Pakistan's History of Fudging Economic Growth Rate Numbers.

Discussion in 'Pakistan' started by satyam, May 21, 2010.

  1. satyam

    satyam New Member

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    Pakistan fudging growth rate numbers

    The usual methodology to post a higher economic growth for the current year is to reduce the growth of the previous year. In other words, reduce the base to get a higher growth for the current year.

    The growth number for 2007-08 was provisionally reported to be 5.8 per cent.

    Pakistan, on the other hand, posted a positive growth of 2.0 per cent and outshined the strongest economies of the region in 2008-09.

    The 5.8 per cent provisional growth of 2007-08 was drastically revised downward to 4.1 per cent and as such the base was reduced to arrive at a higher number of 2.0 per cent for 2008-09. Some methodology for the calculation of value-added for some sectors was also changed without bringing to the notice of the National Accounts Committee.

    The same process has been repeated according to the newspaper story for the year 2009-10. (hey! We like to repeat ourselves - repeated lying, begging, warring)
    The Federal Bureau of Statistics (FBS) has revised the last year's (2008-09) growth of 2.0 per cent to 1.1 per cent and that too, by further trimming the growth of 2007-08 from 4.1 per cent to 3.7 per cent. Since the base of 2008-09 was trimmed to 1.1 per cent, the growth for the current fiscal year (2009-10) has (magically) risen to 4.1 per cent.

    Not only the growth of last year was reduced but also growth of some components of the GDP was outlandishly jacked up in 2009-10.

    The growth of the construction sector was pushed up to an unbelievable level of 15 per cent. Only a lunatic would expect the construction sector to grow by 15 per cent in 2009-10. The production of cement adjusted for exports and that of iron and steel has been used as a proxy for calculating growth in value-added in construction.


    Voila! There you have it. Phenomenal GDP growth in the land of the pure. Wait till next year when the growth will be in double digits (and thereby reducing the last three years' growth to zero). :)
     
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  3. ajtr

    ajtr Veteran Member Veteran Member

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    no surprise at all....The amazing economic growth of 6% which pakistan showed during all 10 yrs of musharraf's rule was actually done by fudging the the figures.During musharaffis rule former Prime Minister Shaukat Aziz was nicknamed as shortcut Aziz for fudging the economic books.IF pakistan was really growing at 6% all those 10 years how can its economy collapsed with in 6 months of musharaff's leaving the power.All these 10 years mush and shortcut aziz were all fudging the books to show good economic progress in pakistan.Pakistan's economy has collapsed long back in 1990s and since then it didnt recovered.

    Shaukat Aziz’s Figure Fudging


    Throughout his tenure, the former Prime Minister Shaukat Aziz, more commonly known as Shortcut Aziz didn’t tire of telling us as how well the economy was performing, and how the national exchequer was brimming with cash and the foreign reserves were all time high and all the economic indicators were showing nothing but positive signs of gigantic improvements.

    Whenever his celebrated attention was diverted towards the utter misery of nation plunging in sheer poverty and huge rigmarole of price hike and dilapidated standard of life, his answer would be that very soon the economy would ooze out “trickle down effect”, and one precursor of that effect was that everyone had mobile phones and roads were jammed with the cars.

    Though it’s another story that nobody has enough money to load their balance and they consider it suffice to just give “miss bell”, and now banks have started taking their vehicles back because of non payment of lease installments.

    Now Finance Minister Ishaq Dar has told us the real picture of Shortcut Aziz’s criminal fudging. He said, “the largest portion of the budget overrun was because of the Rs138 billion subsidy on petroleum products and Rs70 billion on account of non-payment to Wapda, adding that no budgetary provisions had been made in that regard. An additional expenditure of Rs45 billion was incurred on importing wheat and there was no budgetary provision for that either.”

    Now the new government has to take harsh decisions, but they must understand that they must not put much of the pressure on the already dying people.
     
  4. ajtr

    ajtr Veteran Member Veteran Member

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    Pakistani government started fudging figures and removing those in Planning Commission who were a hindrance to this process. Chief economist Pervaiz Tahir was shunted out because he differed with the Government over the numbers on poverty reduction figures. This ‘window dressing’ assumed huge proportions during the tenure of Prime Minister Abdul Aziz and President Musharraf that when Aziz quit the job, the whole edifice collapsed like a pack of cards. Later, in order to get more funds from the World Bank, the Pakistani government tried to lie its way through by presenting ‘inaccurate data’ to the Chief of World Bank. The World Bank saw through the game and refused to accept the data presented by the official Pakistani delegation. In fact, WB President Robert Zoellick, used 'derogatory language', according to reports. The unedifying episode was thus a repeat of a similar one in circa 2000. Pakistani business newspaper, Business Recorder, in its editorial of August 1, 2008, has freely accepted the usual proclivity of Pakistani economic managers to fudge figures to hide inconvenient truths.


    Fudging income and poverty numbers


    THE budget-making period is often marked by allegations of the fudging of figures particularly about key economic indicators but, as it happens, not all of them are detected and challenged and are rarely rectified.

    A former chief economist of the federal government talked of his “struggle” from 2002 to 2006, in an op-ed piece last week in this newspaper, to convince the authorities against manipulating data and how he could not succeed. As a result, final figures on poverty, GDP, unemployment, prices, etc., were “improved upon” although few believed in the achievements that were claimed.

    Last month, one saw serious allegations of fudging of GDP growth and poverty figures. The ministry of finance was accused of having fabricated the figure of 2.37 per cent in an attempt to impress the IMF that this year’s GDP growth was almost close to what it had asked for –– the target of 2.5 per cent. Provisional GDP estimates for 2008-09 were worked out at Rs5,532.4 billion compared to the previous fiscal year’s Rs5,404.5 billion, resulting in an increase of 2.37 per cent.

    However, a day later, on May 19, the finance ministry bosses felt compelled to revise the GDP figure downwards from 2.37 to 2.15 per cent. It was conceded that the figure of 2.37 per cent, worked out by the Federal Bureau of Statistics and endorsed by National Accounts Committee, was flawed.

    Shaukat Tarin, the finance chief, also felt uneasy over the episode. He said he had asked the institution concerned to “ensure transparency in figures and present the growth figures as they are.” But he avoided touching the issues such as reducing the base by lowering the GDP growth of last fiscal from 5.78 per cent to 4.1 per cent and the change in methodology in measuring the growth in agriculture and construction sectors, and insisted that all the FBS steps other than excluding the large-scale manufacturing growth till March were justified.

    The GDP growth target was originally set at 5.8 per cent. As the year proceeded, it was revised downwards to 3.4 per cent and then again to 2.5 per cent. Last week, Planning Commission Deputy Chairman Sardar Assef Ahmad Ali said that the GDP growth rate for this fiscal year would be two per cent. Then the finance ministry came out with the figure of 2.37 per cent. In fact, the National Accounts Committee risked its credibility when it approved without any hesitation the FBS statistics.

    Where the FBS went wrong was its decision to exclude the negative growth figures of large-scale manufacturing (LSM) of -7.7 per cent registered during July-March period and to include only the LSM figures of July-February period that stood at -5.7 per cent.

    Moreover, the FBS included doubtful figures of major crops in the growth estimates. The rice output in the current fiscal year was estimated at 6.96 million tons against the target of 5.7 million tons; wheat at 23.4 million tons against 24 million tons target, cotton 11.8 million bales against target of 14.1 million bales and sugarcane 50 million tons against the target 56.5 million tons.

    The military regimes have been notorious for cooking up figures to cover up bad performance or exaggerating a positive achievement in a bid to earn legitimacy from the public for their illegal rule.

    The caretaker government headed by Mohammadmian Soomro last year decided to set up a high-powered committee to ascertain the accuracy of the FBS data after it developed serious doubts about the quality of the figures about GDP growth, crops produce, inflation, poverty and industrial progress worked out by Shaukat Aziz regime.

    The committee headed by Deputy Chairman Planning Commission Dr Akram Shiekh decided in its first meeting that industrial data would now be collected by the ministry of industries and not by the Federal Bureau of Statistics because the latter’s data did not match the ground realities. For instance, the FBS figures put food inflation at 14 per cent while, according to independent economists, it was over 20 per cent. Donor agencies also, time and again, in their reviews of Pakistan’s economy, had doubted figures of economic indicators.

    The World Bank is also infamous for fudging data particularly about poverty and its health projects in the Third World countries. Last week, it ran into a serious dispute with Pakistan’s Planning Commission over how much poverty has reduced in the country. The bank claims that the number of those living below the poverty line has come down from 22.3 per cent to 17.2 per cent of the total population.

    But nobody in the Planning Commission is willing to buy this figure and include it in the Economic Survey 2008-09 for it is obvious that this could not happen at a time when the country’s economy is under severe strain due to high inflation.

    The World Bank insists it has used the correct methodology to calculate this figure worked out by the Planning Commission’s subsidiary body called Centre for Poverty Reduction and Social Policy Development (CPRSPD). In stark contrast, PC’s panel of economists had found poverty in the range of 37.5 per cent just a few months back.

    The World Bank, according to a newspaper report, had concluded that poverty declined from 22.3 per cent in 2005-06 to 17.2 per cent this year on the basis of the data collected in 2007-08 under the Household Income Expenditure Survey.

    According to the survey, poverty in the urban areas stood at 10.10 per cent and in the rural areas at 20.60 per cent. The poverty is often calculated on the basis of the CPI-based inflation statistics.

    There is an impression that the bright performance of the economy and high GDP growth rates claimed by the Musharraf-Shaukat regime were mostly fudged and not based on ground realities.

    In 2004, Dr Akmal Hussain, a noted economist, had disputed the then finance minister’s claim that the percentage of population below the poverty line has declined by 4.2 percentage points as compared to the level in the year 2000. He claimed there was a fudge in the figure and argued that the composition of growth is contrary to the official claim of poverty reduction.

    What had happened was that the agriculture sector where the majority of the poor subsist had shown a sharp decline in growth from 4.1 per cent previous year to 2.6 per cent. Even in the large-scale manufacturing sector with a growth rate of 17.1 per cent, the growth was predicated on a relatively small group of industries, namely consumer durables, automobiles, textiles and cement. These are hardly the industries whose growth could be expected to reduce poverty so quickly.

    The World Bank had also been fudging figures of poverty in India. In 2004, Indian Planning Commission member N.K. Singh had accused the World Bank of inflating poverty figures to maintain its own relevance. “If the World Bank starts giving real figures, it will lose its raison d’etre.” The actual level of poverty, he said, was much lower than what was being projected by the World Bank.

    The bank has also been accused of tampering with figures relating to malaria project and its success in India. Writing in the prestigious medical Journal “Lancet” in 2006, a group of experts charged the bank for falsifying financial and statistical accounts and also medical malpractices in Malaria treatment, mostly in India and Brazil. About the Malaria Booster Programme launched in April 2005 in India, the experts said that the bank ‘reneged on funding and created a smokescreen of misleading figures’.
     
