PIDE seminar: 'about 74 percent Pakistan's population is food insecure'

About 74 percent of Pakistan's population is food insecure as the country has waged war against militants which has increased economic woes manifold. Addressing a pre-budget seminar organised by Pakistan Institute of Development Economics (PIDE) here on Wednesday, a leading economist Dr Akmal Hussain said.
"Pakistan is witnessing deep recession translating into higher poverty and unemployment. Our 74 percent food insecure population coupled with deep recession is causing severe stress for the nation at a time when we are fighting battle of survival against militants." He explained that the major reason of higher budget deficit was the inability of the government to generate the desire revenues because the low growth restricted its ability to get higher revenues. He suggested the government to address structural issues being faced the economy and undertaking of institutional reforms were the dire need of the day.
He also asked the government not to slash down the development spending because it would hamper growth. He was of the view that the key challenge was to bring changes in composition of expenditures by abolishing non-productive expenditures while increasing development budget coupled with ensuring effective utilisation.
According to his calculations, the rightsizing in ministries could save Rs 91.5 billion while public sector enterprises were running into loss of over Rs 140 billion that needs to be restructured and privatised. The commodity operation is burdening the national exchequer by Rs 450 billion and there is need to end unnecessary intervention of the government.
Former Special Secretary to Ministry of Finance who is currently serving as Dean NUST Business School (NBS) Dr Ishfaque H Khan criticised the government for finalising 7th NFC Award purely on political grounds instead of taking any economic analysis and projections of revenues over the next fiscal years. Sharing data on the bleak economic indicators, he said that the investment to GDP ratio declined from over 22 percent to 13.4 percent in few years which is the lowest in last 40 years period that indicates that there will be no higher growth and job opportunities over the next 2 to 3 years.
He said that the government has been misguided by recommending to fix Rs 1,667 billion as revenue collection target of the FBR for current fiscal that was now expecting a shortfall of around Rs 200 billion. On the basis of higher revenue targets the provinces built in higher expenditure in the budget as the federating units were given additional Rs 500 billion in 2010-11. It was assumed that the provinces would provide one percent of GDP surplus budget but they came up with deficit budget so there was slippage from day first. He was of the view that now the government was again repeating the same mistake by fixing higher target and any number beyond Rs 1765 to Rs 1775 billion would result into putting built in shortages in achieving the desired target from day one.
Former Principle Economic Advisor Sakib Sherani said that Pakistan experienced boom bust cycle on growth trajectory and the country per capita income growth shrunk compared to India and Bangladesh even during the period of higher growth from 2003 to 2008. Pakistan witnessed an average growth of 2.6 percent over the last three years while inflation was in double digit in last 45 months which was highest ever since 1973-74, paving the risk of plunging into hyper inflation.
He was of the view that Karachi's 94 percent commercial land was blocked by Karachi Port Trust (KPT), Railways and army/navy, leaving no space available for undertaking any economic activities for private sector. During the seminar, the economists pointed out that the lack of fiscal efforts on part of the government was increasing woes of the struggling economy of Pakistan and risks of hyper inflation was very much there keeping in view experience of Latin America. Instead of exporting 6 million tons surplus wheat at cheaper rates keeping in view the lower international prices, the economists asked the government to come up with ration card scheme for catering the needs of poorest segments of the society in the next budget.
Vice Chancellor PIDE Dr Rashid Amjad said that they were suggesting a new strategy to steer the economy out of stagflation including better macroeconomic management, maintaining fiscal prudence while reviving the role of government in development and prudent monetary management to spark the revival of the private sector in the economy.