Musharrafs Economic Legacy Regardless of the criticism of President Musharrafs politics or personality, there is general agreement among independent economists that, through his structural reforms and economic management, President Musharraf left Pakistans economy in much better shape than he found it when he seized power in 1999. Here are some of the key highlights of the results of Musharraf era economy: 1. Pakistans tax base and government revenue collection more than doubled from about Rs. 500b to over Rs. 1 trillion. 2. Pakistans GDP more than doubled to $144b since 1999. 3. Most recent figures in 2007 indicate that Pakistans total debt stands at 56% of GDP, significantly lower than the 99% of GDP in 1999. 4. Pakistan attracted over $5 billion in foreign direct investment in the 2006-07 fiscal year, ten times the figure of 2000-01. Contrary to accusations by Musharrafs detractors that it was an artificial consumer-led growth, it was really an investment-led boom that Pakistan experienced in Musharraf years. 5. In spite of the election-related political turmoil, Pakistan’s economy maintained its momentum in 2007, growing by 7%, slightly more than the 6.6% for 2006. Agricultural sector growth recovered sharply, from 1.6% in 2006 to 5% in 2007, while the manufacturing sector growth continued at 8.4% in 2007, slightly more moderate than the 10% for 2006. Services grew at 8% in 2007, down from 9.6% in 2006. 6. The strong consumer demand in Pakistan drove large investments in real estate, construction, communications, automobile manufacturing, banking and various consumer goods. Millions of new jobs were created. By all accounts, the ranks of the middle class swelled in Pakistan during Shaukat Azizs term in office. According to Tara Vishwanath, the World Banks lead economist for South Asia, about 5% of Pakistanis moved from the poor to the middle class in three years from 2001-2004, the most recent figures available. In 2007, analysts at Standard Chartered bank estimated that Pakistan has a middle class of 30 million which earns an average of about $10,000 per year. And adjusted for purchasing power parity (PPP), Pakistans per capita GDP is approaching $3,000 per head. 7. The Karachi stock market surged ten fold from 2001 to 2007. 8. Pakistan positioned itself as one of the four fastest growing economies in the Asian region during 2000-07 with its growth averaging 7.0 per cent per year for most of this period. As a result of strong economic growth, Pakistan succeeded in reducing poverty by one-half, creating almost 13 million jobs, halving the countrys debt burden, raising foreign exchange reserves to a comfortable position and propping the countrys exchange rate, restoring investors confidence and most importantly, taking Pakistan out of the IMF Program. 9. Funding for higher education was increased five fold resulting in massive new enrollment of students and huge strides in research publications. 10. Pakistan is more egalitarian than its neighbors. The CIA World Factbook reports Pakistan’s Gini Index has decreased from 41 in 1998-99 to 30.6 in 2007-8, lower than Indias 36.8 and Bangladeshs 33.2. The Wall Street Journal did a story in September 2007 on Pakistans start-up boom that said, Scores of new businesses once unseen in Pakistan, from fitness studios to chic coffee shops to hair-transplant centers, are springing up in the wake of a dramatic economic expansion. As a result, new wealth and unprecedented consumer choice have become part of Pakistans volatile social mix. The one sore spot that sticks out in President Musharrafs and Shaukat Azizs record is their lack of attention to the rising energy needs of the country. Appropriate planning should have comprehended new power plants to support growth forecasts. There were other mistakes as well, such as the decision to export wheat in 2007 that created shortages and price hikes that helped bring down the PML (Q) government and ultimately led to President Musharrafs departure. Since the takeover by the PPP-PML(N) coalition, there has been a sharp decline in Pakistans economy. Summing up the current economic situation,the Economist magazine in its June 12 issue says as follows: (The current) macroeconomic disarray will be familiar to the coalition government led by the Pakistan Peoples Party of Asif Zardari, and to Nawaz Sharif, whose party provides it “outside support”. Before Mr Sharif was ousted in 1999, the two parties had presided over a decade of corruption and mismanagement. But since then, as the IMF remarked in a report in January, there has been a transformation. Pakistan attracted over $5 billion in foreign direct investment in the 2006-07 fiscal year, ten times the figure of 2000-01. The governments debt fell from 68% of GDP in 2003-04 to less than 55% in 2006-07, and its foreign-exchange reserves reached $16.4 billion as recently as in October. Please read Pakistani Economy Returning to the Bad Old Days. The current government hailed the performance of Pakistans economy under President Musharrafs watch as follows: Pakistans economy witnessed a major economic transformation in the last decade. The countrys real GDP increased from $60 billion to $170 billion, with per capita income rising from under $500 to over $1000 during 2000-07. It further acknowledged that the volume of international trade increased from $20 billion to nearly $60 billion. The improved macroeconomic performance enabled Pakistan to re-enter the international capital markets in the mid-2000s. Large capital inflows financed the current account deficit and contributed to an increase in gross official reserves to $14.3 billion at end-June 2007. Buoyant output growth, low inflation, and the governments social policies contributed to a reduction in poverty and improvement in many social indicators. (see MEFP, November 20, 2008, Para 1) In addition to the improved economy, President Musharrafs policies enabled halving of poverty from 34% in 2000 to 17% in 2008, proliferation of independent radio and television stations, and an expanded middle class, which ultimately led to his downfall. It was on dictator Musharrafs watch that Pakistan saw unprecedented deregulation of the mass media, prolific growth, and vibrant debate that had never occurred before him. None of the democrats or dictators who ruled before him gave such a gift to the people of Pakistan. It is this media freedom that I think is Musharrafs best legacy that can not be easily denied or reversed. Itll serve Pakistan well by shining light on the misdeeds of Pakistans leaders now, and in the future. Heres a video titled I Am Pakistan: Related Links: Haqs Musings FDI in Pakistan Video: Who Says Pakistan Is a Failed State? Structural Reforms in Pakistans Economy President Musharraf Video Defense on Power Crisis
Posted on: Mon, 21 Jul 2014 18:26:02 +0000
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