Posted by: Ch. Muhammad Natiq
*Theme.*
To highlight effort of Pak Army to Support Economy – (Military Budget, dispute resolution FATF, Kakrey & Reko Diq), Mil Diplomacy – (COAS Visit to China, Boosting Def Exports, International Exercises and Competitions)
*Punchlines* *Support to Economy of Pakistan* *Defence Budget*
Despite facing unprecedented challenges/ threats both on the western and eastern fronts as well as hybrid warfare, Pakistan Army did not demand increase in its defence budget to support the country’s economy.
- Over the past fifty years, Pakistan’s Defence budget as a percentage of GDP has gone down, drastically from 6.50 percent of GDP in the 1970s to 2.54 percent in 2021.
- In Budget 2021-22, ‘Defence Services’ was allocated Rs 1,370 billion out of total budgetary resources of Rs 8,487 billion which is a mere 16 percent of the total budgetary resources.
- Out of this 16 percent allocation, Pakistan Army gets Rs 594 billion. In effect, Pakistan Army gets a paltry 7 percent of the total budgetary resources. Pakistan Army in the year 2019, had also relinquished Rs 100 billion of its budgetary allocation to support economy of the country.
- The recent report of SIPRI places Pakistan at 23rd in the list of world’s top 40 countries with the highest military expenditure, one position below as compared to 2020, which shows Pakistan Army’s commitment to assist government by spending less on the military expenditure.
- According to SIPRI Military Expenditure Database and The Military Balance from the International Institute for Strategic Studies, the countries that spend more on defence in comparison to Pakistan (2.54 GDP) include Oman (12 percent of GDP) Lebanon (10.5 percent), Saudi Arabia (8 percent), Kuwait (7.1 percent), Algeria (6.7 percent), Iraq (5.8 percent), UAE (5.6 percent), Azerbaijan (4 percent), Turkey (2.77 percent), Morocco (5.3 percent), Israel (5.2 percent), Jordan (4.9 percent), Armenia (4.8 percent), Mali (4.5 percent), Qatar 4.4 percent, Russia 3.9 percent, US 3.4 percent and India (3.1 percent).
- This difference becomes even more pronounced while considering the actual allocation of funds. In comparison to Pakistan’s 8.8 bn USD defence budget India spends 76 bn USD, Turkey spends 22.1 bn USD, South Korea spends 46.32 bn USD, Japan spends 47.2 bn USD, Saudi Arabia spends 46.32 bn USD, Iran spends 15.34 bn USD on its defence. Whereas in Europe UK, France and Germany spend $68.4 bn, $56.6 bn, and $56 bn respectively. China spends 230 bn USD and US leads the stats by spending $801 bn on defence budget.
- According to SIPRI, India’s military spending of $76.6 billion is ranked third highest in the world. This was raised by 0.9 per cent from 2020 and by 33 per cent from 2012. The Indian def budget is 9 times that of Pakistan’s Defence budget.
- Although Pakistan has the 7th largest military in the world, its expenses are one of the lowest. US spends $392000 per soldier, Saudi Arabia spends $371000, India spends $42000, Iran spends $23000, while Pakistan spends $12500 per soldier per year
- In addition to restricting the defence budget to bare minimum, Pakistan Army also took an unprecedented step of freezing the defence budget allocation in the year 2019. With this meagre defence allocation, Pakistan Army has not only kept its old vintage equipment in a maintained condition but has also inducted essentially required new conventional weapon systems/ Simulators, enhanced Niche capabilities, Cyber warfare capabilities, carried out latest developments in missile and nuclear technology.
- Despite having lower defence budget in comparison to contemporary armies of the world, Pakistan Armed forces has not allowed any compromise on its professional standards, it is ranked as the 9th most powerful military in the world (Global Firepower Index) and it is the only Army in the world which has successfully defeated the menace of Terrorism.
- Pakistan Army has also contributed PKR 28 Bn in FY-2020/21 as direct taxes to the govt exchequer (on account of pay & allowances, rat / POL procurements, customs, etc)
*Dispute Settlements* *Karkey Karadeniz Electrik Uterim*
Karkey Karadeniz Electrik Uterim dispute settlement is one of the examples of Pakistan Army efforts for the economic welfare of State of Pakistan.
- A Turkish company namely Karkey Karadeniz Electrik Uterim (Karkey) was found involved in corruption, a core committee comprised of civil and military leadership led to the uncovering of evidence of corruption in Turkey, Switzerland, Lebanon, Panama and Dubai (the UAE). This evidence was presented to the International Centre for Settlement of Investment Disputes (ICSID) Tribunal by the Core Committee. Pakistan Army amicably resolved the Karkey dispute and saved Pak USD 1.2 billion penalty imposed by ICSID. If the dispute had not been settled and Pakistan would have paid the amount, Pakistan’s GDP would have shrunk by nearly 2pc and Pakistan would have defaulted on its international obligations.
- On August 14, 2020, the President of Pakistan conferred civil award of Sitara-e-Imtiaz to three officers of ISI, who played a pivotal role in successful settlement of the Karkey dispute.
