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What price Mirage deal?
Posted on Thursday, July 18, 1996 in The Friday Times (Editorial)
The DCC has erred in its decision to purchase 40 Mirage 2000-V fighter jets worth US$ 4 billion approximately from France. This judgment is based on shallow considerations of `national security’. It ignores the devastating impact of such staggering military expenditures on our national debt. And it reeks of unholy commissions and deviant practices at a time when corruption in government has become the country’s number-one problem.
It is, of course, true that the Pakistan Air Force is saddled with an ageing and depleted fleet of combat aircraft and genuinely needs a fresh induction of modern jets to prop up the air defenses of the country. The F-16s are not available and the Russians are reluctant to sell sophisticated aircraft to Pakistan except against hard cash. The PAF is also keen to stake its own claim on national resources in view of the Pakistan Navy’s recent purchases of submarines and frigates worth over US$ 1 billion and the Pakistan Army’s intention to buy new tanks and other equipment at a cost of US$ 500 million or so. But the PAF’s case for the Mirage 2000-V has been considerably weakened by a number of factors.
Unlike the submarines and the tanks, the Mirage 2000-V is suited for an offensive military doctrine rather than an avowedly defensive one like Pakistan’s. The prospects of a full-fledged war between India and Pakistan, in which the Mirage 2000-V might be expected to play a decisive role, can also be ruled out. Our nuclear deterrent is already in place and both countries may eventually be persuaded to negotiate a no-war pact.
The cost of the proposed project ― over twice as much as that sanctioned for the army and navy together ― is also prohibitive. The French want 40 per cent — about US$ 1.6 billion ― as down payment. The credits for the balance will also be difficult to arrange except at high borrowing rates. The government hopes, however, to nudge the French into accepting a down payment of 15 per cent and reduce the Mirage package to US$ 3.5 billion or so. Even so, can we afford this deal?
No, we can’t. Apart from the Rs 132 billion given to defense expenditures in FY1996-97 (26.4 per cent of the budget), we have had to fork over Rs 186 billion (37.2 per cent of budgetary outlays) in debt payments. In the following years, if the Mirage deal goes through, this debt affliction will break our back. The less the down payment now, the higher the incidence of interest payments on debt later. Alternatively, the greater the down payment now, the greater the pressure on our balance of payments which is already forecast to dip at about US$ 4 billion next year. As it is, we have been forced to foreclose our much-vaunted energy policy because we may not have the foreign exchange required to fuel the newly commissioned power plants. Where on earth, therefore, are we going to find the exorbitant sums for the new Mirages proposed by the PAF?
The PAF, unfortunately, has lost much public sympathy of late. It was once the darling of the public and the press. Now aspersions are being cast upon the credibility and integrity of the PAF’s high command. The association of the PAF’s Shaheen Foundation with a particular TV company in the private sector suggests bad judgement on the part of the Air Chief. People are also asking questions about certain vested interests that are bent upon pushing the Mirage deal through. It is regrettable, too, that the recent purchases of several squadrons of second-hand Mirage aircraft have led to allegations in a section of the press that kickbacks of as much as US$ 20 million might have been involved. And the reputation of the manufacturer of the Mirage aircraft, Dassault, which has been indicted for corruption, leaves much to be desired. This whispering campaign has created a certain perception in the mind of the public which cannot, and should not, be ignored.
The prime minister, Benazir Bhutto, wonders why a deal approved by the DCC last year should now have become controversial. She is said to be particularly incensed by suggestions in the press that the President and the army high command are not terribly enthused by it. It is speculated that the President, in particular, is keen that options for buying other, cheaper aircraft should be thoroughly exhausted before the Mirage 2000-V project is taken up in earnest.
If that is indeed the President’s view, what is so wrong with it? Why is the PM and the PAF in such a mad rush to plunge into a multi-billion dollar deal which could have far-reaching and adverse implications for the economy? The public interest demands that the Mirage project should be seriously debated and reconsidered. The government should also release details of middlemen and commission agents in all defense deals so that everything is above board. The high command of the PAF and the Pakistan Navy, in particular, cannot afford further erosion of their credibility which is now at an all-time low.
http://www.najamsethi.com/what-price-mirage-deal/
