Military Spending and Economic Growth in South Asia: A Panel Data Analysis

Despite the large number and variety of studies addressing the relationship between military spending and economic growth, a consensus regarding the exact nature of any relationship between the two has proven elusive. This study uses a panel co-integration approach to examine the relationship between military spending and economic growth in the five South Asian countries of India, Pakistan, Nepal, Sri Lanka and Bangladesh over the period of 1988–2007. It finds that a 1% increase in military spending increases real GDP by only 0.04%, suggesting that the substantial amount of public expenditure that is currently directed towards military purposes in these countries has a negligible impact upon economic growth.     

Indian and Chinese espionage

India and China both have powerful spy networks; completely different in their approaches to espionage; both effective against their perceived enemies. China focuses first on internal threats, on Taiwan and Hong Kong, and then the US and Japan. India’s defense policy focuses on Pakistan and internal terrorist threats, and then on China. In reality, however, when it comes to spying on each other, both China and India suffer from incompetence and apathy – which endangers both their own security and regional stability. This article looks at how they spy on each other, and asks why and how they need to improve. The narrative also touches upon some of the individuals who are waging the spy war, from India’s wily spymaster Ajit Doval down to junior Chinese agents such as Wang Qing and Pema Tsering. The two countries are not friends. They have the largest territorial dispute in the world on their hands, covering an area the size of North Korea, and they have large armies facing each other along 4000 kilometers of frontier. But they also lay claim to the world’s two oldest and richest civilizations, with a rich history of exchange, and now with a combined population of 2.6 billion people and more than a quarter of the world’s economic output. If they cooperated, they could solve many of the world’s problems; but if they lurch into conflict, the potential consequences are terrifying to contemplate. Unfortunately, despite their geographical closeness, they do not know much about each other. They have few cultural interchanges, little diplomacy, few trade missions. They do not watch each other’s films, read each other’s books or listen to each other’s music. Chinese tourists would rather fly to New Zealand for their holidays than cross the border to India, and Indian students would rather study in Europe than China. China and India are neighbors that barely talk to each other. Most significantly, they do not spy on each competently. For countries that do not interact socially, defensive understanding is important for security – but China prefers the glamor of facing up to its Pacific and other maritime rivals such as the US and Japan. India, for its part, does talk a great deal about the China threat, but its resources and expertise are wrapped up in controlling its security threat from Pakistan and the Islamic world. When China and India do try to spy on each other, it is often without the benefit of a long-term focus or understanding. India has some very skilled operatives within the Research and Analysis Wing, but few that specialize in China. China has an enormous pool of resources spread across several government departments, including the Ministry of Public Security, and also has extensive facilities and manpower in the Joint Staff Department of the Central Military Commission (the JSD) and the new Strategic Support Force (the SSF). However, China’s intelligence services generally behave as if India is not worth spying on. Given that the two countries do not have the cultural or political machinery in place to understand each other, espionage and intelligence gathering is vital to ensure that miscalculations do not take place. This has been apparent over the last few years in stand-offs in the Himalaya, as well as top-level suspicions on each side about a variety of subjects including terrorism, covert operations in Sri Lanka and Burma, and the two countries’ nuclear weapons programs. Both countries do occasionally make efforts in espionage against each other, especially during sensitive periods such as the mountain stand-offs of 2014 and 2013 and during policy developments in nuclear warfare. In this article the author looks at actual spying incidents between the two countries, their methodologies, their staff, their technical capabilities, and how the act of spying, which is usually viewed as intrinsically adversarial, can be a force for good. The article relies on interviews with actual participants in intelligence from both countries as well as extensive use of contemporary online sources, and secondary analysis by both military and academic experts from China, India and NATO countries.     

