Defence as an economic asset
Conventional wisdom is on the side of liberal minded analysts who love to generalize that the money spent on the Defence Services is mostly wasted and trot out considerable statistics to support their argument that countries like Pakistan spend an inordinate amount relative to their Gross National Product (GNP). This not only tends to ride roughshod over geo-political realities (and having a strong deterrence thereof) but tends to minimize the direct and indirect economic benefits accruing from manpower employment and material utilisation.
It is true that much more money is spent on Defence than what Pakistan can afford but that is the price one pays for freedom from Indian hegemony. Skeptics may study the recent example of Sri Lanka which was bullied into inviting Indian interference. At the moment the allocations for Defence Services are almost at par with Debt Servicing, together they eat up almost all the Current Revenues of the Government of Pakistan (GOP). It is also true that we do not give enough to Defence to maintain the relative parity necessary to deter possible Indian aggression, that material gap is covered by the credibility of superior motivation. To cope with these extremes, successive GOP regimes have adopted a pragmatic course that makes compromises but keeps faith with the principle that we cannot depend upon anyone else for succour and are ourselves the best guarantor of our freedom.
Three of the Four Asian Tigers that have enjoyed sustained economic uplift, S. Korea, Taiwan and Singapore, have maintained large Armed Forces much beyond what their GNP could proportionately sustain. Despite these supposed albatrosses around their necks all three are outstanding models of the Asian economic miracle. Therefore, the generalized supposition that a large Armed Forces are a drag on the economy does not gel with the evidence at hand. However, one cannot walk away from the fact that a large outlay for Defence in third world countries takes away crucial funds from development.
A study of the Armed Forces around the world will show that the adjacent region to any such Post gains economically. A brigade of US Armour based in Fort Hood, Texas, which was destined for reduction pre-the Gulf crisis, became the subject of a sustained campaign by the civilian residents around the base that the brigade should not be axed as it would destroy the regional economy. In the US Congress, Senators and Representatives are judged by their voting electorate retentive to their effectiveness in getting defence funds allocated for industrial projects or military locations within that electorate. Most of the major towns and cities of the Indian sub-continent had British cantonments as the nucleus of their economic creation. A hundred years later the economic raison d’etre has hardly changed. In the face of ever-rising prices of urban real estate an opportunity exists for our economic and defence planners to take advantage of in a pragmatic manner, we must re-locate our cantonments in Brigade sizes closer to their operational areas, keeping the development of the local adjacent rural and urban economies in view.
Given that the primary (and now almost only) external threat to Pakistan is from India, the main disposition of our land forces has to be on the eastern borders. At this time, in cities like Lahore and Sialkot, we have virtually no depth and our forces are thus concentrated on the eastern side of the cities. These troops are meant not only to defend these vulnerable cities but also the border belt extending for over 100 miles or so North and South. It makes good strategic and tactical sense to disperse these formations and have Brigade-sized infantry groups in close proximity to their respective operational areas, with similar Brigade-sized armour and artillery units held back in support in-depth instead of being concentrated along with Divisional and Corps formations. The cost of re-locating to modern facilities can easily be offset by the proceeds of the urban real estate sold in Lahore and Sialkot. Obviously this scenario can be repeated down our eastern borders with India. Similarly Corps and Army Reserves can be held back, in some southern parts of Pakistan, even west of the Indus. These smaller cantonments would ensure that a part of the money allocated for Defence Services is funnelled into under-developed regions into the local economies with commensurate development in communications, health, education, etc, emulating the development of the American west in the nineteenth century in many ways, where the railroad and US Army Posts contributed extensively to the local economies, thus opening up the opportunities for the future. While the PAF does not need much re-location except perhaps in the South, the Pakistan Navy is already in the process of moving out of Karachi to the developing sea-ports along the coast like Pasni, Gwadar, etc. To beef up these potential cantonments, in both the strategic and economic senses. Army and Airforce units could be stationed. Similarly, keeping the communication road-routes during war-time in view, we could develop logistics bases on the way to Iran through Zahidan and Turbat. This may also deter drug smugglers from virtually establishing their fiefdoms.