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  5. ajtr

    ajtr Veteran Member Veteran Member

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    Yes, Dr Ashfaque, the data are fudged




    Monday, July 20, 2009
    I write in response to Dr Ashfaque Hasan Khan’s comment on an article I wrote recently challenging the economic accomplishments of the previous regime. Rather than concentrate on the issues I raised, he attacks me for being political and looking for a job. I would say to him that such an attack is in bad taste and quite unnecessary. I would also say to him I thought he knew me better. Dr Ashfaque says that our economic data is credible and is endorsed by all the smartest professionals in various international agencies. He has a short memory.

    One of the first things our now-absconding Shaukat Aziz did on taking over as finance minister in the previous government was to accuse the previous government (of Nawaz Sharif) of falsifying the data provided to the IMF. One of the first things Ishaq Dar did on taking over as finance minister early in the present government was to accuse the previous government (of Shaukat Aziz) of fudging the data. This was payback time. Given this background, is the dark cloud of suspicion that hangs over our economic data something new? Is it only me?

    Dr Ashfaque asks me to do a bit of reading before making generalised statements. I suggest he do the same. He should go to the IMF website and read the staff report on the subject of fake data that Pakistan presented to the IMF. As a senior adviser to the executive director in the IMF at that time, I have never been so embarrassed for my country.

    At the executive board meeting on the subject, the minutes of which are unfortunately confidential but are available with me if Dr Ashfaque would like to do some more reading, all I could do was hang my head in shame as each executive director, all 23 of them (excluding our chair which presented a weak defence written by me), castigated Pakistan in the strongest possible terms for taking money from the IMF based on cooked up data.

    The IMF staff which had led missions to Pakistan during the fudging period, the smart professionals who are the best in their field and can never be duped according to Dr Ashfaque, were especially shamed because they had been taken for a ride and were shown to be clueless. A burning issue dominated the meeting. Did the IMF staff know what was going on? If they did, they misled the IMF executive board, were complicit in the fudging, and should be dismissed. If they did not, they should be dismissed for incompetence.

    At the end of a highly-charged five-hour meeting, it was the decision of the executive board to fine Pakistan millions of dollars and ask the money back they had taken from the IMF during the fudging period. This is a matter of record which I suggest Dr Ashfaque look up before lecturing me on how good our economic data is. One further point. This fudging went on during an IMF programme when scrutiny of data is at its most rigorous. Imagine the fun the previous government had when there was no IMF programme!

    Dr Ashfaq quotes a long list of accomplishments of the government he served in, conveniently hiding everything behind averages. I believe he was the previous government’s spokesman. He certainly still speaks like one. In my article, I conceded that some good things were done. This is undeniable. But I, like many others, continue to harbour serious doubts about these so-called accomplishments. Take just one example. It is claimed that poverty was cut by a half in seven years. If the Musharraf government had continued for a few more years, poverty in Pakistan would have been eliminated altogether! Does Dr Ashfaque seriously expect me, or anyone else of sound mind, to believe this fantastic fabrication?

    Dr Meekal Aziz Ahmed

    Virginia, US
     
  6. ajtr

    ajtr Veteran Member Veteran Member

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    Questioning The Poverty Figure

    Dr.Akmal Hussain
    Newspaper: Daily Times
    Dated: Monday, June 14, 2004

    The government can take due credit for its growth performance this year. The GDP growth for the first time in more than a decade has reached 6.4 percent, and unlike last year it is supported by an increase in the investment rate from 16.7 percent last year to 18.1 percent this year. The fiscal deficit was reduced to 3.3 percent and State Bank reserves continued to rise. These figures are consistent and credible. What is not plausible however is the Finance Minister's claim that the percentage of population below the poverty line has declined by 4.2 percentage points compared to the level in the year 2000. There is a fudge in this figure and the reasons are as follows:
    (1) The composition of growth is contrary to the official claim of poverty reduction: The agriculture sector where the majority of the poor subsist has shown a sharp decline in growth from 4.1 percent last year to 2.6 percent this year. It is the large-scale manufacturing sector with a growth rate of 17.1 percent, which has determined the overall GDP growth performance. Even in this sector, growth is predicated on a relatively small group of industries, namely consumer durables, automobiles, textiles and cement. These are industries with low employment elasticities and where highly skilled and relatively well-paid workers are employed. Therefore these are hardly the industries whose growth could be expected to reduce poverty so quickly. Much less can they be regarded to be producing goods for the poor.
    (2) Income inequality between the richest 25 percent and the poorest 25 percent of the population has been increasing over the last decade. Even though data for the last two years is not available, yet the composition of growth suggests that income inequality has remained acute. The fact that inflation in the prices of the poor person's basket (food items), has increased at a higher rate than the average inflation rate, provides further indication that the distribution of real income between the rich and the poor may have become more unequal. When income inequality is high and increasing, a small increase in GDP growth cannot be expected to lead to such a sharp reduction in poverty as claimed by the Finance Minister.
    (3) The claim of poverty reduction is being made on the basis of a small sample survey of only about 5000 households, selected without regard to provincial coverage and conducted for only one quarter, April to June this year, when earnings from wheat harvesting enable a larger consumption expenditure by the poor. The results of this small sample survey are being compared to sample results in the base year drawn from the standard and periodic Pakistan Integrated Household Survey (PIHS). This has a much larger sample (14,000 households) with representation from each province, and averages out the seasonal variations in household expenditure by covering four quarters (one year). Given the quite different design of the sample surveys in the year 2000 and the year 2004 respectively, the results are technically incomparable. It would be like comparing apples with oranges. The specific differences in design of the two surveys indicated above, are such that a reduction in poverty would tend to arise from the differences in sample design rather than a change in the real magnitude of poverty.

    A professionally sound assessment of changes in the levels of poverty over the last four years would have to wait till the next round of the PIHS is conducted. Given the level of income inequality and the composition of growth, the recent increase in the GDP growth rate can at best provide grounds for the hope that poverty may have stopped growing. There is certainly neither adequate evidence nor any analytical reason to suggest such a sharp reduction in poverty (4 percentage points), as the Finance Minister in cavalier fashion proclaimed before an incredulous populace. He can take well-deserved credit for his achievements in terms of overall investment, growth and financial stability. Not for having substantially reduced poverty. To do so would be to assume out the very problem that is to be confronted, now that we have the fiscal space.
     
  7. ajtr

    ajtr Veteran Member Veteran Member

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    Economic survey contradicts realities


    By Zafar Samdani

    LAHORE, June 12: While annual Economic Surveys launched by government on the eve of the national budget are never models of accuracy and logic, one cannot recall this document so heavily defiant of these principles than the latest Survey.

    Numerous aspects of the Survey are on occasion mere raising eyebrows but it is the theme of poverty that produces a claim substantiated by specially manufactured data but contradicted by statistics in the Survey on many poverty-linked aspects.

    A 4.2 per cent reduction has been claimed in the incident of poverty. The main evidence cited to authenticate a 'decline in poverty', indeed reversal of previous trends is a limited survey conducted in April-May this year. The Finance Minister has also asserted that 'other indicators representing the living conditions of the people have shown improvement over 2000-01.

    What are these indicators? The survey under reference was primarily urban based while poverty is more rampant in rural Pakistan that is predominantly, indeed wholly, dependent on agriculture. The Survey reports a disappointing 2.4 per cent growth rate for the agriculture sector against a target of 4.2 per cent. That makes for rise in poverty rather than arresting existing trends, let alone their reversal.

    Two of the main cash crops of the country, cotton and wheat, were 'lacklustre'-explanations of pest attack and bad weather are simplistic but that is another issue. These crops involve a large percentage of farmers. Are unsatisfactory crops a formulae for countering poverty?

    Similarly, should statistics for inflation growing at 3.9 per cent over the first ten months of the last year against 3.3 per cent for the same period a year before, 4.9 per cent rise in food items against 3.1 per cent for the year before, unemployment galloping at 8.27 and National Savings 'remaining flat at 20 per cent' for the last two years be viewed as contributing towards reduction in poverty or intensifying misery?

    The Economic Survey notes, quite correctly, an alarming increase in environmental degradation despite the government's efforts to improve conditions. Urban populations are under the risk of air pollution, provision of fresh water supplies in many parts of the country and some negative environmental factors are 'more than five times as high as in industrial countries and Latin America', according to the Survey. Which argument should one accept? Leading urban centres are simply bursting at the seams; their populations are growing at a frightening rate while civic facilities and basic services have failed to keep pace with higher population. The cities are expanding because of rural migration and the reason behind people leaving their hearths and homes is always poverty. Degradation of environmental conditions thus points towards rising poverty in the country, particularly in rural areas.

    Some of the factors listed in the Survey as proof of better living conditions are drinking water, sanitation and use of electricity and gas for cooking purposes. How could such statistics be compiled in the face of incontrovertible evidence of deteriorating sanitary conditions and deaths by drinking of contaminated water in addition to official research citing a percentage of poison in the drinking water available in many cities makes one wonder.

    The question that the Survey's contents on poverty throws up is: are its authors live in a private world or they have premeditatedly produced a document that is in stark contradiction of prevailing realities, one that misrepresents and misinterprets.
     
  8. ajtr

    ajtr Veteran Member Veteran Member

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    Caretakers see through cooked up growth





    Sunday, January 27, 2008
    Body to study figure fudging by Aziz govt
    ISLAMABAD: In a shocking development, the interim government headed by Muhammadmian Soomro has expressed no-confidence in the figures firmed up by the Shaukat Aziz government about various major economic indicators such as the GDP growth, major crops produce, inflation, poverty, and industrial data.

    Quite disturbed with the flour crisis, energy crisis, and the economic data of FBS, particularly food inflation, employment and poverty figures, which mostly do not match with ground realities, Prime Minister Muhammadmian Soomro has constituted a high-powered committee to ascertain the accuracy, reliability and credibility of the data gathered by the Federal Bureau of Statistics (FBS).

    "The economy about which the previous government used to make tall claims was exposed in the four-day wheel jam strike after the assassination of Ms Bhutto and the government has been compelled to readjust all economic indicators," a senior government official told The News.

    The committee has been constituted with Deputy Chairman Planning Commission Dr Akram Shiekh as the head. The committee comprises Special Secretary to Finance Ministry Dr Ashfaq H Khan, Secretary FBS Asad Illahi, DG FBS SECP Chairman Raziur Rehman, and Secretary Ministry of Industries Shahab Khawaja.

    When contacted, Dr Akram Sheikh confirmed the development and said that the prime minister had constituted the committee on quality figures about the economy headed by him in the last ECC meeting.

    He said that primarily the committee had been tasked to bring unorganised industrial sector in the final figures about industrial growth estimates and to this effect, the Ministry of Industries had been directed to compile and capture the data about the unorganised industry across the country. To a question about the figures firmed up by the previous regime about the GDP growth, inflation, poverty and crops production, Akram Sheikh said the committee would start work on the said issues later. "However, it would take up the accuracy issue of the industrial data first."

    In the terms of reference (ToRs) of the committee, a copy of which is available with The News, the assignment of the newly-constituted body is to appraise critically the input data of the FBS and assess the accuracy, reliability and credibility of various economic indicators.

