Yousuf Raza Gilani's performance as Prime Minister remained disappointing during the last four years with severe energy shortages and a steady erosion of macro-economic indicators. The country remains in the throes of a severe energy crisis ranging from about 16 to 22 hours largely due to the government's inability to resolve the circular debt despite one off payment of Rs 391 billion on account of electricity.
There were violent street protests in several cities and towns country-wide against massive unscheduled load shedding as the Prime Minister bade farewell to his office on Tuesday following the apex court decision. The price of electricity rose by around 130 per cent during Gilani's tenure and load shedding by more than 500 per cent. Load shedding resulted in shortage of water in urban areas.
The performance on the economic front was equally disappointing during the tenure of Prime Minister Gilani with the suspension of the International Monetary Fund (IMF) programme due to failure of the economic team to meet agreed stipulated reforms. The government's heavy reliance on borrowing to finance the fiscal deficit and borrowing from multilaterals for support to the balance of payment position doubled the country's debt during the last four years. The total debt and liabilities of the country, according to official figures, increased from Rs 6.418 trillion in fiscal year 2008 to Rs 12.146 trillion in 2011.
The fiscal deficit targets have consistently been missed during the last four years. State Owned Enterprises (SOEs) continued to rely on large bail out packages largely because of the government's policy to use them as recruitment centers and appointing senior management on the basis of nepotism as opposed to competence.
The budget deficit was agreed at 4.2 per cent of the GDP with the IMF for the fiscal year 2008-09 but ended at 5.2 per cent; in 2009-10 the budget deficit target was missed by 1.7 per cent with the fiscal deficit for the year at 6.3 per cent of GDP against the target of 4.6 per cent.
The budget deficit in 2010-11 was 6 per cent against the twice revised target of 5.3 per cent and 5.5 per cent for the current fiscal year. The projected deficit for 2011-12 is 4 per cent however few consider this as achievable. Development expenditure was consistently slashed to meet the ever burgeoning fiscal deficit. The federal Public Sector Development Programme (PSDP) allocation for 2009-10 was revised downward to Rs 310 billion from Rs 446 billion to finance the higher than projected fiscal deficit. The federal PSDP allocation for 2010-11 was revised downward to Rs 196 billion from the budgeted Rs 290 billion. Gilani's successor would have an uphill extremely challenging task to ensure macro economic stability.