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Adverse socio-economic impact of India’s rising military expenditure

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The world is still in grip of COVID19 pandemic. Some vaccines are being tested but so far none of them has passed safety tests.

The lockdowns have played havoc with economies, the world over. The ugly West has allocated trillions of dollars for economic welfare of the impoverished people.  But, India allocated paltry US$25 billion by way of welfare. Some economists have predicted recession, and even collapse of Chinese and Indian economies. Regrettably, Indian chief of defence staff has threatened that military option was on the table if talks with China fail.

India’s rising military expenditure and purchases: The Indian military doesn’t seem to know there’s a pandemic. India’s 2020-21 Budget envisages a total outlay of Rs 30, 42,230 crore. Out of this, Rs 3, 37,553 crore has been allocated for military (excluding military pensions). For military pensions, Rs. 1, 33,825 crore has been provided in Budget Estimates 2020-21. There is an increase of Rs 40,367.21 crore in the total military allocations (Rs 4, 71,378 crore) over 2019-20.

The total military budget accounts for 15.49 percent of total expenditure for 2020-21. The allocation represents a growth of 9.37 per cent over Budget Estimates for 2019-20. Out of Rs 3, 37,553 crore allocated for 2020-21, Rs 2, 18,998 crore is for net revenue expenditure and Rs 1, 18,555 crore is for capital expenditure, which includes modernization-related expenditure.

The ‘transparent’ military expenditure shows an increase of only 9.37 per cent. But, if we add to it concealed provisions the increase would balloon manifold. The concealed provisions include quasi-defence allocations like border and strategic roads, nuclear/space research, paramilitary forces like Border Security Force, Central Reserve Police Force, and so on.  Besides there are public sector undertakings like dockyards, machine tool industries and Bharat Heavy Electrical Limited.

Then, India unnoticeably increases her defence expenditure under Revised and Actual budget estimates. But the real expenditure in past years has been much greater than that shown. Previously, India increased its military outlays in revised and then actual estimates.  Thus the actual military expenditure is much higher than the initial estimates, which are quoted in international media under a hypnotic spell.

India does so to `lower’ its military budget as proportion of GNP. Thus India, as compared with its neighbours, gets a favourable image in The Military Balance, Jane’s Defense, and other international magazines.

Colossal expenditure on conventional weapons by a nuclear power is not understood. Nuclear deterrence does not mean matching bomb for bomb. Nuclear victory would at best be pyrrhic. Heretofore is a bird’s-eye view of her shopping itinerary. Procurement of 36 Rafales and 12 Su-30 MKI aircraft and 21 MiG-29.  Upgrading Indian Air Force’s existing MiG-29 aircraft. The MiG-29 procurement and upgradation from Russia will cost Rs. 7,418 crores. Producing the Su-30 MKI at the Hindustan Aeronautics Limited will cost Rs. 10,730 crores.

India’s `Defence Acquisition Council approved a collection of arms procurement projects worth $5.55 billion, including domestic efforts worth $.4.44 billion’. The inventory includes Pinaka multi-barrel rocket launchers, upgrading BMP-2 infantry combat vehicles; software-defined radios; Nirbhay land-attack cruise missiles, Astra beyond-visual-range missiles, Excalibur artillery rounds for M777 ultralight howitzers (US), Igla-S air defense systems (Russia), Spike anti-tank guided missiles (Israel), 100 modified K-9 Vajra 155 mm/52 caliber self-propelled tracked howitzers (South Korea), S-400 Missile Air Defense System (Russia),  and Rafale fighter jets (France).

In contrast with military spending, India earmarked a meager $25 billion in corona virus relief measures (India’s miserly response a path to viral collapse, Asia Times May 5, 2020).

Misconception:  India’s rising military expenditure is based on a misconception of national security. National security, from the point of view of an economist, depends on three factors: (a) The quantity of national resources available, now and in future, (b) The proportion of these resources allocated to national security purposes, and (c) The efficiency with which the resources so allocated are used.

Resources are always limited vis-à-vis unlimited wants. As such, the problem of defence allocations should, in effect, be a problem of constrained resource optimization, not blind allocation of resources.

Let India lower her expenditure. Pakistan will follow suit. As a result of India’s rising military expenditures, Pakistan also increases its defence expenditure despite meager resources.

Indian policy of increasing her defence outlays is based on strategic misconceptions. India visualised it would be suicidal for Pakistan to increase her defence budget  pari passu with India’s budget.  In any case, Pakistan could not afford to spend more than half the increase in India’s defence budget. A higher allocation would sap Pakistan’s resource potential for sustained growth in future.

