ISLAMABAD, 5 June 2006 — Minister of State for Finance Omar Ayub Khan will present the budget for 2006-2007 in the National Assembly today.
Salman Shah, finance adviser to Prime Minister Shaukat Aziz, said yesterday Pakistan posted robust growth of 6.6 percent during the fiscal year ending June 30 despite suffering from a massive earthquake and effects of soaring world oil prices.
Poverty was reduced by more than 10 percent and per capita income rose to $847 from $579 in 2002-3, according to an official economic survey.
The survey said inflation during the first 10 months of the year stood at 8.0 percent, down from 9.3 last year, while the fiscal deficit including losses caused by the devastating earthquake in October was 4.2 percent of GDP (Gross Domestic Product).
“Pakistan’s economy has grown at an average rate of over 7.5 percent in the last three years and is one of the fastest growing economies of the Asian region,” Shah said.
Giving an overview of the national economy, Federal Minister for Information and Broadcasting Muhammad Ali Durrani, Salman Shah and Omar Ayub said last week the country had an inflation rate of up to 8 percent, 35 million people were unemployed and the GDP growth was expected to be between 6 to 8 percent.
The ministers added that the flow of investments, remittances from Pakistanis living abroad and overseas grants were expected to ensure sustainable economic growth. They acknowledged that around 40 million people in Pakistan were living below the poverty line.
Durrani said the Oct. 8, 2005 earthquake dealt a blow to the economy prompting the government to readjust its priorities. A massive amount of money, which was supposed to be utilized for development, was used in the relief, rehabilitation and rescue operations following the quake, he said. “We have been able to tide over the problem,” he added. Referring to the budget Durrani said it would give relief to the people. Shah said about 22.8 million new jobs were being created to check growing unemployment.
Newspapers have reported that education sector is likely to get a fraction of defense spending in the budget. The allocation for defense is expected to shoot up 38.6 percent to 310 billion rupees ($5.16 billion) for the 2006/07 fiscal year, starting on July 1.
Education spending is difficult to pin down as funds are channeled through federal and provincial governments, but it has been about half that of defense for the last five years.
“If the world calls Pakistan a failed state, it’s because of the indicators,” said Asad Sayeed, an economist and director of the private Collective for Social Science Research.
“One indicator is that we are one of the highest spenders on defense, as a proportion of GDP (gross domestic product), while spending on education is among the lowest.
“Third World average spending on education is 4.5 percent of GDP, while ours is 2.8 percent.
