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Sharp decline in Pakistan's defence imports

Muhammad Najeeb in Islamabad

Pakistan's defence-related imports have declined from $1.1 billion in 1996-97 to $ 539 million in 2000-2001, indicating a substantial downturn in the procurement of military hardware in the past five years.

A report in the Business Recorder daily says Pakistan has also gradually reduced its defence budget during the period owing to immense pressure from international monetary agencies.

The paper, quoting an unnamed senior official of the finance ministry, said ever since the detonation of nuclear devices in May 1998 and the subsequent imposition of international economic sanctions, Pakistan's armed forces have voluntarily reduced their expenditure in foreign currency.

"In 1998-99 alone it (the military) surrendered more than $ 300 million to the government from its budgetary allocation of foreign exchange," the paper said quoting the official.

It said that in the past three years the armed forces have only imported crucial defence items that cannot be replaced locally.

In a bid to bring down the size of the defence budget in proportion to the country's gross domestic product, the government has already shifted a sizeable chunk of the military's pension-related expenses to the civilian current expense account.

"Basically, it is the sharp erosion in the value of the (Pakistani) rupee that has compelled the armed forces to reduce imports as the size of the defence budget can hardly absorb major fluctuations in exchange rate," the official was quoted as saying.

The paper said despite major increases announced by India in its defence budget in the past two years, Pakistan has frozen its defence budget at previous year's level without even incorporating the inflationary impact in its overall defence expenditure.

Indo-Asian News Service

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