Wednesday, January 6, 2010

Comparing India and Pakistan in 2010

Dr. Ishrat Husain, a former World Bank senior official and an ex governor of the State Bank of Pakistan, wrote an article captioned "India, Pakistan: a comparison" at the end of the first five decades of two nations' existence as independent states. To my knowledge, Dr. Hussain has not done an update of his article since it was first published. Although about three years too late, this post is my attempt to present a comparison of the two South Asian nations after sixty years of independence.

Here is the opening paragraph from Dr. Husain's article from the late 1990s, which I believe still stands true today:

"India and Pakistan are completing five decades of their independence. Since the partition, the relationship between the two countries has been uneasy and characterized by a set of paradoxes. There is a mixture of love and hate, a tinge of envy and admiration, bouts of paranoia and longing for cooperation, and a fierce rivalry but a sense of proximity, too. The heavy emotional overtones have made it difficult to sift the facts from the myths and make an objective assessment. There are in fact only two extreme types of reactions on each side. Either there are those who always find that the grass is greener on the other side of the pasture or those who are totally dismissive of the accomplishments of the other side."

Not much has changed in the last ten years as far as the above paragraph is concerned. The relationship between the two nations remains as emotionally charged as ever.

Then Dr. Husain's essay talked about what he saw as the common successes of the two nations in the first fifty years:

1. Despite the prophets of gloom and doom on both sides of the fence, both India and Pakistan have succeeded in more than doubling their per capita incomes. This is a remarkable feat considering that the population has increased fourfold in case of Pakistan and threefold in India. Leaving aside the countries in East Asia and China, very few large countries have been able to reach this milestone.

2. The incidence of poverty (defined as $1 per day) has also been reduced significantly although the number of absolute poor remains astoundingly high. However, the level of poverty is lower in Pakistan.

3. Food production has not only kept pace with the rise in population but has surpassed it. Both countries, leaving aside annual fluctuations due to weather conditions, are self-sufficient in food. (Pakistan exports its surplus rice but imports small volumes of wheat).

4. Food self-sufficiency has been accompanied by improved nutritional status. Daily caloric and protein intake per capita has risen by almost one-third but malnourishment among children is still high.

5. The cracks in the dualistic nature of the economy -- a well-developed modern sector and a backward traditional sector -- are appearing fast in both the countries. A buoyant middle class is emerging. The use of modern inputs and mechanization of agriculture has been a leveling influence in this direction. But public policies have not always been consistent or supportive.


Here is the update to the above assessment:

1. Per capita incomes in both nations have more than doubled in the last ten years, in spite of significant increases in population. The most recent and detailed real per capita income data was calculated and reported by Asian Development Bank based on a detailed study of a list of around 800 household and nonhousehold products in 2005 and early 2006 to compare real purchasing power for ADB's trans-national income comparison program (ICP). The ABD ICP concluded that Pakistan had the highest per capita income at HK$ 13,528 (US $1,745) among the largest nations in South Asia. ADB reported India’s per capita as HK $12,090 (US $1,560). Nominal per capita GDP estimates for Pakistan range from US $1000 to US $1022, while the range for India is from US $ 1017 to US $ 1100. Purchasing power parity (PPP) per capita GDP estimates for Pakistan from various sources range from $2500 to $2644, while the same sources put the range for India's per capita GDP from $2780 to $2972.

2. The incidence of poverty (defined as $1.25 per day) has also come down in both nations, although the number of poor in South Asia still remains very high. According to the 2009 UN Human and Income Poverty Report, the people living under $1.25 a day in India is 41.6 percent, about twice as much as Pakistan's 22.6 percent. The most recent estimates by UNDP in Pakistan for 2007-2008 indicate poverty level at 17.2%.

3. Food production has barely kept pace with the rise of population, particularly in Pakistan. There have been higher food prices and shortages of various commodities such as wheat and sugar. There is widespread hunger and malnutrition in all parts of India. India ranks 66th on the 2008 Global Hunger Index of 88 countries while Pakistan is slightly better at 61 and Bangladesh slightly worse at 70. The first India State Hunger Index (Ishi) report in 2008 found that Madhya Pradesh had the most severe level of hunger in India, comparable to Chad and Ethiopia. Four states — Punjab, Kerala, Haryana and Assam — fell in the 'serious' category. "Affluent" Gujarat, 13th on the Indian list is below Haiti, ranked 69. The authors said India's poor performance was primarily due to its relatively high levels of child malnutrition and under-nourishment resulting from calorie deficient diets.

4. Though the nutritional status has improved in both nations, there are still very high levels of malnutrition, particularly among children. In spite of the fact that there is about 22% malnutrition in Pakistan and the child malnutrition being much higher at 40% (versus India's 46%), the average per capita calorie intake of about 2500 calories is within normal range. But the nutritional balance necessary for good health appears to be lacking in Pakistanis' dietary habits. Senior Indian official Syeda Hameed has acknowledged that Pakistan and Bangladesh have done better than India in meeting the nutritional needs of their populations.

5. India's economy has grown more rapidly than Pakistan's in the last ten years. However, both nations have accepted and implemented significant economic reforms that have opened up their economies and brought about rapid growth, more than doubling the size of each economy in the last ten years.

Dr. Husain's paper went on to talk about the common failures of the two countries in their first fifty years as follows:

The relatively inward-looking economic policies and high protection to domestic industry did not allow them to reap the benefits of integration with the fast-expanding and much larger world economy. This has changed particularly since 1991 but the control mind-set of the politicians and the bureaucrats has not changed. The centrally planned allocation of resources and "license raj" has given rise to an inefficient private sector that thrive more on contacts, bribes, loans from public financial institutions, lobbying, tax evasion and rent-seeking rather than on competitive behavior. Unless both the control mind-set of the government and the parasitic behavior of the private industrial entrepreneurs do not change drastically, the potential of an efficient economy would be hard to achieve. This can be accomplished by promoting domestic and international competition, reducing tariff and non-tariff barriers and removing constraints to entry for newcomers.

