Monday, December 12, 2016

India's War Budget to Be World's 3rd Biggest Despite High Poverty

In 2016, India surpassed Saudi Arabia and Russia to claim the 4th spot among the top five defense spenders globally for the first time, according to Jane's Defense.  India, a country with 33% of the world's poor, is projected to surpass the United Kingdom to rise to the 3rd spot for defense spending by 2018.

Sources: FT/IHS Jane's (Defense Budgets) and World Bank (Poverty)

India's military spending has grown rapidly from $38.17 billion in 2010 to $50.7 billion in 2016. It is projected to rise further to $56.5 billion in 2018 and $64.07 billion in 2020, according to Jane's.  For comparison, India's south Asian neighbor Pakistan's defense budget for 2016 is only $8 billion.

India's rapid rise to the list of world's top defense spenders stands in sharp contrast to the reality that it remains home to the world's largest population of poor, hungry and illiterate citizens. India also leads the world for lack of hygiene, disease burdens and open defecation.

Prime Minister Narendra Modi's rule has seen dramatic growth of wealth inequality in India. Top 1% of Indians now own 58.4% of India's wealth, up from 49% in 2014 when Mr. Modi was elected Prime Minister, according to Credit Suisse Global Wealth Report 2016.

Median wealth data compiled by Credit Suisse for 2016 shows that average Pakistani adult is 20% richer than an average Indian adult and the median wealth of a Pakistani adult is 120% higher than that of his or her Indian counterpart, according to Credit Suisse Wealth Report 2016. Average household wealth in Pakistan has grown 2.1% while it has declined 0.8% in India since the end of last year.

CS Wealth Report 2016 indicates that 50% of Pakistanis own more than $1,180 per adult which is 120% more than the $608 per adult owned by 50% of Indians.

The Credit-Suisse report says that the richest 1% of Indians own 58.4% of India's wealth, second only to Russia's at 74.5%. That makes India the 2nd biggest oligarchy in the world.

The CS wealth data, particularly the median wealth figures,  clearly show that Pakistan has much lower levels of inequality than India.

Share of World's Poor Population By Countries  Source: Our World in Data

Oxford Poverty and Human Development Initiative (OPHI)'s MPI, multi-dimensional poverty index, brings together 10 indicators, with equal weighting for education, health and living standards. In South Asia region, Afghanistan has the highest level of destitution at 38%, according to OPHI's MPI index. This is followed by India at 28.5%. Bangladesh (17.2%) and Pakistan (20.7%) have much lower levels.

Rapid growth in India's defense expenditures conveys Prime Minister Modi's priorities. It seems that he believes the way for India to achieve great power status is through building a massive military regardless of the deep deprivations of the Indian people.

Mr. Modi's massive military buildup poses a serious threat to India's neighbors, particularly Pakistan, a much smaller country which was invaded and split in two by the Indian military in 1971.  The Indian invasion resulted in the creation of Bangladesh.

Related Links:

Haq's Musings

Credit Suisse Global Wealth Report 2016

India Massive Military Buildup

Modi's Israel Envy

India Home to World's Largest Population of Poor, Hungry & Illiterates

India Leads the World in Open Defecation

MPI Captures Depth of Deprivation in India


rjs said...

if Pakistan's defense budget for 2016 was $8 billion, that's around $43.90 per capita...with a $50.7 defense budget for India, that works out to about $40.50 per capita...i'd call that a draw...

Riaz Haq said...

India's Obsessive Spending on Defence by Phiroze Vasunia

Arms manufacturers of the world, rejoice. The government of India is your loyal friend. Not just this government, but the previous government too - the UPA as well as the NDA.

According to a study conducted by the Stockholm International Peace Research Institute, India topped the list of weapons importers and accounted for some 15 per cent of worldwide arms imports from 2010 to 2014. Five of the 10 biggest arms importers in this period were in Asia, including China (5%), Pakistan (4%), South Korea 3%), and Singapore (3%). Imports are only part of the picture of the global arms industry, of course, and the countries that had the highest levels of military expenditure in 2014 were the USA, China, and Russia. India was placed seventh on that list, with spending at $50 billion or 2.4 per cent of GDP, an increase of 39% between 2005 and 2014.

