The government on Saturday appointed Abdul Wajid Rana as the new finance secretary in the wake of a recent report by the International Monetary Fund (IMF) exposing the vulnerability of Pakistan’s economic policies.
In its recent report on the state of the country’s economy, the IMF has unearthed that, in a bid to hide the real budget deficit, Pakistan’s expenditures were understated by Rs317 billion and revenues overstated by Rs215 billion.
Abdul Wajid Rana was earlier serving as the economic affairs division (EAD) secretary. He will be the sixth finance secretary appointed during the four years of the Gilani government. Outgoing finance secretary Dr Waqar Masood has served at the position three times.
Rana confirmed that he has been posted as secretary finance. Sources said Dr Waqar Masood has been appointed as the EAD secretary, but it was not yet clear whether he would assume charge.
In 2008, too, the government had appointed Masood as the EAD secretary, but he refused to assume charge and remained an officer on special duty for quite a few months. He had said in a plea that he would not serve as EAD secretary, which, according to him, was a comparatively less important slot.
Before being made the EAD secretary, Rana had been special finance secretary for a short period. He also remained the economic minister in Washington for four-and-a-half years. He was originally brought back to Pakistan to be posted as secretary finance, but, sources said, the Presidency rejected the move initiated by finance minister Dr Abdul Hafeez Shaikh. Rana has also served in Sindh and Khyber- Pakhtunkhwa as finance secretary. He served with Hafeez Shaikh in Sindh and is credited for being responsible for a surplus in the provincial budget.
Analysts said the biggest challenge for the new finance secretary would be to control increasing expenditures and present realistic budget figures. He would also be exposed to extreme pressure from the government to maintain and continue a loose fiscal policy in a bid to lure voters ahead of the general elections.
The IMF has presented a reforms package in its report that promises a budget consolidation of up to Rs215 billion through a combination of expenditure cuts and increase in new taxes.
Published in The Express Tribune, February 12th, 2012.
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I think Rana would make a good and a trustworthy finance secretary as he has achieved a good deal of experiences in several places. Hope for the best.
@Raj - USA: Read the report, not the news item!!
"The Executive Board of the International Monetary Fund (IMF) reviewed today data revisions and misreporting by Pakistan, along with the authorities' commitment to promptly repurchase SDR18.95 million in outstanding debt to the IMF, and to voluntarily repurchase another SDR 22 million by May 31, 2000." http://www.imf.org/external/np/sec/nb/2000/nb0023.htm
Twelve years ago, the same story happened, fudging figures...the saga continues...and still you cry for respect!
@Nine-Zero Karachi: Only if you knew, what IMF is all about you would not leave such a comment.
Just another example of double dealing by PAK. This should come as a surprise to no one.
@meekal ahmed: You say: Having said that, the IMF report does NOT say we are mis-reporting the numbers. They ARE saying that we are under-estimating the spending side and over-stating the revenue side — IN THEIR JUDGEMENT.
Wrong. The news item clearly reports:
In its recent report on the state of the country’s economy, the IMF has unearthed that, in a bid to hide the real budget deficit, Pakistan’s expenditures were understated by Rs317 billion and revenues overstated by Rs215 billion.
Understated and Overstated, clearly implying mis-reporting unearthed by IMF and not under estimated and over estimated as you claim.
@ Nosherwan Shahid Shaikh
It's the nexus of the IMF, the world bank and basic math out to get the land of the pure.
@Mahmood Saeed:
A good suggestion. But wait. You have to see the full implications of this "international audit".
We have been shamed before and it cost us millions of SDR's (the IMF unit of account) in fines for cooking the books during an IMF program.
Since we do not have an IMF program and are therefore not accessing their resources, there is no constraint on us and no fear that we will be "caught".
Having said that, the IMF report does NOT say we are mis-reporting the numbers. They ARE saying that we are under-estimating the spending side and over-stating the revenue side -- IN THEIR JUDGEMENT.
Of course we (including the new FS who is a good man) will say the IMF is wrong and we are right.
History teaches us that the reverse is almost ALWAYS the truth.
Yes but PAK does have nuclear weapons
No Finance Secretary or any bureaucrat can fudge numbers without orders from the Minister(s). Looks very much like another Memogate like affair. Let NAB investiagate with the help of independent international auditors.