The weaknesses in governance in the legal and judicial system, poor enforcement of private property rights and contracts, preponderance of discretionary government rules and regulations and lack of transparency in decision making act as brakes on broad-based participation and sharing of benefits by the majority of the population.

In terms of fiscal management, the record of both the countries is less than stellar. Higher fiscal deficits averaging 7-8 percent of GDP have persisted for fairly long periods of time and crowded out private capital formation through large domestic borrowing. Defense expenditures and internal debt servicing continue to pre-empt large proportion of tax revenues with adverse consequences for maintenance and expansion of physical infrastructure, basic social services and other essential services that only the government can provide. The congested urban services such as water, electricity, transport in both countries are a potential source of social upheaval.

The state of financial sector in both countries is plagued with serious ills. The nationalization of commercial banking services, the neglect of credit quality in allocation decisions, lack of competition and inadequate prudential regulations and supervision have put the system under severe pressure and increased the share of non-performing assets in the banks’ portfolio. The financial intermediation role in mobilizing and efficiently allocating domestic savings has been seriously compromised and the banking system is fragile. Both countries are now taking steps to liberalize the financial sector and open it up to competition from foreign banks as well as private banks.


Here is the update on the areas of common failures of India and Pakistan:

Though the level of globalization of the two nations remains well below China's, both India and Pakistan have made significant strides in this direction. In Pakistan, exports account for less than 15% of gross domestic product, compared with about 25% in India and 40% in China, according former Musharraf economic adviser Salman Shah. The policy changes in both nations have also opened up greater FDI inflows, though Pakistan's FDI has declined in the last two years due to security perceptions, after several years of strong FDI inflows, particularly in banking, telecommunications, real estate and oil and gas sectors.

Both countries continue to run large budget deficits. India's fiscal deficit for 2008-2009 stood at 6.5 percent of gdp and it is rising, according to Bloomberg. Pakistan has said its fiscal deficit will widen to as much as 4.9% of gross domestic product in 2009-2010, according to the Wall Street Journal.

The banking sectors in both nations have seen major improvements in delivery of new services. India and Pakistan have ranked 31 and 34 respectively, out of 52 countries in the World Economic Forum's first Financial Development Report. Both nations are ranked ahead of the Russian Federation (35), Indonesia (38), Turkey (39), Poland (41), Brazil (40), Philippines (48) and Kazakhstan (45).

Consumer and commercial credit availability and retail services have improved in the last ten years. Microfinance sectors are now well established in South Asia, helping fight poverty, and empowering women economically.

Both nations are suffering from poor governance resulting in lack of responsiveness to the basic needs of the vast majority of their people. In fact, the latest Human Development Report for 2009 shows that both major South Asian nations have slipped further down relative to other regions of the world. Pakistan's HDI ranking dropped 3 places from 138 last year to 141 this year, and India slipped six places from 128 in 2008 to 134 this year.

The level of urbanization in Pakistan is now the highest in South Asia, and its urban population is likely to equal its rural population by 2030, according to a report titled ‘Life in the City: Pakistan in Focus’, released by the United Nations Population Fund. Pakistan ranks 163 and India at 174 on a list of over 200 countries compiled by Nationmaster. The urban population now contributes about three quarters of Pakistan's gross domestic product and almost all of the government revenue. The industrial sector contributes over 27% of the GDP, higher than the 19% contributed by agriculture, with services accounting for the rest of the GDP.



The increasing urbanization has had the effect of defusing the "population bomb" in Pakistan. With increasing urbanization, Pakistan's population growth rate has declined from 2.17% in 2000 to 1.9% in 2008. Based on PAI Research Commentary by Karen Hardee and Elizabeth Leahy, the total fertility rate (TFR) in Pakistan is still the highest in South Asia at 4.1 children per woman. Women in urban areas have an average of 3.3 children compared to their rural counterparts, who have an average of 4.5 children. The overall fertility rate has been cut in half from about 8 children per woman in 1960s to about 4 this decade, according to a study published in 2009.

Third, Dr. Husain turned his attention to the areas where India surpassed Pakistan:

There is little doubt that the scientific and technological manpower and research and development institutions in India are far superior and can match those of the western institutions. The real breakthrough in the Indian export of software after the opening up of the economy in 1991 attests to the validity of the proposition that human capital formation accompanied by market-friendly economic policies can lift the developing countries out of low-level equilibrium trap.

Indian scientists working in India excel in the areas of defense technology, space research, electronics and avionics, genetics, telecommunications, etc. The number of Ph.Ds produced by India in science and engineering every year -- about 5,000 -- is higher than the entire stock of Ph.Ds in Pakistan. The premier research institutions in Pakistan started about the same time as India have become hotbed of internal bickerings and rivalries rather than generator of ideas, processes and products.

Related to this superior performance in the field of scientific research and technological development is the better record of investment in education by India. The adult literacy rate, female literacy rate, gross enrollment ratios at all levels, and education index of India have moved way ahead of Pakistan. Rapid decline in total fertility rates in India has reduced population growth rate to 1.8 percent compared to 3.0 percent for Pakistan.

Health access to the population and infant mortality rates are also better in India and thus the overall picture of social indicators, although not very impressive by international standards, emerges more favorable. The two most important determinants of Pakistan’s dismal performance in social development are its inability to control population growth and the lack of willingness to educate girls in the rural areas.


Here's the update on areas where India was ahead of Pakistan ten years ago:

In response to the growing concerns about the nation lagging in higher education achievement, Pakistan launched Higher Education Reform led by Dr. Ata ur Rahman, adviser to President Musharraf in 2002. This reform resulted in over fivefold increase in public funding for universities, with a special emphasis on science, technology and engineering. The reform supported initiatives such as a free national digital library and high-speed Internet access for universities as well as new scholarships enabling more than 2,000 students to study abroad for PhDs — with incentives to return to Pakistan afterward. The years of reform have coincided with increases in the number of Pakistani authors publishing in research journals, especially in mathematics and engineering, as well as boosting the impact of their research outside Pakistan.



