Military Spending and Economic Growth in Pakistan

Dépenses militaires et croissance économique au Pakistan

Muhammad Nadeem Mirza (), Zafar Nawaz Jaspal and Ahmed Ijaz Malik
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Muhammad Nadeem Mirza: QAU - Quaid-i-Azam University
Zafar Nawaz Jaspal: QAU - Quaid-i-Azam University
Ahmed Ijaz Malik: QAU - Quaid-i-Azam University

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Abstract: This paper deals with the causal relation between military spending and economic growth of a state. There are three schools of thought on this issue: military spending promotes economic growth; it retards economic growth; and there exists no causal relations between the two. Pakistan's military spending – being indispensable because of the existing threat perception – has been considered as a burden on the national economy. This paper argues that military spending as part of the budgetary expenditure does not all go in the drain. Its role in the economic development of Pakistan – if less in economic growth – cannot be neglected. However, their indirect impact on the economic growth of Pakistan has been substantial. Technological advancement, provision of security, military's social uplift projects which positively affect the 'health' of the economy, military's ancillary institutions like Fauji Foundation, Bahria Foundation, Shaheen Foundation, Army Welfare Trust (AWT) are performing their role directly in the economic growth of the state. Importantly, Arms trade internationally has been contributing trillions of dollars in various states economies. This paper suggests that defence industrial capacity and efficiency can be improved in order to increase the output, which in turn, would help the state's economy by earning millions of dollars through arms sale at the international arena and by ensuring the continued supply of necessary equipment to its armed forces, especially in the times of crises – which in turn, may not only ensure the security of the Pakistan, but also reducing the political leverage being held by great powers on Pakistan. To achieve the target, as a first step, efficient planning be done so as to make the defence industry self-sufficient, and in the long-run to strengthen it to support the overall military spending. This way, it would not only contribute to the economic development, but also in the economic growth of Pakistan.

Keywords: Military expenditure; Military Spending; Economic Growth; Pakistan; South Asia; Threat Analysis; Defence industry; defence burden; Arms industry; Arms trade (search for similar items in EconPapers)
Date: 2015
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01267466
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Citations: View citations in EconPapers (2)

Published in Margalla Papers, 2015, 19, pp.151-184

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01267466

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