Controversy over GDP statistics

[Neither Right Nor Wrong]

I m not doubting Paks ability to rise from the present situation...nor am I doubting your intentions wrt the above post ...I m just politely pointing out the generalization made in the above statement.

 

[Materialistic]

lol.ok bhai you win.But i tell you telecommunication and media are not the type of Industries which will take you to Japan's level.They are just one time temporary boosters.

buddy, there is no single industry that can take you to that level.

Musharaf gave Pakistan freedom of media resulting in 161+ channels in less than 2 years.

A boom in telecommunication industry, where we stand with the world having latest cutting edge technology and the most advanced network systems.

We also boomed or shall i say something more than a boom in fashion industry, music industry and the only government to fund and help produce a decent movie like Khuda K Liye

We saw tremendous infrastructural developments, that we talk about today.

Our banking system was strengthened the backbone of economy and we stand at 63 out of 200+ countries worldwide and this is by far the highest in south-east asia.

All the new projects from high-end housing societies, to towers under construction and other private sector development including permission for airliners to fly out of Pakistan to middle east and licenses for private media organisations to cover news.

Development of Gwadar.

Even these power projects that current government brags about are also the works of Musharaf.

Slight increament in value of Ruppee in 05-06. (when ruppee was 16.5 against Qatari Riyal & speculated to reach 15 within same year until things got messy PPP came to power and ruppee fell directly down to 23 against a Qatari Riyal)

And last but not the least, the amount of progress we made in defence industry under his regime is also alot.

The world bank and IMF announcements of Pakistan recovery and development and these figures of economy are not a kids play that anyone can write.

PPP just carried own our traditional route of blaming the previous government saying Khazana khali hogya (Treasury is empty).

PIA was earning billions as revenue under his time before turning to ruins under PPP.

Same goes for the steel mill and railway and energy sector was also in a better shape in his time.

 

[Hyde]

buddy, there is no single industry that can take you to that level.

True

Musharaf gave Pakistan freedom of media resulting in 161+ channels in less than 2 years.

If you need a really qualified doctor let me know

Name me these channels - or research before you speak next time

A boom in telecommunication industry, where we stand with the world having latest cutting edge technology and the most advanced network systems.

Latest cutting edge technology? - As far as i know most of the telecommunication companies are foreign and they came with their own vision/intentions of making profits. They came because they saw potentional in this sector of Pakistan. I don't think they would have delayed/refused had their been any other government in Pakistan. It was in direct result of globalization.... telecommunication sector boomed all over the world in past decade - even in developed countries.... Look now for example all those companies who entered the market during Musharraf's era are now expanding their business in Pakistan and bringing lot of more investment in this sector, introducing new services and packages and technology even in this corrupt regime of Mr 10%

We also boomed or shall i say something more than a boom in fashion industry, music industry and the only government to fund and help produce a decent movie like Khuda K Liye

Khuda ke liye

We saw tremendous infrastructural development, that we talk about today.

Yes there is........ but it was carried forward from the previous governments too...... all i know is if these infrastructural project boomed (that was bound to happen after economic growth) / corruption also increased massively

PIA was earning billions as revenue under his time before turning to ruins under PPP.

when?

only one year? and that too only a little....... for the rest of the decade it suffered losses

Same goes for the steel mill and railway and energy sector was also in a better shape in his time.

When? Pakistan Railways suffered losses for the whole decade

Energy sector performed poorly - there is not any worth mentioning energy projects during his tenure

Steel Mill was in profit for 1 year as far as i know and for rest of the decade it suffered losses

 

[sparklingway]

Questioning growth number​

Tuesday, May 18, 2010
Dr Ashfaque H Khan

Pakistan's economy has grown at an average annual rate of 5.0 per cent over the last 62 years despite numerous impediments to its growth. By any standard, this has been a major achievement in terms of raising real incomes and alleviating poverty. The economic growth, however, remained uneven and interrupted by a variety of factors for a prolonged period. It was during 2000-07 that Pakistan's economy experienced the longest spell of strongest growth due to sound economic policies, structural reforms and a benign international economic environment.

Economic growth has slowed considerably in Pakistan over the last two to three years owing to a variety of domestic and external factors. What is worrisome is the new development where the growth number is being manipulated to paint a rosy picture. There was a story about the manipulation of growth number for 2009-10 in The News on May 16, 2010. The usual methodology to post a higher economic growth for the current year is to reduce the growth of the previous year. In other words, reduce the base to get a higher growth for the current year.

The growth number for 2007-08 was provisionally reported to be 5.8 per cent. The year 2008-09 was the most difficult year for the world economy as global financial meltdown triggered a full-fledged economic crisis. Strong economies like Hong Kong, Malaysia, Singapore, Taiwan and Thailand witnessed negative growth. Pakistan, on the other hand, posted a positive growth of 2.0 per cent and outshined the strongest economies of the region in 2008-09.