I presume this gap is in the FY 2011-12 budget. Rs317 Billion + Rs215 Billion = Rs 532 Billion. That means about $ 5.3 Billion. If i am not wrong Pakistan's total planned outlay in the federal budget for FY 2011-12 was about $ 27 Billion. It was a budget with 6.6 % deficit. That means a deficit of about $ 1.78 Billion. So the total gap in the budget becomes about $ 7.08 Billion. In a $ 27 Billion expenditure a gap of about $ 7 Billion is huge. It is about 25 %. Pakistan's defense budget for the same period was about $ 5 Billion and another about $ 1 Billion was used for payment of pension to retired military personnel. Then there is huge payments for loans taken earlier and for payments of salary and pension for government employees. About $ 8 Billion for interest payments, about $ 2.5 Billion for repayment of foreign loans and about $ 1.66 Billion for subsidies. What is left for development after all this ? No wonder only a petty sum of $0.1 Billion has been allocated for earthquake relief and rehabilitation. This is basically a crisis that is being deferred to the future generation by living on loans.
I don't understand economics much but Rs317 billion + Rs215 billion sounds like a huge amount for the country of Pakistan's size. Is it a very serious matter? what are the implications for Pakistan's economy, inflation etc; any articles explaining this?
I hope Pakistan goes bankrupt and everyone who has voting rights suffers due to it. Everyone has to realize the importance of their vote otherwise this country will be no more.
@Nosherwan Shahid Shaikh: Which part of the news didn't you understand? The IMF pointed out that the Finance ministry is cooking up figures to hide the real deficit. This deficit was NOT caused by the IMF.
God help us. This nexus of IMF, World Bank & WTO has finally befallen upon Pakistan. It is sad to see a secretary being changed due to IMF's report.
You can change the players all you want - but regardless of the name the task remains daunting -- can anyone honestly say that they didn't know that Pakistan economy was in deep trouble and that you are on the precipice looking into a dark void? The IMF message has been consistent - you just don't like what they have to say. . Your economic problems are the result of making decisions based on emotion rather than logic combined with weak politicians who try and buy votes by subsidizing things with money they have to borrow.
I don't see the connection between the IMF report and a change in the FS.
Did the government expect a glowing report from the IMF? It was bound to be a tough one -- and some say not tough enough.
The authorities have limited input into the report. Their views are certainly taken on-board but in the end it is very much a staff assessment that is cleared by departments and approved by IMF senior management.
Every thing will be O.K! Pray to God & miracles will happen! Deficit will turn into surplus. All we need is FAITH in ALLAH Ho TALA!
Nothing new.
Lying to the IMF seems to be par for the course for the Government of Pakistan. See the below news brief from the IMF dating back to 2000:
Dr.Hafeez Shaikh being a weakest person who is a rubber stamp for a few persons must be changed. He shamelessly fudged the figures and did not have moral decency to apologize. With his presence things will never improve despite a competent new Finance Secretary- Wajid Rana. It is that Wajid Rana will not be hijacked by stock market brokers and Job sellers. All jobs in Government are sold through open bidding. Hope Rana who has come on merit will promote merit. May God protect you Rana.
Cooking books and hoping to getaway with it, for Pakistan is just another norm !!! They wonder as to why no one in the world trusts them !!!
Changing finance Secretaries is not the answer, this is just a cosmetic gesture and any thinking person would know that.
Good move.
Finance Minister should also be removed for announcing Amnesty from probe on investment made in stock exchange.International Finance community and west will back list Pakistan due to this move which will encourage global money laundering.
That adds up to a whopping Rs532 billion in real deficit terms. Half a trillion rupees just disappeared into thin air?
Until and unless we stop appointing bureacrats at positions requiring professional expertise, we will face such disgrace and mismanagement.
Bring in a good person as Chairman FBR. A person who knows the working and has respect of business community. A person like Asrar Rauf would change the things around. Finance Minister needs to be changed...he is allowing the economy to drift
After General Ayub Khan's tenure, Pakistan could not have proper Economics Managers neither Administrators.
The present state of affairs of Pakistan is an eye opener for the people of Pakistan.
Unless the people will not choose the right kind of legislators, the plunder and loot in the country will never stop.
Different governments came and went but the condition of a common man has gone from bad to worse.
The sincerity with Pakistan has also vanished with the death of Quaid-e-Azam Mohammad Ali Jinnah.
What we are left is loot and plunder and nothing else.
MY Al-Mighty Allah save Pakistan from further ruining the country. Ameen.
Put Tariq Bajwa at the spot. He knows his stuff also also honest