KARACHI, Dec 6: A more than $2 billion difference in trade imbalance figure shown by the Federal Bureau of Statistics (FBS) and those of State Bank of Pakistan during four months of the current fiscal year has again brought into sharp focus the issue of credibility of government data and statistics on trade and in other areas like prices, industrial and agricultural production, poverty assessment, social indicators, etc.
Trade figures released by the FBS for July to October 2007-08 showed trade deficit at $5.58bn. Imports amounted to $11.44bn and exports were worth $5.86bn. The State Bank of Pakistan figures showed trade deficit of $3.53bn which is more than $2bn less than reported by the FBS. The SBP figures show imports at $9.53bn and exports at $5.99bn.
The Customs data indicate a total volume of international trade at $17.30bn against which the State Bank reports transaction of $15.5bn. It leaves a balance of over $2bn with a question mark. “If the orders booked for export or for import of goods worth more than $2bn are cancelled and not delivered, would the customs correct these figures?” is one question being raised.
“One simple reason for difference between FBS and SBP figures is that the Bureau collects information from customs based on letters of credit while State Bank reports actual inflow and outflow of foreign exchange,” a senior banker explained.
On the export side the incoming proceeds shown by State Bank of Pakistan is about $130 million more than the amount of export documents lodged at the Customs which is understandable because this may pertain to outstanding proceeds in the pipeline.
But it is difference of $1.91bn in imports being reported by the SBP and Customs that has sparked off speculation in the business. The customs show import at $11.44bn based on letters of credit. But the SBP report clearance of $9.53bn worth of imported goods. Goods worth more than Rs100bn booked for import in Pakistan are either not being delivered or stuck up at the port of origin for some reason.
Whatever the reason, the business circles fear further widening of this difference between the customs and State Bank figures as international oil prices are showing no respite and trade gap is expected to further expand because of import of wheat, edible oil and other commodities.
“An independent and professional statistical institution is a nightmare for every government,” to quote a retired bureaucrat who said statistics and data have therefore always remained weak areas in Pakistan. He said the General Statistics Act was enforced in 1975 that led to the formation of a Federal Bureau of Statistics.
“But it was never supported by the government by way of allocation of funds in the budget or training of the people,” he said.
The FBS as many officials recall remained a dumping ground for all those bureaucrats who for one reason or the other fell from the grace of the government of the day. “The Bureau is last port of call for every government officer who is on his way out,” he said.
Soon after taking over in 1999, the economic managers of President Musharraf announced on many occasions to restructure the FBS into an independent and professional institutions. The World Bank and the International Monetary Fund too advised the government to set up an independent data gathering institution.
“A committee that included deputy chairman of Planning Commission, governor of State Bank and adviser to the former prime minister on finance interviewed three foreign qualified persons for appointing him as head of the proposed Statistics Institution,” a well-placed and authoritative source in Islamabad disclosed to reveal that none of the three candidates were found competent.
How serious was previous government in setting up an independent and professional statistics and data collecting and information disseminating institution can be understood by the fact that no meeting of Federal Statistical Council has been held in last 10 years.
Trade figures have been in doubt for last several years. The first controversy on trade figures was raised by vice-chairman of the then Export Promotion Bureau Abu Shamim Arif when he found that official export figures were not being reported correctly. This controversy was resolved after the matter was taken up a joint committee of the EPB and Federal Bureau of Statistics.
Responding to the growing public scepticism and advice from international institutions like the World Bank and the International Monetary Fund, the government after the year 2001 decided to restructure Federal Bureau of Statistics to convert it in to an independent and professional institution.
The economists question and people are not willing to accept government claims of growth rate, poverty containment, increase in per capita income and improvement in social indicators unless there is an independent and professional statistics and data body.