Pakistan’s budget 2003-04: The economics of hypocrisy

Pakistan's finance minister, Shaukat Aziz, when presenting the new fiscal year budget in June, made tall claims about the country's improved economic outlook. This budget, Aziz's fourth since being appointed finance minister by General Pervez Musharraf in 1999, is the first he has presented under the military-led civilian government of Prime Minister Mir Zafarullah Khan Jamali. Yet, despite the arrival of an elected civilian government since Aziz released last year's budget, essentially nothing has changed in his economic planning. The budget for 2003-04 is merely a continuation of economic policies aimed at achieving targets set by the World Bank and the International Monetary Fund (IMF).

In his 7 June budget speech, Aziz offered an ambiguous appraisal of Pakistan's fiscal health, on the one hand describing a rosy recovery process, and on the other enumerating five major challenges that appeared to contradict his claims of sound economic growth and poverty reduction. These challenges are: accelerating economic growth in sectors with job creation capacity, a step deemed essential for poverty reduction; making larger investments in human development, an objective that has received increased budget support; recovering losses in public sector corporations, which would increase the capacity to invest in human capital and development; making improvements in physical infrastructure such as water storage, canals, roads and ports in order to more fully realise the economy's potential; and attracting greater private sector investment, a point on which some limited success has already been achieved.