Turkey - Military Spending

In recent years, Turkey’s defence spending has seen a marked growth, reaching $19bn in 2018. The Stockholm International Peace Research Institute reported the level of military spending in 2014 in Turkey was in 15th place in the world, at $22.6 billion [PPP, not current account]. Military spending in Turkey increased by 24 percent in 2018 to $19.0 billion, the highest annual percentage increase among the world’s top 15 military spenders.

Turkey’s defense spending stood at 29.4 billion Turkish Liras, or $13.2 billion, Turkish Defense Minister Ismet Yilmaz said 08 November 2014. He was responding to a question from an opposition party leader, the Nationalist Movement Party’s Ankara deputy Ozcan Yeniceri, who asked how much Turkey had spent on its defense budget since 2002. Yilmaz said Turkey spent about 1.71 percent of its Gross Domestic Product, or the GDP on defense in 2014. Turkey used to spend 3.5 percent of its GDP on defense in 2002.

According to the minister, Turkey’s military expenditure per capita in 2013 was 474 Turkish Liras or $213. He also said Turkey’s defense exports stood at $1.4 billion in 2014, while its imports amounted to $1.3 billion. The 2014 defense budget accounted for 3.7 percent of the overall state budget. About half of the country’s defense budget went to personnel spending such as salaries, benefits and pension payments to retired Turkish Army personnel.

The dates for projects that will make Turkey a regional power and add strength to the Turkish Armed Forces (TSK) in counter-terrorism were finalized in March 2012. According to the strategic plan prepared by the Turkish Undersecretariat of Defense Industry:

1. the first indigenous helicopter ATAK will be ready in 2013.
2. the design for a Turkish war jet would be completed by end-2014.
3. the unmanned aerial vehicle ANKA will be ready for the TSK by end-2014.
4. the feasibility work for an original submarine is expected to be completed by 2015.
5. the training plane, Hurkus, will be manufactured by end-2015 in Turkey.
6. the prototype of national tank Altay will be ready by end-2015.
7. the first warship under the MILGEM-S project will be ready in 2016
8. Turkey will manufacture and send an observation satellite to space by end-2016.

The Turkish Undersecretariat of Defense Industry is making plans to open five defense industry contact offices in the Middle East, Far East, United States, Caucasus-Central Asia, and EU-NATO regions to boost sales in the near future.

The majority of the SSM budget is being met from sources transferred from the Defence Industry Support Fund (DISF), which is totally independent from the MoND budget and is one of the most important financial resources for TAF projects. The DISF figures for 2010 have been recently disclosed by MoND M. Vecdi GÖNÜL, who stated that during 2010, for the funding of defence projects carried out by the SSM, a total of US$1.8 Billion had been transferred from the DISF and over US$674 Million from the MoND budget. According to GÖNÜL, the DISF achieved US$138 Million in revenues in 2010 and had a total of US$3.96 Billion worth of assets from the Treasury.

In 2009, Turkey spent about $10 billion of its central budget on military expenditures, not including the Undersecretariat for the Defense Industry (SSM) fund. Using a more generally applicable definition of military spending and a comparable exchange rate, Turkey's military spending was about $14 billion in 2009. Since military service is a compulsory service, the true cost of personnel is not included in these calculations. If the Turkish Armed Forces (TSK) employed professional soldiers, Turkey's military spending would be much higher. If the opportunity costs of conscription were calculated, the result would certainly point to enormous budgets.

Turkey was one of the fifteen countries with the highest military expenditure in 2006 (in purchasing power parity dollar terms). Although Europeanization reforms that have been carried out in Turkey since 2001 strengthened the Parliament's oversight functions, the defence budget is still not totally transparent. Due to the existence of extra-budgetary funds, such as the Defence Industry Support Fund, which has been used for major arms procurement projects, the exact size of the military's budget is still unknown. The known defence budget was 19.66 billion YTL for 2008, amounting to 8,8 percent of the total fiscal budget and 2,74 percent of the GNP.20 According to the SIPRI statistics, Turkey's military expenditures were 18,013 million YTL and 20,585 million YTL respectively in 2007 and 2008, corresponding to 2.1 percent of the GDP in 2007.

The high cost of maintaining a credible military establishment in an age of rapidly changing technology has required heavy expenditures by the Ministry of National Defense in relation to other demands on the government's revenue. As a result, the Turkish government has allocated funds to defense in disproportion to widely acknowledged needs for social and economic development. In the decade between 1981 and 1991, defense was the largest category in the national budget, averaging in most years close to 20 percent of total government expenditures and 4 to 5 percent of the country's gross domestic product (GDP--see Glossary). The next largest budget category--education--commanded little more than half of the resources earmarked for defense.

