http://www.nation.com.pk/daily/may-2006/28/bnews4.php


Over Rs 1tr spent on poverty alleviation: Dr Ashfaque

ISLAMABAD (APP) - The government spent an unprecedented amount of over Rs. one trillion on poverty alleviation and social sector related programmes during the last four years, which caused decline in poverty from 32.1 per cent in 2000-01 to 25.4 per cent in 2004-05.

“Rural poverty has declined from 39 per cent to 31.8 per cent and urban poverty from 22.7 per cent to 17.1 per cent”, Advisor to the Ministry of Finance, Dr. Ashfaque Hasan Khan told the agency in an exclusive interview here on Saturday.

He said, the real GDP grew at an average rate of almost 6 per cent per annum in the last four years against 3.3 per cent in the preceding four years and is poised to be between 6 to 7 per cent during the current fiscal year, showing a strong economic recovery in the country. He said the growth recovered from 1.8 per cent in 2000-01 to 8.4 per cent last year. “If we take a longer term view, growth recovered from an average of 3 per cent during last six years prior to 2001-02 to an average of over 6.5 per cent during last three years (2002-03 - 2004-05)”, he remarked.

Dr. Ashfaque said that due to strong domestic consumption and investment, the demand is picking momentum and the real private sector consumption grew by 8.2 per cent in 2003/04 and 16.8 per cent in 2004/05.

Higher consumption spending, feeding back into economic activity is likely to support the ongoing growth momentum, he said adding, it suggests the emergence of a strong middle class with buying powers. The Advisor said that unemployment has reduced from 8.3 per cent in 2001-02 to 6.2 per cent in the Second Quarter of 2005-06 and the pace of job creation has increased.

“During 1999-2000 to 2001-02, 2.23 million jobs were created while in 2001-02 to 2003-04, 2.96 million jobs were created and during 2003-04 and the first half of the current fiscal year (2005-06), we succeeded in creating 5.8 million jobs”, he remarked. About reduction in poverty, he said that poverty in Pakistan has declined from 32.1 per cent in 2000-01 to 25.4 per cent in 2004/05; Rural Poverty has declined from 39.0 to 31.8 per cent and Urban Poverty from 22.7 per cennt to 17.1 per cent, he added

Giving reasons for decline in poverty, he said, the real GDP grew at an average rate of almost 6 per cent per annum in the last 4 years (2000-01 to 2004-05) as against 3.3 per cent in the preceding 4 years. Dr. Ashfaque said the agriculture sector registered a strong growth of 7.5 per cent in 2004-05 and the GDP grew due to large increase in public sector spending.

He further said that Non-interest and Non-Defense (NIND) spending in real terms grew by an average rate of 8.2 per cent during 2000-06 against a decline of 1.2 per cent in the 1990s.

There was a four times increase in remittances and significant reduction in fiscal deficit, he said and added it reduced from an average of 7.0 per cent of GDP in the 1990s to around 3.0 per cent in recent years.
Dr. Ashfaque Hasan Khan who is also Director General Debt Office said there was sharp reduction in country’s debt burden from over 100 per cent of GDP to 61.7 per cent last year. Foreign Investment recovered from an average of $400 million to over $3.0 billion this year, he added.

About Tax collection, he said collections have more than doubled in 7 years and it took 10 years to add Rs.200 billion in tax collection but it took just 7 years to add Rs.400 billion.

“Pakistan has said goodbye to the IMF”, he remarked. He added that owing to stable economic positions and sound policies, Pakistan has re-entered the International capital markets and successfully brought stability in exchange rate.

I hope all this is true.

tax is still low a lot more needs to be collected, there are a lot of people in pakistan who are still evading tax.

Latest ecomomic ADB and WB led survey / concensus will confirm the strong decline in poverty as claimed by GoP which should now be well below 25%.
Report is due in weeks.