FeaturedNationalVOLUME 17 ISSUE # 27

Half-truths about economy

The Pakistan Muslim League-Nawaz (PML-N) government has released “statistics” to claim that its five-year (2013-18) performance was better than that of the Pakistan Tehreek-i-Insaf (PTI) setup, led by Prime Minister Imran Khan, who was ousted through a no-confidence motion. The PML-N claims its tenure was marked by high economic growth, low inflation and unemployment rates, reduction in poverty, corruption and debt, increase in tax collection, and drop in trade and fiscal deficits. However, if analysed carefully, it becomes clear that almost all economic indicators in the PTI government were better than that of the PML-N regime, except inflation and unemployment.

It is also a fact that high prices are an international issue and the coalition government has fully realized it after overthrowing the PTI government as it could not bring down prices in two weeks, as promised by Prime Minister Shehbaz Sharif in his interviews before coming to power. Instead, prices of food and essentials have skyrocketed in the new government. As regards employment opportunities, it should also be kept in mind that the PTI government had to face the COVID-19 pandemic, which harmed even developed economies. Still the PTI government took effective measures to save the lives and jobs of people, which were appreciated by all world bodies. Despite facing the worst crisis of human history, the PTI government created 5.8 million jobs in three years. On the other hand, the PML-N had not faced such a situation. It also artificially kept the dollar rate low against the rupee and pumped $6-7b into the market every year. It aimed to keep inflation in check but it put an unbearable burden on Pakistan’s economy. The PTI had to remove this structural flaw, which led to price hikes in the country. Though the flexible exchange rate was one of the IMF conditions, yet it provided breathing space to the national economy, especially during the pandemic, when all world economies were suffering badly.

According to the government, when the PML-N completed its term in 2018, dollar-rupee parity stood at Rs116 but when the PTI regime was removed through a vote of no-confidence one dollar was equal to Rs189. Here, the government is telling a half-truth. It did not tell the complete story. It should also have informed the nation that it had spent almost $25-35b in its five years to keep the price of the US dollar artificially low, which overburdened the economy.

According to the government, at the end of the PML-N tenure in 2018, the GDP growth rate was at 6.1pc, but the PTI had brought it to negative. It is also a half-baked fact. According to a report released by the current PML-N government, the GDP growth rate in the PTI government’s last year remained over 6pc. It was about 5.5pc in the previous year. The GDP growth rate remained negative when the pandemic was raging in the world and Pakistan. The government should have told the whole truth to the nation.

The inflation rate in 2018 was only 3.4pc which climbed to 13pc by the end of the PTI rule. Likewise, food inflation, which was only 2.3pc in 2018, rose to 15pc by the end of the PTI tenure, the government claims. There are two reasons behind the low inflation rate then. First, international commodity rates were not as high as they are now. Fuel prices have reached their unprecedented levels in the world. The PTI government could not do much about it. The new government is also helpless about it, otherwise it would not have increased petrol and diesel prices by Rs30/litre in one go, which has not happened in Pakistan’s history. Then the past PML-N government artificially kept the dollar-rupee exchange rate high. Otherwise, prices would not have been as low. When the current government cites low electricity tariffs and gas prices, it should also inform the nation that international prices of gas have doubled only in a year and Pakistan has to import it to meet its needs. It should also tell the nation why it has failed to bring down their rates now.

It is a fact that Pakistan was on the verge of default when the PML-N completed its term and all key indicators proved it. In 2018, the current account deficit was $20 billion, the highest in Pakistan’s history, while it was just $623 million in April 2022, when the PTI government was removed. Foreign reserves in 2018 were just $9 billion, hardly enough to meet the needs of the country for a few weeks. They were over $22 billion in April. Tax collection in 2018 was Rs3,770 billion and Rs6,100 in 2022. Foreign remittances in 2018 were $19 billion and $31 in 2022, exports in 2018 were $20 billion and $36 billion in 2022, the total volume of the economy was Rs3,500b in 2018 and Rs6,500 in 2022.

The PTI government was often criticised for debt but it is a fact that it obtained less loan as compared to Pakistan’s GDP than received by the PML-N government. The debt-to-GDP rate in 2018 was 70pc, but it fell to 65pc in 2022. It is for the first time in Pakistan’s history that its debt-to-GDP ratio has decreased.

The PTI also created 5.8 million jobs in the last three years despite facing the pandemic. It also distributed Rs3.6 billion under the Ehsaas programme while the PML-N had given away Rs1.2b under the Benazir Income Support Programme (BISP) in 2018. Besides, the PTI also launched low-cost housing, Sehat card, Kisan card, Mazdoor card, ration card, interest-free loans, Ehsaas scholarships worth Rs38 billion, 10 billion tree project, started work on 10 dams, 31 hospitals, 21 universities and hundreds of colleges.

The statistics show the PML-N should not talk about its economic performance because Pakistan was worse off at the end of its tenure in 2018 and even the previous PPP government had fared better than it.