    The official said in the first meeting of the committee on quality FBS figures, it was decided that industrial data would now be collected by the Ministry of Industries, not the Federal Bureau of Statistics, arguing that the data collected by the FBS did not match the ground realities.

    There is no denying the fact that the country experienced unprecedented food inflation that hovered around 14 per cent as per the FBS figures, but the ground realities speak of something different and according to independent economists, the food inflation stands above 20 per cent.

    When contacted, Qaiser Bengali, a well-known independent economist, said the move to constitute a committee on quality figures about the economy was itself not less than a no-confidence in the credibility of the previous regime.

    He reminded that he was highlighting how the government was manoeuvering and fudging the economic data since 2001. Qaiser Bengali said, although, the constitution of the committee was a good step in the right direction, but the main thing was to see the composition of the committee and how much credibility it commanded to fulfill its responsibility.

    Bangali doubted that the committee comprising all government functionaries would come up to the expectation of the people by revealing the shocking disclosures in figure fudging that the previous government had committed just to show its economic output.

    Donor agencies also, time and again in their various reviews of Pakistan's economy, have doubted figures of some economic indicators, but the previous government headed by Shaukat Aziz took on many donors for issuing such statements.The wheat produce claims of 23.5 million tonnes are also questionable keeping in view the wheat and flour crisis that has hit the country in a big way.

    Many are of the view that most of the figures are manipulated to show maximum economic output. Efforts were made to seek the comment of secretary FBS Asad Illahi on the development, but he was stated to be in the Combined Military Hospital to look after his ailing son.
     
  9. ajtr

    ajtr Veteran Member Veteran Member

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    Growth rate manipulation!

    EDITORIAL (May 21 2010): The National Accounts Committee has approved the projected Gross Domestic Product (GDP) growth rate of 4.1 percent for the current fiscal year. The key word is projected, indicating that this is not the final figure as it simply cannot be considering that the fiscal year ends on June 30. The growth rate is, by definition, a statistic that is premised on the base year selected, given certain parameters.

    Any change in the base year, or indeed in the parameters, would automatically change growth estimates. Thus, if a government decides to take a low growth year as the base year, then estimates would change as, indeed, they would if the reference growth rate of the base year is changed. It is indeed telling that the Federal Bureau of Statistics (FBS) reduced the reference growth rate for 2008-09 from 2 to 1.1 percent.

    The growth rate can also be manipulated if the government decides to project a ball park figure for poor areas, which typically under report, in all economies of the world, but particularly in ours as reflected in our large parallel undocumented economy. Or the GDP deflator may be miscalculated, deliberately or otherwise, which is a measure of the level of prices of all new, domestically produced, final goods and services in the economy. Governments are also typically tempted to overstate national output during times of an economic "bust" and understate during a "boom". However in the West, there are private sector agencies that do collect, collate and analyse government-released data for consistency and keep them honest to some extent.

    In marked contrast, Pakistan has no data collection agency in the private sector that has the capacity to challenge government statistics by releasing their own. However, there is no dearth of critics who accuse the government of blatantly overstating the growth rate. The reason their charge sticks, nine times out of ten, is because the government does not employ any finesse, defined as keeping track of data integrity and consistency, when it fudges statistics. It maybe recalled that Shaukat Aziz, the country's former Prime Minister, was accused of manipulating statistics that showed better performance of the economy than was, in fact, the case.

    Analysts across a broad spectrum have taken the present government to task for coming up with a growth figure that they consider is obviously inaccurate, given the slowdown in the economy - a slowdown attributable to the continuing energy shortfall, as well as the high cost of borrowing, second year running. Critics further cite the recent statement by the Advisor to the Prime Minister on Finance Dr Hafeez Sheikh that the government may well go for another IMF programme in the event that it is unable to translate the elusive pledges at the Friends of Democratic Pakistan meeting in April 2009 into disbursement as proof positive that the economy remains mired in crisis.

    This is indeed a compelling argument as the original 23-month IMF programme is a mere five months from completion, a time-period which evidently the IMF had considered sufficient to turn the economy around. Unfortunately, the country seems to be far from showing signs of either raising domestic revenue or reducing expenditure, implying thereby that self-sufficiency remains a dream.

    GDP calculation is a very important part of policy planning and reform as it influences strategic decisions by the government, by the State Bank as well as by investors and ordinary people. It is precisely for this reason that the Czech Head of Statistical Office was forced to resign in 2002, after her office understated the growth rate. While in Pakistan, our state-employed statisticians would no doubt blame their manipulation of statistics on pressure from the executive, yet in the interest of taking informed economic decisions, it is time that the government gives complete autonomy to the FBS.
     
  10. ajtr

    ajtr Veteran Member Veteran Member

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    Aziz govt overspent Rs558bn, fudged figures: Dar





    Thursday, April 10, 2008
    Macro-economic projections revised downward

    By Mehtab Haider

    ISLAMABAD: Holding the Shaukat Aziz government responsible for "figure fudging" and creating mess on the economic front, Finance Minister Ishaq Dar said that all findings would be tabled before parliament for action against those who violated their own Fiscal Responsibility Law.

    The economic situation is so alarming that the government had to revise downward all macro-economic projections including GDP growth target from 7.2 per cent to six per cent, fiscal deficit target surged from 4.5 per cent of GDP to over six per cent, FBR target from Rs1025 billion to Rs990 billion, inflation going up from six per cent to 10 per cent, current account deficit up from 5.5 per cent to 10 per cent of GDP, possibility of raising basis points on Pakistan's issued bonds from 200 points to 600 basis points over LIBOR (London Inter-Bank Offering Rates) by June 30, 2008.

    "The mismanagement of economy has resulted in overspending of Rs558 billion and if the government does not take corrective measures then fiscal deficit will touch 9.5 per cent of GDP by June 2008."

    Ishaq Dar presented these startling and disturbing figures about Pakistan's economy at a press conference along with Information Minister Sherry Rehman here at the PM Secretariat on Wednesday.

    He said that these figures would be presented before parliament, the National Assembly Standing Committee on Finance and the Public Accounts Committee for scrutiny of the facts where Shaukat Aziz and his entire team would be asked to explain this sad state of economy.

    He said the caretaker government was also responsible for this mess, as they too took no step to control the situation. Instead, they hiked POL prices and power tariff. He also said that over 73.6 per cent population lived below poverty line, according to two dollar a day definition.

    Flanked by Special Finance Secretary Dr Ashfaque Hassan Khan, Secretary Finance Dr Waqar Masood and Chairman FBR Abdullah Yousaf, Ishaq Dar said the government would take tough measures to put the economy back on the right track by rationalising the POL prices, focusing on agriculture and manufacturing sectors and tackling energy crisis through conservation for achieving the desired results.

    To improve the economic situation, he said, the government would generate $2.5 billion from foreign inflows, reducing expenditure and by mobilising revenue generation from various avenues to revive the derailed economy.

    The public debt, he said, touched new height during the last eight years. It rose to Rs 2946 billion from 1947 to 1999, but climbed to Rs5695 billion by June 2008, showing an increase of Rs2749 billion in the last eight years. "Those who claim to have broken the begging bowl have actually enlarged it," Ishaq Dar observed.

    He said external debt has climbed to $42.5 billion from $37.5 billion in 1999 despite receiving significant inflows. He also said the credit rating of the country could also be downgraded.He said the growth in money supply (M2) is fuelling inflationary pressure as it is projected to grow by 19% till June 2008, resulting into CPI inflation exceeding 10% and food inflation 14%.

    The money in circulation was Rs643 billion in 1999, which grew to Rs4065 billion by June 2007. It is projected that the money circulation will reach Rs4837 billion by June 2008. Answering a question about the strategy to reduce the fiscal deficit to 6per cent of GDP, he said that the decision on imposition of new taxes could be taken in the budget on the basis of progressive taxation. However, he said the POL prices could be rationalized and the cabinet would take a decision in this regard.

    To another question about the officials who were part of the team of the previous regime and are still sitting with him, he said that the standing committees of the National Assembly, the Senate and the Public Accounts Committee have the right to summon any one to question about these figures.

    He also outlined the coalition government's strategy to revive the economy, saying that the government would focus on hitherto neglected agriculture and manufacturing sectors in the months ahead.
     
  11. ajtr

    ajtr Veteran Member Veteran Member

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    External debt hits$40.322bn in 4 years




    By Shahid Iqbal

    KARACHI, Feb 5: How much the government added to the external debt is much more important than the build-up of a heap of new record domestic debt, adding a trillion rupees to the total.

    The huge external debt, which witnessed an addition of about $7billion to the total of over $40 billion in just four years, is set to start a vicious cycle of borrowing — servicing — borrowing.

    The rising bill of external debt-servicing gets more importance in the wake of widening current account deficit.

    This deficit curtails the government’s ability to pay external bills, forcing it to borrow to meet the requirement or sell the assets it has for yielding foreign exchange.

    The government has been paying about $3 billion each year as debt-servicing despite rescheduling of Paris Club consortium debt which has the largest share in the total debt.

    The latest figures issued by the State Bank showed that the total external debt reached $40.322 billion from $33.352 billion since 2003-04.

    The addition of about $6.9 billion in just four years showed that the government borrowed massively to meet its external payment.

    This has increased the cost of debt-servicing. The future government is bound to borrow more to keep itself able to make external payments. This could be the second biggest task of the future government after de-freezing the petroleum prices.


    The future government will have to carry out another task to launch Global Depository Receipts (GDRs) to raise dollars for its increasing demand. The dollar demand has multiplied after record oil prices which hit $100 per barrel.

    The slow export growth and high import growth is another difficult area which demands more dollars.


    The country’s foreign exchange reserves have stared depleting but still these are about $15 billion.

    This will be the toughest task for the future government to maintain reserves and keep the payment system smooth.

    The foreign exchange reserves have been a trade mark of success of the previous government.

    Both the Prime Minister and President referred the forex reserves as one of the biggest successes in numerous speeches they made in last couple of years.

    The SBP’s data showed that the government of Shaukat Aziz went beyond all records of increasing domestic debt which rose by almost one trillion rupees in five year to make the total as Rs2.7 trillion.

    According to the report, the previous government which completed its five-year tenure increased the domestic debt by 58 per cent in five years.

    The government broke all records of previous governments to add such huge debt on the back of the weak economy.


    The previous government added both the external and domestic debt on such a scale which never happened before.

    The caretaker government has followed the same path and has been borrowing at the fastest speed.

    The State Bank in its monetary policy criticised huge borrowing from the State Bank.

    The SBP accused the government of accelerating inflation through huge borrowing and destroying all efforts of the SBP to control inflation. The government borrowed about Rs237 billion from SBP in six months.
     
  12. ajtr

    ajtr Veteran Member Veteran Member

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    Defying logic and reason



    By Mir Mohammad Ali Talpur

    MULLAH Naseeruddin, the sardonic sage, once decided that he could make his donkey survive without fodder because it was proving expensive and troublesome. In spite of objections he began reducing the fodder daily by a fistful. This continued for quite some time until one day a dejected Mullah told people that the foolish donkey died just as it was getting used to living without fodder.

    He said had it survived one more day without the last fistful it would have got used to living without food and he would have been spared a lot of trouble and expense.

