India prods Pakistan to spend more on defence

Columnist SULTAN AHMED warns about Indian attempts to provoke increased expenditure by PAKISTAN.

India has raised its military spending by a staggering 28.2 per cent following a 11 per cent increase last year. What it has done has not come as a total surprise as it had indicated after the Kargil crisis it would raise the defence outlay to 3 per cent of its GDP from 2.3 per cent.

Despite the increase in its military spending by 3 billion dollars it has not touched the 3 per cent mark. But finance minister Yashwant Sinha and Prime Minister Atal Behari Vajpayee have promised more funds as the need arises.

Pakistan has dubbed the Indian action as a proof of its hegemonistic design in the region, which President Clinton has described as “the most dangerous place in the world today” primarily because of India’s military designs.

After saying that, how should Pakistan respond to the vastly enhanced Indian military outlay and what it signifies politically and economically? And Pakistan is not the only country in the region to be upset by the Indian moves as India has a tendency to rely on strong arm-methods in its relations with them as well.

As things stand today the increase in India’s military spending is more than the total defence spending of Pakistan at the current exchange rate of both currencies. While Indian outlay has gone up by Rs. 130 billion, Pakistan’s total military outlay this year at its lower exchange rate is Rs. 142 billion.

And India’s total military spending of Rs. 580 billion is more than the total Pakistani budget for the current year of Rs. 705 billion at its lower exchange rate inclusive of the external borrowing of Rs. 59.3 billion.

Pakistan had, in fact, lowered the military spending last year from Rs. 145 billion to Rs. 128 billion, and the current year’s outlay at Rs. 142 billion is lower than last year’s budgeted outlay of Rs. 145 billion. And out of its current outlay of Rs. 142 billion Gen. Musharraf has announced a saving of Rs. 7 billion which is to be used for poverty-alleviation. The trend in Pakistan is clearly in the opposite direction, and rightly so, in view of the futility of an arms race in the region.

The Chief Executive, hence announced immediately after the Indian budget that Pakistan did not want to participate in an arms race in the region. He said an economically sound Pakistan would be a great defence against any aggression. His realistic and far-sighted decision is, indeed, proper and the right course for Pakistan to follow.

If we opt for a contrary course, where will it lead us? We cannot spend too much of the budget on defence as it is already consuming 22 per cent of the total budget, while debt servicing takes away 45 per cent from which there is no immediate escape? And a little more military spending cannot make us militarily stronger vis-a-vis India which is adopting a perverse policy despite its current budget deficit of 5.6 per cent of the GDP, which may not come down to 5.1 per cent next year despite setting that target.

Pakistan is already spending five per cent of the GDP on defence and it has to be wary of spending more, particularly when its development outlay has slipped to 3.6 per cent of the GDP, and that has been in the range of 3 per cent for the last three years as compared to 7 to 9 per cent in the early 1980s. A developing country which spends too little on development has to remain an underdeveloped country with a feeble economy for long, more so when it has large population of 140 million.

Even out of the total budget, inclusive of external aid, the annual development plan outlay is only 18 per cent while debt servicing takes away 45 per cent or one half of the budget outlay. That is how lopsided our fiscal picture and development pattern is.

Indian strategists led by K. Subramanium have been advocating that India should raise its military spending to 3 per cent of the GDP and force Pakistan to spend far more on defence, as the Soviet Union did, and implode in the process definitively. Should we follow that Indian prescription mindlessly or out of sheer fear or national pride? Instead let us try to profit by the global experience.

The collapse of the Soviet Union is too recent an event for the world to forget. Eleven years after that epoch-making event Russia and the former Soviet republics are in deep trouble politically, economically and culturally. Their transition is proving to be too prolonged and painful.

Although Yugoslavia was not part of the USSR it was another state which collapsed and split into pieces in an excess of violence and total disorder.

Vietnam in the 1970s provided the best example of a people who were determined to oppose the most powerful country in the world and defeat it. Earlier they made France withdraw from Vietnam, and then the humiliating US withdrawal followed.

