Public debt decreased from 53.5% to 52%
Staff Report

ISLAMABAD—Pakistan has successfully managed to decrease public debt from 53.5% to 52% of GDP and contained inflation from 9.10% to 7.20%, says Global Competitiveness Report of 2007-2008
The World Economic Forum has released its Global Competitiveness Report 2007-2008 today, identifying that Pakistan has improved its competitiveness by 7 ranks as compared to last year. Considering methodology used for 2006-2007 for 122 countries Pakistan would have secured the 84th position.
The World Economic Forum has adopted a new methodology for evaluating the Global Competitiveness Index for 2007-2008, which includes breaking out the single pillar on market efficiency into its three subcomponents (goods, labor, and financial markets). The World Economic Forum also included six new countries to measure the Global Competitiveness Index.
Therefore straight comparisons to rankings in prior years of the Global Competitiveness Index cannot be made directly. The United States tops the overall ranking in The Global Competitiveness Report of 2007-2008. Switzerland is in second position followed by Denmark, Sweden, Germany, Finland and Singapore. Pakistan has maintained its position by 92, whereas other major players lost there rankings by significant numbers. India lost 5 ranks on the GCI, whereas, Slovenia and Brazil lost 6 ranks, Egypt lost 14, United Arab Emirates and Indonesia lost 5 and 4 ranks respectively. Pakistan remained more or less stable with respect to the constant sample and not considering the countries which entered the rankings for the first time this year, above Pakistan.
It seems that the Global Competitiveness Report of the World Economic Forum (WEF) recognizes the leadership of the current government's strategy based on deregulation, privatisation and liberalization, where Pakistan realized important progress in a number of different dimensions captured in the indexes. Significant improvement were made in Institutions, including property right (+0.40), in institutional framework (+0.27 for diversion of public fund variable, +0.35 in the efficiency of the legal framework among other), in the level of security (+0.31). Also private institutions sub-pillar is assessed as more efficient and transparent than last year (+0.24).
The pillar on Infrastructure shows improvement with respect to last year (+0.6 overall), with a notable increase in the number of telephone lines (+0.48) in line with the government's effort to improve connectivity and infrastructure. On the Macroeconomic stability, level of public debt has decreased (from 53.5% to 52% of GDP) and so has inflation (from 9.10% to 7.20%).
Health and primary education pillar shows a negative delta of 0.31 with respect to last year, due to the fact that data on expenditure for education, used by the World Economic Forum is from 2004-2005, which is used by the World Development Indicators (WDI). Nevertheless many variables are stable and the net primary enrollment rate has actually improved. It is also important to note that the hard data included in the GCI were the most recent available at the time of the index computation. However the majority of the data used by WEF for this pillar is from 2005.
The WEF used the figures of 2005-2006, which has calculated the expenditure in education at 1.60% of GDP. This means that the increase in public expenditure in education (2.42% of the GDP) implemented by the Government of Pakistan in 2007 is not reflected in this year's index, but will be reflected next year.
The country has improved in important dimension, such as the extent and effect of taxation (0.32), the total tax rate, the effectiveness of anti-monopoly policies (+0.02) and the business impact of rules on FDI (+0.31). Pakistan has shown an overall positive delta of 0.15, with improvements in some variables on the pillar of Labor market efficiency.