Although India has about 270 million illiterate adults, India's overall literacy rate is better than Pakistan's. Pakistan's population of illiterate adults is estimated at 47 million, fourth largest after India's 270 million, China's 71 million, Bangladesh's 49 million, according to the latest UNESCO Education For All report for 2010.



But India remains significantly ahead of Pakistan in higher education, with six universities, mostly IITs, ranked among the top 400 universities of the world versus only one from Pakistan, National University of Science and Technology(NUST) ranked at 350, up from 375 last year. Replication of NUST campuses, like the IIT campuses in India, can help spawn more highly rated institutions of higher learning near major cities in Pakistan.



Pakistan's information technology industry is quite young. It is in very early stages of development compared to the much older and bigger Indian IT industry, which had a significant headstart of at least a decade over Pakistan. During the lost decade of the 1990s under Bhutto and Sharif governments, Pakistani economy stagnated and its IT industry did not make any headway. However, the industry has grown at 40% CAGR during the 2001-2007, and it is estimated at $2.8 billion as of last year, with about half of it coming from exports. This pales in comparison to over $5 billion revenue a year reported by India's Tata Consulting alone.

India's literacy rate of 61% is well ahead of Pakistan's 50% rate. In higher education, six Indian universities have made the list of the top 400 universities published by Times Higher Education Supplement this year. Only one Pakistani university was considered worthy of such honor.

Pakistan has consistently scored lower on the HDI sub-index on education than its overall HDI index. It is obvious from the UNDP report and other sources that Pakistan's dismal record in enrolling and educating its young people, particularly girls, stands in the way of any significant positive development in the nation. The recent announcement of a new education policy that calls for more than doubling the education spending from about 3% to 7% of GDP is a step in the right direction. However, money alone will not solve the deep-seated problems of poor access to education, rampant corruption and the ghost schools that only exist on paper, that have simply lined the pockets of corrupt politicians and officials. Any additional money allocated must be part of a broader push for transparent and effective delivery of useful education to save the people from the curses of poverty, ignorance and extremism which are seriously hurting the nation.

A basic indicator of healthcare is access to physicians. There are 80 doctors per 100,000 population in Pakistan versus 60 in India, according to the World Health Organization. For comparison with the developed world, the US and Europe have over 250 physicians per 100,000 people. UNDP recently reported that life expectancy at birth in Pakistan is 66.2 years versus India's 63.4 years.

Access to healhcare in South Asia, particularly due to the wide gender gap, presents a huge challenge, and it requires greater focus to ensure improvement in human resources. Though the life expectancy has increased to 66.2 years in Pakistan and 63.4 years in India, it is still low relative to the rest of the world. The infant mortality rate remains stubbornly high, particular in Pakistan, though it has come down down from 76 per 1000 live births in 2003 to 65 in 2009. With 320 mothers dying per 100,000 live births in Pakistan and 450 in India, the maternal mortality rate in South Asia is very high, according to UNICEF.

Finally, Dr. Hussain addressed areas where he thought Pakistan was ahead of India fifty years after independence as follows:

The economic growth rate of Pakistan has been consistently higher than India. Starting from almost the same level or slightly lower level in 1947, Pakistan’s per capita income today in US nominal dollar terms is one-third higher (430 versus 320) and in purchasing parity dollar terms is two-third higher (2,310 versus 1,280). The latter suggests that the average Pakistani has enjoyed better living standards and consumption levels in the past but the gap may be narrowing since early 1990s. Had the population growth rate in Pakistan been slower and equaled that of India, this gap would have been much wider and the per capita income in Pakistan today would have been twice as high and the incidence of poverty further down.

Although both India and Pakistan have pursued inward-looking strategies, the anti-export bias in case of Pakistan has been comparably lower and the integration with the world market faster. The trade-GDP ratio in PPP terms is twice that of all South Asian countries. Pakistan’s export growth has been stronger and the composition of exports has shifted from primary to manufactured goods; albeit the dominance of cotton-based products has enhanced its vulnerability.

Domestic investment rates in Pakistan have remained much below those of India over the entire span primarily due to the relatively higher domestic savings rates in the latter. But the efficiency of investment as measured by the aggregate incremental capital-output ratio or total factor productivity has been higher in case of Pakistan and, to some extent, compensated the lower quantity of investment.


Here's the update on the above assessment:

Although Pakistan's economy has more than doubled in the last decade, the nation's economic growth has been slower than India's since the 1990s. Since 2008, Pakistan's economy has, in the words of the Economist, returned to the "bad old days" of the lost decade of 1990s. According to Economic Survey 2008-09, presented by Finance Minister Shaukat Tarin, Pakistan's economy grew by a mere 2.0 percent, barely keeping pace with population growth. The growth fell significantly short of the 4.5 percent target for the year, which was already very modest compared with an average of 7% economic growth witnessed from 2001-2008.

While it lags behind China, India now exports a larger percentage of its GDP than Pakistan. In Pakistan, exports account for less than 15% of gross domestic product, compared with about 25% in India and 40% in China, according former Musharraf economic adviser Salman Shah.

At 30% of GDP, Indians continue to save twice as much as Pakistanis who save about 15%. Indians' private savings provide a much larger pool for domestic investments than the much smaller private savings in Pakistan.

Let me conclude with an excerpt from a British writer William Dalrymple's article, published on 14 August, 2007 in The Guardian:

"On the ground, of course, the reality is different and first-time visitors to Pakistan are almost always surprised by the country's visible prosperity. There is far less poverty on show in Pakistan than in India, fewer beggars, and much less desperation. In many ways the infrastructure of Pakistan is much more advanced: there are better roads and airports, and more reliable electricity. Middle-class Pakistani houses are often bigger and better appointed than their equivalents in India.



