The Rise in Pakistan Defence Budget: What to Read?

Pakistan’s Budget was unveiled last month, as part of ruling Pakistan Muslim League-led government’s last budget for its term before the elections kick-in in the coming months. Of all the allocations, the allocation to defence sector generated headlines, as defence budget rose by 19.6 percent to Rs. 1.1 trillion from previous year’s allocation of 920.2 billion, and over the last five years, it was close to a two-fold increase compared to Rs. 630 billion figure of Financial Year 2013-14. During Financial Years 2016 and 2017, it rose 11 percent and 7 percent respectively.¹ The hike does not consist of the 260 billion meant for soldiers’ pensions.² Moreover, the highest growth was registered in naval allocation amounting to 21.4 percent greater than army’s 19.4 percent, a probable hint towards an increased outlay over the maritime commitments for the CPEC and submarine deal with China.³

The quantum of hike does necessitate an inquiry into whether it could have extra-regional connotations or not, since the move comes in the backdrop of the new low bilateral ties reached post-surgical strikes, when the LoC is characterised by an exponentially rising ceasefire violations and unrest in Kashmir. Pakistan had also expressed its concern over India’s rising defence spending, following which Pakistan reportedly apprised the UN Secretary General about the developments.⁴ In the larger backdrop, the increase comes amidst lukewarm, if not deteriorating, relationship with the United States amidst the pressure to bring the Taliban to the negotiating table, given the deteriorating security section in the nation.

A break up of Rs. 1.1 trillion allocation shows that:-

1. “Rs. 423 billion have been allocated for employee-related expenses”, covering “salaries and allowances paid to troops in uniform and civilian employees”.⁵
2. Rs. 253.5 billion are for operating expenses, consisting of “transport, Petroleum Oil, and Lubricants, ration, medical treatment, training”. ⁶
3. Rs. 282 billion for local purchases and import of arms and ammunition, and,
4. Rs. 141 billion for civil works, which consists of “funds marked for maintenance of existing infrastructure and construction of new buildings”.⁷

While some strategic developments, including operationalisation of the 15,000 troop strong Special Security Division to protect the CPEC, and post-Zarb-e-Azb security measures like fencing of the Durand Line and fortifications along it, may plausibly allude to higher spending, the hike must not be interpreted purely as a threat, given domestic political and administrative issues at play, and since several possibilities surface if one reads into this.

Given the civil-military equation in Pakistan, defence spending is an area where the military establishment has had a greater say despite the civilian administration allocating the budget. A clear discussion is yet to take place in the Pakistan Parliament where one could make out the exact procedure followed on defence spending. Until then, the budget would be open to numerous interpretations.⁸ Also, since major planned acquisitions have been kept out of this hike, much cannot be said about the military’s intent on seeing these figures which appear innocuous, and given the purpose described.⁹

The least that could be inferred from this is that the hike comes at a time when civil-military relationship in the nation is undergoing a critical phase, following Nawaz Sharif’s ouster and when the establishment has cleared the ground for other political players to ensure a fractured mandate, given Sharif’s desperate attempts to play victim as election draws closer. The fact that even at this critical juncture of civil-military ties, the government could allocate more for defence spending reconfirms its writ.

Keeping the speculations aside, Pakistan’s rising GDP growth rates also leave excess resources for the nation to allocate towards defence spending, a phenomenon natural to any growing economy. In last two years, the economy has grown 5.4 percent and 5.8 percent respectively, and during the last five years, revenue collection, according to the federal board of revenue, has risen from Rs. 1980 billion in 2013, and is being estimated at 4888 billion by the end of this year.¹⁰

In Conclusion, while the budget data does not point to any threatening developments per se, what would be of importance is to see how Pakistan’s evolving defence engagements with powers like Russia and US fare over the course of time. Since some big-ticket purchases are on the cards, especially with Russia, such engagements may even impinge on India’s own defence engagements with those nations.

References:

1. “Budget 2018-19: Standout features and key talking points”, The Dawn, Islamabad, April 28, 2018; and “Defence budget set at Rs 920.2bn for FY2017-18”, The Dawn, Islamabad, May 26, 2017.
2. Kamran Yousaf, “Defence budget up by around 20%”, The Express Tribune, Islamabad, April 28, 2018.
3. Baqir Sajjad Syed, “Budget 2018-19: Rs1.1 trillion proposed for defence”, The Dawn, Islamabad, April 28, 2018.
4. Shafqat Ali, India’s massive military spending upsets Pakistan, The Nation, Islamabad, May 05, 2018.
5. Kamran Yousaf, Defence budget up by around 20%”, The Express Tribune, Islamabad, April 28, 2018.
6. Ibid.
7. Ibid.
8. Ibid.
9. Ananth Shreyas, “Pakistan budget allocation for defence rises by 19.6% in 2018-19 fiscal year”, Financial Express, New Delhi, April 30, 2018.
10. Staff Reporter, “Budget to expand economy, encourage businesses, protect vulnerable people: Miftah”, Pakistan Observer, Islamabad, April 30, 2018, and “Despite challenges: Growth rate at all-time high 5.8pc in 13 years”, The News, Islamabad, April 27, 2018.

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