Bad spending

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It goes without saying that the successive state governments in Jammu and Kashmir have inherited a severe social and economic decline. In post-2002 Jammu and Kashmir, the state governments have remained very vocal about bringing peace through development and this line of action has been shared, endorsed and supported by the Union governments in New Delhi too. On the face of it, such official assertions carry much weight, at least theoretically. But as happens in this part of the world, theory and practice remain separated and segregated as is evidenced by the fact that whatever figures in political speeches is not reflected through actual actions on the ground. Although in the kind of situation facing Jammu and Kashmir, the key objective of the governments should be to restore economic and social conditions as quickly as possible, but as of now the state is yet to see the kind of policy reforms that are needed to realize the objective.

Take for instance the amounts spent to deal with the situation in Jammu and Kashmir militarily. Even as a whole lot of studies conducted into the economics of conflicts by experts under the aegis of influential institutions like the World Bank suggest that increased thrust on dealing with the conflicts militarily (as is reflected by increased spending on security), does not alter conflicts as much as political initiatives do, the huge security expenditures incurred by the state are indicative of the faulty policy in this regard. A recent study conducted by Paul Collier and Anke Hoeffler has found out that the effect of military spending is significantly different in post-conflict situation, as the situation in Kashmir, as per the government’s own admission, is now. They say “high level of military spending post-conflict significantly increases the risk of reversion to war”. Now taking this finding as a pointer, one could question the logic and rationale of the policy adopted by New Delhi in Jammu and Kashmir vis-à-vis military or security spending.

As has been witnessed ‘over Kashmir’ between India and Pakistan, either country has been matching the other on military spending, although it means that both lose precious resources which could suffice the basic needs of teeming millions living in abject poverty. But given the deficit of trust that plagues their relationships, more the one country spends on military, the more the other thinks that it too has to invest more to remain prepared for a possible showdown. Same argument may be extended to match the internal situation within Jammu and Kashmir, which translates into meaning that the more spending on security matters by the government induces the militants too to spend more to prepare for renewal of conflict. These fears have been expressed in a study “Aid, Policy and Growth in Post-Conflict Societies” published by the World Bank in 2003.

The study suggests a policy lesson for the government that they should be wary of the strong lobbying pressures for maintaining high military spending. There is certainly a vested interest of the huge military industrial complex, as well as the protagonists among the security establishment attached to the security related expenditure which government needs to be careful about. In addition to the problems resulting from such spending, suggests the study, the government could forego the opportunity to realize a peace dividend from reduced spending.


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