Pakistan defence budget: A reality check

Pakistan defence budget: A reality check

SLAMABAD: The defence ministry has defended the defence budget for the next financial year was necessitated by the challenging security environment.

“The critics need to also realise the security environment that Pakistan faces today and economic determinants of security,” the defence ministry said in a rare statement on Monday.

The defence spending is to increase to 1.1 trillion Rupees (approximately $9.6 billion) in 2018-19.

The ministry maintained that the “economy of any country cannot grow without security, peace and stability”.

The proposed allocation of Rs1.1tr is being compared with the original allocation of Rs920bn for the outgoing year, which has been computed as an 18 per cent hike — the highest in decades.

However, the outgoing year’s allocation was increased by around 8pc during the course of the year to Rs 998bn. The defence ministry now wants this year’s allocation to be compared with the revised figures, instead of the original allocation, because it wants to avoid the sharp rise in defence spending getting public attention.

“Defence budget for the year 18-19 stands at Rs1,100bn which is 10.2pc increase to the closing year. The routine yearly increase ranges between 10pc and 12pc which caters for inflation, depreciation, rise in pay etc,” the ministry said.

“This year increase in defence budget is also considered a normal increase, keeping in view all internal and external challenges posed to Pakistan,” it added.

Journalists usually measure the defence allocations in terms of the percentage increase over previous year. This does not give a correct view. Therefore, defence budgets for a more realistic analysis are measured in terms of percentage of both overall public spending and of Gross Domestic Product (GDP).

Defence spending share in terms of both total outlay of the budget and percentage of GDP have been going up. Over the past decade or so defence spending was reduced to less than 3pc (around 2.6pc) of GDP and similarly its share in the national pie was also reduced to well under 20pc. It is now once again set to reach 3.2pc of GDP and 21pc of the total outlay for the next year. However the Indian defence budget is more than $63 billion.