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Bangladesh defence budget and your expecations


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The upcoming FY2020-21 is months away. What are your expectation from the Finance Ministry as far as the defence and public security budgets are concerned?

Areas of interest:

  • Infrastructure (Military bases, cantonments, defence related facilities)
  • Manpower (Welfare, training)
  • Equipment (Weapons, aircraft, warships)
  • Defence industry (Military industrial factories, shipyards, dockyards, MRO facilities)
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I don't expect the defence budget to rise abnormally becausee 60% of the budget is dedicated towards salaries of personnel and only a small armount goes towards defence purchases. Most of the purchases are made through special allocations not covered by the official defence budget.

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I hope we can increase the defence budget to about 8 billion this time. We are getting European and US hardwares which requires extra bucks to buy the required armaments and accessories relating to these heavy weight purchases.

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12 minutes ago, Legionair said:

The budget is stable and currently at 6.2% of the GDP , however this year we can expect to have a budget of $5bn and bear in mind we are saving for BAF procurements for last few years. 

Bangladesh's defence budget is 1.2% of GDP, its the second lowest in the region after Bhutan.

https://www.sipri.org/sites/default/files/Data for all countries from 1988–2018 in constant (2017) USD (pdf).pdf

GFJvTSy.jpg

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8 minutes ago, Asaf Khandekar said:

Bangladesh's defence budget is 1.2% of GDP, its the second lowest in the region after Bhutan.

https://www.sipri.org/sites/default/files/Data for all countries from 1988–2018 in constant (2017) USD (pdf).pdf

 

You are kind of right about the GDP allocation ratio, Bangladesh Armed forces received 3.87 Billion dollar allocation what is 8.3% of its Total Budget. The size of Bangladesh GDP is now US$ 302.4 billion. The size of the proposed budget for FY2019-20 is USD 62.28 Billion Dollar.

A tiny rise in the Yearly allocation. The 2019 -2020 defense budget also amounts to 8.3% of total annual government expenditure and about 1.5% of GDP.

Source:

https://bdnewsnet.com/bangladesh/bdmilitary/3-87-billion-usd-defense-budget-of-bangladesh-2019-2020/

 

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The current defence budget is BDT 32,520 crore for the defence services and another BDT 38 crore for the armed forces division.

Acquisitions and achievements by forces in the last three fiscal years:

Bangladesh Army: During the last 3 fiscal years 24,720 members of Bangladesh Army participated in 2244 training courses. At the same time, foreign currencies of about Tk.3513.49 crore were earned by participating in UN peace keeping missions. Besides, Vessel type-A, Vessel type-D, Tank MBT-2000 (diamic), RR Repeater Station, RR Terminal Station, Sound Ranging Equipment, Fixed Wing Aircraft, Electric Met Station, Radar Control AD Gun System, Locating Warning Radar, VSL Type-B etc. were purchased.

Bangladesh Navy: During the last three Fiscal Years, 2 Submarines, 2 Frigate, 2 Corvettes, 1 Fleet Tanker, 2 Landing Craft utility, 2 Large Patrol Craft, 2 Submarine Tug and 2 Landing Craft Tank have been added to the fleet of Bangladesh Navy. At the same time, the procurement process of 2 Frigates (H3), 2 Maritime Patrol Aircrafts, 1 Torpedo base Facility and 1 Submarine Base Facility has been completed. A new base called Sheikh Mujib has been established. During the last three FYs, Bangladesh Navy earned about 573.00 crore taka from UN Peace Keeping Mission.

Bangladesh Air Force: During the last 3 years, as part of air defense, Bangladesh Air Force successfully completed 66962:00 flying hours. During the same period, the Air Defense RADARs completed 41,067:43 hours of air observations. As many as 11,437 officers and air force soldiers received higher training at home and abroad. Besides, 2135 officers and air force soldiers participated in the UN Peace Keeping Missions and earned approximately Tk. 399.00 billion. To ensure extensive use of information technology 212 computers of the Air Force have been brought under LAN/WAN Network.

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46 minutes ago, Asaf Khandekar said:

Bangladesh's defence budget is 1.2% of GDP, its the second lowest in the region after Bhutan.

https://www.sipri.org/sites/default/files/Data for all countries from 1988–2018 in constant (2017) USD (pdf).pdf

GFJvTSy.jpg

I didn't know Bangladesh has a higher defence budget than Malaysia! I see why it can afford AH-64E. 😄

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On 1/28/2020 at 7:21 AM, Asaf Khandekar said:

Bangladesh's defence budget is 1.2% of GDP, its the second lowest in the region after Bhutan.

https://www.sipri.org/sites/default/files/Data for all countries from 1988–2018 in constant (2017) USD (pdf).pdf

GFJvTSy.jpg

I think the budget is gonna be bigger this time but will not be a surprising percentage increase. Govt still focusing more on the social and infrastructure sector, mainly power generation. I think more money will be allocated to construction this time around especially to the roads and communication ministry.

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On 1/29/2020 at 5:58 AM, Salted Cola said:

Singapore budget almost equal to that of military state PakistanÂ đŸ˜±

Not to show shocking though, once you see their hardware.

