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Pakistan Army out of funds to Construct Military Headquarters

2008-10-28 Pakistan's army has halted construction of an expensive new headquarters in the capital, Islamabad, because of the dire economic woes facing the country.

Pakistan is grappling with a balance-of-payments crisis and has just a few weeks to raise billions of dollars in foreign loans needed to meet debt payments and pay for imports.

The seven-month-old civilian government running Pakistan after more than eight years under former army chief Pervez Musharraf is reluctant to go to the International Monetary Fund for help but analysts say it has little choice.

A military spokesman said army chief General Ashfaq Kiyani had decided to suspend construction of a $210 million new headquarters. Even before the economic crisis set in, critics said the project was a waste of money.

"About 10 percent of work has been completed but we felt it should be halted as we understand the nation's quest for economic stability and want to help," said the spokesman, Major-General Athar Abbas.

Construction began last year under Musharraf, on a big plot of land up against the foothills of the Himalayas, as part of a plan to move all three military services to one headquarters.

The powerful army's headquarters is in nearby Rawalpindi, which was a garrison town under British colonial rule.

Newspapers have speculated that the IMF would seek a big cut in defence spending as part of any loan deal but President Asif Ali Zaradri was reported as saying on Tuesday there would be no cut in the military's budget.

The army is battling Islamist militants across the northwest as part of the U.S.-led campaign against terrorism, and is trying to match old rival India's military power.

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