Feeding the white elephant: Defence budget hike

General Kayani, the most powerful man in Pakistan

A report in this newspaper yesterday suggests the defence budget has been quietly hiked by an astonishing 25 per cent, from the budgeted figure of Rs442bn to over Rs550bn. As usual, neither the government nor the military has seen fit to divulge any details, making it difficult to comment on the need for such an extraordinary increase.

Surveying the landscape of Pakistan and assessing the security situation, however, provides some clues. For one, the army has been very active in the flood rescue and relief efforts, costly activities that could not have been budgeted for earlier this summer. For another, the military operations against militant groups in the tribal areas look set to continue. North Waziristan remains a hornet’s nest that has yet to be tackled and the other agencies of Fata continue to require the application of force as the security forces struggle to master the clear-and-hold phase of counter-insurgency. So a hike in the defence budget may well be justified.

What isn’t justified is the lack of transparency. At the best of times, there needs to be accountability of the public’s money that is spent by state institutions. In times of crisis, when funds are even scarcer than usual and the state has to make choices between equally pressing needs, accountability becomes an even more pressing factor. Do the armed forces absolutely need Rs110bn more or could they have done with less if belt-tightening had been attempted first? Where will the money go, only to fund essential, emergency needs or also to finance wants that could otherwise be postponed? The public will likely never know.

Even parliament, where in-camera meetings could provide some kind of limited oversight, is unlikely to be given any details. (Earlier this week, the Public Accounts Committee was stonewalled by Finance Secretary Salman Siddique when members demanded details of a one-time Rs5.5bn supplementary grant to the ISI in 2007-08.)

A few comparisons may put the figure of Rs110bn in the proper perspective. Rs110bn is close to half the amount public-sector enterprises rack up in losses each year — a key area of reform and restructuring that the international financial institutions have been emphasising. Rs110bn exceeds the entire gains that the reformed General Sales Tax is expected to make. The sum is also roughly equal to the amount which would be raised by the controversial ‘flood tax’ that has been mooted. One single head of expenditure, then, is already set to absorb all the revenue gains that are expected to be made this year — even before those gains are realised. Surely, the public is owed an explanation.

Source: Dawn Editorial, 24 Sep, 2010



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