ISLAMABAD, June 16: The government has failed to narrow the gap between the rich and the poor during the last seven years despite increase in per capita income and huge allocation of resources for development.

This was the gist of a discussion among economists at a seminar on “A Critical Analysis of Budget 2007-08”, organised by the Sustainable Development Policy Institute (SDPI).

Pakistan Muslim League-Nawaz (PML-N) Central Information Secretary Ahsan Iqbal said it was the eighth budget under Gen Musharraf and fifth budget of Shaukat Aziz but no real solution had been offered to the problems and the crises of governance and institutions were increasingly posing a real challenge to the country and the nation.

He said Pakistan was blessed with resources and potential for becoming a prosperous country but the present government has given no serious consideration to real productive sectors, especially export-oriented manufacturing, and to establish a balanced socio-economic platform for sustainable development.

“The existing situation of quality of life, poor delivery of services, worsening law and order, high unemployment and poverty rates continue to expose the claims of Gen Musharraf’s regime,” he added while questioning the achievements of his seven-point agenda announced in 1999.

He said the phenomenon of rising inflation and price hike, growing trade deficit, poverty, inequality and unemployment could not be controlled by opening 5,000 unviable utility stores, privatising profit making institutions and giving subsidies to the state-owned institutions.

Mr Iqbal contradicted the government’s claim that the high growth rate was a result of its better economic performance, adding that it was foreign aid, loans, remittances, privatisation, multilateral financial assistance programmes and above all the events of 9/11, which changed the face of global economy where Asian economies, including Pakistan, gained a central place.

Economic analyst Dr A.R. Kemal said as a professional economist we must appreciate the good policies and criticise the wrong ones.

He said there was increase in the investment but the worrying aspect of it was that most of it went to telecommunication sector rather than industry and agriculture.

Commenting on the previous speaker’s remarks, he said sufficient and effective utilisations of funds were equally important than the volume of its allocation, as under the Social Action Programme (SAP) there was an increase in allocation for education but no significant enrolment was recorded.

Elaborating different aspects of the growth rate and increase in per capita income, he said the trickle down effect was very minimum for the poor.

Contesting the myth that the military government records higher growth rate than the democratic one, he said the military governments excessively borrowed from international donors.

He said when the military leave the power it usually left the increased budget deficit and the democratic government was left with no option but to clear the mess created by the military regime.

International donors prescriptions such as structural and stability adjustment programmes also resulted in the increase in unemployment and poverty.

He recommended exploring other options rather than relying on loans from international donors, and added that the export was mainly determined by the diversification of export rather than trade policies.

Dr Abid Qaiyum Suleri in his brief comparison between the allocations and spending, and prosperity and development highlighted the micro realities of the budget, and said 80 per cent of the parliamentarians remained silent during the budget debate. He stressed that trade policy should ideally be presented before budget.