    Successive Pakistani governments have devotedly followed Mullah Naseeruddin’s theory. It seems they believe that if food prices gradually go beyond the purchasing power of people they too like the Mullah’s donkey will learn to survive without nourishment. They are oblivious to the catastrophic consequences of their policies. Prices have steadily risen while real incomes have fallen sharply due to overall inflation and the rising cost of services and utilities. The lower and fringe classes were barely surviving anyway but in the nine years that this government has ruled the roost, prices of essentials have tripled and this has now broken the back of the middle class as well. The flour crisis has hit the country like a magnitude 10 earthquake on the economic Richter scale and the expected increase in POL prices will be a devastating tsunami for the people.

    Ominously ‘food poverty’ has now reached the rural areas where it was unheard of before and the centuries-old cushion of helping out each other is no longer working. The old buffers are breaking down under the consistent and sustained assault of distorted government policies. This has been aggravated by exorbitantly priced agricultural inputs and successive crop failures. Once the social fabric unravels in the rural areas the resulting chaos may prove to be the last nail in the coffin.

    Slowly and inexorably the prices of commodities are going beyond the reach of the majority of people. A few statistics will help explain the acuteness of the food inflation problem. Figures comparing the prices of some essentials in 1999 with those of 2007 are self-explanatory. The price of a 2.5 litre Dalda ghee tin rose from Rs173 to Rs275, a 59 per cent increase, while loose-ghee prices skyrocketed by 127 per cent from Rs40 to Rs91. Significantly, only the poor use loose ghee.Fresh milk rose from Rs22 to Rs34, a 54 per cent rise. Irri-6 rice jumped from Rs12 per kg to Rs24 in 2007 and is now selling at Rs26. Beef with bone registered a 166 per cent rise from Rs60 to Rs160 while the boneless variety shot up by 186 per cent from Rs70 to Rs200. Again beef is consumed mostly by those who can’t afford any better and the way cattle are slaughtered and transported is not for the weak-hearted to know. In Hyderabad I have on many occasions seen stray dogs biting off pieces of meat from the carts it is transported in.

    Sugar prices rose by 58 per cent over the last eight years without a corresponding increase in sugar-cane prices. Lentil forms the mainstay of poor people’s diet and all types registered a significant increase in price. In the early sixties a friend used to say ‘but for daal there would be a revolution in Pakistan’ because it was sustaining the stomachs of the poor. Now it too is getting beyond the reach of the poorest.

    One is forced to wonder if the government is really short of funds. The facts prove otherwise but policymakers refuse to consider the problems of the people as worthy of their attention. According to a State Bank report the government borrowed a staggering $15bn-plus over the last four years as the country’s total debt and liabilities surged to the $40bn mark. Our rulers need these colossal amounts to meet the demands of their luxurious and wasteful lifestyles.

    In the period that prices of essentials tripled for the people, the total cost of running inefficient state institutions rose four-fold. We are not talking peanuts here. If these funds were put to better use like research and development in the agricultural, medical, education and social sectors, many of the problems faced by the country could be eradicated. Instead the rulers choose to spend the hard-earned money of the people, and foreign largesse, on themselves.

    The expenses at President House rose from Rs75m in 1999 to Rs309m now, on the PM from Rs98m to Rs367m, on the National Assembly from Rs250m to Rs1, 006m and on the Senate from Rs111m to Rs577m. The icing on the cake is that the veritable army of incompetent, bumbling and at times positively rude ministers, advisers and special assistants now costs Rs155m while seven years ago Rs24m was enough for this contingent’s upkeep. In 2004 Mr Jamali took 29 persons for Umra at a cost of Rs16.7m, Chaudhry sahib’s 134-person entourage dipped into the exchequer to the tune of Rs15.23m while Mr Aziz took along 49 persons on a trip that cost us Rs11.12m. How much of a dent the pilgrimage undertaken by the new caretaker PM and his entourage put in the public pocket is not yet known. It needs to be asked if sins can be washed away by performing Haj and Umra at the taxpayers’ expense.

    A report in this paper on Oct 23, 2007 said, ‘Government spends Rs65m on overseas treatment of 18 bigwigs’ and ‘that too in a country where the public per capita health expenditure is a measly Rs360’. It adds that MNA Kunwar Khalid Yunus’s treatment in the UK cost Rs4.5m while Sher Afgan’s cure accounted for $50,000. I ask the readers to kindly visit government hospitals where the conditions are no better than those found in abattoirs.

    Can one expect the governments here to change and work towards the welfare of the people? I suppose not because their warped and misplaced priorities are aimed only at self-aggrandisement and perpetuation of their rule.

    The people have never been their priority and never will be because that entails sacrifice on their part. They relentlessly pursue policies which are unquestionably anti-people and defy the logic and reason that govern the laws of governance.

    It is said Mullah Naseeruddin was told one day that his mother-in-law had drowned. He rushed to the river and asked to be shown the spot where she had drowned. He then started walking upstream. Surprised, his friends said it would be better if they went downstream. He replied, “You probably don’t know the lady, she acted obsessively differently from normal people. So I am certain we will find her body somewhere upstream.”

    Our rulers are devoted disciples of Mullah Naseeruddin’s mother-in law and will never do what common sense and circumstances demand of them.
     
  13. ajtr

    ajtr Veteran Member Veteran Member

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    Hey! Hey! Hey! What's Going On?


    Author: Arindam Banerji, Ph.D., CA, USA ([email protected])
    Publication: IndiaCause.com
    Date: June 7, 2003
    URL: http://www.indiacause.com/OL_030607.htm
    Arindam Banerji, the author of this article, took the usual route of going from the IITs, through a Ph.D in the US, to finally working in sundry research labs. Currently, he is a scientist of some repute, the kind whose ideas actually get used by people, and an entrepreneur, with, he says, not much success. Some day, he says, he�ll go back to India, but for now, as time permits, he is a writer and political thinker on South Asian geo-political issues.

    Hey! Hey! Hey! What�s Going On?

    Last week was nothing short of a disaster for Indian journalism � according to my powers of observation, we pulled off at least 3 different Jayson Blairs, all in the space of 1 short week. Three very visible journalists/columnists published articles with random half-truths and lies, with nary a rebuttal nor a correction to follow anywhere. Facts are created and distorted seemingly for political conclusions. Everybody of course has the right to their opinions, but our veterans here seem to have their own version of facts, too. Where cooked up facts will not do, some are audaciously hidden while others are put in contexts that do not belong at all. All in the name of making some obtuse, perhaps political point.

    All right, all right, let�s not crucify them, before perusing their stories.

    Mr. Aiyar spreads some numbers around

    First, let�s take the odd case of Mr. Mani Shankar Aiyer � on a jaunt to Islamabad, he takes the time out to continue his lobbying efforts on the behalf of Pakistan. He writes "Shaukat Aziz ... announces that the Pakistan economy in the current financial year, July 2002-June 2003, has recorded the fastest growth in South Asia. He does not say so but the sad fact is that they have overtaken India as we slide downwards and they slither up. Per capita income in the current fiscal year, he adds, has risen by a double-digit figure...";

    Note that he makes three claims:

    1. Per capita income has gone up by a double digit figure

    2. Pakistan recorded the fastest growth in S. Asia.

    3. �have overtaken India as we slide downwards and they slither up�

    The problem is that though none of them are strictly incorrect, Mr. Aiyar deliberately shades the truth in each. The end result is pushing his political interest in playing up the Pakistani economy, while at the same time denigrating the Indian economy. So, once again lets look at the facts:

    Per Capita Incomes

    First, let us look at the pesky per capita income numbers. Reality is that Pakistan's per capita income ($420.00) has declined to below that of Sub Saharan Africa ($460.00). Mr. Aiyer's magic numbers that proclaim a $10.00 in per capita income growth fails to take into account the re-evaluation of most currencies against the dollar - thus, automatically, the Indian Rupee has gone up by 4% and so has the Indian per capita income. [Parsuram, BRF]. So, most everybody�s per-capita numbers have gone up somewhat, since Uncle Sam is printing up dollars night and day - incorrect implications by Mr. Aiyer here. In fact, if you look at income growth over 1990-2000, an average Indian was fifty per cent more prosperous in 2000 compared to his (or her) situation in 1990, while a Pakistani gained only 13% in the same time. So, yes Mr. Aiyar tells the truth, but at best half-the-truth about per-capita incomes.


    Fastest growth in S. Asia

    So, what about those great growth numbers brought about by Musharraf�s policies. Taking a closer look at Pakistan's claims of growth, Dr. Assad Sayyed (a Pakistani economist, not an Indian one) says "General Musharraf and his economic mandarins generally highlight ...the military regime has been able to reduce the fiscal deficit to 5.6% of the GDP compared to � 6.1% in the 1990s. As much as 41% of this reduction in the deficit was achieved through slashing public investment.". Or in other words, Pakistan cut out critical public investment to prop up the numbers. Mr. Musharraf in order to protect his gaddi, has doomed the Pakistani public to many more years of minimal improvements in living standards. So, in this particular case, Mr. Aiyar without giving a source for his data, compared true Indian progress with propped up numbers, resulting in a false politically motivated insinuation.

    As we slide downwards and they slither up �

    Finally, let us consider this canard of �have overtaken India as we slide downwards and they slither up�. Explains Farrukh Saleem, a Pakistani journalist by the way of background "America buys Rs100 billion worth of Pakistani textiles a year. "Made in Pakistan" labels are available in some 5,000 retail outlets throughout the US. In Pakistan, 60 per cent of the total labor force - some 25 million workers is employed by the textile sector.�. In short, the textile industry is Pakistan�s largest legitimate industry and in fact, the only legitimate industry of any significant size.


    Unfortunately, it seems this very industry is in a lot of trouble, as "American Eagle Outfitters and Perry Ellis have stopped ordering Pakistani apparel altogether. ...Orders from large American retailers are down more than 40 percent ...(or)... 64 percent reduction in orders for clothes that would be made from December through February.". As a consequence, at least �150,000 Pakistanis have already lost their jobs and some 177 manufacturers have closed down shop. .. Spill-over job losses would eventually run into a million or so (when apparel workers don't have the money to buy eggs poultry workers also suffer and so on).�. This trend is not going away any time soon � just like countries do not want to play cricket in Pakistan, they seem to be shying away from doing business in Pakistan.

    The very same Farrukh Saleem talking about the state of the Indian industry says the following: -�Mumbai is now home to at least three dozen American companies including Kodak, Heinz, Monsanto, Warner Bros, Federal Express, Bank of America, Bankers Trust, Parke Davis, Intel, JP Morgan, Kellogg, Pfizer, Procter & Gamble, American Int�l Group, Exxon-Mobil, Delta and Boston Consulting.

    Delhi has AT&T, GE, General Motors, Oracle, Pepsi, Unocal, Xerox, Lockheed, Raytheon, Rockwell, Honeywell, Adobe, AES, Alcoa, American Express, Northrop, McKinsey, Amway, Polaroid and Coca Cola. Bangalore has Caterpillar, Dell, Sun, Texas Instruments, NCR, Hewlett Packard, Motorola, Lucent, IBM, Novell, Ingersoll- Rand, American Data and MetLife. Hyderabad has Microsoft, Cognizant, Chip Engines and Brigade. Chennai has Ford, Caltex, Tenneco, Covansys, Diebold, Citibank, Ernst & Young and Price Waterhouse.

