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HVK Archives: 'Pak spends three times more on defence than India'

'Pak spends three times more on defence than India' - The Indian Express

Posted By Ashok V Chowgule (ashokvc@giasbm01.vsnl.net.in)
10 April 1997

Title : 'Pak spends three times more on defence than India'
Author :
Publication : The Indian Express
Date : April 10, 1997

Dr Mahbub-ul-haq has had a long career as a policy-maker in his capacity
as chief economist of ,the Pakistan Planning Commission (1957-70),
Director of the World Bank's Policy Planning Department (1970-82),
Planning and Finance Minister in Pakistan's Federal Cabinet (1982-88),
and chief architect of the UNDP annual Human Development Report
(1989-95). He is currently President of the Human Development Centre, a
non-profit think-tank devoted to human development issues and research
on South Asia. Excerpts from an interview:

Your report suggests various corrective steps to improve conditions in
South Asia. Having been a finance minister, what obstacles do you
foresee in their implementation?

Solutions in Pakistan are political. Technocrats are not able to
implement their proposals because they are checked by politicians. I am
worried whether the current power structure will accept a shift in
priorities. My only hope is that is they sec Pakistan losing out to
neighbouring countries, particularly India, they will wake up. Pakistan
is 80 per cent ahead of India in per capita income according to the
World Bank report but in every social indicator it is fading behind
India. It is now falling behind Bangladesh. We are least prepared to
enter the 21st century.

You haved proposed a cut in defence expenditures. In the current state
of affairs, do you believe this is a proposal that will he taken
seriously?

On defence expenditures, both India and Pakistan are suffering.
Pakistan suffers more because we are a smaller country. We are spending
three times more per person on defence per annum. We spend $28. India
spends $ 10. We have no choice. Wars are not on a per capita basis,
they are total wars. As such, I have always believed that the real
initiative has to be taken by India since it is the larger country.
Nobody is going to blame them for gambling with national security if
they cut by 5 per cent. It is also necessary that we find a peaceful
solution to our disputes. I think they have done very well not to
overplay the talks and not to declare it a success or disaster. We
should continue the process. Both sides should see how much we are
losing due to this confrontation. Except South Asia, every region has
reduced defence spending. How long can we deny our economic prospects?
We must find a multilateral solution. The reduction will have to come
as an agreement between SAARC countries. All we can do is raise the
issues and present the choices.

You also talk about bold debt equity swaps. But what has been the
report card of South Asian countries so far on privatisation?

I am afraid that the report card is very poor. They all say a great
deal but they hardly move. There is always a strong bureaucracy that
wants to hold on because it means monetary and economic power and an
avenue of corruption. It is very clear that we have to take a chance on
privatising public assets through the international markets.

I am not in flour of governments negotiating with multi-nationals trying
to sell them in bulk. We should get the best professional firms in the
world and pay them. Governments can have some percentage to be on the
board. About 10 per cent. We should have a programme of action the
next two years. Raise $25 to 30 billion and make a sizeable foreign
exchange cushion.

I am in favour of selling off State assets over a three-year period,
wiping off domestic debt and putting the remainder into the social
sector. The SAARC region has experiences very different from Latin
America or East Russia. Communist countries are picking up speed faster
than the SAARC countries. Even Africa is beginning to that. But here we
are still mortgaged to bureaucratic interference.


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