An investment in national security

 The link between rapid economic growth and national security

On Independence Day each year, the Prime Minister of India speaks to the nation from the imposing ramparts of the Red Fort in Delhi. As a young boy, I remember waking up at an ungodly hour on that day and making it to the base of the Fort as a student cadet in the National Cadet Corps (NCC).  The experience was a mostly groggy and unpleasant but we at least got to carry an (outdated, unloaded) SMLE .303 rifle. I do not remember a single speech from that time.

As an adult, I have listened on occasion to these speeches on TV.  The chaste Hindi that is almost always used is an attempt to connect beyond the corridors of elite ‘Lutyens’ India.  In common parlance the Independence Day speech is an annual dedicated event that attempts to connect with ‘Bharat’. The messaging can provide important clues about what the Government is thinking about with respect to the common man.This year, the Prime Minister discussed the link between rapid growth and national security unlike the previous years where he spoke about the economy, education, jobs, health and malnutrition. Prime Minister Manmohan Singh’s words translated into English were “If we do not increase the pace of the country’s economic growth, take steps to encourage new investment in the economy, improve the management of Government finances and work for the livelihood security of the common man and energy security of the country, then it most certainly affects our national security.”

Photo: dianiro78

To the best of my knowledge this is the first time an explicit link has been made between rapid (not merely good) economic growth and national security by any Prime Minister of India. It also signifies a potential shift from the mantra of the last several years where the fruits of ‘excess’ growth were allocated to giveaways rather than to investment, livelihood security (the National Employment Guarantee Scheme is debatable and an exception), energy security, fiscal prudence or national security.

The idea that economic growth can provide the resources to invest in the security (internal and external) of any nation is not new. Since time immemorial, gold in the treasury coffers directly influenced the ability of nations to wage war and increase access to new dominions and further resources. The Thatcher and Reagan economic transformations were justified in large part by the need to win the Cold War. In recent times, the rise of China is connected to the four modernisations program adopted by Deng Xiao Ping in 1978. The programme stressed economic self-reliance for China and was designed to make China a great economic and military power by the early 21st Century. The programme began with the freeing up of agricultural markets in China thirty years ago and through advances in industry and technology has now made its way to the modernisation of internal and external defense in China. The world’s countries spent $1.7 trillion on their militaries last year, according to new figures published by the Stockholm International Peace Research Institute (SIPRI). That has barely changed from the year before, masking decreases in the west countered by big increases in China, Russia and some Middle Eastern countries. China’s total annual military expenditure at about $160 billion is one-fifth that of the US, but with its rapid relative growth that is expected to shrink to less than half by 2030. On present trends, China will likely outspend the US by 2035. All this made possible by robust economic growth and an explicit sequence where economic growth preceded a patiently waiting military.

India’s challenges are at once similar and different. The long term challenge of enhancing the capabilities of the military combine with near term challenges of building modern well-trained police, para-military and anti-terrorist forces in the country. These are of course instruments of the state that maintain national security or restore peace after moments of unrest. The best way to create a “national climate of stability” and obviate the need to call on these forces is to focus on all the things that the Prime Minister touched upon in his speech– education, health, jobs, and energy security. A programme to create a national climate of stability requires most importantly a series of small steps in the framework of a multi-decade growth plan. The mechanics by which economic growth kick starts this virtuous circle is shown in the schematic below. The fiscal resources generated from robust growth go towards building the hardware and software required for internal and external security. These fiscal resources may also be used for plugging gaps in economic development. These gaps– inflation, joblessness, poverty and inconsistent development- result in conditions that threaten stability and often impact national security. Using resources to fund the modernisation of the security apparatus as well as to create a climate of stability in turn reinforces domestic and international confidence towards savings and investment. This confidence is self-feeding and encourages greater growth through investment, which creates a virtuous cycle.
Sixty-Five years ago India’s first Prime Minister Jawaharlal Nehru spoke of a tryst with destiny. India has largely missed this tryst in the intervening years, but can still make it if it puts economic growth and inclusiveness at the center of its agenda.  The semantic of the word ‘inclusiveness’ is not a national subsidy but a focus on mainstreaming economic opportunity to the excluded. India is an ancient land whose focus on peace and tolerance for millennia has ensured a measure of societal stability and contentment. The great game of peace and tolerance in today’s world is best played with economic resources that can help create the ambiance of internal and external stability.