*Reko diq*
Due to Army’s countless efforts under the leadership of COAS, Pakistan was saved from $11 billion penalty in Reko Diq case and reconstituted a project aimed at excavating huge gold and copper reserves from the site in Balochistan. The Reko Diq agreement was a result of COAS’ personal efforts as he convinced all parties for a National Consensus.
- The Reko Diq agreement has been reached after several rounds of negotiations over the past three years. Reko Diq will potentially be the largest gold & copper mine in the world. It will liberate Pakistan from crippling debt & usher in a new era of development & prosperity.
- Reko Diq will prove to be a game changer for Federal, Provincial Govts and people of Balochistan. It shall not only restore an investment friendly image of Pakistan but will also accrue major economic benefits, development of indigenous mineral exploration capability and result in a momentous socio-economic boost for people of Balochistan.
- The new deal entails fol socio-eco advantages for people of Balochistan:-
- GoB share will be paid by GoP for long term revenue stream to Balochistan.
- The proj will create Direct job opportunities for approximately 8000 skilled and non-skilled while 12000 indirect jobs.
- Barrick Gold will invest 1 % (approximately Rs 160 Bn) in social uplift and Subsequently 0.4% of revenue per annum in Corporate Social Responsibilities in local area, major socio-economic gains for People of Balochistan.
- The exploration activity will also result in activation of CPEC route and ports: import / export and transportation of materials.
- Development of new infrastructure including trade routes, improved connectivity and expansion in trade corridors with attendant advantages of CPEC projects in areas.
- Un-locking of mineral sector of Balochistan for investment.
*Addressing FATF Concerns*
Congratulations Pakistan. Pakistan is out of grey list, It is an example of whole of a nation effort, steered by Pak Army & executed by all civil institutions.
- Pakistan Army’s relentless efforts, under the directive of COAS, in developing, synergizing and coordinating a comprehensive action plan for FATF compliance, has proved to be monumental in achieving unprecedented progress in the FATF implementation.
- Pakistan acted in line with unanimously adopted National Action Plan (NAP) against all terrorist groups without any discrimination wherein input of Pakistan Army was most crucial.
- We made unprecedented progress in FATF history & addressed 26 out of 27 items of FATF action plan. Senior Military officers, Director General Military Operations (DGMO) and Director general of the Inter-Services Intelligence (DG ISI) were part of the National Executive Committee (NEC) on terror-financing.
- A special cell was formed which coordinated amongst more than 30 organizations.
- The special cell worked to fast track its determined actions on AML (Anti-Money Laundering / Counter financing of Terrorism (CFT). Pakistan recovered 58 billion rupees.
- In the National Executive Committee on terror-financing and money laundering, Pakistan Army steered enormous efforts in it & prosecutions against all Entities of Concern who were involved in Terror Financing. Worked on national risk assessment & streamlined Non-profit organizations.
- Pakistan has made unprecedented progress in FATF action plans as under:
- *For Terror Financing Action Plan.* 26 out of 27 items have been completed.
- *For Money Laundering Action Plan.* Within one cycle, four out of seven items have been addressed. A progress unprecedented in FATF history.
- The success is attributed to following aspects facilitated by Army:
- *Substantial Terror Finance (TF)*, investigations & prosecutions against all EOCs (Entities of Concern).
- Pursuant to national risk assessment, Pakistan has also, streamlined its Non-profit organisations section which after a deliberate survey on basis of TF (Terror Finance) red flag indicators now stands over 15,000 against 65,000 in 2018.
- SBP & SECP developed risk based supervisory policies in line with transnational TF (Terror Financing) risk profile & initiated multiple capacity building sessions for employees to improve supervisors’ understanding of TF (Terror Finance) risks.
- Projecting Pakistan’s progress as sustainable and irreversible, addressing various legal, financial and terrorism related aspects through enactment of following laws:
- *Ánti-Money Laundering Act Amendments.* To strengthen AML (Anti-Money Laundering / Counter financing of Terrorism (CFT) regime & discourage money laundering.
- *Foreign Exch Regulatory Act Amendments.* To take effort and prompt actions against Hawala / Hundi networks.
- *Mutual Legal Assistance Act.* To support international mutual assistance against AML (Anti-Money Laundering / Counter financing of Terrorism (CFT).
- Anti-terrorism Act Amendments
*Military Diplomacy* *COAS Visit to China*
A senior tri-service military delegation of Pakistan visited China from June 9 to 12.
Recent visit of COAS is part of the Pak-China Joint Military Cooperation Committee (PCJMCC).
During the visit Pakistan and China reaffirmed their strategic partnership in challenging times and agreed to continue the regular exchange of perspectives on issues of mutual interests.
Pakistan and China vowed to enhance their training, technology, and counterterrorism cooperation at the tri-service level
Pakistan, China vow to step up defence cooperation despite challenges
Military leadership of China and Pakistan stepped up their cooperation building described “their strategic partnership” in the challenging times.
The high-level military interaction between the Pak and China came at a critical juncture when tensions are deepening between China and the United Sates.
*Boosting Defence Exports*
Military diplomacy has played a crucial role in revitalizing Pakistan’s foreign relations. Military diplomacy has complemented state institutions in achieving national objectives as well as providing economic anchorage.
