Because of shared responsibilities each state institution has the right to watch for a secure and stable economic position of the country. The recently concluded seminar on the ‘Interplay of Economy and Security,’ organised by the ISPR in collaboration with the Federation of Pakistan Chamber of Commerce and Industries in Karachi on October 10 2017, had the resonance of the same ‘right’. However, given the present political atmosphere charged with the interpretation that Nawaz Sharif was ousted because of military intervention, the seminar has taken a deliberate meddling of the armed forces into the economic affairs, considered a purely civilian domain. What else, but mere suspicion and mistrust provoked the government to give such illogical feedback about the military’s observance of the financial position in Pakistan. In the normal course, this event would have been seen either as an inclusive attempt to get a better sense of the situation or as a warning from a concerned quarter that the security of the state is at risk because of some deteriorating economic indicators. In August 2017, Admiral Mike Mullen, the US Chairman of the Joint Chief of Staff, stated that the national debt of the US was the single biggest threat to its national security. The Chief of the Army Staff, (COAS) Qamar Bajwa, who was a keynote speaker at the seminar, reiterated his point saying that increasing debt and rising current account deficit was a challenge to national security.
Going by numbers, Pakistan’s GDP has shown a steady increase. The economists are shy to give credit of this rise to the improved balance sheet. Instead, they call it the function of an external debt that has risen to 67.2 per cent of the total national output. The current account deficit is at the tune of $ 12.1 billion and the trade deficit hovering around $32.4 billion are further proofs that we are producing less at home. The solutions Bajwa suggested to overcome these structural problems have been heard before. He asked the government to create an economic environment that facilitates income generation opportunities like broadening the tax base, documenting the economy, diversifying exports, encouraging the culture of saving to get a growth rate higher than the population growth rate and to have consistent economic policies. Bajwa ended his speech saying that security was not cheap and asked the entrepreneurs to show their responsibility in putting Pakistan on the road to economic success.
The question is what was so wrong about this seminar that the PML-N government, and those supporting the so-called democracy, sans rule of law and respect for constitution, squirmed in their pants, and began lashing at the ISPR for crossing its limits. It is a common practice the world over for the army to analyse its government’s capacity to meet its security imperatives in given resources. However, national security is not just a function of the military it is as much about police as it is about judiciary and other law enforcement and intelligence agencies put together. They can equally raise questions, but they do not because they are heavily politicised.
The current account deficit is at the tune of 12.1 billion dollars and the trade deficit hovering around 32.4 billion dollars are further proofs that we are producing less at home
In a reversed argument, Pakistan’s defence budget is criticised for taking a more significant share from the economic pie and for being exempted from any kind of audit. Minister for Finance, Ishaq Dar in his October 17 press conference, apparently in response to the COAS’s speech about the rising external debt, said that the cost of terrorism had extracted a large share form the national exchequer. The burden, he noted, was felt many times more because of the drying up of the Coalition Support Funds. Dar also pointed out at spending on development projects such as managing the energy crisis. Spot on. However, what Dar missed explaining was that much of what had been spent on generating energy was also borrowed from external sources. Where are the mechanisms and policies that provide opportunities to the private sector for expansion and income generation?
In the real world, the government needs Rs 10 trillion to finance its annual federal and provincial spending. Today the government is the largest buyer of imported products, and its spending has outgrown market expansion. The local market especially the private sector has plunged in the absence of equity support (because of borrowing by the government). The World Bank report “Doing Business, 2017, Equal Opportunities for all,” has pointed out that in terms of institutional support to doing business, Pakistan ranks 144 among 190 countries. Which means that the government policies and its administrative monitoring instruments, at the provincial and federal level, are not conducive for market development. The country is neither developing and nor generating employment. If the money to develop CPEC, had become our latest benchmark for development then perhaps we have more to worry about. We may need to take the COAS’s observation about finances somewhat seriously.
The writer is a journalist; she can be reached at [email protected]
Published in Daily Times, October 26th 2017.