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Thursday, June 30, 2022

Cut in Pakistan’s defence budget is desirable, but not easy

While one remains unsure of how much reduction will actually be brought about, the fact remains that cutting excess fat in the government, especially the defence sector, is possible.

Written by Ayesha Siddiqa |
Updated: June 24, 2019 8:20:52 am
Pakistan, Pakistan army, Pakistan army budget, Pakistan army budget cut, Pakistan economy, Pakistan loan, Indian Express, latest news Creating the impression that the military is cutting defence spending is vital to impress the IMF, which is the only organisation willing to provide cash to Pakistan to sustain the economy.

The Pakistan army’s public relations agency, the ISPR, recently announced cuts in the defence budget as the military’s contribution to tough times. It was also stated that the money would be spent on development of the tribal areas and Balochistan without compromising the military’s war preparedness. Notwithstanding the fact that the DG ISPR, a mere major general, jumped the gun by taking upon himself the authority of the current civilian government to announce how the money saved by the military would be spent, it draws attention towards the issue of how much is really needed to defend the country.

The announcement in itself does not mean anything until it specifies the total allocation for the military and exactly what cuts are being made. Surely, out of the PKR 1,100 billion for FY-2018/19, reduction cannot be brought into the 38 per cent spent on pay and personnel, 25 per cent on procurement and approximately 24 per cent as operational cost. The only element left is about 14 per cent under the head of civil works.

It is possible that like in the mid-2000s when Pervez Musharraf’s handpicked prime minister, Shaukat Aziz, brought cosmetic changes to the defence budget — by putting pensions under civilian head of account that gave the impression of military expenditure being reduced — part of the civil works budget is diverted to development projects of FATA and Balochistan. In this case, the projects will be those that are closer to the army’s heart. Since the days of Shaukat Aziz, about PKR 175-200 billion of military spending in the form of pensions, special projects, spending for military paid for from civilian expenditure, is not recorded as part of the defence budget, which makes it almost 3.7 per cent of the GDP.

Creating the impression that the military is cutting defence spending is vital to impress the IMF, which is the only organisation willing to provide cash to Pakistan to sustain the economy. While China is seen as a major saviour for Pakistan, funding for the China-Pakistan Economic Corridor (CPEC) seems to have reduced in the last couple of years by approximately 54 per cent. The new MoUs signed have not materialised in supply of cash to the Pakistani economy. Referring to the IMF, it wants the civilian government to not divert resources to non-development budget heads that are defence and debt servicing. This means that no money from the IMF funds is to be diverted to defence purchases from Russia, or to pay off China’s debt.

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Unlike the 1980s when General Zia ul Haq was able to shoo away multilateral aid donors by arguing that “Pakistan cannot afford any cut or freeze in defence expenditure, since you cannot freeze the threat to Pakistan’s security,” this time the IMF is proving more difficult. The main emphasis, however, is for Pakistan to reduce deficit spending or increase its earning. Since direct taxes have proven to be difficult, cutting costs remain the only option.

While one remains unsure of how much reduction will actually be brought about, the fact remains that cutting excess fat in the government, especially the defence sector, is possible. Pakistan could comfortably reduce about 25 per cent of defence spending without a change in its current capabilities. To attain such reduction it would require preplanning a rationalised defence structure, better human resource planning, conservation of available resources, stricter controls, cutting down duplication of activities, and reducing additional pomp and show. Inter-services rivalry alone is a major source of wastage. Many of the inter-services organisations, including the ISPR, are inter-services just in name. At the present moment, the ISPR is an army-dedicated organisation with the other two services operating their own public relations wings. Similarly, money could be saved through rationalising defence production.

Rationalising is easier said then done. It requires a vision to be given by a political government. The only time that happened in Pakistan was in the first two years of the Zulfiqar Ali Bhutto government. In 1973 an elaborate higher defence management structure was laid out. This is not likely to happen again, certainly not under the present Imran Khan government.

The other person who could rationalise defence spending is a visionary army chief to be followed by other service chiefs. An outgoing service chief may not have the capacity to rationalise defence decision-making and planning that has an impact on decreasing expenditure. Even if General Qamar Javed Bajwa gets an extension, he would be too eager to provide sweeteners for the top brass of the military, which is where most expensive perks are concentrated. A new chief in November this year would be too busy planning his own team; he may not have the time for such things. In a powerful organisation like Pakistan’s, the service chief may not have the capability to reduce wastage as there is a paper trail for the money required by different sub-organisations and units of the armed forces.

Reduction cannot begin until there is some level of transparency and accountability from a source above the armed forces. The military has in the past killed institutional efforts at accountability. Though the audit of defence services is carried out by the government, a special organisation for the audit of defence purchases was closed down during the late 1990s after it could not function. Over the years, some sub-organisations like the Frontier Works Organisation (FWO) and the National Logistics Cell (NLC) that are part of the GHQ, got themselves out of the ambit of the existing defence audit. This was done through creating commercial structures to justify that a public sector audit couldn’t be carried out. The military’s control of the MoD has strengthened to a degree that no controls actually work.

The discussion thus far has not even touched upon the burgeoning commercial ventures of the military which are probably what will be used to divert additional funds to the military. After all, military business is anything but accountable to a civilian government. This segment has begun to establish a gradual control over the public sector and is drawing upon partnerships internationally. Reducing this economic giant is ideal but not doable in the near future.

The writer is research associate at the Centre for International Studies and Diplomacy at SOAS, University of London

— This article first appeared in the June 24, 2019 print edition under the title ‘Cutting the flab’

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