Why a Large Defence Budget is Highly Beneficial to the Nation
Posted on October 13th, 2012

Dilrook Kannangara

Defence budget allocation is often misunderstood. Some tend to view it as needless war expenses. Pro-Tamil Elam lobby gets hysterical when defence budget is mentioned. Various NGOs blame defence expenses for relatively stagnant education and healthcare allocations. There is an attempt to classify defence allocation as corruption by another quarter. All these theories emanate from frogs in the well; those who are ignorant of the world outside. Most peaceful countries allocate 2% to 4% on GDP on defence. Sri Lanka’s current allocation of 2.8% of GDP is dwarfed by Singapore’s 3.5%. Given the similarity of national security threats, Sri Lanka must match Singapore’s 3.5% of GDP on defence.

In this context, the 25% increase in defence budget for 2013 is a healthy sign. At current exchange rates, it exceeds US$2 billion.

How Defence Spend Directly Benefits the Nation Economically

Over 90% of the defence budget goes for salaries, other personnel related expenses and for locally procured goods and services. When applied to the 2013 budget, it is equal to 257 billion rupees that is coming back to the economy of the total defence budget of 286 billion rupees. Most personnel are from rural areas without other employment opportunities. Not only they are gainfully employed by the military, the influx of finances into their rural villages automatically uplifts business and all economic activity. Trading activities flourish, houses are being built and siblings and families of soldiers and officers are economically secured. The need for the government to spend additional funds on welfare and economic injections is reduced.

Providing food, clothing, equipment, other goods and services drive many industries throughout the country. Along with these industries, their upstream industries (suppliers) also benefit. When added up they are a huge component of the economy.

Handsome Returns of the Defence Spend

There is no doubt the Sri Lankan economy is growing rapidly after the outright military victory in 2009. Manufacturing, exports, imports, tourism, Foreign Direct Investments and local industries have recorded huge increases over the period thanks to the military victory. Deceptive “ƒ”¹…”peace’ awaiting war during the CFA (ceasefire agreement) never came anywhere close to the current level of economic activity. It is amply evident that the investment in defence over the years paying off handsomely.

The economy of the North grew by a staggering 22% in 2011 and now the Jaffna economy can be estimated to be over US$3 billion a year. It must be remembered that the economy of Jaffna did not contribute to the Sri Lankan economy during the period 1990 to 1995 when it was under LTTE control on one side and under the total economic embargo on the other. Even during the time 1983 to 1990 and from 1995 to 2009, its contribution was severely restricted due to LTTE activity. Spending US$2 billion for a return of US$3 billion a year makes perfect economic sense.

However, it is not just Jaffna district that has been added effectively to the national economy. Batticaloa, Vanni, Trincomalee, Ampara districts and threatened villages in Anuradhapura and Polonnaruwa have been added to the national economic grid effectively after 2009. Their total economic worth exceeds US$ 8 billion a year.

All these economic benefits due to the outright military victory of 2009 which was enabled by the defence spend over the years.

North and the east have large stocks of natural resources. Most of these were under the de facto control of the LTTE for considerable part during the war. Had the military not succeeded in eliminating the LTTE, Sri Lanka would not have found access to these resources. Their economic worth spans over years and they are immeasurably large.

Peace, harmony and law and order in the island are imperative to economic activity. Continued economic activity cannot be guaranteed without an effective defence force. That necessitates continued investments in defence just like other peaceful democratic countries.

Unvalued Returns of Defence Spend

There is a third element of the defence budget that often goes unnoticed and unappreciated. Medical, engineering, social services and other professionals in the army, navy and the air force provide invaluable services to the nation under very difficult circumstance avoided by others. Services of the professionals must be contrasted against comparable professionals outside the armed forces who regularly engage in industrial action or leave the country with the baggage of free university education they received without returning anything to the nation.

If the number of medical, engineering and other professional servicemen of the armed forces can be raised, the rate of return for the nation increases rapidly; far better than an equal investment in taxpayer funded universities. There is no brain drain associated with KDU (Kandawala Defence University) graduates. They serve the nation for more than they get. A prudent investment advisor would recommend investing more on the tertiary education of KDU undergraduates than in other university graduates given this high return, high quality and low risk nature of the investment.

Infrastructure development is another major contribution to the nation by defence forces. Since becoming the Ministry of Defence and Urban Development, this has been given a new impetus. Development works that surpass mere beautification of Colombo by the Ministry is praiseworthy. This is an area with humongous potential in a country that emerged from three decades of war.

Disaster relief services carried out by the military is another area of unvalued national service. With increasing number of natural disasters and their impact on the growing population, defence forces have huge potential in this space.

Srilankanisation of the North

Although the 30 year war ended, the north remains detached politically and culturally from the rest of the island nation due to its mono-ethnic nature that more closely resemble Tamil Nadu, South India, than Sri Lanka. The north must go through a process of Srilankanisation where the average Sri Lankan value system mix, language mix, cultural mix and ethnicity mix must be inculcated. Unless it happens, the north will continue to find closer connections with Tamil Nadu than Sri Lanka.

Ethnic Sinhalese and Muslims must be resettled in the north in large numbers. Their linguistic, cultural, schooling and other needs should be addressed by building the required infrastructure. Tamil-only north is a national security threat and it must be turned to a harmonious multicultural community. It is time security forces spearhead ethnic integration activities in the north through settling non-Tamils in sizable numbers to convert the north to a vibrant harmonious community.

3 Responses to “Why a Large Defence Budget is Highly Beneficial to the Nation”

  1. Susantha Wijesinghe Says:

    DILROOK !!! You have said a mouthful in very simple English, which I do hope will get into the thick skulls of the ruling Politicians.

    Also, what you have said in the last paragraph, is the symbolic view of all PEACE LOVING SRI LANKANS. The THREE FORCES and the POLICE should give the lead in implementing what is reflected therein. THE GOVENMENT MUST TAKE THE INITIATIVE, AND GIVE THE GREEN LIGHT TO GET STARTED RIGHT NOW.

    Procrastination is the thief of time. GOSL, please get started right now. Let us admire your courage. DO IT !!!

  2. Sirih Says:

    There are few projects under defence ministry that develop local defence related products and one major one is mine clearing machine which was developed in SL by defence ministry… It is 1000 times cheaper than what you can buy from western merchants… We already have orders from African states and hope this goes further.
    Another project is locally developed Drones for surveillance and it is already prototype stage.. We also have quite good capability on Cyber warfare area and this is well funded including media technology analysis and training .

  3. Dham Says:

    Sirih,
    This is fantastc news. This way we don’t need to be slaves extremists of the world.
    More and more gdd news coming from Gota.
    Time has come for maharaja to step down and support the real man.
    Enough with Indian technology !

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