“Engineering” growth

Pakistan Electric Power Company submitted the electricity growth data to a senior bureaucrat .


Shahbaz Rana May 30, 2010

ISLAMABAD: On Tuesday May 18 at around 2 pm a senior official of the Pakistan Electric Power Company came to see one senior bureaucrat and submitted the electricity growth data to the official who had just arrived from a meeting of National Accounts Committee. The committee had just approved 4.09 per cent provisional economic growth for the fiscal year 200-10.

“Sorry I could not make it earlier, I have brought with me the accurate electricity growth data and the figures we provided you earlier were not accurate, as these were prepared haphazardly”, confessed the Pepco official in front of two journalists (of whose presence he was unaware) and who were there to get the working paper of the National Accounts Committee.

Apparently there was no sign of remorse or regret on the face of the NAC’s official, as probably it was a routine matter for him.

The controversy over the engineered 4.1 per cent economic growth during the current financial year has again triggered a debate over the level of professionalism in the Federal Bureau of Statistics.

It has reemphasised the need for an independent and credible organisation for statistics which could assist the government in better policy formulation by showing the real picture to the policymakers and take a stand against all types of pressure from the corridors of power.

The statistics division is responsible for formulation of policies and plans for statistical development and improvement of statistical services of the country. It is supposed to provide a solid database to planners, policy and decision makers in the government, researchers and other data users in various socio-economic sectors.

The recent fudged 4.1 per cent Gross Domestic Product growth was not the first such instance. Independent economists have been raising their voices against the manipulated growth figures for the last many years particularly during the Musharraf Regime.

There was a time when Prime Minister Shaukat Aziz himself used to release the National Accounts Committee working paper, duly approved by his confidant Dr Ashfaq Hasan Khan.

Other than the growth numbers, poverty, inflation and unemployment rates are the areas where the Federal Bureau of Statistics does not enjoy credibility. 2008 was one of the worst years in terms of increase in the prices of goods and services. Independent economists had predicted hyper inflation but the government statisticians used to insist that the rate of increase in the prices of goods and services was not more than 25 per cent.

According to the IMF’s Regional Economic Outlook report on Middle East and Central Asia, the region’s average unemployment rate is over 12 per cent. According to the FBS, in 2008-09 the unemployment rate in Pakistan marginally increased to 5.5 per cent from 5.2 per cent.

With average 7 per cent growth during Shaukat Aziz government there could be 5.2 per cent unemployment rate but when the growth has slipped to 3.8 per cent still less than 6 per cent unemployment rate does not make sense.

The other mystery that the FBS could not resolve is poverty rate. The FBS says the poverty is 17.2 per cent and the official Panel of Economists counts it near 40 per cent, though it does not share its methodology of counting the poor.

Last year the government had to publish Economic Survey of Pakistan without poverty numbers. It will be the consecutive second year when there will be a poverty chapter in the Economic Survey but again there might not be a poverty number.

In an opinion of Deputy Chairman Planning Commission Dr Nadeemul Haq there are systemic weaknesses in the Federal Bureau of Statistics and capacity constraints too. He sees the resolution of the problems in giving autonomy to the Division by making it an independent body.

The government has already approved the restructuring of the FBS with the increased autonomy through merger of Federal Bureau of Statistics, Population Census Organization and Agriculture Census Organization into a new autonomous entity namely the Pakistan Bureau of Statistics.

The draft bill was tabled in the National Assembly on January 27, 2010, which was referred to the relevant standing committee. But the irony of the matter is that the NA Standing Committee on Economic Affairs and Statistics, headed by a young Parliamentarian, has twice failed to debate the bill despite convening the meeting. At both occasions, the meeting was postponed due to lack of quorum. It also shows the government’s indifference towards one of the most strategic institutions of the country.

The experts in and outside the government say that without bringing in professional people and giving it “practical” autonomy the credibility of the Bureau can not be restored. But they still doubt the government’s level of commitment and seriousness in making it a professional body.

Published in the Express Tribune, May 31st, 2010.

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COMMENTS (2)

Meekal Ahmed | 11 years ago | Reply Mr. Rana, This is a good article. As I noted somewhere else, the issue of creating an independent statistical office is a long-standing one. In-coming government always accuse the outgoing lot of cooking the books. However, when the shoe is on the other foot, they do the same thing. At the very basic level, since inflation is understated real output must be overstated. And since almost all economic variables are linked to real output, there are large cascading errors in the entire macroeconomic framework. The fact that the NA Standing Committee on Economics and Statistics has not even met is (as you suggest) a reflection of the low priority we attach to good statistics. As an aside I wonder how many people in the Committee know anything about either economics or statistics.
farhan | 11 years ago | Reply The writer has pointed some most interesting facts about government statistics. You mentioned that Musharraf did manufacture the growth figures - a fact that many educated Pakistanis (who love Musharraf) do not accept and keep saying that Musharraf regime was successful in average GDP growth rate of 6.8 per cent between 2002 to 2007. Poverty, unemployment and inflation tops the list of data that government engineered often but how many of us do talk about these grave problems of Pakistan? We can only pray that soon Pakistan would get rid of these grave problems.
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