Photo: Reuters
Photo: Reuters

Opinion | Countries don’t win wars, only companies do

Modern wars are hugely expensive affairs and the end results often don’t justify the costs

In the aftermath of the tragic killing of at least 40 men of the Central Reserve Police Force at Pulwama, there has been a clamour for some form of reprisal against Pakistan, believed to be the perpetrator behind the attack. The brutal nature of the assault seems to call for nothing short of war to end once and for all the unending cycle of violence from across the border.

Yet, even as the government in tandem with the military brass considers the best response, it bears repeating that modern wars are hugely expensive affairs and the end results often don’t justify the costs. According to a recent estimate by the Costs of War project at the Watson Institute of Brown University in the US, the direct and indirect costs of the war against terror unleashed by the US over the last two decades added up to more than $5.5 trillion.

With the impending departure of US troops from Afghanistan, leaving the ill-fated country to the mercies of the Taliban, it is a moot point whether those trillions have achieved anything.

The story has been repeated across wars over the last 50 years. Despite its resounding victory in the 1971 war against Pakistan, there were few long-term gains for India. Instead, successive droughts in 1972 and 1973 compounded the expenditure incurred during the war, leading to a massive spike in inflation, and a gross domestic product growth of just 0.9% for 1971-72.

A war today would be far more costly in degree and scale. This is, of course, over and above the risk of any conflagration triggering a nuclear war between the two nations, the human costs of which are quite simply intolerable.

In a piece just after the surgical strikes in 2016, IndiaSpend, using a 2007 study by researchers from Rutgers University, the University of Colorado Boulder, and the University of California, Los Angeles, concluded that “if India and Pakistan fought a war detonating 100 nuclear warheads (around half of their combined arsenal), each equivalent to a 15-kilotonne Hiroshima bomb, more than 21 million people will be directly killed, about half the world’s protective ozone layer would be destroyed, and a ‘nuclear winter’ would cripple the monsoons and agriculture worldwide".

Besides the direct cost of war, there is a larger macroeconomic impact on the economy as well in the form of the opportunity lost by not investing this amount in other sectors. Pakistan’s defence expenditure is 3.2% of its gross domestic product , whereas for India it is about 2.16%. Strikingly, both countries spend less than that on public health and education.

Indeed, the only winners from any war are arms and armament companies concentrated in the US and Europe, which often have the luxury of selling their wares to both countries involved in a conflict. An analysis by the Financial Times on the extent to which the US and foreign companies profited from the Iraq war revealed that the top 10 contractors secured business worth at least $72 billion.

Thanks to ruinous wars in places such as Syria and Yemen, the global arms industry is booming, with the total international trade in arms now worth about $100 billion every year. According to Stockholm International Peace Research Institute (Sipri), an influential think tank, major weapons sales between 2012 and 2017 went up 10% over the previous five years.

There is good reason why the US was among the first countries to back India’s right to defend itself after the attacks in Kashmir. India is the world’s largest arms importer and the US the largest exporter, accounting for 34% of all global arms sales. Guess who benefits if India steps up its spending on weapons? For India, the situation has been worsened by its inability to indigenize the production of critical weapon components.

This hierarchical pattern is played out with mind-numbing regularity as rich, developed nations find willing buyers in developing nations that can ill afford such vastsums. African nations such as Angola and Sudan, among the poorest countries in the world, have seen their military budgets rising sharply as insurgencies and terrorism take their toll. Little wonder then that arms sales to Africa increased by 40% over the last five years.

Dominating this landscape are companies such as US manufacturer Lockheed Martin Corp. with $2.7 billion in profit on the back of 2018 revenue of $51.6 billion, as well as others like Raytheon Co., Northrop Grumman Corp., and General Dynamics Corp., all from the US, and the UK-based BAE Systems. Aircraft manufacturer Boeing, whose repertoire includes the much vaunted F-15, F-18 and F-22 fighter planes, is another company for which the business of war is hugely attractive.

After trailing Pakistan for the first few decades after Partition, India has left its neighbour well behind on most parameters of growth by turning its focus on social and developmental issues. By unleashing and channelizing the creative and entrepreneurial energies of its people particularly after 1991, it is today one of the fastest growing large economies in the world.

In many ways, India has already won the only war that matters, the one that gives its citizens an opportunity to realize themselves. An old Greek saying goes “After the war, aid." For Pakistan, it is worth reflecting on the wisdom of that.

Sundeep Khanna is an executive editor at Mint and oversees the newsroom’s corporate coverage.

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