Balancing military spending, security, development

Ikram Sehgal, The Daily Star/Asia News Network, Dhaka

Military spending, security and economic development are interrelated variables. A typically Keynesian argument is that military spending stimulates economic growth like any other fiscal expenditure, benefiting the economy by viz:

First, training manpower for future insertion into the labor market. Second, modernization of the economy through technologically advanced Defense industries. Third, the construction of highways and other infrastructure.

The military is said to promote entrepreneurial leadership qualities in its personnel, presumably scarce among civilian elites, particularly in developing countries. All of the aforementioned can be said to be true of Pakistan.

The contra-argument is that while military institutions do contribute to development; the net effect of military spending in the vast majority of underdeveloped countries has been to retard development.

A tractor contributes to the grain harvest and a teacher helps increase a country's human capital, in contrast a tank does not add anything to economic growth (except for its function as part of an "insurance policy" for the country). On the contrary, the tank is a burden that the economy must bear.

Dwight D. Eisenhower, 34th U.S. President said, "Every gun that is made, every warship launched, every rocket fired, signifies in the final sense a theft from those who hunger and are not fed, those who are cold and not clothed."

While defense industries do contribute to economic growth in the developed world, developing countries that import arms manufactured in wealthier countries create a negative burden for their economies, particularly where debt is incurred to purchase arms. The great recession in the U.S. through the 1930s only ended with the advent of World War II. Military spending generally has had a negative effect in developing countries that have no indigenous capacity.

Two opposing views have dominated the issue about defense burden viz (1) those who view defense expenditure as a burden on the economy of the country and would rather see greater appliance of resources to the economic sector, and (2) those who do not see any contradiction between defense, development and economic growth.

The major challenge before the Third World countries is how to maintain a balance between national security needs on the one hand and development and general welfare of the masses on the other.

Since resources are scarce, defense effectiveness can only be enhanced at the expense of the other sectors of national well- being. It is paradoxical that the root causes of insecurity are often developmental. Resources provided to the military and security sector due to the failure of sustainable development to take hold can be traced to a lack of human security, civil strife, military involvement in the political apparatus, and a lack of opportunities for effective participation.

Many have therefore recognized that security can no longer be seen only in the traditional military sense -- but its definition must be widened to also include an emphasis on achieving human security and economic and social stability.

Insecurity clearly impedes the development process and can destroy the benefits derived from years or even decades of development investments.

The recent spate of terrorism attacks on "soft" targets has force-multiplied insecurity. Until there is security for the individual, and society at large, sustainable development will not take hold. Peace can never be won on the battlefield; it must be won on the streets, in homes and within societies themselves.

What are the linkages between security and the development agenda? Competition for access to natural resources, rapid urbanization, overcrowding, poverty, unemployment, and the breakdown of family and tribal links create tensions and often generate conflict. Then there is the pervasive theme about linkage between insecurity and political extremism, nepotism, and corruption.

The following are counted among the adverse effects of defense spending:

1 Investment Cost: The defense sector appropriates scarce national economic resources and foreign exchange for the purchase of equipment and other services.

2 Productivity Cost: All government-controlled economic activity is wasteful and unproductive. The same amount of resources of invested by the private sector would produce more than those invested by the government.

3 Income Shift Cost: The size of the civilian non-defense sector is reduced by the allocation of resources to defense.

There are also some favorable effects of defense spending, viz:

* Training benefits: A large section of manpower from rural areas are shifted from subsistence to cash economy. Discipline and technical skills, which they receive during training, prepares them for the modern economy and a better life. Their contact with modern behavior is transferred to their family members, relatives and village folk in their areas,

* Infrastructure benefits: The military is often called upon to undertake major infrastructure development projects, like roads, railways, airports and communication, which are also used by the civilian population, even in the U.S., the U.S. Corps of Engineers has been involved in major projects,

* Welfare benefits: The Armed Forces provide food, clothing, shelter, education and medical facilities to a substantial number of manpower from different areas of the country, this also facilitates unification,

* Security benefits: Security cannot be quantified or measured in tangible terms. Both internal as well external securities are necessary to provide a peaceful atmosphere for human progress, as well as economic activity. Defense can be ignored only at the risk of anarchy and destruction of the state.

Three of the Four Asian Tigers that have enjoyed sustained economic uplift, S. Korea, Taiwan and Singapore, have maintained large Armed Forces much beyond what their GNP could proportionately sustain. Despite these supposed albatrosses around their necks all three are outstanding models of the Asian economic miracle.