This is an alternative Earth-like world, which has just entered the rough equivalent of Cold War. The primary contenders are the large quasi-socialist country with a strong command economy, opposed by the Coalition. Both have yet to develop nuclear weaponry, but on the other hand, many countries have already mastered advanced information technologies, comparable to today's Earth IT level.
The "Coalition" - is a transnational union of numerous small island states. These states are formally independent from each other, but they share a lot of things, like common internal market, free movement between islands, transnational legislation and so on - just like the European Union today. But unlike EU, these states are held together not by a supranational government-like body, but by a group of wealthy transnational companies.
The archipelago's individual island states do not have their own armies (it's too costly for them), so they rely on the protection from private military companies. These PMCs defend the entire Coalition from outer threats, while member countries pay for their services, so they don't have to deal with their own military spending. Unlike it's neighbour, the Coalition's military isn't large, instead coalitional PMCs rely on cutting edge technologies and small, expensive, but highly trained special forces, consisting of contract servicemen.
The Coalition's rival - the local equivalent of USSR - doesn't really have advanced military tech (its army and navy are like early 1950s level, compared to the corporatocracy's 1970-1980s technologies). However, the continental country's got a large population (the populations difference between these two are like between modern China and Japan), and thus it can afford to recruit and maintain quite a large army. Plus, having an authoritarian regime and universal conscription system also helps.
My question is, would the described factions make equal opponents in terms of military strength in a somewhat realistic setting?