Signs of the government's thirst for arms acquisitions were evident when Narendra Modi declared during his visit to France that India would purchase a number of Rafaele jets for roughly $4.3 billion. On the heels of that development came the disclosure that the US Secretary of Defence, Ashton Carter, would be flying in to New Delhi in May to close the sale of Apache and Chinook helicopters, worth some $2.5 billion. The figures are staggering, though not by the standards of military expenditure, and there will be other such announcements in the months and years ahead since India cannot manufacture the weapons that its leaders insist upon.

Kumar said...

Haq sahab, it may be hard for you to swallow but it is all due to Pakistan's irresponsible behaviour as a nation. Pakistan;s notorious movements have compelled India to go for all this war preparations.

Riaz Haq said...

Kumar: "Haq sahab, it may be hard for you to swallow but it is all due to Pakistan's irresponsible behaviour as a nation. Pakistan;s notorious movements have compelled India to go for all this war preparations."

Why is India's Hindu leadership so paranoid about Pakistan and Pakistanis? asks Stephen Cohen of Brookings: “One of the most important puzzles of India-Pakistan relations is not why the smaller Pakistan feels encircled and threatened, but why the larger India does. It would seem that India, seven times more populous than Pakistan and five times its size, and which defeated Pakistan in 1971, would feel more secure. This has not been the case and Pakistan remains deeply embedded in Indian thinking. There are historical, strategic, ideological, and domestic reasons why Pakistan remains the central obsession of much of the Indian strategic community, just as India remains Pakistan’s.”

Riaz Haq said...

World Bank poverty data

Below $1.90 PPP: Pakistan 7.9% India 21.2%

Below $3.10 PPP: Pakistan 43.6% India 58%

Riaz Haq said...

Myth of #India as an Upcoming Asian #Economic Powerhouse. Rising #Poverty and Social Inequality. #Modi via @grtvnews

India is no doubt one of the biggest democracy in the world; because it has the highest population, Simple! (China highly populist, and officially “communist”). India is the second biggest nation in the world in terms of population and seventh largest in terms of area. According to the IMF as of 2015, the Indian economically nominally worth US$ 2.182 trillion, it, it’s the eleventh largest economy in terms of market exchange rates at US$ 8.027 trillion, third largest by PPP, with an annual GDP growth of last decade’s 5.8%.[1]

These numbers in retrospect are nonsense which feed the illusion to the general public so they can keep on living like they are in a hope that their life will get better.

These numbers do not represent the true picture of the country, not only India`s but any country. Like GDP can be a good indicator, but the real measure is GDP per capita. Which measures how a single person achieves the share of income among its citizens. When it comes to India the GDP is $2.182 trillion, but per capita income is only $1581 which is not much higher than Bangladesh`s $1086 and Pakistan’s $1316 per capita, but less among many African countries, like Nigeria $3203, South Africa $6,482, Zambia $1721, Sudan $1875, Namibia $5408, Ghana $1441, Djibouti $1813, Botswana $7123 and many more to mention here.[2] In fact, India is like “ticking time bomb” by 2026 the world population will be 1.5 billion largest in the world and the economy is not growing enough to meet the demands to create 20 million jobs per year.[3]

Yes, I know India is part of BRICS and they have announced in creating their own kind of bank but then what? India still owes money to the IMF; their public debt to GDP is nearly 70%,[4] Likewise, India is worst in terms of BRIC countries when it comes to GDP per capita, human development, education, poverty and so forth. India is lagging behind in BRIC countries. And Yes, then there is IT, the huge investments in India by the foreign companies just because those corporation can have cheap labor rather than paying their people in home countries with high wages. The beauty of globalization which no body mentions and no one talks all they care to show people the random numbers and apathy of people to consent without barely eliciting a yawn.

One of the main hurdles in the progress of India is poverty, poverty which should have been brought under control, but in India it is more or less same ratios of poverty post-independence.

