Missed targets linked with poor planning

LAHORE: The reason that governments fail to achieve the annual budgetary targets is that no strategy is in place and the core team of strategists do not meet and plan on a frequent basis, experts said on Wednesday.
They said the annual planning process is the primary trigger for decision making and prudent planners meet at least fortnightly to adjust strategy to any change in global or domestic scenario so that goals set at the start of year are achieved.
Economist Asif Ali Shahid said the conditions change during a year, which may have positive or negative impact on the plans announced at the time of presentation of budget.
Though, the change in petroleum products and commodity rates took all economic planners by surprise, yet this had positive impact on all oil importing countries. Another change that occurred this year was the rapid decline in the value of Euro that adversely impacted the exports of many developing economies including India and Pakistan to Euro zone.
He said oil prices started to decline in the last quarter of 2014, while Euro gradually weakened against the dollar over a 12 months period due to threats of defaults from few of its members.
All regional economies waited for a while to adjust the petroleum product rates absorbing the higher profits to strengthen government finances. However, Pakistani government passed on most of the benefit of lower oil rates to the consumers that kept its finances weak. He said Indians, Chinese and even Turkey adjusted their currencies to a lower rate against the Euro to offshoot the decline in its value. Pakistan, on the other side, defended its rupee and has suffered more in the form of sharp decline in its exports.
Further, Earth quake, floods, draughts and other natural disasters force countries to divert resources for rehabilitation that disturb the economic targets, Shahid said.
Market analyst Amina Usman said the export target will be missed by at least $1 billion and imports will be higher than the target given in the budget.
She said textile exports suffered the most despite the fact that Pakistan enjoyed zero rate market access in Euro area.
The planners should find out what did India do that shielded them to some extent from export decline, she said, adding that GDP growth in Pakistan remained stagnant at 4.20 percent although the federal Finance Minister still sees some positivity by stating that it will in fact be 4.24 percent an increase of 0.04 percent - forgetting that the GDP growth target for the year was five percent which is missed by 0.76 percent.
She said Indian economy also faced similar hurdles but is destined to grow this year by 6.4 percent the highest in the developing world.
Amina said the only thing that the Indians are good at is that the economic planners are vigilant, the prime minister meets industrialists at least once a month and he goes to other countries not for pleasure but to market India.
He has the guts to openly support businessmen, she said, adding that businessmen in India command respect and tax evaders are prosecuted.
India government did not defend its rupee that is at its 30 months lowest rate, she said. In Pakistan, however, Ishaq Dar rubbished the federal commerce minister at recent cabinet meeting when he said high rupee value is one of the main hindrances in exports.
There is a consensus that refunds of the exporters held by FBR are also a major drawback impeding growth in exports. Despite this realization the issue remains unresolved.