Pakistan can`t afford more military offensives: Finance Ministry

Last Updated: Sunday, January 16, 2011 - 14:10

Islamabad: Pakistan`s troubled economy cannot afford any more military offensives against terrorists if the government continues to compromise on economic reforms for political concessions, the Finance Ministry has said.

"The defence budget can rise abruptly if another military venture is launched. That will be unbearable for the economy," the Express Tribune quoted an official as having told Prime Minister Yousuf Raza Gilani during a mid-year economic review meeting.

The warning comes after US military chief Admiral Mike Mullen insisted Pakistan send troops to take on the Haqqani network and other al Qaeda elements holed up in the North Waziristan tribal region near Afghan border.

Experts say this can be one of the most expensive military campaigns undertaken so far. Earlier this week, both political and military leaders told US Vice President Joe Biden during his Islamabad visit that they would consider sending the Army into the border regions only at a time of their choosing.

The Finance Ministry`s warning is also seen in the wake of the recent differences among the ruling coalition government in Pakistan over rising inflation and prices of essential commodities. Gilani`s administration reversed its decision to increase fuel prices to appease the opposition groups.

"Since these are testing circumstances, tough and unpopular decisions need to be taken. Failing that, we will be further complicating our economic troubles," an official told the Express Tribune about the meeting.

Officials said the Finance Ministry had warned the government that a fiscal deficit for the ongoing financial year could touch 7.5 percent of Gross Domestic Product instead of an original estimate of 6.5 percent if drastic measures were not taken to jack up revenue collection or control expenditure.

Prime Minister Gilani said the economic challenges of Pakistan would be shared with parliament to seek their proposals for resolving the financial difficulties of the country and the people.

"The objective behind the reconciliatory process and consultation with political leadership is to develop a consensus and take decisions in the larger national interest," Gilani told the meeting.

Militancy-hit Pakistan has witnessed a devastating flood last year, which claimed around 1,700 lives and affected more than 20 million people. The overall economic loss was estimated at around USD 9.5 billion.

IANS



First Published: Sunday, January 16, 2011 - 14:10

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