Guns Versus Butter Debate in South Asia

[Riaz Haq]

I have just published on my blog, Haq's Musings, a guest post by Colonel Pavan Nair, a retired Indian Army officer, a detailed analysis of the Indian defense spending in the context of the nation's growing needs for social spending on food, education and health care. Col Nair prefaces his analysis by lamenting that "defense economics has not been a subject for serious study or debate in Indian academic or military circles. Little or no literature is available with the exception of a few books in the area of defense accounts. Economists and activists have long argued that defense related expenditure needs to be curtailed. Opinion is clearly divided between the developmental lobby and strategic thinkers who wield influence with the political leadership."

Nair then goes on to accept the challenge of defense economics in India by laying out his case with lots of data and sources, and concludes with the following:

Besides external defense, internal security and human-development form a vital part of the overall security and well-being of the nation. Is the rupee being spent wisely? The answer is in the negative both in terms of quantum and efficacy. DE has risen to unsustainable levels in the last decade primarily on account of dependence on imports and nuclearization. There is a trade-off between defense and developmental spending specifically in the area of health which becomes visible in poor human-development parameters like infant mortality rates and child malnutrition. Bangladesh is well ahead of India in these parameters. Internal security has been neglected for too long. There is a need to balance overall expenditure to meet the challenge of the emerging economic and strategic scenario. Force levels need to be reviewed. Like obsolete equipment, obsolete organizations should be dispensed with. The army has become equipment and staff oriented. It also remains manpower-intensive with too few junior officers and a large tail. The Thirteenth Finance Commission could look into aspects of internal and external security to come to a reasonable limit for both. It would also be expedient if the Commission specifies what constitutes defense spending and whether Defense Services Civil Estimates should form part of defense expenditure. DE must be capped at current levels.

I agree with Col Nair's conclusion, and would like to see similar detailed analysis of Pakistan's defense expenditures. Though the problems of poverty and hunger in Pakistan are a bit less serious than in India, Pakistan suffers from high illiteracy and low levels of human development that pose a serious threat to its future.

India has the dubious distinction of being among the top ten on two very different lists: It ranks at the top of the nations of the world with its 270 million illiterate adults, the largest in the world, as detailed by a just released UNESCO report on education; India also shows up at number four in military spending in terms of purchasing power parity, behind United States, China and Russia.

Not only is India the lowest among BRIC nations in terms of human development, India is also the only country among the top ten military spenders which, at 134 on a list of 182 nations, ranks near the bottom of the UNDP's human development rankings. Pakistan, at 141, ranks even lower than India.

India also fares badly on the 2009 World Hunger Index, ranking at 65 along with several sub-Saharan nations. Pakistan ranks at 58 on the same index.

Access to healhcare in South Asia, particularly due to the wide gender gap, presents a huge challenge, and it requires greater focus to ensure improvement in human resources. Though the life expectancy has increased to 66.2 years in Pakistan and 63.4 years in India, it is still low relative to the rest of the world. The infant mortality rate remains stubbornly high, particular in Pakistan, though it has come down down from 76 per 1000 live births in 2003 to 65 in 2009. With 320 mothers dying per 100,000 live births in Pakistan and 450 in India, the maternal mortality rate in South Asia is very high, according to UNICEF.

The reality of grinding poverty in resurgent India was recently summed up well by a BBC commentator Soutik Biswas as follows:

A sobering thought to keep in mind though. Impressive growth figures are unlikely to stun the poor into mindless optimism about their future. India has long been used to illustrate how extensive poverty coexists with growth. It has a shabby record in pulling people out of poverty - in the last two decades the number of absolutely poor in India has declined by 17 percentage points compared to China, which brought down its absolutely poor by some 45 percentage points. The number of Indian billionaires rose from nine in 2004 to 40 in 2007, says Forbes magazine. That's higher than Japan which had 24, while France and Italy had 14 billionaires each. When one of the world's highest number of billionaires coexist with what one economist calls the world's "largest number of homeless, ill-fed illiterates", something is gravely wrong. This is what rankles many in this happy season of positive thinking.

It is time for major South Asian nations to deal with the urgent need for careful balancing of their genuine defense requirements against the need to spend to solve the very serious problems of food, education, health care and human resource development for securing the future of their peoples.

Related Links:

UNESCO Education For All Report 2010

India's Arms Build-up: Guns Versus Bread

South Asia Slipping in Human Development

World Hunger Index 2009

Challenges of 2010-2020 in South Asia

India and Pakistan Contrasted 2010

Food, Clothing and Shelter in India and Pakistan

[Riaz Haq]

Here's an Op Ed piece in The News by columnist Farrukh Saleem:

Myth 1: The allocation for defence is the single largest component in our budget. Not true. The single largest allocation in Budget 2013-14 went to the Public Sector Development Programme (PSDP). The second largest allocation in Budget 2013-14 went to servicing the national debt. The third largest government expenditure, including off the budget allocations, are the losses at public-sector enterprises (PSEs). Yes, the fourth largest government expenditure goes into defence.

Myth 2: The defence budget eats up a large percentage of the total outlay. Not true. In Budget 2013-14, a total of 15.74 percent of the total outlay was allocated for defence. PSDP and debt servicing were 30 percent each. What that means is that more than 84 percent of all government expenditures are non-defence related.

Myth 3: The defence budget has been increasing at an increasing rate. Not true. In 2001-02, we spent 4.6 percent of our GDP on defence. In 2013-14, twelve years later, our defence spending has gone down to 2.7 percent of GDP.

Myth 4: We end up spending a very high percentage of our GDP on defence. Not true. There are at least four dozen countries that spend a higher percentage of their GDP on defence.

They include: India, Egypt, Sri Lanka, the United States, the United Kingdom, South Korea, France, Eritrea, Oman, Saudi Arabia, Israel, Jordan, Liberia, Brunei, Syria, Kuwait, Yemen, Angola, Singapore, Greece, Iran, Bahrain, Djibouti, Morocco, Chile, Lebanon, Russia, Colombia, Zimbabwe, Turkey, Georgia, Guinea-Bissau, Ethiopia, Namibia, Guinea, Turkmenistan, Kyrgyzstan, Algeria, Serbia and Montenegro, Armenia, Botswana, Ukraine, Uganda, Ecuador, Bulgaria, Lesotho and Sudan.

Myth 5: The Pakistan Army consumes the bulk of the defence budget. Not true. In the 1970s, the Pakistan Army’s share in the defence budget had shot up to 80 percent. In 2012-13, the Pakistan Army’s share in the defence budget stood at 48 percent.

Now some facts:

Fact 1: The Pakistan Army’s budget as a percentage of our national budget now hovers around eight percent.

Fact 2: Losses incurred at public-sector enterprises can pay for 100 percent of our defence budget.

Fact 3: Pakistan’s armed forces are the sixth largest but our expenses per soldier are the lowest. America spends nearly $400,000 per soldier, India $25,000 and Pakistan $10,000.

Fact 4: Of all the armies in the world, Pak Army has received the highest number of UN medals. Of all the armies in the world, Pak Army is the largest contributor of troops to the UN peacekeeping missions.

Mark Twain once remarked, “Get your facts first, and then you can distort them as much as you please.”

http://www.thenews.com.pk/Todays-News-9-246627-Defence-budget