Rs100,000 per Pakistani – by Farrukh Saleem
In 2009, every man, woman and child in Pakistan was indebted to the tune of Rs46,000. In 2011, every man, woman and child in Pakistan was indebted to the tune of Rs61,000. As of the last day of 2013, every Pakistani man, woman and child carried a debt burden of Rs100,000.
Lo and behold, between June 2013 and September 2013, our total debt and liabilities, according to the SBP, went up by a colossal Rs1.1 trillion. In effect, the PML-N has been borrowing Rs6 billion a day every day of the year. Just where are all the billions going? Why is the government burying us all under so much debt? Answer: Budget deficit.
How does the government manage to lose more than Rs1.5 trillion a year every year? How does the government mange to lose a colossal seven percent to eight percent of GDP a year every year? Here are three of the biggest of all black holes: the Public Sector Development Programme (PSDP), state-owned enterprises (SOEs) and the government’s commodity operations.
For the year 2013-14, the blackest of all the black holes – the PSDP – is going to suck in Rs1,150,000,000,000 (Rs1.15 trillion) or a wholesome five percent of our GDP. The PSDP was meant to escalate the rate of our economic growth. Clearly, the PSDP has done no such thing. For the record, no government has ever done an impact assessment of the trillion-rupee PSDP.
Data on the PSDP is hard to come by but the largest chunk is spent on politically determined brick and mortar projects and an estimated 20 percent is spent on the purchase of vehicles. Amazingly, no more than six percent is spent on human capital. Someone intelligent refers to the PSDP as “a slush fund for politicians”.
For the year 2013-14, the black holes called SOEs are going to suck in Rs500,000,000,000 (Rs500 billion) or a wholesome two percent of our GDP. Someone intelligent refers to the SOEs as “a slush fund for bureaucrats”.
For the year 2013-14, the black hole called commodity operations is going to suck in Rs100,000,000,000 (Rs100 billion) or a wholesome 0.5 percent of our GDP. Lo and behold, the PSDP (five percent of GDP), SOEs (two percent of GDP), commodity operations (0.5 percent of GDP) collectively equate to the annual budgetary deficit. And the budgetary deficit is the root of most financial ills.
What is the PML-N doing about our black holes? On the PSDP, absolutely nothing. On commodity operations, absolutely nothing. On the SOEs, privatisation. In effect, one pass and two fails. And that is not good enough.
Lo and behold, growing at that rate, every man, woman and child in Pakistan will be indebted to the tune of Rs250,000 by the end of the PML-N’s current term. Remember Shakespeare,“he that dies pays all debts.”
The writer is a columnist based in Islamabad.
Email: firstname.lastname@example.org. Twitter: @saleemfarrukh