e? In fact, Rs 18 billion of its defense has to be financed to borrowing. The Pakistani government has not been governing; it has simply been acting as a debt-securing agency. 2) Lately the government has been touting the fact that it has achieved the IMF imposed budget defect target. What it neglects to mention that it achieved the target through questionable means. Firstly, it drastically reduced its developmental expenditure from 7.5 per cent of GDP in the early ‘90s to a paltry 3 per cent, which translates to a cutback of 140 billion in present prices. A cutback of expenditure of such extent in the governments purchases of private sector goods like cement, pipes and cables and services like engineering explains why a number of private sub-sectors are at the point of closing down, operating at a vastly reduced capacity. This is adding to the issues of hunger, poverty and unemployment being faced in Pakistan. The government has also reduced the amount it givers to the provinces by Rs 30 billion, transferring some of its debt to the provincial governments. In other words the government has done nothing to resolve the issue of structural defect.3) What’s worse is that not only has developmental expenditure been sharply curtailed, but that the scarce resources set aside for infrastructure works have been diverted to less productive investments_like the new motorway and the new Lahore airport. This massive reduction of the public sector’s developmental activities is causing a contraction in employment opportunities for Pakistan’s growing number of middle class educated youth. This is particularly serious in the areas where the private sector is unlikely to locate due to the lack of infrastructure. Thus the really poor areas continue to live in poverty due to the government’s inability to provide adequate physical and social infrastructure or create an environment for private sector investment. It has also not...
