Pakistan’s defense budget

Like it or not, Pakistan’s defense budget always attracts a lot of attention both from the United States of America (USA) and India: USA, because its important interests are engaged in Pakistan and the surrounding region and India, because it has gone to war 3 times with Pakistan since 1947. However, when making a historic assessment of the Pakistani defense budgets over the years, the matter should really be looked at and evaluated from the perspective of our own security concerns, both external and internal. And it is in this context that we have to maintain a careful balance between the ever present financial constraints of a struggling Pakistani economy and the growing challenges on national and regional security. On one hand we have to be mindful of what the Indians are doing to beef up their defense spending and on the other hand also be aware of the reality that Pakistan is in the midst of a war on terror since 2001; a war that has cost the nation dearly in terms of personnel, material and finances, and more importantly a war that has yet to be taken to its logical conclusion: defeating the enemy within.

India recently (in February 2016) announced its 2016-17 fiscal budget and defense got $51 billion, 2.25% of India’s GDP. In real terms though the Indian defense budget would be even higher since pensions, border forces, and nuclear warheads/missile development are not included in this amount. In comparison (as per analysis released by Pakistan Ministry of Defense) Pakistan’s defense budget is the lowest in the region. It spends roughly the same allocation as a percentage of GDP (2.30%), but we all know that Pakistan’s GDP is much smaller than that of India; about one eighth. Last year, India overtook Germany to rank at number 8 in the list of countries with the highest military expenditure. It spent more money on National Defense than countries like Germany, Brazil, South Korea, Italy and Canada. Pakistan on the other hand ranks at number 27 on the Global Index of Defense Budgets and in 2015-16 spent about $7 billion in its military budget. By the year 2020, India is expected to emerge as the third-biggest country in terms of defense-related expenditures, behind the USA at number 1 and China at number 2. It is expected to spend a whopping $70 billion in the year 2020 on Military Power Projection leaving Pakistan so far behind that it would be virtually impossible for Pakistan to even dream of matching the Indian spend, in the process leaving it more and more vulnerable against a stockpile of military prowess developing on the not so friendly eastern side of its borders.

The thing is that with India’s economy expanding at a much higher pace than Pakistan’s – India’s GDP is growing at +7%, whereas, Pakistan’s GDP growth still hovers around the 4% mark – and given that the existing Indian economy is already nearly 8 times the size of Pakistan’s economy, essentially in economic terms India virtually adds one whole of Pakistan’s total economic turnover to its economy every year. The next question which then arises is that are India’s armed forces also expanding in the same proportion, i.e. adding to their military might every year equivalent to the whole of Pakistan’s annual defense budget? The answer is: Yes.

India is frantically building and inducting Aircraft Carriers, Su-30MKI jets, artillery guns, stealth destroyers, stealth frigates, conventional and nuclear submarines, various offensive and defensive missile systems, military satellites, new mountain strike corps, attack helicopters and much more every year. Agreed that Pakistan’s economy in comparison to its Indian counterpart has serious size limitations, but in wake of such weapon frenzy by India, it will be foolhardy for it to sit idle and not work on developing a credible defense to safeguard its sovereignty.

So naturally in response, Pakistan’s Defense Ministry would be looking at a higher allocation in the coming fiscal budget 2016-17, as it plans to acquire and mobilize a new weapon system and with Zarb-e-Azb in full swing it needs more funds to tackle the prevailing law and order and security situation within the country. In addition, the nuclear development program requires continuous resource allocation because one must not forget that Pakistan tested in response to India’s tests, as otherwise given India’s conventional superiority plus nuclear weapons would have become an unacceptable threat to Pakistan amidst an environment of distrust and unresolved issues between the two countries. While, given the asymmetric power situation, Pakistan is unlikely to provoke India but then again India on the other hand has a Cold Start Doctrine that means a sudden strike by it against Pakistan if there is a terrorist event in India and by the way it will be India that determines whether or not it was sponsored by Pakistan! Threat of war aside, a focus on our necessary defense needs also means that it allows us to maintain strategic stability in our relations with India as well as Afghanistan since there is a conscious realization here that our very own internal stability and prosperity depends on regional stability.

Various myths pertaining to Pakistan’s defense budget have been created within and outside of Pakistan. The reality however is that given the size and dimension of national security challenges that Pakistan has been facing over the last two decades, its defense spending as a percentage of its GDP is actually much less than other countries with much lower threat levels. A country’s defense spending depends on a combination of different factors that include: war or the perceived risk of war; security environment such as military expenditure incurred by neighbors; the momentum of the regional arms race; attitude of neighbors, meaning they are friendly or hostile; geo-strategic considerations; and last but not least, availability of economic resources. Pakistan too has to factor in all these elements when deciding what it needs to spend on its defense. Contrary to the general perception, Pakistan’s defense spending (in purchasing power terms) as a percentage of its GDP and in relation to the various new tasks now shouldered by the Pakistani military, has actually been registering a decline; especially when viewed in proportion to the additional responsibilities the armed forces have had to assume in recent years – taming extremism, countering terrorism, overcoming destabilizing missions of foreign agencies, fighting separatists, protecting civilians, fighting resultant destruction from natural disasters and calamities, and rooting out corruption. Divide the available resources between the funds required in supporting operations against all these new challenges and the total allocation appears rather meager.

The dilemma being that while the economic managers don’t have much fiscal space to play with, Pakistan’s current high security needs obviate any possibility of curtailing defense expenditure, which already are quite constrained. In fact, with high internal risks and mounting external pressures both on our eastern and western borders, security will need more funding. All indications suggest that India is now in the process of developing a nuclear missile shield. If this happens, it won’t be a defensive arrangement as the name might suggest but an offensive deployment of radars and ballistic missiles designed and deployed to take down incoming missiles at a far-off distance; thereby neutralizing our strategy of off-setting conventional warfare disadvantage by developing nuclear deterrence. With so much at stake, it is imperative that we do not fall behind in securing our national defense and it is in this context one hopes that even if an increase in 2016-17 is not possible, at least the historic pace of increase in our security/defense expenditure should continue at any cost.

The writer is an entrepreneur and economic analyst. He can be contacted at

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