The Hindu Business Line : Call to reduce defence spending in South Asia

TOP industrialists and policy-makers have said that defence spending in South Asia should be reduced to promote trade, economic and social development of the region.

Speaking at a conference titled `Peace Dividend' organised by the Hindustan Times group here, the Reliance Group Vice-Chairman, Mr Anil Ambani, the Hindustan Lever Chairman, Mr M.S. Banga, the Planning Commission Member, Mr N.K. Singh, the former Governor of the Reserve Bank of India, Dr Bimal Jalan, and the former Prime Minister of Pakistan, Ms Benazir Bhutto, echoed near identical sentiments and called upon the governments to cut defence expenditure.

Mr Ambani, while stressing that the overall defence expenditure in South Asia should be reduced, asserted that India had no scope of manoeuvring its security spending in view of the already low spending and terrorism.

"Of course, as far as India is concerned, one must not exaggerate the significance of the conventionally understood peace dividend in the fiscal sense. The financial changes to the exchequer from increased regional security could be minimal in the medium term," Mr Ambani said, pointing out that the country's defence budget at three per cent of the gross domestic product (GDP) was already "quite modest" and went largely towards staff expenses.

He said that even if peace with Islamabad was assured, New Delhi's security concerns "transcend Pakistan and in addressing these, the country will have to spend even more on higher cost of modern technology''.

Mr Ambani said that apart from the regular defence expenditure, the country would also have to continue to spend on internal security to modernise its response to terrorism.

He urged the South Asian leaders to agree to a pact aimed at reducing defence expenditure and earmark resources for the social sector. "Cutting military spending by five per cent annually could generate a peace dividend of around $8 billion, enough to finance most of the social services," he said.

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