The Fire Within: Naxalite Insurgency Violence in India

India is at a crossroads today. While it is fast emerging as a global power with a vibrant democratic polity, a robust economy and a nuclear-weapons capable military, the country is also witnessing a growing polarisation between the rich and poor and between urban and rural areas, a rise in communal tensions, large numbers of suicides by impoverished and indebted farmers and a spurt in terrorist activities and attacks by various disgruntled organisations and groups. Of these various challenges, as attested to by Prime Minister Manmohan Singh himself, the most dangerous threat to India's territorial integrity, prosperity and wellbeing has come from the Naxalite insurgency or ‘people's war’ that is manifest in large areas of eastern, central and southern India. But what factors account for the formation and persistence of Naxalite insurgency in India? What are the key objectives of the Naxalites and why is violence directed against the Indian State? And how has the Indian State (both central and state governments) responded to the Naxalite insurgency and with what effect? These are the main research questions that we attempt to answer in this paper. We put forward two broad arguments. First, the Naxalite insurgency in India is the latest manifestation of peasant struggles caused by grinding poverty, exploitation and inequality that have prevailed in rural areas for centuries. What sustains these struggles to this day is the fact that socio-economic conditions in rural areas have changed little and the policies followed by the post-independent Indian State have generally failed to mitigate rural problems. Second, the Naxalite insurgency has emerged as the most dangerous threat mainly due to the movement's spatial spread, growing support base in tribal and backward areas and enhanced fighting capabilities. The Indian State has viewed the movement as a ‘law and order’ problem and responded with force. But a ‘law and order’ approach to the Naxalite insurgency is unlikely to produce a lasting resolution of the problem, since it would not effectively redress deep-rooted grievances felt by a majority of India's rural poor for decades.     

Bangladesh: The Changing Dynamics of Violent Extremism and the Response of the State

Bangladesh is currently facing an incremental growth of radicalization. This radicalization can be traced back to the country’s early post-Independence years. Over time, political violence, ideological clashes between secular and right-wing ideologies, and weak governance have created conditions for the growth of radical Islam. The public rhetoric on corruption, weakening of democratic institutions, inadequate law enforcement agencies, fragile justice delivery system, fledgling educational and social institutions and growing unemployment provides further space for alternative narratives by extremist ideologues. Home-grown extremist outfits have received ideological and tactical supports from transnational terrorist network such as Islamic State (IS) and Al-Qaeda in Indian Subcontinent (AQIS), but only in a limited manner. The supply and demand side of radicalization in Bangladesh has not yet been addressed by actors such as the government, private sector, civil society and media. The failures in multiple sectors in the state governance have led to a situation where IS and AQIS now see Bangladesh as a potential ground for exerting their supremacy as flag bearers of radical forms of Islam.     

Country Survey I–Military Spending in India 1

After a brief survey of the Indian economy, we survey the supply and demand of military expenditures in India over the last four decades. The causes of military expenditures appear to include regional rivalries and protracted conflicts, but it has proven difficult to delineate these with empirical models. The effects of military spending in India on economic growth appear to be benign, despite much speculation to the contrary. However, the opportunity costs of defence spending are shown to be considerable. We conclude with speculation about the role of debt and debt servicing in retarding future economic growth in India. We also speculate about the potential for the creation of a war economy in India.     

谈“三非”人员对我国的不良影响及对策

近年来，我国的“三非”问题逐渐凸显，大量“三非”人员的涌入给我国的国家尊严、国防安全、社会稳定、经济发展以及人口素质等诸多方面都带来了冲击。研究化解、预防“三非”人员，将对我国的经济发展、社会稳定具有极为重要的现实意义。     

Reactor-grade plutonium and nuclear weapons: ending the debate

The claim that reactor-grade plutonium cannot or will not be used to produce nuclear weapons has been used to justify non-nuclear-weapon states’ large stockpiles of plutonium that has been separated from highly radioactive spent fuel. However, by using reduced-mass plutonium cores, it is possible to manufacture reliable nuclear weapons with reactor-grade plutonium. These weapons can have the same design, size, weight, and predetonation probability as weapons using weapon-grade plutonium and would require no special cooling. The increased radiation from reactor-grade plutonium could be easily managed by shielding and operational procedures. Weapons using plutonium routinely produced by pressurized-water reactors could have a lethal area between 40 percent and 75 percent that of weapons using weapon-grade plutonium. In the past, both Sweden and Pakistan considered using reactor-grade plutonium to produce nuclear weapons, and India may be using reactor-grade plutonium in its arsenal today. Despite claims to the contrary, the United States used what was truly reactor-grade plutonium in a successful nuclear test in 1962. The capability of reactor-grade plutonium to produce highly destructive nuclear weapons leads to the conclusion that the separation of plutonium, plutonium stockpiling, and the use of plutonium-based fuels must be phased out and banned.     

