Writer: Brigadier Ghulam Jilani, retired

There is a profound relationship between the security and economy of a modern nation state, which has remained relevant since times immemorial. Wars have been fought in the past and will be fought in future, for economic reasons. Economic progress will be essential because wealth is usually needed to underpin military power, and military power is usually needed to acquire and protect wealth. This statement needs a historical context.

Historical Context

The first battle of Islam at Badr, was fought more for economic reasons and clashing ideologies. Budding Islam was an ideological threat to the overall economy of the Quraish, who would harvest their business boon during the pilgrimage of neighbouring Arab tribes to the Holy Kaaba. Islam challenged their ideology, to make their gods irrelevant, and the Quraish knew this irrelevance would affect their trade and business. The threat further escalated when the Holy Prophet ﷺ migrated to Yasrib (later Madina). Hazrat Saad bin Muaz, an Ansar (helper) chief had visited Mecca for the pilgrimage, but it was denied to him by Abu Jahl, who threatened him with dire consequences unless the Prophet Muhammad ﷺ was killed or externed from the territory of Madina. Hazrat Saad gave him a counter threat; if he was not permitted to perform the pilgrimage, he would be constrained to block their trade route to Syria. Abu Jahl and the other Quraish immediately realised the gravity of the situation, and felt that if the Muslims gained power through their base at Madina, very soon the Meccans would suffer economically. And it later resulted into a battle at Badr.

In a later period, the Muslims, after conquering the Iberian Peninsula (Spain), were defeated in the Battle of Tours in 732 AD and their further drive towards western Europe was halted. Peter Frankopan writes in his book The Silk Road, that the truth is that while defeat was certainly a setback, it did not mean new attacks would not be unleashed in the future. If, that is, there were prizes worth winning. As far as western Europe was concerned in this period, these prizes were few and far between. Wealth and rewards lay elsewhere. The Muslims thereafter, did not venture into western Europe because it was then going through the Dark Ages.

Historical examples will unequivocally suggest that a well-equipped and organised army is pivotal to the steady rise of nations. The Ottomans reached their zenith between 1451 and 1566, and unlike most armies of the period, the permanent core of Ottoman forces received regular pay. The elites were rewarded by revenue charged to lands.

William Dalrymple in his book The Anarchy explains that the Mughal army was the high point of Mughal rule, until the death of Aurangzeb in 1707. It could fight back to defend and steadily expand its territories by defeating any force that challenged the writ of the Mughals, but the death of Aurangzeb changed everything for the British East India Company (EIC). The empire went into tatters and central rule was defied. Local sovereigns fell out of Mughal control and raised their own armies. Tipu Sultan decided to break off relations with the Mughal monarch Shah Alam, and became the first ruler to formally disown even nominal sovereignty to the Mughal emperor. According to Tipu, the emperor was actually enslaved to Scindia–the Marhatta raja who was protecting the crown in Delhi against its enemies–on a monthly wage of Rs 15,000. Such was the deplorable situation for the Mughals because they had failed to raise a strong army owing to lack of resources, thus had to mortgage their sovereignty to local maharajas and warlords. This gave a decisive advantage to the EIC, which dealt with local nawabs and rajas piecemeal, to establish full control over the Subcontinent.

Tipu Sultan controlled Mahe on the Malabar Coast, which the British considered a gateway and economic and logistic lifeline to their arch rival—the French EIC—for further extension into India. Thus, defeating the Nawab of Mysore became vital for its economic gains, and to preclude any chance of the French establishing a toehold in India. Cornwallis, as Governor General after the Second Anglo Mysore War, turned the fortunes of Bengal, thus had the resources to deal with Tipu. The sepoys of the Bengal Presidency Army of the EIC were classed as gentlemen troopers, earned around Rs 300 a year, while their equivalents in the Mysore army earned Rs 180. EIC’s armies could therefore draw unprecedented manpower to defeat Tipu Sultan. As Burton Stein put it, the colonial conquest of India was as much bought as fought. Economic condition is directly proportional to military power, therefore with better resources, the EIC outspent and outgunned the Mysore army.

In the same period Mahadji Scindia, who was also trying to exert his influence, anxiously reflected that without money it was impossible to assemble an army or prosecute war. According to Napoleon, an army marches on its stomach.

