"Following my article that appeared in these columns last week, several readers have asked me to elaborate on how GoP (and its mouthpiece, the Pakistan Economic Survey 2003-04) juggles numbers to fit it's theory of tremendous economic growth during the past four years of current Economic Management Team's stewardship. Let us look at some relevant data before and after GoP's decision to re-base statistics from 1980-81 to 1999-00."
UNADJUSTED PER CAPITA INCOME: "Considering the fanfare regarding economic growth, it comes as quite a surprise to note that unadjusted per capita income has grown by a meagre USD 74 during the past four years. Adjusted for USD inflation, we have actually seen an anaemic 1.4% annual growth in per capita income. At this rate, it will take us over 50 years to reach USD 1,000.quite a wait don't you think?"
REBASED PER CAPITA INCOME: "By rebasing financial reporting to 1999-00 as against the historical base of 1980-81.a right step in its logic hasn't made much difference to the story of growth. By this reckoning, unadjusted income rose by USD 97 at an annual growth rate of a shade over 4 percent. However, when adjusted for dollar inflation, it amounts to an annual compound growth rate (CAGR) of only 1.7 percent. That will mean our per capita USD income could now double in 41 years approximately two generations!"
POPULATION TRICKS: "To add a little zip to its data, PES 2003-04 would have us believe that Pakistan's population declined in 1995-96.cute don't you think? This enables GoP to claim that the country's total population as of 30 June 2004 will be 148.7 million whereas it was already over 149 million last year and was expected to be nearly 152 million based on the deflated 1.9% annual rate of growth for 2003-04. In fact, independent ERSA.stats show Pakistan's 2004 population at 153 million. Using this realistic figure, and taking 1999-00 as base year, true data would be as follows:"
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Per Capita GDP.USD 1995-96 1999-00 2003-04
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Historical.Unadjusted 513 447 521
Rebased & in 1999-00 dollars 669 534 564
Per annum increase (decrease)
PML(N) Government (5.8)
Musharraf / Jamali Government 1.3
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CONCLUSION: "Our per capita income in USD of 1999-00, adjusted for USD inflation of 2.5% p.a. for 2000-04 and 2.2% p.a. for 1996-00 (ERSA.stats. Data), is actually lower today than it was a dozen years ago. Given all the favourable circumstances like USD 12-13 billion additional remittances inflow post-nine-eleven events, the windfall from rescheduled foreign debt, and debt write-offs and freebies from USA for being allies in its anti-terror campaign, the most that the present dispensation can claim is that it has arrested per capita income decline. but, surely, the average Joe was over 100 dollars better off in 1995-96 than he is today!"
Let's see how GoP's spin-doctors answer this one!
(email: [email protected])
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PES 2002-03 PES 2003-04
1980-81 Basis 1999-00 Basis
FY ending 30 June 1999-00 2003-04 4 years CAGR note 1999-00 2003-04 4 years CAGR note
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Population (million) 136 151.9 2.8 1 135.9 148.7 2.3 3
PKR / USD parity 51.8 57.8 2.8 51.8 57.8 2.8
USD inflation 2000-04 2.5 2.5
USD inflation 1996-00 2.2 2.2
GDP
GDP (mp) PKR billion 3,147 4,567 9.8 2 3,793 5,458 9.5
GDP (mp) USD billion 60.8 79.1 6.8 73.3 94.5 6.6
Per Capita GDP (PKR) 23,141 30,076 6.8 27,913 36,700 7.1
Per Capita GDP (USD) 447 521 3.9 539 636 4.2
In 1999-00 dollars 447 472 1.4 539 576 1.7
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1. "Population for 2002-03 is given as 149.03 million. With GoP claimed growth of only 1.9% for this year, it should be 151.86 million come 30th June 2004."
2. The GDP (mp) for 2003-04 is derived by taking PES 2003-04 GDP and deflating it by GoP's claimed 19.5% rebasing impact.
3. "To reflect a healthy per capital growth, GoP has resorted to outright skull-duggery. By showing that population actually declined during '95-96, the authors of PES 2003-04 were able to deflate the current year's population by over 3 million."
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