    A large majority of US corporate giants are now dependent on Tata Consultancy, Infosys Technologies, Wipro, Satyam Computer Services, HCL Technologies, Patni Computer Systems, Silverline Technologies, Mahindra, Pentasoft, Mascot, Mascom, Mastek, Polaris, L&T and Hexaware (all Indian software giants).�

    The list goes on and on � in fact, now at least 77 MNCs produce intellectual property (not sweat shops) in R&D labs in India. Mr. Aiyer, how many companies have done the same in Pakistan in the last few years? On the other hand, can you name any significant export products from Pakistan, other than textiles, low-end sports equipment, drugs and terrorism � can you name any intellectually relevant commercial products?? Nope. But, then why put India down? What was the need for the half-truths and distortion, Mr. Aiyar?

    Speaking on Behalf of Indians

    Praful Bidwai�s communist-anarchist dementia took an unusual turn in his latest column in rediff; criticizing Indo-Israel relations, he says: "... and is now trying to buy the "Arrow" missile defense system in whose development S Y Coleman, a firm headed by Lt Gen Jay Garner (yes, of Iraq fame!) was critically involved."

    It would seem from his statements, that Bidwai is opposed to the Arrow anti-missile system, since it comes from Israel and people with links to Iraq. Essentially, it is more acceptable to him that my family in Delhi get vaporized, in stead of India getting the defensive Arrow anti-missile system from Israel.

    Isn't that EXACTLY Pakistan's position?

    Of course it is, but more importantly, how is this, according to Mr. Bidwai the opinion of most Indians. Indian freedom of speech gives Mr. Bidwai the right to propagate Pakistani national interests in his column. But, how does this give him the right to pass off the Pakistani national interests, as what is good for India or even as the majority Indian opinion? I�m quite sure that all my friends and relatives in Delhi would rather NOT be vaporized � they would prefer to get an anti-missile system, even if it comes from North Korea or Saddam Hussein.

    Fetish for Terrorists

    Sarmila Bose, an assistant editor and columnist for Ananda Bazar Patrika and The Telegraph newspapers in India, writes "For the hypothetical choice between Narendra Modi of Gujarat and General Musharraf, it's no contest really - the truly disturbing sign of the direction India's democracy has taken is that the 'Paki in khaki' would get my vote any day over the saffron-draped Hindu nationalist peddling the politics of hate".

    This article, again is an example of clear obfuscation of facts and plain one-sided presentation of facts to make a spurious point. Much as I detest her conclusion, she has a right to make it � but does she have the right to delve into half-truths and openly hide facts to do this. The question that one has to ask is what was this big political point that she hoped to make through such obfuscation?

    Musharraf as the Great Dictator

    Ms. Bose who has shown this same fetish for terrorists before, sings Musharraf�s praises without telling her audience, any of the following:

    1. In May,1988, the Shias, who are in a majority in Gilgit, rose in revolt against the Sunni-dominated administration. Zia put an SSG group commanded by Gen. Musharraf in charge of suppressing the revolt. Gen. Musharraf transported a large number of Wahabi Pakhtoon tribesmen from the NWFP and Afghanistan, commanded by bin Laden, to Gilgit to teach the Shias a lesson. http://www.jammu-kashmir.com/ insights/insight20000206b.html. These tribesmen under bin Laden massacred hundreds of Shias. In its issue of May,1990, "Herald", the monthly journal of the "Dawn" group of publications of Karachi, wrote as follows:

    " In May,1988, low-intensity political rivalry and sectarian tension ignited into full-scale carnage as thousands of armed tribesmen from outside Gilgit district invaded Gilgit along t he Karakoram Highway. Nobody stopped them. They destroyed crops and houses, lynched and burnt people to death in the villages around Gilgit town. The number of dead and injured was put in the hundreds. But numbers alone tell nothing of the savagery of the invading hordes and the chilling impact it has left on these peaceful valleys."

    2. Musharraf started the Kargil conflict, which caused the death of at least 533 Indians, injuring many more.

    3. Musharraf, as COAS has directly controlled the jihadi terrorism against Indians killing tens of thousands over the last decade. In fact, his belief in jihad is captured by his own statement as ""the acquisition of Kashmir by Pakistan can wait. What is more important is to keep the Indian army bleeding in Kashmir just as the Afghan Mujahideen kept the Soviet troops bleeding in Afghanistan". The US state department in 2001 said " Pakistan's military government, headed by Gen. Pervez Musharraf, continued previous Pakistani Government support of the Kashmir insurgency, and Kashmiri militant groups continued to operate in Pakistan, raising funds and recruiting new cadre."

    4. Musharraf as COAS and then President directly helped the Taliban kill tens of thousands of Afghans in a brutal war. In fact, the air-lift of Kunduz after the US invasion was started to move out key Pakistani army officers amongst the ranks of the Taliban.

    5. Musharraf scuttled plans to capture Osama by the US, thus leading to eventual the death of many innocent civilians in US and Afghanistan. In fact, in the last 3 years all major international terrorist attacks can be seen to have a Pakistani hand (led by Musharraf, of course).

    6. "General Pervez Musharraf says the press in Pakistan is free. Journalists' experience and reports by! indepen dent sources on this issue suggest there is not much truth in this claim. Green Press' report too - State of Press in Pakistan - finds there is no "press freedom" in Pakistan. Besides attacks against the press, the report has also chronicled all violations against freedom of _expression and curbs on entertainment from May 2002 to May 2003. The report documents more than 50 cases that it says amount to "crimes" against press and other freedoms. Most of these actions were allegedly masterminded by the state to suppress dissenting voices. None was probed or culprits punished" Friday Times also available at http:// www.pakistan-facts.com/article.php/20030502121837343

    Of course, all this was considered "much" preferable to any as yet unproven accusations on Modi. (Please note the recent Nanavati report). Preferable, to an extent that she chose to hide all the facts. Why was it necessary to paint this picture of a terrorist general?

    ooh, that great Pakistani economy once again

    Bose further claims "The reality is that in terms of these crucial issues, the military dictatorship of General Musharraf from 1999 to 2002 arguably provided better governance, not only compared to previous elected governments of Pakistan, but also compared to the democratically elected government of India during the same period". She further adds "Secondly, General Musharraf seemed at least to try to deal with pressing policy matters including economic problems. Some of his economic successes are directly related to his decision to do a policy somersault in Afghanistan and become America's ally in its 'global war against terrorism' - a practical move most certainly in his country's best interest. In India the economic reform programme is adrift while issues of temple-building or 'cow protection' take centre-stage."

    Somehow, the whole governance issue and Pakistan�s handling of their economy has made both Aiyer and Bose gush and blush.

    Of course, this period of governance has seen Pakistani editors regularly flee the country due to risk to their families and witnessed open threats to the life of one of the most visible editors in Pakistan. Almost all civilian organizations are now run by military men. Bernard-Henri Levy's recently published book says "Pakistan is the most delinquent of nations" and claiming that Pakistan was the real key to all Islamic-led international terrorism, he said that the US had solved only 1% of the problem by deposing Saddam Hussein.

    This is about Musharraf's Pakistan, about which Shaheen Sehbai says the following

    "Last week the Inter Services Agency (ISI) of General Musharraf kidnapped the Deputy Opposition Leader of Punjab Assembly, Rana Sanaullah Khan, beat him blue and black, shaved half of his head and half of his moustache and abandoned him on a deserted road, all for criticizing the Army Generals. In another move the bold and brave Lahore newspaper "Weekly Independent" was directly threatened with a senior official warning the publisher: "Enough is Enough"." - SA Tribune

    Further, Dr. Assad Sayyed writes in May 2002, "This assessment of Pakistan's economy - based for the most part on official data � shows that economic indicators pertaining to the lives and livelihoods of the Pakistanis have performed dismally in the last few years. In fact, some of them are even worse than those in the 'lost decade' of the 1990s. More importantly this deterioration in the economy apart from the drought - is in large part due to the policy framework adopted by the government."

    India in the same time period, has done some of the following:

    Fact #1. "Citing the 18.05 per cent rise in exports, Jaitley said, with this India share in the world exports in merchandise goods has increased from 0.4 per cent in 1992-93 to 0.7 per cent in 2001-02 and 0.8 per cent in 2003. If the present trend is maintained, we might even reach one per cent share in world exports before the target year of 2007," he said." - IE

    Fact #2. "Despite an overall sluggish growth, many sectors in the economy are growing. And, growing at very handsome rates too. According to an ET Intelligence Group study, a large number of industries are growing at rates over 10%. Iraq or not, and SARS be damned. Compared to the growth rate of the real economy, that's stupendous" - TNN

    Fact #3. "Auto part exports to rise over 100% to $2bn in 2 years" - ET

    Fact #4. "Agricultural and processed food exports rose 23% during April-October 2002" - ET

    Fact #5. "Electronics components' exports have posted a 20.35 per cent rise in 2001-02 to Rs 2200 crore compared to Rs 1,828 crore in 2000-01, according to an estimate by Electronics and Computer Software Export Promotion Council." - ET

    Of course, her agenda would not allow her to "expose" the following truth about the adrift economic reform program: "The winter session of India's 12th Parliament adjourned on Dec 21,2002 after setting something of a record for the legislative business carried out. Lok Sabha the lower house, had passed 42 pieces of legislation and Rajya Sabha,the upper house had approved more than half of them. A few dead laws were repealed. Some were fine-tuned. The reach of the legislators has been wide. Commentators say that the bills passed will reform the markets, strengthen the economy and make life a little more equitable." - goodnewsindia.com

    Do we really want to compare Indian economic successes with Pakistan's terrorism extortion-money based economic bubble? Do we really want to compare Indian governance with Pakistani governance? From the above evidence, it appears not. While I�m sure that the Indian economy could be handled more efficiently, what was it that stopped Ms. Bose from giving a more factual description?

    How does this happen?

    The most important thing to note is that these are some of the columns that came to my notice just within the last one week. I have clearly missed many more.

    While, I have strong opinions on why these veterans chose to skate on thin ice � I�ll not make them here. I�m sure folks on the right side of the fence do the same too and others should look into them just as closely. But, the upshot of all this is that the Indian readers� opinions get biased by things other than facts.

    How much of this brain-washing happens every day in our media that goes completely unnoticed? Why does it go un-challenged? Finally and much more importantly, what overall effect does this have on the Indian readers? How many false opinions of the Indian populace is based on such facts. You tell me.

    Arindam Banerji, Ph.D.
     
  14. ajtr

    ajtr Veteran Member Veteran Member

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    Govt adopts novel tactic to project higher growth rate


    ISLAMABAD, May 16: The government has revised current year’s real economic growth rate at 4.1 per cent – much higher than the 3.3 per cent announced earlier – mainly because of a major downward revision in growth and production figures for the last two years.
    Informed sources told Dawn on Sunday that last year’s (2008-09) real economic growth (commonly defined as Gross Domestic Product) rate had been revised downwards to a paltry 1.2 per cent from two per cent announced and hitherto acknowledged by the government. Likewise, the real GDP growth rate for 2007-08 has also been brought down to 3.7 per cent from previous estimates of 4.1 per cent.

