July 19, 2008 ☼ armed forces ☼ climate change ☼ defence policy ☼ defence procurement ☼ education ☼ Foreign Affairs ☼ geopolitics ☼ India ☼ labour markets ☼ Pakistan ☼ Security ☼ strategic affairs
This is an archived blog post from The Acorn.
Here’s a version of my essay that appeared in Pakistan’s The Friday Times July 11-17, 2008 | (Vol. XX, No. 21):
India’s armed forces, according to K Subrahmanyam, have “not modernised their decision-making process ever since Lord Ismay prescribed it in 1947. Command and control have not changed since the Second World War. We are now thinking about buying modern equipment when the force structure and philosophy of it go back to the desert campaign of Rommel and Southeast Asia Command of Mountbatten.”
Mr Subrahmanyam’s words highlight a much broader point—that India’s external and domestic contexts have radically changed, especially since 1991, and a wide-ranging rethink of its defence policy has become an urgent necessity. A comprehensive policy review, however, is yet to take place.
That’s because the country’s leaders—even those with an interest and expertise in defence matters—have been constrained by the diktats of coalition politics, repulsed by the vested interests of the civilian and military bureaucracies, and not least, deterred by the popular media’s enthusiasm for blowing up corruption scandals.
The central challenge is to make India’s defence policy—encompassing doctrine, equipment and manpower—consistent with its emergence as a significant global player. The process of economic liberalisation first initiated by the P V Narasimha Rao government in the early 1990s not only turned India into a trillion dollar economy by early 2008, but also made it an important stakeholder in global economic and strategic affairs. Even as this is placing new demands on the armed forces, the mix of resources available for defence has changed. Budget constraints, for instance, have eased. Manpower constraints, on the other hand, have become tighter. Mindsets and policies, though, hark back to the days when the reverse was true.
Incorporating human security
Doctrinally, the armed forces—and especially the Indian Army—are mainly concerned with maintaining the military balance on India’s borders and on countering insurgencies. And for good reason, given the state of affairs. But events in recent years suggest that India’s armed forces will be increasingly required to address threats to what the late Pakistani economist, Mahbub ul Haq called “human security”, not just in and around the country, but in the broader region.
The mechanisms of climate change, for instance, will not only accentuate existing conflicts but create entirely new ones. To prepare for these scenarios, the armed forces not only need to acquire new capabilities, but also improve their co-operation capital. Like climate change, many of the emerging threats to human security—like pandemics and international terrorism—are decentralised and trans-national. And almost all of them could get worse over the next decade. To be sure, India’s strategic community has begun to contemplate on these areas—the Institute for Defence Studies and Analyses held a preparatory workshop on climate change and security in April this year—but their incorporation into doctrine is still a long distance away.
From outlays to outcomes
India’s defence budget for 2008-09 crossed the Rs 1 trillion mark, which really marks an increase of only 5% after accounting for inflation. At 2% of the GDP this is the lowest outlay for defence since the 1960s. This, many have argued, is too low, especially in the light of sustained double-digit increases in China’s defence expenditure over the years.
But lurking below the headlines is the fact that India spends too little of its defence budget on modernisation—only about 10%, compared to 30-40% in developed countries. And what is worse, the defence ministry routinely surrenders 10% of its outlays due to an inability to spend. In no year in the past decade has the defence ministry spent the entire budget allocated to it.
This is, in part, due to India’s persistent inability to evolve an effective procurement policy. It is easy to blame this entirely on the country’s inability to exorcise the ghost of the Bofors scandal of the 1980s, variations of which have played out in the terms of all governments since the 1990s.
But there are deeper reasons: first, India now has access to a wider, more competitive international market for armaments. But the procurement philosophy remains wedded to the days when India was in a “seller’s market”. Second, India’s private sector industrial base has shown itself to be globally competitive. Yet, until recently, defence was out of bounds for the domestic private sector. And finally, Indian policy-makers suffer from the “evil middleman” syndrome. In a dogmatic bid to keep the middlemen away, procurement rules are made more complex. Paradoxically, complex rules increase the need for middlemen.
