Two countries where large defense expenditures have helped economic development are Israel and the USA. Both are leading in innovation. Israel has the highest rates of innovation per capita in the world and the USA comes next. This seems like a paradox--defense is by definition considered a waste. The reality is that technology is a big component of successful armies. Israel has been able to build a huge cadre of highly skilled engineers who develop technologies for sophisticated warfare. The same is true for the USA. Technologies developed in the military then find their way into the commercial sector. India, the only stable democracy in South Asia, is surrounded by potential enemies. China has the characteristics of a society predisposed to predatory warfare. With a fast growing economy, it has the resources to fund its military. Its institutions have lagged and its rulers are capable of whipping up nationalistic emotions to divert attention from their stranglehold over society. Pakistan, despite its recent moves towards democracy, remains unstable and could be looking at a coup staged by terrorists. India needs to increase the share of expenditures on technology for sophisticated warfare rather than spend on a standing army.