    The revised growth estimates have been compiled on the basis of reconciled data for the last two years and were expected to be approved by a National Accounts Committee (NAC) meeting to be held on Tuesday (May 18). The NAC, comprising federal and provincial economic ministries and agencies, is the highest forum to approve annual economic data and its findings become the basis of next year’s national economic planning and budget making.

    “The downward revision in 2008-09 growth estimates has provided a substantial cushion to push up current year’s growth rate (at constant factor cost of 19992000) by about 1.2 percentage points to 4.1 per cent of GDP,” a government official said. He said there was nothing wrong with the upward revision in current year’s growth rate because reduction in last year’s rate was based on actual and reconciled economic figures.

    Other major contributors to growth during the current fiscal year were services (60 per cent contribution), followed by industry at 30 per cent and agriculture 10 per cent. In terms of individual sector, manufacturing accounted for 23 per cent of the current year’s overall growth, followed by wholesale and retail trade at 21 per cent and social and community services at 19 per cent.

    This is despite the fact that gross fixed capital formation (GFCF) at current market prices has been estimated to have declined by 0.6 per cent after recording a 5.5 per cent increase in 200809. The private sector has accounted for the decline with an estimated contraction of GFCF of 3.5 per cent for the year. The bulk of the decline has happened in electricity, gas, large-scale manufacturing, transport & communication and finance and insurance. General government GFCF is estimated to have increased by 9.8 per cent.

    INDUSTRY: The industry recorded a growth rate of 4.90 per cent this year, significantly higher than the targeted 1.7 per cent. The mining and quarrying contracted by 1.7 per cent against a target of 2 per cent increase over the last year. However, manufacturing is estimated to have grown by 5.1 per cent, substantially higher than the 1.8 per cent growth target.

    The sources said that large-scale manufacturing grew by 4.3 per cent during the current year against a target of 1 per cent. Small-scale manufacturing, too, increased at the rate of 7.5 per cent, significantly higher than targeted 3 per cent.

    SERVICES SECTOR: Another major contribution in higher than the planned growth rate came from services sector this year. The government had set a growth target of 3.9 per cent for services for the outgoing year but this sector is estimated to have improved by 4.56 per cent.

    AGRICULTURE: The sources said the agriculture sector growth rate at 2 per cent had remained significantly short of 3.8 per cent target set for the current year. The government had set a growth rate of 3.5 per cent for major crops but it declined by 0.2 per cent. Likewise, output of minor crops reduced by 1.2 per cent against a growth target of 4 per cent while livestock growth rate was recorded at 4.1 per cent against a target of 4 per cent.

    This is despite the fact that output of almost all major crops — except cotton — was lower than last year’s production. For example, the wheat output at 23.864 million tons is 0.7 per cent less than 24.033 million tons last year. Cotton output at 12.7 million bales is 7.4 per cent higher than last year’s 11.8 million bales.

    Rice production this year at 6.88 million tons is 1 per cent lower than last year’s 6.95 million tons while sugarcane output at 49.4 million tons was 1.3 per cent less than 50.05 million tons last year or 23 per cent less than 64 million tons in 2007-08. Maize production stood at 3.49 million tons against last year’s 3.59 million tons, down by 3 per cent.

    Likewise, gram production stood at 571,000 tons against last year’s 741,000 tons, significantly down by 23 per cent. Jowar and Bajra production were also lower by 6.3 per cent and 1.1 per cent respectively.
     
  15. ajtr

    ajtr Veteran Member Veteran Member

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    NAC’s estimated growth figures may have been fudged


    ISLAMABAD: The National Accounts Committee is alleged to have estimated a growth figure of 4.1 per cent for the current year by doctoring the estimates for the growth in the construction, livestock and the wholesale and retail sectors, say analysts.

    Independent economists in and outside the government are sceptical about the projected 4 per cent growth for the financial year 2009-10. The National Accounts Committee (NAC) has projected that during the current fiscal year the economy would grow by 4.1 per cent, officials had revealed to The Express Tribune on Friday. Independent economists, however, have attributed this extraordinary showing of the Gross Domestic Product (GDP) to “creative accounting.”

    The have found out that the government not only played with last year’s GDP growth numbers by revising them downwards but also allegedly fudged the growth numbers of some of the sectors for this fiscal year. It was not for the first time that economists have unearthed such discrepancies. Last year, the National Accounts Committee showed the GDP growth at 2.24 per cent. Only after criticism from economists did the government revise the numbers downwards to 2 per cent.

    Economists said that in order to get advantage of the lower base, the government once again revised last year’s 2 per cent growth number to 1.14 per cent. The NAC is to meet on May 18 to discuss provisional growth figures for the outgoing and the final figures of the previous two financial years. The government earlier estimated that that the national output would remain at 3 per cent. Later on, the projection was revised upward to 3.4 per cent but the final figures are a surprise to many.

    The IMF and the Asian Development Bank have also forecast less than 3.5 per cent growth for the current financial year. The Incremental Capital Output Ratio concept says that for growth, investment is needed. The NAC document, according to the officials, reported negative 3.5 per cent growth in fixed private investment in nominal terms and negative growth over 15 per cent in real terms .

    “With negative growth in fixed private investment, over 4 per cent growth is surprising”, said a Finance Ministry official. According to an economist, who was the one of the main economic managers during the last regime, the NAC has projected 15 per cent growth in the construction sector. “How could there be 15 per cent growth in the construction sector when the public sector spending is less than the last year and no major construction activity is going on”?

    The former Finance Ministry official said that 15 per cent growth in the construction sector would boost the economic growth by 0.3 per cent. Another economist, said private construction falls under ownership and dwelling, thus, 15 per cent growth in the construction sector is “out of the question.” Similarly, in the livestock sector the NAC assessed 4.2 per cent growth for the current fiscal year. Historically, growth in the livestock sector never went beyond 3.5 per cent, said the former official, adding, the manipulation in the livestock sector contributed 0.9 per cent in the total national outlook.

    According to the provisional estimates of the NAC, the agriculture sector’s growth target was missed for the consecutive second year. This year the agriculture sector grew by 2.2 per cent against the target of 3.8 per cent. In the wholesale and retail sector the NAC has projected 5.1 per cent growth. “More than one-third growth in the wholesale and retail sector is led by growth in imports and with negative growth in imports over 4 per cent growth is astonishing”, said an economist working in the Ministry of Finance.

    Published in the Express Tribune, May 16th, 2010.
     
  16. ajtr

    ajtr Veteran Member Veteran Member

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    Context of '1979-1991: Criminal BCCI Bank Repeatedly Saves Pakistan from Financial Ruin'


    This is a scalable context timeline. It contains events related to the event 1979-1991: Criminal BCCI Bank Repeatedly Saves Pakistan from Financial Ruin. You can narrow or broaden the context of this timeline by adjusting the zoom level. The lower the scale, the more relevant the items on average will be, while the higher the scale, the less relevant the items, on average, will be.

    1 2 3 4 5
    1979-1991: Criminal BCCI Bank Repeatedly Saves Pakistan from Financial Ruin
    By 1979, Pakistan’s economy is on the brink of collapse. Pakistan owes large debts to international organizations such as the World Bank and the International Monetary Fund (IMF), but lacks the money to pay off its loans. The criminal BCCI bank led by Agha Hasan Abedi comes up with a scheme to save Pakistan’s economy. In 1979, the IMF says that if Pakistan increases its hard currency reserves by at least $50 million for 90 days, Pakistan’s State Bank can raise the lending limits for commercial banks. With banks able to make more loans, the economy will be able to perform better. BCCI secretly loans the State Bank the hard currency until the 90 days are over and then takes it back. Having established this system, BCCI helps Pakistan’s State Bank numerous times in subsequent years to avoid financial limitations placed on Pakistan. BCCI will finally collapse in 1991 (see July 5, 1991). [BEATY AND GWYNNE, 1993, PP. 292-293]
    Entity Tags: Bank of Credit and Commerce International, International Monetary Fund, Pakistan State Bank, World Bank
    Timeline Tags: Complete 911 Timeline


    February 1988-December 1992: Justice Department Blocks Investigations into BCCI

    US Justice Department headquarters. [Source: GlobeXplorer]
    Sen. John Kerry (D) stumbles across the criminality of the Bank of Credit and Commerce International (BCCI) while investigating international drug trafficking as part of a congressional oversight committee. He soon starts a vigorous congressional investigation of BCCI, and New York district attorney Robert Morgenthau launches a vigorous investigation as well. [NEW YORK TIMES, 7/29/1991] However, Kerry’s and Morgenthau’s investigations are consistently stifled. Kerry will later say that, “with the key exception of the Federal Reserve, there was almost [no]… information or cooperation provided by other government agencies.” [US CONGRESS, SENATE, COMMITTEE ON FOREIGN RELATIONS, 12/1992] Kerry will later conclude that the Justice Department in particular went to great lengths to block his and Morgenthau’s investigations “through a variety of mechanisms, ranging from not making witnesses available, to not returning phone calls, to claiming that every aspect of the case was under investigation in a period when little, if anything was being done.” After the Bank of England shuts down BCCI in July 1991 (see July 5, 1991), making big headlines, Under Assistant Attorney General Robert Mueller takes over Justice Department efforts on BCCI and assigns many new attorneys to the case. But Kerry will ultimately conclude that the indictments the Justice Department brings forth against BCCI after that time were narrower and less detailed than those of Morgenthau’s, and often seemed to be in response to what Morgenthau was doing. [US CONGRESS, 12/1992] Kerry submits his report on BCCI in December 1992, and after that investigations into BCCI peter out. President Bush will appoint Mueller to be director of the FBI shortly before 9/11 (see September 4, 2001).
    Entity Tags: US Department of Justice, Robert S. Mueller III, John Kerry, Bank of Credit and Commerce International, Robert Morgenthau
    Timeline Tags: Complete 911 Timeline

    (1991): Bin Laden Allegedly Stays at London Estate of Saudi Billionaire

    Khalid bin Mahfouz. [Source: CBC]
    Shortly after 9/11, the London Times will report that Osama bin Laden stayed at the London estate of Saudi billionaire Khalid bin Mahfouz. “Sources close to the bin Mahfouz family say that about 10 years ago, when bin Laden was widely regarded as a religious visionary and defender of the Muslim faith, he visited the property and spent ‘two or three days’ on the estate, relaxing in its open-air swimming pool, walking in the grounds and talking to bin Mahfouz. What the men discussed remains a mystery.” Bin Mahfouz was a major investor in the criminal Bank of Credit and Commerce International (BCCI), which is closed down around this time (see July 5, 1991). [LONDON TIMES, 9/23/2001] Bin Laden was also heavily invested in BCCI at the time (see July 1991). There are other reports of bin Laden visiting London around this time (see Early 1990s-Late 1996), and even briefly living there (see Early 1994). The name “bin Mahfouz” appears on the “Golden Chain,” a list of early al-Qaeda financial supporters (see 1988-1989). Bin Mahfouz denies any terrorist link to bin Laden.
    Entity Tags: Khalid bin Mahfouz, Osama bin Laden, Bank of Credit and Commerce International
    Timeline Tags: Complete 911 Timeline

