KARACHI: The official statistics reflect the state of the formal economy, it does not gauge the potential of the informal economy, which according to some independent estimates, is equal to or even bigger than the documented economy, and the real source of resilience.

The economists in Pakistan are divided over the reliability of the official statistics. In developed documented economies, official statistics reflect the true picture, but in Pakistan lack of documentation and limitation of data collecting agencies statistics are seen with suspicion.

Some private think-tanks and NGOs challenge the government figures and give out their own numbers. The reliability of their statistics is also a mystery to many.

Recently, the adviser to the prime minister on finance had informed a gathering of business elite that the number of poor had crossed over 44 per cent of the population which included 28 per cent living in abject poverty.

The adviser particularly mentioned that these latest figures were released by the same institution which had claimed in Musharraf regime that the poverty rate had fallen down to 23.5 per cent from 34 per cent.

Prof Khurshid Ahmed, Naib Amir of Jamaat Islami, an economist, said that there was a lack of credibility of the official data since procedures and techniques being employed from sampling to generalisation of the statistics were not up to the mark.

He hastened to add that since it was a government agency so manipulation of figures was common as successive governments influenced it to paint a rosy economic picture.

“So how can you expect the data is reliable, accurate and timely and give you the true picture when its handling lacks the standard scientific rules and transparency?” he posed a question.

He further said that diagnosis on the basis of these flawed statistics would further aggravate economic issues and would never help it to get recovered unless right and appropriate prescription as per the symptoms was adopted to cure it effectively. He further said that during Musharraf regime the Federal Bureau of Statistics (FBS) had been operating without any head for over three years reflecting the level of seriousness over the issue.

When asked about the reasons of relative political calm despite depressing economic situations, he said that the situation was not good but it was not that bad as being made to believe as agriculture and the industry, particularly small and cottage industry, had the resilience to absorb the economic shocks.

He pointed out that there were protests and demonstrations against hike in power rates and load-shedding and wheat crisis, but general masses usually pinned their hopes on the new government in the hope that their hardships would be eased. “Change through vote is better option rather violence or street power,” he observed.

He added that the impact of current financial turmoil may add pressure on economy as about 30 per cent of goods and services of total GDP depended on the international trading system and if the global economy slowed down, it would have a limited impact on us also, but it would be absorbable.

He, however, pointed out that the Great Depression of 1930 had not any major impact on this region because it was not that much integrated with the international economic system.

About economic resilience, he said that it derived from the informal economy which is about over 50 per cent of the total GDP, besides the culture, social values and tradition also matter.

Sartaj Aziz, former finance minister of PML-N government and a seasoned economist, said unfortunately the Musharaff-Shaukat government had manipulated the economic data to present the picture they wanted to show during the last eight years and now the economy was paying its cost.

He particularly mentioned the poverty data and said it was distorted to paint excellent performance of their government which was against the reality and tantamount to unfair conduct. “This has also shattered the reliability and transparency of the official economic data,” he added.

He said statisticians and economic experts knew what happened to these statistics and they had also questioned it, but unless the Federal Board of Statistics was not made independent and free from the influence of the ministry of finance and the Planning Commission, the official data would lack credibility.

He said that the previous government had also committed manipulation of per capita income which was shown at $800 from $400 in just five years owing to rebasing of the year.

“At least 24 years would be needed to double the per capita income, if national income rises at the rate of three per cent in real terms,” Mr Aziz added.

About the poverty rate, he said it had shown some decline from 32 to 29 per cent, but not that sharp decline as claimed by the Musharraf regime on the basis of a fake survey of 750 households in the capital, now again it surged to over 40 per cent.

He ruled out the default and economic emergency and said that the situation was not that worse as being highlighted in the face of the global recession and financial crisis, saying that in 1999 the country had only $400 million forex reserves and it was not defaulted. Presently reserves are over $7 billion so we need not to worry. However, he appealed to Pakistanis, particularly politicians who have foreign currency accounts abroad, to bring their money back.

He was of the view that global crises would have limited impact on the economy as the local banking sector was safe and sound, but said the flight of capital was needed to be checked.

“Our real sector — agriculture and industry — is in good shape and will absorb the external shocks in terms of slow export, but imports must be cut down to maintain judicious balance of payments in view of slow inflows of foreign investment,” he said.

About unbridled rise in inflation which has hit low-income groups the most, he said that the Benazir Income Support Programme (BISP) would help give cover to over 4-5 million households from food inflation and added that the inflation would start easing with the arrival of new wheat crop.

However, Mohammad Suhail, Director at JS Global, was of the view that there was no reason to lose faith in official data and statistics as were painting the real picture of the economy. You could say not 100 per cent, but it is the only source which gives us an insight of the economy and tells us how it is and which state it was in.

When asked why there was a general impression that the official figures, particularly about inflation, unemployment, GDP growth, per capita income, etc., were understated or manipulated deliberately by the government, he rejected this impression, saying that only media and politicians create mess about the reliability and transparency of official data for obvious reasons.

He pointed out that over the years not only the quality of statistics had improved, its reliability and acceptability had also increased.

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