"Despite major reductions, the United States still possesses the most powerful conventional and nuclear armed forces in the world," it says in The Military Balance 1996-97. The US is also by far the world's largest arms producer, dominating the defence market.
In the past year alone, the institute points out, the US has provided 20,000 troops to the peace implementation force in Bosnia, deployed two carrier battle groups to the waters off Taiwan to ease tensions between China and Taiwan, and launched new raids on Iraq.
The US has scaled down its forces, cutting from 18 army divisions to 10, and from 25 Air Force tactical wings to 13. The number of personnel on active duty is to reduce from 2 million to 1.5 million. But the sheer size of what remains, combined with continuing investment in hi-tech weaponry which gives it a technological edge, keep America superior.
The Department of Defense is planning to enhance its capability in advanced munitions, battlefield surveillance, strategic mobility and the readiness of reserve forces," the institute says. "Numerous improvements to command, control, communications, computers and intelligence for naval, land and air forces will be implemented," said the report.
Washington has committed itself to keeping around 100,000 troops in Europe, and about the same in East Asia and the Pacific, as well as deployments of pre-positioned equipment in the Middle East and the Indian Ocean. America's policy is to maintain the capability to engage in two simultaneous major regional conflicts.
The US also dominates the arms market. World arms sales in 1995 rose by 15 per cent to $30.2bn (pounds 19bn) because of increased demand from the Middle East and East Asia, the institute estimates. The US accounted for $13.3bn, or 44 per cent of the total. Russia almost doubled its total to $3bn, but was still in second place.
Russia is, the report makes clear, not in the same league as the United States any more. "The decline in capability in all departments of the Russian armed forces seems set to continue," the institute concludes. Since 1992, military spending has fallen by about 45 per cent, though Moscow still tries to keep up pretensions of a global role.
"The Russians are making a great effort to keep themselves out there, so to speak, on the world stage in certain key areas," the institute's deputy director Rose Gottemoeller told a press conference. However, she discounted claims from the Russian military that poverty was pushing the military towards mutiny. "It's an extremely serious problem, but there are no signs that troops will drive into the Kremlin in tanks," she said.
In Europe, aspirations to a defence and security identity that is not dominated by the US are not matched by resources, the report notes. "There is a mismatch between the call for a stronger European pillar in the Alliance and the provision of military capabilities."