Pakistan Considering Defense Spending Cut for Upcoming Budget
(Source: Forecast International; issued June 05, 2019)
The Pakistani military may accept a defense spending cut in the coming budget, due to be unveiled later this month.

In a statement, Prime Minister Imran Khan indicated that the Pakistani military has agreed to the government reducing the defense budget for the upcoming 2019/2020 year, amid a challenging economic environment. Prime Minister Khan applauded the military’s “unprecedented voluntary initiative of stringent cuts in their defense expenditures.” He referenced the “critical financial situation” and said that the funding can be reallocated toward improving development in Baluchistan province.

Maj. Gen. Asif Ghafoor, the spokesman for the military’s Inter Services Public Relations (ISPR) agency, said the “voluntary cut” would not be at the cost of defense and security. Major General Ghafoor emphasized that it was important to develop Pakistan’s tribal areas and Baluchistan.

The 2018/2019 defense budget, as approved, stood at PKR1,100 billion, though may have been adjusted upward somewhat earlier in 2019 amid a standoff with India. In February, the Indian Air Force carried out a strike across the line of control in response to a terror attack that claimed the lives of dozens of Indian personnel. The Pakistani and Indian Air Forces subsequently engaged in an aerial skirmish that saw at least one aircraft – an Indian MiG-21 – shot down.

Previous government forecasts had expected growth in the Pakistani defense budget for the upcoming year, to over PKR1,200 billion. Neither Prime Minister Khan nor the ISPR spokesman indicated what the new level for defense spending will be for 2019/2020. Pakistan is due to unveil the upcoming budget on June 11.

Pakistan only rarely cuts its defense spending, which accounts for around 3 percent of gross domestic product. However, the country has faced a financial crisis that prompted the prime minister to seek external assistance. He was able to secure loans and deferred payments from allies in the Gulf and recently reached a deal with the International Monetary Fund over a three-year, $6 billion bailout.

Baluchistan, particularly its southern port of Gwadar, is a key element of the China-Pakistan Economic Corridor, a bilateral program between Beijing and Islamabad that envisions tens of billions of dollars in investment in Pakistan. As the program has gotten underway, insurgents have threatened to derail the effort through attacks on infrastructure, Pakistani security forces, and Chinese nationals.

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