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Pakistan raises annual defence budget to $8.78 billion U.S.
June 26, 2017

Pakistan raises annual defence budget to $8.78 billion U.S.

In its 2017-2018 budget, the Government of Pakistan has budgeted $8.78 billion U.S. (Rs. 920.2 billion) for the armed forces – an increase of $578 million (or 7%) to the budget for 2016-2017.

The allocations are as follow: 24% for operating expenses; 35% for salaries and remuneration; 14% for “civil works” (likely post-conflict reconstruction in the Federally Administered Tribal Areas); and 27% for “physical assets” (likely referring to maintenance). Pensions ($1.7 billion) have been budgeted separately.

The Pakistan Army will receive 47.5% of the budget (i.e. $4.17 billion), while the Pakistan Air Force (PAF) and Pakistan Navy will be provided with 20.5% ($1.8 billion) and 10.7% ($939.46 million), respectively.

The remaining amount, 20.3% ($1.87 billion) will be allotted for defence production, which involves the procurement of arms, such as the JF-17 multi-role fighter, al-Khalid main battle tank (MBT) and others.

Notes & Comments:

Next year’s defence production allocation aligns with IHS Jane’s projection that Pakistan may spend $12 billion in procurement from 2016 to 2024 – i.e. $1.5 billion per year.

Besides regular force increases this part of the budget may include payments for big-ticket programs, such as the eight Hangor-class submarines (the first four will arrive in 2022-2023), four MILGEM Ada corvettes (which will be inked in June), three new Saab 2000-based Erieye airborne early warning and control aircraft, the STM-led Agosta 90B submarine upgrade program and armour upgrade program with Ukraine.

There are additional defence programs on Pakistan’s roadmap. The PAF is expected to issue its first JF-17 Block-III orders in 2017. In 2016, Pakistan had begun assessing new hardware, such as 155mm/52-calibre wheeled self-propelled howitzers, attack helicopters and assault rifles. Pakistan is also aiming to develop a new miniature submarine, light armoured vehicle, guided rockets for multiple launch rocket systems and new munitions. These programs will add to Pakistan’s cash outlay.

  • Qasim57

    Quick question – is that a 7% increase, or is it that defence is 7% of our total budget?

    • 7% increase from ’16-17.

      • Kabeer Khan

        Bilal Khan:
        You did not mention,,,,,,
        How much budget allocated for nuclear program ??

      • Qasim57

        Nice. I guess our defence expenditure (as a % of total budget) is still at or near 2.3% like last year’s.

        • Stan

          That math don’t add up 8.78 dollars is more like 18% of the budget

          • Qasim57

            I apologise, 2.3% of our GDP.

  • ahmria

    I personally think the airforce and navy should get a bigger slice of the budget. Both arms seem to be underfunded compared to the army budget. The navy especially so. Considering our coastline and the fact that we have a lot of sea trade a stronger naval presence is very important. The Air Force should also be strengthened again if we are to achieve parity with our neighbours Air Force.

    • bill

      This hypothetical statement is given at many forums that PN and PAF should get more share it is just like that blanket is short in measurement yet one is trying to cover his whole body. The PA is getting more share based on ground realities as our relations with some of our neighbors are becoming bad to worse i.e Iran and Afghansitan excluding India. Now PA has to cover more fronts along with war on terror, so it is quite logical that PA is getting more share. We can compensate the deficiencies regarding PN and PAF by adding more SAMS and coastal ASHM batteries, which we have already done up to some extent.

      At least in case of Navy IN will shall think twice before going for blockade or attack like 1971 due to following reasons.
      1 Now two main ports of PN are operational i.e Gawadar and Karachi.
      2. Better awareness due to installation of coastal radars/ Air assets.
      3. Modernization of Agosta 90bs along with deployment of 450+KM babur CM capable to attack both naval and surface assets.
      4. The addition of coastal defense Missile batteries along with already deployed C602s, believed to be development od C602 so may have range as far as up to 400KM.
      5. Addition of FACs.
      Similarly Army Air defense capabilities are certainly improving with addition of LY80 and FM90. One should expect addition of HQ9 soon providing PA high altitude defenses capabilities.

  • MT

    Pak budget is too little to buy big stuffs

    How is this 1.8bill $ capital budget with 10%yrly growth ll incur purchase of Chinese submarine, 5th gen fighter, frigates.

