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INTRODUCTION
The amount from country’s budget dedicated for military maintenance entirely is
known as military budget or Defense budget. And it shares a causal relation with
1.1 OBECTIVES
To look for the relationship between the Military budget and economic
growth of Pakistan.
To estimate how much Military budget takes up the entire Budget of the
Country.
To find out why the current relation between defense spending and
To look for ways to reduce the fixed cost that military budget requires so it
Our report revolves around the problems that Pakistan faces in terms of national
economic growth, it has been revealed that military expenditure is a huge drag
on state’s development. And so the purpose of our report is to find out the
2. LITERATURE REVIEW
(Dawn, 2006) In this dawn news article important points are being discussed. As
experience has shown, a high defense spending often tends to retard socio-
economic development and undermines national integration and this exactly what
increases to over 6.5 per cent of the GDP for a decade and/or more. During the
1978-88 decade, this threshold had been crossed with defense expenditures
much more than the other two important social sector variables, health and
defence sectors but they also spend a major amount on resources and health and
managed properly in the coming years, military spending will definitely be at the
national integration.
(Fiaz Hussain) The author in this article says that since independence 1947,
Pakistan on average has spent Rs.83.13 billion (on average 5.97 percent GDP) on
defence sector and during last fiscal year, 2012, Pakistan spent Rs.507.159 billion
on defence sector which constitutes 5.3 percent of GDP and 12.9 percent of total
still among the poorest countries and the per capita gross national income for
Pakistan was US$ 1261 Whereas Pakistan still faces health problems and there are
no proper health sectors here in Pakistan. On the other hand Pakistan does spend a
considerable amount on such military expenditures but for other major problems it
doesn't spend much amount. For Policy purposes it is very important to determine
the channels by which Dexp influence the economic growth process. The use of
Our report is exploratory; exploring the problems, reasons and the possible
solutions to the defense spending and its effects on Pakistan economic growth.
(ANWAR & RAFIQUE, 2012) Our data source says that, on average the military
spending had been 6.62 percent of GDP until 1999 but in 2000 these spending
declined from 5.1 to 4.1 afterwards it started to rise from 2001 to 2003 and then
fell again it was because of the foreign aid after the war on terror. The state
security justified the high spending on military due to potential threats from inside.
After the partition of Pakistan and India the rivalry began the two countries had
same political strategies’ and budgetary mechanisms but differ in religion and
foreign policy which was the base of the conflicts. The government and military of
Pakistan perceived India as a threat to their sovereignty. In 1980 the president and
general Zia ul haq and the head of army refused to reduce the defense expenditure
as they were really insecure from India they said that we cannot fight the nuclear
submarine and jets with sticks and stones so we are not in a position to reduce our
defense expenditure.
3.3 DATA ANALYSIS
Our report will now be looking further into the topic with detailed analysis of the
4. DATA ANALYSIS
After this detailed look on our chosen data sources and studies we have
As the military spending or defense spending has been one of those sector of
state’s budget.
Did face a fluctuating up and fall sometime but on average it has always
been high.
The most prominent factors of being affected much drastically are health and
eduation.
The reasons for this are mainly high security threat to Pakistan externally as
well internally.
spending.
According to the data that we studied, there are so many reasons that serve
military budget. Since the partition of India and Pakistan both countries
consider each other as their potential threat but it’s more on Pakistan’s part
since Pakistan is the one that has been a part of India and later it sought for
independence which was opposed by india largely. So for Pakistan India has
always been a been major threat. Since then many both countries has fought
many wars that made new established Pakistan’s state more delicate. Then
later on during time of General Zia, Pakistan made alliance with USA to
fight Soveit invasion of Afghanistan and for this purpose troops of trained
militant were sent to Afghanistan. And borders were opened for Afghan
security threats. While on the other hand when those militant were ordered
Taliban, Al-Qaeda and other such militant troops. Due to these constant
budget.
relations the economic development of Pakistan is the cost that has to paid in
order to gain military budget and due to this the there is also a negative
impact on GDP.
After the study of the collected data, the only solution to this economic
hurdle seems is to build a good relation with the countries that are bordering
positive relation with Indian and Afghanistan through not only just dialogues
but increasing the horizons of trade that will in turn lessen the chances of
spending so vastly on defense budget. Doing this will not only decrease
national threat and will increase economic growth but it can also help in
enhancing the law and order situation and the budget of law enforcement
Pakistan military receives the largest amount of the budget which in result has a
negative impact on our overall economy that has caused a downfall in our
education and health sector as well as has a negative impact on our GDP. The
reason why Unaccountable amount of budget has been reserved for military
the rival countries. if we look at the state’s position we cannot just reduce our
defense expenditure, as there can be a war break out and if we end up in a position
of war we need all the right equipments as we cannot fight with sticks and stones
but to reduce the threats we can try to build goodwill relationships and increase
trade with the rival countries so that our chances of being attacked would lessen to
some extent and the fear of threats and breaking out of war would go down and the
budget can be evened out, which will result in the increase in state’s socio
economic development.
6. RECOMMENDATION
Both India and Pakistan are the countries with great economic backgrounds but the
expenditure and higher military expenditure. The trade could be increased in India
in order to make our relations better and end the rivalry India gave the status of
most favorite nation to Pakistan but still Pakistan could not reciprocate it defense
no doubt is the basic element of national security but the policy makers should also
consider the energy social and economic elements of the security of the nation. The
current defense security is high due to the nontraditional warfare but it should be
should be the qualities of the defense budget it should be on the top priority list of
the annual budget sheet. The developmental pace requires high GDP growth and to
reduce poverty. Poverty is becoming a threat day by day to the nation and it would
be a disaster in future if we could not stop ourselves from fueling the conflicts in
social structures
5. REFERENCES
ANWAR, A., & RAFIQUE, Z. (2012). DEFENSE SPENDING-ECONOMIC GROWTH. Pakistan Economic and
Social Review.
Dawn. (2006, december 25). https://www.dawn.com/news/224868. Retrieved december 25, 2017, from
https://www.dawn.com/: https://www.dawn.com/news/224868
Fiaz Hussain, D. S. Is Defense Expenditure Pro Poor or Anti Poor in Pakistan? An Empirical.