Iran: Military Spending, Modernization, and the Shifting Military Balance in the Gulf

By Anthony H. Cordesman

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The military balance between Iran, its Arab neighbors, and the United States has been a critical military issue in the Middle East since at least the rise of Nasser in the 1950s. Iran, Iraq, and the other Gulf states have been the scene of a major arms race since the mid-1950s. The fall of the Shah of Iran in 1979 and rise of Khomeini helped trigger a major war between Iran and Iraq that lasted from 1980 to 1988, and came to involve every Gulf state and the U.S. The economic impact of the war helped trigger the Iraqi invasion of Kuwait and a subsequent war to liberate Kuwait in 1990-1991. Its aftermath then led to the U.S. led invasion of Iraq in 2003, the rise of violent Islamist extremism, and ongoing struggle against ISIS.

The risks this arms race presents in terms of a future conflict have not diminished with time, and many elements of the regional arms race have accelerated sharply in recent years. Clashes with Iran in the Gulf, struggles for influence in Iraq and Syria, and the war in Yemen all act as warnings that new rounds of conflict are possible. The Iranian reactions to the U.S. withdrawal from the JCPOA nuclear agreement with Iran, and the U.S. response also indicate new rounds of conflict are possible.

On July 22nd, Iran’s President Hassan Rouhani warned the U.S. that, “Mr. Trump, don’t play with the lion’s tail, this would only lead to regret. America should know that peace with Iran is the mother of all peace, and war with Iran is the mother of all wars. You are not in a position to incite the Iranian nation against Iran’s security and interests.” The next morning, President Trump replied with a Tweet in full capitals stating that,

“NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE. WE ARE NO LONGER A COUNTRY THAT WILL STAND FOR YOUR DEMENTED WORDS OF VIOLENCE & DEATH. BE CAUTIOUS!”

No one can safely dismiss such rhetoric as political posturing over the fact the U.S. is imposing steadily more serious economic sanctions over Iran. The history of war is as much the history on unintended conflicts and escalation as of deliberate attacks. There have already been far too many such wars in the Middle East, and the current arms race has far too long and dangerous history to ignore.

The Burke Chair at CSIS is issuing a new major new 185-page report that uses a wide range of tables and graphs to trace the history of the Gulf arms race in terms of military expenditures, arms transfers, and comparative rates of military modernization. In the process, it examines the economic burden on the Gulf states of these military expenditures and arms transfers, the recent shifts in the balance in terms of the major elements of conventional warfighting capability, and the impact of a steady shift towards options for asymmetric warfare.

This report is entitled Iran: Military Spending, Modernization, and the Shifting Military Balance in the Gulf, and is available on the CSIS web sites at https://csis-prod.s3.amazonaws.com/s3fs-public/publication/180904_Iran_Shifting_Balance.pdf?.

The report is divided into twelve main sections:

It draws heavily on both official open source reporting and the work of major research centers like the International Institute for Security Studies (IISS) and the Stockholm International Peace Research Institute (SIPRI), as well as variety of other think tanks and commercial research centers. It notes the critical role of the United States and European forces like those of Britain and France in shaping the balance, as well as the emerging role of Russia, but focuses on the detail trends in Iran, Iraq, and the Southern Arab Gulf states - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.

A detailed Table of Contents is provided at the start of the report. The introduction addresses its broad contents, and each major section then provides the Figures with tables, graphs, and maps that explain the evolution of military spending, arms transfer, modernization and their impact of the balance in more detail. In each case, the text addresses the issues in going from comparisons of spending on conventional forces and major arms to the analysis of capabilities for asymmetric warfare.

Anthony H. Cordesman holds the Arleigh A. Burke Chair in Strategy at the Center for Strategic and International Studies in Washington, D.C. He has served as a consultant on Afghanistan to the U.S. Department of Defense and the U.S. Department of State.