Moreover, the Pakistani economy is undergoing a construction and consumer boom similar to India's, with growth rates of 7%, and what is currently the fastest-rising stock market in Asia. You can see the effects everywhere: in new shopping centers and restaurant complexes, in the hoardings for the latest laptops and iPods, in the cranes and building sites, in the endless stores selling mobile phones: in 2003 the country had fewer than three million cellphone users; today there are almost 50 million."


A familiar yardstick often used to measure progress of a nation is its energy consumption. Per capita energy consumption in Pakistan is estimated at 14.2 million Btu, which is much higher than Bangladesh's 5 million BTUs per capita but slightly less than India's 15.9 million BTU per capita energy consumption. However, South Asia's per capita energy consumption is only a fraction of other industrializing economies in Asia region such as China (56.2 million BTU), Thailand (58 million BTU) and Malaysia (104 million BTU), according to the US Dept of Energy 2006 report. To put it in perspective, the world average per capita energy use is about 65 million BTUs and the average American consumes 352 million BTUs. With 40% of the Pakistani households that have yet to receive electricity, and only 18% of the households that have access to pipeline gas, the energy sector is expected to play a critical role in economic and social development. With this growth comes higher energy consumption and stronger pressures on the country’s energy resources. At present, natural gas and oil supply the bulk (80 percent) of Pakistan’s energy needs. However, the consumption of those energy sources vastly exceeds the supply. For instance, Pakistan currently produces only 18.3 percent of the oil it consumes, fostering a dependency on imports that places considerable strain on the country’s financial position. On the other hand, hydro and coal are perhaps underutilized today, as Pakistan has ample potential supplies of both.

Pakistan's KSE-100 stock index surged 55% in 2009, a year that also saw the South Asian nation wracked by increased violence and its state institutions described by various media talking heads as being on the verge of collapse. Even more surprising is the whopping 825% increase in KSE-100 from 1999 to 2009, which makes it a significantly better performer than the BRIC nations. BRIC darling China has actually underperformed its peers, rising only 150 percent compared with energy-rich Brazil (520 percent) and Russia (326 percent) or well-regulated India (274 percent), which some investors see as a safer and more diverse bet compared with the Chinese equity market, which is dominated by bank stocks.





Summary:

Goldman Sachs report on "BRIC" and "Next 11" projects that India will be the fourth largest economy in the world by 2025. Goldman also forecasts Pakistan's rank moving up from the 26th largest now to the 18th largest economy in the world by 2025. If the deteriorating security situation and current economic slump in Pakistan are not contained and managed properly, there is a strong chance that Pakistan would be left significantly behind India at the time of the next update of this comparison in 2020. However, Pakistan is just too big to fail. In spite of all of the serious problems it faces today, I remain optimistic that country will not only survive but thrive in the coming decades. With a fairly large educated urban middle class, vibrant media, active civil society, assertive judiciary, many philanthropic organizations, and a spirit of entrepreneurship, the nation has the necessary ingredients to overcome its current difficulties to build a strong economy with a democratic government accountable to its people.

Here are some more recent comparative indicators:

One out of every three illiterate adults in the world is an Indian, according to UNESCO. Pakistan stands fourth in the world in terms of illiterate adult population, after India, China and Bangladesh.

One out of very two hungry persons in the world is an Indian, according to World Food Program. Pakistan fares significantly better than India on the hunger front.

Poverty:

Population living under $1.25 a day - India: 41.6% Pakistan: 22.6% Source: UNDP

The reason for higher levels of poverty in India in spite of its rapid economic growth is the growing rich-poor disparity. Gini index measuring rich-poor gap for India is at 36, higher than Pakistan's 30. Gini index is defined as a ratio with values between 0 and 100: A low Gini index indicates more equal income or wealth distribution, while a high Gini index indicates more unequal distribution. Zero corresponds to perfect equality (everyone having exactly the same income) and 100 corresponds to perfect inequality (where one person has all the income, while everyone else has zero income).

Nutrition:

Underweight Children Under Five (in percent) Pakistan 38% India 46% Source: UNICEF

Health:

Life expectancy at birth (years), 2007 India: 63.4 Pakistan: 66.2 Source: HDR2009

Education:

Youth (15–24 years) literacy rate, 2000 to 2007, male Pakistan: 80% India 87% Source: UNICEF

Youth (15–24 years) literacy rate, 2000 to 2007, female Pakistan 60% India 77% Source: UNICEF

Economics:

GDP per capita (US$), 2008 Pak:$1000-1022 India $1017-1100

Child Protection:

Child marriage under 15-years ; 1998–2007*, total Pakistan - 32% India - 47% Source: UNICEF

Under-5 mortality rate per 1000 live births (2007), Value Pakistan - 90 India 72 Source: UNICEF

Here is the summary of a 2011 Update of this article:

Pakistan has created more jobs, graduated more people from schools and colleges, built a larger middle class and lifted more people out of poverty as percentage of its population than India in the last decade. And Pakistan has done so in spite of the huge challenges posed by the war in Afghanistan and a very violent insurgency at home.

The above summary is based on volumes of recently released reports and data on job creation, education, middle class size, public hygiene, poverty and hunger over the last decade that offer new surprising insights into the lives of ordinary people in two South Asian countries. It adds to my previous post on this blog titled "India and Pakistan Contrasted in 2010".



Here's a video clip of British Writer William Dalrymple comparing in India and Pakistan:



Here's another video clip from Intelligence Squared debate about Pakistan:



Here's recent video of Prof Jayati Ghosh of Nehru University debunking the myth of the "Indian Miracle":




Related Links:

Haq's Musings

Explore the World--Gapminder.org

The India You May Not Know

Pakistan's Foreign Visitors Pleasantly Surprised

Escape From India

Reflections on India

After Partition: India, Pakistan and Bangladesh

The "Poor" Neighbor by William Dalrymple

Pakistan's Modern Infrastructure

Video: Who Says Pakistan Is a Failed State?

