Pak Economy

Sultan M Hali

Pakistan is still reeling under the impact of the recent spates of devastating floods, which have wreaked havoc across the country. More than 20 million people having been affected, the death toll has risen over 1600 and an outbreak of epidemic, which may cause more than 3.5 million children’s lives at risk, is causing nightmares to the people. With communication infrastructure having been devastated and schools, colleges, homes, factories and workplaces having been washed away by the deluge, it will take years and billions of dollars to rebuild the lives of people. On top of it, the tottering economy, little or no help from foreign donors and the unabated threat from terror attacks, it will be difficult for Pakistan to meet the challenges alone. Along with the sense of impending doom, there is the realization that we have been let down by successive governments, who failed in the task of water management, falling prey to political whims and deferring the decision to build more dams. The notion that flood water caused so much devastation and the surplus water in a country, which till recently was crying for more water, will see the waters rush to the seas wasted and unutilized for energy irrigation. Rivers and creeks overflowed inundating the entire areas in Khyber-Pakhtunkhwa (KP), swamping villages and towns in Punjab, Sindh and Baluchistan and creating real emergency for the people of Pakistan who were least prepared to deal with such an extraordinary challenge. Incessant rains not only brought fresh waves of gushing water but also caused landslides killing many people in Northern Pakistan with districts of Skardu and Hangu most affected. The awesome deluges razed buildings of thickly populated areas leaving thousands marooned and homeless. The communication infrastructure being the worst hit impeded the relief operation. International friends and donors including UN Secretary General made emotional statements but their response remained sluggish and paltry. The people of Pakistan are optimistic that relief effort will gear up soon and their needs will be met. Read More »More dams could have reduced devastation in Pakistan

By Mehtab Haider

ISLAMABAD: A World Bank survey has revealed that poverty in Pakistan was reduced by 50 percent on consumption-led growth of the economy under the rule of the former president, Pervez Musharraf.

“The percentage of the people living below the poverty line in Pakistan fell from 34.5 percent in 2001/02 to 17.2 percent in 2007/08,” World Bank said in its Country Partnership Strategy (CPS) paper, based on a survey conducted in fiscal year 2007/08. The bank is going to provide $6 billion to Pakistan on the basis of CPS findings.

According to Planning Commission officials, the PPP-led government asked the commission to conceal the results of the survey because the poverty started rising after the Musharraf’s regime.Read More »Poverty reduced to half in Musharraf rule: WB report

By Ismat Sabir

President Asif Ali Zardari said that the key to Pakistan’s economic development is trade not aid. However, the president terms the assistance not as aid but as payment for damages that the country has suffered due to its role in fighting the war on terror. It was also renamed by President Obama’s administration as ‘Overseas Contingency Operation’.

It has been proved that aid alone has not been able to cure sick economies of the developing countries and they are under the aid trap, which is steadily increasing day by day. Their dependence on foreign assistance to meet the budget deficit is rising, which is one of the aid conditionality and also forces them to hire foreign experts; and at the same time aid also accounts for a major expenditure item in the budget as the allocations for interest payments and principal as and when it becomes due. Pakistan pays under the head of debt and debt servicing, inclusive of domestic debt, to about 30 percent of the budget expenditure. Read More »Pakistan sinking in debt

* Receives $3.647 billion from donors in same period

By Ijaz Kakakhel

ISLAMABAD: The government reportedly paid $3.136 billion as debt servicing from July 2009 to June 2010, sources told Daily Times on Wednesday.

Out of the total payment, an amount of $2.380 billion was paid as principal amount and $756 million as interest on foreign loan. In June 2010 alone, the government paid $196.605 million as debt servicing i.e. $140.190 million as principal amount and $56.415 million as interest on foreign loan, the sources maintained.
Read More »Pakistan Financial Year 2009-10: Government pays $3.136 billion in debt servicing

Khalid Mustafa

Pakistan’s public debt has alarmingly swelled to whopping figure of Rs9 trillion meaning thereby that every person and even a child who is yet to be born will come to this world with a gift from the incumbent regime of debt of Rs54,000.

The incumbent regime has virtually failed to improve its economic landscape as it could neither succeed in enhancing the tax base for revenue nor curtail its expenditure owing to which budget deficit is not being controlled.

The domestic debt stood at Rs3275 billion till June 2008 that swelled by Rs586 billion to Rs38,616 billion by June 2009. Now the domestic loan has increased by Rs792 billion to Rs4653 billion from June 2009 up to June 2010. In last two years, the debt increased by Rs1378 billion pulling up the public debt to over Rs9.2 trillion. Pakistan’s debt to GDP ratio has increased to 61 percent from 55 percent.

Apart from the huge debt, in the outgoing fiscal, the budget deficit stayed at 6.2 percent against the revised target of 5.2 percent which was originally at 4.9 percent.

So much so the government has failed to implement VAT from July 1, 2010 and it also seems that the government will not be able to implement the reformed GST from October 1, 2010 if the rifts between the centre and provinces on GST collection on services are kept in view.

The incumbent regime also ostensibly lacks the will even to withdraw the exemptions from 5 powerful sectors of economy.
Read More »Is IMF catching Pakistan in a debt trap?

By Javed Mirza

KARACHI: Consumer Price Index (CPI) rose by 11.73 percent in 2009/10, surpassing the government’s target of 10 percent, mainly because of unprecedented increase in the electricity tariff.

It was, however, below the central bank’s projection of 12 percent. In the last financial year, CPI had gone up by 21 percent.

“CPI could have been contained to a single digit figure if the electricity charges had not been raised during the year,” said an analyst.

The government had to raise electricity prices because of a commitment with the International Monetary Fund (IMF).

Food inflation came down to 14.48 percent from over 30 percent in the previous fiscal. Read More »Pak Economy: Inflation surpasses government’s target

ISLAMABAD: The International Monitory Fund (IMF) projected that Pakistani economy will grow by 4 percent during the current fiscal year, which will expand to 6 percent within the next five years.

The Fund released “World Economic Outlook” report on Thursday in Washington. The report said the growth of Pakistani economy (GDP) was 3 percent during the last fiscal year, which will grow to 6 percent in fiscal year 2015.Read More »Pak economy to grow by 4pc in current year: IMF

Mehmood-Ul-Hassan Khan Finance Minister Dr Abdul Hafeez Shaikh presented the federal budget for 2010-2011. As usual, the government termed it business and investment friendly. The government also projected it as people friendly and growth oriented… Read More »Federal Budget 2010-11: Conflicting Realities

* Upper House unanimously passes recommendations of Standing Committee on Finance
* Committee proposes withdrawal of one percent increase in GST
* Senators recommend 60% raise in salaries of grades 1 to 16 govt employees

By Zeeshan Javaid

The Upper House of the Parliament on Wednesday unanimously approved 74 budgetary recommendations and forwarded them to the National Assembly for their incorporation in the Finance Bill 2010-11.Read More »Pakistan Budget 2010-2011: Senate recommends 74 changes