High Military Spending ≠ Security. Here’s Who’s Actually Ready. The New AWTY War Economy Index

Is your country ready for war? Most aren’t.

Fernando C. Gaspar

Jul 11, 2025

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Hey there, The war economy isn’t coming — it’s already here.
And most people don’t even know what it means.

In this issue, I reveal the AWTY War Economy Transition Index — a global resilience index that cuts through headlines and measures what really matters: your country’s ability to adapt during overlapping economic transitions, rising geopolitical risk, and the race for dual-use innovation.

If your score is low, you’re vulnerable.
If it’s high, you’re standing on ground that others will rush to claim.

1. WAR ECONOMY REALITY CHECK: Is Your Job Already on the Line? What about your life?

Imagine waking up to find your job obsolete—not by automation, but by geopolitics. Sounds extreme?
The numbers say otherwise.
The War Economy isn't coming; it's already here.

2. The Transition No One's Ready For—But Everyone’s In

Conventional wisdom says all this talk about economic transitions—green, digital, geopolitical—is just talk. But here’s the truth:
These transitions are happening NOW, reshaping your job, your investments, your life.
And nothing proves it better than the newly published AWTY War Economy Transition Index, which measures exactly how countries are pivoting toward defense-driven economies.

3. The War Economy Index: What the Data Really Shows

In the middle of overlapping economic transitions, from green and digital to geopolitical realignment, most countries are flying blind.

That’s why I built the AWTY War Economy Transition Index — a data-driven resilience index that shows how prepared your country really is for the next shock.
It’s part of the AWTY index, previously published, and I’ve already defined what success means for each of the five transitions and published the AWTY Green Transition report.
Today it’s about defense.

This isn’t about forecasting war.
It’s about measuring the economic impact of rising geopolitical risk, weak alliances, and the lack of dual-use innovation.

The AWTY Index tracks five critical dimensions — from defense spending to technological capacity — and reveals whether your country is building resilience or sitting on a trapdoor.

The AWTY War Economy Transition Index scientifically measures each country's ability to shift toward a war economy by analyzing five critical areas:

Defense Spending Burden (How much of GDP goes to defense)
Military Innovation & Technology (Import/export of advanced defense technologies)
Global Security Environment (Political stability, absence of violence)
International Alliances & Treaties (Number and depth of defense pacts)
Geopolitical Influence (Structural global power and capability)AWTY_War_Economy_Report.

The AWTY War Economy Transition Index is calculated using 11,946 validated country-year data points from 1990 to 2024.

This number reflects the sheer depth of the dataset—spanning over three decades and covering more than 170 countries—making it one of the most comprehensive transition-readiness metrics available today.

I’m mentioning this just to underscore the scientific rigor and credibility of the index.
I also want to highlight that all this data is secondary data.
Publicly available secondary data (see links in the data file).
So, the authorities could have been measuring this for a long time.
Do you think they’ve been hiding it from us?

Every country receives a score from 0 to 10, providing a transparent and comparable snapshot of economic readiness. (see the methodology detailed in the report)

What does your country’s score mean?

The AWTY-WE score runs from 0 to 10, measuring how ready a country is to shift from a peace-time economy to a defense-oriented one without collapse.

Score ≥ 7:
Full readiness. These countries can rapidly mobilize defense, absorb supply chain shocks, and still protect civil stability. Think: USA (8.7), Poland (8.3), Lithuania (7.8).
Translation: Jobs, funding, and innovation flow faster here.
Score 3–6:
Intermediate readiness. Some capabilities exist, but gaps in innovation, alliances, or internal stability limit response. Most countries live here.
Translation: If instability hits, your paycheck might feel it first.
Score < 3:
Fragility trap. Countries in this zone face systemic risk. Weak in defense, isolated diplomatically, unstable internally. Think: Somalia (1.0), Yemen (0.87), Afghanistan (0.89).
Translation: These economies won’t survive a major geopolitical shock intact.

A high score means resilience. A low score means you're economically exposed.

AWTY War Economy Transition Index: Where Does Your Country Stand? (Top and Bottom 10, 2024)

(Not seeing your country here? Download the summary report to discover exactly where you stand—and why it matters. Check the end of the post.)

Here's what AWTY-WE revealed:

Poland's Wake-Up Call: Scoring 8.28 overall (10 points on defense spending alone), Poland transformed rapidly after 2014, leveraging dual-use technologies—innovations useful for both civilian jobs and defense.
Baltic Rising Stars: Lithuania (7.82), Estonia (7.79), Latvia (7.27)—rapidly improved readiness post-Crimea annexation, strengthening alliances and investing in innovation.
The Innovation Divide: The U.S. (overall 8.71, innovation 10.0) and Israel (7.93 overall, 7.35 innovation) dominate defense innovation, securing jobs and economic leadership. Countries with weaker innovation, like Saudi Arabia, despite high defense spending, trail behind significantly.
Fragility Trap: Somalia (1.04), Yemen (0.87), and Afghanistan (0.89) struggle economically, remaining trapped due to instability and isolation, unable to participate in new economic opportunities.

