Pakistan operating in statistical darkness

There's a need to develop a strong statistical base to get better knowledge of the state of society and economy

Shahid Javed Burki February 26, 2017
The writer is a former caretaker finance minister and served as Vice-President at the World Bank

In a series of articles beginning with the one today, I will discuss the need for Pakistan to develop a strong statistical base to get better knowledge of the state of society and economy. The world does not know Pakistan well. In fact, neither do the Pakistanis, not even the policymakers who have the responsibility to mind the country’s affairs.

What we know about the state of the Pakistani economy is not based on reliable facts. High quality statistics and information are needed for at least three reasons. They are indispensable for the making of good public policy. They inform the private sector about the opportunities available in the economy and about the direction of economic change. Good information and data will also help us to correctly place the economy in the global system. The last has considerable importance in the age of globalisation. I am confident that once the size of the national income has been correctly determined, it will turn out that Pakistan is one of the world’s 20 largest economies. This should qualify it to gain a place in the G20, from which it has been excluded.

I should discuss the question of estimating the national income. The data on which national income estimates are made are collected, mostly from carefully designed surveys. This is not done in Pakistan to the extent needed. We have little idea about what goes on in several sectors of the economy. Agricultural output is based on the information provided by local officials who follow different methods of estimating crop yields. This means that the information coming in from one area may not be comparable to that from the adjoining area.

We have a vague idea that the livestock sector has become an important part of the rural economy. But we need to know more. How large is the livestock sector and how many people it employs. We know that millions of women work in the sector, several of them as entrepreneurs. How large is their role and could their productivity be improved, are important questions for the making of good public policy. There is an impression that the commercialisation of the livestock sector may have had a negative effect on the state of nutrition in the countryside. As more milk gets picked up by the processors, children in the countryside are getting a lesser amount. This may be contributing to the stunting of the population. We don’t know as much as we should about value added by some of the modern services such as IT. My impression is that the IT industry is contributing more to the national economy, employing more people and earning more in exports than indicated by statistics. A significant amount of the money that is recorded as “remittances from overseas Pakistanis” is in fact payment to small vendors who do assignments for family members and friends living and working abroad. A significant number of them are women working from home.

The forthcoming population census should provide us with vital demographic data. Just to take one example: We are underestimating the size of the urban population, something that may not change even after the new census if the definition of what is implied by an urban area is not altered. Some of the obvious urban communities are being classified as rural. This is the case, for instance, of the communities on the side of the Islamabad Highway, short of the road to the airport. Definitions need to be changed if they result in such obvious distortions.

Should we make a serious effort to collect that information? The answer to the question is an obvious yes. How should that be done? That question will need some analysis of the competence of the institutions that are engaged in the important tasks of data gathering and analysis. It might be necessary to engage institutions such as the World Bank that have the expertise in the area of development statistics and maintain a vast and accessible repository of what is available. How soon can this exercise be done? It will take a while before the needed structure can be put in place but the work should begin immediately. There are alternative assessment methods available which I will discuss next week.

Published in The Express Tribune, February 27th, 2017.

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Rollin & Trollin | 7 years ago | Reply Begs the question how can anyone do any econometrics without any stats ??
RK Singh | 7 years ago | Reply @Burkhi sab, I follow your enlightened articles with interest and attention. You are one of the few people who can give unbiased reports from Pakistan. Can you clear this confusion to me? India's GDP is 1719 USD. Pakistan's GDP is 1474. Difference of just 14%. But you compare such statistics like production of Steel. Automobiles, Power production, Agriculture, International trade, forex reserves etc, India is somewhere between 3 to 10 times Pakistan's "per-capita" outputs. Each of these sectors are are lagging behind India's output by 20 to 25 times. Population difference is just 6 times.Does it mean that Pakistan is spiking their GDP data upwards to match with India's GDP?
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