Pakistani economists and defence experts have
sharply criticised country's defence expenditures and other budgetary
measures, which they said, would continue to add people's woes,
already living under grinding poverty.
Pakistan last week unveiled 1.09 trillion (18.16
billion dollars) national budget for the fiscal 2005-6, reflecting
hike in defence expenditures and boosting development outlays.
The country raised its defence budget by 15.5
percent to 223 billion rupees, but finance minister Omar Ayub linked
the expenditures with gross domestic product (GDP) growth, which
posted 8.4 percent rise in the fiscal ending June 30.
"We can create jobs only by investing more on
industrialisation and infrastructure and need to revisit our
expenditures on defence, especially when tension is melting with
India," retired army general Talat Masood said.
The 'irreversible' peace process between the two
arch rivals, which have fought three wars, was initiated in April 2003
after the tensions spiked in 2002, when the duo mobilised the troops
on borders followed a deadly raid on India's parliament in December
2001, which New Delhi blamed on Pakistani-backed militants.
"Expenditures on non-combatant and
non-operational heads ought to be lessened," he said.
Critics said the defence expenditures were quite
non-transparent and thus carried doubts on its justification.
"Our defence needs definitely call for
appropriate allocation but the nation should know as to how much is
being expended on lavish expenditures to maintain lifestyles of senior
officers and their spouses and how much on genuine needs,"
independent economist Qaiser Bengali said." It should be
Measures for poverty reduction may also not be so
effective as institutional weakness, corruption and other factors
could not translate development budget into a reality, they said.
"The government has allocated a considerable
sum for development and poverty elevation but its utilisation always
carries a big question mark as 60 to 80 percent of the allocation
remains unutilised," chief of Research Institute of Islamic
Banking and Finance, Shahid Hasan Siddiqui, said.
The government vowed Monday to undertake a wide
network of roads, dams and other infrastructure work under the
272-billion-rupees Public Sector Development Programme, which has
handed a large increase in financing.
"A significant increase was also made in the
outgoing financial year for development but it failed to deliver and
flopped in generating employment, which to our statistics looms at 8.5
percent to nine percent," Siddiqui said.
Official data shows that unemployment has been
static at 7.9 percent for past two years.
The economists rather insisted that unemployment
had increased in past five years.
"In 1999, when the rulers took over the
government, unemployment rate was 5.89 percent and this is according
to government's own figure and now if the government figure of 7.69
percent unemployment is accepted even then it showed a rise," he
Economists also rejected measures for giving relief
to poor and salaried class, saying the increase was not even a
"On one side, they have raised, but that too
slightly, the salaries of the government employees but then taken it
back from the other by raising sales tax by 55 billion rupees, a tax
payable by all and the rising inflation," he said.
In a move to relieve the financial pressure on
civil servants, Ayub said the government would raise their wages by up
to 30 percent whereas minimum wages of labourers were also raised to
3000 rupees (50 dollars) a month from 2500 rupees.
"This is simply a joke with labourers as
authorities have already failed to even implement the earlier
rates," remarked Bengali, former chief of Social Development and
Policy Institute (SPDC), an apex research institute.
Kaiser, who has been engaged in research on
macro-economic issues of the country for the past 25 years, said he
always felt proud of the country as he never found hunger cases
throughout his field work though malnutrition was rampant.
"But for the past three years I have seen
hunger cases and that too in urban settlements like Karachi," he
"The budget is good for rich and bad for poor,
as I can simply define it," he said.
"It (the budget) is more business friendly but
not pro-people at all," Siddiqui remarked.
Pakistani capital market, however, is content with
the budget as their fears of a rise in share trading tax proved
"The market was fearing a rise in the turnover
tax but the budget did not incorporate that increase giving a sigh of
investors," Director Jahangir Siddiqui Capital
Market Mohammad Sohail said.
"The overall budget would cast neutral to
positive impacts on the capital market," he said.