What about the warzones?

You might expect Russia to top the list. After all, it's fighting a brutal war in Ukraine. But here’s the twist: while Russia does score high on defense spending and arms exports, it lags behind on internal stability and global alliances. The war has exposed those cracks.

Ukraine, despite limited resources, scores an impressive 7.6 thanks to deepened alliances, battlefield innovation, and strategic aid integration. It's a textbook case of asymmetric resilience.

Israel ranks #3 globally, with top-tier innovation, strong alliances, and a tightly integrated military-industrial ecosystem.

These rankings don’t just reflect firepower — they reveal which countries can turn economic systems into defense systems without collapse.

And what about Iran, North Korea, China, Yemen?

Let’s break the myth: this index doesn’t reward aggression or secrecy — it measures systemic readiness. That includes alliances, innovation, and internal stability.

Iran scores modestly. Its military influence is regional, not global. Sanctions limit alliances and tech access. Strong in proxy warfare, but brittle in industrial capacity.
North Korea? It’s militarized but isolated. Innovation and alliances are near zero. High military burden, but in a collapsed civilian economy. That’s not readiness — that’s entrenchment.
Yemen (Houthi-held) sits at the very bottom. Despite tactical impact in the Red Sea, it ranks under 1.0. No alliances, no tech base, and extreme instability.
Geopolitical noise ≠ economic power.
China is a slow-burn juggernaut. It ranks high on influence and innovation, but scores are held back by limited formal alliances and political friction.
But here’s the catch: by 2030, China may rival the U.S. across several vectors — if trends continue.

The real war economy powerhouses aren’t who you think. Check the full report to see who’s rising—and who’s bluffing.

And where does Europe stand?

Europe is waking up, but unevenly.
Countries like Poland, Lithuania, Estonia sprinted ahead — turning fear into preparedness.
Others, like Spain, Italy, Austria, barely moved the needle despite NATO ties.
The biggest divider? Innovation. Without dual-use R&D, even big budgets won’t protect your economy.

The war economy isn’t a future scenario — it’s the new baseline.

And for Europe, the choice is clear: rearm with intelligence, or risk becoming strategically irrelevant and eventually more and more wars in the continent.

Want to know exactly how your country ranks? The full AWTY report provides a complete breakdown, giving you clarity on your region's risks and opportunities.

4. But Isn’t This Just Cold War Nostalgia?

That’s the pushback I hear most:

“This is all just another cycle. Military spending goes up, then down. Nothing new.”

Here’s why that’s wrong — and dangerously misleading.

This is not a return to Cold War blocs.
It’s a structural transformation of economies, not just armies.
What’s emerging now is a fusion: defense meets tech, meets trade, meets innovation ecosystems.

It’s not about tanks. It’s about:

Semiconductor control
AI-enhanced logistics
Cyber shields for global infrastructure
Dual-use industries that create jobs and deterrence

Critics also claim:

“We shouldn't reward militarization.”

And I don’t.

The AWTY War Economy Index isn’t a scoreboard for hawks.
Countries like Israel and the Baltics score high because they’ve built resilience without collapse — funding security without gutting civil liberties or economic balance (maybe this needs to be reviewed shortly in the case of Israel).

Meanwhile, high spenders with fragile institutions? They get exposed.
This index reveals readiness, not aggression.

The truth is, we're already living in a war economy world. Most people just haven’t caught up.
And the longer they deny it, the greater the risk to their jobs, investments, and security.

This isn’t about war. It’s about whether your economy can survive a crisis without falling apart.

5. Resilience Is the New Power

In a world full of trolls, criminals in power positions and volatile alliances, black swan shocks, and rising militarization, economic strength alone is no longer enough.

Resilience is the new currency.
And only a few countries are investing in it the right way.

The AWTY War Economy Transition Index doesn’t predict conflict.
It measures your country’s ability to adapt before it’s too late — to turn disruption into strategic advantage.

If your region scores low, your supply chains, your funding, your job security could all be at risk.
If it scores high, you're likely standing on fertile ground for innovation, investment, and influence.

Don’t guess. Measure. Don’t wait. Prepare.

The real threat isn’t war — it’s unpreparedness.
Whether we’re talking green tech, defense logistics, or supply chain shocks, countries that embrace dual-use innovation and build systemic resilience will lead the next phase of economic transition.

The AWTY War Economy Index makes this visible — turning fog into clarity.

🔍 Want to know where your country stands?
Download the full report and prepare for what’s coming — not with opinions, but with metrics that matter.

I just explained my opinion on this.
But I might be wrong. What’s yours?

🧨 Is the war economy really about resilience — or just another excuse for militarization?
🌍 Can Europe stay relevant without becoming a fortress?
💥 Or are we already too late?

Drop your take in the comments 💬