How was this positive 2.0 per cent growth achieved? The 5.8 per cent provisional growth of 2007-08 was drastically revised downward to 4.1 per cent and as such the base was reduced to arrive at a higher number of 2.0 per cent for 2008-09. Some methodology for the calculation of value-added for some sectors was also changed without bringing to the notice of the National Accounts Committee.

The same process has been repeated according to the newspaper story for the year 2009-10. The Federal Bureau of Statistics (FBS) – the institution responsible for compiling the country's national income accounts, has revised the last year's (2008-09) growth of 2.0 per cent to 1.1 per cent and that too, by further trimming the growth of 2007-08 from 4.1 per cent to 3.7 per cent. Since the base of 2008-09 was trimmed to 1.1 per cent, the growth for the current fiscal year (2009-10) has risen to 4.1 per cent.

Not only the growth of last year was reduced but also growth of some components of the GDP was outlandishly jacked up in 2009-10. As reported in the news item, the growth of the construction sector was pushed up to an unbelievable level of 15 per cent. Only a lunatic would expect the construction sector to grow by 15 per cent in 2009-10 when the public sector development programme of the federal government has been slashed to one-half and the private sector construction activities are at near standstill. The production of cement adjusted for exports and that of iron and steel has been used as a proxy for calculating growth in value-added in construction.

The interesting paradox here is that while cement production unadjusted for exports, grew by 11.2 per cent and iron and steel registered a high negative double digit growth, the construction industry seems to have thrived and grew by 15 per cent. This is simply unbelievable. Furthermore, the growth of the livestock sector, which accounts for over 11 per cent of the GDP, has been jacked up as well according to the news item.

Though the FBS' staffers are technically weak, they are surely honest. My appeal to them is to do their job professionally as they have been doing in the past. The revision in growth numbers is common in every part of the world but unfortunately the extent of revision has grown significantly in Pakistan over the last few years. The provisional growth of 5.8 per cent in 2007-08 has been revised downward to 4.1 per cent and further to 3.7 per cent – a downward revision of 2.0 percentage points is simply unacceptable and has perhaps never happened before.

Should anyone accept that the economy has grown by 4.1 per cent in 2009-10 in the midst of deteriorating security environment, crippling impact of power shortages and mismanagement, persisting double-digit inflation and a higher interest rate environment? If the growth is really 4.1 per cent in 2009-10 – up from 1.1 per cent in the previous year, then the government and its economic managers will have to answer the following questions. Should we believe that the spate of suicide bombing and heightened political tension have had no impact on economic growth? Should we believe that the long hours of power outages have had no adverse impact on the economy? Should we also believe that the higher double-digit inflation and the higher interest rate environment have had no adverse effect on the economy? Should we re-write our own economic theory?

Economic theory armed with extensive empirical evidence suggests that the declining rate of investment, high inflation and interest rate, large fiscal deficit, armed conflicts, wars, political instability, corruption, absence of rule of law, high poverty rates, rising debt burden, and weak infrastructure will have negative effects on economic growth. How come economic growth accelerated from 1.1 per cent in 2008-09 to 4.1 per cent in 2009-10 in the midst of all the above-listed factors? Economic managers will have to answer these questions.


The writer is director general and dean at NUST Business School, Islamabad. Email: ahkhan@nbs.edu.pk

 

[Hutchroy]

Growth rate manipulation!

EDITORIAL (May 21 2010): The National Accounts Committee has approved the projected Gross Domestic Product (GDP) growth rate of 4.1 percent for the current fiscal year. The key word is projected, indicating that this is not the final figure as it simply cannot be considering that the fiscal year ends on June 30. The growth rate is, by definition, a statistic that is premised on the base year selected, given certain parameters.

Any change in the base year, or indeed in the parameters, would automatically change growth estimates. Thus, if a government decides to take a low growth year as the base year, then estimates would change as, indeed, they would if the reference growth rate of the base year is changed. It is indeed telling that the Federal Bureau of Statistics (FBS) reduced the reference growth rate for 2008-09 from 2 to 1.1 percent.

The growth rate can also be manipulated if the government decides to project a ball park figure for poor areas, which typically under report, in all economies of the world, but particularly in ours as reflected in our large parallel undocumented economy. Or the GDP deflator may be miscalculated, deliberately or otherwise, which is a measure of the level of prices of all new, domestically produced, final goods and services in the economy. Governments are also typically tempted to overstate national output during times of an economic "bust" and understate during a "boom". However in the West, there are private sector agencies that do collect, collate and analyse government-released data for consistency and keep them honest to some extent.

