Development 2.0--by Nadeem Ul Haque

Estimating the Footprint of the Government on the Economy The Planning Commission Framework for Economic Growth (FEG) established that the footprint of the government in the Pakistan economy was very large. Often people note that government expenditures as a percentage of GDP are only 22% and therefore the size of the government in the economy is not large. This line of argument is again used to establish a basis for arguing for increased taxation. The FEG noted that the percentage of government expenditure in GDP was not the correct measure of the influence of government in the economy where the government is Still controls a large number of Public sector enterprises (in fact the largest companies listed on the stock exchange are largely owned and managed by the government). The government still engages in many market transactions often as a dominant player (eg. energy, construction commodities etc). An aggressive tax subsidy policy as well as tax expenditu...

Most donor advice to us, which most Pakistani economists slavishly accept is that revenues must increase. To this objective a number of new tax measures have been suggested and implemented without moving revenues as a ratio of GDP much. For years I have argued that we need to look on the expenditure side of the equation if we are to control our deficit. There is little questioning of our expenditures by the media and by our citizens. Most discussion assumes that our expenditures are all for the public good. Consequently the constant refrain to increase development expenditures and expenditures for education. My view is that we must focus on the waste in government and rationalize our expenditures so that they are truly used for public welfare. Last year this discussion led to an article by Dr Farrukh Saleem perhaps the only article that documents a list of useless government agencies that still exist. He says, “The government of Pakistan is fat, so fat that all the excess b...

Most of our histroy we have had budgetry problems. Repeated Fund programs have been contracted to address our fiscal situation. The typical economist mantra is increase taxation. No one seems to look at the plethora of public enterprises that seem to hang over from our socialist planning days. Journalists find this to be an unexciting topic compared to the NRO and the usual topics. So today let us review one public enterrpise-NATIONAL BOOK FOUNDATION. More to follow later. National Book Foundation says on its website that in a 25 year period (1972-2007), it has produced 7113 books and revenues of Rs. 1308 million. At today’s xchnge rate that is $15 million. Using an approximate average exchange rate over this period of about 45 to the US dollar, they will have sold books worth about $ 45 million. Let us analyze this situation 1. Bascially they have published 284 books in a year backed by state funding and a virtual state monopoly in its early years. This in a country of ...

My email has been inundated with messages that contain the following. " Govt. Concessions for a Member of NATIONAL ASSEMBLY (MNA) Ø Monthly Salary : Rs. 120,000 to 200,000 Ø Expense for Constitution per month : Rs.100,000 Ø Office expenditure per month : Rs.140,000 Ø Traveling concession (Rs. 8 per km) : Rs.48,000 (For a visit to ISLAMABAD & return): 6000 km Ø Daily BETA during Assembly meets : Rs.500 Ø Charge for 1st class (A/C) in train : Free (For any number of times all over PAKISTAN ) Ø Charge for Business Class in flights: Free for 40 trips / year (With wife or P.A.) Ø Rent for Govt.. hostel any where: Free Ø Electricity costs at home : Free up to 50,000 units Ø Local phone call charge : Free up to 1,70,000 calls Ø TOTAL expense for a MNA per year : Rs. 32,000,000 Ø TOTAL expense for 5 years : Rs. 1,60,000,000 Ø For 534 MNA, the ex...