Bangladesh - Military Spending

The Government of Bangladesh is actively seeking to upgrade its military and security capabilities and has allocated increasing amounts to its defense and security-related budget. Terrorist attacks, including attacks on Bangladeshi security forces, have also increased the demand for security and defense services and equipment.

Bangladesh Government has taken various steps to develop our country technically in near future and raise the country’s economy at prestigious level in the world. Therefore, Bangladesh Government has declared Vision 2021, Forces Goal 2030 and long term Vision 2041. To achieve these Goals, Bangladesh Government has emphasized to extend technical training facilities in the country.

Prime Minister Sheikh Hasina said 07 January 2017 the Awami League under the leadership of the Father of the Nation Bangabandhu Sheikh Mujibur Rahman played a pioneering role for development of the armed forces. Present Awami League government is also following the footprint of Bangabandhu, she said adding that the armed forces would be made a modern force under the “Forces Goal-2030”.

Bangladesh’s $66.8 billion national budget in fiscal year 2020-21 included a 6.13 percent ($4.1 billion) allocation for defense and 4.0 percent ($2.67 billion) allocation for public security. These allocations grew steadily from 2016 to 2019, but stagnated in fiscal year 2020-21 in the wake of the COVID-19 pandemic. According to analysis from research consultancy Strategic Defense Intelligence (SDI), the Bangladeshi defense industry is largely underdeveloped with only limited domestic suppliers. As a result, most of Bangladesh’s defense and security equipment and service needs are met through tenders of government contracts with foreign suppliers.

In June 2016, the Government of Bangladesh announced that it had increased the defense budget for 2016-2017 to $2.8 billion U.S. – i.e. a 7% increase from 2015-2016. As of 2012 Bangladesh's annual defense budget was only $1.6 billion. Modernization of the Armed Forces is one of the major commitments of the government of Prime Minister Sheikh Hasina, who is also the Defence Minister of Bangladesh. In February 2009 the newly elected government announced an ambitious procurement plan, including anti-tank and anti-ship missile systems, aircraft for maritime patrol, frigates, tanks and helicopters. A parliamentary committee agreed in principal the 10-year plan in June 2009.

Bangladesh is working through a military modernization plan, which includes looking to partners for affordable defense systems, especially to supply its Special Operations Forces and disaster relief equipment. This modernization effort provides an opportunity for other countries to expand security cooperation, especially through the US Excess Defense Articles program, which makes US equipment that is surplus to our requirements available to partners.

Because it has been in power almost continuously since 1975, the military has been in position to channel resources to the defense sector. According to A.M.A. Muhith, a former Bangladeshi finance minister and a critic of the military, "the defense establishment has become virtually unaccountable and has appropriated a disproportionate share of resources for its perpetuation and enrichment." Muhith asserts that whereas public spending increased ninefold between 1974 and 1986, defense spending during that same period increased more than twentyfold.

The army received the best treatment. According to 1985 data, the army received over 50 percent of defense outlays. Moreover, army personnel strength has tripled since 1975. Navy and air force expansion has been less spectacular, although their capital outlays for such high-cost items as ships and aircraft represented an onerous economic burden. Analysts calculate that actual outlays for defense were considerably higher than published government budgets suggested.

Nevertheless, the armed forces continued to experience severe economic constraints. The defense budget for fiscal year 1989 totaled US$290 million and was the largest budget item, accounting for 17.2 percent of the national budget. In per capita terms, Bangladesh spent about US$3 per year, or about 2 percent of its gross national product, on defense. By any standard, this was a small sum for a military establishment numbering just over 100,000 personnel under arms. Foreign procurement took 15 to 20 percent of the defense budget. Recurring costs, such as training and pay, accounted for more than 50 percent.

In the proposed budget for FY 2009-10, the government announced that it wanted to restructure the country’s defence system to ensure security of the country and the people and continue to improve defence capability. “Enhanced provision in terms of higher training, modern military hardware and other facilities for the army, navy, air force and border security forces will be provided, so that they are fully prepared to face the challenges of the 21st century,” Finance Minister AMA Muhith said in his budget speech on 11 June 2009. The finance minister proposed increasing the original allocation of Tk 7,967 crore for FY 2008-09 to Tk 8,196 crore in the revised budget and allocating Tk 8,382 crore in the budget for FY 2009-10.