In marked contrast, Pakistan has no data collection agency in the private sector that has the capacity to challenge government statistics by releasing their own. However, there is no dearth of critics who accuse the government of blatantly overstating the growth rate. The reason their charge sticks, nine times out of ten, is because the government does not employ any finesse, defined as keeping track of data integrity and consistency, when it fudges statistics. It maybe recalled that Shaukat Aziz, the country's former Prime Minister, was accused of manipulating statistics that showed better performance of the economy than was, in fact, the case.

Analysts across a broad spectrum have taken the present government to task for coming up with a growth figure that they consider is obviously inaccurate, given the slowdown in the economy - a slowdown attributable to the continuing energy shortfall, as well as the high cost of borrowing, second year running. Critics further cite the recent statement by the Advisor to the Prime Minister on Finance Dr Hafeez Sheikh that the government may well go for another IMF programme in the event that it is unable to translate the elusive pledges at the Friends of Democratic Pakistan meeting in April 2009 into disbursement as proof positive that the economy remains mired in crisis.

This is indeed a compelling argument as the original 23-month IMF programme is a mere five months from completion, a time-period which evidently the IMF had considered sufficient to turn the economy around. Unfortunately, the country seems to be far from showing signs of either raising domestic revenue or reducing expenditure, implying thereby that self-sufficiency remains a dream.

GDP calculation is a very important part of policy planning and reform as it influences strategic decisions by the government, by the State Bank as well as by investors and ordinary people. It is precisely for this reason that the Czech Head of Statistical Office was forced to resign in 2002, after her office understated the growth rate. While in Pakistan, our state-employed statisticians would no doubt blame their manipulation of statistics on pressure from the executive, yet in the interest of taking informed economic decisions, it is time that the government gives complete autonomy to the FBS.

 

[sparklingway]

Fudging numbers

It was truly amazing to read Dr Ashfaque H Khan's article "Questioning growth number" (May 18). A world authority on fudging numbers, clearly Dr Khan had something 'valuable' to say on the subject. Practising his art of sycophantic loyalty over 11 yeas in four different governments and with at least seven different finance ministers, the good doctor's 'golden moment' came in 1999 when Pakistan had to pay a $40 million fine to the IMF, thanks to Dr Khan's figure-fudging.

Given that Dr Khan was accused, every year, of doctoring the growth numbers to please his masters, perhaps he can be honest for a change and let his readers know: was he lying when he announced the country's 'miracle' growth numbers under Musharraf? Or is he being disingenuous now by accusing the Federal Board of Statistics and the government of using the same methodology used under him?

Shaikh Manzar Alam

Former president, KATI

Karachi

Note that Ashfaque Khan has been caught fudging figures in reality more than once.

 

[xenia]

this is making me skeptical about previous rates as well!!

 

[sparklingway]

this is making me skeptical about previous rates as well!!

Do you want me to post op-eds which conclusively prove that figures in 05-06 were most definitely fudged by a large margin?

There's no doubt that figures are fudged, its an annual practice for the FBS.

 

[xenia]

^^if convenient to post, u r more than welcome..

 

[sparklingway]

I guess these snippets will be enough for now:-

7. Pakistani Finance Ministers, whether under its political or military dispensations, have always faced accusations of fudging of statistics. Aziz is no exception. In preparing the annual reports on the state of the economy, his predecessors were using 1980-81 as the base year for comparison purposes. Aziz has changed it to 1999-2000. In the year 1980-81, the economy did quite well under Zia-ul-Haq, particularly after the large-scale flow of Western assistance in the wake of the Soviet invasion of Afghanistan. In 1999-2000, the Pakistani economy hit the rock bottom as a consequence of the imposition of some sanctions by the US in 1990 under the Pressler Amendment, more sanctions after the Chagai nuclear tests of 1998 and still more sanctions following the military take-over in October,1999. His critics allege that the figures of today look impressive as compared to those of 1999-2000, but they are not that impressive if compared with those of 1980-81.

A former chief economist of the federal government talked of his “struggle” from 2002 to 2006, in an op-ed piece last week in this newspaper, to convince the authorities against manipulating data and how he could not succeed. As a result, final figures on poverty, GDP, unemployment, prices, etc., were “improved upon” although few believed in the achievements that were claimed.

The military regimes have been notorious for cooking up figures to cover up bad performance or exaggerating a positive achievement in a bid to earn legitimacy from the public for their illegal rule.

The caretaker government headed by Mohammadmian Soomro last year decided to set up a high-powered committee to ascertain the accuracy of the FBS data after it developed serious doubts about the quality of the figures about GDP growth, crops produce, inflation, poverty and industrial progress worked out by Shaukat Aziz regime.