    Without FMS , Pak military acquisition is going southways if we count the free/subsidized American weapons Pak managed to fetch since 9/11
    Indian situation is poor as well with 13bill $ capital allocation for 2017

    • Donny G

      local manufacturing in Pakistan is reducing the costs

      • Stan

        if you count the provincial ,federal and private sector Pakistan spends $16 billion on education but we are not producing good highly educated people ….the system is screwed up….the return on that investment is being waisted

      • MT

        Can you list those prominent pakistani manufacturers

  • SP

    Most of the budget seems to be spent on employee costs and maintaining the existing infrastructure with little left for procurement of new equipment.

    Pakistans economy needs to grow by at least 6% a year. The electricity production is less per capita in Pakistan than India. If NS government just suceeds in adding an exra 10,000 MW of electricity to the national grid then even that will be a big success for the government and give a lift to the economy. The government needs to dispose of loss making entities and to increase taxation.

    Political stability is important to achieve economic success and avoid a wasted decade like the 1990’s.

    • Aaif khan

      I am being told that power is rising as part of theCPEC and Not because of NS.

      • SP

        CPEC could have been launched during Musharraf rule or PPP rule but China had confidence only in NS.

        • Aaif khan

          Do you mean Chinese waited 14 years just for NS? I am not ruling out this. It could be possible but hard for me to believe.

          What you said – is the same word of PMLN people’s.

          I belive they launch it now because insurgency is contained security situation has improved throughout Pakistan and they must have also calculated the economic growth.

          NS wanted to take the credit of these security improvement but Raheel get away with it. Anyway, Pakistan repaired/recovered and that’s what matters the most.

          • SP

            Musharraf was following US agenda in order to prolong his rule and got us into the insurgency in the first place, Zardari came to power with the support of the US in a deal brokered by Gen. Kiyani and served US interests.

            China definitely waited for Zardari’s exit to start CPEC, and only ;launched CPEC when they had confidence in the Pakstani government.

            Some of the projects taking place on fast track basis and already nearing completion are in Punjab like Balloki, Sahiwal, Haveli Bahadur Shah, Bhikki power plants, Besides M3 motorway and Orange Line Metro train which demonstrates confidence in NS government to facilitate the Chinese.

          • Aaif khan

            Yes, they waited for someone like Ik and NS and Not just NS.

          • SP

            IK has zero credibility, is the king of U turns and is a hypocrite of the highest order. His promises to change Pakistan within 90 or 9 days has been exposed as lies by his governance in KP.

  • Saul Goodman

    Looks like Pak military is four-five years away from gaining key systems. Example the vital JF-17 Block III, 250-300 of them to replace current Mirages/F-7s. A big step in the right direction.

    • Syed Adeel Mahmood

      They have a plan to replace 190 air crafts in 2019 for JFT.
      other subs and warships always take years to be built in and get inducted.

    • Ali Afzal

      There is not much difference between JF-17B and JF-17 block 3

  • The defence production allocation falls across those six areas (e.g. expenses, physical assets, etc), it is just written as a separate organization (like the PAF, PA, PN).

    • Hassan Raza

      One thing more Bilal, I commented on this post of yours:-

      AVIC PITCHES AIR-COOLED AESA RADAR FOR JF-17

      and still waiting for your response. Please check that comment and respond.

      Thank you

      • I tend to avoid those comparisons, but the JF-17 Block-III – with quantity – would be a credible threat if given all of those subsystems and weapons.

  • Shershahsuri

    Procurement or capital budget of should be exceeded to 3 billion dollars and after five years to 5 billion dollars at least to keep up up-gradation.

  • Its very hard for the pakistani armed forces, with the allocation of small defence budget , especially acquisition and procurement of envisaged and planned big tickets looking difficult , no doubt all forces will get all necessary funds but now this is a time to partner and join hands with private sector , local vendors, joint ventures with foreign companies and most important is to cooperate with technical univercities, and should be given a task and funds to come out with the new surprize ,only way to cut the production price and prefference should be given to the local production ,especially in the field of mechanical and electronics.

  • Waqas

    Govt must involve private sector in arm production and should allow them to export them .
    Fwo has the capacity to add some earning from cpec.
    Ministry of production should search for new markets to sell it’s arms and technology to third world country
    Pakistan must look for its foreign investors with 50% partnership in research and development program

  • Ali Afzal

    Pakistan should also spend on border security with Afghanistan & Iran. More importantly it should buy more gunship helicopters and night vision goggles.

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