On top of that, Singapore never claims to be the saviour of the Muslim world and played no part in dragging Afghanistan back to stone age.

........................

I am a bit worried about funding of new hardware as the government's revenue collection has taken a hit due a very recent slow down of private sector (don't be fooled by BBS's "8% growth" chest thumping).

I hope procurement plans are not jeopardised.

https://www.newagebd.net/article/99293/nbrs-collection-shortfall-soars-to-tk-39542cr-in-july-jan

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12 minutes ago, Alim said:

government's revenue collection has taken a hit due a very recent slow down of private sector (don't be fooled by BBS's "8% growth" chest thumping).

The revenue collection and growth rate has no relation (I am  not saying BBS is accurate or they do not exaggerate stats). And also the NBR data about the revenue collection is exaggerated too. In case of growth calculation, the IMF and WB data is also above 7% so the growth is not all lies.  

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There will always be collection defecits because the NBR puts higher KPI in order to create pressure on reaching or exceeding some reserve targets they don't publicise. If we take in to account the independent evaluation of the country's economy then it still looks rosy.

I'm counting on Padma bridge, Payra DSP, Khan Jahan Ali airport combined to add at least 1.5% to the economy. This includes rail road network being laid from Payra.

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6 minutes ago, Dark Carnage said:

The revenue collection and growth rate has no relation (I am  not saying BBS is accurate or they do not exaggerate stats). And also the NBR data about the revenue collection is exaggerated too. In case of growth calculation, the IMF and WB data is also above 7% so the growth is not all lies.  

They are directly related as revenue growth is directly tied to economic activity.

IMF and WB regularly question BBS's calculation but they do not have the resources to collect data and calculate from scratch for each of their members.

They try to scale the economic growth using their own limited corrective modelling.

You cannot fudge revenue stats though as money collected has to be paid out fot specific expenditures including defence purchases.

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3 minutes ago, TigerShark said:

There will always be collection defecits because the NBR puts higher KPI in order to create pressure on reaching or exceeding some reserve targets they don't publicise. If we take in to account the independent evaluation of the country's economy then it still looks rosy.

I'm counting on Padma bridge, Payra DSP, Khan Jahan Ali airport combined to add at least 1.5% to the economy. This includes rail road network being laid from Payra.

You are correct in that they set high KPIs and ever year sees some shortfalls but this year stands out as the deficit is significant.

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21 minutes ago, Alim said:

They are directly related as revenue growth is directly tied to economic activity.

IMF and WB regularly question BBS's calculation but they do not have the resources to collect data and calculate from scratch for each of their members.

They try to scale the economic growth using their own limited corrective modelling.

You cannot fudge revenue stats though as money collected has to be paid out fot specific expenditures including defence purchases.

We are talking about GDP growth here (8% increase), not the revenue growth. Revenue growth is not satisfactory. GDP is the total money circulating in the country. It does not help to increase the government fund directly unless revenue growth follows through. But, in BD GDP growth is riding mostly on government expenditure on infra projects and most of the times these sectors enjoy tax holiday. So, government fund (collected as tax, revenue etc) is not increasing as fast forcing govt to take more and more loans.

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6 minutes ago, Dark Carnage said:

We are talking about GDP growth here (8% increase), not the revenue growth. Revenue growth is not satisfactory. GDP is the total money circulating in the country. It does not help to increase the government fund directly unless revenue growth follows through. But, in BD GDP growth is riding mostly on government expenditure on infra projects and most of the times these sectors enjoy tax holiday. So, government fund (collected as tax, revenue etc) is not increasing as fast forcing govt to take more and more 

Revenue growth is directly tied to economic growth.

If there is less economic activity, people pay less taxes. Less tax > less revenue > potentially less allocation to defence procurement.

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1 minute ago, Alim said:

Revenue growth is directly tied to economic growth.

If there is less economic activity, people pay less taxes. Less tax > less revenue > potentially less allocation to defence procurement.

But with govt expenditure through borrowed money economy an still flourish to some extent. And paying taxes has some relationship with good governance also. People can earn a lot and still pay not taxes.

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15 minutes ago, Dark Carnage said:

But with govt expenditure through borrowed money economy an still flourish to some extent. And paying taxes has some relationship with good governance also. People can earn a lot and still pay not taxes.

I agree with you in that the government is tying a noose around our neck by excessive borrowing.

It hurts in two ways: 

1. Reduces capacity to obtain favourable foreign loans due to inability to improve credit ratings

2. Dries up bank funds available for the private sector. Businesses start going under which has a dom inno effect on the economy

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28 minutes ago, Alim said:

1. Reduces capacity to obtain favourable foreign loans due to inability to improve credit ratings

Credit rating mostly depends on the ability to repay the loans. And our debt-gdp ratio is one of the lowest in the world.

29 minutes ago, Alim said:

2. Dries up bank funds available for the private sector. Businesses start going under which has a dom inno effect on the economy

This is the most ominous thing currently happening to our economy.