The committee headed by Deputy Chairman Planning Commission Dr Akram Shiekh decided in its first meeting that industrial data would now be collected by the ministry of industries and not by the Federal Bureau of Statistics because the latter’s data did not match the ground realities. For instance, the FBS figures put food inflation at 14 per cent while, according to independent economists, it was over 20 per cent. Donor agencies also, time and again, in their reviews of Pakistan’s economy, had doubted figures of economic indicators.

Yes, Dr Ashfaque, the data are fudged
Monday, July 20, 2009
I write in response to Dr Ashfaque Hasan Khan’s comment on an article I wrote recently challenging the economic accomplishments of the previous regime. Rather than concentrate on the issues I raised, he attacks me for being political and looking for a job. I would say to him that such an attack is in bad taste and quite unnecessary. I would also say to him I thought he knew me better. Dr Ashfaque says that our economic data is credible and is endorsed by all the smartest professionals in various international agencies. He has a short memory.

One of the first things our now-absconding Shaukat Aziz did on taking over as finance minister in the previous government was to accuse the previous government (of Nawaz Sharif) of falsifying the data provided to the IMF. One of the first things Ishaq Dar did on taking over as finance minister early in the present government was to accuse the previous government (of Shaukat Aziz) of fudging the data. This was payback time. Given this background, is the dark cloud of suspicion that hangs over our economic data something new? Is it only me?

Dr Ashfaque asks me to do a bit of reading before making generalised statements. I suggest he do the same. He should go to the IMF website and read the staff report on the subject of fake data that Pakistan presented to the IMF. As a senior adviser to the executive director in the IMF at that time, I have never been so embarrassed for my country.

At the executive board meeting on the subject, the minutes of which are unfortunately confidential but are available with me if Dr Ashfaque would like to do some more reading, all I could do was hang my head in shame as each executive director, all 23 of them (excluding our chair which presented a weak defence written by me), castigated Pakistan in the strongest possible terms for taking money from the IMF based on cooked up data.

The IMF staff which had led missions to Pakistan during the fudging period, the smart professionals who are the best in their field and can never be duped according to Dr Ashfaque, were especially shamed because they had been taken for a ride and were shown to be clueless. A burning issue dominated the meeting. Did the IMF staff know what was going on? If they did, they misled the IMF executive board, were complicit in the fudging, and should be dismissed. If they did not, they should be dismissed for incompetence.

At the end of a highly-charged five-hour meeting, it was the decision of the executive board to fine Pakistan millions of dollars and ask the money back they had taken from the IMF during the fudging period. This is a matter of record which I suggest Dr Ashfaque look up before lecturing me on how good our economic data is. One further point. This fudging went on during an IMF programme when scrutiny of data is at its most rigorous. Imagine the fun the previous government had when there was no IMF programme!

Dr Ashfaq quotes a long list of accomplishments of the government he served in, conveniently hiding everything behind averages. I believe he was the previous government’s spokesman. He certainly still speaks like one. In my article, I conceded that some good things were done. This is undeniable. But I, like many others, continue to harbour serious doubts about these so-called accomplishments. Take just one example. It is claimed that poverty was cut by a half in seven years. If the Musharraf government had continued for a few more years, poverty in Pakistan would have been eliminated altogether! Does Dr Ashfaque seriously expect me, or anyone else of sound mind, to believe this fantastic fabrication?

Dr Meekal Aziz Ahmed

Virginia, US

Poverty reduction figure is fudged

By Dr Akmal Hussain

The government can take due credit for its growth performance this year. Its figures for GDP growth, investment rate, fiscal deficit, all seem consistent and credible. What is not plausible however is the finance minister’s claim that the percentage of population below the poverty line has declined by 4.2 percentage points compared to 2000. In fact this claim is fudged.

(1) The composition of growth is contrary to the official claim of poverty reduction: The agriculture sector where the majority of the poor subsist has shown a sharp decline in growth from 4.1 percent last year to 2.6 percent this year. It is the large-scale manufacturing sector with a growth rate of 17.1 percent which has determined the overall GDP growth performance. Even in this sector, however, growth is predicated on a relatively small group of industries, namely consumer durables, automobiles, textiles and cement. These are industries with low employment elasticities and where highly skilled and relatively well-paid workers are employed. Therefore these are hardly the industries whose growth could be expected to reduce overall poverty so quickly. Nor do they produce goods for the poor.

(2) Income inequality between the richest 25 percent and the poorest 25 percent of the population has been increasing over the last decade. The composition of growth suggests that income inequality remains acute. The fact that inflation in the prices of the poor person’s basket (food items) has increased at a higher rate than the average inflation rate provides further indication that the distribution of real income between the rich and the poor may have become more unequal. When income inequality is high and increasing, a small increase in GDP growth cannot be expected to lead to such a significant reduction in poverty as claimed by the Finance Minister.