India Worse Than Pakistan, Bangladesh on Nutrition

UNDP Reports Pakistan Poverty Declined to 17 Percent

Pakistan's Choice: Talibanization or Globalization

Pakistan's Financial Services Sector

Pakistan's Decade 1999-2009

South Asia Slipping in Human Development

Asia Gains in Top Asian Universities

Pakistan's Multi-Billion Dollar IT Industry

India-Pakistan Military Comparison

ITU Internet Access Data by Countries

Food, Clothing and Shelter in India and Pakistan

Pakistan Energy Crisis

41 comments:

Riaz Haq said...

Here's a relevant opinion by Soutik Biswas of BBC:

Has India's "Deciding Decade" begun? A study, done by a Delhi-based economic research firm along with a leading newspaper, thinks so. It says that India's GDP can grow at an average annual rate of 9.6% for the next 10 years even if there were no reforms. Incomes will double, the middle class will burgeon and urbanisation will proceed at breakneck speed.

Now the bad news. Even with this scorching growth, more than 250 million people of a total population of 1.3bn will still be "very poor" in 2020, the study says. That's not all: not even 100 million Indians will be graduates or post graduates despite the growth. Clearly, without radical reforms in education and infrastructure taken up with missionary bipartisan zeal, millions of Indians will still be hungry, poor and illiterate. Are India's politicians and bureaucrats up to the task? On present evidence, hardly. But we all live in hope.

The decade has also begun with a rash of good news stories. The government is planning to give out passports within three days of verification, make compulsory baby seats in cars and provide cheaper food for the poor. At least one state is launching madrassas or religious schools where English will be the medium of instruction. The government is also promising to introduce more women-friendly laws, harsher punishment for sexual crimes and fast track courts. All this just proves how much ground India has to cover. And Indian governments are famous for making announcements that take months, sorry, decades to implement. So we will wait and see.

But there is a piece of truly good news that holds out hope for India. Bihar, India's basket case state - poorest, most lawless, underdeveloped - appears to have clocked the fastest rate of growth during 2008-2009. If the Bihar government is to believed, the state's growth rate - 11.4% - is higher than India's industrially developed states. It is being attributed to good governance, buoyant revenues, increased government spending and a swelling unorganised private sector. If this is true then Bihar has all the makings of a miracle economy.

Bihar's remarkable "turnaround" shows the way for India, in a way. It also proves, as political philosopher Pratap Bhanu Mehta says, that "for the first time in modern Indian history, Indians, including the very marginalised, have a sense that change is possible: our destinies are ours to shape".

A sobering thought to keep in mind though. Impressive growth figures are unlikely to stun the poor into mindless optimism about their future. India has long been used to illustrate how extensive poverty coexists with growth. It has a shabby record in pulling people out of poverty - in the last two decades the number of absolutely poor in India has declined by 17 percentage points compared to China, which brought down its absolutely poor by some 45 percentage points. The number of Indian billionaires rose from nine in 2004 to 40 in 2007, says Forbes magazine. That's higher than Japan which had 24, while France and Italy had 14 billionaires each. When one of the world's highest number of billionaires coexist with what one economist calls the world's "largest number of homeless, ill-fed illiterates", something is gravely wrong. This is what rankles many in this happy season of positive thinking.

mohammed said...

Good Article. I can see you have done immense research to write this article.
Before I post my comments let me say I am Indian.

If you look at the economies of India and Pakistan, there is no doubt Pakistan and for that matter sri lanka enjoyed higher urban area and higher per capita compared to India. Pakistan has higher fertile land and natural resources if you compare on per person basis and yet Pakistan today is getting behind India in every sense.

Since 1990 India did grew at a fantastic pace, but it is because we had the right ingredients to grew set by our 50 years of democratic rule compared to lack of it in Pakistan.

Today once again the biggest difference is there is lot of hope in india, in their government and there is belief that better days are ahead of us.

In Pakistan there is a lack of hope and uncertain future with a unstable government and politics.

You talked about IIT. There are not six but fifteen IIT's in India today. Out of fifteen, seven IIT's are setup in the last three years. Besides engineering, we have management schools that are world renowned and ranked with top institutes in the world.
That's the pace India is at.
Someone from Pakistan told me that less than 10,000 engineers come from Pakistan. My state which has less than third of population of Pakistan produces over 20,000 engineers.

I think it has become absurd to compare India and Pakistan anymore.

India has left Pakistan behind at the beginning of this century.

One final thought. Its usually people from Pakistan who always compare themselves with India. Its hard to find an article that talks about development, economics or politics without somehow bringing India into it. I don't understand what is the obsession with India.
Pakistan needs to look in itself and its strengths if it wants grow and prosper and be a force and rank in top ten economies.

India will be the third largest economy by 2012 behind USA and China. India is the second largest by population.

Pakistan will be at 27 by 2012. Pakistan is the Sixth largest nation by population.

Anonymous said...

Well said, Mohammed. Like you, I too am Indian. We have a long way to go and should keep our eyes firmly on the ball :-)

Riaz Haq said...

