The Ministry of Defense’s Budget as percentage of GDP and Total State Budget

Although peace is one of the major challenges for today’s society, it seems that even governments are not negligible about this fact, which is shown in spending considerable amounts for their armies. Part of this trend is also Albania, which since 1999 has received more and more commitments in the field of defense. Our country certainly was not accepted as a member of NATO due to its high power military. Acceptance of Albania was more a political decision (Report “Congressional Research Service”: NATO enlargement, Albania, Croatia and future candidates, page 9), in which was argued if Albania can contribute to security of member states or not. For that reason a significant part of total budget has gone to the Ministry of Defense.
 


^{Source: Ministry of Finance, Banc of Albania
Comments and Analysis: Open Data Albania (ODA)}

Funds allocated from the State Budget for defense function, made this function ranking at the fourth level after Transport, Education and Health. This function has received more funds in 2007, an important year in achieving a lot of reforms. During this year, almost half of the Ministry of Defense budget is used for the purchasing of goods and services and also for capital Investments.

In the years coming, costs for defense function have fluctuated at the levels of 5.1%. This means that actually Albania is spending more on Military defense, which main function is the national security than to the police and order  which provides protection of citizens within the country.

In 2001, the defense has received 2.7 times more money than agriculture, 6.3 times more money than tourism and culture, (both of these functions proclaimed as the country’s development priorities).

In fact, it should be noted that the percentage of funds allocated to Defense derives from membership in NATO, which suggests a limit of about 2% of GDP invested for this reason. In 2007 and 2009 the level of funds allocated for defense were at the highest level, where compared as a percentage of GDP were round 1.87% and 1.86 respectively. 

In 2010, in the Initial State Budget funds allocated for this function were forecasted at the level of 2% of GDP, while in the Revised Budget in July the funds were decreased by 5 billion All. This led to reductions of the funds allocated for defense to GDP from 2% to 1.61%. Even in 2011, the forecasted amount of funds were at the level of 1.66% (less than the threshold), indicating that Albania has difficulties in affording spending over 2% of GDP on defense.

All the information is presented in the dynamic table below:

^{Source: Ministry of Finance, Banc of Albania
Comments and Analysis: Open Data Albania (ODA}