Defence budget – Part II – Dr Farrukh Saleem

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Why are ‘military pensions’ of Rs359 billion not included in the ‘defence budget’? Answer: Generally accepted accounting principles (GAAP) are a “common set of accounting principles, standards and procedures.” If I am not mistaken, it was Shaukat Aziz who applied GAAP and moved ‘military pensions’ out of the ‘defence budget’. Legally, military retirees are part of the civilian ‘labour force’ and thus pensions paid to military retirees should not be part of the ‘defence budget’.

Question: Why are funds that are being spent on the rehabilitation of ex-Fata included in the defence budget? Answer: In my opinion, funds spent on the rehabilitation of ex-Fata should not be part of the defence budget.

Question: Why are funds that are being spent on the Pak-Afghan and the Pak-Iran border fencing included in the defence budget? Answer: There’s a hefty amount of Rs155 billion that has been made part of the defence budget. In my opinion, funds that are being spent on the rehabilitation of ex-Fata and the building of the Pak-Afghan and the Pak-Iran border fence should not be part of the defence budget. If Rs155 billion is taken out of the defence budget then Pakistan’s allocation for defence goes down from 18 percent of the budget to less than 16 percent of the budget.

Question: Why is our allocation for education so low? Answer: We spend a meager 2.9 percent of our GDP on education or Rs1,300 billion a year or a per capita expenditure of Rs500 a month. That’s one of the lowest on the face of the planet. We must double our allocation for education.

Question: Is there a connection between a country’s defence budget and the spending on education? Answer: In Pakistan’s case, defence comes out of the federal budget and education from provincial budgets. So there’s no connection between our defence budget and our spending on education. In Pakistan’s case, our defence budget is officially 18 percent of the federal budget and provinces allocate very little for education.

Question: Is the prosperity of a country dependent on the size of its military? Answer: No. A country’s prosperity is not dependent on the size of its military. Consider Switzerland. On a per capita basis, Switzerland has a large military and at the same time Switzerland’s per capita income stands at $69,000. Other countries that fall in the same category are South Korea, Singapore, Italy and Thailand.

Question: Is there a connection between a country’s defence budget and the spending on health? Answer: In Pakistan’s case, defence comes out of the federal budget and health from provincial budgets. Consider the United States. The US spends 3.4 percent of its GDP on defence and $9,400 per capita on health. Pakistan, on the other hand, spends 2.8 percent of its GDP on defence and a paltry $129 per capita on health. Even Afghanistan and Zambia spend more on health than Pakistan. Conclusion: There is no connection between a country’s defence budget and the spending on health.

Fact 1: Our State Owned Enterprises (SOEs) eat up Rs1,800 billion a year, every year. Fact 2: The electricity sector eats up Rs1,000 billion a year, ever year. Fact 3: Around $2 billion worth of natural gas is stolen a year, every year. Education is not our priority. Neither is health.

The writer is a columnist based in Islamabad.

Email: farrukh15@hotmail.com Twitter: @saleemfarrukh