Javid Husain Pakistan is the classic case of a country which has got into the rut of living far beyond its resources. This dangerous tendency developed in the 1950s when the US economic and military assistance became available making it possible for us to exceed the limits of our national resources in our spending habits as a nation. Year after year our governments financed the excess of their expenditures over revenues through loans from donor countries and international financial institutions, thus avoiding hard choices in our budgetary allocations and priorities. In addition our leaders, senior officials and the elite of the society adopted lifestyles which were not sustainable within the constraints of our national resources and the low level of development of the country. The profligacy on the part of our governments and the leading sections of our country has turned us virtually into an international basket case and our leaders into regular international beggars who have lost all sense of shame or honour in their loan and aid seeking yatras to foreign capitals. Besides causing the loss of honour and dignity, our dependence on foreign doles has compromised our sovereignty and our independence to take political, security and economic decisions in our best national interest. It should be clear to even the nave that beggars cant be choosers. Further, our tendency to live beyond our means has also slowed down our economic growth besides leading us into the debt trap. A cursory glance at the federal budget for the current fiscal year would highlight the predicament in which we have placed ourselves. The federal governments net revenue receipts were estimated to be Rs 1371 billion as against the projected current or non-developmental expenditure amo-unting to Rs 1699 billion leaving a huge gap of Rs 328 billion. The actual gap is likely to be higher because of the expected shortfall in revenue generation and the unanticipated increase in current expenditure, particularly the military expenditure. The gap between the revenues and the current expenditure was to be met partly through internal and external borrowing and partly through bank borrowing which generates inflationary pressures and can be considered as a regressive tax with proportionately gre-ater burden on the people with lower incomes. Ideally, the government must utilise these loans for developmental purposes so that they add to the productive capacity of the economy and enable it to pay back those loans. When a government starts using external and internal loans for meeting its non-developmental expenditure, as has been the case with Pakistan for decades, it puts itself on the slippery path leading to financial insolvency. Every year the need for loans increases because of the growing debt servicing liability, while there is no commensurate increase in the governments capacity to pay back the outstanding loans. During the current financial year alone the governments debt servicing liability is estimated to be Rs 780 billion. The military expenditure including military pensions and the unanticipated increase is likely to be around Rs 550 billion. Thus, the military expenditure and debt servicing liability alone will consume almost the whole of the federal governments net revenues leaving virtually nothing for running the civil administration or for developmental activities which will be dependent on internal and external loans amounting to Rs 700 billion. In view of the budgetary constraints, the government has reportedly slashed the federal public sector development expenditure heavily bringing it down to Rs 250 billion as against the target of Rs 446 billion. The provincial public sector development programme may shrink to Rs 100 billion as against the target of Rs 200 billion. Thus, the total public sector development expenditure during the current financial year is likely to be around Rs 350 billion as against the corresponding figure of Rs 418 billion for the last fiscal year, that is to say, instead of moving forward we are moving backwards The inevitable result would be in the form of slowing down of the developmental activities and the growth rate of the economy. It is not surprising, therefore, that whereas the Indian gross domestic product is likely to grow at the rate of 7.7 percent during 2010, according to the Economist magazine, the growth rate of Pakistans GDP is expected to be as low as 2.9 percent during the same period. That speaks volumes about the quality of our leadership and planners both on the civil and the military side. The slowing down of the developmental activities because of our chronic disease of living beyond our means has produced disastrous consequences for our economy, society and national security. The resultant slow growth rate of GDP has heightened the incidence of poverty, increased unemployment and intensified inflationary pressures. It has left little room for the government to provide to the people improved educational and health facilities on which the future prosperity of the nation depends. The goal of enhancing the welfare of the people has become more and more distant. The inequalities of income and wealth have widened. Consequently, there is growing discontent among the people which reflects itself in increasing lawlessness, violence and other forms of anti-social behaviour. The growing strains and polarisation of the society pose serious risks to the stability of our polity and endanger the security of the country. The prevailing situation in Pakistan calls for a firm resolve on the part of our leadership, the civil and military elite and the intelligentsia to take necessary corrective steps urgently before the negative trends in our economy, society, foreign affairs and security become irreversible. Obviously, the starting point of any programme of reform should be a national determination to adopt an austere lifestyle. Our political leaders, especially those in power, will have to set an example by giving up the luxuries of life and cutting down unnecessary expenditures in their official and personal lives. Once the leadership reforms its ways, the civil and military elite will soon fall in line, thus initiating a new trend towards simplicity and austerity in our society which by the way is also the teaching of Islam. In addition, we should reorder our governmental and national priorities assigning the highest importance to the goal of economic development. This must reflect itself in the form of increased allocation of resources for developmental activities, especially for education which is the prime engine of economic growth, in contrast with the current situation in which the lions share of resources is taken away by the military. It would be worth our while to learn from the experience of our Chinese friends who starting from 1979 assigned the highest priority to the goal of economic development supported by a judicious combination of a low-risk and non-adventurous foreign policy and a comparatively low level of allocation of resources to the military. The net result was the rapid growth of the Chinese economy which is the envy of the world. While comparisons can be hazardous sometimes, there is still a lot that we can learn from the Chinese experience. The writer is a retired ambassador. Email: javid.husain@gmail.com