World Bank exposes bad performance of PPP, allies
Saturday, May 04, 2013
ISLAMABAD: A latest World Bank publication reflects extremely poorly on the economic performance of the outgoing government whose coalition partners — the PPP, MQM and ANP — are presently trying to hide their dismal performance, massive corruption and bad governance behind the sympathy factor, which they are smartly encashing due to their own failings in addressing the issue of terrorism.
The WB also lamented that Pakistan was ranked as one the lowest spenders on education and health in the region, and warned: “At the current rate of progress, it will be difficult for Pakistan to meet the MDG (Millennium Development Goals) targets on health and education by 2015.” It added that 44 percent of children under five in Pakistan are stunted in the absence of nutritious food.
“Pakistan’s economy continued to underperform when compared with other economies in the region,” the April 2013 publication of the WB Pakistan said, adding that there was no improvement in the security situation and no abatement in the energy crisis, which besides other factors continued to dampen the growth prospects besides adversely impacting the fiscal situation.
“The fiscal situation worsened in FY12 (Fiscal year 2012) as the overall budget deficit increased to 8.5 percent of GDP — the highest level in two decades,” the WB report said.
The report said Pakistan also lags behind other South Asian countries in the field of education and health. “Despite the worrying state of education and health, especially amongst the poor, the resource allocation as a percentage of the GDP remained low.”
The WB publication reported the following about the economic condition of Pakistan, “Faced with some stiff challenges, Pakistan’s economy continued to underperform when compared with other economies in the region. There was no improvement in the security situation; political tensions have grown; the southern provinces were yet again battered by severe floods which impacted agricultural growth and public expenditure; there was no abatement in the energy crisis, which continued to dampen the growth prospects while at the same time adversely impacting the fiscal situation; the fiscal situation worsened in FY12 as the overall budget deficit increased to the 8.5 percent of GDP — the highest level in two decades — (6.6 percent of GDP excluding one-time expenditure on payment of electricity subsidy arrears); this was exacerbated by a monetary mode of financing the deficit which kept inflation high (at 11 percent); tax collection improved but was waylaid by a sharp decline in non-tax revenue, mainly due to delay in release of Coalition Support Fund (CSF) by the US administration; external vulnerabilities increased as the current account deficit rose to 2 percent of GDP; exports declined by 3 percent, while imports increased by 12 percent; capital inflows continues to be weak while debt servicing liabilities, including those to IMF, continued to mount; despite the release of US$1.9 billion by US administration from CSF, net foreign exchange reserves of State Bank of Pakistan have declined by US$6 billion over the last 17 months; the rupee remained under severe pressure throughout the year and depreciated by almost 12 percent during this period.”
The report added, “Faced with such an adverse scenario, the preliminary economic growth of 3.7 percent in FY12 signifies economy’s remarkable resilience. This, however, was partly the result of a strong increase in private consumption caused by continued and robust increase in workers’ remittances (increased by 18 percent). Faced with this worsening balance of payment situation, the government is in talks with the IMF over a new stabilization program.”
The WB publication said, “Accelerating progress in human development remains the key underpinning for sustained economic gains. The Net Enrollment Rates in education have been increasing in Pakistan but still lag behind other South Asia countries. Infant and under-five mortality rates represent a similar story. Gender disparities persist in education, health and all economic sectors. Pakistan has one of the lowest female labor participation rates in the region. Nutrition also remains a significant cross-cutting challenge, as 44% of children under five are stunted.”
It added, “Despite the worrying state of education and health, especially amongst the poor, the resource allocation as a percentage of the GDP remained low. Pakistan is ranked as one of the lowest in the region (at about 2% of GDP). At the current rate of progress, it will be difficult for Pakistan to meet the MDG targets on health and education by 2015.”
The WB publication said, “Poverty gains of over the past decade have been impressive but may be difficult to sustain. Pakistan saw a decline in poverty trends, with the poverty rate falling from 34.5 percent in 2001/02 to an estimated 17.2 percent in 2007/08. Over the past few years there have been signs that poverty levels may have further decreased, despite the downturn in the economy, floods and inflation.
“These gains might have been supported primarily through remittances, faster than expected recovery of the agriculture output and exports following the floods, a broader-based economic growth, and strengthening of, and greater funding for, social safety nets programmes.”