The figure shows the total population every decade with poverty in percentage and how much the poverty has declined in India, the percentage may have decreased, but the total number of people living under the poverty line has been more or less same.

Riaz Haq said...

#Pakistan conducts successful test of 700 kilometer range Babur cruise #missile to hit targets on land and sea

Pakistan on Wednesday conducted a successful test of an enhanced version of the indigenously developed Babur cruise missile., said a statement released from the Inter-Services Public Relations (ISPR).

The cruise missile incorporates advanced aerodynamics and avionics and can strike targets on both land and sea at a range of 700 kilometres, added the ISPR statement.

“It is a low flying, terrain hugging missile, which carries certain stealth features and is capable of carrying various types of warheads,” the military’s media wing said.

The Babur cruise missile is equipped with state of the art navigational technologies of Terrain Contour Matching (TERCOM) and Digital Scene Matching and Area Co-relation (DSMAC), which enables it to hit targets with pinpoint accuracy even in the absence of GPS navigation.

“Babur Weapon System is an important force multiplier for Pakistan’s strategic defence.”

The launch was witnessed by Chairman Joint Chiefs of Staff Committee General Zubair Mahmood Hayat, senior officers from the Strategic Plans Division, Strategic Forces, scientists and engineers of strategic organisations.

“This test further strengthens Pakistan’s deterrence capability,” said General Hayat.

Earlier this year, Pakistan conducted a successful flight test of the indigenously developed Air Launched Cruise Missile (ALCM) Ra’ad.

Anonymous said...

Pakistan should not think that they are the biggest threat to India as China is a bigger threat with a modern army. Therefore India needs to spend huge amounts on defence even though this money could have been spent on poverty alleviation.

Chandra said...

Data are from different years but even if I accept it, Pakistan is falling behind in Human Development in South Asia

Hindustani said...

Sometimes I wonder if our Pakistan brethren actually hate us or love us. They care so much about poverty.

Riaz Haq said...

Hindustani: "Sometimes I wonder if our Pakistan brethren actually hate us or love us. They care so much about poverty. "

Pakistanis care more about India's poor than Modi and co.

Last year, Pakistanis sent $5 billion to help poor brethren in India, according to the World Bank.

Sunny said...

Indian economy is far far better and STRONGER than Pakistani economy

You should really be concerned at Pakistan's debt trap and falling exports

Riaz Haq said...

Sunny: "You should really be concerned at Pakistan's debt trap and falling exports"

India's public debt-to-gdp ratio of 67.2% is higher than Pakistan's 64.8%

And India's exports are also falling

Rajesh said...

I found some fascinating data about pure land.
If you check at the calculations stated in the article mythe would be busted
I would advise you to calculate the data - if Rs 3030 per month divided by 30 days further divided by Rs 100 to convert to dollar... Voila the number comes to 1 dollar per day.. This makes 33% of pure land population living below 2 dollar per day

Riaz Haq said...

Rajesh: "I would advise you to calculate the data - if Rs 3030 per month divided by 30 days further divided by Rs 100 to convert to dollar... Voila the number comes to 1 dollar per day.. This makes 33% of pure land population living below 2 dollar per day "

Pakistan Rs 100 in purchase power parity (PPP) terms is about $3.10 per day, not $1 as you suggest. 29.5% of Pakistanis live below this poverty line.

Using the same criteria, over two-thirds of Indians live below the poverty line of $3. 10

Anonymous said...

WikiLeaks has revealed that the Dalai Lama was providing orphans under his care to go to war for India against Pakistan in 1971. Every year Indian army trucks will park outside the orphanage to pick up the kids and send them to the battlefield.

Riaz Haq said...

#Russia's tilt towards #Pakistan will be a body blow for #India's security. #China #Afghanistan … via @dailyo_

At a high-level meeting held in Moscow on December 27, 2016, representatives from Russia, China and Pakistan underlined the growing influence of the Islamic State of Iraq and Syria (ISIS) in Afghanistan and the deteriorating security situation in the region.

