Rare meeting: Dar, Gen Raheel discuss army budgetary needs

Finance minister dismisses claims of 15-20% increase.

ISLAMABAD:

In a rare move, Chief of Army Staff General Raheel Sharif met with Finance Minister Ishaq Dar on Saturday to discuss the military’s pressing budgetary needs in light of the rapidly changing internal security situation.

The two men discussed the budgetary requirements of the military for the year 2014-15, read a terse statement issued by the ministry.

“The finance minister acknowledged the need to ensure the fulfilment of the requirements of defence in light of the current security situation”, the statement added. Dar also assured the army chief that defence was of paramount importance to the country and hence, necessary resources will be allocated.

According to a finance ministry official, the meeting was held in the General Headquarters (GHQ) Rawalpindi. He also said that the actual defence budget may be higher than the revised budget, if the federal government decides to launch the ground offensive in North Waziristan.

In normal circumstances, the defence budget for the financial year 2014-15 will be over 10% higher than the revised budget of Rs647 billion. However, in exceptional circumstances, the military’s additional financial needs could be met through development grant. On Friday, Defence Minister Khawaja Asif said launching a military operation against the Taliban this month could be a possibility if Tehreek-e-Taliban Pakistan violates the ceasefire.



Some media outlets claimed that Ishaq Dar had agreed to a 15% to 20% increase during his meeting with the army chief. However, he denied these claims, saying that it was too early to give a specific figure yet. “It is premature to speculate about the size of the defence budget. The meeting was held to determine parameters, which will then become the base for next year’s budget,” he told The Express Tribune.

Usually, the military’s budgetary requirements are discussed at the level of the military’s Director-General Budget – a position usually held by a two-star General. In case of a disagreement over the size of the defence budget, the matter goes to the level of Chief of General Staff, who is a three-star General, according to officials privy to budget-making exercise.

The recent meeting at the level of the four-star General signifies the urgency of the matter, according to analysts.

There have been a few instances in the past where finance ministers met with the army chiefs but it is unusual that an official statement was issued after the meeting. The government did not want to hide its intentions to launch a military offensive, if the talks collapsed, claimed analysts.

The next year’s budget will be tabled in the National Assembly by June, which will be implemented from July.

For the current financial year 2013-14, the Pakistan Muslim League-Nawaz government had allocated Rs627 billion for meeting the needs of the defence of the country. The amount is exclusive of the military’s share in Coalition Support Fund (CSF), disbursed by the United States and receipts from the United Nations on account of contribution to the UN’s peacekeeping missions.

According to International Monetary Fund’s projections, as against the Rs627 billion, the defence spending in the current fiscal year will remain at Rs647 billion.

Outstanding issue

Finance ministry officials said the issue of outstanding payments to the military on account of CSF disbursements was also discussed by the army chief and the finance minister. The military gets 60% of the total CSF disbarments as its share.

During the last 11 years, Pakistan has received around $12 billion from the US for rendering services in the war against terrorism. The outstanding CSF dues against the US are $1.6 billion, said Finance Minister Dar on Thursday.

The officials said that for last few years, the finance ministry was not fully disbursing the military’s share. Instead, it asked the defence ministry to borrow the sum from banks and the finance ministry promised to return the loan, including interest payments, they added.

However, GHQ has allegedly asked the federal government to make the CSF payments from the budget.


Published in The Express Tribune, March 9^th, 2014.