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Pakistan recently unveiled a 1.09 trillion rupee (USD $18.16 billion) national budget for 2005-2006. The budget increased defense expenditures from 194 billion rupees in 2004-2005 to 223 billion rupees, a rise of more than 15%. Spending on development will also rise, and the overall increase in expenditures is 21%.

The largest single item is for the country’s debt payments, which amount to more than 300 billion rupees. The government also vowed June 6 to undertake a wide network of roads, dams and other infrastructural work under the 272-billion-rupee Public Sector Development Program.

The moves will be financed by a combination of tax revenue increases and borrowing. Pakistan’s GDP rose by 8.4% in 2004-2005, the highest recorded in 20 years.

Sources and Additional Readings

• Agence France-Presse: Pakistan Hikes Defense Spending by 15.5 Percent

• A Brookings Leadership Forum (June 9, 2005 in Washington, DC) – The U.S.-Pakistan Relationship: Challenges and Opportunities with Khurshid M. Kasuri, Minister for Foreign Affairs of the Islamic Republic of Pakistan. Transcripts are ususally posted several days after the event.

• DID (June 06/05) – Pakistan Requests $1.3B Defense Package

• DID (Feb. 28/05) – China’s Defense Budget PRepares for Double-Digit Growth

• DID (Feb. 28/05) – Slower Growth for India’s Defense Budget [~7.8%]