Fake growth during Musharraf!

There was no real growth during Musharraf. His economic policies did not result in any significant revival of Pakistan's economy. Here are some excerpts from Pakistani authors-

1. The economic Survey of 2007 showed the growth about 7% during 2000-2007. However many economists doubt the authencity of figures. We should also rememeber that it was a military government and was easy to hide the real figures or scrutinise by independent agencies.

2.Herald magazine (December 2008 issue) reports that Karamat Ali, executive director of the Pakistan Institute of Labour Education and Research, ‘believes that the official growth figures were often met with skepticism.’ With regards to the poverty level figures, Karamat Ali states, ‘In 2007, the Planning Commission’schief economist was transferred when he refused to approve government’s claim that poverty level had been reduced by 10 percent from 33 to 23 percent. These figures were clear manipulation as according to the latest UN assessments, poverty has intensified to the extent that in over half the country,hunger stalks one-fifth of the population and malnutrition about two-fifths. In Dawn(July 2009) this month, Kaiser Bengali, reported, ‘The years 2000-2007 … composition of growth brought little solace to half the population and, in fact, misery for the bottom quarter.’

3.Development and growth in an economy results in falling unemployment level. However, in Pakistan, this was not the case.Unemployment levels actually rose in some sectors. In the industrial sector, for example, unfavorable economic policies led to the closure of mills and subsequently high unemployment. Furthermore, reported Kaiser Bengali, “in the period when the agriculture sector grew by 1.5 percent and the banking sector grew by 30 percent ….. this was jobless growth. It was profit-centered and not wage-centered. It ensured that stock market indexes and corporate profits boomed but was meaningless for the people, who are now faced with the stark reality of unemployment and declining real wages.

4.It was profit-centered and not wage-centered. It ensured that stock market indexes and corporate profits boomed but was meaningless for the people, who are now faced with the stark reality of unemployment and declining real wages. Of course, official labor force statistics have reported a decline in unemployment. That, however, is a product of blatant data manipulation that the previous regime had come to specialize in.”

With an expanding economy and money flowing in, following sensible economic policies result in building up reserves and decreasing a country’s debt level. In Pakistan,debt levels rose dramatically between 1999 and 2008. If you sift through history, debt levels between 1947 and 1999 was Rs 2,946 billion. Conversely, if you look at the trend in the past ten years, the government borrowed so heavily that our debt level increased by Rs 2,749 billion to Rs 5,695 billion. Ultimately, it took the previous government eight years to bring up the debt to what was accumulated in over 50 years. Ishaq Dar (the first Finance Minister under the current regime) said in Nation that “those who claim to have broken the begging bowl have actually enlarged it…” High level of debt is not conducive for sustainable development as debt is a burden and has to be paid off. It suggests that Pakistan was living way beyond its means and needs to either expand its economy (which it was unable to do) or contract in future to bridge the gap (which is currently happening).

5.General Musharraf's regime has broken all records in borrowing and has pushed the country into a debt trap. Recent State Bank reports showed the government had borrowed a staggering amount of over 15 billion dollars in the past four years, as the country's total debt and liabilities had peaked to an all time high of 40.322 billion dollars. Such debt, apart from additional borrowing, is also composed of rescheduled debt as the Musharraf government continued borrowing to fund the basic government duties due to its inability to generate sufficient wealth from the domestic economy. Such amounts of debt have never existed in the history of Pakistan. By the end of 2004, the total external debt was 33 billion dollars. If the government had stopped borrowing as it claimed, the country's total debt would have declined to 23 billion dollars, based upon Pakistan's regular yearly payments by the end of June 2007.

More of it in the next article. But it should be clear, that there was never a real growth, as aclaimed by mnay. It was ll rich-consumer driven, whic did not increase any employment or built any industries in Pakistan. Taht is why, as soon a democratic and free government came, evryhting collapsed like a House of cards.

Pakistan asks India for Railway engines

The government of Pakistan has requested India, to provide about 50 railway engines on lease. With no domestic production facility in the country, Pakistan is in a serious shortfall of 250-300 engines. Pakistan has mostly imported its engines from china, which have largely proved full-inefficient and costly. This has also resulted in huge decline in the railway fortunes of Pakistan.

India is increasing its railway connectivity, and has decided to start 48 new trains this fiscal year. India will also build 1100 km of new railway lines. While the only problem is financial crunch, which will be easily solved next year, by increase of passenger fares by 10-15%.

On the other hand Pakistan railways will close 102 railway lines this year because of lack of locomotives and increasing losses. So only 157 train services will cover a population of 180 million.

http://nation.com.pk/pakistan-news-newspaper-daily-english-online/Politics/12-Oct-2011/Railways-reaches-a-deadend

http://www.dailytimes.com.pk/default.asp?page=2011%5C10%5C12%5Cstory_12-10-2011_pg12_10

The illusion of Musharraf's economic growth!

Its all been agreed, that Musharraf era had created a illusion of economic growth. There was no economic growth in real sense. Only consumer driven growth which had increased due to high influx of aid during the period. There was no infrastructure development, no electricity production and no development of industries. The Pakistani government had no real vision to steer the economic growth.

This fact hardly recognised by the Pakistani think-tanks, has now been able to gain momentum. Musharraf's era did not increase tax collections. The Tax-GDP ratio has gone too low.

Hereis an article from pakistani Financial ....

"Probably the greatest wrong that the Musharraf government gave to Pakistan was the perpetual lies that his PM and his economic team foisted on to the country. Old habits die hard and the continuation of those lies is now a way of life with the public functionaries. The other day, it was mentioned that functionaries belonging to a real estate company were caught with fictitious land documents.

The owner is way up with every political party that is in power. The expense that comes with it is so huge that the country will reel under it. It happened in the US and in the EU zone countries. Once that bubble bursts, the end will be significantly different. Pakistan is already reeling under huge deficits not of finance but of every damn thing under the sun. The distribution network has been undone by the price increase and there is now no way that the country can undo what has happened as a result of the inconsequential postings that have been given.

Pakistan's competitive edge has been eroded by the inefficiencies that have been perpetuated by an inefficient human resource and a corrupt leadership-style in which a corrupt distributed leadership plays a humongous part. The distributed leadership is part of the new management style where the lower functionaries are allowed to work independently, but within a certain sphere of work rules and regulations. These rules and regulations are kept up-to-date by the political leadership. Where the political leadership is found inept and wanting in discretion and the rule of law, these and other national matters and issues cannot be resolved."