Here's a Wall Street Journal story comparing roads in India and Pakistan:

A major conundrum to those who visit both India and Pakistan is why the roads are so much better in the latter.
For all its problems, Pakistan’s 367-kilometer-long M2 motorway between Lahore and Islamabad strikes a visitor as being streets ahead of India’s decrepit inter-state roads even if roads minister Kamal Nath is on a binge of fund-raising to try to improve India’s highways.
For one, there’s a disciplined motorway police that patrol Pakistan’s highways and don’t take bribes. If you go above 120 kilometers an hour, and are caught on camera, a fine awaits you at the toll gate. Nonpayment means you can’t get out. The M2 motorway passes through the densely populated Punjab countryside but there are no cows, rickshaws or motorbikes coming at traffic on the wrong side of the road which is a common experience in India.
The M2 road was built in the late 1990s by South Korean firm Daewoo, whose name is still emblazoned on the modern service stations that line the route.
Sunita Kohli, a New Delhi-based interior designer who recently did work on a boutique hotel in Lahore, says she was impressed with the road compared to similar developments in India.
“We really lag behind on infrastructure,” she said. “Now we’re trying to make up for lost time.”
That’s not to say Pakistan doesn’t face its own infrastructure challenges. Its most pressing need is to build more power plants and stop people from stealing electricity to avoid hours of blackouts across the country.
And Pakistan’s motorways — at just over 600 kilometers in combine length — are only a small fraction of the total road network, much of which is old. Ms. Kohli says she sees the M2 as a “showcase.”
India still slightly edges out Pakistan in the United Nations’ Human Development Index, which measures per capita GDP, literacy, life expectancy and other development criteria.
Until a couple of years ago, Pakistan’s economy was booming and there was plenty of public and private money for infrastructure spending. Now, foreign direct investment has dried up and the government, running a large deficit, has had to turn to the IMF for more than $11 billion in loans.
But first-time visitors to Pakistan, many expecting a failed state, are surprised by some of the modern infrastructure.
Apart from the roads, Pakistan’s broadband and wireless roaming speeds also compare favorably with India. Doing business in Pakistan is easier than in India and China, according to the World Bank.
With regular Taliban suicide bombings, though, Pakistan is unable to capitalize on these positives and continues to generate only negative headlines.

Anonymous said...

India's poverty at 42% compared with Pakistan's poverty of 17% makes Pakistan look decades ahead of India.

To my indian friends:
Development has nothing to do with GDP figures. Economics is governed by Fat tails. If bill gates moves to India then India's GDP figure would rise significantly but it would have zero effect on its "real" economy.

Pakistan is the 7th largest by population and india is the 2nd largest. But Pakistan's population is almost 10 times smaller than India's. Pakistan GDP stands at 450 billion compared to india's 3 trillion. If you get the ratio right then Pakistan is ahead.

Vijay Bhaskar said...

India is ahead of Pakistan when it comes to per-capita income.

http://en.wikipedia.org/wiki/List_of_countries_by_GNI_%28PPP%29_per_capita

India: $3230
Pakistan: $2710

But yeah, India lags behind Pakistan when it comes to eliminating poverty.

But things can reverse soon. For example, we look at the Global Hunger Index (http://upload.wikimedia.org/wikipedia/commons/4/43/Ghi_by_country_700.jpg)

in 1990, Pakistan was at 24.7 and India at 31.0

in 2009, Pakistan is still better at 21 versus India's 23.9 - but the gap plugged by India is better than that of Pakistan.

A few more years of robust growth in India will help India reduce its hunger index even further.

Riaz Haq said...

Vijay: "India is ahead of Pakistan when it comes to per-capita income.

http://en.wikipedia.org/wiki/List_of_countries_by_GNI_%28PPP%29_per_capita

India: $3230
Pakistan: $2710"


In nominal US dollar terms, per capita incomes of India and Pakistan are the same. The PPP calc methods are not reliable.

Pakistanis have higher per capita incomes than India on the PPP basis, as calculated by the ADB's ICP program. The fact is that Pakistanis' real per capita incomes are much higher than reported by various agencies. The most recent real per capita income data was calculated and reported by Asian Development Bank based on a detailed study of a list of around 800 household and nonhousehold products in 2005 and early 2006 to compare real purchasing power for ADB's trans-national income comparison program (ICP). The ICP concluded that Pakistan had the highest per capita income at HK$ 13,528 among the largest nations in South Asia. It reported India’s per capita as HK $12,090.

Riaz Haq said...

Can Indian govt data be trusted? Here's a Seekingalpha post raising doubts about India's GDP figures:

Yesterday, we had written about the controversy over GDP numbers. What has happened since is even more bizarre. Now the government has issue new numbers. All within some 24 hours. The government has revised consumption numbers quite dramatically, claiming the earlier low numbers were simply a result of a calculation error.

The size of revision is dramatic. The consumption size GDP growth estimate is now 10%, compared to 3.7% earlier. Pvt consumption growth is now 3.7% compared to 0.3%, while the government expenditure growth is now 14.2% compared to -0.6% earlier.

Contrary to making us feel better about government data, this makes us feel even more uncomfortable. Yesterday, we had believed the explanation behind the low consumption numbers were systemically less efficient calculation methods. We understand quarterly data on GDP has started coming out only in the last 1-2 years, so we thought, the government still has to get its act right on the number collection mechanism.

So our point was: just ignore these consumption numbers, focus on the supply side numbers, where the data is being collected for several years, so more reliable.

Do we feel better now, given that the government claims it was an error and not systemic issues? No. Our point is this: how do we know the current numbers are not simply something pulled out of a hat?

That is what it seems to us. Reacting to the front page story in The Economic Times, it appears to us, that the finance ministry may have simply directed someone at the CSO to come out with palatable numbers forthwith.

We have for long said Indian WPI numbers are incorrect. The Wisdomsmith guage for WPI shows far different numbers (and much higher) to official numbers.

Indian government needs to get some more method into its statistics. Since the last 12 months, official data is becoming increasingly suspect.

Anand Jodhani said...

Mr Riaz Haq

I have been following your posts for quite a while on different forum. I have respect for your words and particularly have appreciated some of the socio political issues you have brought to the fore in your posts.

But that seems to be waning off late. Your credentials say you have more logic and reason than your posts show.

You really think you should indulge in this kind of mind-numbing exercise of comparing India/Pakistan Sir.

