Showing posts with label Annual Defense Budget. Show all posts
Showing posts with label Annual Defense Budget. Show all posts

Saturday, June 7, 2014

Defence budget 2014-15: Rising trend continues

































































AS I write this, the budget for the FY 14-15 has not yet been placed in the Parliament. Meanwhile, it has been reported in the media that the total budget this year will be over Tk. 2,50,000 crore (over $31 billion). Of this amount, Tk. 16,400 crore ($ 2.05 billion) will be earmarked for defence. The amount represents 6.56% of the national budget and a 12.7% rise from last year's budget ($1.86 billion).
Defence budget in Bangladesh has always remained a taboo -- not to be discussed in public forum or in the Parliament. The Parliament session, which must pass the budget by June 30, is yet to start. Given the weekends and holidays, there will be very little time left to discuss the budget in threadbare. Moreover, with virtually no opposition inside the parliament, we can only expect speeches long on eulogy and short on substance. Issues brought up by the MPs continue to be those of their own areas, or of their business or professional interest. Although there have been attempts by the present government to introduce the MPs and top government functionaries to the defence matters by conducting short courses for them in the National Defence College (NDC), we are yet to see its outcome in the national arena.
There is a Parliamentary Committee on Defence, but there too major policy or procurement decisions are not discussed. We are often told of a “Forces' Goal 2021” chalked out by the Ministry of Defence, but ordinary citizens are not privy to its content. While there had been numerous discussions, debates and suggestions from various trade bodies, pressure groups and civil society organisations on what fiscal measures government should take to accelerate the pace of development, there has been total silence regarding defence expenditures. In Bangladesh, we leave the need assessment to the defence professionals, namely the military organisation itself. Defence represents only a part of the national security apparatus; in a developing country like Bangladesh, security of people from hunger, disease, poverty and lawlessness is often of primary concern. Yet when we talk of national security we think primarily of defence against external aggression, hence the need for the defence forces.
A standing military force is a hallmark of an independent, sovereign nation. Its primary mission is to defeat external aggression and internal subversion. Military forces provide the muscle behind diplomacy, and also project national power overseas. In recent years, Bangladesh armed forces have played a key role in UN peacekeeping operations. They had been our goodwill ambassadors to the global hotspots and been able to restore democracy and good governance in areas where only chaos reigned before. In many parts of trouble-torn Africa, Bangladesh is a household name fondly remembered for restoring peace and order in the wake of violent civil wars. At home too, not only have the military forces been at the forefront of disaster management, they have also been usefully deployed in various nation-building activities. The defence forces, therefore, continue to enjoy a high respectability.
In a democratic country, such as ours, the military is always subordinate to the civilian political authority and acts within the parameters set by the government. Even in case of war or warlike situation, while the military works out the strategic planning and tactical details, the broad strategic objectives are defined and circumscribed by the civilian political masters. However, where political institutions are weak or unstable, the military exercises powerful influence in the allocation of resources and exercises extra-constitutional power in the national politics. In our own neighbourhood, we have the examples of Pakistan and India -- in Pakistan the military often calls the final shot in national affairs, whereas in India the military operates under tight civilian control and has no role to play in the functioning of the political process. The results are apparent for all to see; while Pakistan is tottering on the brink of failure, India is a emerging as a major power in Asia. It is, therefore, important that the military's role and task must be overseen by the political masters and not the other way round. 
Bangladesh inherited a rudimentary defence force in 1971; the army had three ill-equipped brigades, the air force had no aircraft and the navy had no ships. Since then, of course, the forces have come a long way. The Army has 7 infantry divisions and additional armoured and artillery components. The Air Force now operates modern fighters and transport aircraft. The Navy has seen exponential growth in recent years with the acquisition of naval ships, aircraft and soon to join submarine. We had no training establishment at the time of liberation, yet today we are not only self-sufficient in training facilities, but also attract trainees from many friendly countries. We have set up a number of cantonments, naval and air bases. We have set up facilities for the maintenance of sophisticated weapon systems. However, most of the operational equipments are imported from abroad by spending hard currencies. In a resource-strained country, these are difficult choices to make.
The defence budget has more than doubled in the last six years; it is likely to increase at a higher rate over the years as the payment of arms deals already made falls due. Defence competes for funding with other vital sectors such as education, health, agriculture or rural development. States around the world are failing not because of external aggression, but because of the failure to address the primary concern of the people -- security of life and property, a life without hunger and disease, and a prospect for a better future. While making defence budget, the policy planners will have to keep these competing demands in mind.
Bangladesh holds a key geo-strategic position -- a bridge between South and Southeast Asia and China. It will gain in importance as trade and commerce within the region increase through the land and sea corridors. Unlike countries such as China, India or Pakistan, we do not have a major territorial dispute with our neighbours. Our 3,500 km border with India is demarcated except for three small patches totaling about 6.5 km. Our southern border with Myanmar is demarcated too. The Exclusive Economic Zone (EEZ) with Myanmar has already been settled; we expect the EEZ between Bangladesh and India to be settled through arbitration by this year.
Although, conventional threats from external sources are minimal for Bangladesh, there is the danger of internal dissension, especially the threat of terrorism and extremism. Military will continue to provide muscle to resist and defeat such forces. While we grapple with scant national resources, making judicious use of the defence funding should be a top priority. In the decision-making and implementation process, transparency and accountability at all levels are vitally important. Striking the right balance between national development and national defence is, therefore, most important.

