Cash starved Pakistan spends big on military despite financial meltdown

Cash-strapped Pakistan, which is negotiating a rescue package with the International Monetary Fund, has increased its defence budget by 11% for fiscal year 2022-23, compared to the (Pakistani) Rs 1,370 billion budget projection for the current fiscal year, which ends this month.

Defence spending is estimated at Rs 1,523 billion, or 17.5% of overall current expenditure, according to the Karachi-based tabloid Dawn.

Worryingly, the country’s allocation for the Higher Education Commission for 2022-23 is only Rs 65 billion. That’s not everything. The funding for the federal and provincial Public Sector Development Programme (PSDP) has been decreased to Rs 727 billion, down 19.2% from the previous year’s budgeted amount of Rs 900 billion. Though the PSDP cannot enhance the country’s economy on its own, a reduction in allocation could cause a slowdown in public investment, lowering manufacturing and overall competitiveness, according to an expert with a ratings agency.