Pakistan aims to contain military expenditure


Pakistan hopes to lower its costly military expenditure in the next fiscal year to below the 16 percent it took of the state’s budget in the current 2011-2012 fiscal year, the army’s spokesman said.

The cash-strapped country allocated “around $5 billion to the army’s budget” in the current fiscal year, military spokesman Major-General Athar Abbas told Reuters on the sidelines of a conference in the Moroccan city of Tangier.
“That’s the equivalent of 16 percent of the state’s budget,” said Athar, Reuters reports.

Asked if the percentage figure would increase in the next fiscal year, Athar said: “Hopefully not because  for about five years, the military budget remained at between 13 percent and 14 percent.
“It was increased only this year because of the environment of security, and a lot of things that were required by the paramilitary in particular.
“I don’t see the military expenditure taking in more than $5 billion (in the next fiscal year),” he added.

Pakistan government’s fiscal year runs from July 1 of the previous calendar year to end-June of the following year.

The state increased by close to 12 percent the budget for the military in 2011-2012, in what analysts link to an annual inflation rate that hovers around 13 percent.

Pakistan’s budget targets a budget deficit of 4 percent of gross domestic product (GDP) for 2011/12 and an economic growth of 4.2 percent.

Funds allocated by the government to the Pakistani army still represent a “very small amount”, he said.
“There is a lot of scope of enhancing the revenues of the government. If they go up by 70 or 80 percent the military budget will boil down to 10 percent,” Athar said.

With one of the world’s lowest tax-to-GDP ratio, reaching around 10 percent, Pakistan is growingly dependent on foreign funds and loans, even for development projects.