World Bank Report paints gloomy economic condition of Pakistan
September 30, 2011
In its latest report on Pakistan’s economy, The World Bank has painted a dismal report in which it has reported a noticeable decline in per captia income (PCI), and increase in unemployment by volumes. Expressing its deep apprehensions over Pakistan’s economic progress, it has said that progress had slowed considerably, and Pakistan was lagging well behind even such SAARC counterparts as Bangladesh, Nepal, Sri-Lanka and India. The report cites political tensions, confrontations and natural calamities, chiefly floods, as the main reasons for this sad state of affairs. Unemployment stands at a whooping 13%, while more than 18% of masses were spending lives below the line of poverty. There is no increase in employment opportunities, against the required 3 million employment opportunities. The 1990 growth of GDP has been reported to be 5%, which has since fallen down to a lowly 2.5%, while the report also criticizes subsidy over electricity, which has swelled to as high as an astronomical above 17% during a short span of time. The World Bank report also declares the statistics for next fiscal year’s budget (FY2011-2012) as unrealistic, accusing government of trying to balance the budget through interest-based loans, which abetted inflation.
World Bank has declared the oncoming few years as quite rough and tough for Pakistan’s economy, as a continuous growth and strong economic stability were essential norms for development. While it has strongly castigated the doomed efforts of trying to sustain economy and inflation by massive printing of currency notes. All the success that had been achieved during previous eight years is slowly turning into a massive waste. Reconstruction and rehabilitation of flood affectees would encompass decades of efforts, while the Country has already being burdened by massive pressure due to paucity of financial resources required to tackle the situation. The report also highlights the issues of war against terrorism and sectarianism, which have created a most uncertain situation of law and order in Country, and the World Bank has been known to have stressed Pakistan to take over the occurring challenges immediately with zeal. These include, rectifying the deteriorating reserves of revenue, unnecessary and uncalled spread and flux of a massive lavish official expenditure, worst ever governance record, unproductive growth structure of economy, severe retardation in social growth, raging chaos, uncertainty, surging population explosion etc.
World Bank has also termed Pakistan as surging quiet ahead with inflation in the entire region; at well over 14%, while increase in prices of commodities is a whooping 20% and above, also termed as the highest in region. Poverty has increased by 2.5% in urban areas, while rural areas are experiencing a 1.5% increase in the morbidity. In his recent statement the president of World Bank made quiet realistic statements that loans were knocking at the gates of crisis, even in developed countries, while the situation for under-developed countries was obviously way above dangerous. The signs of these oncoming, surfacing dangers are becoming quiet evident in sectors of stock market shares and bonds, and many countries, standing on the very brink of progressive developing are experiencing severe paucity of any viable options to deal with any emergency.
This report of World should suffice for opening the slumber, our inept, corrupt and inexperienced government seems to be enjoying, and despite all the tall vociferous claims of ‘revolutionary measures’ and their explosive results, our badly mauled economy has its own battered story to tell. In its annual report the Asian development Bank (ADB) has informed that during past five years, Pakistan’s foreign based loans have registered an increase of U$. 20 billion, burdening its financial reserves. Unemployment abounds, and Pakistan faced difficulties in attaining desired targets, in alleviating poverty, access of primary students to school admissions, and achievement of developmental goals.
ADB report indicates a massive overload of foreign loans worth U$.53.71 billion, as compared to U$.33.5 billion in 2005, as the 27.8%ratio climbs to increase during past four years to 31.3% as of current. Reports also indicates a massive build-up of interests rate on loans, in tandem with principal amount; from a previous five year amount of U$.2.42 billion/annum to its current of U$. 3.43 billion /annum. Report also indicates that Pakistan had targeted tax revenue returns worth 26% for 2011. However waivers due to floods limited this target to 10.9%, which also affected GDP.
A critical review of reports of World Bank and ADB reveal that incumbents simply lack any economic expertise, and/or any will to perform better and prudently, in order to route the Country on its way to economic progress. While inaugurating State Bank of Pakistan 63 years ago, the founder of Pakistan, Quaid-e-Azam Muhammad Ali Jinnah had proclaimed that State Bank was a symbol of Pakistan’s sovereign standing in financial aspects; while after a few months he also proclaimed that Muslims had lost their glorious rule in Sub-Continent due to the fact that they had become addicted to such morbidities like, spending more than their resources, and had fallen into the dangerous and poisonous addiction of loans. It is unfortunately and amazingly coming alive as of current times, when rulers, although elected, were more addicted to these morbidities than the monarchs themselves.
Between 01 July 2001 and June 2011, Pakistan has faced a budget deficit of an enormous Rs.5143 billion; meaning it spent this massive amount on official expenses; while during this similar period, internal loans of Country also increased by Rs.4430 billion. Pakistan’s budgetary deficit has its roots in tax evasions and massive daylight corruption. As neither Parliament is publicly inclined to legislate taxes for influential rich elements, nor is government ready to implement a transparent and effective taxation system.
The government should try to recollect that it had little or no time left to straighten out things as Country was constantly lagging, and while no lessons seems to have been learnt from any of past debacles, it should also be recollected that rulers were answerable to masses for their deeds. The government should also realize that these current reports of World Bank and ADB were strong jolts, akin to those of Wikileaks and could force masses to agitate on the basis of these , well ahead of any other anticipation.