The “War Economy”

June 7, 2010 § 1 Comment

Pakistan’s 2010-2011 budget was unveiled a few days ago, and there aren’t too many surprises in it. It confirms what we already knew, that the country is in deep trouble with regards to deficits, and the solution of the government is to propose more borrowing. The government also proposes increasing tax revenues, which is based on the government’s agreement to the IMF’s “recommendation” to impose a Value Added Tax in the country (the tax will be implemented starting October 1 of this year). The budget also trims the deficit by reducing some expenditures.

But of course the item that cannot be touched is military spending. That not only remains unchanged but has in fact been increased by SEVENTEEN PERCENT! No other item receives this treatment. And the justification for this outrageous increase? The finance minister, Abdul Hafeez Shaikh, says that Pakistan currently has a “war economy,” which requires a singular focus on the war and presumably he means that all else must be sacrificed for its sake.

It’s hard not to fantasize about the education budget being increased by seventeen percent, or housing for poor people being increased by seventeen percent, or maternal healthcare being increased by seventeen percent… well, you get the idea. What the minister, and the government, fail to realize is that the people of Pakistan have already been living under desperate conditions, and the REAL war that needs to be declared is on poverty, on gender inequality, on the stigmatization of non-Sunnis and non-Muslims, and many, many other problems that plague the country. For example, after 63 years of independence:

The literacy rate is 55%.
Women’s literacy rate is still only a little over half that of men’s.
As many as a quarter of children do not get basic immunizations.
Women have a 1 in 74 chance of dying in childbirth.
One-third of newborns are underweight.
Malnutrition is rampant.
One-fourth of people live on less than US$1 per day.

(Data courtesy of UNICEF)

The problem is that in a “war economy,” the largest consumer of national resources, i.e., the military, will only extend its monopolization of the Treasury. We are told that this is necessary, that it is for our own good. But isn’t it necessary to increase the literacy rate? Isn’t it necessary that women stop dying in childbirth? Isn’t it urgent that children be immunized and that everyone have safe and clean water to drink? The opportunity cost of military spending, which is what we COULD be spending on instead, is very high indeed. We need to remember that if we weren’t spending on tanks and F-16s and generals’ salaries, we could provide all the basic needs of the Pakistani people. Every single one of them. For everyone.

So this latest euphemism isn’t just a “screw you” from the Army, it’s an attempt to further scare Pakistanis into allowing precious national resources to be used for the military, and for the Pakistani people to take on yet more debt to keep the Army engorged. The destinies of future generations have been mortgaged for the sake of the “war economy.”

Meanwhile, the IMF and the World Bank keep pressing Pakistan to reduce social welfare spending, reduce corruption, privatize state-owned enterprises, raise taxes, raise electricity tariffs, etc etc. The “Friends of Democratic Pakistan” group, a set of countries including the United States, which promised Pakistan US$5.3 billion in 2009, has suspended payments pending “reforms” including the implementation of the Value Added Tax (which will be disastrous for consumers, poor people, small businesses).

Yes, Pakistan can manage its financial affairs with greater efficiency. But these “friendly” sources never ask Pakistan to reduce the biggest drain on Pakistan’s economy: military spending. Instead we get euphemisms like the “war economy.”

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