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Alarmed by Pak's defence spending, IMF seeks more controls

Pakistani daily The Nation quoted sources as saying that Pakistan's defence spending had exceeded the revised figure of Rs 143 billion which overran last year's defence budget deficit figure to 6.5 per cent as against the target of 6.1 per cent.

The increase in defence spending has prompted IMF to demand an expenditure control system to keep the current year's defence expenses within the agreed limit, the daily said.

It said Pakistan's defence ministry has initiated steps to make itself eligible for a $250 million loan tranche from the IMF under an expensive stand-by arrangement and has built up a spending control system to keep the defence budget within limits set by the Washington-based agency.

The finance ministry has also set up a Fiscal Monitoring Committee to monitor defence spending and revenue situation and then report to the IMF that Pakistan was well within its agreed macro-economic targets.

Earlier, in June, the finance ministry had set a 4.7 per cent budget deficit target for year 2000-2001. The decision to revise defence budget figures was taken during negotiations with the IMF mission last week, the daily added.

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