A Chinese supplied Pakistani nuke capable missile

India-Pakistan Arms Race is on, but Pakistan appears to be making the same mistake that the USSR made against the US – getting involved in an arms race against an economically superior enemy. Can Pakistan really compete against an economic superpower and world’s fastest growing economy – India? Here is a report on Pakistan’s defence spending.

The Pakistan government proposes to spike allocation for defence by a whopping 18 per cent to Rs. 1.1 trillion for the next fiscal year from the original estimate of Rs. 920 bn for the outgoing financial year. The increase represents the highest growth in the defence budget in over a decade, as the allocation is 10.22% greater than the revised estimate of Rs. 998 m for the present financial year.

The Top 5 Defence Budgets of the world:

  • US ($602.8 billion)
  • China ($150.5 billion)
  • Saudi Arabia ($76.7 billion)
  • Russia ($61.2 billion)
  • India ($52.5 billion)

According to Defence News, the defence expenditure is 21% of the total budget outlay for the next year and 3.2% of gross domestic product. The increase is consistent with the rate of 20% at which the current expense is estimated to grow the next financial year.

However, the allocation does not give the complete picture of the defence budget, as it does not include Rs. 260 bn for the pension of retired soldiers and the allocation for major weapon procurement.

In his budget speech, the newly appointed Finance Minister, Miftah Ismail, noted the sacrifices rendered by the military and paramilitary forces, and their success in eliminating terrorist hideouts.

The government allowed 11% annual increase in the defence budget on an average except for its first budget 2013-14 when the PML-N government had increased the defence spending by 15%.

The budget does not include several other allocations for the military, including Rs. 260 bn for pension, which is 76% of the federal government’s total pension bill, as well as Rs.45 bn for security enhancement.

While there is no mention of expenditure incurred on the country’s nuclear and missile program, major planned military hardware acquisitions are also not part of the Rs.1.1 tr defence allocation. The defence budget details show that maximum growth (31%) has been recorded in the employees-related expenses over the original allocation for the outgoing year and 16.25% when compared with the revised numbers. This head covers the salaries and allowances paid to troops in uniform and civilian employees.

The operating expense, which covers transport, POL, ration, medical treatment, training etc, has grown by 12.4% from the one allocated in the current financial year.

A 16% increase has been proposed for physical assets that provide for local purchase and import of arms and ammunition and related procurement. The increase is 12.8% over the revised figures for 2017-18.

Civil works that include funds marked for maintenance of existing infrastructure and construction of new buildings get a 10.1% increase over the original allocation, or six per cent when compared with the revised figure.

The ratio at which the budgets of the three forces and the inter-services institutions are proposed to grow also gives an interesting read. The army traditionally gets the lion’s share of the increase, but this time around the navy has been given 21.4% increase over the original allocation, followed by the army (19.7%), Pakistan Air Force (19.5%) and inter-services institutions (18.6%).

It gets even more interesting when the hike is compared with the revised budget for the outgoing year according to which the army got the lowest rise of four per cent whereas the air force 16%, the navy 15.5% and the inter-services institutions 17.3%.

Jane’s Defence Budgets Report had in December forecast that global defence expenditure was set to touch the highest level in 2018 since the end of the Cold War. Over the last decade, the global defence expenditure had fallen from an average level of 2.7% to 2.2% of GDP. However, they are growing for the fifth consecutive year.