Indians incessantly compare themselves with the Chinese citing arbitrary reports and articles. You know why - Because there is no comparison. Chinese are better and Indians constantly try to prove to themselves that they are no less.
It stems from an inferiority complex the Indians have.

I am sure a man of your IQ will be able to identify these traits in yourself/others and dedicate his power of the word for betterment of Pakistan rather than indulge in this kind of intense intellectual masturbation.

I dont think I need to tell you but if you really need to get convinced about the realities on India Pakistan, just visit the CIA factbook and read through all the sections. CIA factbook is an accepted and authentic source, you would agree. Both countries are pathetic and just about on all fronts except for population growth rates.

I have always believed that the best way for Pakistan's upliftment is through education since its an educated Pakistani who will be reasonable with India and deal in a reasonable way.

That is not to say India deserves reasonable dealing. The Human Right Abuses used as political manifestos, the uncalled for 1971 escalations, the nuclear programs, etc etc were all such stupid things to do.

But, you and me, with university education can sure leave those times behind and work for a better future for both countries.

Would love to engage in an active dialogue with you sometime. My gmail id is anandjodhani@gmail.com

Do let me know if we can talk sometime Mr Haq. Will be glad to take as much venom as you want to spew.

Bless you and may peace prevail

moon said...

Respected indians,
i agree with ur opinion that india is far ahead than pakistan in economy. but economy to ur opinon is gdp growth or whatever but being a lay man i havn't seen any impact of this on the common people. but if u really want to compare then sorry to say in my opinion pakistan is undergoing reforms which india is lacking.
if u observe news channels then u will come to see that pakistani nation is changing her attitude, e.g, active civil society, active judiciary, people developing democratic modes ant accountable to their politicianse.t.c these are the turning points of nations.
pakistan is now undergoing war on terror, security concerns, flood devastations e.t.c but with all these things pakistan is comparable with india on all fronts.
Now my third point is , is this the progression that country gdp is 10% growth where 50% or more people sleeping hungry i think india is not only refers to lakshmi mittal or anil ambani but it also refers to ramo of charkand.
my dear friends if u go throgh ADB reports about ratio of poor people nd living standards then u will come to know reality.
compare infra structure of both the countries, look at me i m arguing with u sitting in a remote rural are of pakistan on laptop using wireless internet where few years back there was no electricity. city area is about 150km far away from here and thanks to carpeted one way road i reach there in about one and half hour.
if u dont trust me then visit pakistan nd see what kindof progression is there and what is real progression. and u may also come to know what kind of people are pakistani is? not like that of indian govt. propaganda. what kind of love, pakistani feels about indians, i m sure u will find totally different from what is looking now.
in the end i m sorry if any one hurt on my comments. I wish and i pray for both the counteries for their prosperity and peace. i think both counteries need reforms and i am hopeful that these will happen soon.

Riaz Haq said...

Here is a little trivia about India and Pakistan IQs:

According to Prof Richard Lynn's worldwide IQ data published by Webster Online dictionary, Pakistanis avg IQ rose from 81 in 2002 to 84 in 2006, while Indians's avg IQ increased by just one point from 81 to 82.

http://www.websters-online-dictionary.org/definitions/IQ+and+Global+Inequality?cx=partner-pub-0939450753529744%3Av0qd01-tdlq&cof=FORID%3A9&ie=UTF-8&q=IQ+and+Global+Inequality&sa=Search#922

A recent UNM study linking IQs and disease burdens can be the basis for rationalizing it.

Looking at the situation in South Asia, it appears from the WHO data that Pakistan is doing a bit better than India in 12 out of 14 disease groups ranging from diarrhea to heart disease to intentional injuries, and it is equal for the remaining two (Malaria and Asthma).

Poverty, hunger, unsanitary or unsafe conditions and inadequate health care in South Asia's developing nations are exposing their citizens to high risk of a variety of diseases which may impact their intelligence. Every year, World Health Organization reports what it calls "Environmental Burden of Disease" in each country of the world in terms of disability adjusted life years (DALYs) per 1000 people and total number of deaths from diseases ranging from diarrhea and other infectious diseases to heart disease, road traffic injuries and different forms of cancer.

In the range of DALYs/1000 capita from 13 (lowest) to 289 (highest), WHO's latest data indicates that India is at 65 while Pakistan is slightly better at 58. In terms of total number of deaths per year from disease, India stands at 2.7 million deaths while Pakistani death toll is 318, 400 people. Among other South Asian nations, Afghanistan's DALYs/1000 is 255, Bangladesh 64 and Sri Lanka 61. By contrast, the DALYs/1000 figures are 14 for Singapore and 32 for China.

Riaz Haq said...

There is no question that the Indian economy is doing much better than Pakistani economy as Pakistan fnds itself mired in some serious crises.

BUt there is a patterns of some western magazines, probably inspired by their Indian staffers, that exaggerate India's accomplishments, while making Pakistan look worse than the reality warrants.

The latest example is data published by The Economist on India and Pakistan in its current issue.

It says the following about India:

GDP growth: 8.2%
GDP: $1,832bn (PPP: $4,508bn)
Inflation: 5.8%
Population: 1,202.1m
GDP per head: $1,520 (PPP: $3,750)

And Pakistan:

GDP growth: 3.2%
GDP: $188bn (PPP: $487bn)
Inflation: 9.9%
Population: 189.6m
GDP per head: $992 (PPP: $2,570)

Here are the problems with the above:

1. Pakitan's population is about 180 million, not 190 million as stated by the Economist. This distortion causes Pakistan's GDP to look smaller than it is.

2. India's GDP is not $1.8 trillion. The highest figure I have seen is $1.5 trillion. This exaggeration makes India's per capita GDP higher than reality.

3. The magazine puts India's inflation rate at 5.8%...the actual inflation rate in India is in double digits....wth the latest figures closer to 15%.

The fact is that, using credible data from multiple souces, the real per capita GDP of both India and Pakistan hovers a little over $1000 in nominal terms.

