‘Pakistan’s military leadership driving country into deeper economic crisis’

New Delhi, Oct 14 (IANS) The World Bank’s October 2026 regional update highlights that roughly 48 per cent of all people living below the $3 a day poverty line across the Middle East, North Africa, Afghanistan, and Pakistan (MENAAP) region are Pakistani, while the remaining 47 per cent are in Afghanistan, Syria, and Yemen.

Pakistan, thus, holds nearly as many extremely poor people as three active war zones combined, without a war on its own territory.

The World Bank states that MENAAP is the only region where poverty remains above pre-pandemic levels and continues to rise, with Pakistan driving most of that deterioration. This is not the arithmetic of a country stabilising after a war or long military crisis but of managed decline, presided over by the military establishment that took control of economic policy while showing no capacity to exercise it, according to an article in the European Times.

The article highlights that Pakistan’s continued high expenditure on defence, driven by the military leadership, is responsible for the worsening economic crisis. The FY2026-27 budget allocated PKR 3 trillion to defence services, a 17.6 per cent increase, with physical assets rising 39.6 per cent to PKR 925.8 billion for weapons procurement. Military pensions of PKR 822 billion sit outside that figure, as does PKR 319 billion for the Armed Forces Development Programme. Development spending stayed flat at roughly PKR 1 trillion nominally, a substantial real-terms cut. The previous budget raised defence by more than 20 per cent while cutting total federal expenditure by seven per cent, and the allocation exceeded combined spending on higher education, agriculture and climate adaptation in one of the world’s most climate-vulnerable countries.

The article blames Field Marshal Syed Asim Munir, the de facto ruler of Pakistan, for the economic mess in the country. Since June 2023, he has co-chaired the Special Investment Facilitation Council (SIFC), the apex body now directing economic policy, which includes 36 serving officers drawing salaries from the defence budget. The SIFC is formalising the army’s influence over economic policy and has drawn alarm among economists and businessmen in Pakistan. The council was created to deliver $5 billion in annual foreign direct investment and has not come close. Three years on, its principal achievement is the institutionalisation of the Pakistan military authority over a portfolio in which the institution has no competence, the article observed.

It underscored that Pakistan’s economy is growing 2.2 per cent while its poverty rate climbs 6.4 points is not a sign of recovery, and the military controlling policy has responded by expanding its own budget by 17.6 per cent and its procurement line by nearly 40 per cent. American money, should it arrive in Pakistan, would only buy more time rather than a solution. Pakistan’s problem is not a shortage of external finance, since it has received more of that than almost any comparable country. The problem is a political economy in which the only actor with the power to reform, the military establishment, has the greatest interest in preserving things exactly as they are.

–IANS

sps/vd