More than the salaries of the servicemen is the cost of material to support their mission, weapons and equipment. While a fair amount is made indigenously, more than what was two decades ago, we have never reached our true potential keeping our vast demand in view. South Korea, Taiwan and Singapore have been off-setting their cost of defence material by large armament exports. This allowed their defence purchases cost effectiveness (and saving of precious foreign exchange) as the material was then produced within their respective countries in quantity. By having buy-back arrangements quality was assured. In many cases foreign manufacturers were more than happy to produce their material in such low-wage areas as it made their products extremely competitive compared to their opposition. Pakistan, with vast needs of defence material, should have been far ahead in production of advanced weaponry and high-tech products within the country. However, an unholy cabal of commission agents acting on behalf of foreign manufacturers and in concert with local technical experts have effectively sabotaged in-country production on one pretext or the other. Any time this country spends foreign exchange to purchase weapons and equipment, that allocation does become dead economically speaking, by having indigenous production of the same, we not only save on the labour cost but divert the salary portion of the product to our own local blue and white collar workers while earning commensurate foreign exchange on the export content. Unfortunately for us it is almost impossible to get rid of the influence of some of these unscrupulous agents who do not hesitate to wine, dine and bribe pliant men in authority to achieve their nefarious proposes, all under a veneer of vocal patriotism, sustained by an old-boy network that remains deliberately and culpably blind to the bribery and corruption.
For every able-bodied man (or woman) who holds down a job in the Defence Services, there at least a dozen people, children, parents, etc directly dependent upon him (or her). In times of severe recession, western countries have resorted to public sector projects to force-feed jobs into the economy though the worker-dependant ratio is not as high as that in Pakistan. Pakistan has almost 700,000 in uniform supported by about 300,000 men in para-military units, a total of almost a million men. Given that services such as cleaning, transportation, tailoring, barbering, etc besides defence-oriented industries and commercial activities such as tea-shops, grocers, etc function in the vicinity of army cantonments because of the presence of Armed Forces personnel, there is a direct contribution to the economy. Jobs are in short supply in Pakistan because there is a time-lag between the liberalization of the economy and the economy actually opening up to create more jobs, the employment offered by the Armed Forces for unskilled workers is extremely necessary to the economy. The Armed Forces take a lot of unskilled people and gives them some practical skills as well as on-the-job training which is useful post-service. One would require many technical training institutes in the civilian sector to accomplish the same. Because of our low literacy level, the Armed Forces have a basic education process at the unit level, becoming increasingly sophisticated as the level of education required becomes higher. One major factor of the economy is the security environment. A bad law and order situation makes potential investment shy and any investment made fly. This has been most marked in Sindh where crime and terrorism has proliferated in the last few years along with the breakdown of the political process. The role of the Armed Forces is primarily to act as a deterrent but when the situation goes beyond the control of the civilian law enforcement agencies (LEAs), to act to bolster the democratic process and prevent it from being overwhelmed and taken over by the agents and forces of disorder. This does not take into account possible civil disturbances in Pakistan’s only port city, Karachi, as well as along the major arterial road and rail routes up-country. One day’s work stoppage can be calculated in terms of at least US $100-200 million, thus the Defence Services as a deterrent makes an enormous invisible contribution to the economy, consider the devastating effect on the economy if such a preventive measure did not exist.
There are many other factors that can contribute to the economy directly, not the least being a pragmatic and innovative cost-effective programme of economizing by the Armed Forces themselves. Suffice to say that it is well within our potential to force-multiply allocations for Defence Services into an economic asset rather than being a drag on the economy. Given the strait-jacket of the threat perception to our internal and external security, the Defence Services have a positive role to play in the economy and we must not detract from this aspect.
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