In order to build up the Army, Navy, and Air Forces as prudent and efficient forces, modernization is essential. To protect the national sovereignty and security, it is necessary to acquire essential arms, ammunitions, and modern war-equipment in order to increase capability of the Armed Forces. Further, it is essential to impart training related to modern war techniques and to expand application of information technology for increasing efficiency of the defence forces. Therefore, modernization of the forces has been given priority.

With a view to encountering climate changes, adverse impact of climate changes on agriculture and natural disaster, prediction and warning is given regarding excessive rainfall, floods, drought, hailstorms, depression in the sea, tornado and cyclone. Besides, in order to face earthquake disaster, forecasting and Tsunami warning is provided to the government and the public. It is therefore essential to strengthen the activities related to weather observation, warning, digital mapping and space and distance observation through best application of modern technology and researches. As such, weather observation, research and warning system is given the second priority.

Services of the Inter-Departments are essential in order to increase the capability of the Armed Forces and their modernization. Therefore, it is necessary to expand and improve the standard of services for increasing capability of the Armed Forces. For this reason, activities of the Inter-Departments are given priority.

According to the World Bank, military expenditures data from SIPRI are derived from the NATO definition, which includes all current and capital expenditures on the armed forces, including peacekeeping forces; defense ministries and other government agencies engaged in defense projects; paramilitary forces, if these are judged to be trained and equipped for military operations; and military space activities. Such expenditures include military and civil personnel, including retirement pensions of military personnel and social services for personnel; operation and maintenance; procurement; military research and development; and military aid (in the military expenditures of the donor country).

Excluded are civil defense and current expenditures for previous military activities, such as for veterans' benefits, demobilization, conversion, and destruction of weapons. This definition cannot be applied for all countries, however, since that would require much more detailed information than is available about what is included in military budgets and off-budget military expenditure items. (For example, military budgets might or might not cover civil defense, reserves and auxiliary forces, police and paramilitary forces, dual-purpose forces such as military and civilian police, military grants in kind, pensions for military personnel, and social security contributions paid by one part of government to another.)

NATO defines defense expenditure as payments made by a national government specifically to meet the needs of its armed forces or those of Allies. A major component of defense expenditure is payments on Armed Forces financed within the Ministry of Defense (MoD) budget. Armed Forces include Land, Maritime and Air forces as well as Joint formations such as Administration and Command, Special Operations Forces, Medical Service, Logistic Command etc. In view of the differences between the NATO and national definitions, the figures shown may diverge considerably from those which are quoted by national authorities or given in national budgets.

They might also include "Other Forces" like Ministry of Interior troops, border guards, national police forces, customs, gendarmerie, carabinierie, coast guards etc. In such cases, expenditure should be included only in proportion to the forces that are trained in military tactics, are equipped as a military force, can operate under direct military authority in deployed operations, and can, realistically, be deployed outside national territory in support of a military force. Also, expenditure on Other Forces financed through the budgets of ministries other than MoD should be included in defense expenditure.

Pension payments made directly by the government to retired military and civilian employees of military departments should be included regardless of whether these payments are made from the budget of the MoD or other ministries. Expenditures for peacekeeping and humanitarian operations (paid by MoD or other ministries), the destruction of weapons, equipment and ammunition, and the costs associated with inspection and control of equipment destruction are included in defense expenditures.

Research and development (R&D) costs are to be included in defense expenditures. R&D costs should also include those for projects that do not successfully lead to production of equipment. Expenditure for the military component of mixed civilian-military activities is included, but only when this military component can be specifically accounted for or estimated. Financial assistance by one Allied country to another, specifically to support the defense effort of the recipient, should be included in the defense expenditure of the donor country and not in the defense expenditure of the receiving country. War damage payments and spending on civil defense are both excluded from the NATO definition of defense expenditure.