Military expenditure and economic growth in Middle Eastern countries and Turkey: a non-linear panel data approach

The economic growth effects of military expenditure have been the subject of a large literature in defence economics. Theories on the economic impacts of military expenditure greatly differ and include arguments that they either enhance economic growth or crowd out productive investments. Empirical literature on defence expenditure and economic growth nexus generally employs linear specifications to investigate the impact of defence expenditures on economic growth. Although it is now well established that many economic variables may have a non-linear data-generating mechanism, it seems that this reality has long been neglected in empirical work on defence–growth nexus. This paper attempts to fill this gap by employing non-linear panel data models to examine the effects of military expenditures on economic growth for Middle Eastern countries and Turkey, for the time period 1988–2012. Results show that the effect of military expenditure on economic growth is nonlinear such that the state of the economy actually determines the effect of the former on the latter. This is important not only in showing asymmetric relationship between these variables but also in revealing the reasons of mixed results of earlier literature.     

UNITED NATIONS SECURITY COUNCIL REFORM

Much has changed since the United Nations was established in 1945. New challenges confront the organization including global warming, global diseases and global terrorism. Responding to these challenges requires continual change, adaptation and learning—a hallmark of the stewardship of current UN Secretary General Kofi Annan. In 1997 Annan announced major structural changes to streamline the organization, follow up five years later by another initiative to clarify, simplify and rationalize the organization and subsequent efforts to streamline UN peacekeeping. The UN has also forged new partnerships with civil society and the private sector. Important as these changes are, reform of the General Assembly and the Security Council hold the organization hostage to the vested interests of key member states. There are a number of options to make the Council more representative including regionalism, population distribution, economic weight, culture/religion/civilization and democracy. Clearly the largest challenge is the absence of representation for Asia, Africa and Latin America. Currently Germany, Japan, India and Brazil have strong claims—plus at least one candidate from Africa. Should these four countries decide to act in unison, they could force reform of the Security Council     

Pakistan’s nuclear future: continued dependence on asymmetric escalation

ABSTRACT

In 2019, the geostrategic landscape of South Asia significantly changed. A crisis between India and Pakistan involved air strikes across international boundaries for the first time since the 1971 war. Pakistan came close to economic collapse, while India re-elected hawkish Narendra Modi as prime minister in a landslide. These developments, alongside the United States’ efforts to strike a deal to leave Afghanistan and rapidly improving US-India relations, portend new challenges for Pakistan’s security managers—challenges that nuclear weapons are ill-suited to address. Despite the shifting security and political situation in the region, however, Pakistan’s nuclear posture and doctrine seem unlikely to change. This article explores the roots of Pakistan’s reliance on the traditional predictions of the nuclear revolution, most notably the notion that nuclear-armed states will not go to war with one another, and argues that this reliance on nuclear deterrence is a response both to Pakistan’s security environment and to serious constraints on moving away from nuclear weapons toward an improved conventional force posture. Pakistan’s central problems remain the same as when it first contemplated nuclear weapons: the threat from India, the absence of true allies, a weak state and a weaker economy, and few friends in the international system. While 2019 may have been a turning point for other states in the region, Pakistan is likely to stay the course.     

The US–India courtship: from Clinton to Bush

While a considerable thaw in Indo–US relations bequeathed by the Cold War took place under Clinton, there are still factors, even after 11 September 2001, which have hindered a relationship with common strategic interests. These factors involve divergences on nuclear proliferation, the emergence of China as a world power, the pace of India's economic liberalisation, and Indo–Pakistan tension. A strategic partnership is achievable, but India will need to keep US interests constantly in focus.     

