Reading the newspapers, I get the impression that Iran has embarked on a massive military build-up unprecedented since Hitler's in the 1930s. But there don't seem to be any actual numbers about how much Iran is spending in all the verbiage.
Each year, the London-based International Institute for Strategic Studies publishes a new edition of The Military Balance, which reports on military budgets around the world. Unfortunately, they want 95 pounds for the book, which I can't afford. So, I've been Googling around looking for articles in the news media that will reveal the secret of Iran's latest military budget. I've found a lot of articles in the English-language press inspired by the May 24th publication of the 2006 edition of the book, but none of them seem much interested in the Iranian figures for 2005 that it contains.
So, here's the only article I've found. This June 1, 2006 piece is stored on the IISS website:
Iran's defense budget remains a fraction of the expenditure of its Arab neighbors in the Persian Gulf in per capita terms, according to the latest edition of Military Balance.
The spending by Iran is also the least as a percentage of the country's gross national product (GNP) in the region with the exception of the United Arab Emirates (UAE).
Military Balance, published by the International Institute for Strategic Studies in London, puts Iran's defense budget for 2005 at $6.2 billion.
Iran's defense budget remains a fraction of the expenditure of its Arab neighbors in the Persian Gulf in per capita terms, according to the latest edition of Military Balance. The spending by Iran is also the least as a percentage of the country's gross national product (GNP) in the region with the exception of the United Arab Emirates (UAE)....
The amount is equivalent to $91 per head of the country's 68 million population, up to 25 times less than its neighbors on the other side of the Persian Gulf.
Saudi Arabia's defense budget of dlrs 25.4 billion corresponds to dlrs 962 per capita, spending by Oman of $3.02 bn equates to $1,007 per head and the UAE's $2.65 bn expenditure works out at $1,035 each for its 2.56 million inhabitants.
The ratio is even higher for Kuwait, an equivalent of dlrs 1,856 per head for its dlrs 4.27 bn defense budget in 2005. In Qatar, the cost reaches $2,538 per capita to make up its dlrs 3.02 bn expenditure.
In terms of the country's GDP, Iran's defense spending works out at only 3.5 percent, higher than only than the UAE's 2.23 percent among Persian Gulf countries. [Emphasis mine]
Expenditure in Bahrain, which is equivalent to $764 per capita, is 4.1 percent of GDP. In Qatar it is 6.19 percent, in Kuwait 6.24 percent, in Saudi Arabia 8.44 percent and in Oman 9.64 percent, the report said.
Now, this article is from the "Islam Republic News Agency," which I presume is a propaganda arm of the Tehran government. Still, the IISS hosts the article on its site, so I presume it's a factual transcription of what's in the IISS publication.
In other words, as of 2005, Iran is spending a smaller share, 3.5%, of its tiny GDP on military matters than America is spending of its vast GDP. According to an International Herald Tribune article of the same day, the IISS estimates America's military spending in 2005 as 3.7% of our gigantic GDP.
The US GDP is more than 20 times bigger than Iran's when measured in terms of purchasing power parity and more than 60 time bigger when measured by exchange rates. A reader has pointed out that the effective figure is probably about halfway in between, or 40 or so times bigger: Iran pays soldiers' wages in purchasing power parity but has to buy technology abroad at the exchange rate.
So, what is Iran up to?
The Guardian reported, based on Military Balance 2006:
Iran's leaders have responded to the threat of US military action by adopting a policy of "strategic deterrent defence", intended to complement diplomatic means, it says. "Iran is also careful not to adopt an offensive posture. Iran's strategy is to absorb a first strike, then initiate immediate retaliation with all means available - but only if such a move serves political ends and does not threaten the very existence of the Islamic regime."
The IISS said Iranian retaliation could range from instigating trouble next door in Iraq and Afghanistan to trying to block the Straits of Hormuz, a western oil supply route at the mouth of the Gulf. Iran may have practised minelaying in the straits during recent military exercises.
In other words, Iran, residing between two countries recently conquered by the U.S. and being in the same general region as the very powerful Israeli military, is scared of being attacked by the U.S. and/or Israel. So, it is investing, at a moderate pace, in deterrent weapons, while being "careful not to adopt an offensive posture."
If Iran had offensive intentions, what would it be up to? One obvious opportunity would be its northern neighbor, Azerbaijan, which is oil-endowed, horribly ruled, and populated by the Azeri ethnic group that makes up much of the core of Iran's population. For example, Ali Khameni, who is the Supreme Leader of Iran (not President Borat, as you might imagine if you trusted the newspapers), is an Azeri.
It's like if Nova Scotia was an independent country run by a kleptocrat who had inherited his job from his dad, a Soviet apparatchik. And if Nova Scotia had oil! In that case, America would have have mounted a Nova Scotian Liberation operation a long, long time ago. And yet, Iran doesn't seem to be doing much of anything about Azerbaijan.
Similarly, Iran isn't doing much of anything anywhere else. It spends $100 million per year on Hezbollah, which has been good for PR recently due to Israeli incompetence, and it has benefited from America spending hundreds of billions to hand Iraq over to Shi'ites with strong ties to Iran. But mostly it seems to be trying to deter attack by the two most dangerous countries in the region, America and Israel.