For every rupee spent by the military, the civilian government spends Rs4.6. This proportion (excluding debt servicing) was exactly the same 10 years ago, meaning that both the civilian and military budgets have grown at exactly the same rates.
PKONWEB Report — To provide fiscal space for debt servicing– a hot button line item for the government, Pakistan’s military has slashed its budget considered a rare move despite the ongoing hybrid war it is confronted with and tensions on the eastern border– It’s “to help ease the country’s “critical financial situation,”” Prime Minister Imran Khan said on social media.
“I appreciate Pak Mil’s unprecedented voluntary initiative of stringent cuts in their defense expenditures for next FY bec of our critical financial situation, despite multiple security challenges. My govt will spend this money saved on dev of merged tribal areas & Balochistan.”
This will allow money to be spent on the development of the tribal regions bordering Afghanistan, still recovering from more than a decade-long insurgency, and violence-racked Balochistan province, Imran Khan added.
The announcement comes amid two developments: Tensions on the border with India on the (eastern) border; and as Pakistan has struck an agreement with the International Monetary Fund (IMF) for a $6 billion loan in which Islamabad is expected to put in place measures to rein in a ballooning fiscal and current account deficits built over the years to get access to the funds– the IMF nod also opens doors for Khan’s government to tap other international multilateral lending institutions.
The IMF has said the primary budget deficit should be trimmed by the equivalent of $5 billion, but previous civilian rulers had said a cut in defense spending could stoke tensions with the military– a misplaced fear albeit misconstrued alluded to on social media today by the former editor Dawn.
Unlike some other civilian leaders, PM Khan appears to have better handle on civil-military affairs. According to a senior Pakistani defense expert, “the military is like an Arabian horse, and one must be good at handling it.”
DG ISPR Gen. Asif Ghafoor responded to Indian spin on the move: “Indian fake media busy spinning on our internal def budgeting choice. Don’t forget, we were the same forces with same budget on 27 Feb 19. We hv the capability & capacity to respond. Remember, it’s not budgeting, it’s resolve of force & the nation firmly standing behind its forces.”
The government has taken other steps previously as part of its austerity drive and tight fiscal management while it continues to stave off the crisis and establish contours of a social-welfare system it has promised amid tensions on the border and a US-Taliban talks for peace in Afghanistan.
Pakistan’s de facto finance chief, Hafeez Shaikh, on June 11 is due to announce spending plans for the financial year beginning in July.
Under Pakistan’s devolved system as per 18th Amendment, the federal government must hand over more than half its budget to the provinces, and the remainder is mostly eaten up by a huge debt servicing and the military’s budget.
Debt and debt servicing, many experts say, have become an imminent point of order.
Its huge pile (principle loans + interest on loans) built up over a decade had become a paperweight on the country’s fiscal and economic management.
According to one report published in February in The Express Tribune, For every rupee spent by the military, the civilian government spends Rs4.6. This proportion (excluding debt servicing) was exactly the same 10 years ago, the article said, “meaning that both the civilian and military budgets have grown at exactly the same rates.”