According to the statement issued at the end of the meeting: "The Russian Federation and the People's Republic of China as the UN Security Council permanent members confirmed their flexible approach to delisting Afghan individuals from the UN sanctions lists as their contribution to the efforts aimed at launching peaceful dialogue between Kabul and Taliban."

What has surprised everyone is the exclusion of Afghanistan from the negotiations, apparently aimed at discussing the security situation in conflict-ridden Afghanistan. This trilateral initiative stands in open contrast to the publicly-stated positions of all the countries of supporting the Afghan-owned and Afghan-led reconciliation process. Sensing the mounting Afghan opposition, the group has finally decided to include Afghanistan in the next meeting. While Iran is soon going to be part of the group, there is no proposal to involve India.

Much to India's disappointment, the emerging axis between Moscow, Islamabad and Beijing seems to have put Pakistan in the driver's seat, according it greater control over the future of Afghanistan.

Russia's diplomatic efforts to accommodate the Taliban as an instrument against the ISIS, in tandem with Pakistan and China, may also have unexpected ramifications for Indo-Russian ties. The Indian leadership, both publicly and behind diplomatic corridors, has been trying to convince Russia that Pakistan is the fountainhead of terrorism in the region. But India's traditional ally Russia is not convinced.

Even though Russia' diplomatic engagement with the Taliban has begun to strain Moscow-Kabul ties, as well as put Russia's historic and strategic partnership with India at great risk, Moscow's engagement with the Taliban is driven by a number of counterterrorism and security reasons.

Russian foreign policymakers believe that engagement with the Taliban is essential for maintaining long-term political stability in Afghanistan; Moscow can use the Taliban's opposition to Islamic State (ISIS) to further Russia's counter-terrorism objectives; and Pakistan's role is crucial in bringing peace to war-torn Afghanistan.

The Russian leadership views the Taliban as a useful partner in its fight against the ISIS. Putin has long worried about jihadists from former Soviet republics joining the ISIS' fight in Syria. For this very reason, Russia sees ISIS as a particular threat in a way it doesn't see Taliban.

Riaz Haq said...

Gen Raheel to head Saudi-led anti-terror force: Khawaja Asif

After weeks of speculation, Defence Minister Khawaja Asif on Friday confirmed that former army chief General (retd) Raheel Sharif has been appointed the commander of the Saudi-led 39-nation military coalition to combat terrorism.

The defence minister told a private news channel that Gen Raheel’s appointment was made a few days back and that the government was taken into confidence about the former army chief’s new role. He, however, would not provide further details.

Well before Gen Raheel’s retirement, there were rumours that he might be made the head of coalition of likeminded Muslim countries Saudi Arabia had cobbled together last year in the wake of the conflict in Yemen and other Middle Eastern countries.

Speculations about Gen Raheel’s appointment were rife after he was recently spotted in Saudi Arabia. A video showing Gen Raheel escorted by security officials while performing Umrah went viral on social media in the last few days.

However, there was no official confirmation about his visit to Saudi Arabia.

The Inter-Services Public Relations (ISPR), the military’s media wing, would not offer any comment when approached about his appointment, saying that the military’s media wing was not authorised to say anything on his activities since he is retired.

Since the defence minister has confirmed Gen Raheel’s appointment, the move is seen as significant given the fact that Pakistan was initially reluctant to join the Saudi-led initiative. In fact, Pakistan’s relations with Saudi Arabia saw an unusual strain after Islamabad refused to send troops to Yemen to fight Houthi rebels last year. Saudi Arabia was so upset with the parliament’s resolution urging the government to stay away from the conflict in Yemen that a senior Saudi envoy at the time said the Kingdom felt betrayed.

In order to pacify Saudi Arabia, Gen Raheel travelled to the Kingdom a few times and eventually Pakistan agreed to join the Saudi-led military coalition. The government, however, clarified that the Saudi coalition was not meant to interfere in Syria or Yemen. It also insisted that Pakistan would not send ground troops to any other country.

