The Finance Minister spoke to us about the economic emergency. Excerpts:
The price of war:
The security expense won't be just Rs 3 billion, it will be more. Three billion is just the requirement of the army. There will be other expenses. It's going to be difficult to find the money. Our revenues are down because economic activities have slowed. Tourism and exports are down, imports are down. The revenue is largely import-based and so that has been affected. Tax collection is slow, and the revenue shortfall will run into several billion rupees. We have a real problem.
Private sector activity has come down. If government spending in development activity drops then there will be a further slowdown in the economy, possibly a bigger recession. We are thinking of several ways to meet the shortfall, we are asking the international community to give us extra money this year to help us maintain our ongoing priority development. Some of our resources would have to be diverted from development programs and we need extra support from donors to make sure that development is not affected.
We are telling donors we may need $70-80 million. Some donors have indicated they are willing. We have said if you want to provide money for security that is also welcome, money for new programs are also welcome.