(3) The minister’s claim of poverty reduction is being made on the basis of a small sample survey of only about 5000 households, selected without regard to provincial coverage and conducted for only one quarter, April to June this year, when earnings from wheat harvesting enable a larger consumption expenditure by the poor. The results of this small sample survey are being compared to sample results in the base year drawn from the standard and periodic Pakistan Integrated Household Survey (PIHS). This has a much larger sample (14,000 households) with representation from each province, and averages out the seasonal variations in household expenditure by covering four quarters (one year). Given the quite different design of the sample surveys in the year 2000 and the year 2004 respectively, the results are technically incomparable. The specific differences in design of the two surveys indicated above are such that a reduction in poverty would tend to show from the differences in sample design rather than a change in the real magnitude of poverty.

A professionally sound assessment of changes in the levels of poverty over the last four years will have to wait till the next round of the PIHS is conducted. Until then, we can at best hope that the recent increase in the GDP growth rate may have stopped poverty from increasing. There is certainly neither adequate evidence nor any analytical reason to suggest such a sharp reduction in poverty (4 percentage points), as the finance minister has proclaimed before an incredulous populace.

Economic survey contradicts realities

Economic survey contradicts realities -DAWN - Business; 13 June, 2004

LAHORE, June 12: While annual Economic Surveys launched by government on the eve of the national budget are never models of accuracy and logic, one cannot recall this document so heavily defiant of these principles than the latest Survey.

Numerous aspects of the Survey are on occasion mere raising eyebrows but it is the theme of poverty that produces a claim substantiated by specially manufactured data but contradicted by statistics in the Survey on many poverty-linked aspects.

A 4.2 per cent reduction has been claimed in the incident of poverty. The main evidence cited to authenticate a 'decline in poverty', indeed reversal of previous trends is a limited survey conducted in April-May this year. The Finance Minister has also asserted that 'other indicators representing the living conditions of the people have shown improvement over 2000-01.

What are these indicators? The survey under reference was primarily urban based while poverty is more rampant in rural Pakistan that is predominantly, indeed wholly, dependent on agriculture. The Survey reports a disappointing 2.4 per cent growth rate for the agriculture sector against a target of 4.2 per cent. That makes for rise in poverty rather than arresting existing trends, let alone their reversal.

Two of the main cash crops of the country, cotton and wheat, were 'lacklustre'-explanations of pest attack and bad weather are simplistic but that is another issue. These crops involve a large percentage of farmers. Are unsatisfactory crops a formulae for countering poverty?

Similarly, should statistics for inflation growing at 3.9 per cent over the first ten months of the last year against 3.3 per cent for the same period a year before, 4.9 per cent rise in food items against 3.1 per cent for the year before, unemployment galloping at 8.27 and National Savings 'remaining flat at 20 per cent' for the last two years be viewed as contributing towards reduction in poverty or intensifying misery?

The Economic Survey notes, quite correctly, an alarming increase in environmental degradation despite the government's efforts to improve conditions. Urban populations are under the risk of air pollution, provision of fresh water supplies in many parts of the country and some negative environmental factors are 'more than five times as high as in industrial countries and Latin America', according to the Survey. Which argument should one accept? Leading urban centres are simply bursting at the seams; their populations are growing at a frightening rate while civic facilities and basic services have failed to keep pace with higher population. The cities are expanding because of rural migration and the reason behind people leaving their hearths and homes is always poverty. Degradation of environmental conditions thus points towards rising poverty in the country, particularly in rural areas.

Some of the factors listed in the Survey as proof of better living conditions are drinking water, sanitation and use of electricity and gas for cooking purposes. How could such statistics be compiled in the face of incontrovertible evidence of deteriorating sanitary conditions and deaths by drinking of contaminated water in addition to official research citing a percentage of poison in the drinking water available in many cities makes one wonder.

The question that the Survey's contents on poverty throws up is: are its authors live in a private world or they have premeditatedly produced a document that is in stark contradiction of prevailing realities, one that misrepresents and misinterprets.

ISLAMABAD: In a shocking development, the interim government headed by Muhammadmian Soomro has expressed no-confidence in the figures firmed up by the Shaukat Aziz government about various major economic indicators such as the GDP growth, major crops produce, inflation, poverty, and industrial data.

Quite disturbed with the flour crisis, energy crisis, and the economic data of FBS, particularly food inflation, employment and poverty figures, which mostly do not match with ground realities, Prime Minister Muhammadmian Soomro has constituted a high-powered committee to ascertain the accuracy, reliability and credibility of the data gathered by the Federal Bureau of Statistics (FBS).

