Here’s to the inexplicable ones

The misfits; the round pegs in square holes; the ones not fond of rules; the ones who have no respect for common sense. With apologies to Steve Jobs for misquoting (or Rob Siltanen depending on whose story you believe), there is no shortage of strange inexplicable digits in the latest Economic Survey, and ‘about the only thing you can’t do is ignore them’.

The most visible of those was the CPEC outlay mentioned in the chapter on energy. “The CPEC envisages projects in energy and infrastructure, with a total financial outlay of around $46 billion.” That’s according to the Q-Block, which is responsible for the Economic Survey. Yet much before the final draft of the survey, the boss of the neighbouring block had been boasting that CPEC outlay has increased to north of $55 billion, moving on to $62. Who knows what the actual number is?

Then there are items a little less visible. The survey’s chapter on social protection proudly flagged a section on BISP’s role in poverty reduction. “An Impact Evaluation Study conducted by the Oxford Policy Management in 2016 assessed the outcomes of the beneficiaries against key objectives including [poverty reduction], women’s empowerment, improved household and child nutrition.” (Emphasis on poverty reduction).

For those who are following the issue, this contention by the survey that BISP is playing a role in poverty reduction is rather confusing. Because for all these years, whenever critics pointed out BISP’s failure in reducing poverty, its chairperson Marvi Memon defended the programme saying BISP is only for poverty management.

In an interview published on January 16, 2017, Memon categorically said: “both the finance Minster and I have gone on record, as politicians, and have said that BISP is doing poverty management,” and that she did not see BISP in the field of poverty alleviation. Yet, if the latest survey is any guide, the government is spending money to test the impact of an organization against an objective which (according to Memon) is not its purpose of existence in the first place. Does that make any sense at all?

Or take the government’s commitment to education. The survey’s chapter on education maintains that “the government of Pakistan is cognizant to increase the flows of resources to education sector by ensuring proper and timely utilization of funds in order to achieve the target of 4.0 percent of GDP by 2018.”

Four percent of GDP by FY18? That’s a promise left unfulfilled on the very next day of the release of the survey when Finance Minister Ishaq Dar announced his federal budget. The federal budget has allocated 0.36 percent of the GDP to education (current and development) for FY18. That’s a basis point less than the FY16 number.

After incorporating Punjab’s Rs336 billion budgeted education spending for FY18, total education spending in the country would be around 1.29 percent of GDP. Even if the remaining three provinces cumulatively budget Rs600 billion (which is a very tall order) for education for FY18, total education spending by June next year would be confined to 2.9 percent of the GDP. And that’s not four percent of the GDP.

The cost of war:

The anomalies in the cost of war on terror are also inexplicable. The government maintains that it’s winning the war on terror. The same is reflected in the government’s estimates of total losses due to terrorist attacks. Published as an annexure to each year’s economic survey, losses due to terrorist attacks have been decreasing year after year. Yet when you look at item wise summary, losses in tax collection have increased in the last five odds years, whereas losses under all other categories have reduced over time.

How does the government explain this? Well it doesn’t. Nor does it explain how the final estimate of losses in tax collection (due to terrorist attacks) in FY16, FY15 and FY14 have been consistently more than 40 percent higher than its provisional estimate.

These full-year provisional loss estimates on tax collection are based on Jul-March tax collection data. But the 40-percent-plus differential between provisional loss estimates and final revised numbers is surprising, when in fact both the difference between ‘budgeted and actual tax collection’, as well as ‘provisional full-year collection estimates and actual revised numbers’ usually hovers around 10 percent.

There is also no explanation on how terrorist attacks cause so much loss to tax collection but cause almost no loss to exports. Likewise, it’s difficult to understand how losses to privatization stood at $0.24 billion in FY17, when in fact this very government estimated it to be nearly zero since FY14. Isn’t the government’s privatization plan already on a back burner due to its own political and economic management failures? In the absence of detailed explanation, these anomalies lead one to believe that the cost of war estimate is only an exercise in imagination.