ISLAMABAD, PAKISTAN — When Pakistan announced its annual budget June 13, defense spending received a hefty 14 percent boost.
The increase came despite pleas from Western donors to cut the military budget, estimated to be just over 26 percent of the country's total budget in the new fiscal year that begins in July.
"We have to be in a position to defend ourselves," said Prime Minister Benazir Bhutto, before the budget figure was announced. She justified the increase as essential because of higher military pensions and administrative expenses.
Other Pakistani officials also have backed the increase on the grounds that it only keeps up with inflation during the past year and does not represent growth in defense spending in real terms.
Defense spending has become a major constraint on the Pakistani government. It cuts into funds available for development programs in one of the world's poorest countries, with a population of 130 million.
Pakistan's longstanding dispute with India over the Himalayan state of Kashmir also lies behind the defense expenditures. The two countries have fought three wars, two of them over the Muslim-majority state. Today, India controls two-thirds of Kashmir while Pakistan controls the remaining portion. Elections in Pakistani-controlled Kashmir are scheduled for Sunday.
Both countries spend billions of dollars to maintain large armies ready to go to war at short notice.
Pakistan could keep up with India's military spending during much of the cold war when Pakistan received billions of dollars in Western assistance. But since the collapse of the former Soviet Union, the flow of military aid to Pakistan, like many other countries in the developing world, has begun to dry up.
The Pakistani government is also faced with the need to pay off $43 billion in loans from foreign sources and domestic banks that were accrued during the years when foreign aid flowed in. Almost three-quarters of the new budget will go toward servicing that debt, defense spending, and running the government bureaucracy. That leaves little money for public services like education and health care, and for job creation.
Independent economists say the best hope for Pakistan is to step up its pace of development and growth in order to keep up with its large defense burden. New taxes worth 40.85 billion rupees ($1.17 billion) were announced in the budget, and many economists are predicting higher inflation for at least another year.
Given this delicate economic situation, no one knows if increased spending on defense can be sustained, or for how long.