Officials here said the primary objective of the Saudi coalition was to coordinate efforts to fight groups such as Da’ish in the most effective manner.

Pakistan has maintained a somewhat neutral policy on some of the hotspots in Middle East particularly in Syria and Yemen. The policy was aimed at ensuring a delicate balance with both Saudi Arabia and Iran, which are at odds with each other on the Middle Eastern politics. Gen Raheel even attempted to mediate between Saudi Arabia and Iran but could not achieve much success.

Riaz Haq said...

Pakistan fires its first submarine-based nuclear cruise missile

Pakistan has successfully fired its first nuclear-capable submarine-based cruise missile, in a move that escalates tensions with neighbouring India.

The Pakistani navy said on Monday afternoon that it had launched a nuclear-capable Babur-3 missile, which has a range of 450km, from an undisclosed location in the Indian Ocean.

“Pakistan eyes this hallmark development as a step towards reinforcing the policy of credible minimum deterrence,” the military said in a statement.

It added that the missile was “capable of delivering various types of payloads and will provide Pakistan with a credible second strike capability, augmenting deterrence”.

The move comes with tensions still high on the de facto border with nuclear-armed India. Hours before the announcement of the test, India said three civilians had been killed when militants crossed the line of control between the two countries in Kashmir and attacked an army camp.

The skirmish was the latest in a series of tit-for-tat strikes across the border since 19 Indian soldiers were killed in an attack on the Uri army base in India-controlled Kashmir in September.

Experts said Pakistan was thinking of developing a sea-based nuclear missile programme in case India succeeded in damaging or eliminating its land-based weapons. According to some, the country has vigorously pursued sea-based nuclear missiles for years — but before Monday’s test it had only launched nuclear missiles from land and air-based platforms.

“It’s the completion of our triad, which is important,” one senior government official told the FT.

India is pursuing a sea-based nuclear deterrent “largely to keep up with China while Pakistan is attempting to follow suit”, according to Walter Ladwig, a lecturer in international relations at King’s College, London.

“If Pakistan could succeed in developing a successful and survivable submarine-based deterrent, it could, in theory, assuage a lot of their concerns about pre-emption by India,” he said. “However, it also creates opportunities for more mistakes and accidents.”

Shashank Joshi, a senior fellow at the Royal United Services Institute, said: “If Pakistan fears that India may aspire to destroying Pakistan’s nukes on the ground, thereby undercutting mutual deterrence, then it makes sense to put weapons at sea, where they are more survivable.”

But he added: “This would come with a huge price tag.”

Pakistan’s test comes two weeks after India test-fired its long range ballistic missile Agni-V, which has a range of more than 5,000km.

India is also well ahead in developing an at-sea missile system, having test-launched a cruise missile from a submarine in 2013.

Nevertheless, Pakistan has stepped up its spending on armed forces in recent years. In 2015, Pakistan formally reached an agreement with China for the latter to supply the Pakistan navy with eight new submarines, the country’s largest defence contract in value terms.

A spokesman for the Indian army did not immediately respond to a request to comment.

Riaz Haq said...

#China makes worldwide ports' investments as great maritime power. #CPEC #Gwadar #Pakistan … … via @F

Pakistan’s Arabian Sea port of Gwadar is perched on the world’s energy jugular. Sea lanes nearby carry most of China’s oil imports; any disruption could choke the world’s second-largest economy.

Owned, financed and built by China, Gwadar occupies a strategic location. Yet Islamabad and Beijing for years denied any military plans for the harbour, insisting it was a purely commercial project to boost trade. Now the mask is slipping.

“As Gwadar becomes more active as a port, Chinese traffic both commercial and naval will grow to this region,” says a senior foreign ministry official in Islamabad. “There are no plans for a permanent Chinese naval base. But the relationship is stretching out to the sea.”

Gwadar is part of a much bigger ambition, driven by President Xi Jinping, for China to become a maritime superpower. An FT investigation reveals how far Beijing has already come in achieving that objective over the past six years.