《印度之行》的后殖民解读

福斯特的小说《印度之行》，讲述了20世纪20年代英国殖民者与印度当地人民之间的冲突。以特顿、朗尼为主流的英国殖民者残酷统治印度，文化官员菲尔丁寻求与印度人的真诚友谊，英国来客莫尔夫人、阿德拉想了解真实的印度，但他们都以失败告终。英国人欧洲中心主义、白人集体意识以及殖民政权毫不掩饰的种族歧视和带有感情色彩的暴力统治，唤醒了印度人民，割裂了这本来就脆弱的联结。赋予东西方平等的话语权，实现文化的多元化，加强文化交流。是东西方交往健康发展的根本途径。     

India’s emerging space assets and nuclear-weapons capabilities

ABSTRACT

Over the last five decades, India’s nuclear and space programs have gone through several phases, from collaboration to divorce to supportive. An interplay of two factors determined the nature of the relationship. One was the state of India’s nuclear-weapon program. The second was international conditions, especially India’s relationship with the nuclear-nonproliferation regime. In the early decades, because of the rudimentary nature of India’s nuclear and space programs, the relationship was collaborative, since the rocket technology being developed was a necessary adjunct to the nuclear-weapon program. Subsequently, as India’s rocketry capabilities and nuclear-weapon program began to mature and concerns about international sanctions under the non-proliferation regime began to grow, the two programs were separated. The Indian rocketry program was also divided, with the civilian-space and ballistic-missile programs clearly demarcated. After India declared itself a nuclear-weapon state in 1998 and the programs matured, the relationship has become more supportive. As the two programs mature further, this relationship is likely to deepen, as the nuclear-weapon program requires space assets to build a robust and survivable nuclear deterrent force.     

State and society in Asia

India and China are the 2 most populous countries of the world; in the 1950s, both countries initiated a centrally planned program for rapid development within vastly differing political systems. China embarked India's policy encouraged only voluntary acceptance of family planning. In both cases, however, government involvement in population forms a part of comprehensive national planning. Both countries rely on a limited resource base and technological sophistication in order to alleviate mass poverty and misery. The political implications of population growth cannot be neatly isolated from those that are generated by social and economic forces of change in a society that is in a transitional stage of modernization and development. Development has not been an unmixed bleesing; population growth is one of its counterproductive outcomes. The development process has begun to draw increasing attention to hitherto neglected correlates of fertility decline, such as a reduction in infant mortality, universal education, improvement in women's status, and women's participation in economic activity outside the home, all of which eventually result in greater demand for family planning services. Both the Indian and Chinese models highlight the importance of taking the people into one's confidence; the response of the common people to official initiatives is critical in securing a reduction in fertility levels. China has adopted a 1 child family policy, yet it is unreasonable to expect that the Indian people would agree to a nationally prescribed family size norm below 2 children. The principal determinant of future population trends in both these countries is the course of their politics. The success of developing countries will be assured if the developed nations support their progress without being worried about their population growth, which is the result of their unavoidable failure to modernize their social and economic structures.     

China's Nuclear Forces and Their Significance to India

The Indian nuclear program is a response to a perceived politico-strategic threat from China as opposed to a military-operational one that New Delhi began after perceiving an “ultimatum” from China in 1965. Consequently, India is in the process of acquiring an assured second-strike capability vis-à-vis China to meet the requirements of general deterrence. While India has always been concerned about the Sino-Pakistani nuclear/missile nexus, China has become wary of the growing military ties between the United States and India in recent years, especially because of the military implications of the US-India civil nuclear deal. Given the growing conventional military gap between the two states, India is not lowering its nuclear threshold to meet the Chinese conventional challenge. Instead, India is upgrading its conventional military strategy from dissuasion to deterrence against China. While the overall Sino-Indian nuclear relationship is stable, it will be challenged as China acquires advanced conventional weapons that blur the distinction between conventional and nuclear conflict.     

Does defence expenditure have a spillover effect on income inequality? A cross-regional analysis in China

China’s defence expenditure has been growing rapidly along with GDP growth during the past two decades. Meanwhile, the income gap has continued to increase. There are conflicting views regarding whether the defence expenditure is capable of reducing income inequality. Therefore, this paper investigates the existence of any spillover effect of defence expenditure on income inequality, with a special focus on the regional differences among 31 provinces and 7 military regions in China. We extend panel cointegration and the impulse response function by using panel data during the period of 1997–2012. The empirical results show that the defence expenditure has an impact on income inequality, and the effect varies over different regions in China. The defence expenditure has a spillover effect on income inequality in the full sample panel and the southeastern panel. An increase in the defence expenditure does not crowd out social welfare spending due to the high level of economic development and government expenditure. On the contrary, in the northern panel, the effect is opposite because of the unbalanced economic development levels within the panel. Beijing as the capital of China, benefits more from the expansion of defence expenditure thus widening the income gap. In addition, the impulse response analyses further confirm a stronger effect of the defence expenditure on income inequality in the northern and the southeastern panels over a short period.     

