In an exclusive interview to the Business Recorder, the Economic Advisor to the Ministry of Finance, Ashfaque Hassan Khan, highlighted the economic achievements of the present government: from restoring the country's economic sovereignty to improving the macro economic environment, to bringing the debt burden under some control during a short span of time.
The Opposition is likely to dismiss such claims as an integral component of Dr Khan's terms of reference - to focus on the economic achievements of the government and to ignore or, at best, underplay the negative forces plaguing the economy.
This is not unique to the present regime and many an opposition in the past has levelled similar charges against the government and senior members of the bureaucracy of the day. In this context, it is pertinent to examine such claims closely to assess whether the economy is performing as well as is being projected by the Economic Advisor.
The list of positives noted by Dr Khan was exhaustive and mirrored what has been claimed by the PML politicians, including Prime Minister Shaukat Aziz and his Special Advisor on Finance, Dr Salman Shah: a growth rate of 8.3 percent, a manufacturing growth rate of 15.6 percent, increase in agricultural growth of 7.5 percent and in the services sector by 7.5 percent.
Alternate macro economic statistics are not available, and hence these cannot be realistically challenged. However, equally obvious is the fact that these are last year's statistics, given that the current year's macro economic statistics have yet to be calculated. And it is precisely this fact that has allowed Dr Khan to present a rosy picture as far as macro economic performance is concerned.
The recent international oil price hike, first due to the continuing insurgency in Iraq and more recently due to Hurricane Katrina in the US Gulf coast, has seriously affected the oil stockpiles around the world with prices having risen to an unprecedented high.
This is likely to lead to a slowing down of growth rates all over the world, including Pakistan. Additionally, if floods due to heavy rainfall earlier this year are taken into account, the growth rate of agricultural output is likely to be affected. This, in turn, will have repercussions on our manufacturing sector as it relies heavily on farm products for inputs.
The resulting impact on growth would be a matter of time. Dr Khan thus did not focus on the repercussions of the oil price rise on our macro economy, though he felt it prudent to blame rising inflation on the rise in oil prices.
Economic sovereignty, he argued, had been restored our total forex liability was 347 percent of our annual forex earnings in 1998-99. Now they are only 137 percent. What he failed to quantify was how much of this was due to relief given in terms of reprofiling of our forex debt and conversion of loans into grants due to our post 9/11 stance.
The social and living standards survey, he argued, has shown an improvement and insisted that schemes like the Khushhal Pakistan, Tameer-i-Watan and One Village One Product would address poverty and unemployment.
Critics, of course, allege that these programmes are no different from similar programmes of the past, for example, the People's Programme as well as the five-point agenda and the five-marla scheme, neither of which were able to deal with the problem given its sheer scale.
Dr Khan must also be aware of statements made during the recent visits of the presidents of both World Bank and Asian Development Bank when they expressed serious concern about rising poverty levels, reflective of inadequate investment in social sectors, as well as statements by President Musharraf himself about the need to focus on poverty alleviation.
Ignoring the problem will not make it go away. Besides Dr Khan's remarks would have been well regarded had he been forthright and come up with certain major problems that the economy is currently grappling, with including poor governance.