Pakistan’s Economic Expenditure Prudence – Budget 2012-13


Budget at a glance

Budget distribution at a glance

As they say, picture is worth a thousand words, so I made the picture first and it’s more or less self-explanatory.

Here is my key observation, when I first tried to understand the budget:

  1. Around Rs. 1 trillion (‘kharab’) is spent on debt servicing (interest payment alone) in 1 year.
  2. I thought, our major portion of revenue goes to Defence sector ?

Additionally, when we spend our fortune in debt servicing (read interest payment), naturally how are we going to have funds to invest in education, lack of which, is the MOTHER OF ALL ISSUES WE FACE TODAY. Secondly, looking at the fact that majority of our population does not have access to the basic health services, eg we have estimated 140,000 doctors and 120,000 beds in healthcare facilities, in the country, that makes the ratio of hospital bed to population as 6:10,000 and doctor to people 1:1000 roughly. Now, compare how much we are spending on health sector to improve the situation, a measly Rs 8 billion for a population of 180 million.

budgetatgalance

And lastly, we should be shrewd, not to rely on foreign aid and donor agencies, like Paris Club, IMF, or enter into multilateral agreements for foreign countries, which we can easily see, is quite far from an aid and in fact a major cause of all resulting burden to the economy, in the form of – inflation, poverty, lack of development funds for education, social uplift, unemployment, and eventually developing a sense of hopelessness in the society. It’s estimated that we have to pay ~$5billion, in the form of debt servicing, to IMF alone, ie a burden of Rs. 500 billion to the exchequer. With Pakistan’s debt hovering at an alarming rate of 68% of GDP, and external debt at $62 billion (Rs. 6.2 trillion), how are we going to survive, is a daunting question for the new incumbent government. If I start to research about each of these foreign loan agreements and their terms, I am sure, I would have startling facts there as well, like how much we are taking as loan and how much we end up paying over decades, while remaining slaves, accepting dictates from those foreign governments.

We were told 1400 years ago, that we could not benefit from either giving or using interest (usury), but we tend to neglect history. We were clearly explained that interest creates economic disparity and divides the society into haves and have-nots eventually. And now we see individuals in the world like Warren Buffet, with $60 billions, can possibly buy many countries many times over.

Wealth distribution in Pakistan is no different, with the top 10% of the population earning 27.6% and the bottom 10% earning only 4.1% of the income[10]  According to the HDI, 60.3% of Pakistan’s population lives on under $2 a day, which is like 100 million people.

How long are we going to call a war against God and His Messenger (‘nauzobillah’), while trying to justify the use of interest (‘riba’ or usury). It’s evident, that we going nowhere, but harming ourselves.

We don’t need a genius to sort our issues out, anyone with a genuine ‘will’ to serve the nation, can correct our direction and bring prosperity back to the nation.

Think!

I have written another analysis on Pakistan Budget 2013, listing it’s pros and cons and what is most important. You can read here.

 

Sources and Further Reading:

http://www.sbp.org.pk/ecodata/pakdebtsvr.pdf

http://pakobserver.net/detailnews.asp?id=130030

http://www.finance.gov.pk/publications/DPS_12.pdf

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3 thoughts on “Pakistan’s Economic Expenditure Prudence – Budget 2012-13

  1. Pingback: Pakistan Govt. Budget proposed for 2013-14 | Learn, Share & Help fellow beings

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