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NepalDefense Spending
Nepal was one of the poorest nations in the world. With
a per
capita income ranging from US$158 to US$180 per year,
about 40
percent of the population living in conditions of absolute
poverty,
and virtually no marketable national resources, the
country's
fiscal resources for maintaining a standing army were
woefully
inadequate
(see The Five-Year Plans
, ch. 3). To compound
matters,
the country had virtually no capacity to provision its
military
beyond the most basic items such as food, clothing, and
small-arms
ammunition. Almost all of the army's equipment needs, such
as airdefense guns and aircraft of all kinds, and its
requirements for
overhauling major equipment items were purchased abroad
through
scarce foreign exchange reserves or concessional terms. By
any
standard, the Royal Nepal Army faced severe resource
constraints,
even in comparison with other less- developed countries.
Nevertheless, resources earmarked for the military
represented
a modest defense burden. According to 1989 estimates,
approximately
US$33 million, or 1.2 percent of the gross national
product
(GNP-- see Glossary),
was budgeted for defense. The defense
outlay
represented approximately 6.2 percent of the central
government
expenditures budget. Health, education, and economic
development
clearly took priority over defense
(see Regular and Development Budget
, ch. 3). Defense budget figures must be used with
caution,
however. Most observers suspected that actual outlays for
the
military were buried in other budget categories or else
handled
discreetly under accounts controlled by the royal family.
Much of
the defense budget, however, paid for routine recurring
costs,
particularly salaries and pensions. The defense budget
traditionally was not subjected to close public scrutiny,
and all
but the most generalized statistics were a closely guarded
secret.
As of mid-1991, it was unclear whether this pattern would
hold
true. The Parliament, now genuinely representative, was
constitutionally responsible for passing the annual budget
and
overseeing national defense requirements, but had not yet
had a
chance to prove itself in practice.
Data as of September 1991
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