The Cost of Power: How Pakistan's military economy is undermining its future

PAKISTAN'S enduring economic difficulties are well recognised globally. In recent years, the nation has experienced alarming inflation, an ongoing crisis in foreign exchange reserves, and an overwhelming debt burden. These issues have led to widespread unemployment, increased poverty, and daily hardships for a population already caught in the crossfire of recurring terrorist violence and military operations ostensibly aimed at countering it.

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Nevertheless, despite this worsening scenario and the harsh effects of austerity measures imposed by the IMF on the populace, Pakistan's disproportionately large military appears unaffected and is, in fact, gradually expanding its share of the national economy.

The expansive role of the military in Pakistan's domestic affairs extends beyond politics and foreign policy, significantly permeating the economic sphere. To begin with, the military absorbs a substantial portion of the GDP - Pakistan's defence expenditure for FY 2025 stood at 2.3 per cent of GDP, exceeding equivalent figures for India, China, and the European Union.

According to study by a leading business portal, Pakistan's defence budget experienced an annual growth rate of 12.6 per cent between FY17 and FY25, compared to India's 8 per cent. In contrast, education and healthcare were allocated merely 2 per cent and 1.3 per cent of the GDP, respectively.

In addition, the military has developed an extensive private conglomerate, commonly referred to as the 'milbus' (military business) -- a term introduced by prominent scholar Ayesha Siddiqa in her seminal work Military Inc.: Inside Pakistan's Military Economy.