India thinks Pakistan had to choose between Scylla and Charybdis that is economic collapse or defence preparations (same quandary as of former USSR). However, India’s perceptions proved to be wrong. Pakistan has neutralised the impact of this differential economic performance by, going nuclear. If Pakistan weakens its defence by slashing its defence expenditure, will India guarantee that it will not attack Pakistan or go for a quasi-attack (Operation Parakram(valour) costing Rs 74 crore).

Impending collapse: India is heading for a recession, widespread unemployment, fall in growth rate, and fall in purchasing power and demand, industrial production, and so on. India’s leading companies are suffering losses. The central government’s fiscal deficit will rise to about 5.1per cent of Gross Domestic Product in fiscal 2021, with considerable upside risk depending on the quantum of forthcoming fiscal support,

The options for printing more money, imposing new taxes, selling bonds to locals, and raising money from non-resident Indians (NRIs) are all also limited.

Falling GDP, collapsing wholesale prices: Is Indian economy heading to its worst show in September quarter since 2008 global financial crisis?

There is no major crisis situation right now globally and the current slowdown is on account of the failure of the country’s clogged domestic growth.

Most international agencies including Moody’s have lowered their GDP growth forecasts for India. India is entering the sub-five percent GDP growth range after a gap of 42 quarters? If the predictions of State Bank of India (SBI) economists offer any clue, second-quarter Gross Domestic Product (GDP) will come at 4.2 percent. That’s the lowest quarterly growth in 30 quarters ever since the new series, with 2011-12 base. In the fourth quarter of FY13, the GDP growth had fallen to 4.3 percent. If one looks at the old series (2004-05 base), this will be the lowest quarterly growth in at least 42 quarters. In the fourth quarter of FY09, growth had fallen to 3.5 percent.

Indian economy had a shocker when the GDP growth slowed to a 6-year low of 5 percent in the April-June quarter. Even after that, there is no recovery in sight. Production figures have been flashing negative signals. The manufacturing sector has been on a decline spree. The wholesale price index (WPI) fell to a 39-month low of 0.3 percent in September on account of a continuing deflation in fuel and power components and manufactured products.

The Index of Industrial Production (IIP), a key barometer of economic activity, contracted for the second straight month in September by 4.3 percent. In August, the factory output had contracted by 1.4 percent (revised estimates).

The former finance minister told Rajya Sabha ` India’s economy about to collapse, attended by ‘incompetent doctors’.Even following successful companies are running in losses: Vodafone, Airtel, India Post, GMR Infra, Yes Bank, Union Bank, PNB Bank, Axisa Bank, JP Group, Viddeocon, Aircel, Tata Docomo, Jet Airways, Heritage Renting, BSNL, and  Auto Industry, including Maruti.

Effect on China: Economists have predicted recession of C hina’s economy also because of the pandemic. But, the impact would be less severe than on India. China’s Achillese heel is its non-inclusive , authoritarian institutions, lack of innovation, and debt rfeliance. But, a contrary opinion is that it’s certainly true that China will tide over its difficulties through sense of dynamism, forward-looking optimism, and ingenuity of. `Chinese workers and Chinese entrepreneurs. For instance, People’s Bank of China has been very innovative during the last fifteen years.

Inference: Rising military expenditure could precipitate collapse of Indian economy.

Mr. Amjed Jaaved has been contributing free-lance for over five decades. His contributions stand published in the leading dailies at home and abroad (Nepal. Bangladesh, et. al.). He is author of seven e-books including Terrorism, Jihad, Nukes and other Issues in Focus (ISBN: 9781301505944). He holds degrees in economics, business administration, and law.

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Defense

The Proxy War of Libya: Unravelling the Complexities

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The African continent has been infamous for its desolate conditions and impoverished lifestyle for years. The violence has not spared the region either since the extremely unstable Middle-East has set the vendetta throughout the region, verging Africa in the east. Whether it comes to the spreading influence of ISIS under the flag of Boko Haram; a terrorist organisation operating in Chad and North-eastern Nigeria, or the rampant corruption scandals and ream of military cops in Zimbabwe, the region rivals the instability of its eastern neighbour. However, one conflict stands out in Northern Africa, in terms of high-stake involvement of foreign powers and policies that have riven the country, not unlike Syria in the Middle-East. Libya is one instance in Africa that has faced the civil war for almost a decade yet involves not only local powers but is also a focal point that has caused the NATO powers to be at odds.

