Poor Nation, Rich Army
This Republic Day, Pakistan should consider why it remains underdeveloped as its military booms.
On March 23, Pakistan will celebrate its Republic Day with the same “zeal and fervor” as it does every year. As usual, the Pakistani military will come out in full force, with joint parades by the Army, the Air Force, and the Navy. The ostentatious marches will include a display of Pakistan’s nuclear-capable missile system, an air show, and gun salutes to local and international dignitaries present for the occasion.
The extravaganza is always broadcast live on local television channels, set to the fanfare of new propaganda songs produced especially for the event by the military’s media wing. It is rare for the public to question these theatrics—but doing so is more urgent than ever.
Pakistan is going through some serious financial turmoil. Over the last few months, Prime Minister Imran Khan has crisscrossed the globe in search of aid to shore up the economy. Before one recent trip, he even acknowledged the country’s desperation for foreign money. Meanwhile, the country’s finance minister, Asad Umar, has been busy negotiating a new bailout package with the International Monetary Fund—Pakistan has been in the care of the IMF for 22 years out of the last 30. Inflation is at a four-year high, reaching over 8 percent, and Islamabad believes that it could tick even higher.
Although Pakistan’s recent economic woes are troubling, the country has faced similar pressures for years. One-third of its population lives under the poverty line, and the country is ranked at 150 out of 189 countries in the latest United Nations Human Development Index. The national debt stands at around $100 billion, while its foreign exchange reserves are a meager $15 billion. The value of the Pakistani rupee, one of the worst-performing currencies in Asia, has dropped 31 percent since 2017.
Yet anyone watching the parade on March 23 may believe that all is well. And they certainly won’t get the impression that the military is, in fact, behind many of the country’s economic problems. But after debt servicing, the military is Pakistan’s biggest economic burden. Already, over 20 percent of the annual budget officially goes to the military, but the armed forces have been pushing for more every year. Just in the last budget cycle, it won a 20 percent hike in its yearly allocation. The actual expense of the military is even higher, but it is hidden by moving some of the expenses to other budget lines. The parliament neither seriously debates the military budget nor subjects its spending to audit. By contrast, the country spends less than 5 percent of GDP on social services like education and health care, well below the regional average.
The military mainly protects itself by keeping the threat of India alive. The two nuclear-armed neighbors have been in conflict since the partition of South Asia in 1947. The militaries have fought four wars, with three of them over Kashmir valley. Even though Pakistan initiated these conflicts, it has told the public that it was only countering Indian aggression. In recent years, Pakistan has avoided a direct war, perhaps because it lost all previous ones. But it relies on militant groups based in Pakistan to keep tensions alive. This February offered a glimpse of such dynamics at play. In turn, the Pakistani Army gets the perfect excuse for its oversized burden on the country’s economy. Like a mafia protection racket, the military creates its own demand.
But it is not just the military’s budget that is eating away at the resources of a country that it has directly ruled for half of Pakistan’s 72 years of existence. Today, the armed forces’ empire has expanded well beyond its traditional role in security. It runs about 50 commercial entities. The military’s main business arm, the Fauji Foundation, has seen enormous growth. According to Bloomberg, its assets grew 78 percent between 2011 and 2015, and it has annual income over $1.5 billion. The military-backed organization has stakes in real estate, food, and the communications industry.
It appears that the business wing of the military is expanding even more under the Khan government. Khan’s critics allege that the military backed his candidacy and now, in return, enjoys relative freedom to do what it wants. There is plenty of evidence to back those claims.
Reuters recently reported that the Pakistani Army is moving into another lucrative industry: mining and oil exploration. Khan’s government is reportedly facilitating the arrangements by giving the military preferential treatment during negotiations.
Meanwhile, the military seems to be getting its way in a push to roll back a 2010 constitutional amendment that allotted more government funds for local government use, shrinking the available budget to the central government and hence limiting military disbursements. The government under President Asif Ali Zardari had been able to push through the amendment because the memory of military rule under Gen. Pervez Musharraf was still quite fresh. He had been ousted only 20 months earlier.
Since those days, it appears that the military’s influence is creeping back to the fore, and it wants to see the end of an amendment that it believes is a hindrance to its budgetary expansion. In March last year, the military chief of staff, Gen. Qamar Javed Bajwa, even spoke publicly against the 2010 amendment, which was widely reported by the local media. He even blamed the country’s financial woes on it. Now, the ruling party’s members are parroting similar concerns.
Islamabad must realize that the more the military budget expands, the harder it will be to push the institution back into a more appropriate and limited role in a country. Instead of parades like the one on March 23 that endorse further militarization, the country’s policymakers should use the day as an opportunity to think about why Pakistan remains poor as its armed forces continue to get richer.
There’s no better time for some introspection than Republic Day, when Pakistan’s founders passed a resolution demanding independence from British-controlled India. 72 years later, the country that got freedom from its colonial masters has now become hostage to its own military. The path to true independence and progress lies through peaceful economic development, not though a perpetual wartime economy.