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Dr. Akmal Hussain
Dated: September 4, 2002


The Editor,
The Daily Times,

Dear Sir,

This is with reference to the letter of Ravi Raina which appears to be commenting on two quite different articles. The first part of his letter refers to my article of 29th August while the second part refers to some other author's article. Re Ravi Raina's comments on my article, I am glad that he agrees with its "gist", that the "resources of the two nations must be spent on development rather than the military". However surely the article goes beyond this simple formulation: It argues that the concept of national security needs to be revised to focus on the security of citizens rather than on the size of military expenditure. In any case if military expenditures escalate on both sides, the relative military strength of either country may not necessarily increase. What is certain however is that with increasing resources directed towards military expenditures, the economic deprivation and hence security of citizens would be undermined.

While agreeing with the "gist" of the article your esteemed reader disagrees with the specific figures of GDP per capita for Pakistan and India respectively. He refers to a slightly different set of figures based on the London Economist. Here I would like to point out that comparative per capita GDP figures for different countries based on the Purchasing Power Parity Index (PPP) will of course differ depending on the way the PPP is estimated. Just to give an example, in the latest Human Development Report (2002) the estimate for the GDP per capita on the PPP basis is US $ 2358 for India and US $ 1928 for Pakistan, which is quite different from what Ravi Raina has quoted (US $ 2500 for India and US $ 2100 for Pakistan). The difference arises because the two sources are using different PPP indices. The essential point however that I was making in my article is that while India's per capita GDP is slightly higher than that of Pakistan, the international ranking of the two countries is fairly close. For example according to the World Development Report of the World Bank (2000) India has a ranking of 163 in per capita terms while that of Pakistan is 162.

Ravi Raina's next point that the cost of military confrontation is much higher than for Pakistan can be dangerously misleading. He refers to the total size of India's economy compared to Pakistan ("ten times" higher) and the substantially higher savings rate of India for proposing that there is a huge disparity in the cost of economic confrontation between the two sides. The key factor here is not the absolute size of the GDP but the GDP relative to the size of the population, i.e. the comparable index is not GDP but GDP per capita. Similarly it is not the domestic savings rate per se that determines the ability of an economy to withstand military confrontation. It is the impact of such confrontation on the slow down in domestic and foreign investment and hence on GDP growth rates that matters. In this regard one can argue that in fact India may be more vulnerable than Pakistan since it depends upon foreign investment and investment by non resident nationals to a much greater extent than Pakistan. Here again the key issue that your esteemed reader needs to keep in mind is that the asymmetry in the absolute size of the economies of India and Pakistan cannot be used as a basis for propounding the strategy of coercive diplomacy, which Indian strategists have erroneously formulated. My article argues that the cost of military confrontation between India and Pakistan would have severe adverse effects on infrastructure, investment, GDP growth, poverty and political stability for both countries. Beyond this economic cost is the grave danger of such a conflict escalating into a nuclear exchange. This would make any comparative economic calculus irrelevant since it would bring a horrendous human disaster to the subcontinent regardless of the difference in per capita incomes, between its countries.

May I thank Ravi Raina for the comment and I hope my rejoinder takes the discussion forward.

With best wishes and regards,

Yours sincerely,

Dr. Akmal Hussain


Ms. Mariam Zia,
Editorial Assistant,
The Daily Times,

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