Reading the Economic Survey

Not that anyone reads it, and of this I am almost certain.
The maximum reading of the Economic Survey is most likely limited to the "Overview of the Economy," and that too by journalists for their breaking news; and such reading is in any case limited to a few variables like GDP and inflation, most of which nobody understands anyways, beyond creating the hype.
So this is an attempt to read the fine print in the Economic Survey.
In the foreword to the Economic Survey, the Finance Minister asserts that the instability of the economy is directly related to structural weaknesses which have not been addressed for decades.
Seriously!
We have been taking on millions, if not billions, of dollar debt for decades from all sorts of multilateral agencies, including IMF and the World Bank, under technical assistance programs to carry out all kinds of structural reforms, economic, judicial, police and whatnot, and we are still not reformed?
Either we are too stubborn to be reformed, or we don't want to be reformed.
Irrespective, the conclusion is that all the reformists failed; if we do need an analysis, even more than where we spent all the money that we borrowed, it should be focused on the gains from all the technical assistance money that was spent on consultants who were to reform us; they surely did not do their jobs very well?
The Finance Minister also asserted later in the foreword, probably rightly, that our economy was a mess because the entire world was now moving towards protectionism.
That being the case, is it not strange that we want to go against the global tide and privatise our State Owned Enterprises and want Foreign Direct Investment?
Moving on, to the discussion in the Economic Survey on everybody's favourite, GDP, what everyone misses is that private consumption has remained around and above 80% for the last 6 years, with total consumption hovering over 90% during the same period; capital investment went down to 13.9% with ever increasing negative net trade.
These numbers clearly evidence that as a nation our problem is that we are consuming beyond our means, but we still remain obsessed with growing - refer last week's article.
More confusing is the statement in the Economic Survey that the Pakistan Bureau of Statistics believes that the expenditure approach to measure GDP is rudimental, and that the biggest "summand", private consumption, is calculated as residual.
If the biggest component, 82%, is a residual, notwithstanding the confusion that what is it a residual off, and the approach is rudimental, than how are we sure of the whole?
Perhaps the residual is calculated via the sector growth analysis, which has its own complications, the biggest being collection of relevant data by a bureaucracy which has yet to embrace technology.
But even ignoring the accuracy of the data, the Economic Survey has some frightening information.
Actual surface water availability decreased by 18.5%; with that kind of water shortage, how were we expecting agriculture to grow?
Noise that you hear on the grapevine - average water loss is over 60% in the case of unlined water courses, canals I assume; Pakistan could "run dry" by 2025, and we are more worried about our GDP ranking; Pakistan is on its way to becoming the most water-stressed country in the region by the year 2040; Pakistan has the world's fourth-highest rate of water use; Baluchistan, parts of Sindh, including Hyderabad and Karachi, are already facing acute water shortage.
Not a drop to drink; and we are building metros and motorways!
According to experts, we are where we are with water availability because of poor water management and lack of political will to deal with the crisis. (Some of the water-related comments above are extracted from DW website).
For a country that relies on agriculture for almost all of its employment, food sustainability meaning security, and the majority of its exports, an absolute reliance on glaciers and rains for water is remarkable!
Look at the numbers - cotton production is down from 13.9 million bales in 2014; 15 to 9.8 million bales in 2018-19; rice and sugarcane production is around the same in 2104-15 and 2018-19, but that is anything but good, since both guzzle water; wheat production has gone down marginally in this period, but the problem is that the Government purchases wheat at more than international prices and then lets it rot due to inadequate storage facilities.
And we are more worried about the PIA's performance!
Due to lack of space, the significant fall in sale of tractors in 2018-19 because of the non-filer restriction and the need to subsidise fertilizer are ignored; except amazing!
According to the Economic Survey, livestock contributes 60.5% to the overall agriculture and 11.2% to GDP.
And how is livestock calculated?
Livestock population - Estimated figure based on inter census growth rate of Livestock Census 1996 & 2006.
Milk and meat production - By applying milk production parameters to the projected population of respective years based on inter census growth rate of Livestock Census 1996& 2006.
Domestic rural and commercial poultry - Statistically calculated using the figures of 2005-6; the figures of eggs are calculated using the poultry parameters for egg production.
If I understand all of the above correctly, arguably the single biggest component of our GDP is based on a census carried out in 2006.
And we already know how good we are at carrying out a census.
We got our own population wrong, which means that for the past many years many more Pakistanis were there eating eggs and meat than we figured; we are also exporting meat and poultry, which we were not before; we have a serious water crisis, which has impacted our agriculture production significantly, and which suggests less fodder for livestock, and animals consume more water than plants.
And still our livestock grew by 4%.
I am not sure whether the Economic Survey makes for amusing or worrying reading, and perhaps I will continue with this attempt to highlight the fine print in the Economic Survey in a later article; but then again, maybe not.
The point, irrespective, is that we seriously need to prioritise our challenges, and for my money, notwithstanding that we have not even completed the chapter on Agriculture in this article, there are some challenges of existential nature that we seem to be ignoring.
I suggest that those in the driving seat diligently start reading the Economic Survey.
(The writer is a chartered accountant based in Islamabad. Email: [email protected])