September 27, 2002	Friday	Rajab 19, 1423

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ISLAMABAD, Sept 26: The government has rejected the latest World Bank report, which says that Pakistan is spending 29 per cent of its budget on defence.

“The total defence expenditure in the budget for 2001-2002 was 18.6 per cent which has been reduced to 16.5 per cent in the budget for 2002-2003,” said the economic advisor to the ministry of finance, Dr Ashfaq Hasan Khan, on Thursday.

“Therefore, it is absolutely wrong to say that the government is spending 29 per cent of the budget on defence and it is very high by international standards,” he added.

Commenting on a Dawn’s report, published on Thursday, Dr Khan said the government had objected to the World Bank’s report, which, he said was a draft report and not a final report.

“We have raised the issue with the bank and told its officials that language of the draft report was extremely harsh and needs to be improved,” he added.

The ministry official told Dawn that he had attended a video conference recently in Washington and had expressed his serious reservations about the draft report. He was hopeful that the WB would rectify its report by incorporating facts which were being given to it by the government.

Dr Khan said that Pakistan’s defence budget had been static for the last three years. “In fact, it has been capped,” he said, regretting that some officials of the World Bank did not bother to look into facts before preparing their draft report.

“Pakistan’s defence budget is not our problem but the real problem is debt servicing for which we have made available Rs289.7 billion during the current financial year,” he said.

Responding to a question, he said the defence budget, which used to be seven per cent of the GDP in 1980s, had declined to 3.6 per cent of the GDP and as such there was a substantial reduction in it.

“But look at India which is spending 42 per cent of its budget on defence despite the fact its fiscal deficit is hovering around 10 to 11 per cent of the GDP,” the official said, adding that whatever little defence expenditure had been increased last year by Pakistan, it was due to threat perceptions in the region and India’s massive building of troops on borders.