Analysing defence and social sector spending in Pakistan

Pakistan government has been underpinning the idea of ‘the ascendency of military welfare over social sector development’ each year during the national budget allocations. Defence allocations are usually prioritized in the Pakistan’s national spending because state security is the primary concern of the government.[i] Pakistan spent nearly US $ 8.7 billion – that is – 3.2 percent of its gross domestic product (GDP) on defence activities, services and pensions in fiscal year (FY) 2015.[ii] In contrast, the government expenditure incurred on social sectors like education and health accounted for a share of 2.2 percent and 0.8 percent of the GDP respectively in FY 2015. Table 1 provides the trend in government spending on defence, education and health over the period FY 2011 – FY 2015. The provinces of Pakistan namely Punjab, Sind, Baluchistan and Khyber Pakhtunkhwa (KP) have been spending a significant amount of their total expenditure on education and health sectors (See Figure 1).

Figure 1: Spending on Education and Health Sector by Provinces in percent, FY 2014-15

Social vs defence

Pakistan has been the top spender on defence activities and requirements in South Asia.[iii] In 2014, Pakistan spent 3.2 percent of its GDP on defence, followed by Sri Lanka with 2.5 percent and India with 2.4 percent. Huge spending by Pakistan government to enhance its defence capabilities has left comparatively less funds for the development of education and health sector. As a result, Pakistan lagged in achieving progress towards the millennium development goals (MDGs) and performed poorly on health and education indicators of the human development index (HDI). Pakistan’s rank on the HDI deteriorated from 145 in 2011 to 146 in 2014, among 187 countries (HDI Report 2011 and 2014).[iv]  The under-5 child mortality rate was 81.1 deaths per 1,000 live births in 2015, which is significantly above the millennium development goals (MDG) target of 52 deaths per 1,000 live births (World Bank 2015). The other health indicator that is infant mortality rate was recorded at 65.8 deaths per 1,000 live births against the MDG target of 40 deaths per 1,000 live births in 2015  (World Bank 2015).

Table 1: Government of Pakistan’s Expenditure on Defence, Education and Health as a percent of GDP, FY 2011 – FY 2015

Years

Defence Education Health

FY 2011

2.9 1.8 0.6

FY 2012

3.0 1.9 0.6
FY 2013 3.1 2.1

0.7

FY 2014

3.0

2.1

0.8

FY 2015 3.2 2.2

0.8

Source- Calculated by author using data from Economic Survey of Pakistan and Poverty Reduction strategy Papers (PRSP) for various years

One of the major factors for impeding Pakistan’s economic growth is gender and income inequalities that have widened over time. Amongst all sectors, the education sector has witnessed vast gender disparities as two-third of the women population aged 15+ were unable to read and write and 35 percent of the girls remained out of school in 2013 (Education for All, UNESCO 2015).[v] Nearly 5.1 million children were out of school in 2010 (59 percent were girls), which increased to 6.7 million (62 percent were girls) in 2013.[vi] Several economists have argued that gender bias in education adversely impacts the economic growth by reducing the quality of human capital directly and indirectly through the high fertility rates that result in a decline in investment and savings (Klasen 2002).[vii] In addition, the widening gap between rich and poor classes has severely affected the growth of the society (OECD 2014).[viii] The GINI coefficient[ix] in Pakistan was 30 for the period 2003 – 2012 (HDI Report 2014).

The education sector in Pakistan is primarily dominated by public schools, which held a share of 75 percent in 2013, followed by religious educational institutions (Deeni Madrassas) with 15 percent and private schools with the remaining share of 10 percent. Due to low private sector participation, the provision of basic facilities and infrastructure in social sectors becomes difficult. For an inclusive growth, the government needs to focus on improving the present state of social sectors in Pakistan. This would require an effective governance, management and targeted channelization of funds. However, the government of Pakistan in collaboration with the United Nations Educational, Scientific and Educational Organization (UNESCO) has signed  the Malala Funds-in-Trust agreement in 2014 to improve access of quality education to girls who remain out of school either due to poor water and sanitation facilties in schools or absence of schools in remote or far-off areas. In the health sector, the government instituted the Lady Health Worker Programme in 1994 with an aim to provide basic healthcare facilties to people in rural and slum areas. Many programmes aimed at prevention of diseases like malaria, AIDS and tuberculosis were also initiated in Pakistan. Despite these programmes, Pakistan could not achieve significant improvement on the social front.

Thus, it is essential to encourage private-public sector partnership in education and health sector to provide the missing facilities like sanitation and drinking water, basic infrastructure and more schools in remote and tribal areas of Pakistan. Hence,  more financial resources need to be diverted towards the social sectors.


Preety Bhogal is a Research Assistant at the Centre for Policy Research (CPR) and can be contacted at preetybhogal@cprindia.org.

[i] Rizvi, H. Askari (2000), ‘Military, State and Society’, Pg- 62-63

[ii] The fiscal year in Pakistan runs from 1st July of current year to 30th June of next year.

[iii] SIPRI Military Database, 1988-2014

[iv] Human Development Report 2011. Available at- http://www.pk.undp.org/content/dam/pakistan/docs/HDR/UNDP-PK-HDR-GLOBAL-2011.pdf and Human Development Report 2014. Available at- http://www.pk.undp.org/content/dam/pakistan/docs/DevelopmentPolicy/HDR-2014-English.pdf Last accessed on 1st October, 2015

[v] ‘Education for All 2015 National Review Report: Pakistan’, United Nations Educational, Scientific and Cultural Organization (UNESCO). Available at- http://unesdoc.unesco.org/images/0022/002297/229718E.pdf Last accessed on 1st October, 2015

[vi] Ibid; Education for All Global Monitoring Report – Factsheet (2012), UNESCO. Available at- http://en.unesco.org/gem-report/sites/gem-report/files/EDUCATION_IN_PAKISTAN__A_FACT_SHEET.pdf Last accessed on 12 October, 2015

[vii] Klasen, Stephen (2002), ‘Low Schooling for Girls, Slower Growth for All? Cross-country Evidence on the Effect of Gender Inequality in Education on Economic Development’, The World Bank Economic Review, Vol. 16, No. 3, 345-373

[viii] Organization for Economic Cooperation and Development (OECD), 2014. Available at- http://www.oecd.org/newsroom/inequality-hurts-economic-growth.htm Last accessed on 9th October, 2015

[ix] GINI coefficient measures the income inequality for any country.


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