Closer home Iran with its disorganised army was able to withstand the Iraqi invasion backed by the Western world altogether. It was the will of the Iranian people which prevailed over the arms of Saddam Hussain and his Western backers.

And now Saddam Hussain is showing how he can stand up against the US and its Western allies even if the Iraqi people may not be really with him out of their own volition.

Still close home, we had the Afghan example of a people with external assistance resisting the Soviet military might with the latest weapons in use. It has been said the prolonged and suicidal Soviet engagement ultimately brought about the collapse of the Soviet Union. Afghanistan was regarded as the Soviet Vietnam.

On the other side we had the example of East Pakistan in 1971 which showed that if the people are not with the rulers half the country can be lost quick - in less than a fortnight. What eventually matters is the will of the people, the will to fight for their country, resist aggression and triumph over the aggressors despite their vast arms and large funds.

Hence Gen. Musharraf is giving importance to the rapid development of the country with poverty alleviation as his top priority.

Our nuclear weapons and the delivery system based on missiles are sufficient deterrent against any invasion of Pakistan. When it comes to nuclear weapons, it is not an issue of the number of weapons on both sides. In this area quality matters far more than quantity.

So even Dr. A.Q. Khan says that after acquiring nuclear deterrence, Pakistan should focus on economic development, and it is the industrial strength of the country which enhances the defence capability of the country.

In advanced countries like the US the government does not make all the advanced weapons they need. Companies like General Dynamics, Boeings and McDoland Douglas make many of the weapons needed by the US. In fact, they do a great deal of research and come up with new and more deadly weapons.

But in Pakistan the ordinance factories or the Kamrah Rebuild Factory make most of the weapons. And all call for heavy investment which the government does not have. They can contract out manufacture of components of the weapons, but I am told that private manufacturers lack the required precision in the parts needed, and hence the government agencies have to manufacture what they need. This is the outcome of inadequate industrial development which needs to be remedied quickly.

If we have to spend more on defence we need far more resources than we have. And that means higher economic growth instead of the average of 3 per cent in the second half of the 1990s after an average economic growth of 6 per cent in the 1980s. Expected economic growth this year is 4.5 per cent, because of the improvement in agriculture primarily. But we need to recover the average economic growth of 6 per cent soon, if not more. This is all the more imperative when the population growth is around 6 per cent which will give us a per capita income growth of 3 per cent, which is not high at all.

India is to record an economic growth rate of six per cent this year, and expects the growth rate of 7 to 8 per cent in the next ten years. Wanting a far higher growth is one thing and making that a reality is another. But India is clearly on the growth path led by its computer software industry after it has achieved self-sufficiency in food for its billion people. And that makes its leaders too confident about the future of India, and talk in rather threatening terms to Pakistan.

The disparity in the size and strength of the India and Pakistan, as seen by the Economist of London, is such that it talks of them as the elephant and the Pekinese. Pakistan can change such perceptions only if it comes to the right track politically and economically and sustains a high growth rate along with social justice.

At the moment we are to rely a great deal on external assistance for rapid development of the country. We are seeking external aid, external loans and investment. These can come to us on very hard terms. We need adequate political and economic stability and great deal of improvement in law and order to achieve that. Substantial foreign investment can come only if we have adequate infrastructure which demands large and sustained investment.

Now we are seeking foreign assistance not only for development but also for poverty-alleviation. We are to seek a 3 billion dollars IMF programme spread over three years to reduce poverty and additional assistance from the World Bank and the Asian Development Bank. We are clearly starting from the basics. And we have to make the best use of the foreign funds and local resources we manage to mobilise.

All that demands a tension-free environment in the region. That is possible only if India agrees to talk to Pakistan for resolution of the disputes between them. India now says it can talk to Pakistan’s military rulers but has come up with the rider that Pakistan should stop assisting the Mujahideen in Kashmir. It is to be hoped that Clinton’s visit to India eventually results in India seeking a negotiated settlement with Pakistan for the good of the region as a whole.