According to the recent article published Balkan Defense Monitor 2024, Serbia was the first country in the region in terms of defense spending, which accounted for 2% of its GDP in 2023, followed by North Macedonia with 1.7% and Albania with 1.6%. The latter two countries, both NATO members, are expected to achieve the Alliance’s 2% target in 2024.
Albania and North Macedonia are also expected to overtake Serbia, which is expected to fall to third place in the region with 1.8% in 2024.
This is the third edition of the Balkans Defense Monitor, which the Belgrade Center for Security Policy (BCSP) has been publishing since 2022. It covers Albania, Bosnia and Herzegovina, Croatia, Montenegro, Macedonia North and Serbia.
Croatia, another NATO member, has kept its defense spending at around 1.5% of GDP over the past three years.
Meanwhile, Montenegro and Bosnia and Herzegovina lag behind the rest of the Balkans, with just 1% and 0.7% of defense spending planned in 2023. The former country joined NATO in 2017, while the second joined a Membership Action Plan (MAP), a NATO Program to support countries wishing to join the Alliance, in 2010.
The Defense Monitor also analyzes the share of expenditure allocated to personnel, on the one hand, and to weapons and equipment, on the other. As in previous years, Bosnia and Herzegovina’s personnel costs are the highest, at 89%. It is followed by Montenegro which spends 56% on personnel and only 24% on weapons and equipment.
“Bosnia’s constitutional structure makes it more difficult to invest in state defense. Most of the funds are spent on personnel, therefore mainly on the most basic conditions of the general staff and the army. It is not big enough and in the future it will be necessary to think about how Bosnia should increase its defense budget,” said Harun Cero, project manager at the Friedrich Ebert Foundation in Sarajevo, during the presentation of Defense Monitor in Belgrade.
Croatia and North Macedonia, meanwhile, have significantly reduced the percentage spent on personnel compared to 2020, says the Balkan Defense Monitor. Croatia now spends almost equally on personnel (41%) and weapons (39%). In North Macedonia, personnel receive 38% of spending, while weapons and equipment receive 26%.
Finally, Serbia spends exactly the same share – 39% – on personnel and weapons. The document notes that there was an upward trend in spending in Serbia between 2016 and 2022, which was then temporarily interrupted, but is expected to increase again.
According to the document, Croatia’s military budget has also increased significantly – it has almost doubled since 2017, largely thanks to the acquisition of 12 French Dassault Rafale fighter jets in 2021.
“Everyone talks about the ‘quasi-arms race’ in the Balkans in the context of the war in Ukraine, but it started in 2015 between Serbia and Croatia. It is a multidimensional process. For one, most of the arsenal comes from the Yugoslav Army, so it’s not uncommon that you need to buy something new. But this process should be carried out in a less toxic way,” said Vuk Vuksanović, lead researcher of BCSP and one of the authors of the Monitor, during his presentation.
He also said that arms procurement was a component of foreign policy.
“The elites in Belgrade believe that if we are well armed, our neighbors will take us more seriously and we will be better able to oppose the West and Russia. This is also part of domestic politics and domestic political marketing, since the army is one of the most reliable institutions,” Vuksanović added.
On the way to the 2% goal: acceleration after the war in Ukraine
The increase in defense spending in Albania and North Macedonia is comparable to trends observed in other NATO member states. According to NATO estimatesspending in 2023 across the Alliance increased by 8.3%, by far the largest increase in 10 years.
In 2023, average Allied spending was 1.82% of GDP, with 11 of NATO’s 31 member states spending more than 2%. According to Secretary General Jens Stoltenberg, this figure should to reach 18 in 2024.
This is a significant increase compared to 2014, when only the United States, the United Kingdom and Greece crossed the 2% threshold, according to NATO data.
The question of spending became more pressing with the election of Donald Trump in the United States in 2016, and subsequently, notably after the Russian invasion of Ukraine in 2022.
In the Balkans, no NATO ally has yet reached the 2% target, although North Macedonia and Albania are expected to do so in 2024. In the meantime, all NATO allies, including those in this region, meet another requirement: at least 20%. of defense spending is on equipment.
“North Macedonia’s defense budget has seen a substantial increase since the country joined NATO in 2020. This increase is also a consequence of a long-term plan to modernize the army,” says the Balkan Defense Monitor.
This was confirmed by Radmila Šekerinska, former Minister of Defense of North Macedonia, who also spoke at the presentation of the Balkan Defense Monitor 2024 in Belgrade.
“We started below 1% in 2017 and went to 1.8% this year and hopefully 2% next year. After Ukraine, we saw that without security everything is nothing, everything collapses,” she said.
She also added that as defense minister from June 2017 to early 2022, she did not have many meetings with European officials. The war in Ukraine has made the EU take defense more seriously, Šekerinska added, pointing out that Ursula von der Leyen had announced a defense portfolio in her potential next Commission, which makes a big difference.
In Montenegro, on the other hand, the defense budget has fluctuated in recent years. Spending was 1.6% in 2019 but fell to around 1% after 2021.
“This is partly due to the country’s accession to NATO and the modernization of its army to meet NATO standards, but also to the political crisis and changes in government,” we read in the document.
The program of the current Prime Minister of Montenegro, Milojko Spajić, presented to parliament last October, included an increase in defense spending up to 2% of GDP and the modernization of units of the Montenegrin armed forces.
