1- Inflation 30 years high (according to GEO - CPI 12%)
2- Rupee devalued by 10 rupees per dollar
3- Stock exchange fell by 2000 points and $19 billion
4- Foreign Investment $12 billion flew away to Dubai

GDP Purchasing Power Parity (PPP) in 1999: $ 270 billion
GDP Purchasing Power Parity (PPP) in 2007: $ 475.5 billion
GDP Purchasing Power Parity (PPP) in 2008: $ 504.3 billion

GDP per Capita Income in 1999: $ 450
GDP per Capita Income in 2007: $ 926
GDP per Capita Income in 2008: $1085

Pak revenue collection 1999: Rs. 305 billion
Pak revenue collection 2007: Rs. 708 billion

Pak Foreign reserves in 1999: $ 700 million
Pak Foreign reserves in 2007: $ 16.4 billion
Pak Foreign reserves in 2008: $ 10.9 billion

Pak Exports in 1999: $ 8 billion
Pak Exports in 2007: $ 18.5 billion

Textile Exports in 1999: $ 5.5 billion
Textile Exports in 2007: $ 11.2 billion

KHI stock exchange 1999: $ 5 billion at 700 points
KHI stock exchange 2007: $ 75 billion at 14,000 points
KHI stock exchange 2008: $ 56 billion at 12,000 points

Foreign Investment in 1999: $ 301 million
Foreign Investment in 2007: $ 8.4 billion

Debt servicing 1999: 65% of GDP
Debt servicing 2007: 28% of GDP
Debt servicing 2008: 27% of GDP

Poverty level in 1999: 34%
Poverty level in 2007: 24%

Literacy rate in 1999: 45%
Literacy rate in 2007: 53%

Pak Development programs 1999: Rs. 80 billion
Pak Development programs 2007: Rs. 520 billion
Pak Development programs 2008: Rs. 549.7 billion

http://presidentmusharraf.wordpress.com/

Change starts with taking responsibility not blaming others for all our vows.

My two cents… inflation to follow.

90% of his local press conferences comprise of criticism of the last govt.’s policies. However, every intelligent person knows that this is just rhetoric. This govt. will continue with each & every major economic policy of the last government.

Obviously he cannot lie to the Western press. They will eat him alive for each & every word he utters. So he has to stick to the facts rather than the rhetoric.

This is rather confusing !

However, a lot of the criticism is just criticism for the sake of criticism.

In the start of the article the author implies that he will show that our macroeconomic situation is in worse condition than it was in 1999. However, many of the policies that the author has criticized are just a continuation of previous policies and not new or unique to the Musharraf government.

First, Bhutto’s nationalization was the most tragic thing that happened to Pakistan’s economy and it has never fully recovered. It led to massive economic inefficiencies, corruption, & eventually a huge burden on the annual budget. When Sharif left, about Rs.100 Billion from the annual budget was going towards financing the losses of these public sector entities.
Privatization was definitely the right policy.

Whether the assets were sold away at below market prices is a seperate issue and the author should give specific examples if that is the case.

Second, the public sector companies were only partially privatized through the stock market (5-10% of their outstanding shares). Controlling stakes were sold through direct bidding. This is the preferred method to privatize and is in fact the method Supreme Court of Pakistan suggested in the case of Pakistan Steel Mills. This is because the Stock Market is more efficient in determining the price of an asset than any single or group of analysts. In this way when the controlling stake is sold it will be at or near the market value and there will be less chance of corruption.

Privatization of the banking sector has been benefitial not only to the buyers of the banks but also the government since the government retains about 49% stake in all the major privatized banks. The increase in profits and market value of the banks has benefitted the govt. as well. Plus it has put a stop to taking out of loans and defaulting by the politicians in the 90’s.

Third, Debt has to be looked in terms of ratios rather than in absolute terms. The GDP of Pakistan has about doubled in the last 8 years whereas the external debt has remained about the same which means the ratio of Debt to GDP has reduced to half. Looking at absolute numbers is stupid. That means that the USA is worse off than all the other countries of the world since it has the largest amount of debt in absolute terms.
However, I agree that the government has done excessive internal borrowing which has resulted in uncontrollable inflation.

Regarding the price of petrol in the domestic market it is highly subsidized and the govt. is running a huge deficit. Every economist worth his salt is opposing this subsidy and saying that the govt. should have eased the prices upwards during the last year as the world prices increased instead of holding it constant for elections purposes. You are saying the opposite. As it is the govt. is financing huge deficits through internal borrowings and you want it to borrow more! Just so you know in European countries petrol is being sold at about USD 2.3 / litre which comes to over Rs.140/litre.

Regarding the service sector, if you take a look at developed economies or even middle income countries, it constitutes the major section of GDP. So this is not an anamoly for Pakistan. But i agree that for our country to develop we must have a strong industrial foundation and increased savings rates.

Regarding FDI, investment in infrastructure projects should be encouraged more. However, any FDI, that comes in for the long haul such as the purchase of Lackson Tobacco that you have quoted, should be welcome. As long as it is not short term speculative money coming into the stock market. Obviously all foriegn investors come in to make a return on their investment and take the money back. Nobody is going to give us charity. So this argument that they are taking profits outside is just stupid.

One of the few sustainable achievements of the last government was the almost threefold increase in tax collection.

Regarding poverty i agree that none of the development has benefitted the poor majority of society. And this is also true of all the govt.’s of the 90’s and will probably be true for the next govt. as well. I have’nt seen any plans from any of the parties except meaningless rhetoric.