The Ministry of Defence has sought Rs 920 billion - an 18 percent increase over the current year's budgeted Rs 781 - for the fiscal year 2016-17. In the outgoing year the defence budget was increased by 11.6 percent against the allocation for the previous year of Rs 780 billion from Rs 700 billion in 2014-15. However, due to resource constraints the allocation under the defence ministry head for the next year is not expected to be more than Rs 860 billion.
The increase in the demand for the next year is dictated by the enhanced threat perception which is said to have increased due to the current geo-political situation and Pakistan's strategic location in the region as well as by the additional role being undertaken by the armed forces for providing security to the on- going projects of China-Pakistan Economic Corridor (CPEC).
The ministry is also said to have requested that sales tax and customs duties on defence imports should be waived off and that powers to waive off austerity measures of defence organisations should be given to secretary defence and not the secretary finance. The ministry has also sought preferential treatment in pensions suggesting that there should be one rank-one pension formula for the defence services.
Expenditures on defence in Pakistan have always been dictated and determined by our foreign policy which has remained a closely guarded preserve of our defence institution. And this policy has, in turn, remained hostage to the Kashmir question which, in turn, has remained the centre- point of our security. Of course, no one would grudge the price, no matter how high, to pay for his country's security. And since this price is being fixed solely by the defence institution, the emphasis has always been on ever more sophisticated weapon systems capable of neutralising offensive capability of our Eastern neighbour.
This strategy has from day one made the national economy subservient to security rather than security becoming subservient to the economy. It was always our security needs that had dictated our annual budgets irrespective of our ability to meet these security-related demands from our own resources.
During the Cold War the US military assistance had filled this expanding gap between our security needs and our ability to generate resources on our own. As soon as the Soviet Union vanished from the scene, the US also walked away from the region. As a result the country suffered enormous economic setbacks during the 1990s while its defence needs were being met by China, Saudi Arabia and the UAE. The second Afghan war once again saw the US rushing back to the region with its dollar dole. And now having seemingly lost interest in the region or perhaps having come very close to our arch enemy, India, Washington seems reluctant to even help finance a deal for eight F-16s. With the oil price plummeting we can hardly expect Saudi Arabia and the UAE to be as forthcoming as they were in the 1990s. And it is a moot point if China would be able to fill the gap that is being created due to drying up of our traditional sources of dole.
So, one would like to believe that it is now time for the civilians and the armed forces to sign a charter of economy (CoE) to make our security subservient to our national economy, of course without giving up our stated position on Kashmir or letting India out-flank Pakistan in the region using Kabul and Tehran. How does one do this? Well, libraries of our staff colleges should be full of analytical reports on how our foreign and defence policies have fared over the last 69 years. These reports would show what we have gained by the single-minded pursuit of these policies and what we have lost. And as can be clearly seen these policies worked to an extent only because of massive external help-both military and economic. China alone would not be able to shoulder this massive external burden. In fact we should not in our own self interest burden China with such a responsibility.
Many bitter enemies of yesteryears have become close economic allies with vested self interests in each other's economic well-being using what is called geo-economics to determine their relations rather than geo-strategy or for that matter geo-politics. The CoE that one wishes the civilians and the military to sign one hopes would be based on a strategy inspired by geo-economics with a view to trying to solve the country's security problems rather than continue to waste our energies and resources in trying to achieve the unachievable.
Indeed what is needed urgently is a CoE to be signed between the civilian government and the military institution and not one between the ruling party and the opposition as is being suggested by finance minister Ishaq Dar. There already exists an unspoken CoE among all civilian politicians. Even the Jamaat-e-Islami or for that matter the Jamiat-e-Ulema-e-Islam seems to have found the system of market economy that is practiced in the country nearer to their beliefs than the so-called socialist economic system against which they had waged a jihad with the guns and gold doled out by the capitalist world.
The PPP had already adopted what the late Benazir Bhutto used to call the New Labour ideology which again was not very much different from Mrs Thatcher's market mantra. And every time Imran opens his mouth to talk about the economy he sounds more like a champion of the cruel capitalistic system that is prevalent in the UK. And that leaves the ruling PMLN whose very leadership is the product of the market economy sans any regulations. So, no matter which of the above mentioned parties is in the saddle in Islamabad, there would not be much of a difference in the official economic policies with, of course, a slightly differing emphasis on priorities.
All have embraced the trickle-down theory and all use the GNP per capita as a measure of economic growth which is based on statistics calculated by dividing the total national income produced equally among all the people in the country. But these averages camouflage the crass reality of an ever-widening gap between the rich and the poor with a handful of rich owning almost the entire wealth of the nation while the teeming millions are seen running from pillar to post for two square meals a day.