Ishfaq Ilahi Choudhury

Monday, July 29, 2013

Analysts: Pakistan Budget Hike Provides Little


The increase in defense spending under Pakistan’s new defense budget is largely consumed by wages and the cost of anti-insurgency operations, analysts say, providing little real increase for the military.

Unveiled by the new Pakistani government of Prime Minister Nawaz Sharif’s Pakistan Muslim League-N June 12, the budget, converted from Pakistani rupees, amounts to some US $6.36 billion, a rise from the previous budget of approximately US $4.6 billion.

It comes at a time of severe economic hardship.

According to the text of the unveiled budget, GDP growth has been below 3 percent and inflation has remained at 13 percent, the highest for the past four decades, while foreign exchange reserves have fallen from $11.1 billion to $6.3 billion.

The defense budget does not usually include procurement. It mainly consists of wages and operational costs with increases fueled by ongoing counterinsurgency efforts.

Especially when considering the latter factor, said Brian Cloughley, former Australian defense attaché to Islamabad, , the higher budget is “no increase at all, really.”

This view is echoed by a former economic adviser to the government who now heads the Macroeconomic Insight Consultancy in Islamabad, Sakib Sherani, who says the increase is “barely in line with expected inflation.”

“In addition, with continued deployment in the western part of the country, I would assume it leaves little for anything else” Sherani said.

Cloughley highlights that “The main drain at the moment is the enormous operating costs involved in counterinsurgency in the west. F-16 and Cobra sorties alone are colossally expensive, plus troop reinforcement in [Khyber Pakhtunkhwa]/Federally Administered Tribal Areas is costing a fortune.

“I am sure that most of the increase is required by expenditure on operations in the west of the country. Operating costs of moving massive numbers of troops to KP from the border with India, then maintaining them in the field, are enormous. Daily resupply, alone, is most expensive in such terrain,” he said.

Ordnance expended during these missions is very expensive.

“Among other ordnance, Pakistan has bought [at full cost], 1,450 2,000-pound bombs, and 1,600 laser bomb kits for the F-16s. These alone would be over $200 million. And remember that between May 2008 and November 2011, the PAF conducted 5,500 sorties over the tribal areas, engaging 4,600 targets,” said Cloughley.

The increase, therefore, has essentially gone to the Army and Air Force, something mirrored in the fiscal 2012-2013 budget. In that budget, the Army was allocated $2.8 billion (an increase of $128 million), the Air Force was allocated $1.2 billion (an increase of $64 million), and the Navy was allocated $562 million (a decrease of $1.4 million).

However, no official breakdown of figures has been released for the 2013-2014 budget.

Exacerbating the already severe economic situation is a prolonged period of stagnant growth and inflation, made worse, according to Sherani, by corruption and maladministration during the tenure of the outgoing government of the Pakistan People’s Party (PPP).

The economic problems leave analysts to believe large-scale procurements are unlikely.

“There isn’t going to be enough money for submarines or refueling aircraft for the F-16s, for example. No really big-ticket items will be affordable” said Cloughley.

Sherani said he is unsure if “large-scale procurement can be funded from the budget for the next one to two years,” but is thankful that “ongoing programs have not met with funding cuts, to the best of my knowledge.”

Despite the economic woes, Salma Malik, assistant professor, at the Department of Defence & Strategic Studies, in Islamabad’s Quaid-i-Azam University, said some large-scale procurement is possible out of sheer necessity.

Noting that the Air Force has been particularly hard hit by the economic downturn, and did not receive any funds from 2007 under the Armed Force Development Programme 2025, she thinks funds may have to be found.

“On one hand, PAF equipment would be expensive implying that procurements may need to be phased out,” she said.

“However, the other aspect is equally true that a significant time gap is generally involved between commencement of the acquisition process and the operationalization of the equipment, for example, fighter aircraft, where they would be operationally ready; hence the sense of urgency.”

For this reason, she thinks “some allocation might happen straightaway.”

Other aspects of the budget include big increases for the two divisions of the Ministry of Defence, the Defence Division and the Defence Production Division. Their combined budget increased from $14 million in 2012-FY2013 to approximately $59.3 million.

The Defence Division received $35.5 million, up from nearly $12.6 million, the majority of which is for ongoing projects such as base development, with nearly $25 million slated for the National Electronics Complex of Pakistan, which is a major state-owned research-and-development organization.

The Defence Production Division received nearly $23.3 million, of which $22.8 million is for ongoing modernization of Karachi Shipyard and Engineering Works, the state-owned warship builder.

This includes the installation of a ship lift and transfer system plus associated equipment to improve the docking and repair facilities.

But under Pakistan’s dire economic circumstances, Cloughley said the longer-term outlook for defense spending is not positive.

“The best that can be hoped for is ‘steady as it goes’.”