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The 90s decade disastrous for Pakistani economy |
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June 16, 2000 ISLAMABAD
(AP) - The 1990s was a disastrous decade for Pakistan's
economy according to the annual economic survey released Thursday which
said that the number of poor people has nearly tripled.
According
to the 1999-2000 Economic Survey, an annual review of the
country's economy, there are now 44 million people living below the
poverty line, unable to consume even the basic minimum nutritional food,
compared to 17 million in 1987-88.
"Declining
economic growth, persistence of severe macro-economic imbalances,
lack of social safety nets and poor governance in the 1990s have had
adverse affects on the country's poor and most vulnerable," said the
survey released by the Finance Minister Shaukat Aziz at a news conference
in the federal capital.
Pakistan
also marched into the 21st century with a military regime
that threw out the civilian government in a bloodless coup in October 1999
charging rampant corruption and economic mismanagement.
The
army promised to revive an economy that was teetering on the brink
of bankruptcy.
According
to the survey progress on that front has been made with the
last fiscal year showing an increase in exports, a bumper cotton crop, a
drop in inflation, a slight increase in investor confidence and a marginal
increase in the manufacturing sector.
However,
the army government has run into powerful opposition to its
attempts to document Pakistan's economy and increase its tax base.
Pakistan's
army ruler Gen. Pervez Musharraf earlier called it "shameful"
that only 1.2 million people in a country of 140 million people pay taxes.
In
the last one month the army government has been struggling to survey
businesses, document their inventory and their sales.
Businesses
have fiercely resisted calling daily strikes, virtually
paralyzing the country and losing millions of dollars a day in lost
revenues.
In
Pakistan most transactions are done on a cash basis to avoid payment
of taxes and smuggling is a thriving business that the government says
denies the exchequer billions of dollars a day in lost revenue from
customs duties and sales taxes.
Musharraf
has refused to bow to the pressure of the business community,
which has successfully stymied attempts by previous governments to
document their business and force them to pay taxes.
The
military government also says it will impose a 15 percent sales
tax effective on July 1. Businessmen say they will resist.
The
Economic Survey, released just two days before Pakistan hands down
its budget on Saturday, says that there has been a slight recovery in
growth with the gross domestic product growing by 4.5 percent in the last
fiscal year compared to 3.2 percent in the previous and an average of 4
percent for the second half of the 1990s.
he
only good news out of the 1990s was the slight drop in the deficit
to 6.4 percent in the second half of the decade. However that came about
by seriously cutting development expenditures in a country where the
literacy rate is barely 30 percent and much less among women.
The
recent recovery in the growth rate is being credited to a bumper
cotton and wheat crop which means the agriculture sector will grow by 5.5
percent compared to 1.9 percent in the last fiscal year.
"One
of the most positive developments of the outgoing fiscal year
has been a strong rebound in exports," says the economic survey.
Also
according to the survey the last fiscal year saw a slowdown in
monetary growth. Money supply grew by 3.2 percent between July 1999 and
March 2000 compared to 9.4 percent the full previous fiscal year.
As
well the limping economic recovery has been helped by a stabilized
currency which saw drastic and successive devaluation's in the last half
of the 1990s, according to the economic survey. |