Until the mid-1970s, the military budget covered only the domestic cost of maintaining the large armed forces establishment; most equipment costs and much of the expense of training military specialists were borne by the United States. A sharp increase in defense spending by Turkey itself was necessitated by the 1974 intervention in Cyprus. The immediate cost of the Cyprus operation, estimated at between US$350 million and US$700 million, was overshadowed by the burden of compensating for the embargo on military assistance imposed by the United States until 1978.

The Defense Industry Support Fund, which is separate from the regular defense budget, finances a US$15 billion military modernization program with earmarked taxes and assessments. The modernization fund is supplemented by a so-called Gulf Fund of grants from Saudi Arabia, Kuwait, the United Arab Emirates, and the United States to compensate Turkey for the cost of maintaining the embargo against Iraq and the lost income from the closing of the Kirkuk-Yumurtalik oil pipeline. By 1993 the Gulf Fund had accumulated more than US$4.8 billion.

According to NATO estimates, personnel expenditures constituted almost exactly 50 percent of total defense expenditures in 1993. Equipment expenditures made up 25 percent of the total, infrastructure expenditures 3.2 percent, and other operating expenses the remaining 21.6 percent. The share of the budget going to personnel was lower than in most NATO countries, although higher than in the United States (38.6 percent in 1993). Low-paid conscripts who make up the bulk of the armed forces accounted for only 11 percent of overall personnel costs.

Equipment purchases absorbed 9.2 percent of defense outlays from 1980 to 1984 and 18.2 percent from 1985 to 1989. Such expenditures rose to 25.6 percent in 1993 because Turkey was obliged to assume an increasing share of the cost of new armaments, munitions, and supplies. United States and German aid has been indispensable to Turkey's efforts to introduce advanced weapons systems. United States assistance has enabled Turkey to continue its modernization program in spite of the weakness of the Turkish lira (for value of the lira--see Glossary). The aid reached a high level during the Persian Gulf crisis, but tapered off with the end of the Cold War, its basis shifting from grants to concessionary loans.

The Turkish defense budget was estimated as US$4.1 billion in 1992, US$4.5 billion in 1993, and US$4.6 billion in 1994. Based on the NATO definition of military spending, the 1992 budget was US$6.1 billion, the 1993 budget US$7.1 billion, and the 1994 budget US$7.3 billion. Separate data published by the United States Arms Control and Disarmament Agency (ACDA) depict moderate real growth in Turkey's actual defense spending during most of the 1980s, from US$3.19 billion in 1981 to US$4.13 billion in 1989 (both expressed in constant 1991 dollars). Expenditures rose sharply to US$5.2 billion in 1990 and US$5.7 billion in 1991, largely as a result of the Persian Gulf War. The shrinkage of the armed forces was expected eventually to produce economies, but the initial effect was an increase in the defense budget to acquire and support more advanced weapons.

The country's economic sacrifice in building a strong defense establishment has been greater than that of its more affluent NATO partners. In 1991 Turkey's military expenditures were 5.4 percent of gross national product (GNP); this was roughly the same proportion as a decade earlier, although defense spending had dropped to as low as 3.9 percent of GNP in 1988. Military spending constituted 20.3 percent of total central government expenditures in 1990 and 17.9 percent in 1991 by ACDA's calculations. The budget of the Ministry of National Defense, which excludes some defense-related costs, was 10.4 percent of the entire budget in 1993 and was scheduled to fall to 9.4 percent in 1994. Within NATO only the United States expended a larger percentage of government outlays on defense, and only Greece spent as high a share of GNP on defense. However, Turkey's defense expenditures per capita, amounting to US$97 annually, were the lowest among NATO countries.

According to the World Bank, military expenditures data from SIPRI are derived from the NATO definition, which includes all current and capital expenditures on the armed forces, including peacekeeping forces; defense ministries and other government agencies engaged in defense projects; paramilitary forces, if these are judged to be trained and equipped for military operations; and military space activities. Such expenditures include military and civil personnel, including retirement pensions of military personnel and social services for personnel; operation and maintenance; procurement; military research and development; and military aid (in the military expenditures of the donor country).

Excluded are civil defense and current expenditures for previous military activities, such as for veterans' benefits, demobilization, conversion, and destruction of weapons. This definition cannot be applied for all countries, however, since that would require much more detailed information than is available about what is included in military budgets and off-budget military expenditure items. (For example, military budgets might or might not cover civil defense, reserves and auxiliary forces, police and paramilitary forces, dual-purpose forces such as military and civilian police, military grants in kind, pensions for military personnel, and social security contributions paid by one part of government to another.)