ISLAMABAD: Pakistan’s provinces agreed to contribute funds for national defense and economic stability despite facing their own fiscal pressures, a key coalition partner of the ruling administration said on Thursday, but the government must pursue long-term reforms instead of relying on repeated provincial sacrifices.
Addressing the post-budget debate in the National Assembly, Pakistan Peoples Party (PPP) Chairman Bilawal Bhutto-Zardari said provincial administrations had repeatedly given up fiscal space to help the federation manage national crises and stabilize the economy, but warned such arrangements could not serve as a permanent solution.
“All the provinces have decided that they are ready to make this sacrifice, to make this contribution, for the benefit of their people,” he told lawmakers.
His remarks came days after Finance Minister Muhammad Aurangzeb confirmed the federal government would utilize provincial funds to help meet defense and strategic requirements while maintaining fiscal discipline under a $7 billion International Monetary Fund (IMF) program.
Pakistan raised defense spending by about 18 percent in its federal budget for the fiscal year beginning July 1, following last year’s military confrontation with India and continuing security challenges along its western border with Afghanistan.
Bhutto-Zardari said provincial governments had for years been asked to generate budget surpluses under IMF-backed economic reforms, limiting their ability to spend on local development projects.
“Every year, the provincial governments are told to show surplus,” he said, arguing that funds that could otherwise be spent on public services and development were being redirected to support broader national economic objectives.
While backing the latest arrangement, he said Pakistan needed a long-term fiscal framework that reduced reliance on “non-sustainable solutions” and enabled both the federation and provinces to meet their obligations.
“When this budget is passed, we should try to come up with a plan that is long-term, that is sustainable,” he said.
“We should introduce growth-oriented economic policies so that we can fulfill the needs of our development and the needs of national defense.”
The PPP leader said the latest provincial contribution demonstrated political consensus at a time of heightened security and economic challenges, adding long-term growth and fiscal reforms were necessary to avoid repeated demands on provincial resources.
