The increase in Serbia's military budget will cause reactions from other countries in our region, where we failed to build mutual trust and predictability. You don't need to be a foreign policy expert to predict a virtual arms race for countries in the region that cannot afford it.
Government of the Republic of Serbia adopted the proposal of the Law on the Budget of Serbia for 2025. It is more than certain that it will be adopted in to the National Assembly.
Revenues in the Serbian budget for 2025 are planned in the amount of 2.105,6 billion dinars, and expenditures 2.343,2 billion, which will result in a projected deficit of 237,6 billion dinars or about 3 percent of GDP. Nevertheless, economic growth of 4,2 percent is expected, and public debt should be maintained at around 47,5 percent of GDP.
If we compare the allocation of the budget of the Ministry of Defense with last year's, it has formally increased by 64,78 percent despite the fact that the current National Security Strategy and Defense Strategy do not indicate any indicators that would affect Serbia's security vulnerability. However, last year's planned military budget of 158.859.212.000 dinars (1.355.696.000 euros) was already increased on January 13, when President Vučić announced that, in addition to the approved budget, another 736 million euros would be allocated for additional arming of the Armed Forces last year, from of which 186 million from the account of the company Jugoimport SDPR.
With the amounts from the aforementioned announcement, Serbia has planned 2024 billion euros for defense in 2,09, which in percentage terms makes up 2,74 percent of GDP. That amount was increased again in September 2024 through budget rebalancing by an additional 417 million euros, which is the first installment for the purchase of French multi-purpose aircraft "Rafal", which was paid from the capital part of the budget of the Ministry of Defense. Despite the insufficient transparency of the spending of financial resources, especially from the accounts of state-owned companies, with all the mentioned amounts, we can conclude that the total military spending of Serbia for the current year totaled 2,51 billion euros or 3,29 percent of the planned GDP. It should be emphasized that according to the assessment of the Ministry of Finance, the projected rate of economic growth for 2024 is 3,8 percent of GDP, which in absolute terms is 8.946,2 billion dinars, or 76,3 billion euros. That assessment was practically confirmed by the International Monetary Fund, the World Bank and the European Bank for Reconstruction and Development.
According to the current Law on the Budget of the Republic of Serbia for 2024 (Article 50), the total level of expenditures and expenditures of the budget of Serbia for 2025 is limited to the amount of 2.266,7 billion dinars, which was not respected because the total expenditures and expenditures for the next year in the amount of 2.660,2 billion dinars.
AMONG THE CHAMPIONS OF EUROPE
Although the planned total expenditures and expenditures at the state level are increased by 17,36 percent in relation to the legal limit, in the case of the planned appropriation for the Ministry of Defense it amounts to 92,06 percent. Namely, the legal limit of expenditures and expenditures for the Ministry of Defense is 136.296.976.000 dinars, and the planned amount for 2025 is 261.770.065,000 dinars. Despite the expected GDP growth in 2025 in the range of 3,7 to 4,2 percent, Serbia's military spending will amount to 2,8 percent of GDP. This continuity of high military spending positions Serbia as one of the countries with the highest military allocations in Europe in relation to GDP.
If we perceive the defense system in a broader context, then in 2025, Serbia will allocate a total of 403.025.231.000 dinars or 4,5 percent of the expected GDP for the entire security sector. In addition to the section for the Ministry of Defense, it also includes the section for the Ministry of Internal Affairs, the Security and Information Agency, the Demining Center and the Office of the Council for National Security and Protection of Secret Data.
The budget of the Ministry of Defense for 2025 included the equipping with weapons and military equipment from the company Odbrambene industrija Srbije and JP Jugoimport-SDPR (6.728.417.000 dinars) and the equipping with multipurpose fighter planes "Rafal" with accompanying training, field and logistical support services (55.000.000.000 .2026 dinars). It should be emphasized that in 2027 and 184.000.000.000, an allocation of XNUMX dinars is planned for the purpose of equipping new aircraft.
In addition, 10.159.623.000 dinars are planned to support the implementation of the decision on the reintroduction of mandatory military service. It is interesting that significant funds in the total amount of 3.800.000.000 dinars were allocated for the construction of new facilities and infrastructure for the Ministry of Defense and the Serbian Army, which do not include current repairs and maintenance. All the mentioned items represent capital expenditures of the Ministry of Defense that will be realized in the next three-year budget cycle in order to fulfill the obligations from the contract.