"The economy about which the previous government used to make tall claims was exposed in the four-day wheel jam strike after the assassination of Ms Bhutto and the government has been compelled to readjust all economic indicators," a senior government official told The News.

The committee has been constituted with Deputy Chairman Planning Commission Dr Akram Shiekh as the head. The committee comprises Special Secretary to Finance Ministry Dr Ashfaq H Khan, Secretary FBS Asad Illahi, DG FBS SECP Chairman Raziur Rehman, and Secretary Ministry of Industries Shahab Khawaja.

When contacted, Dr Akram Sheikh confirmed the development and said that the prime minister had constituted the committee on quality figures about the economy headed by him in the last ECC meeting.

He said that primarily the committee had been tasked to bring unorganised industrial sector in the final figures about industrial growth estimates and to this effect, the Ministry of Industries had been directed to compile and capture the data about the unorganised industry across the country. To a question about the figures firmed up by the previous regime about the GDP growth, inflation, poverty and crops production, Akram Sheikh said the committee would start work on the said issues later. "However, it would take up the accuracy issue of the industrial data first."

In the terms of reference (ToRs) of the committee, a copy of which is available with The News, the assignment of the newly-constituted body is to appraise critically the input data of the FBS and assess the accuracy, reliability and credibility of various economic indicators.

The official said in the first meeting of the committee on quality FBS figures, it was decided that industrial data would now be collected by the Ministry of Industries, not the Federal Bureau of Statistics, arguing that the data collected by the FBS did not match the ground realities.

There is no denying the fact that the country experienced unprecedented food inflation that hovered around 14 per cent as per the FBS figures, but the ground realities speak of something different and according to independent economists, the food inflation stands above 20 per cent.

When contacted, Qaiser Bengali, a well-known independent economist, said the move to constitute a committee on quality figures about the economy was itself not less than a no-confidence in the credibility of the previous regime.

He reminded that he was highlighting how the government was manoeuvering and fudging the economic data since 2001. Qaiser Bengali said, although, the constitution of the committee was a good step in the right direction, but the main thing was to see the composition of the committee and how much credibility it commanded to fulfill its responsibility.

Bangali doubted that the committee comprising all government functionaries would come up to the expectation of the people by revealing the shocking disclosures in figure fudging that the previous government had committed just to show its economic output.

Donor agencies also, time and again in their various reviews of Pakistan's economy, have doubted figures of some economic indicators, but the previous government headed by Shaukat Aziz took on many donors for issuing such statements.The wheat produce claims of 23.5 million tonnes are also questionable keeping in view the wheat and flour crisis that has hit the country in a big way.

Many are of the view that most of the figures are manipulated to show maximum economic output. Efforts were made to seek the comment of secretary FBS Asad Illahi on the development, but he was stated to be in the Combined Military Hospital to look after his ailing son.

 

[ajpirzada]

well i dont know y is there a fuss....

this happens in developed world as well. here in UK ull find July's (could be any month) figures to be different when they are published in the following months against when they were published in July. mainly becuase in july some of the data was based on the forecast or expected outcome for that month as the outcome was still to be materialised.

similar is the case here. when giving growth figures for last year, some of the data (lik always) was based on expectations which did not prove correct due to fall in expected agricultural output. now that we know everything about what happened in that year, we can give the exact figures which will become part of ur historical data.

now that ur past years output level has gone down, ur this year growth rate has gone up as a result. + there were some other gud results in services and lare scale manufacturing sector which helped lift the gdp growth.

so dont worry................... its absolutely normal and nothing specific to pakistan

 

[razgriz19]

True

If you need a really qualified doctor let me know

Name me these channels - or research before you speak next time


Latest cutting edge technology? - As far as i know most of the telecommunication companies are foreign and they came with their own vision/intentions of making profits. They came because they saw potentional in this sector of Pakistan. I don't think they would have delayed/refused had their been any other government in Pakistan. It was in direct result of globalization.... telecommunication sector boomed all over the world in past decade - even in developed countries.... Look now for example all those companies who entered the market during Musharraf's era are now expanding their business in Pakistan and bringing lot of more investment in this sector, introducing new services and packages and technology even in this corrupt regime of Mr 10%


Khuda ke liye

Yes there is........ but it was carried forward from the previous governments too...... all i know is if these infrastructural project boomed (that was bound to happen after economic growth) / corruption also increased massively

when?

only one year? and that too only a little....... for the rest of the decade it suffered losses



When? Pakistan Railways suffered losses for the whole decade

Energy sector performed poorly - there is not any worth mentioning energy projects during his tenure

Steel Mill was in profit for 1 year as far as i know and for rest of the decade it suffered losses

MR. Zaki, welll u seems to be an anti musharraf but here are some facts...