In the 20th century, since Germany did not offer enough land to supply the German people and the demands of German industry, Hitler felt, as early as 1933, that it was imperative to expand into the eastern territories and bring them under control. Just before initiating his offensive in the west, Hitler first took on Czechoslovakia and Austria to obviate economic difficulties, and then turned to Norway. To run the German war machine, iron ore and control of Norway’s extensive coastline were required. This would grant Germany sway over the North Sea for the passage of their warships and submarines into the Atlantic, and also facilitate import of iron ore from Sweden, via the port of Luleå.

According to a trade pact concluded in 1940, Germany would deliver military equipment and industrial goods to the Soviet Union, in return for raw materials like oil and grain. Soviet richness in natural resources, and German dependence, convinced Hitler to start planning an attack on Russia as soon as possible. His idea was that by occupying and exploiting the rich natural resources of the Soviet Union, he could make Germany independent of imports, and that independence would negate the effect of any future sea blockade. The economy and its growth had serious consequences in war. In the final outcome of the war on Russia, the Germans were outproduced by the Soviet Union in the armaments battle, as well as outfought by it on the front.

In the American Civil War, whereas the Confederates found it impossible to pay for the war, the Union’s economy was booming. The American way of war, to use Professor Weigley’s phrase, was first forged here in the Union’s mobilisation and deployment of its massive industrial-technological potential, to defeat the Confederates.

Nixon in his book Leaders mentions that despite the Soviet advantage and edge in Vietnam, Kosygin, the then foreign minister of USSR, confided to de Gaulle, the French President, lamenting the economic problems caused by that war for the Soviet Union. The USSR was later bled white economically by the Americans. The US military, with superiority in strategic nuclear weaponry, had outspent and outgunned the Soviet Union, and that put additional pressure on its economy, which ultimately resulted in collapse.

According to Richard Nixon, economic power will be key to other kinds of power. The militarisation of the world economy as the Worldwatch Institute terms it, is now advancing faster than it has for a generation. Slow growth in a country is likely to depress public morale, cause discontent, and exacerbate the discussion over national spending priorities. On the other hand, large-scale armaments spending, though realising more growth for its part, can cause a diversion of resources from other groups in society, and make the national economy less capable of handling the competitive challenges of other countries.

In today’s politico-military world, there exists a tense environment between a nation’s existence and its survival in a laissez-faire economic world; on the one hand are pursuits for strategic security through investment in state-of-the-art weapon systems, and allocation of national resources to the armed forces. On the other is the search for economic stability and national prosperity according to the ideals and aspirations of its people, which are naturally contingent upon growth, enlarged output, and thriving international trade, to minimise unemployment. This tall order can be disturbed due to disproportionate spending on armaments and armed forces. There are models for both types, like Japan, South Korea, Switzerland, Sweden and Austria, which have taken advantage of growth and international production without much expenditure on security. The other models are India, Pakistan and Iran, among others.

In the case of Pakistan, it has to allocate a higher share of the budget for defence, in its effort to avoid, or at least mitigate, the effects of being outspent and outgunned by its eastern neighbour. India has a 3.73 trillion dollar, 5th largest economy and 2nd largest army of the world. It poses a huge challenge to the security of Pakistan. To effectively thwart Indian designs, full spectrum deterrence has to be maintained, which former COAS General Ashfaq Parvez Kayani put across very aptly, plan on the adversaries' capabilities, not intentions.

Defence spending in the budget for 2018/19 was 2.87% of the GDP, which was drastically cut (voluntarily) by the Army to 2.62%, that is 14% of the total outlay of the budget, from 18.5% in the outgoing year. This happened when the Pakistan Army was also quelling internal disorder. India spent 15.5 % of its total budget outlay for defence for 2019/20 and 2020/21, which comes to about 2.1 % of its GDP.

