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Business Recorder

Published Date: Dec 17, 2015

The govt’s claims of saving Rs560bn

Federal ministers of the government usually make tall claims about the achievements of their governments in order to give a better impression of their performance. Speaking at the 18th Sustainable Development Conference organised by Sustainable Development Policy Institute (SDPI) in Islamabad on 8th December 2015, Federal Minister for Planning and Development, Ahsan Iqbal, asserted that the government during the past two and half years had saved Rs 560 billion by ensuring transparency in the execution of public sector projects. Further, economic indicators and security situation in the country had improved due to effective policies of the government. Government had also given Vision 2025 for sustainable development and under this long-term development plan efforts were being made to put the country in the list of 25 top performing countries over the next 10 years. Besides, the government was working in close collaboration with the provincial governments in line with Sustainable Development Goals (SDGs). A collective Vision for South Asia should also be launched to fight the common enemy in the form of poverty, illiteracy, unemployment and terrorism. This can only be achieved through regional cooperation and integration. The China-Pakistan Economic Corridor (CPEC), a manifestation of regional cooperation, would bear fruits for all the partner neighbouring countries. Speaking on the same day at the inaugural session of a consultative workshop on mid-term performance and future planning, Ahsan Iqbal reiterated again that the government had saved Rs 567 billion through scrutiny and rationalization of various ministries and divisions. However, he admitted failure to address structural challenges of the economy during the last two and half years as entire focus had remained on stabilisation. 
Although the competence of Federal Minister for Planning and Development is beyond doubt yet what he has said at both the above occasions is rather vague and difficult to digest. He has said that economic indicators have improved during the tenure of the PML (N) government but the reality is that the improvement is confined to only few indicators like the level of foreign exchange reserves, the deceleration in the inflation rate and some semblance of stabilisation of the economy. Structural problems and other weaknesses of the economy have still to be addressed. So far as Vision for South Asia is concerned, it may be a good idea but it is a collective effort and no country in the South Asian region is contemplating about it, at least as yet. How the government Vision 2025 is likely to unfold and bear fruit could only be judged after 10 years. The most controversial observation could be the saving of Rs 560 billion by ensuring transparency in the public projects. Ahsan Iqbal should know that this is a lot of money and there is no precise measure to properly estimate the saving through transparency in projects. In fact, most of the analysts accuse the present government of overspending on certain projects like the Nandipur power project and transport projects in urban areas. 
While Ahsan Iqbal may have been swayed by political considerations in his observations, Chief Economist of the Planning Commission, Nadeem Javed, seems to be more upright and objective in his presentation. In his speech at the workshop on the same day, he remarked that low growth, a decline in exports, low saving and investment as well as foreign direct investment and declining credit to the private sector were some of the major issues confronting the economy. There was a gap of 2 to 3 percent in revenue mobilisation in the first quarter of FY16. Country’s exports had been falling due to multiple factors such as energy crisis, overvaluation of exchange rate of around 7 percent and low commodity prices. Handsome taxation and regulatory duty as well as liquidity crunch was reducing private sector credit growth. Current growth rate was inadequate to provide employment opportunities to the youth and the government faced a massive challenge of raising GDP growth rate to 7-7.5 percent to generate enough employment opportunities. There was also a challenge for the government on how to start economic activity in the manufacturing sector. Strangely enough, all these observations are against the usual tendency of the public servants and coming from a person who is part and parcel of the government machinery. We appreciate his outspokenness and wish other officials to follow his example. After all, recognition of weaknesses is the first step towards their resolution.