Really, Senator!

After the end of what was an in-camera meeting of the Senate Standing Committee on Defence and Defence Production, its chair, Senator Mushahid Hussain Sayed, ‘revealed’ that the country’s defence expenditure is only 2.3 per cent of GDP and the 33^rd highest in the world. The secretary of defence told the Committee that the defence budget for the current fiscal year was Rs545 billion. This is what the budget documents for 2012-13 say: Rs545.386 billion to be exact, out of an estimated GDP of Rs23,655 billion. Not much of a revelation there. One wonders why the members of the Committee — Chaudhry Shujaat Hussain, Farhatullah Babar, Sehar Kamran, Raja Muhammad Zafarul Haq, Haji Muhammad Adeel and Tahir Hussain Mashhadi among them — termed it a good beginning as nothing more was shared than the numbers approved by parliament at the time of the budget.

The given amount of Rs545.386 billion is the current budget of the Defence and Defence Production Divisions. As the honourable senators would know, all divisions of the federal government also have a share in the Public Sector Development Programme (PSDP). The Defence and Defence Production Divisions are no exception. In the current budget, the development budget of the Defence Division was Rs6.51 billion. Similarly, a development allocation of two billion rupees was made to the Defence Production Division. Defence-related PSDP is not confined to these two divisions. The Higher Education Commission, for instance, makes allocations to the universities managed by the defence authorities. In the 2012-13 budget, the development and recurrent allocation amounted to around Rs1.25 billion. Finally, and most importantly, the current budget of the Defence Division does not include superannuation allowances and pensions, a fudging done by the Musharraf regime in 2000 to show a lower burden of defence expenditure. An allocation of Rs98.218 billion is shown in the budget for 2012-13 for military pensions. It is more than three times the allocation for civilian pensions. To this must be added a proportionate share of Rs26.634 billion out of the provision of Rs35 billion made for the pay and pension reforms. On aggregate, the budgeted defence allocation for 2012-13 is Rs680 billion. As a percentage of GDP, the allocation is 2.9 per cent, not 2.3 per cent.

The computation is based on the information clearly identifiable in the budget documents as defence-related as per the generally accepted definition used by the Stockholm International Peace Research Institute. The World Bank and other databases also employ the same definition. There may be some disguised allocations in the budget — a practice followed in many countries. For instance, last year, on June 5, The Express Tribune reported that an allocation of Rs150 billion made under contingent liabilities included provisions for an armed services development programme. The item appears in this year’s budget as well. Similarly, the budget provided to the nuclear programme is not apparent in the budget. Our calculation of Rs680 billion or 2.9 per cent of GDP does not include any ‘guesstimates’ of the hidden items of expenditure.

Senator Sayed implied that his figure of 2.3 per cent of GDP made Pakistan the 33^rd highest spender on defence in the world. International documents use actual expenditure, not budget allocations. In any case, these documents have not yet gone beyond 2010-11, in which year Pakistan spent three per cent of its GDP on defence. Parliamentary oversight of defence spending to ensure transparency and a revisit of the defence paradigm is welcome. A precondition is to have the facts right.

Published in The Express Tribune, October 26^th, 2012.