Economic Comparison 1999 – 2007 and beyondUpdated March 2010!

Compiled by: Mirza Rohail B and Afreen Baig



Pak Economy in 1999 was: $ 75 billion (Source)
Pak Economy in 2007 is: $ 160 billion (Source) and (Source)
Pak Economy in 2008 is: $ 170 billion (Source)



GDP Growth in 1999: 3.1 % (Source)

GDP Growth in 2005: 8.4 % (Source)

GDP Growth in 2007: 7 % (Source)

GDP Growth in 2009: 2 % (Source) and (Source)



GDP Purchasing Power Parity (PPP) in 1999: $ 270 billion (Source)
GDP Purchasing Power Parity (PPP) in 2007: $ 475.5 billion (Source)
GDP Purchasing Power Parity (PPP) in 2008: $ 504.3 billion (Source)



GDP per Capita Income in 1999: $ 450 (Source)
GDP per Capita Income in 2007: $ 926 (Source)

GDP per Capita Income in 2008: $1085 (Source)



Pak revenue collection 1999: Rs. 305 billion (Source)
Pak revenue collection 2007: Rs. 708 billion (Source) and (Source)

Pak revenue collection 2008: Rs. 990 billion (Source)

Pak revenue collection 2009: Rs. 1150 billion (Source) and (Source)



Pak Foreign reserves in 1999: $ 1.96 billion (Source)
Pak Foreign reserves in 2007: $ 16.4 billion (Source) and (Source)

Pak Foreign reserves in 2008: $ 8.89 billion (Source)

Pak Foreign reserves in 2009: $ 14.4 billion (Source)



Pak Exports in 1999: $ 8 billion (Source)
Pak Exports in 2007: $ 18.5 billion (Source)

Pak Exports in 2008: $ 19.22 billion (Source) and (Source)

Pak Exports in 2009: $ 17.78 billion (Source) and (Source)



Textile Exports in 1999: $ 5.5 billion (Source)
Textile Exports in 2007: $ 11.2 billion (Source)



KHI stock exchange 1999: $ 5 billion at 700 points
KHI stock exchange 2007: $ 75 billion at 14,000 points (Source)
KHI stock exchange 2008: $ 46 billion at 9,300 points (Source) and $20 billion at 4,972 points (Source)

KHI stock exchange 2009: $ 26.5 billion (Source) at 9,000 points (Source)



Foreign Investment in 1999: $ 301 million (Source)
Foreign Investment in 2007: $ 8.4 billion (Source)

Foreign Investment in 2008: $ 5.19 billion (Source)



Large Scale Manufacturing (LSM) in 1999: 1.5% ( Source)

Large Scale Manufacturing (LSM) in 2005: 19.9% (Source)

Large Scale Manufacturing (LSM) in 2007: 8.6% (Source)

Large Scale Manufacturing (LSM) in 2008: 4.8% (Source)



Debt (External Debt & Liabilities) in 1988: $ 18 billion

Debt (External Debt & Liabilities) in 1999: $ 39 billion (Source) (Source) (Source)

Debt (External Debt & Liabilities) in 2007: $ 40.17 billion (Source) and (Source)

Debt (External Debt & Liabilities) in 2009: $ 50.1 billion (Source)



Debt servicing 1999: 65% of GDP (Source) and (Source)
Debt servicing 2007: 28% of GDP (Source) and (Source)

Debt servicing 2008: 27% of GDP (Source)



Poverty level in 1999: 34% (Source) and (Source)
Poverty level in 2007: 24% (Source) and (Source)



Literacy rate in 1999: 45% (Source)
Literacy rate in 2007: 53% (Source)



Pak Development programs 1999: Rs. 80 billion (Source)
Pak Development programs 2007: Rs. 520 billion (Source)
Pak Development programs 2008: Rs. 549.7 billion (Source)

Pak Development programs 2010: Rs. 300 billion (Source)



Today, even the most prominent of media and journalist, have not only started to acknowledge this great economic achievement, but also started quoting these statistics to compare President Musharraf’s tenure with earlier and present tenures.

Economic Comparison 1999 – 2007 and beyond Our leader – Musharraf

 

[kidwaibhai]

No economic crisis
By S. Akbar Zaidi​

PAKISTANI citizens have been misled these last 10 months, and we economists have got all our sums and analysis completely wrong.

While as Pakistani citizens we were struggling to make ends meet and to barely survive under a huge range of crises, little did we know that things were not half as bad as we had all been experiencing every single day.