India nuclear weapons: No first use or no full disclosure?

This article argues India is laying the foundation to move away from “no-first-use” (NFU) as its nuclear weapons employment policy. Since the inception of its nuclear weapons program, India has claimed NFU as the centerpiece of its nuclear strategy. But India has a history of developing foundational changes to its nuclear weapons program before such changes actually occur. For example, the infrastructure of India’s nuclear weapons program was already being created in the 1950s under the guise of civilian nuclear power. Similarly, the weaponization of India’s program, which did not officially occur until after the 1998 tests, had its genesis in far earlier decisions. A close examination of trends in India’s nuclear weapons production complex, its delivery systems, and its command and control complex all lead to the conclusion that India is laying the groundwork for more flexible employment options, up to and including first use. This article does not argue such a decision has been taken. Rather, it argues the underpinning is in place to allow for a move to more flexible options, perhaps very quickly, at some point in the future. This could occur during crisis or it could occur incrementally over time.     

The politics of population

This article suggests some of the principal factors behind the decisions by an increasing number of countries deciding that the achievement of their national objectives required a policy for population, and the way that they are likely to work out. By 1983, 35 developing countries had an official policy to reduce their population growth rate, and in 34 others, the government supported family planning activities--usually for reasons of health or as a human right. The number is remarkable given the many compelling reasons that governments have for not attempting anything so difficult as to modify demographic trends. The future results of population programs, in social and economic terms, are very difficult to quantify, thus defying cost-benefit analysis of the desirability of investing resources in this area, rather than in something else. There are also powerful political reasons why a government might well hesitate before embarking on a policy to reduce the nation's fertility. At the very least, it implies government interference in the most private and personal of human relations, an invasion of human rights, and a disturbance of the traditional patterns of society and behavior. For many countries that are pursuing a policy to limit population growth, the decision has been taken only after the grievous consequences of not having such a policy have already become manifest. The critical question is how soon a government will make the connection among political disobedience, economic and social distress, and the population explosion, and adopt a population policy. Although the number of developing countries that have officially proclaimed a strongly pro-natalist population policy is relatively small, many have Marxist governments. Overall, governments have several strategies at their disposal: 1) improving the accessability and the quality of the service; 2) promoting population education and family planning motivation (with the assistance of the media, folk art, and personal persuasion); and 3) applying a judicious mixture of incentives and disincentives.     

The nexus between military expenditures and economic growth in the BRICS and the US: an empirical note

This empirical note re-examines the causal linkages between military expenditures and economic growth for the BRICS countries (Brazil, Russia, India, China, and South Africa) and that for the USA during the period 1988–2012. Results of Granger causality tests show that military expenditures influence economic growth in the USA, economic growth influences military expenditures in both Brazil and India, a feedback between military expenditures and economic growth in Russia, and no causal relation exists between military expenditures and economic growth in China and South Africa. The findings of this study can provide important policy implications for the BRICS countries and also for the USA.     

New terrorist threat to India's internal security: the danger from Pakistan's “Karachi Project”

The spectacular commando-style terrorist strike on Mumbai in November 2008 exposed India's lax internal security structure. As nearly all the security apparatus broke down during the long spell of attacks, massive public outrage flared up across the country calling for a firmer government response. Shockingly, India has done little to prevent a recurrence and a new security threat faces the country every single day not merely before but even after the Mumbai attacks. In contrast, Pakistan's Inter Services Intelligence and the Lashkar-e-Taiba have successfully evaded pressures from both India and the international community and continue their terror campaign against India under the “Karachi Project” with the explicit intention to unsettle South Asia. Classified documents indicated that India is at the forefront of a cataclysmic “nuclear terrorism” threat from a “combination of Pakistan-based terrorists and homegrown radicals.” This article analyses the danger posed by the Indo-Pak radical groups targeting India and India's lack of preparedness to the new security threat from the “Karachi Project.”