In a rare development, Chief of the Army Staff General Qamar Javed Bajwa has defended the government’s tough economic measures as indispensable. The endorsement comes as relief to an embattled government, which is being criticized by the opposition, businesspeople and the common people for raising prices of essentials, electricity, gas, high tax rates and unprecedented depreciation of the rupee against the US dollar.
Speaking at a Corps Commanders meeting at the General Headquarters (GHQ), where the economic and internal security situation was discussed in addition to emerging challenges on the external front, the Army Chief also apprised the forum about difficult but extremely essential long-term beneficial measures taken by the government for improving and strengthening the national economy, said a statement issued by the Inter-Services Public Relations (ISPR) at the conclusion of the meeting of the army’s top brass. It was a second occasion in a week when General Qamar Javed Bajwa, who has recently been made part of a newly-constituted National Development Council, spoke on the economy.
Earlier, he had dwelt upon the economic situation at a seminar at the National Defence University and blamed financial indiscipline and timid decision-making in the past for the current fiscal mess in the country and endorsed the steps being taken by the government to deal with the situation and sought public support for the economic plan. “We’re going through a difficult economic situation due to fiscal mismanagement,” he had told the audience of the seminar at Islamabad. According to a statement issued by the Inter-Services Public Relations, he said, “We understand that the government has gone for difficult but quintessential decisions for long-term benefits and what we’re doing is playing our part.” General Bajwa told the seminar that the military was doing its bit to confront the economic challenges by cutting costs. The defence budget was increased by 20pc last year but the military decided to forgo a big increase in FY 2019-20.
Last month, the Pakistani Army decided to voluntarily slash its budget for the next fiscal year to help the government tackle a critical financial situation. It provided fiscal space to the government to provide relief to people. The money will be spent on the development of the tribal regions bordering Afghanistan, still recovering from more than a decade-long insurgency, and Balochistan province. Commenting on the military’s decision to forgo the annual increase in defence budget, COAS General Qamar Javed Bajwa had said the voluntary cut in defence spending was not a favour to the nation. “Irrespective of the voluntary cut in defence budget in upcoming financial year, there shall be no impact on our response potential to all types of threat and the quality of life of the soldiers,” he was quoted as saying while speaking to troops. Talking about the military’s decision to forgo a routine increase in the military budget, he said “the initiative is not a favour to the nation as we are one, through thick and thin.”
The country’s economic outlook has sharply deteriorated over the past year. Growth remained 3.3pc in the last fiscal year, compared with 5.2pc the previous year. It is forecast to 2.4pc in the new financial year. Inflation is likely to rise to 11-13pc during fiscal year 2019-20, according to official forecasts. In its annual budget statement, the government said that it expected a fiscal deficit of 7.1pc this year, down from 7.2pc the previous year. The rupee has lost more than 50pc of its value since December 2017.
Faced with large fiscal deficit, higher inflation and lower GDP growth, the government has unveiled an aggressive plan for revenue generation through newer taxes and increased tax rates in the budget for financial year 2019-20. Subsidies have also been withdrawn. The foreign exchange rate has been linked to market dynamics because of which the rupee has devalued significantly in the past 11 months of the government of Prime Minister Imran Khan. Energy costs have also gone up and the State Bank of Pakistan (SBP) has hiked policy rates. Most of the measures were taken get a $6b bailout package from the International Monetary Fund (IMF).
Prices of every daily-use item have already increased after electricity and gas tariff was hiked by the government after coming to power. Naan and roti prices have jumped to Rs12 from Rs10. Medicine rates have increased by 15pc recently. The government’s policies have only hurt the common people and more adjustments mean more trouble for the people. Pakistan’s debt and liabilities skyrocketed to Rs33.3 trillion at the end of 2018, with an addition of Rs3.4 trillion in six months. By December, total losses of public sector enterprises had surged to Rs1.6 trillion, a net addition of Rs192.6 billion or 13.8pc in six months. External debt and liabilities of Pakistan mounted to $99.1 billion as of December 2018, according to the central bank. However, Pakistan’s trade deficit shrunk by 9.66 pc during the first seven months of the fiscal year 2018-19. Pakistan’s exports remained $13.23 billion, while imports were recorded at $ 32.49 billion during July to January 2018-19. The trade deficit witnessed more than $2 billion reduction during the period, according to the Pakistan Bureau of Statistics. Prime Minister Imran Khan had inherited an economy, which was on the verge of collapse but his attempts to revive it have only overburdened the common people.
Analysts say the endorsement by the Army Chief of tough economic decisions is a welcome sign for the government and people. The past governments failed to take timely decisions for political gains and the result was that almost all national institutions were making heavy losses when the Pakistan Tehreek-i-Insaf (PTI) government took power in August last year. As all sympathies of the armed forces are with the people of the country, not any political party or government, the Army Chief’s approval indicates that the country is on the right path and people will soon start reaping the fruit of the tough measures.