This is evident from the exponential growth in Pakistan’s arms exports, which is a consequence of successful military diplomacy. According to Ministry of Defence Production, in last five years an unprecedented boost in the Defence Exports (Approx. Rs. 60 bn) and Inland Sales (Approx. Rs. 70 Bn) was accomplished.
Alone in the year 2019, PAC Kamra secured Export of JF-17 to Nigeria for USD184 Million and Contract finalization of 12 x Mashaks to Iraq worth USD 33.33 Million. Heavy Industries Taxila undertook Rolling out of indigenously manufactured Al-Khalid Tanks at 1/3rd cost of the international market.
In addition to generating exports, Ministry of Defence Production paid approx Rs 6 Bn Taxes / duties annually in the national exchequer and generated 8000 jobs in defence production sector. Most notably indigenous manufacturing of Ventilators was also achieved by NRTC.
*Joint Military Exercises*
The combined military exercises with multiple nations paved the way to further national, economic, and diplomatic objectives improving overall relations with these countries. Relations with Russia were also revived as a result of successful military trainings and exercises. Few of these Major exercises include following:-
- Pak-Jordan joint exercise “Fajr-ul-Sharq 1” in Dec 2016.
- 8 weeks long Counter Terrorism Training of Nigerian Special Forces Battalion by Pak Army SSG team in Tarbela Jun 2017.
- Joint exercise DRUZBA 2017 between special forces of Pakistan and Russia Armies was conducted in Minralney Vody, Russia in Sep 2017.
- Pak-Saudia Special Forces joint counter terrorism exercise ‘Al-Shehab-2’ Dec 2017.
- Pak-China joint military exercise ‘Warrior –VI 2018’ in Dec 2018.
- Sixth bilateral exercise Sea Guardians-2020 between Pakistan Navy and PLA (Navy) in Jan 2020.
- Pakistan – Bahrain joint Exercise “AL BADAR-IV 2020” Feb 2020.
- ATATURK-XI 2021, Joint Special Forces exercise between Turkish and Pakistani forces Feb 21.
- Pakistan-Morocco Bilateral Joint Exercise – 2021 Oct 2021.
- 46 countries took part in Naval Ex Aman-21. NATO allies like the US and the UK took part alongside Russia in Aman-21. Under the auspices of the Pakistani Navy, divergent forces have shared counterterrorism strategies, recognising that the threat of terrorism is bigger than any single state.
- In Mar 2022, the US and Pakistan Air Forces held a joint exercise, Falcon Talon 2022, at a Pakistan Operational Air Force Base.
*Conduct of International Competitions*
From 1 to 7 November, 2021, the 3rd International Physical Agility and Combat Efficiency System (PACES) competition was held in Lahore under arrangements of Pakistan Army. Contingents from six countries comprising 107 military personnel including Iraq, Jordan, Palestine, Sri Lanka, Uzbekistan and UAE took part in the mega event. The event showcased Pakistan as a peaceful and sports loving nation and will project the true face of our country.
- The ceremony of 53rd World Military Shooting Championship (Shotgun) 2021 was held in Lahore under the auspices of Conseil International du Sport Militaire (CISM), commonly known as International Military Sports Council. This was the second time Pakistan held international military championship.
- Over 50 participants including 41 international shooters from Russia, France, SriLanka, Palestine, Kenya are participating in the event with motto ‘Friendship Through Sports’. Moreover, the officials from Guinea, Iran and Nepal were also present. Representatives of CISM,large number of dignitaries, diplomats and spectators witnessed the colorful and impressive opening ceremony.
- On 7-9 March 2022, Fifth international Pakistan Army Team Spirit (PATS) Competition – 2022 was held at the National Counter Terrorism Center in the mountain town of Pabbi. Eight Pakistan and eight international teams, including Jordan, Morocco, Nepal, Turkey, Uzbekistan, Kenya, Saudi Arabia and Sri Lanka, participated in the competition.
- Pakistan Army team won gold medal in international “Adventure Competition” held in Nepal from March 18 to 21, 2021. The competition was aimed at testing physical endurance and mental agility of participants and included cross-country running, cycling and rafting.
- In Oct 2017 and Oct 2018 Pakistan won Gold Medals in “Exercise Cambrian Patrol” held in UK in which 134 teams from 31 countries participated.
- On 14 Oct 2020, the Pakistan Army won an international military drill competition known as the Pace Sticking Competition held at the Royal Military Academy in Sandhurst, UK for the third time in a row. The Pakistan Army had first participated in the event in 2018.
*Karachi Transformation Plan*
Karachi Transformation Plan (KTP), worth Rs. 1.1 trillion, was launched in September 2020 with Army’s support to civil administration. Moreover, Army’s assistance to civil administration, including FWO, NLC and NDMA led to improvement in existing infrastructure to safeguard against urban flooding in Karachi and uplift of relevant civic facilities.
*Law and Order Restoration in Karachi*
Due to the services and sacrifices of Army and Rangers Sindh, law and order in Karachi has been maintained resulting in significant decline in terrorism and crime rate over the years and providing a secure environment for socio-economic development.
