A dismal scorecard
What is the economic performance of the five-year tenure of the PML-N government? The official claim is that growth rose to 5.8 percent in the current year against a growth of 3.68 percent in 2013 while inflation rose by a mere 3.77 percent instead of 7.75 percent in 2018.The budget deficit declined from 8.2 percent in 2013, to a low of 5.8 percent in 2016-17. Pakistan, under the three-year (2013-16) International Monetary Fund programme, raised revenue considerably (from 2.5 trillion rupees in 2013 to 3.95 trillion rupees in the current year - a rise of 56 percent). Development expenditure was 5.1 percent of GDP in 2013 and in the first four years, it was lower at 4.9 percent, 4.2 percent and 4.5 percent, however, by 2017 it was slightly higher at 5.3 percent. Private investment as a percentage of GDP increased from 9.8 percent in 2013 to 10.4 percent in 2014-15 down to 9.8 percent according to provisional estimates of 2017-18 verifying the country's decline in the World Bank ranking in ease of doing business - from 110th place (out of 190 countries) in 2013 to 147th as per the latest report
But the PML-N government failed on many fronts. The level of governance of PML-N has been worse than during the PPP-led coalition government and this is evident from the woeful inefficiency of public sector enterprises (PSEs). Privatisation, a manifesto promise by the PML-N, focused on sale of profit-making units and little or nothing was done to restructure and begin sale of lossmaking units. A lower rate of inflation has been due to the drastic decline in the international price of oil, from a high of over 140 dollars per barrel in June 2008 to a low of 20 dollars per barrel in January 2016.In 2013 savings rate was 13.9 percent of GDP but it declined to 11.4 percent by 2017-18. As a result, the gap between savings and investment widened during the tenure of the PML-N government which accounts partly for the rise in government domestic debt from 9.5 trillion rupees in 2013 to over 16 trillion rupees this year (a rise of 68 percent).Exports declined due to an overvalued rupee that made our exports uncompetitive. Imports rosefrom 41 billion dollars in 2014-15 to 48.6 billion dollars in 2016-17 and total imports reached 45 billion dollars by April this year (in spite of a decline in the international price of oil from a high of 140 dollars per barrel in 2008 to less than half that rate for the bulk of the PML-N's tenure).
No doubt, the PML-N government has increased generation by 10,000MW but it failed to undertake a holistic assessment of the sector. Transmission system was not upgraded concurrently even though in 2012 the then Secretary Water and Power Ministry had warned that the transmission capacity of the network was limited to 15000MW. This accounts for frequent tripping at present. The power sector performance was not the focus of the PML-N, accounting for the circular debt rising to levels higher than what it inherited in 2013. At present the cash-strapped treasury cannot release funds to remove the financial bottlenecks in the sector - ranging from import of fuel to transmission of electricity. Borrowing has been the order of the day which has raised the cost of electricity for households and industry/commercial units and has been another impediment in our export growth. All in all it was sorry performance by PML-N government on the economic front.