Pakistan's economy must escape the clutches of its armed forces

The country must abandon its anti-India doctrine for any chance of success in the economic arena

- RAGHU RAMAN

We'll eat grass but will get our own bomb." This vow made by Pakistani Prime Minister Zulfikar Ali Bhutto wasn't just rhetoric; it became his nation's strategy. Five decades later, Pakistan spends skewed sums on its armed forces, while its formal economy stagnates at a low proportion of its GDP. With a burgeoning defence budget, its anti-India doctrine is self-defeating.

In 2025-26, India's allocation for defence is 6.8 trillion (about $79 billion) or about 1.9% of GDP; Pakistan's budget for 2025-26 has upped its core defence outlay by 20% to about $9 billion while cutting overall expenditure; with its military pensions taken into account, its total spending would be nearly $12 billion, which is well above 3% of its GDP. Islamabad's defence bill sucks in revenue and weakens its credit profile; half its external borrowings over the last decade serviced either past bailouts or military imports. This strategy, coupled with politically 'untouchable' energy subsidies and a minuscule tax base, creates conundrums for Pakistan.

Its debt spiral combines with currency depreciation to lower the efficacy of every successive bailout, even as rising energy costs hold its industries back. The military's dominance of fiscal policy ensures that the bulk of its population lives in penury, while the army enjoys comfort and control.