Guatemala and Mexico have the smallest military budgets as a percentage of GDP in Latin America, according to Mexican newspaper Excelsior.
Excelsior reported that Mexico’s armed forces receive 0.49 percent of GDP, while Guatemala’s receive just 0.40 percent. At the other end of the list are Chile, with 2.43 percent of GDP spent on the military, and Colombia, with 2.3. The United States, meanwhile, spends some 4.06 percent.
InSight Crime Analysis
Colombia, Guatemala and Mexico are amongst the countries that face the biggest threat from organized crime in the hemisphere, and all have deployed their militaries domestically to fight drug trafficking. However, their levels of military spending relative to GDP vary greatly, as shown on graph, below.
Guatemala's military spending has dropped sharply in recent decades, down from 1.59 percent of GDP in 1988, while the civil war was still raging, to its current figure of 0.4 percent, according to figures from the World Bank.
The 1996 peace accords set the army's budget at 0.66 percent of GDP, but in 2004, the government set the limit at 0.33 percent of GDP, and cut troop numbers from 23,000 to 15,500. Last year, then-President Alvaro Colom repealed the limit, saying it had been a "historic error." The Defense Ministry said that the budget limit had allowed organized crime and drug trafficking to grow in key parts of the country like San Marcos, Quiche and Izabal, which were left "at the mercy" of organized crime.
Mexico's military spending is also low due to historical political factors -- Reuters has attributed this to the country's "rejection of military intervention after decades of post-colonial warring that culminated in its bloody revolution of 1910-1920," as well as its embrace of non-alignment doctrine.
Colombia's military spending has historically been far higher than that of Mexico or Guatemala, as it has been fighting a civil conflict within its borders since the 1960s. Spending was given a big boost with the inception of US aid program Plan Colombia in 2000, which has handed over some $7 billion, mostly in military aid, since then.