Libya, officially recognised as the ‘State of Libya’, is a war-torn country in the Northern periphery of the African continent. The country is bordered by the Mediterranean Sea in the North, Egypt lies to its East and Sudan and Tunisia border in the Southeast and Northwest respectively. Apparent from the topography, Libya stands as an epicentre to the countries ridden with conflicts, stands the ground that was the central root of the infamous Arab Spring uprisings taking a rebellious storm right off its borders in Tunisia back in 2011. While the NATO-led campaign garnered success in overthrowing the notorious dictator, Muammar Gaddafi, and thus bringing the draconian regime to an end, it failed to account for the brewing rebels and militias in pockets throughout the state of Libya.

Over the following years, weaponry and ammunition was widely pervaded across the region in spite of strict embargo placed. The pilling artillery and unregulated rebels cycled the instability in the country leading to the successive governments to fail and eventually split the country in two dominant positions: The UN-recognised Government National Accord (GNA), led by Tripoli-based leader and prime minister Fayez Al-Sarraj, and the Libyan National Army (LNA), led by the tailing ally and successor to Gaddafi, General Khalifa Haftar.

While both GNA and LNA vied for the control on Libya, foreign powers involved rather similar to the labyrinth of stakes in Syria, each state split over the side supporting their part of the story and ultimately serving their arching purpose of interference in the region. Despite of the ruling regime of Al-Sarraj since the controversial election win of GNA in 2016, Haftar-led LNA controls an expansive territory and has been launching offensive attacks against the GNA alliance. GNA enjoys the support of US, Turkey, Qatar and Italy; each serving either ideological support or military backing to secure the elected government of Libya. Meanwhile, LNA is backed by Russia, Saudi Arabia, Egypt and France. While the western powers see GNA as an economically stabilising solution to the Libyan crisis, Russia and France eye Haftar as a key ally to expand influence in the African region and reap control of the oil-rich resources under control of Haftar’s troops in the oil-crescent territory.

The Turkish regime, on the other hand, eye Libya as a direct answer to the Russian influence in the Syrian war that has been pushing the Kurdish alliance stronger along and within the southern borders of Turkey. This has led to recent clashes and direct escalation in the proxy war waged in Syria. Turkey plans to incentivise the leveraging position against Russia in Libya by deploying military advisory to Tripoli to strengthen their position against the Russian-backed Haftar to ultimately deter the alliance from spreading far in the African region.

The power split in Libya was exacerbated in 2017 following the Gulf crisis that led to the boycott of Qatar by the Arab quartet led by Saudi Arabia. Libya stood as a battle ground for both strategic and military positions to one up the other alliance in external power games while the internal matters of Libya are long forgotten and population left clueless and desperate for welfare. Since then, the vested interests in Libya have side-lined yet the peace process has been encouraged by both UN and Merkel-led ‘Berlin process’ in support to the UN efforts to restore peace in Libya. However, the strained relations and foreign demarcation is still apparent even though no escalation has been in action for months.

Now the ceasefires have been in talks for a while and except for a few skirmishes, the powers have been curbed since June 2020. The silence could imply room for diplomatic efforts to push a much-awaited resolve to this complex proxy war. With the recent turn of events in the global political canvas, wheels of the betterment might turn in favour of Libya. Saudi Arabia has recently joined hands with Qatar, opening all borders to the estranged ally and resuming diplomatic relations. Turkey is eying the coveted spot in the European Union since the UK exit. The US in redefining its policies under the revitalising administration of Joseph Biden while Russia deals with the tensed relations with the Gulf since the oil price war shattered the mutual understanding shared for years. The core players of the Libyan Proxy war are dormant and may remain passive due to external complexities to handle. Yet, with regional powers like Egypt threatening invasions in Libya and both GNA and LNA showing no interest in negotiation, a conclusive end to the Libyan crisis is still farfetched.

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Pakistan Army’s Ranking improved

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According to data issued by the group on its official website, Pakistan Army has been ranked the 10th most powerful in the world out of 133 countries on the Global Firepower index 2021.Especially the Special Services Group (SSG) is among the best in the world.  Just behind; 1- United States PwrIndx: 0.0721,  2- Russia PwrIndx: 0.0796, 3- China PwrIndx: 0.0858, 4- India PwrIndx: 0.1214, 5- Japan PwrIndx: 0.1435, 6- South Korea PwrIndx: 0.1621, 7- France PwrIndx: 0.1691, 8- United Kingdom PwrIndx: 0.2008, 9- Brazil PwrIndx: 0.2037, 10- Pakistan PwrIndx: 0.2083.