Investments into a vast network of harbours across the globe have made Chinese port operators the world leaders. Its shipping companies carry more cargo than those of any other nation — five of the top 10 container ports in the world are in mainland China with another in Hong Kong. Its coastguard has the globe’s largest maritime law enforcement fleet, its navy is the world’s fastest growing among major powers and its fishing armada numbers some 200,000 seagoing vessels.

The emergence of China as a maritime superpower is set to challenge a US command of the seas that has underwritten a crucial element of Pax Americana, the relative period of peace enjoyed in the west since the second world war. As US President-elect Donald Trump prepares to take power, strategic tensions between China and the US are already evident in the South China Sea, where Beijing has pledged to enforce its claim to disputed islands and atolls. Rex Tillerson, the Trump nominee for US secretary of state, said on Wednesday that Washington should block Beijing’s access to the islands. Relations were also dented over Mr Trump’s warm overtures toward Taiwan, which China regards as a breakaway province.

China understands maritime influence in the same way as Alfred Thayer Mahan, the 19th century American strategist. “Control of the sea,” Mr Mahan wrote, “by maritime commerce and naval supremacy, means predominant influence in the world; because, however great the wealth of the land, nothing facilitates the necessary exchanges as does the sea.”

Drummed into military service

The Gwadar template, where Beijing used its commercial know-how and financial muscle to secure ownership over a strategic trading base, only to enlist it later into military service, has been replicated in other key locations.

In Sri Lanka, Greece and Djibouti in the Horn of Africa, Chinese investment in civilian ports has been followed by deployments or visits of People’s Liberation Army Navy vessels and in some cases announcements of longer term military contingencies.

“There is an inherent duality in the facilities that China is establishing in foreign ports, which are ostensibly commercial but quickly upgradeable to carry out essential military missions,” says Abhijit Singh, senior fellow at the Observer Research Foundation in New Delhi. “They are great for the soft projection of hard power.”

Data compiled or commissioned by the Financial Times from third-party sources show the extent of China’s dominance in most maritime domains.

Riaz Haq said...

India 60th in inclusive development index; ranks below China, Pakistan

India has been ranked 60th among 79 developing economies, below neighbouring China and Pakistan, in the inclusive development index, according to a WEF report. WEF’s ‘Inclusive Growth and Development Report 2017’, released today, said that most countries are missing important opportunities to raise economic growth and reduce inequality at the same time because the growth model and measurement tools that have guided policymakers for decades require significant readjustment.

Lithuania tops the list of 79 developing economies that also features Azerbaijan and Hungary at second and third positions, respectively. While India is placed at the 60th spot, many of the neighbouring nations are ahead in the rankings. China is ranked at the 15th position, Nepal (27th), Bangladesh (36th) and Pakistan (52nd).

The Inclusive Development Index (IDI) is based on 12 performance indicators. In order to provide a more complete measure of economic development than GDP growth alone, the index has three pillars — Growth and Development, Inclusion and Intergenerational Equity, and Sustainability.

Riaz Haq said...

#Indian officials: #India to deploy 464 newly ordered T-90MS tanks along border with #Pakistan | IHS Jane's 360 …

The Indian Army (IA) plans to deploy about 464 newly ordered T-90MS main battle tanks (MBTs) along India's western and northern borders with Pakistan, military officials told IHS Jane's on 19 January.

The T-90MS MBTs, which are being acquired in kit form from Russia for INR134.80 billion (USD2 billion), will in the coming years supplement around 850-900 Bhishma MBTs currently deployed in the Indian states of Rajasthan and Punjab, both of which border Pakistan.

Bhishma is the designation for the Indian variant of the T-90S MBT, the export model of the T-90 MBT in use with the Russian Ground Forces.

Riaz Haq said...

#Pakistan steps up #missile tests to counter #India #defence push … via @FT

Pakistan is ramping up nuclear missile tests in response to India’s drive to modernise its armed forces, increasing already heightened tensions between the two countries, military and political analysts warn.

Islamabad last week conducted its first flight test of the surface-to-surface Ababeel missile, which has a range of 2,200km and which officials and analysts say marks a significant step forward in the country’s ability to target locations in India. The move followed Pakistan’s first ballistic missile launch from a submarine earlier this month.

