The Cost of
Being India-Centric
By Ahmad Faruqui, PhD
Dansville, CA
In recent months, General Musharraf
has repeatedly stated that Pakistan’s foreign
policy is not India-centric. But does this talk
jibe with his actions?
On March 20, Musharraf witnessed first-hand the
second-in-six-months launch of the Babur cruise
missile. One is unlikely to see this nuclear-capable
missile being used against internal enemies, whether
they are irritants in Balochistan or foreigners
in the tribal areas. The only use for the missile
is to counter the threat posed by India’s
Brahmos cruise missile.
In additions, the deal for the American F-16 fighters
is back on track, now that the October earthquake
has receded in the background. Just like Babur,
this high-tech fighter would hardly be the weapon
of choice against internal enemies. It is designed
to neutralize the threat posed by the Indian Air
Force, which in the medium-to-long term is likely
to be armed with F-16s and F-18s, in addition
to Russian SU-30s.
If there was any doubt that Musharraf continues
to pursue an India-centric foreign policy, it
was removed by Islamabad’s decision to hike
its defense budget by Rs. 61 billion. Now, that’s
serious money, representing a billion dollars.
Moreover, it represents a hike of 27 percent in
last year’s defense expenditures of Rs.
223 billion. This increase could not be designed
to match the rate of inflation, which the government
maintains is in single digits. It could not represent
incremental funding to continue the “war
against terror” in the tribal areas or in
Balochistan. It is squarely and simply designed
to keep India at bay, while allowing Pakistan
to push a militaristic agenda in Kashmir.
China’s increasing military profile, in
particular its “string of pearls”
strategy in the Indian Ocean, figures prominently
in the Indian strategic calculus. While the Indian
Army is mostly focused on Pakistan, its Air Force
and Navy are mostly focused on China. The Air
Force is improving its capabilities through the
acquisition of Israeli-made Phalcon airborne early
warning and control systems. The Indian Navy is
on its way to becoming a blue water navy. It is
developing sea denial and limited power projection
capabilities with its upgraded fleet of submarines
and the possible deployment of two aircraft carriers
within the next decade.
Pakistan’s military spending program, being
entirely India-specific, faces an impossible task
of countering a perceived enemy that is six times
larger. Between 1947 and 2006, Pakistan’s
military expenditures showed an annual growth
rate of 11.5 percent in nominal terms and 6.5
percent in constant dollars. These growth rates
match India’s growth rates between 1962
and 2006, which were 11.6 percent in nominal terms
and 7 percent in constant dollars. Even then,
the military balance remains heavily in India’s
favor.
Using an econometric model, one can explain the
evolution of Pakistani military spending almost
entirely by reviewing the evolution of Indian
military spending. The relationship is valid whether
one looks at data in nominal local currency units
or in constant dollars. The model shows that for
every 10 percent increase in Indian military spending,
Pakistan has increased its military spending by
10 percent in the following year. This has been
Islamabad’s way of keeping the local-currency
ratio of Indian-to-Pakistani military spending
roughly around 3:1. During the past four decades,
it has fluctuated between 2:1 and 4:1.
Last year, India spent Rs. 817 billion on its
military. That translates into $18.3 billion (the
Indian rupee is worth about a third more than
a Pakistani rupee). This year, it is expected
to spend Rs. 890 billion ($20 billion), about
9 percent more than last year. So why has Pakistan
raised its defense spending by three times the
amount in percentage terms as India? Because the
ratio (in local currency) between Indian military
spending and Pakistan’s military spending
had deteriorated during the past three years to
almost 4:1. Pakistan’s latest increase will
bring the ratio down to 3:1.
It should be noted that official military expenditures
published by both countries do not include the
cost of military pensions nor the cost of large-scale
nuclear and ballistic missile programs. In addition,
in the case of Pakistan, they do not include the
costs of large weapon systems such as submarines,
tanks or fighters. Like so much else that happens
in Islamabad, the accounting of these additional
expenditures is a mystery.
In India’s case, the budget of the central
government has a large section devoted to military
spending. It tells us that about 40 percent goes
to the capital account and the rest to the current
account. Within the current account, 66 percent
goes to the army, 20 percent to the air force
and 14 percent to the navy. Of the army’s
budget, 42 percent goes to salaries and so on.
The ministry of finance in New Delhi provides
all together some 85 pages of detail on military
spending, a stark contrast to the single line
entry in Pakistan’s budget. It is unfortunate
that Shaukat Aziz has not shown the same zeal
in making military expenditures transparent as
he has displayed in making earthquake relief expenditures
transparent.
This would be a welcome change, since the Pakistani
military has provided no accounting of its expenses
for almost six decades. Now that the military
budget is hitting $5 billion — a very large
amount for any country, let alone a poor country
— the Opposition needs to raise this issue
of military transparency and accountability in
Parliament. This would be entirely appropriate,
given that the official line coming from the Treasury
benches is that that the country has no external
enemies.
The timing is auspicious, since the prime minister
of the only known “enemy” state has
just offered a treaty of peace and friendship
to Pakistan. If Pakistan would rethink its militarily
forward policy on Kashmir and focus henceforth
all its energies on seeking a diplomatic settlement
to the dispute, about half of its military expenditure
would become un-necessary. By so doing, its defense
spending would come down to about 2.5 percent
of GDP, in line with that of other South Asian
countries. Such a move would free up $2.5 billion
dollars, or Rs. 147.5 billion, for developmental
programs.
Thus far, Islamabad shows no sign of changing
its India-centric defense posture. Strategic myopia
has crept into the DNA of Pakistan’s defense
and foreign policy establishment. How long will
it continue to hold back the human and social
development of the 160 million people of Pakistan?
That is the $64 million question. Pakistan needs
to gear up for fighting an economic battle in
the international market place, not for fighting
a war that is unlikely to ever take place.
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