It has been argued that setting up the integrated defence headquarters will alleviate some of the procurement problems by helping prioritise purchases. However, neither the political leadership nor the services headquarters have been too keen on integration beyond operational “jointness”. But emerging operational imperatives clearly point towards the need for greater integration. So too the economics—combining resources to improve the overall teeth-to-tail ratio will be more effective in translating outlays to outcomes.
Bitten by Bangalore
It is with respect to manpower that the effect of the transformation of the Indian economy can be felt most acutely. The armed forces have long complained of a shortage of officers up to the rank of lieutenant-colonel and its equivalent. They, however, are not the only ones complaining. If the Army is short of around 11,000 officers, the IT industry, according to a 2005 survey by NASSCOM & McKinsey, will face a potential shortage of 500,000 by the year 2010. The Confederation of Indian Industry (CII) and the National Manufacturing Competitive Council (NMCC) have expressed similar worries.
The International Monetary Fund’s Raghuram Rajan and Arvind Subramanian have called this phenomenon the “Bangalore Bug”. India’s services sector—IT, telecoms, BPO, financial services, retail and real estate–is booming. This has caused a sustained increases in wages, pulling millions of people out of poverty. The bad news is that the some of the increase in wages is caused by a worrying factor—a shortage of talent.
This year, Hewitt Associates, a human resources consultancy, reported that salaries in India rose by an average of 15.1% last year, among the highest in the world. “The struggle for talent and sustainability”, it noted “is large and rapidly growing in India.”
A struggle for talent? In a country where around 16 million people, the equivalent of the entire population of the Netherlands, enter the workforce every year? Well yes, because only a small fraction of the 16 million is employable in India’s service industries. India might well produce over half-a-million engineering graduates each year—but as corporate recruiters testify, there is a huge variation in quality, and only a fraction of these are readily employable.
The struggle for talent comes about because everyone from airlines to the army are fighting over the same small number of graduates. As manpower—especially managerial talent—becomes relatively less abundant, the armed forces must become more capital intensive. And should the next government implement labour reforms causing mass manufacturing to take off in India, the armed forces could well develop a shortage of junior commissioned officers too.
Increasing military pay—as demanded by the armed forces and the defence ministry—will only partially address the issue. Shortage of skilled labour will ultimately be solved by creating adequate supply. This calls for liberalising India’s education sector, which remains shackled by the state controls.
While the media has been consumed by narratives of a career in the armed forces losing its appeal among the youth, the National Defence Academy (NDA) continues to attract over 300,000 applicants for its 300 vacancies. If the armed forces are to transform recruitment by picking rougher diamonds and invest in polishing them, they could reduce the officer shortages even in the short term.
Over the medium-term, economic realities will compel the armed forces to become more capital intensive. A more capital intensive army does not necessarily mean one that imports big ticket items. Rather, it is one that invests in technology to improve force projection at all levels: from better body armour and munitions for the soldier to highly-networked formations and integrated command & control. Beyond merely improving the “teeth-to-tail” ratio: the armed forces must fundamentally re-examine what it is that constitutes teeth.
Own time, own target?
“The army,” according to Leon Trotsky “is a copy of society and suffers from all its diseases, usually at a higher temperature.” As India joins the ranks of middle-income countries, at a time of unprecedented domestic socio-economic mobility, during a period of geopolitical flux and in the face of entirely new types of security threats, a degree of fever is only to be expected.
There is little doubt, though, that India’s defence policy will adapt to the new conditions. In the era of coalition governments, the odds are that the changes will come in a piecemeal fashion, one step at a time. It takes a crisis of some kind for India to digest a dramatic change.
Two of India’s best bloggers on defence matters provided valuable inputs to this piece. To them, due thanks!
Update: Another version of this article was published in Mail Today on July 31, 2008.
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