Saturday, January 15, 2011

‘Economy cannot afford more military offensives’

‘Economy cannot afford more military offensives’
ISLAMABAD: The finance ministry has said that Pakistan’s troubled economy cannot indigenously afford more military offensives if the government continues to compromise economic reforms for political concessions.

The defence budget can rise abruptly if another military venture is launched. That will be unbearable for the economy,” an official was quoted as telling Prime Minister Yousaf Raza Gilani during a mid-year economic review meeting.

The warning came amid reports that the US was pushing Pakistan to send troops into North Waziristan to take on the Haqqani network. Experts say this can be one of the most expensive military campaigns undertaken so far. Earlier this week, both political and military leaders told US Vice-President Joe Biden during his Islamabad visit that they would consider sending the army into the border regions only at a time of their choosing.

The word of caution by finance authorities to the beleaguered administration comes less than a fornight after the government reversed an increase in fuel prices to appease protesting opposition groups.
“Since these are testing circumstances, tough and unpopular decisions need to be taken. Failing that, we will be further complicating our economic troubles,” an official told The Express Tribune what transpired during the meeting. Officials said that the finance ministry had warned the government that a fiscal deficit for the ongoing financial year could touch 7.5 per cent of Gross Domestic Product instead of an original estimate of 6.5 per cent if drastic measures were not taken to jack up revenue collection or control expenditure.

Meanwhile, a statement issued by the prime minister’s media office quoted Gilani as saying that the economic challenges of Pakistan would be shared with parliament to seek their proposals for resolving the financial difficulties of the country and the people.

“The objective behind the reconciliatory process and consultation with political leadership is to develop consensus and take decisions in the larger national interest,” Gilani told the meeting.

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