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Finance ministry rejects newspaper editorial on ‘flawed narrative’

Finance ministry rejects newspaper editorial on ‘flawed narrative’

ISLAMABAD: The Ministry of Finance has rebutted an editorial published in a Karachi-based business newspaper accusing the Minister for Economic Affairs Division Muhammad Hammad Azhar of a “flawed narrative” even as the Minister has discharged his responsibilities as an official spokesperson of the federal government representing the collective view of all economic ministries.

In an official statement, spokesperson Ministry of Finance has said that the views expressed by the newspaper in its editorial captioned ‘Azhar’s flawed narrative continues’ dated 07 November 2019 are a fanciful articulation of personalised nature rather than being an objective assessment of the spokesperson’s narrative. The editorial makes some sweeping claims that are not based on data but either inaccurate information or simply value statements.

The newspaper claims that the Minister’s comparison of the first-year inflation figures of PTI with PMLN & PPP is not appropriate. The ninister has simply reminded the protesting opposition parties that the inflation rates during their own tenures rose to higher rates as compared to the first 13 months of PTI government.

The newspaper dismisses the achievement of foreign portfolio investment flows becoming positive in Pakistan after three years and links this inflow to the of loss of employment in SME sector. This is stated to be not based on any data but an ‘anecdotal survey of Islamabad’. The above merits no response.

The stock market’s surge of 6500 point since August that the Minister mentioned in his presser is reported as 500 points in the editorial and then dismissed as not warranting importance because the market has players that according to the editor ‘manipulate’ the stock market and does not cover 99% of country’s population. This view is quite opposite to the importance that Business Recorder itself gives to the stock market on a regular basis, printing analysis, reports and headlines carrying its movement and trends.

The improvement in fiscal deficit In Q1 FY20 is then criticized in the piece for being compared to the last year, which in fact is a standard practice. The PTI government achieved success in curtailing the external deficit in its first year of government by 32% (and further by 64% in first quarter of FY20). Now the government has focused on fiscal consolidation in this year (first quarter fiscal deficit is 0.7% vs 1.4% last year). This is rational sequencing and is now acknowledged by informed analysts. The editorial itself mentions ‘appropriate phasing’ as the correct strategy to ease the stabilisation process.

The claim of rising export volumes is disputed in the editorial and is attributed largely to increase in rice import by China. Data on volume of exports published for last year and this year shows the above assertion to be incorrect.

During last fiscal year, as per the SBP, the total volumes of export grew by 12%. The breakdown of exports provided by PBS shows that exports of cotton cloth increased by 16.61%, bedwear by 8.18%, ready-made garments by 32.77% and knitwear by 15.52%. The above make up for 40% of Pakistan’s exports. The first quarter data of this FY20 also shows a healthy increase in volumes. Therefore, to attribute the entire exports volume growth to just rice imported by China is not supported by data and shows bias in the newspaper’s analysis.

The decrease in circular debt flow is contested in the editorial. During the last year of PMLN government, circular debt flow was Rs 38 billion/month on average, whereas during the first year of PTI government it reduced to Rs 27.8 billion/month. This year it will be less than Rs 12 billion/month on an annual average. The Power Ministry has confirmed these numbers.

Lastly, whilst making personal attacks, the newspaper has also portrayed Minister Hammad Azhar as purely a lawyer and ignored the fact that he graduated in Development Economics from the School of Oriental and African Studies, University of London. He also has experience in managing industry for the last 13 years.

It is hoped that the newspaper in future will desist from such subjective analysis based on personal and biased views which is not the hallmark of a standard bearer newspaper such as ‘The Business Recorder’.