It is disturbing that like most developing countries, a steady budget deficit in Pakistan is the primary cause of major ills of the economy. It has varied between 5.4 to 8.7% of the GDP during the last two decades. The current account deficit varied between 2.7 to 7.2% of the GDP during the same period. The economy of Pakistan is under stress, with payment of interest on debt, both external and internal, now soaring to a level that it consumes the lion’s share of revenue collected by the federal government. Interest payments in the first quarter of fiscal year 23-24 increased alarmingly to Rs 1.38 trillion, equal to 98% of the federal government’s net income of Rs 1.4 trillion. This leaves a miniscule amount for other heads, thus the need to take more loans to repay older ones. The problem is further compounded by the woes of loss-making state owned enterprises. Presently there are 215 of them, of which 170 are commercial entities with 475,000 employees, which have rarely achieved a five percent return on their assets in three consecutive years. Circular debt of the power sector, despite massive increase in tariffs, has reached Rs 2.54 trillion after September 2023. This vicious cycle, if not stemmed, will further aggravate the economic afflictions of Pakistan.

The defence budget has always been in the national discourse of Pakistan. It is common to suggest a cut in the defence budget in the name of assuaging economic distress, to lessen military influence in national decision making. This is an unwise and dangerous discourse. The military establishment like other pillars of state, has a role in national decision making. The solution is not to reduce its size, but to increase the capacity of other institutions to play their roles efficiently. National polity and security, if left to infighting, creates a vacuum which is then filled by forces like the erstwhile EIC, which is not good for the country. We have experienced trauma and the scourge of terrorism in all provinces in the last decade, which almost shook the foundations of the country. This has been courageously and methodically cut down by the Armed Forces of Pakistan. This can only be consolidated through institution building and unity.

t is a challenge to prioritise the distribution of resources for a weak economy like Pakistan. In hard times, should the budgets of organised and functional institutions like the Army, NADRA, HEC, Motorway Police and Emergency Service 1122 also be slashed, to bring them at par with other dysfunctional state institutions? The logical course should be to support government and non-government organisations on ways and means to help increase the size of the financial cake of Pakistan, instead of cutting the budget of the Army to make room for others. Empirical evidence suggests that poverty in different parts of the world does not occur always due to lack of resources, but due to poverty of ideas, the inability to innovate, and indifference to undo wrongs. Economy in truth and honesty always results in more poverty and unrest.

The people of Pakistan speak 12 major languages and hundreds of dialects. Before independence from colonial rule, Pakistan lacked a political entity, despite its distinct geographical entity based on the Indus River. It is not only ethnically diverse, but also has sectarian cleavages. Though Pakistan has enough resources, the population bomb is ticking fast. To hold it together requires statesmanship of the highest order, and unison effort of all institutions of the country.

Elements of national security and power are intertwined, therefore the Pakistan Army in the peculiar political, regional and international environment, cannot and should not stay aloof as a bystander, to witness deterioration of the economy, brick by brick. Thus, as the most organised institution of the country, it may help other organs of the state to apply their own weight effectively. Objectively, it should work in tandem with national security policy, and within it. It must buttress other institutions, to bring them at par with international standards and competitiveness. And this must be done within the precincts of the constitution of Pakistan.

It is for this reason that the Army has again shown an instutionalised way forward, within the four walls of the constitution, exerting its administrative power to re-energise governance to address economic issues, at priority. To bring in foreign investment and avoid any effort to stymie it (through red tape), on 20th June 2023, the Government of Pakistan approved the establishment of the Special Investment Facilitation Council (SIFC), to act as a single window to facilitate investors, establish cooperation among all Government departments, and fast-track project development. It is chaired by the Prime Minister, with members including federal ministers, provincial chiefs and the head of the Army. The Government established the SIFC to shorten lengthy business processes through a cooperative and collaborative whole-of-the government approach, with representation of all stakeholders. It is aimed at capitalising on Pakistan's untapped potential in key sectors of defence production, agriculture, mining, information technology (IT) and energy, through domestic and foreign investment. The Army, therefore, has an important role in SIFC.

How and Why the Army is an Important Building Block of Economic Revival

The Pakistan Army, due to its internal and external standing, and the confidence it inspires among friendly countries, is poised to bring in much needed foreign investment to improve the economy and bid adieu to international loaning agencies. Pakistan Army has its footprint far and wide in every area of Pakistan, thus the tone it has set for itself and other organs of the state, has an historical and well documented record, that it is adept to realise the dream of economic stability.

