By Habiba Urooj
Pakistan’s economy has been almost ruined. Terrorism, bad governance, poor economic planning, ineffective and corrupt revenue collection machinery, non-development spending, high rate of taxation have had a negative impact on our economy. Our economic managers are struggling hard to make our economy better and making policies for this thing under the supervision of our leaders. Because of a budget deficit, our leaders started borrowing from the IMF to bridge the deficit in budget.
In the budget component, there are two components of especial interest:
1. Debt servicing
2. Defense budget
A budget is a plan that outlines an organization’s financial and operational goals. So a budget may be thought of as an action plan; planning a budget helps a business allocate resources, evaluate performance, and formulate plans.
1.2 DEFENCE BUDGET
A military or defense budget of an entity, most often a nation or a state, is the budget and financial resources dedicated to raising and maintaining armed forces for that entity. Military budgets reflect how much an entity perceives the likelihood of threats against it, or the amount of aggression it wishes to employ. It also provides an idea of how much finances could be provided for the upcoming year.
1.2.1 DIVISION OF DEFENCE BUDGET
Defense budget mainly divided in
I. Military defense
ii. Employees related
iii. Defense administration
In Military defense, which is related to the weapons import, machinery related expenditures of armed forces. Employee related deals with the civilians of armed forces, e.g. their pensions etc. Defense administration is related to the expenditures which are given to the forces for the institutes which are running under the armed forces e.g. army or navy training colleges, hospitals etc.
1.3 PAKISTAN’S DEFENCE STRETEGY:
Pakistan is mainly focusing on three things while making defense strategy.
1.3.1. SECURING THE BORDER FROM NEIGHBOURING COUNTRIES:
Pakistan has security deficit with regard to its neighboring countries like Afghanistan and India, where from these two countries there’s a real or peceived threat of war or smuggling issues, etc. and Pakistan does not have a large enough army to secure its border from these two countries. India disposes of forces that is almost three times as large as Pakistan’s, and this disparity is only partially offset by India’s need to defend its border with China. Senior officers of armed forces are well aware of this security fact, that’s why they are willing to increase the strength of armed forces.
1.3.2. WAR AVOIDANCE:
War avoidance has been the primary goal of Pakistani security policy, especially since the Zia years because past experience has taught the nation that it is very hard to fill the gap of war destruction. At the same time, the military accepts the fact that war is possible and is determined to behave itself well.
1.3.3. OFFENSIVE DEFENSE STRATEGY:
Pakistan, like every other nation, declares formally that its forces and strategy are defensive. Pakistan is facing a much superior enemy, uncertain sources of supply, and little strategic depth, Pakistan cannot expect to absorb an initial attack and to successfully fight a protracted defensive war. Pakistan is in favor of “offensive defense,” a strategy which provides for quick preemptive strikes once a war begins in order to disrupt an enemy advance and inflict high costs.
1.4 HISTORICAL BACKGROUND:
When Pakistan came into being in 14th of august 1947, the defense budget was about Rs. 100 Crore. As Pakistan and India used to be one nation – and then they separated, – there is traditionally a rivalry condition between the two countries since they got independence in 1947. At that time, Pakistan was in a burden of high debt and the defense cost was 70% of Pakistan’s overall budget.
In Pakistan, the defense budget first came after the Indo-Pak war of 1965. It was the first time that there were presented as defense services items in the “demands for Grants”. Separate Grants were demanded for all forces: for navy, army and for air force. After the 1965 war, armed forces felt that they had to establish and build up their defense capabilities and if their budgetary spending was openly available.
Between 1980 and 1989, Pakistan’s spending almost doubled from Rs.63.6 billion to 201.2 billion rupees during the time period of just one decade. Most of this spending was directed at fighting the Afghan war as Pakistan’s defense budget more than doubled while development budget increased only by a slight figure.
Pakistan’s defense budget is basically based on providing stringent funding for the military to maintain a minimum deterrence capability against India. Because of the increasing rate of terrorism in Pakistan, there is high demand for armed forces for security purpose has been increased as well. In 2009/10, Pakistan’s revised Defense Budget was approximately Rs 378 billion, while proposed allocation for 2010- 2011 is Rs 442 Billion showing an increase of 16.5%. India’s defense allocation for 2010-11 is Rs.147, 344 crore (Rs.1.47 trillion), up 8.13 percent from the revised estimates of the previous fiscal year. Pakistan’s Defense Budget is approx $5 billion as compared to India’s $32 billion.
Habiba Urooj has a Masters in Economics, with interests in econometrics, Developmental economics and International Economics.