Playing with Numbers

If the immediate reactions highlighted in the morning’s newspapers published a few hours after the announcement of budget 2000-01 are to be believed, this budget contains a remarkable set of numbers. Many reporters have complimented the government for taking what they call ‘bold measures’. Some newspapers have also, in the short span of a few hours between the announcement of the budget and their going to press, solicited international reaction, much of it also favourable. However, with the hindsight of the published budget speech and with a closer look at the numbers involved, one can only urge caution rather than this misperceived enthusiasm.

One of the most important components of Pakistan’s political economy is the ubiquitous role of the military and of defence expenditure, an item included in each year’s budget. Newspapers have greeted unsuspecting readers with headlines which suggest that there has been a ‘significant’ reduction in next year’s defence expenditure by 6.9 per cent. The allocation for 2000-01 is Rs 133.5 bn, while that for the present financial year was Rs 143.3 bn. Ergo, a reduction of almost Rs 10 bn, or nearly 7 per cent. This figure has been highlighted even more since the Indian budget earlier this year showed an increased allocation for the Indian military of nearly one-third compared to last year, a figure equivalent to an increase of around $ 3 billion. If indeed this was the amount of reduction in the Pakistani defence expenditure, one would have cause for celebration. However, this presumed reduction is wrong on at least two counts.