OFFICERS REMAIN OUTSIDERS
It is commendable that the project to improve information security and cyber defense has been recognized as a capital expenditure for which 2025 dinars will be allocated in 262.540.000 alone. However, it is disappointing that the Ministry of Defense did not make an additional effort to improve the standard of professional military personnel who will receive 66.479.719.000 dinars for their salaries in the coming year. In nominal terms, this represents an increase of 22,34 percent compared to the 2024 budget, but in reality there will be no significant changes in the duties of military personnel. Considering the level of the annual inflation rate measured by the consumer price index (in October 2024, 4,5 percent for Serbia, i.e. 5,6 percent for the city of Belgrade), as well as the plan to introduce mandatory military service and expand the professional composition of the Serbian Armed Forces, there will be no room for an increase in the salary of military personnel.
This means that in the next year, in the competitive market for experts with sophisticated profiles, the Serbian Army will remain an outsider, which will once again lose highly skilled and insufficiently motivated personnel and gain new henchmen with general epaulettes. Investing in members of the military, their abilities and modern knowledge, along with finding ways of financial stimulation and cultivating true, not pub patriotism, is the only way to build the moral strength of the nation, institutions and individuals.
The increase of Serbia's military budget by 92,06 percent, as a rule, represents a significant indicator of a change in priorities in the field of security and geopolitical strategy. The reasons for this can be partly justified because no one can dispute the justification of the reaction to geopolitical tensions and the increase in military spending in response to potential threats, the proximity of war conflicts and changes in international relations. In this context, Serbia is only following the global spiral of increasing military budgets, which can definitely only represent a gloomy perspective for civilization. With this kind of budget, Serbia can try to modernize equipment, reorganize the organizational structure and improve the defense industry and research, but this is doomed to failure if the Serbian Army remains an uncompetitive employer. Soldiers without stimulation, on whom the generals impose additional obligations, represent dissatisfied patriots who, disappointed in the established system of personnel protectionism, leave, convincing themselves and others that it is solely for financial reasons. And the politicians, as a rule ignorant of security, unreservedly trust the generals who are still preparing for past wars and insist on mandatory military service in order to ensure the optimal cost for cleaning the barracks area.
The consequences of such continuous high allocations for defense in relation to GDP can be economic, political and social. This could affect the increase in public debt and the likely redistribution of funds within the budget, which would reduce investments in other sectors such as education, health or social protection. For society, it could represent a trigger for public expression of dissatisfaction, which would call into question the political legitimacy of decision-makers, and thus would certainly generate internal instability.
However, what is certain - the increase in the military budget will cause reactions from other countries in our region, where we failed to build mutual trust and predictability. You don't need to be a foreign policy expert to foresee a virtual arms race among countries in the region that cannot afford it. Namely, the region is neither technologically nor economically in a situation to arm itself, and to spend anyway modest resources on military capabilities instead of improving the basic needs of the population. Serbia's high military spending is neither a secret nor a danger for NATO or EU countries, but with uncoordinated moves, we present ourselves as an unreliable partner that can lead to destabilization of the region with its unilateral moves.
ILLUSIONS OF NEUTRALITY
Back in 2014, NATO members agreed to raise their military spending to 2024 percent of GDP by 2. Regardless of the fact that some members have not yet fulfilled it, due to geopolitical circumstances, many countries are preparing for war by improving the capabilities of their armed forces and the production capacities of defense industries. Part of the Alliance went even further regionally by integrating some of the defense capabilities precipitating Russia as a direct threat. The war in Ukraine demonstrated the necessity of integrating sophisticated technology with a massive supply of old-fashioned ordnance, along with decentralization of command, battlefield initiative, and rapid maneuverability. It is now clear to everyone that it is difficult to have the initiative in a modern land war without air superiority.
Military neutrality is unsustainable in the modern context of security challenges, and it is especially unrealizable the idea of the creators of the National Security Strategy, who based it on the concept of total defense. Serbia has neither the economic nor demographic strength to establish the concept of total defense, and there is no will of international factors to recognize such a neutral status.
The daily infusion of romanticized pseudo-history, which is served free of charge in Serbia through public speakers, keeps society in limbo between the present and the future. We justifiably wonder if there is political courage that will clearly promote the interests of their own country, and not follow instructions from the Kremlin catacombs. The moment Moscow defined the EU as an enemy, Belgrade had to fully harmonize its foreign policy with the Common Foreign and Security Policy of the EU. Because it should be clear to everyone that Serbia is part of the EU, and our defense system is part of the European security architecture.
The author is the executive director of the Council for Strategic Policies
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