ON PAKISTAN'S 2008-9 BUDGET





Pakistan has more livestock than it does school-going children; it ignores the potential inherent in both. According to the Pakistan Livestock Census 2006, our population of buffaloes and cattle has increased (despite our being a nation of carnivores) from 40 million animals in 1996 to 56 million today. Our children lag far behind them - as students are wont to do on their way to school – at 33 million.


These figures might have remained mere statistics in the malleable hands of economists, had the recent Economic Survey of 2007-8 not alerted us to the situation affecting our forgotten majority – the rural sector.


The preamble to the Economic Survey is a Master’s dissertation in double-speak, using phrases such as ‘negative growth’. It begins with the confident assertion that ‘Pakistan’s economy posted a robust growth of 5.8 percent in 2007-8’, and then unveils the reality, ‘as against 6.8 percent last year and this year’s target of 7.2 percent.’ It continues this Dance of the Tattered Veils with the statement that ‘three-fourth’s of this year’s growth came from the services sector alone with only one-fourth from the commodity producing sector.’ A services sector-led growth was, it explains, ‘entirely driven by consumption, particularly private consumption.’


It tells us that macroeconomic indicators of significant sectors all missed their targets. Out of the seventeen that were listed, those that should have gone up - manufacturing, investment, national savings, agricultural production, tax revenues – went down, while others such as government borrowing, overall fiscal deficit, foreign exchange reserves, and inflation were shown to be facing in the wrong direction.


Our economic performance has collapsed from the highs four and five years ago, when our GDP growth was vaunted at 8.6% (now 5.8%), Agriculture at 6.7% (now 1.5%), Manufacturing at 14% (now 5.4%), and Large-scale manufacturing at 18.1% (now 4.8%). The only sector that has remained constant without declining has been the Services sector.


The Economic Survey censures our planners for focusing on our four major crops - wheat, cotton, sugar cane and rice – that contribute only 34% of our agricultural value added, instead of on the livestock and dairy sectors that account for 52 %. The Economic Survey laments that this year we have 1.2 million fewer cotton bales to sustain our textile industry, we have 1.6 million less tons of wheat with which to feed our queuing millions, and we have produced more sugarcane – 63.9 million tons, almost 17% higher than last year – than we need to assuage our national sweet tooth.


And yet, it is our neglected, voiceless livestock that has come to our rescue this year. Aware that it shoulders the yoke of 52% of our agricultural value added, it has grown on its own, almost unaided, by an unsung 3.8%.


Could it be that our salvation lies not in our faltering industry, nor on the unproductive services sector, but in Agro-industries? Is there any justification in repeating our past, by using agriculture, as our colonial masters once taught us to do, as a feeder of under-priced cotton for mills in Lancashire? Ought we to continue supplying under-priced cotton to our local textile mills, without exploring the alternative? Will we ever be able to break the supply chain that shackles our agricultural output and its versatile potential to the demands of our implacable industrial juggernaut?


Many years ago, India faced with a parallel predicament took a conscious decision to develop its livestock sector. From being a milk deficient country in the 1960s, it has become the world’s largest producer of milk. This in itself would have been commendable enough, until one realises that the total bovine population in India has increased over a span of fifty years from 198 million head in 1951 to only 283 million per head in 2003.


India produces 90 million tones of milk (Indian animals are more forthcoming), out of which about 46 % is consumed as liquid milk and almost the same quantity is converted into by-products such as butter, ghee, khoya, paneer, etc. We produce 34 million tonnes, and we could induce our livestock to produce much more. On a Dawn TV programme recently, an expert panelist was asked whether the inordinately low and inefficient milk yields were the fault of the animal or of the farmer. His spontaneous answer was: “The Government’s!” And in a sense, he was right.


Bovines cannot formulate policies, and farmers are not always allowed to. It is for the Government to determine priorities, to create the enabling environment, to set achievable targets. Whether the Government does it or the farming community – we have to be weaned back to milk.


We may need to sooner than we think. Our exports are lopsided heavily in favour of textiles. They account for 57% of our total exports. During 2007-8, they declined by 2.5%, despite R & D funding by the government to assist diversification and valued-added products. The only sector that showed an appreciable increase in exports was the food sector that grew by 22.4%, but that was largely because of the bonanza in international rice prices. Wheat as a commodity appears both in our exports and in our imports. Seduced by a bumper crop of 23.3 million tons in 2006-7, we exported wheat, and then had to import 1.6 million tons of it at a loss of Rs 40 billion. That singular miscalculation cost 6.7 million children their education last year.


We imported 2 million tons of fertiliser – double the quantity of the previous year - without any appreciable improvement in farm yields. That, according to the Economic Survey, cost us $542 million, or another 6.3 million children their education this year.


In aggregate, this equals the education cost of over a third of all children presently enrolled in our schools. Can we afford to be so immoderate in our mistakes, and so reckless with the future of our children? Shouldn’t anyone be invited to take the blame?


During the fiscal year 2007-8, our country had three Finance Ministers – Mr Shaukat Aziz for five months until November 2007, Dr Salman Shah for four months until March 2008, and Mr Ishaq Dar for six weeks until May 2008. Even the present incumbent Syed Naveed Qamar holds the Finance Ministry as an additional charge. That might explain why our National Budget 2008-9 seems like a dish prepared without a recipe, using leftovers.