The Army has an inbuilt mechanism to learn from experience. The quality that distinguishes it, is that lessons learnt were applied as course corrections, which is the hallmark of any strong institution. For example, a weakness was recognised in 1965 and 71 Wars, that the higher direction of war was uncertain. Consequently, the National Defence University (then College) was established. The outcome of this, which must not have gone unnoticed by intellectuals, and commentators, was emphatic during escalations of the years 1987, 2002 and 2009, when the Indian Army was ready to cross the borders. Superior strategy was applied by the high command of Pakistan Army, and merely by correct and timely disposition of forces, the designs of our enemy were defeated. In the words of Sun Tzu, a Chinese general, military strategist, writer and philosopher, the ultimate proof of generalship, is the ability to defeat an opponent without fighting.

The Armed Forces of Pakistan have served and gone beyond the call of duty to improve the economy and social sector of Pakistan. There is oft repeated criticism of Defence Housing Authority (DHA), without analysing its full potential and contribution towards improving the national economy, through revival of at least forty industries involved in construction. Services of the Army also need to be acknowledged in the development of the education sector of Pakistan. National University of Science and Technology (NUST), being run under the auspices of the Army, is now well-placed at 417th position globally, by the Quacquarelli Symonds (QS). NUST is the only university of Pakistan which is included in the list of 500 best universities of the world, by the QS. The Army has also established National University of Technology (NUTECH) which has been selected as one of the most innovative universities in the world in 2023 by the World University Ranking for Innovation (WURI). National University of Modern Languages (NUML), National University of Medical Sciences (NUMS) and Lahore Garrison University also help meet the growing requirements of higher education in the fields of social, technological and medical sciences. Service to education is not confined to higher education. A network of Army Public Schools and Colleges (APSACS), Federal government education institutions (in cantonments and garrisons), and Rangers and Frontier Corps Public Schools, is spread all over the country, and imparting quality education to thousands of young boys and girls in the urban as well as far-flung areas of Pakistan.

Pakistanis take pride in Pakistan China friendship, the practical manifestation of which was through construction of the 800 kilometre long Karakorum Highway (KKH), an engineering marvel. Men in khaki, as part of the Frontier Works Organisation (FWO), helped build the KKH with their blood and sweat, over several years. Such was the difficulty of terrain, virtually each kilometre cost a life. FWO, a subsidiary organisation of Pakistan Army, since establishment in 1966, is contributing in a big way to the national economy. More important is its role in the construction of 674 kilometre long highways, 751 metre long Nahakki Tunnel, Gomal Zam Dam and infrastructure in far-flung areas of the country, where other commercial organisations are reluctant, or unable to tread. Industries like fertilizer, cement, food, and oil and gas exploration companies, function under the umbrella of the Army Welfare Trust. These are run by retired military personnel and civilian professionals for the welfare of veterans, and are the largest tax contributors to the Federal Board of Revenue (FBR).

The Army, through its overseas peacekeeping missions and training activities, earns foreign exchange which is close to the billion dollar mark, per year. Besides that, it is through Special Communication Organization serving the national economy and its people (SCO), National Logistic Cell (NLC) and a large network of combined military hospitals spread all over Pakistan, from Gwadar to Skardu. The Pakistan Army is all set to assist local farmers in a systematic manner for agricultural farming on 1,000 acres of land in the Zarmalam area of South Waziristan. Over the next few years, the farming area will be expanded and 41,000 acres of land will be made suitable for farming. This project is expected to enhance agricultural productivity, promote food self-sufficiency, help boost the local economy, and generate jobs for the young population in Khyber Pakhtunkhwa.

The Army’s contributions in social and economic sectors are many, but the point to highlight it here, is to underscore that the Armed Forces are but a part of Pakistan, and those who are serving in this institution, are Pakistanis. It will be appropriate and to the liking of all, to join hands, and with unity of thought and purpose, make a prosperous Pakistan which has the resources to contribute to all segments of society, and create national power to defeat our enemies. The lesson of history and the contemporary world is united you stand and divided you fall. You have to get away from the past. Dust yourself off, get back into the mainstream. Put your dreams together and move forward. Thinking of the positive things that are true, honest and good, will put us in a positive state of mind.