Asia Times: Pakistan cuts defense spending to improve development



	December 18, 1999	atimes.com

India/Pakistan

Pakistan cuts defense spending to improve development
By Muddassir Rizvi

ISLAMABAD - A planned ''voluntary'' cut in defense spending, and the re-utilization of those funds in poverty reduction programs, announced by the new military government, has gone down well in Pakistan.

''I am very happy about his (Gen Parvez Musharraf) announcement,'' said Khadija Haq, president of the Islamabad-based Dr Mahbub ul Haq Center for Human Development which authored a poverty profile of South Asia in 1997. ''For the last 25 years, the late Dr Mahbub Haq had been advocating for a cut of at least 5 percent in the military spending to be used for poverty alleviation.''

In a late night broadcast on Wednesday, in which he unveiled his government's plan to bale out Pakistan's nearly bankrupt economy, Gen Musharraf said ''I am pleased to announce that the armed forces have voluntarily cut their defense spending.'' He said the 7 billion rupees (roughly $140 million) saved from the defense budget would be utilized in new anti-poverty plans that his government intends to announce for the poorest and low-income groups.

Among his plans for poverty alleviation is a bank, the Micro Credit Bank, which will work with established community organizations, and non-governmental groups and individuals to give credit to the poor, and to encourage them to save. ''Small infrastructure projects will also be financed by the bank. On completion these projects will be maintained by the community organizations,'' he announced.

According to a report released this summer by the Dr Mahbub ul Haq Center for Human Development, there are 42 million people living in absolute poverty in Pakistan - they earn less than one dollar a day. The benefits of economic development have not percolated to the disadvantaged. The Poverty Alleviation Fund, created with a $90 billion soft loan from the World Bank by the previous Nawaz Sharif government, has been a non-starter.

Inheriting a country deep in debt, the military government has proposed strategies to restore investors' confidence, make the country self-reliant especially in food production, improve the balance of trade and broaden the tax net by including agriculture and across the board imposition of the controversial general sales tax.

But Gen Musharraf dwelt longest on his proposal to improve the situation of the poor. ''I have emphasized poverty alleviation as part of our primary objectives,'' he said, explaining that budgetary re-adjustments would be made to free up money for small public works in the poorest and low income urban and rural areas.

The general promised that in the ''poorest of rural areas'' the government would develop farm-to-market roads, de-silt canals, and improve irrigation and soil conservation. ''In the poorest of urban areas, schemes of water supply and sewerage, and garbage collection and disposal will be included,'' he said.

Even his strongest critics are applauding Musharraf. ''The (defense) cut is welcome. It's a significant reduction - almost 2 percent . . . '' said Shahrukh Rafi Khan, executive director of the Sustainable Development Policy Institute.

Defense expert Shireen Mazari, a member of the government's Advisory Board on Foreign Policy has a different opinion. She thinks the military will use the money on its own social development ''which no doubt is a welcome sign. But it should not be confused with a cut or reduction''.

Both Khan and Haq hope the military rulers will implement their plan. ''It could prove to be another statement. The last government in its annual budget this year had made tall claims about alleviating poverty,'' said Khan.

A State Bank of Pakistan report, released earlier this year, revealed that, instead of growing, per capita income had shrunk to below $400 during 1998-1999, from between $450 and $500 in earlier years. The central bank blamed the slump on the shortsighted economic policies of the previous government.

Haq is optimistic that the military government will deliver. ''The general looks serious in what he says. However, we have to wait for the details of how the government will go about implementing its plans and targeting the poorest of the poor. This is the challenge,'' she said.

Pakistan's social indicators are shocking: 62 percent of its adult population cannot read or write; 8 million children are out of school; 45 percent of the population does not have access to safe water; 40 percent does not have access to health care.

''The important point is, the military has succumbed to the pressure of sharing the burden of people's development,'' observes Zafar Mirza, executive coordinator of The Network, an Islamabad-based health advocacy group. ''This is a positive step that must be backed and supported by all quarters.''

(Inter Press Service)