India-Pakistan, Once Again

Written by Subhash Agrawal | Updated: Jun 5 2003, 05:30am hrs
It has been a month since Prime Minister Vajpayees surprise peace initiative towards Pakistan, and during this time whatever little attention that India gets in the international press has largely been hogged by opinions and editorials containing mild to moderate cheers, from Breaking Ice in South Asia to New Hope on Subcontinent to Foes Edging Toward Sanity. While the general global reaction has displayed Indian diplomacy and intentions in somewhat more positive light, the really crucial undertone is one of relief. This headline from the Seattle Post just about sums it up: Imagine a region without the bomb.

Yeah, enemy, no war, no border insecurity, no nuclear escalation, no forward force deployment, no constant state of high-alert and no terrorism-related costs on civil society.

If all this sounds like a pipedream, it is. Ground reality and public debate in either country have changed little to merit confidence in an everlasting peace, or even a temporary one. Pakistan is now on international parole, its leaders are clearly nervous despite their occasional bravado, and there is the beginning of a realisation that jehad represents Pakistans lost decade in terms of international goodwill, human development, per capita GDP or investment. But none of this is likely to result in greater yielding on the Pakistani side. Till today, their media and opinion leaders routinely dismiss Indian sensibility over cross-border terrorism.

Meanwhile, on the Indian side, we have deliberately sidestepped any meaningful dialogue due to our traditional and overarching suspicion of every international act of good or neutral faith. India has messed up on Kashmir through neglect, cussedness, bad governance, corruption and lack of overall sensibility to local concerns, all of which have created a spectacular crisis of leadership in that state which only now is being corrected. Till 1972, almost any referendum would have put India on top over Pakistan, but not now.

But even if reality may not follow fantasy, it may be useful to imagine the economic and geopolitical dividend to India that any peace might bring. First, if India has always punched below its weight internationally it is because our endemic brawl with Pakistan slots us not as a leader but as someone to be regularly scolded. Peace of whatever sort can free us of much of this disadvantage, allowing us to actually practice a foreign policy rather than just a Pakistan policy or an American policy. Second, it creates conditions for greater intra-regional trade with diverse and big benefits to Indian consumers and industry.

But the real dividend may be in defence expenditure. For many years, till the mid-80s, Indias defence budget was about 2.5 per cent of GDP, which is more or less in harmony with global trends. Then it climbed to a peak of 3.7 per cent during the Rajiv Gandhi years. For the last few years, it has hovered around 3 per cent. While in percentage terms it is much lower than Pakistan, which has averaged 18 per cent of its annual budget or 6 per cent of its GDP on defence over the last two decades, Indian defence now takes up a whopping $12.5 billion, or about 14 per cent of total expenditure.

Put another way, our defence budget is higher than all central and state expenditure on health and about the same as on education. Unless GDP growth climbs to 8 or 9 per cent over a long period of time, which is rather unlikely, defence spending at this level cannot be sustained. Not only is it too high and clearly eats into critical social funds, but the real irony is almost 75 per cent of the huge outlay is not going into purchasing latest weapons but rather in maintaining the existing manpower and on pension and welfare. Less than a quarter is left each year for modernisation.

Irrespective of ideology or political affiliation, it is hard to resist the logic of the guns versus butter debate. Or to ignore the fact that even though at independence India started off with many advantages resulting from its size, culture and history, it has since then largely been on the backfoot. Any serious peace initiative with Pakistan requires that India have a strong and clear position on security, as also a sober assessment of its economic needs and geopolitical position.

The author is an analyst of Indian political and business trends and the editor of India Focus, a political risk report for international investors