Leadership: Fighting The Phantom Menace With Borrowed Money


June 14, 2011: This year, Pakistan is increasing its defense budget 12 percent (to $5.7 billion). Last year, the increase was 17 percent. A third of next year's government budget of $29.1 billion is borrowed money or gifts from foreign nations (mostly the United States). While Pakistan increases its defense spending every year, to try and keep up with archrival India, it rarely goes up as much as it has since September 11, 2001. These increases are largely due to U.S. aid (over $40 billion) and economic incentives (allowing Pakistani goods into the U.S. at lower customs duties) The increases in the past few years have mostly been due to the war against the Taliban in the tribal territories, and Islamic terrorism in general. This war was a self-inflicted wound (Pakistan invented the Taliban in the early 1990s, and began sponsoring Islamic terrorists in the late 1970s). Many of these Islamic militant groups turned on Pakistan when Pakistan was given the choice, after September 11, 2001, to either become an ally of the United States (in the war against Islamic terrorists), or an enemy. It was an offer Pakistan could not refuse, but there were expensive consequences. Thus Pakistan insists that American aid is not sufficient to pay for what it costs Pakistan to fight the Islamic terrorists it created.

Then there is India, the traditional enemy. India no longer considers Pakistan the main threat, that role has been taken over by China (a major ally of Pakistan). Despite the terrorist threat, Pakistan has used a lot of the American aid to improve its capabilities against India. But that situation is pretty hopeless. Perhaps noting that, a lot of the additional money for the military went to increasing pay and benefits for the troops. The generals are already rich from what they steal from the budget and American aid. That has been noticed by many less wealthy Pakistanis, thus the raises for the troops.

The true state of Pakistan's defense situation was revealed three years ago when, for the first time in over four decades, Pakistan released information on its defense spending. That year's spending was $4.1 billion. That explains why this data has been kept secret for so long. That's because Pakistan's military rival, and neighbor, India was, two years ago, increasing its defense budget by nearly 50 percent, to $39 billion. The difference should be no surprise. India has six times the population (at 1.1 billion) and 7.5 times the GDP ($1.1 trillion compared to $145 billion). India's economy has been booming for over a decade, while Pakistan's largely stagnates.

This military spending disparity has long been suspected, even with the secrecy. The GDP differences were well known, as were the details of how the two forces were equipped. This, of course, is why Pakistan put so much effort into developing nuclear weapons. Only this would provide a credible defense against a foe with superior conventional forces. Pakistan has been spending about three percent of GDP on defense, while India was long been spending two percent (the proposed increase will make it three percent). The global average back then was about 2.5 percent. Now it's closer to 2.8 percent, while Pakistan's is a bit over three percent. Most of the most powerful military powers on the planet spend at least three percent of GDP on defense. Pakistan has been spending money it doesn't have, in a vain effort to keep up with its much larger neighbor. Now that India has matched Pakistan's three percent, Pakistan has to seriously consider peace, because they can't afford to go above three percent of GDP.



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