The internal assessment of the Planning Commission reveals that PML-N government failed to achieve macroeconomic and social targets it set in the 11th five year plan. The assessment reveals that ruling party failed to achieve the targets even in the areas like electricity and construction of roads. It has neutralized all the claims of economic gains made during past four and half years. The planning commission internal assessments vindicates the authenticity of World Bank (WB) report about the poor performance of Pakistan’s’ economy which was outright rejected by the government last year.
Average gross domestic product growth rate during the past four years remained 4.1 percent against the target of 5.4 percent, although it was calculated by expenditure method alone to which the WB report had also alluded. Agriculture sector grew by 2.1 percent against the target of 3.5 percent. The reason was high cost of inputs, water shortages and payment of low prices of cereals, and sugarcane by government, wholesale buyers and mill owners. The current dispute over the sugarcane price between growers and mills owners is one such example. The steep fall in the export of rice and accumulation of stock of the consecutive two years compelled the farmers to reduce the area under cultivation of rice.
The average industrial output was 5.1 percent during the first four years against the requirement of 6.3 percent. The large scale manufacturing grew at an average pace of 4.3 percent against the target of 6 percent. The slow pace of growth in the manufacturing sector was due to sky-high tariffs of energy inputs and regressive indirect taxes. Similarly, the service sector grew at an average pace of 5.1 percent against the target of 5.8 percent. The Planning Commission has now admitted that exports remained stagnant and the current account deficit widened. The trade deficit with China is $ 12 billion because of the open ended free trade agreement. The Chinese goods find their way to Pakistan’s market with very low tariff. On the other hand Pakistani goods face high tariff and multiple non-tariff barriers.
Saving and investment rates remained dismally low because of which the much trumpeted sustainable economic growth rate was not achieved. In fact the fiscal policy of the last 10 years and misappropriation of national resources pushed the economy below the take off stage of economic growth which was achieved during 2000-2007. How is it possible that an economy which is in preparatory stage of economic growth can be catapulted to the sustained level of economic development with in four years despite the skewed priorities hindering investment in productive projects like dams, water reservoirs and hydropower stations to boost productivity in agriculture and manufacturing sectors, ensuring cheap electric power and sufficient irrigation water. The economy of Pakistan is still agrarian as agriculture contributes directly 20 percent to GDP besides providing different types of raw material to agro based industries and textile industry. But the elected governments have always shown animosity towards the construction of dams and water reservoirs throwing water resources of about $ 2 billion into the sea every year. When the priorities of five year plans are skewed then talking about achieving high economic growth rate is merely day dreaming.