Perils of data misrepresentation | The Express Tribune

ISLAMABAD:

In the realm of economics, numbers are meant to illuminate truth. Yet, in Pakistan, they increasingly cast shadow. From trade balances to growth rates, official statistics have become a battleground of narratives, where figures are not merely data points but instruments of persuasion. Misrepresentation of economic and trade accounts is no longer a peripheral concern; it is a systemic malaise undermining policy, investor confidence, and public trust.

Misrepresentation in Pakistan’s economic reporting assumes several guises. Firstly, the inflated growth narratives; official communiques often trumpet GDP growth while glossing over structural weaknesses. Adjustments in base years and selective inclusion of sectors create an illusion of resilience even as unemployment surges and industrial output stagnates.

Secondly, trade data discrepancies. Recent revelations point to an $11 billion gap in import reporting due to incomplete data integration between Pakistan Revenue Automation Limited (PRAL) and the Pakistan Bureau of Statistics (PBS). Certain customs categories were excluded, leading to under-reporting and skewed trade balances.

Third, census as a political narrative. The Economic Census 2024, hailed as “historic,” omitted informal sectors such as street vendors and freelancers – the critical components of Pakistan’s economy. Gallup’s celebratory framing masked methodological flaws, including AI misclassification and limited rural coverage, raising questions about the integrity of official narratives.

Fourth, opaque methodologies. Lack of transparency in data collection and cleaning processes – such as handling Roman Urdu entries or AI algorithms – further erode credibility. Without independent audits, these gaps persist unchecked.

There are certain obvious reasons for playing with numbers. The roots of misrepresentation are entwined with political and economic imperatives to have political optics, for economic performance is a cornerstone of legitimacy and placates investors and averts panic. The governments under fiscal strain resort to statistical cosmetics to project stability.

Moreover, economic and trade figures influence IMF reviews and donor confidence. The recent resistance to an IMF technical mission probing a $30 billion trade gap underscores the sensitivity of these numbers.

The recent emergence of numbers game in the economic and trade sphere may have many reasons. Officials admitted that tariff classifications under the trade facilitation schemes were not integrated into PRAL systems, causing systemic under-reporting. This lapse not only distorts trade policy but raises suspicions of tax evasion and money laundering.

In addition, there are prevailing controversies over economic census. For example, framing of the census as comprehensive, despite glaring omissions, aligns with state efforts to craft a narrative of progress – a narrative increasingly divorced from ground realities.

The ramifications of statistical misrepresentation are profound. To start with, this leads to policy misalignment. Erroneous trade data leads to misguided tariff structures and fiscal measures, aggravating deficits rather than alleviating them.

Second, this raises investors’ scepticism. Discrepancies in official accounts deter foreign investment, amplifying Pakistan’s vulnerability in global markets. And third, it causes erosion of public trust. When numbers lose credibility, governance loses legitimacy – a perilous trajectory for a fragile economy.

It is imperative to recognise this as a strategic and systemic issue and address on a priority basis. Addressing this malaise demands a multi-pronged approach starting with institutional strengthening of PBS. PBS must embrace methodological transparency and independent audits. Integration of PRAL and Pakistan Single Window systems is imperative to eliminate data silos.

Next, it is imperative to embrace technological modernisation. AI-driven analytics and blockchain-based trade reporting can enhance accuracy and traceability. The legal and ethical frameworks need to be fully in place. Enforcing accountability through statutory reforms and penalising deliberate misreporting will deter malpractice. Most importantly, there is a need for public data literacy. Empowering citizens to interrogate official narratives fosters resilience against misinformation.

It is also worth mentioning that media must transcend sensationalism to scrutinise statistical integrity. Academic institutions, meanwhile, should spearhead research on impression management and its economic implications, bridging the gap between theory and praxis.

Pakistan’s economic revival hinges not merely on fiscal reforms but on a renaissance of credibility. Numbers, when honest, are the scaffolding of sound policy; when distorted, they become instruments of ruin. In an age where data is destiny, Pakistan must choose transparency over theatrics, substance over semblance.

The writer is an international economist.