Government's optimism about growth obvious of economic indicatorsAt the end of the first half of fiscal year 2009-10, all the economic indicators are showing a declining trend.
Contrary to these hard economic facts, Finance Minister Shaukat Tarin and his finance managers are painting a rosy picture to the Gilani cabinet by arranging easy financing from international donors like the Musharraf regime did by re-scheduling of foreign loans.
All the economic indicators including dwindling exports, declining foreign direct investment (FDI), negative Large Scale Manufacturing (LSM) for the past 16 months, rising foreign and domestic debt, less collection of taxes against the targets and unmanageable inflation seem not to be the priority of the incumbent government.
However, the State Bank of Pakistan and Finance Ministry are still optimistic about achieving the set GDP growth target of 3.3 per cent for FY 2009-10. Achieving the growth target is possible through the manipulation of figures only.
The multilateral donors want to keep the country on ventilator just shy of death throes, they would never want their client country to breathe on its own with independent and autonomous economic policies.
The global moneylenders want their own wish list of increasing taxes and decreasing subsidies fulfilled so as to ensure that debts are serviced, with least concern for the woes of masses.
The country’s trade deficit widened by 52.6 per cent in December as imports rose faster than exports. The total exports may remain between $18.5 billion and $19.0 billion this fiscal year, and imports between $30.5 billion and $31 billion. The fiscal deficit is forecast at between 4.7 per cent and 5.2 per cent and the current account deficit between 3.7 per cent and 4.7 per cent of GDP, predicts SBP report.
But the Federal Bureau of Statistics data reveals the other side of the story, exports during the period of July-Dec 2009-10, was recorded at $9.19 billion and imports at $15.99 billion that stood at $9.47 billion and $19.11 billion respectively during the same period the last year.
The IMF estimates Pakistan’s total external debt stocks to increase by more than 43 per cent over the next five years to $73bn from just below $51bn to meet its financial needs. Total external debt at present is hovering around $57bn.
Similarly, the internal debt payable by the government at present amounts to Rs1,651.17bn as of Nov 30, 2009 in the form of Market Treasury Bills (Rs1,135.19bn), Pakistan Investment Bonds (Rs473.73bn) and Ijara Sukuk Bonds (Rs42.42bn. The government paid Rs403.35bn during 2007-08 and Rs1,588.5bn during 2008-09 in terms of maturing MTBs and PIBs to the banks and other institutions.
The FDI during Jul-Nov 2009 declined to $774 million as compared to $1.620bn for the same period last year. While the tax collection also remained Rs581bn against the target of Rs595 billion for the first two quarters and Rs1,380bn for the whole fiscal year of 2009-10.
Large Scale Manufacturing (LSM) has witnessed a negative growth over past 16 months. The 0.67 per cent marginal growth during the first four months of current fiscal was only due to baseline effect as compared to the same period of last year.
Exports are not likely to grow to achive the $18bn target when there is no acceleration in LSM. This is only adding un-employment and also creating frustration in the business and working class.
The people are accepting whatever the government is passing to them in the form of utility bills and not agitating for they don’t have the strength to protest. Their throats are hoarse from yelling crying and shrieking on roads demanding an end to exploitation in the name of loadsheding of electricity, gas, and price hike of sugar, flour and utility rates.
The Prime Minister should deliver by ensuring good governance in real terms for smooth and affordable supply of daily items.