    July 1991: Bin Laden Loses Money in BCCI; Begins Profiting from Drug Trade

    BCCI logo. [Source: BCCI]
    In early 2001, anonymous US officials will say that when the notorious Bank of Credit and Commerce International (BCCI) is shut down in July 1991 (see July 5, 1991), Osama bin Laden suffers a heavy blow because he has put much of his money in the bank and he loses everything he invested there. As a result, he begins to launder money from the drug trade to make up for the lost revenue. He cooperates with Afghan warlord Gulbuddin Hekmatyar, who is already diverting profits from the Afghan drug trade to help finance Islamic terrorist movements. Others claim bin Laden begins his involvement with the drug trade several years later. [UNITED PRESS INTERNATIONAL, 3/1/2001] It also seems that bin Laden’s financial network eventually grows to at least partly replace the role of BCCI for Islamist militant financing (see After July 1991).
    Entity Tags: Gulbuddin Hekmatyar, Osama bin Laden, Bank of Credit and Commerce International
    Timeline Tags: Complete 911 Timeline

    July 5, 1991: Criminal BCCI Bank Is Shut Down

    A Time magazine cover story on BCCI. [Source: Time Magazine]
    The Bank of England shuts down Bank of Credit and Commerce International (BCCI), the largest Islamic bank in the world. Based in Pakistan, this bank financed numerous militant organizations and laundered money generated by illicit drug trafficking and other illegal activities, including arms trafficking. Bin Laden and many other militants had accounts there (see July 1991). [DETROIT NEWS, 9/30/2001] One money-laundering expert later claims, “BCCI did dirty work for every major terrorist service in the world.” [LOS ANGELES TIMES, 1/20/2002] Regulators shut down BCCI offices in dozens of countries and seize about $2 billion of the bank’s $20 billion in assets. BCCI is the seventh largest bank in the world. Sheikh Zayed bin Sultan Al Nahyan, the President of the United Arab Emirates (UAE), owns 77% of the bank at the time of its closing. He and the UAE government will end up losing about $8 billion. About 1.4 million people had deposits in the bank and will end up losing most of their money. [LEVY AND SCOTT-CLARK, 2007, PP. 98-99] American and British governments were aware of its activities yet allowed the bank to operate for years. The Pakistani ISI had major connections to the bank. [DETROIT NEWS, 9/30/2001] The Bank of England is forced to close BCCI largely because of outside pressure. Beginning in February 1991, the mainstream media began reporting on BCCI’s criminal activities as more and more whistleblowers came forward. [LEVY AND SCOTT-CLARK, 2007, PP. 95] However, as later State Department reports indicate, Pakistan remains a major drug trafficking and money-laundering center despite the bank’s closing. [DETROIT NEWS, 9/30/2001] Most of the bank’s top officials will escape prosecution, and remnants of the bank will continue operating in some countries under new names (see August 1991). A French intelligence report in 2001 will suggest the that Osama bin Laden will later build his financial network on the ruins of the BCCI network, oftentimes using former BCCI officials (see October 10, 2001). [WASHINGTON POST, 2/17/2002]
    Entity Tags: Central Intelligence Agency, Osama bin Laden, Pakistan Directorate for Inter-Services Intelligence, Bank of Credit and Commerce International, Bank of England, Zayed bin Sultan Al Nahyan
    Timeline Tags: Complete 911 Timeline

    July 22, 1991: Iran-Contra Related to BCCI Scandal
    According to investigators working with Iran-Contra special prosecutor Lawrence Walsh (see December 19, 1986), the Iran-Contra affair is closely linked to the burgeoning scandal surrounding the Bank of Credit and Commerce International (BCCI—see 1976, 1978-1982, 1981-1991, 1981-1983, 1984-1986, January 1985, December 12, 1985, February 1988-December 1992, March 1991-December 1992, and July 5, 1991.) Former government officials add that the CIA kept secret funds hidden in BCCI accounts, and used the monies to fund covert operations in Nicaragua and elsewhere. Investigators confirm that a US defense intelligence organization used BCCI to maintain a secret “slush fund” for financing covert operations. And, months before National Security Council (NSC) official Oliver North set up his network for diverting funds to the Contras (see December 6, 1985 and April 4, 1986), the NSC used BCCI to divert funds to the Contras (see Early 1986). [TIME, 7/22/1991]
    Entity Tags: Central Intelligence Agency, Bank of Credit and Commerce International, Oliver North, National Security Council, Lawrence E. Walsh, Contras
    Timeline Tags: Iran-Contra Affair

    August 1991: Wanted BCCI Figures Protected in Pakistan and United Arab Emirates

    Ghaith Pharaon. [Source: Mike Stephens / Getty Images]
    In the wake of the July 1991 shutdown of the criminal BCCI bank (see July 5, 1991), the Pakistani government indicates that it is willing to shelter BCCI figures wanted in other countries. For instance, an international arrest warrant is issued for BCCI front man Ghaith Pharaon, and Pakistan has signed an extradition treaty with the US and other countries. But in August 1991, Pakistani Interior Minister Shujaat Hussain, who has authority to block extraditions, states flatly that Pharaon is his friend and he will give him citizenship, protection from extradition, and even immunity from local prosecution. Furthermore, the Los Angeles Times reports that some other senior and mid-level BCCI managers being investigated in the US have already fled to Pakistan. Technically, BCCI is not a Pakistani bank, but 10,000 out of BCCI’s estimated 12,000 employees are Pakistani. The Times reports that Hussain has made clear that “BCCI’s blameless and blamed alike can find shelter from investigations into the bank’s conduct in any of the more than 70 countries where it operated.” Asked if Pakistan would extradite BCCI founder Agha Hasan Abedi, Hussein flatly states, “We will not allow it.” Furthermore, BCCI’s offices remain open in Pakistan and the government has stated that it will not investigate the bank. [LOS ANGELES TIMES, 8/12/1991] A majority of the bank is owned by Sheik Zayed bin Sultan al-Nahayan, President of the United Arab Emirates (UAE), and the UAE similarly indicates that it will not extradite any of the 18 top BCCI managers living there. The UAE is also sitting on most of BCCI’s financial records. [TIME, 8/3/1992] BCCI branches in the UAE are not shut down either, but are simply renamed to become the National Union Bank. [BBC, 8/5/1991] Many years later, Pakistan will still be protecting BCCI figures such as Pharaon (see June 8-August 10, 2006 and June 8-August 10, 2006).
    Entity Tags: Bank of Credit and Commerce International, Zayed bin Sultan Al Nahyan, Shujaat Hussain, Agha Hasan Abedi, Ghaith Pharaon
    Timeline Tags: Complete 911 Timeline

    September 4, 2001: Mueller Takes Over as FBI Director; Criticized for BCCI Investigation
    Robert Mueller assumes the job of FBI Director. He had been nominated for the job in July 2001 after Louis Freeh’s unexpected and sudden resignation (see May 1, 2001). Thomas Pickard was interim director for three months. Mueller held a variety of jobs in the Justice Department for over a decade prior to his nomination. Most notably, he led Justice Department investigations into the 1991 collapse of the Bank of Credit and Commerce International (BCCI) (see July 5, 1991) and the 1988 bombing of Pan-Am Flight 103 over Lockerbie, Scotland. [BBC, 7/5/2001; CNN, 9/5/2001] Mueller was heavily criticized for his role in the BCCI investigation (see February 1988-December 1992). For instance, a bipartisan Congressional BCCI investigation led by Senators John Kerry (D) and Hank Brown (R) stated, “Unfortunately, as time has passed it has become increasingly clear that the Justice Department did indeed make critical errors in its handling of BCCI… and moreover masked inactivity in prosecuting and investigating the bank by advising critics that matters pertaining to BCCI were ‘under investigation,’ when in fact they were not” and also “[hindered] other legitimate investigative efforts, and [failed] to admit that it had made any of these mistakes.” [US CONGRESS, 12/1992] Mueller himself noted in 1991 that there was an “appearance of, one, foot-dragging; two, perhaps a cover-up,” but denied the cover-up claims. A Wall Street Journal editorial notes that “Even George W. Bush bumped up against the outer fringes of the BCCI crowd during his tenure with Harken Energy and in his friendship with Texas entrepreneur James Bath,” and opines, “On general principles, our view is that it would be a mistake to appoint as FBI head anyone who had any role in the failed BCCI probe. Too many important questions remain unanswered…” [WALL STREET JOURNAL, 6/26/2001]
    Entity Tags: Federal Bureau of Investigation, Robert S. Mueller III
    Timeline Tags: Complete 911 Timeline

    October 10, 2001: Report: Bin Laden’s Financial Network Is Successor to the BCCI Bank
    A 70-page French intelligence report claims: “The financial network of [Osama] bin Laden, as well as his network of investments, is similar to the network put in place in the 1980s by BCCI for its fraudulent operations, often with the same people (former directors and cadres of the bank and its affiliates, arms merchants, oil merchants, Saudi investors). The dominant trait of bin Laden’s operations is that of a terrorist network backed up by a vast financial structure.” The BCCI was the largest Islamic bank in the world before it collapsed in July 1991 (see July 5, 1991). A senior US investigator will later say US agencies are looking into the ties outlined by the French because “they just make so much sense, and so few people from BCCI ever went to jail. BCCI was the mother and father of terrorist financing operations.” The report identifies dozens of companies and individuals who were involved with BCCI and were found to be dealing with bin Laden after the bank collapsed. Many went on to work in banks and charities identified by the US and others as supporting al-Qaeda. About six ex-BCCI figures are repeatedly named, including Saudi multi-millionaire Ghaith Pharaon (see October 10, 2001). The role of Saudi billionaire Khalid bin Mahfouz in supporting bin Laden is emphasized in the report. In 1995, bin Mahfouz paid a $225 million fine in a settlement with US prosecutors for his role in the BCCI scandal. [WASHINGTON POST, 2/17/2002] Bin Laden lost money when BCCI was shut down, but may have benefited in the long term as other militants began relying on his financial network instead of BCCI’s (see July 1991 and After July 1991). Representatives of bin Mahfouz will later argue that this report is false and was in fact prepared by Jean-Charles Brisard and not the French intelligence service. Bin Mahfouz has begun libel proceedings against Mr. Brisard, claiming that he has made unfounded and defamatory allegations, and denies that he has ever supported terrorism. [KENDALL FREEMAN, 5/13/2004 ]
    Entity Tags: Jean-Charles Brisard, Ghaith Pharaon, Khalid bin Mahfouz, Al-Qaeda, Bank of Credit and Commerce International, Osama bin Laden
    Timeline Tags: Complete 911 Timeline

