Let me try to properly explain what I meant. Capital is free to move around the world therefore the price of Capital is the same around the world (adj for risk). Labour on the other is hand is not free to move around freely and therefore the price of labour is different in different countries.
Back to analysis.
1)Lets assume 2 Artillery pieces is needed to do same job as one MLRS piece.
2)Artillery requires 4 men to a piece while MLRS requires one man.
3) assume that MLRS costs 3million per piece while Artillery costs one million per piece.
4) Assuming opportunity cost of capital is 5% per year is the same in U.S. and Pakistan and Labour cost is 30,000 in U.S. and 5,000 in Pakistan.
The cost per year for U.S. to maintain one MLRS per year is 180,000 (5%*3Million + 1man * $30000)
The cost per year for U.S. to maintain two Artillery units per year which gives same capability as one MLRS is (4men * 30,000 + 5% * 1Million)*2 = $340,000
The cost per year for Pakistan to maintain one MLRS per year is $155,000 (5%*3Million + 1man * $5,000)
The cost per year for Pakistan to maintain two Artillery units per year which gives same capability as one MLRS is (4men * 5,000 + 5% * 1Million)*2 = $140,000
Therefore it can be seen that because of the differences in the relative costs of labour and capital between U.S. and Pakistan, they will and in fact should have differenct force structures. Pakistan will have more labour intensive military while U.S. will have more capital Intensive Military.