The IMF seems ready to return Pakistan to its Extended Fund Facility, and release the held-up tranche, without going for the defence budget, the logical low-hanging fruit which would enable Pakistan to cut its expenditures. However, it does seem to have got the government to agree to a consolidation of all accounts of military expenditures, a stipulation which formed part o the original agreement, on which the PTI government signed off.
Pakistan’s problem is that it has long crossed the point where debt servicing is the biggest item on the budget, and is approaching the point where it will be borrowing to keep its military expenditure going. This might explain the deep interest outgoing COAS Gen Qqamar Javed Bajwa took in the economy.
While the IMF is holding back on its assault on the defence budget, by getting the accounts consolidated, it is ensuring that Pakistan will be able to hide the expenditures that allowed Pakistan to fund a full-blown nuclear weapons programme, and to continue to produce and improve those weapons.
Pakistan may have to sacrifice both conventional and nuclear forces when it finds it cannot afford them, because the state has simply run out of money. It has not defaulted, nor was there anything behind the recent governmental salary scare. However, it is a bad sign that such fears are being expressed, even if they prove false.
It should not be thought that the IMF is going to give up. It has long looked askance at the military expenditure, and while it has not achieved a solution of either the circular dent issue or power sector reform, that has remained on its agenda for some time. It remained interested in this issue ever since KAPCO became the first power organization in the private sector nearly 40 years ago. Even though the current programme has run into problems even before the current crisis, there was some loud thinking about a succeeding IMF programme after bthe current one was completed. It is possible that that programme will witness an IMF onslaught on military expenditure, one which will see a reduction in manning levels.
It seems that there is a basic clash occurring between the IMF and the Pakistan Army. The underlying conflict is because both are large and well-established organizations, which have very different purposes. The IMF is a bank, lending money to countries facing balance of payments difficulties, and expecting repayments. As it does not make project loans, the repayments must come out of revenues in succeeding years. Those revenues can only be increase if the economy is reformed. The World Bank or Asian Development Bank make project loans; those projects are expected to lead to greater revenues, thus generating the funds needed for repayment.
The Pakistan Army is dedicated to defending the country, and asks for funds to do so. In this task, cost is not supposed to be counted. If it is needed, it is needed. This does not mean that the military mind is not cost conscious. However, the military mind is inspired by the concept of doing what it takes. That does not mean cutting one’s coat according to one’s cloth, but according to one’s body. Money must be spent if need be, as much as is needed. It is not the responsibility of military men to make the funds available; that is to be done by the Finance Ministry.
However, there has been an element of mission creep; because the military believes in a particular way of achieving the nation’s objectives, it has ended up defining not just those objectives, but also the policies by which they are to be achieved. This now includes achieving a country which can finance a certain type of defence.
Along the way, the Army has also aspired to a political role. If it has withdrawn from politics, and is restricting itself to defending the country, that is not because it views the Constitution as deserving obedience, but because interfering does not advance the objective. There may be some personal goals mixed in, but the objective is always the defence of the country. There may be other objectives, such as maintaining the organisation’s integrity, and while that provides a guideline to the COAS, it also means that the civilian government does not exercise sufficient supervision.
It means, for instance, that the military has begun to take an interest in economic affairs. General Bajwa’s saying that the country should switch from geostrategy to geoeconomics was an example, and it also showed that the switch would only be made because the Army gave given its imprimatur, not because the civilian government had made the decision.
The IMF saw all of this, and decided that Pakistan was spending too much money on the military. The IMF has dealt with military regimes, and not just in Pakistan. It cannot afford to be judgemental. However, it perhaps could not help noticing that one objective of the military, its ability to intervene in politics, is met by just a single brigade, the 111 Brigade in Rawalpindi, and does not require the entire structure of divisions and corps. That is dictated by the objective of providing a defence against India.
It must be noted that, because of that, it has also been an objective of the Pakistan Army that the Kashmir cause be kept on the boil, that there sjhould be a readiness to engage in conflict with it. It should not be assumed that this view necessarily puts the Army in conflict with all civilians. It should also not be assumed that there is no reciprocal feeling in India. The BJP regime has shown that Hindu-Muslim tension has survived the Partition.
The problem has arisen because the Army has learnt to use this tension not just to fight three wars, but to impose direct rule four times. The Army is thus seen among many as the preserver of national independence. Another concept within the Army, one which dates back to the Raj, is of the Army as a major employer.
The sort of cuts the IMF would like to impose on Pakistan, and on its military budget, would only be possible if there are severe cuts in personnel. This would have two results: the ability of the armed forces to act as a credible deterrent to Indian aggression would be compromised, as vwould the transfer of funds that occurs to the traditional recruiting grounds of the armed forces in the Punjab and KP. It is not just a matter of funds; these areas’ residents depend on the armed forces for employment.
The malign hand of India cannot be discounted. At the veery least, India and the IMF share objectives. It is sometimes thought that Pakistan is a drag upon India as it tries to exert itself in the world. It is not. Its Army is. Normally, that would mean it is, but since the Army has established itself as a separate entity, it has meant that if India can neutralize Pakistan’s Army, it would be able to assert itself throughout the region, indeed perhaps globally. This would help explain why India was so anxious that Pakistan not only remain on the FATF grey list, but also be downgraded to its black list. The Army took a deep interest in the matter and played an important role in getting FATF yo remobe the country from the grey list.
There have been speuclations about the price that will be demanded for Pakistan to receive the aid it needs. It should be noted that this aid neither pays for development or gets it out of the debt trap, nor susidizes the luxurious lifestyles o the elite. (The recvent austerity measures announced by the government might make for good optics, but they will solve any problem.)
Pakistan will be asked for the sacrifice of its nuclear programme. Now, it seems, its conventional forces are being targeted.
Pakistan may have to sacrifice both conventional and nuclear forces when it finds it cannot afford them, because the state has simply run out of money. It has not defaulted, nor was there anything behind the recent governmental salary scare. However, it is a bad sign that such fears are being expressed, even if they prove false.