Global Firepower (GFP) list relies on more than 50 factors to determine a nation’s Power Index (‘PwrIndx’) score with categories ranging from military might and financials to logistical capability and geography.

Our unique, in-house formula allows for smaller, more technologically-advanced, nations to compete with larger, lesser-developed ones. In the form of bonuses and penalties, special modifiers are applied to further refine the annual list. Color arrows indicate a year-over-year trend comparison.

The geopolitical environment, especially the regional security situation, is quite hostile. Pakistan is bordering India, a typical adversary and has not accepted Pakistan’s independence from the core of heart, and always trying to damage Pakistan. The Kashmir issue is a long standing issue between the two rivals. On the other hand, the Afghan situation is a permanent security threat for Pakistan. Bordering Iran means always facing a danger of aggression from the US or Israel on Iran, resulting in vulnerabilities in Pakistan. The Middle East is a hot burning region and posing instability in the region. The growing tension between China and the US is also a source of a major headache for Pakistan.

Under such a scenario, Pakistan has to be very conscious regarding its security and sovereignty. Although Pakistan’s ailing economy is not supporting its defense needs, it may not compromise strategic issues for its survival. Pakistan focuses on the quality of its forces instead of quantity. The tough training makes a real difference—the utilization of Science and Technology-enabled Pakistan to maintain its supremacy.

Pakistan is situated at a crucial location – the entrance point to the oil-rich Arabian Gulf is just on the major trading route for energy. Pakistan is at the conjunction of Africa, Europe, Eurasia, Central Asia, East Asia, South Asia, and China. Pakistan is a pivotal state and always focus of world powers.

During the cold war era, Pakistan sided with the US and protected the region’s American interests. The US military establishment knows well that as long as Pakistan stands with the US, it can achieve all its strategic goals in the region. However, It was the American choice to give more importance to India and ignore Pakistan.

Pakistan is a peace-loving nation and struggling for the promotion of peace globally. Pakistan always raises its voice at the UN and other international forums for oppressed ones and against any injustice. Pakistan. In the history of seven decades, Pakistan was never involved in any aggression against any country. Pakistan’s official stance is, “We are partner for peace with any country, any nation, or individuals.” Pakistan is a partner and supporter of any peace-initiative in any part of the world. 

However, Pakistan is always prepared to protect its territorial integrity and will not allow any aggressor to harm our sovereignty at any cost. Pakistan is determined for its independence and geographical integrity.

Pakistan is no threat to any country or nation. Neither have any intention of expansion. But always ready to give a tough time to any aggressor.

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Israel continues its air strikes against Syria after Biden’s inauguration: What’s next?

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A family of four, including two children, died as a result of an alleged Israeli air strike on Hama in northwestern Syria on Friday, January 22, Syrian media said. In addition, four people were injured and three civilian houses were destroyed.

According to a military source quoted by Syrian outlets, Israel launched an air strike at 4 a.m. on Friday from the direction of Lebanese city of Tripoli against some targets on the outskirts of Hama city.

“Syrian air defense systems confronted an Israeli air aggression and shot down most of the hostile missiles,” the source said.

The Israeli newspaper Jerusalem Post reported that there were loud sounds of explosions in the area.

In turn, the Israel Defense Forces declined to comment on alleged strikes resulted in the death of Syrian citizens.

Over the past time, Israel significantly stepped up its aerial bombardment. This incident was the fifth in a series of Israeli air attacks on targets in Syria in the past month and the first after the inauguration of the U.S. President Joe Biden. Foreign analysts and military experts said that Tel Aviv intensified air strikes on Syria, taking advantage of the vacuum of power in the United States on the eve of Biden taking office as president.

While the Donald Trump administration turned a blind eye on such aggression, a change of power in the United States could remarkably limit Israel in conducting of military operations against Syria and Iran-affiliated armed groups located there. As it was stated during his presidential campaign, Joe Biden intends to pursue a more conciliatory foreign policy towards Iran. In particular, he unequivocally advocated the resumption of the nuclear deal with the Islamic republic. In this regard, Tel Aviv’s unilateral actions against Iranian interests in Syria could harm Washington’s plans to reduce tensions with Tehran.

By continuing air strikes against Iranian targets in Syria, Israel obviously sent a massage to the United States that Tel Aviv will consistently run anti-Iran policy, even if it will be in conflict with the interests of the Joe Biden administration. On the other hand, such Israeli behavior threatens to worsen relations with the United States, its main ally.

In the nearest future, the US reaction on the Israeli belligerent approach toward Iran will likely determine whether the relations between Tehran, Tel Aviv and Washington will get better or the escalation will continue.

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