“Taken together, these tests prove Pakistan’s ability to go for an outright war if war is imposed on us,” a senior Pakistani foreign ministry official told the Financial Times.

Relations between the two nuclear-armed neighbours have been tense ever since the partition that followed independence from Britain in 1947. They have fought three major wars, largely for control of the disputed state of Kashmir.


“If Pakistan has a ‘second-strike’ capability, it could make it more assertive and potentially more willing to launch a first attack against India,” said Rahul Roy-Chaudhury, senior fellow for South Asia at the International institute for Strategic Studies.

Pakistani officials last week warned they were ready to use nuclear weapons against India in the event of an invasion by its neighbour. This followed an admission by Bipin Rawat, head of the Indian army, that the country had a plan to send troops across the border if it suffered a terror attack believed to originate in Pakistan.


Tariq Rauf, head of the disarmament programme at the Stockholm International Peace Research Institute, said Pakistan’s response was a reaction to the build-up of India’s conventional military forces.

“If you look at deployment of India’s forces which can seize and hold territory, 75 per cent of the forces are within reach of the border [with Pakistan],” he said.

Ikram Sehgal, a prominent Pakistani commentator on defence and security affairs, said: “Pakistan cannot match India’s planned spending on conventional arms. The route that Pakistan is taking is to build up its strategic forces for a credible response if the Indians ever cross over [into Pakistan].”

After its submarine-based missile test, Islamabad said: “The successful attainment of a second-strike capability by Pakistan represents a major scientific milestone. It is manifestation of the strategy of measured response to nuclear strategies and postures being adopted in Pakistan’s neighbourhood.”

An official described the Ababeel missile — the first in Pakistan’s arsenal able to launch multiple warheads at different targets — “the successful completion of our deterrence”.

While most experts believe the threat of nuclear war between the two neighbours remains low, some warn about the risks of an accident caused by trigger-happy military leaders.

“Unlike the old days when the Soviet Union and the United States did not share a common border, India and Pakistan share a land border,” said one senior western diplomat with responsibility for monitoring the two militaries. “The risk of one side accidentally going to war is higher.”

Riaz Haq said...

#China's poor provinces catching up with rich provinces but #poor states in #ndia falling further behind rich states

Poorer countries are catching up with richer countries, the poorer Chinese provinces are catching up with the richer ones, but in India the less developed States are not catching up; instead they are, on average, falling behind the richer States. Internationally, growth rates of per capita GDP widened at least since the 1820s with poorer countries growing slower than richer countries, leading to the basic divide between advanced and developing countries characterised as “Divergence, Big Time” by Prof. Lant Pritchett of Harvard University. However, since 1980 this long-term trend was reversed and poorer countries started catching up with richer ones. In stark contrast, there continues to be divergence within India or an aggravation of regional inequality.

What is especially striking is how convergence has evolved over time. In the 1990s, convergence patterns were not dissimilar (Figure 2) across the world, China and India with either weak convergence or divergence. But things really changed for both the world and China in the 2000s; however they did not change for India. This was despite the promise that less developed States such as Bihar, Madhya Pradesh and Chhattisgarh had started improving their relative performance. But the data show that those developments were neither strong nor durable enough to change the underlying picture of divergence or growing inequality. The findings are similar when we use consumption per capita instead of GSDP per capita.

Therefore, the evidence so far suggests that in India, catch-up remains elusive. The opposing results in India versus those in China and internationally pose a deep puzzle. Convergence happens essentially through trade and through mobility of factors of production. If a State/country is poor, the returns to capital must be high and should be able to attract capital and labour, thereby raising its productivity and enabling catch-up with richer States/countries. Trade, based on comparative advantage, is really a surrogate for the movement of underlying factors of production as economist Paul Samuelson pointed out early on. A less developed country that has abundant labour and scarce capital will export labour-intensive goods (a surrogate for exporting unskilled labour) and import capital-intensive goods (a surrogate for attracting capital).