As economists, we examined economic data periodically released by the Government of Pakistan, the State Bank of Pakistan and a host of international institutions, and were trying to understand how unemployment and poverty rates could be stopped from rising further, convinced that a huge economic crisis was upon us which was going to have severe repercussions on the economy and on the lives of citizens.

The terms ‘recession’, financial crises’, and so on, had become part of the public discourse on the economy. Clearly, we were misinformed by our observed, felt and analytical reality. We have now just been informed that there is no economic crisis in Pakistan.

The growth rate for the economy approved by the National Accounts Committee for the current fiscal year is a very healthy 4.1 per cent, considerably higher than the original highly optimistic targets of three and 3.3 per cent which were released at various times throughout the year.

Compared to the original two per cent growth rate for the last fiscal year 2008-09, this is an impressive improvement of over 100 per cent. However, now with the growth rate revised downwards for 2008-09, to 1.1 per cent, the growth rate for the current fiscal year is almost four times as much, an extraordinary achievement by any definition. Pakistan’s economic managers deserve credit for really turning around the country’s economy.

Journalists and commentators have been accusing the government of ‘manipulating’ the GDP growth figures by creative accounting techniques. They have argued that while it is legitimate to revise GDP growth figures, or any sets of figures, a year or two later, what they contest is the scale of the revision.

Some have argued that a small adjustment, say from two per cent to 1.8 per cent or so, would not have been difficult to accept, but almost halving the growth rate does seem a bit incredulous, and suggests that this is a ‘political ploy’.

Importantly, some commentators have gone further and said that what is more incredulous is the basis on which the new growth figures have been revised. The 15 per cent growth shown in the construction sector, when the public sector development programme and government spending have been substantially reduced this fiscal year, has even been questioned by some government spokesmen who have, nevertheless, defended the new GDP growth figures.

If we were to make even a short list of economic factors that have taken place over the last 18 months or so with a probable impact on the economy, we would marvel further at the achievements and abilities of Pakistan’s economic managers.

Let us start with the obvious features which may have affected the economy. The inflation rate has been around 13 per cent for almost a year, and was 24 per cent about 18 months ago. Between May 2008 and May 2010, the rupee lost value by over 20 per cent. The cost of borrowing, the interest rate, was over 15 per cent in January last year and continues to be very high, while the tax-to-GDP ratio fell to its lowest levels of 8.8 per cent, one of the lowest in the world.

There is, of course, that ubiquitous problem of fighting militants and the war on terror which has cost much public revenue, and given the ‘law and order’ problem across Pakistan since 2008, foreign direct investment has fallen markedly. There was also that problem of a power shortage, with electricity not only far more expensive when it was available, but available for only a fraction of the day, especially in Punjab where a considerable part of Pakistan’s industrial base is located.

Lest one forget, world food prices and oil prices have been consistently high over the last 18 months. And, finally, we have to be reminded, that Pakistan is in a standby agreement with the International Monetary Fund. For those who don’t know what the purpose of the agreement was, it is best to reiterate the fact that this was a stabilisation or austerity programme, not a growth-oriented one.

This means, that the government would sacrifice growth and focus on giving the economy stability which, as evidence for the last 30 years from across the world shows, leads to growing unemployment and poverty. Pakistan’s managers seem to have bucked the trend completely.

Looking at all the factors which have affected Pakistan’s economy over the last two years — and I have listed just a small handful — suggests that there is no way Pakistan’s economy could have made such a miraculous turnaround. If so, as Pakistan’s economic managers claim that we have, we must be grateful to them for they have defied the very logic of economic management and they need to document their achievements so that others can learn.

Moreover, what this turnaround signifies, is that we really do not need the huge promised funds from the Friends of Democratic Pakistan, or from the US on account of the Kerry-Lugar Act, astronomical amounts of promised funds which never materialised. Not only can we survive without all such aid, we can actually thrive in its absence. But just imagine how much more we would have prospered had we received all that promised aid.

DAWN.COM | Editorial | No economic crisis

 

[scrumpy]

Until I got to the last paragraph, I though the article was actually a sarcastic criticism of the released numbers. It does seem strange that the growth rates for the previous years were revised downwards.

Best of luck to Pakistan.

 

[Hyde]

i agree with most points of the author

Dropping country's economy from 167 billion dollars to 161 billion dollars in year 2009 and now raising it to 176 billion dollars before the budget in 2010 is indeed an achievement. (Although our gdp growth remained positive in rupees for year 2008/9 but the depreciation in rupee resulted in negative growth for that year)

Our population growth is also somewhat acceptable and on top of that we are going for IMF, World Bank loans etc. Why do we even need kerry lugar bill with lot of strings attached? where we managed to increase 16 billion dollars for this year - we can expect 10-15 billion dollars increase for next year also (if the dollar remains below 85)