Statistics in Pakistan has been more about claims of achievements with political overtones rather than credible data and unfortunately this is yet another area of activity that has not been given due importance by the Khan administration.
Pakistan Bureau of Statistics (PBS) came under the administrative control of the Ministry of Finance and Pakistan's successive finance ministers have been justifiably accused of manipulating data, some with more finesse than others, with the objective of showing a performance that did not reflect reality but instead reflected well on their own performance. Shaukat Aziz, Musharraf's hand-picked finance minister later promoted to prime minister, was a commercial banker and not an economist or statistician. He was accused of changing critical macroeconomic indicators with a stroke of his pen while not bothering to adjust the associated components. An example was his raising the growth rate without adjusting any item in the three possible ways Gross Domestic Product is calculated: (i) expenditure approach consisting of consumption plus government spending plus investment spending plus change in value of stocks plus (exports minus imports); (ii) factor income approach including income, profits and rent; and/or (iii) value of output consisting of adding up value added from each sector. The result: his manipulation was fairly easy to detect.
Dr Hafeez Sheikh displayed some finesse in manipulating data for example he reduced the weightage of food and perishables by 6 percent, one of the major components of consumer price index, an indicator most relevant to the common man and, therefore, to his political boss Asif Ali Zardari. This led to a fall in the rate of inflation though it did not imply disposable income of the poor and the vulnerable rose - a group that spends the bulk of its income on food.
The accountant Ishaq Dar followed the Shaukat Aziz model of data manipulation but given his arrogance backed by overwhelming support by the then prime minister Nawaz Sharif he oversold his performance in the first year by manipulating the growth rate prevalent two years previous to his being given the finance portfolio downward. His objective: to claim the highest growth rate since the fall of Musharraf's government. This raised further questions about the credibility of PBS data and its subordination to the dictates of the Finance Minister. Significantly, the incumbent Finance Minister Asad Umar noted data manipulation by the PML-N government at the time and tweeted that "this has been approach of this Govt. Instead of dealing with real issues try and hide them thru manipulation of data." Additionally Dar, in order to hide the extent of his reliance on foreign debt, redefined public debt which did not go unnoticed by relevant independent experts and the then opposition.
The Abbasi-led government separated the PBS from the Ministry of Finance and appointed Kamran Michael as head of the Statistics Division though his influence or indeed presence in the Ministry's affairs remained non-existent and the Minister of Finance continued to exert pervasive control over its administration. The Khan administration has not yet appointed any minister/minister of state to head the Statistics Division and has so far not made any mention of who is administratively in-charge of this Division. Reports indicate that PBS is presenting data to the Ministry of Finance as and when required.
Asad Umar has not focused any attention on reforming the PBS; or directed the PBS to revisit the flawed data during the PML-N tenure; or ensure that the foreign exchange reserves do not include the foreign reserves available with commercial banks as per international practice; or indeed redefine the public debt, and the rate of inflation since before Hafeez Sheikh manipulated the weightage of food items. Failure to revisit unjustified interventions in PBS data by previous administrations prompted the PML-N leaders to point out that as the Khan administration has not presented alternate data after its first 100 days in power it implies that it has accepted the data that was released during its tenure. These are serious failings on the part of the Minister of Finance from not only a political perspective but also from the economy's perspective as it disables the Ministry of Finance from taking appropriate mitigating measures based on accurate timely data.
Umar is currently engaged in not only trying to take measures to deal with the current economic impasse but also in fighting off challenges to his authority in the Finance Ministry as well as from powerful cabinet/PTI members so he may simply have not had the time to focus on PBS. It is also possible, nay very probable, that Umar desists from interfering in day to day activities and/or decisions taken by some entities, including PBS, on principle. However, he must understand that not interfering does not mean that these entities would over night begin to act as independent and responsible entities.
Ramesh Kumar joined the PTI in April this year while in January 2018 he was the chairman of the National Assembly's Standing Committee for Statistics when he no doubt became aware of the failings of the PBS data. Perhaps it would be appropriate for the government to give him this Ministry and one would hope that he would spearhead a 'New Pakistan' with data credibility that would enable the Khan administration to take appropriate measures in time. A decision as to which ministry administratively controls the PBS is urgently required and the need is to de-link PBS from the Ministry of Finance in letter and, more importantly, in spirit.
Comments
Comments are closed.