Pakistan’s Fiscal year 2008-09: A year of broken promises, missed targets

By Tanveer Ahmed

KARACHI: The missing of export target proved to be the last nail in the economic coffin of the present government, which has already missed almost all vital economic targets. Every important target from GDP to inflation and large scale manufacturing to overall industrial production has been missed.

Pakistan missed the export target – both budgetary and revised – in financial year 2009-09 which is another addition to a along list of failures of the current economic team.

The trade data released for the overall fiscal 2008-09 on Monday showed that country exported $17.781 billion worth of goods, falling short of budgetary export target of $22 billion and revised target figure of $19.1 billion.

Pakistan’s GDP grew little above two percent in the previous year, far below the budgetary target of 5.5 percent and even lower against revised target of 2.5 percent agreed with IMF when country was forced to resort to Standby Financing Arrangement to stave off a balance-of-payment crisis in 2nd quarter of previous fiscal.

Inflation, targeted at 12 percent for the whole year finally settled at average 20 percent in 2008-09 with strong signs of spiking again with the rise of petroleum prices by a presidential ordinance—a sign of state intervention in the economy by a regime which is in favour of ‘free market’ when it wants to sell the family silver for a one-time gain.

The promises of providing Roti, Kapra and Makan seem to a relic of a bygone era as the unemployment rate stands at 6.5 percent. It is pertinent to mention here that this unemployment rate is at least two years old and the government is reluctant to carry another survey for this crucial social indicator. However, with the manufacturing and industrial output experiencing the worst-ever performance, one need not be a rocket scientist to conclude that joblessness must have increased in the country.

Industrial sector posted a negative growth of 3.6 percent against the growth target of 6 percent fixed for fiscal year 2008-09. Mining and quarrying posted a growth of 1.3 percent against the target of 5 percent

Similarly, manufacturing and services sector also missed targets by a wide margin, depicting the poor state of economy in the present days.

Agriculture was the only exception in this string of bad events on the economic horizon. It posted handsome growth and was even above the budgetary target – thanks to favourable weather conditions that are definitely the work of nature rather than the result of a policy. One can only imagine what would have happened if weather were also given under the control of ‘economic wizards’ of the present government.

As far as the missing of export target is concerned, a host o factors are responsible for such a terrible performance of the export-oriented sector of the country as last financial year was marred by multiple problems both on the domestic and the international front.

The global financial crunch sweeping the developed world had an adverse impact for the developing economies like Pakistan that largely rely on developed world for economic growth in the shape of exports.

Pakistan too suffered from the lesser consumer demand in the western world, however the problems inflicted heavy losses to export sector were related to domestic structural issues like high cost of doing business because of high interest rate, prolonged power outage, increasing tariff of utilities and above all the precarious security situation.

Talks of high potential in export is often repeated and every year from top to bottom of government hierarchy. But every body is keeping a mum on how it would be realised.

http://www.dailytimes.com.pk/default.asp?page=2009\07\14\story_14-7-2009_pg5_2

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