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Defence budget

Updated June 10, 2019

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THE announcement that the military will be “foregoing routine increase in annual defence budget” has justifiably triggered a discussion around this crucial allocation.

For many years, perhaps decades, an argument has been made that Pakistan spends too much on defence, and that its developmental and social service delivery priorities have suffered as result. In response, the argument has been advanced that Pakistan faces a far larger adversary that spends much more on enhancing its military capabilities, and even though our allocations seem large when viewed as a proportion of GDP, they are small by comparison to the scale of the threat the country faces.

The old ‘guns vs butter’ dilemma is possibly the only real economic conversation that the country has had since at least the 1980s. What complicates the picture are those parts of the budget that are spent by the defence establishment but are declared under civilian heads, such as through the Public Sector Development Programme, or the separate allocation for military pensions that is declared in budget documents but is outside the routine defence budget.

On top of this, allocations for military procurement and expenditures for the war against terrorism remain opaque. So large amounts of defence allocations are not captured in the figure for the defence budget, where nearly half of the figure is meant for salaries.

Now, and in the past as well, when the country has gone through its cycles of austerity, with sharp reductions in expenditures, the defence establishment has shared in the burden. In the years 2009 till 2013 for example, when the country was still recovering from the impact of the great crash of 2008 and going through a period of intense austerity, increases in defence allocations dropped to between 2pc to 3pc per annum.

Beyond the actual numbers, the conversation around this allocation now needs to move towards the broader theme of reform.

To begin with, our understanding of defence allocations can benefit from greater transparency and disclosure. It was a hard-won reform when the government persuaded the military establishment to share more than a single line in the defence budget, but there is still plenty of room for improvement in the disclosure regime of defence spending.

After that, the next step would be oversight to see how the money is being spent. That is when genuine reform can be said to have begun.

Published in Dawn, June 10th, 2019