Balancing Military Spending and Economic Crisis

Indian policy and military decision makers are facing a real quandary. On the one hand the country’s economy is suffering greatly, as consumer markets across the world shrink - a direct challenge to the double digit growth of Indian defense budgets over the last decade; on the other hand, perceived and real vulnerability to external and internal threats, both conventional and asymmetric, appear to be growing rapidly. Indian defense officials complain that the country’s chief potential rivals, Pakistan and China are spending about 4% of their GDP on defense, while India’s defense budget rises to a mere 2% of the country’s GDP. With that in mind, India’s defense budget is set to rise to about $40 billion next year (about 3% of GDP), bucking economic trends and no doubt raising eyebrows and maybe even real protest. India’s weapons imports have also seen a huge growth spur over the last decade, and are set to grow even more in the coming years, reaching more than $10 billion in 2012.

With the economic crisis set to continue for at least another year, and with countries around the world getting used to the idea that the impact of this crisis will continue to effect their economies for several years to come, it is reasonable to assume that defense budgets will stagnate, if not shrink over the next several years, unless the economic crisis slides into a military crisis, in which case all bets are off. Either way, it seems like all of us, proponents and opponents of military spending are doomed to live the Chinese proverb: “May You Live in Interesting Times”.
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Balancing Military Spending and Economic Crisis
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