    April 4, 2002: Treasury Secretary Meeting Raises Political Influence Questions

    Talat Othman. [Source: Hanania]
    In the wake of the Operation Greenquest raid on the SAAR network (see March 20, 2002), disgruntled Muslim-American leaders meet with Treasury Secretary Paul O’Neill to complain about the raid. At the time, the Treasury Department had control over the Customs Department, which ran Greenquest. The meeting is arranged by prominent Republican activist Grover Norquist. About a dozen leaders are asked to attend the meeting. O’Neill pledges to look into concerns the leaders have about the raid. [WALL STREET JOURNAL, 4/18/2002; HARPER'S, 3/2004] Those who meet with O’Neill include:
    Khaled Saffuri. He is head of the Islamic Institute, a group he co-founded with Norquist to organize conservative Muslims (see 1998-September 2001). The institute accepted $20,000 in donations from the Safa Trust, which was targeted in the raid. The Safa Trust in turn has been funded by Youssef Nada, who had his assets frozen shortly after 9/11 on suspicion on funding al-Qaeda (see November 7, 2001). The institute also received donations from Abdurahman Alamoudi, another target of the raid who will later receive a long prison term (see October 15, 2004). [WALL STREET JOURNAL, 4/18/2002; HARPER'S, 3/2004]
    Talat Othman. The Wall Street Journal calls him “a longtime associate and supporter of President Bush’s family who gave a benediction at the Republican National Convention in Philadelphia in August 2000.” He serves on the board of Amana Mutual Funds Trust, an investment firm founded by Yaqub Mirza, the director of most of the organizations targeted in the raid. Amana was not a target of the raid, but two other organization that were raided held large blocks of shares in Amana’s mutual funds. Othman claims to know Mirza only slightly. Othman is also on the board of Saffuri’s Islamic Institute. Further, Othman served on the board of Harken Energy in the late 1980s and early 1990s, at the same time that President Bush did. At the time, Othman represented Saudi businessman Abdullah Bakhsh on Harken Energy’s board, and the investments through Bakhsh were considered essential in saving Harken from bankruptcy. Bakhsh has indirect connections to the notorious criminal bank BCCI (see July 5, 1991), and in 1996 reputedly attended a secret meeting with al-Qaeda representatives, where the attendees agreed to pay al-Qaeda many millions of dollars of protection money (see May 1996). [WALL STREET JOURNAL, 12/6/1991; WALL STREET JOURNAL, 4/18/2002] Bakhsh will head a subsidiary of Halliburton, the oil services company formerly run by Vice President Cheney. Othman reportedly remains a friend of Bush. [HARPER'S, 3/2004] Harper’s magazine will note that “large sums of money from the suspect groups have moved through Amana, [yet] Greenquest agents chose not to raid the firm,” and will hint that political influence from Othman and others may have saved Amana from being raided. [HARPER'S, 3/2004]
     
    Last edited: May 24, 2010
  17. ajtr

    ajtr Veteran Member Veteran Member

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    Questioning growth number




    Tuesday, May 18, 2010
    Dr Ashfaque H Khan

    Pakistan's economy has grown at an average annual rate of 5.0 per cent over the last 62 years despite numerous impediments to its growth. By any standard, this has been a major achievement in terms of raising real incomes and alleviating poverty. The economic growth, however, remained uneven and interrupted by a variety of factors for a prolonged period. It was during 2000-07 that Pakistan's economy experienced the longest spell of strongest growth due to sound economic policies, structural reforms and a benign international economic environment.

    Economic growth has slowed considerably in Pakistan over the last two to three years owing to a variety of domestic and external factors. What is worrisome is the new development where the growth number is being manipulated to paint a rosy picture. There was a story about the manipulation of growth number for 2009-10 in The News on May 16, 2010. The usual methodology to post a higher economic growth for the current year is to reduce the growth of the previous year. In other words, reduce the base to get a higher growth for the current year.

    The growth number for 2007-08 was provisionally reported to be 5.8 per cent. The year 2008-09 was the most difficult year for the world economy as global financial meltdown triggered a full-fledged economic crisis. Strong economies like Hong Kong, Malaysia, Singapore, Taiwan and Thailand witnessed negative growth. Pakistan, on the other hand, posted a positive growth of 2.0 per cent and outshined the strongest economies of the region in 2008-09.

    How was this positive 2.0 per cent growth achieved? The 5.8 per cent provisional growth of 2007-08 was drastically revised downward to 4.1 per cent and as such the base was reduced to arrive at a higher number of 2.0 per cent for 2008-09. Some methodology for the calculation of value-added for some sectors was also changed without bringing to the notice of the National Accounts Committee.

    The same process has been repeated according to the newspaper story for the year 2009-10. The Federal Bureau of Statistics (FBS) – the institution responsible for compiling the country's national income accounts, has revised the last year's (2008-09) growth of 2.0 per cent to 1.1 per cent and that too, by further trimming the growth of 2007-08 from 4.1 per cent to 3.7 per cent. Since the base of 2008-09 was trimmed to 1.1 per cent, the growth for the current fiscal year (2009-10) has risen to 4.1 per cent.

    Not only the growth of last year was reduced but also growth of some components of the GDP was outlandishly jacked up in 2009-10. As reported in the news item, the growth of the construction sector was pushed up to an unbelievable level of 15 per cent. Only a lunatic would expect the construction sector to grow by 15 per cent in 2009-10 when the public sector development programme of the federal government has been slashed to one-half and the private sector construction activities are at near standstill. The production of cement adjusted for exports and that of iron and steel has been used as a proxy for calculating growth in value-added in construction.

    The interesting paradox here is that while cement production unadjusted for exports, grew by 11.2 per cent and iron and steel registered a high negative double digit growth, the construction industry seems to have thrived and grew by 15 per cent. This is simply unbelievable. Furthermore, the growth of the livestock sector, which accounts for over 11 per cent of the GDP, has been jacked up as well according to the news item.

    Though the FBS' staffers are technically weak, they are surely honest. My appeal to them is to do their job professionally as they have been doing in the past. The revision in growth numbers is common in every part of the world but unfortunately the extent of revision has grown significantly in Pakistan over the last few years. The provisional growth of 5.8 per cent in 2007-08 has been revised downward to 4.1 per cent and further to 3.7 per cent – a downward revision of 2.0 percentage points is simply unacceptable and has perhaps never happened before.

    Should anyone accept that the economy has grown by 4.1 per cent in 2009-10 in the midst of deteriorating security environment, crippling impact of power shortages and mismanagement, persisting double-digit inflation and a higher interest rate environment? If the growth is really 4.1 per cent in 2009-10 – up from 1.1 per cent in the previous year, then the government and its economic managers will have to answer the following questions. Should we believe that the spate of suicide bombing and heightened political tension have had no impact on economic growth? Should we believe that the long hours of power outages have had no adverse impact on the economy? Should we also believe that the higher double-digit inflation and the higher interest rate environment have had no adverse effect on the economy? Should we re-write our own economic theory?

    Economic theory armed with extensive empirical evidence suggests that the declining rate of investment, high inflation and interest rate, large fiscal deficit, armed conflicts, wars, political instability, corruption, absence of rule of law, high poverty rates, rising debt burden, and weak infrastructure will have negative effects on economic growth. How come economic growth accelerated from 1.1 per cent in 2008-09 to 4.1 per cent in 2009-10 in the midst of all the above-listed factors? Economic managers will have to answer these questions.
     
  18. ajtr

    ajtr Veteran Member Veteran Member

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    Fudging numbers




    Sunday, May 23, 2010
    It was truly amazing to read Dr Ashfaque H Khan's article "Questioning growth number" (May 18). A world authority on fudging numbers, clearly Dr Khan had something 'valuable' to say on the subject. Practising his art of sycophantic loyalty over 11 yeas in four different governments and with at least seven different finance ministers, the good doctor's 'golden moment' came in 1999 when Pakistan had to pay a $40 million fine to the IMF, thanks to Dr Khan's figure-fudging.

    Given that Dr Khan was accused, every year, of doctoring the growth numbers to please his masters, perhaps he can be honest for a change and let his readers know: was he lying when he announced the country's 'miracle' growth numbers under Musharraf? Or is he being disingenuous now by accusing the Federal Board of Statistics and the government of using the same methodology used under him?

    Shaikh Manzar Alam

    Former president, KATI

    Karachi
     
  19. ajtr

    ajtr Veteran Member Veteran Member

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    http://www.southasiaanalysis.org/papers11/paper1040.html

     
  20. joshkirby2000

    joshkirby2000 New Member

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    if Pakistan's growth rate was correct then UAE would have lost all its taxi drivers! =heheh
     
  21. ajtr

    ajtr Veteran Member Veteran Member

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    PAKISTAN: Controversy over government poverty reduction estimate


    Photo: IRIN
    ISLAMABAD, 16 June 2004 (IRIN) - A leading economist has questioned the sampling procedures used to ascertain a 4 percent fall in nationwide poverty as claimed by the Pakistani government. "The sampling procedure [used for the survey] is fundamentally flawed," Dr Akmal Hussain, a Cambridge-educated economist, told IRIN from the eastern city of Lahore. On Monday, in a front page analysis for the English-language broadsheet, Daily Times, titled "Poverty reduction figure is fudged", Hussain questioned the Pakistani finance minister's claim that the "percentage of population below the poverty line has declined by 4.2 percent compared to the year 2000", calling the claim "fudged". "The minister's claim of poverty reduction is being made on the basis of a small sample survey of only about 5,000 households, selected without regard to provincial coverage and conducted for only one quarter, April to June this year, when earnings from wheat harvesting enable a larger consumption expenditure by the poor," he wrote, arguing that "the results of this small sample survey" were being compared to sample results in the base year drawn from the standard and periodic Pakistan Integrated Household Survey (PIHS). "They cannot compare results from a larger sample survey four years ago, which was conducted on an annualised basis, with quarterly data," Hussain fumed. The specific differences in design of the two surveys are such that a reduction in poverty would tend to show from the differences in sample design rather than a change in the real magnitude of poverty," he added. "In other words, because of the design of the two samples being so different, there is an inbuilt bias towards showing poverty reduction," Hussain said. World Bank estimates suggest at least 40 percent of the population of Pakistan live below the poverty line. However, Dr Ashfaque Hassan Khan, the government's chief economist, told IRIN in the capital, Islamabad, that the government had not "claimed" that poverty had been reduced by the percentage points mentioned in the survey. "The government has not claimed any such thing," he stressed. "This is what the results show at the national level, that poverty has declined," he said. The debate arose just days after Shaukat Aziz, the Pakistani finance minister, announced a national budget on Saturday, which he said would boost growth and create jobs for the poor, as it sets a GDP growth rate of 6.6 percent, up from the 6.4 percent in the financial year that ends on 30 June. In a post-budget press conference on Sunday, Aziz also defended the figures of the sample survey showing a 4.2 percent reduction in poverty from last year, promising, though, that a more comprehensive survey would be conducted in July. "This is an endless debate between scholars and, in a way, both the government and Hussain are right," Chaudhry Inayatullah, the chief of the United Nations Development Programme's (UNDP) Sustainable Livelihoods programme, told IRIN in Islamabad. "The UN has no mechanism by which they can verify these figures," he added.
     

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