Debunking the myths of a ‘Chinese footprint’ in Pakistan budget 2017/18 and PM Nawaz Sharif brainwashing people ahead of election.
The new $50 billion budget presented by Pakistan is coming under increased scrutiny, as experts point at a Chinese footprint (CPEC) and accusing the Pakistani government of brainwashing its people ahead of the general election.
But how much of the harsh criticism directed at the new Pakistan budget is actually true? Let’s get the facts straight. The new budget, which was presented by Finance Minister Ishaq Dar on May 26, is a development-heavy budget that is also aimed to boost the country’s military spending at the time of volatile Kashmir crisis against India.
While the government of Prime Minister Nawaz Sharif is likely increasing the country’s defense spending by seven percent due to the growing need to safeguard China-Pakistan Economic Corridor (CPEC) projects as well as be better prepared to fend off any potential military threat from India, critics of Nawaz accuse the government of sugarcoating the budget ahead of the upcoming national elections.
For the fiscal year 2017/18, Pakistan is setting its military budget at $9 billion, compared to $8.4 last year. By contrast, Pakistan’s biggest enemy – India – unveiled its own new budget this past February with defense spending standing at more than $50 billion, according to the Institute for Defense Studies and Analyses.
As much as $20 billion out of the budget’s $50 billion will go toward development, $1.8 billion of which is set to finance CPEC projects. With an op-ed published by DAWN suggesting that there is a “Chinese footprint” on the Pakistani budget, one can argue that the Chinese would allocate more money on CPEC projects if they were so keen about pushing forward the projects that matter to their national interests and not caring about Pakistan and its economic wellbeing whatsoever.
Despite the new Pakistan budget facing a giant avalanche of skepticism and criticism, the government of Nawaz does have quite a few achievements behind its back. Let’s review some of the most prominent ones.
While many critics accuse the government of using the new budget as means to woo voters before elections, it’s tough to say that any of the following achievements could have been made overnight and only with sole purpose to win the next election. With Pakistan’s economy crossing the $300 billion mark for the first time in history earlier this month, the country’s GDP growth rate was driven to 5.28%, which is the first time it has breached the 5% mark in 10 years.
The International Monetary Fund projects Pakistan’s GDP growth rate to be around 6% the next fiscal year thanks to CPEC being in motion. With the foreign reserves standing at $21 billion, tax collection has grown by 81% in the past four years. With nearly all of Pakistan’s economy sectors continuing to soar, the industrial sector has hiked 9% in the current fiscal year, while the services sector have increased by 5.9%. Other sectors such as livestock, forestry and fishing have been also on the rise with a growth of 3.43%, 14.49% and 1.23%, respectively.
Most notably, per income capita jumped by 22% to $1,631 during the current fiscal year. Presenting the budget last Friday, the Finance Minister had a very ambitious prediction for Pakistan. Declaring that Pakistan would be “one of the largest economies by 2020, ” Dar said “world’s credible institutions are predicting that Pakistan would join the G-20 by 2030.”
And Dar does tell the truth when he says international ratings agencies are predicting bright future for Pakistan, as even agencies like Standard & Poor’s, Moody’s and Fitch have unanimously raised the positive ratings for Pakistan over the last few months. In fact, the Pakistani Stock Market has performed the best in Asia and the fifth in the world in the current fiscal year. U. S.-based Morgan Stanley Capital International (MSCI) reclassified Pakistan as an emerging market, with the economy expected to generate inflows of investments in the range of $200 million to $500 million.
A report penned by Geo News seems to be bashing the new Pakistan’s budget from all sides with a wooden stick. One could argue, however, that Geo’s criticism toward the new budget is far-fetched, as pretty much all of the points where the publication criticizes Pakistan’s 2017/18 budget are bashing the Pakistani government for not increasing ENOUGH spending on various sectors – though it does acknowledge the fact that the increases have been made, even nearly double increases in some cases.
One of the most prominent examples is Geo throwing mud at the budget for NOT increasing Pakistan’s health expenditure fourfold even though this year the government has increased health expenditure by nearly two times, from Rs. 29 billion to Rs. 49 billion.
For a country that is only beginning to soak up all the benefits from incoming foreign investments – and in case with CPEC, a whopping $150 billion is estimated to flow into Pakistan in the coming years, according to last year’s summit of top government leaders and investors – and is only beginning to enter the world as an emerging market, increasing expenditure by two times in any of the sectors already deserves praise.
Geo also lashes out at the new budget saying that the 10 percent increase in the salaries of officers and men of the armed forces is not enough to “acknowledge their courage, commitment and sacrifices” for Pakistan, and says the salaries should have been increased by at least 50 percent instead of 10. While this idea is correct for all the right reasons, once again – let’s not forget that the country is only beginning to rise from its knees, and is projected for tremendous economic growth thanks to CPEC projects with China.
Skeptics are also criticizing the new budget for seemingly sugarcoating numbers only to woo voters ahead of the national election. Nawaz’s public approval ratings remain very high (75%) , according to opinion polls conducted in late 2015. While no new opinion polls have been carried out in the past one and a half years, there seems to be a consensus among Pakistanis that Nawaz is “the only viable option for Pakistan.
