While declaring the emergency on 3 November, the Pakistani President Pervez Musharraf lamented -
I am observing that Capital and Business that was flowing into the country is now stopped - they are now questioning whether to invest here or not Pakistan will remain stable. Our economy, the livelihood of our nation which improved over the last 7 years - in economy, in livelihood, in infrastructure, roads, ports, airports, railways, telecommunication, mobile telephone, landlines, rural telephone, information technology, building and construction, the entrepreneurs across the land, the rapid development across Pakistan, the thousands of industries launched, water irrigation, dams, canals, canals with brick linings, water courses, and then the social sector, education, health on the primary and secondary level, and education at every level - on all these Pakistan was moving forward, all this. I am very saddened, God Forbid, that 7 years of hard work may be washed away. [CM]
Shanta Devarajan, the Chief Economist of the South Asia Region at the World Bank, puts some figures to probate the General’s rhetoric.
Since 1999, the Pakistan government has undertaken a series of macroeconomic and structural reforms and Pakistan’s GDP growth rate has accelerated. It has been averaging well over 7 percent a year over the last three years. Poverty has been declining steadily at about one percentage point a year during this period. Despite rising world oil prices, inflation has largely been kept under control. Nevertheless, there are two sources of concern on the macroeconomic front. The current account has gone from a surplus of one percent of GDP four years ago to a deficit of 4.9 percent of GDP today. And export growth has declined sharply from 14 percent a year two years ago to 3 percent this year.
Moreover, Pakistan suffers from a huge “human development deficit.” In 1997, child mortality rates in Pakistan and Bangladesh were the same, at about 114 child deaths per 1000 births. Today, Bangladesh’s rate is 77 and Pakistan’s 101. In addition to low enrolment rates, especially for girls, there is evidence that the quality of education is extremely poor. In a sample of (better off) Punjabi villages, the share of 10-year-olds who could do single-digit addition and subtraction was 29 percent. These problems of basic service delivery cannot be solved without the active participation of communities and parents. In fact, the number of private schools has risen dramatically–from 32,000 in 2001 and 47,000 in 2005. [EPISA]
The Indian Economy Blog » Pakistan - Emergency & Economy
