ISLAMABAD: Senior economists at a pre-budget seminar held at Institute of Policy Studies (IPS) on Thursday came heavy on what they called “the manipulation of fiscal data” on part of both the government and the International Monetary Fund (IMF), which was destroying the country’s economic statistics.
They demanded of the government that the budget for the coming fiscal year 2016-17 should be based on long-term economic priorities of the nation, with human development and wellbeing as the main focus. Mere balancing of payments was by no means the objective of economic planning and policy making. The budget entails the overall policy direction and should not be taken merely as a sheet-balancing or accounting exercise.
The keynote speaker, Dr Ashfaque Hasan Khan, dean, School of Social Sciences & Humanities, National University of Science & Technology (NUST) and former economic advisor to the federal government alleged that the IMF has turned a blind eye on the economic failures of the present government.
The event was chaired by Fasih Uddin, former chief economist, Planning Commission of Pakistan and was also addressed by Masud Daher, former federal secretary. Both are also members of IPS-National Academic Council.
Heavily criticising the macroeconomic policies of the government, especially its austerity measures and spending priorities, Dr Khan claimed that the country will be faced with a deadly debt trap by 2018-19 as a result of the measures taken by the financial managers of the present regime. “Had the international oil prices not gone down since June 2014, the government would have had added at least $8 billion debt on the country by now,” he added.
Dr Khan was of the view that the actual GDP growth falls hardly in the vicinity of three percent to 3.7 percent contrary to the government’s claims to heading towards a growth rate of around six percent, which according to him were based on distorted facts and manipulated data.
He also projected that actual fiscal deficit would amount to over eight percent of the GDP and the government’s economic managers were tarrying to arrive at facts agreed – after several revisions – with the IMF by playing with the actual economic indicators. “A mammoth amount of Rs178 billion was being accounted for as “statistical discrepancy.”
He also calculated the average growth in large scale manufacturing and agriculture at 3.2 percent and 2.8 percent, respectively, during the past three years of economic management by the present regime. “Agriculture growth will remain stagnant this year,” he forecasted.
Dr Khan said the revenue targets are being met at FBR only by delaying refunds to the industry and exporters. Around two million youth of the prime age of 20-24 years are out of job market. Fifty million bales of cotton were destroyed only last year and loss of one million bales represents the loss of half percent GDP.
Out of Rs700 billion development budget, only Rs466 billion has been spent so far and the provinces are being deprived of their social sector budget by delaying tactics and incentivising non-utilisation of funds.
“When all economic indicators are negative how can there be economic stability as being claimed politically by the government,” and “when both the government and private sectors are not spending, how the economy can grow,” he asked. “Moral authority of the leadership has been dented,” he deplored.
“We have damaged growth because of priorities of expenditure were wrong, he lamented. “These are anti-growth, anti-job creation and anti-people policies.”