Economic survey: no economic target achieved in 2011-12

Society Pakistan & World Affairs
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Re: Economic survey: no economic target achieved in 2011-12

^ maybe increase in foreign remittances can be attributed as a success story of the government as they took action against hundi and hawala, people were already sending remittances albeit through illegal channels.

Secondly increase GNP does not mean that the standard of living of the people is increasing, it's pointing towards a dangerous trend that the rich are getting richer and the poor poorer which could be very dangerous in the long run. People have stopped purchasing things without which they can survive (fruits), more than one person is working to counter the effects, and in many cases families moving back to joint family systems.

With the hyper inflation it has become really difficult for the ordinary people to survive, and a big proportion of middle class has crossed over the poverty line. But according to the wizards the income and standard of living of people is increasing.

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Re: Economic survey: no economic target achieved in 2011-12

^^^ Numbers never lie. If figures are there then there must be some valid reason for them to be there. :slight_smile:

You are right. Getting remittances to Pakistan through official means is one big success story of present government. Probably, it is dividend of acting against money changers for whatever reasons.

Musharraf government started the trend of working on increasing official remittances by completely floating rupee and thus bringing official exchange rate as good as open market exchange rate. They also increased incentives on remittances and facilities for remittances through banks. Remittances did increased but still huge business was going on through unofficial channels, where money changers were not declaring remitted money and using that undeclared foreign exchange for capital flight obtained legally or illegally. Anyhow, Musharraf government instead of acting against money changers they resorted on buying dollars from them.

Present government action against money changers, especially against the biggest and most powerful money changer ‘Khanani & Kalia’ in Nov 2008, arresting ‘Munaf Kalia and Javed Khanani’ on $10 billion scam, was big step that helped Pakistan getting increased remittances officially in subsequent years.

I think one have to give credit to ‘Rahman Malik’ and present government on taking such big step, as it is these money changers who facilitate corrupt politicians and bureaucrats transfer their corruption money abroad, and thus have very powerful lobby behind them. To act against them was big step. This action helped Pakistan restricting devaluation of rupee from ~ Rs 80 in November 2008 to Rs 93 today, as the way Pakistan seen inflation in last 4 years along with deterioration in economical growth, dollars could have easily reached Rs 140 to Rs 150 by now.

Effect of action against money changer: In early 2008, dollar was Rs 60 but by November 2008, the time of action against money changers, the exchange rate was ~ Rs 80 to a dollar. Since November 2008 to 2012 (in 4 years), Pakistan inflation was very high, mostly above 20 percent a year, still rupee did not devalued that much (rupee devalued by ~15 percent in last 4 years since November 2008 when inflation during that period of 4 years could be ~ 100 percent).

Graph below shows the rupee exchange rate until September 2008. One can see that dollar exchange rate increased from ~ Rs 60 to a dollar in January 2008 to Rs 77 by Sept 2008. Actually, exchange rate crossed Rs 80 to a dollar when government acted against money changers in Nov 2008. And after that, this rot on rupee in open market stopped.

Anyhow, saying all this, I still think that economical performance and governance of present Zardari government is much better than two thug governments of 1990s. I believe, even corruption is much lower than BeNazir and Nawaz governments of 1990s.