Politicisation starts taking toll on national issues
Principal economic adviser was responsible for sending a different set of figures to PM Syed Yousaf Raza Gilani.
ISLAMABAD:
An internal inquiry conducted by the finance ministry has held the principal economic adviser responsible for sending a diverging set of statistics on the impact of the floods on inflation and the budget to the prime minister, which resulted in confusion and embarrassment.
A finance ministry official told The Express Tribune that the principal economic adviser, Saqib Sherani, was responsible for sending a different set of figures to Prime Minister Syed Yousaf Raza Gilani, which the premier quoted in a cabinet meeting held on September 1.
However, Sherani has denied the allegations saying that certain elements within the ministry were out to malign his reputation. “I have not sent the statistics to the prime minister’s secretariat. I cannot do so without getting clearance from the secretary or finance minister,” he contended.
The figures quoted by the prime minister during the meeting came as a surprise to many, including Finance Minister Dr Abdul Hafeez Shaikh, who was holding talks with the International Monetary Fund (IMF) at the time.
Reportedly, he was embarrassed at the hands of the IMF staff who advised him to go back and get his act together. The mismatch between estimates given by different representatives of the government has also been cited as one of the reasons behind the collapse of talks which were to lead to the release of $1.7 billion from the IMF.
At a time when the minister was convincing the international agency that despite the worst-ever floods to hit Pakistan, the budget deficit would not exceed Rs850 billion, the premier was telling his country that the budget deficit could skyrocket to seven per cent of Gross Domestic Product, or Rs1.18 trillion, Rs330 billion more than the revised figures released by the finance ministry.
The other contrasting figure was that of inflation. While the finance minister was assuring the IMF team that inflation would not increase to 13 per cent in any case, 3.5 per cent more than the pre-flood scenario, the premier announced that inflation was expected to hit 20 per cent.
Sources say that confusion over the figures is a direct consequence of politics within the finance ministry.
It is claimed that Saqib Sherani was among those appointed by former finance minister, Shaukat Tarin, on hefty packages. According to them, these people were the wheelers and dealers in Q Block and even took the liberty to bypass the sitting secretary.
However, after the exit of Shaukat Tarin the current regime sidelined them, which has led to the creation of two factions within the ministry. It has been learnt that conspiracies are hatched every other day by both sides to tarnish the image of the other group.
This is the second time that the principal economic adviser has been associated with a controversy. Earlier, his estimates of zero per cent growth in the worst-case scenario coupled with inflation at 25 per cent also invited the finance minister’s wrath.
A finance ministry official, who was part of the visiting delegation, said that even the IMF has ruled out zero per cent growth as a consequence of floods. “The IMF still believes that Pakistan could achieve three per cent growth by year-end, as it holds that the floods caused loss of wealth not loss of growth momentum,” he explained.
The other conflicting number given by the premier was related to the losses suffered by the economy due to the floods. He put these losses somewhere in the vicinity of $43 billion. However, the initial inquiry states that this number was not given by anyone from the finance ministry – rather, it has been asserted that the figure originated from the Foreign Office, which confused it with the losses on account of the war on terror over the past nine odd years.
“On the face of it, what the prime minister has said is still very conservative but close to reality,” said an official of the PM Secretariat.
He said there was not a question of trust deficit between departments or individuals but the issue was how to tackle the catastrophe and a lot has to be done on this front.
Published in The Express Tribune, September 15th, 2010.
An internal inquiry conducted by the finance ministry has held the principal economic adviser responsible for sending a diverging set of statistics on the impact of the floods on inflation and the budget to the prime minister, which resulted in confusion and embarrassment.
A finance ministry official told The Express Tribune that the principal economic adviser, Saqib Sherani, was responsible for sending a different set of figures to Prime Minister Syed Yousaf Raza Gilani, which the premier quoted in a cabinet meeting held on September 1.
However, Sherani has denied the allegations saying that certain elements within the ministry were out to malign his reputation. “I have not sent the statistics to the prime minister’s secretariat. I cannot do so without getting clearance from the secretary or finance minister,” he contended.
The figures quoted by the prime minister during the meeting came as a surprise to many, including Finance Minister Dr Abdul Hafeez Shaikh, who was holding talks with the International Monetary Fund (IMF) at the time.
Reportedly, he was embarrassed at the hands of the IMF staff who advised him to go back and get his act together. The mismatch between estimates given by different representatives of the government has also been cited as one of the reasons behind the collapse of talks which were to lead to the release of $1.7 billion from the IMF.
At a time when the minister was convincing the international agency that despite the worst-ever floods to hit Pakistan, the budget deficit would not exceed Rs850 billion, the premier was telling his country that the budget deficit could skyrocket to seven per cent of Gross Domestic Product, or Rs1.18 trillion, Rs330 billion more than the revised figures released by the finance ministry.
The other contrasting figure was that of inflation. While the finance minister was assuring the IMF team that inflation would not increase to 13 per cent in any case, 3.5 per cent more than the pre-flood scenario, the premier announced that inflation was expected to hit 20 per cent.
Sources say that confusion over the figures is a direct consequence of politics within the finance ministry.
It is claimed that Saqib Sherani was among those appointed by former finance minister, Shaukat Tarin, on hefty packages. According to them, these people were the wheelers and dealers in Q Block and even took the liberty to bypass the sitting secretary.
However, after the exit of Shaukat Tarin the current regime sidelined them, which has led to the creation of two factions within the ministry. It has been learnt that conspiracies are hatched every other day by both sides to tarnish the image of the other group.
This is the second time that the principal economic adviser has been associated with a controversy. Earlier, his estimates of zero per cent growth in the worst-case scenario coupled with inflation at 25 per cent also invited the finance minister’s wrath.
A finance ministry official, who was part of the visiting delegation, said that even the IMF has ruled out zero per cent growth as a consequence of floods. “The IMF still believes that Pakistan could achieve three per cent growth by year-end, as it holds that the floods caused loss of wealth not loss of growth momentum,” he explained.
The other conflicting number given by the premier was related to the losses suffered by the economy due to the floods. He put these losses somewhere in the vicinity of $43 billion. However, the initial inquiry states that this number was not given by anyone from the finance ministry – rather, it has been asserted that the figure originated from the Foreign Office, which confused it with the losses on account of the war on terror over the past nine odd years.
“On the face of it, what the prime minister has said is still very conservative but close to reality,” said an official of the PM Secretariat.
He said there was not a question of trust deficit between departments or individuals but the issue was how to tackle the catastrophe and a lot has to be done on this front.
Published in The Express Tribune, September 15th, 2010.