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On 1/26/2020 at 12:04 PM, Syed Amar Khan said:

The upcoming FY2020-21 is months away. What are your expectation from the Finance Ministry as far as the defence and public security budgets are concerned?

Areas of interest:

  • Infrastructure (Military bases, cantonments, defence related facilities)
  • Manpower (Welfare, training)
  • Equipment (Weapons, aircraft, warships)
  • Defence industry (Military industrial factories, shipyards, dockyards, MRO facilities)

Equipment! Equipment! Even more Equipment!

Starting with the obvious, at least one squadron of MRCA for BAF, including all related weapons and maintenance facilities for the jets. Also in country training facilities for the pilots. Plan for induction of aerial refeulers and AWACS and a solid timetable.

If we can get 32+ used, but upgraded, EF Typhoon from Germany, UK or Italian current stocks as they retire, we would be practically set for twin engine MRCA. Heck, if we can get 40 EFT's, we could give 32 to BAF and the rest, upgraded to handle attacking surface ships, to BN for their maritime MRCA requirement.

Hopefully BN's locally built frigate program finally lifts off. Some sort of plan to induct at least two, if not four more, modern subs. Hopefully all the subs and the various ships training, maintenance and repair facilities will be built in country too. I don't know if we currently have the facilities to be able to overhaul or repair our Mings in country. We need larger and longer range/endurance replenishment ships; 15K to 25K tons should be good for now.

As for the BA, they should get ToT and start building T-300 systems, also spares and ammo, locally at BoF under license; or just go for the Chinese WS-2B's with ToT. T-300 are license built copies of the Chinese WS-2 GMLRS systems anyway. They should also hurry up with the selection of the 300+ KM GMLRS system.

As for all forces or the country as a whole, a solid plan in place to induct medium/long range SAM systems, within a short time frame, say 6-12 months. Maybe plan to start developing or just get ToT for SRBM/MRBM with up to 1,500-2,500 KM range and very good CEP. We also need cruise missiles of at least 500 KM range, but optimally at least 1,500 KM range.

In case someone wonders why the 1500, 2000 or 2500 KM range? We would need the BM's and CM's to cover most of our Western and Eastern enemies, so that they have virtually no safe space on their territory to operate from and against us.

Finally, we should get into the proper mindset that neither of our neighbors are our friends, not a single one. We are quite unfortunate that the only two countries that we have a physical border with, both are threats to us. So keeping this little reality in mind, all branches of the armed forces should strive to achieve as much long range/deep strike capability as possible.

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52 minutes ago, Zoro96 said:

and the rest, upgraded to handle attacking surface ships, to BN for their maritime MRCA requirement.

I don't understand why people are so eger to give fighter jets to navy. It is one thing to run some choppers and trasnport aircraft but running fighter jet is another ball game. Heck, few years back our AF didnot have enough pilots to run 4++ generation aircraft and they want to give fighters to the naval aviation which is not even 10 years old.

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59 minutes ago, Zoro96 said:

Equipment! Equipment! Even more Equipment!

Starting with the obvious, at least one squadron of MRCA for BAF, including all related weapons and maintenance facilities for the jets. Also in country training facilities for the pilots. Plan for induction of aerial refeulers and AWACS and a solid timetable.

If we can get 32+ used, but upgraded, EF Typhoon from Germany, UK or Italian current stocks as they retire, we would be practically set for twin engine MRCA. Heck, if we can get 40 EFT's, we could give 32 to BAF and the rest, upgraded to handle attacking surface ships, to BN for their maritime MRCA requirement.

Hopefully BN's locally built frigate program finally lifts off. Some sort of plan to induct at least two, if not four more, modern subs. Hopefully all the subs and the various ships training, maintenance and repair facilities will be built in country too. I don't know if we currently have the facilities to be able to overhaul or repair our Mings in country. We need larger and longer range/endurance replenishment ships; 15K to 25K tons should be good for now.

As for the BA, they should get ToT and start building T-300 systems, also spares and ammo, locally at BoF under license; or just go for the Chinese WS-2B's with ToT. T-300 are license built copies of the Chinese WS-2 GMLRS systems anyway. They should also hurry up with the selection of the 300+ KM GMLRS system.

As for all forces or the country as a whole, a solid plan in place to induct medium/long range SAM systems, within a short time frame, say 6-12 months. Maybe plan to start developing or just get ToT for SRBM/MRBM with up to 1,500-2,500 KM range and very good CEP. We also need cruise missiles of at least 500 KM range, but optimally at least 1,500 KM range.

In case someone wonders why the 1500, 2000 or 2500 KM range? We would need the BM's and CM's to cover most of our Western and Eastern enemies, so that they have virtually no safe space on their territory to operate from and against us.

Finally, we should get into the proper mindset that neither of our neighbors are our friends, not a single one. We are quite unfortunate that the only two countries that we have a physical border with, both are threats to us. So keeping this little reality in mind, all branches of the armed forces should strive to achieve as much long range/deep strike capability as possible.

Hey, we are talking about next years budget, not next 10 or 15 years budget.

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