Isn't it shoddy journalism by the Economist?

What happened to fact-checking at the Economist magazine?

Aren't these figments of The Economist's Indian staffers' imagination?

Anand Jodhani said...

Checked the CIA factbook.I always say that growth figures etc must come from a neutral source.

The Pakistan GDP per capita is USD 2400 for the year 2009 and India is at USD 3200. SO definitely an exxageration by the economist.

But Pakistan is growing average 4% for the last 4 years and GDP per capita has increased from USD 2150 in 2005 to 2400 in 2009.

Same time India galloped from USD 2600 to 3200.

Guess Paki economy needs bucking up if India and Pak are to catch up with the likes of China.

Riaz Haq said...

Here are excerpts from a Wall Street Journal Op Ed by Rupa Subramanya Dehejia on potential for India-Pakitan trade:

How does India fit into this picture? And can two nuclear-armed rivals with a fraught relationship meaningfully engage in trade and commerce with each other?

Trade is one of the engines of growth and development but in the case of Pakistan, this potentially important link with India is virtually missing. At present trade is roughly $2 billion a year.

Pakistan accounts for less than 1% of India’s trade and India less than 5% of Pakistan’s trade. Contrast this to the bilateral trade relationship following independence, when 70% of Pakistan’s trade was with India while more than 60% of India’s exports went to Pakistan.

According to Mohsin Khan of the Peterson Institute, economists estimate a “normal” trading relationship would be five to 10 times larger than the current amount.

There is also an estimated $2 billion to $3 billion a year in trade that takes place unofficially through third countries, especially the United Arab Emirates.

If this could be normalized as bilateral trade, it would occur at a much lower cost and therefore greater economic gain.

I’d argue that we must at least try to improve our economic relationship even if the political relationship is still frosty. The great exemplar here is the European Union, which was built on the premise that binding neighbors together economically was a prerequisite for ensuring peace and prosperity for all. We in India have yet to fully absorb this lesson. A prosperous Pakistan will not only be good for Pakistanis themselves but also good for us in India.

It’s time for the liberal commentators on both sides of the border to stop wringing their hands about the demise of a secular liberal democracy, because Pakistan hasn’t been that for some time, if it ever was.

While the support that the Indian intelligentsia has offered their counterparts in Pakistan following the assassination is heart-warming, it’s not consequential in the big picture. Liberals in Pakistan may fight on but it’s time for us in India to accept that Pakistan is an Islamic state with Islamic values and laws.

The crux here is that trade and commerce know no religious boundaries. We must work towards building a stronger bilateral relationship on that basis.

Riaz Haq said...

Middle class Pakistanis are fighting for justice in their society using both soft and hard power, while middle class Indians have become a tool for the few rich in India by singing praises of Shining India in the midst of extreme and widespread poverty, hunger and disease.

Pakistanis give 1% of their GDP to charity while Indians give only half a percent, according to data published by Bain and Co and PCP.

http://www.riazhaq.com/2011/02/philanthropy-lagging-in-india-and.html

Another measures of the goodness of a nation, particularly its middle class, is its level of civic engagement.

By this measure, advanced western nations lead the pack with the United States in #1 position, followed by Ireland, Australia, New Zealand, Britain, Holland, Canada, and lo and behold! Sri Lanka.

In South Asia, Pakistan is a distant second to Sri Lanka's 51% participation rate. Pakistan's participation rate of 42% ranks it at 27, the same as Israel.

India lags far behind with the participation rate of only 28% ranking it at 48 among 130 nations, according to a recent Gallup poll on civic engagement that included 130 nations.

While 53% of Sri Lankans gave money to charity and 53% volunteered time, 51% of Pakistanis contributed money and 27% volunteered time. In India, 28% donated money and 18% volunteered time. Comparable figures for the top-ranking United States are 65% and 43%.

http://www.gallup.com/poll/145589/civic-engagement-highest-developed-countries.aspx#2

Riaz Haq said...

Here's a comparison for those who are curious:

At 3 per 100,000, the suicide rate in Pakistan is a fifth of the suicide rate in India of 15 per 100,000, according to WHO data.

http://www.who.int/mental_health/resources/suicide_prevention_asia_chapter1.pdf

Riaz Haq said...

Here's Maplecroft risk warning for investing in India, according to Times of India:

LONDON: The United Kingdom-based Global Risks Atlas 2011 on Friday described India as the 16th riskiest country to invest in for the security hazards it poses and rather embarrassingly clubs it with Niger, Bangladesh and Mali. The Atlas is published by Maplecroft, a consultancy founded by Alyson Warhurst, chair of strategy and international development at Warwick Business School.

The evaluation is structured on seven key global risks including macroeconomic risk and threats around security, governance, resource security, climate change, social resilience and illicit economies.

Maplecroft assessed India faces simultaneous threats of terrorist attacks from Islamists and Maoists. It also points at India's lack of social resilience despite a robust economic growth and cites its poor human rights record. It says large sections of the population lack access to basic services such as education, healthcare and sanitation, and highlights its less productive workforce, greater susceptibility to pandemics and susceptible to social unrest.


A press release by Maplecroft lumps Pakistan with Russia on investment risk:

Dynamic political risks constitute immediate threats to business and Maplecroft rates 11 countries as ‘extreme risk.’ Most significantly, the emerging economy of Russia has moved up five places from 15th to enter the top ten for the first time, whilst Pakistan has also moved two places up the ranking to 9th.

The ‘extreme risk’ countries now include: Somalia (1), DR Congo (2), Sudan (3), Myanmar (4), Afghanistan (5), Iraq (6), Zimbabwe (7), North Korea (8), Pakistan (9), Russia (10) and Central African Republic (11).

Russia’s increased risk profile reflects both the heightened activity of militant Islamist separatists in the Northern Caucasus and their ambition to strike targets elsewhere in the country. Russia has suffered a number of devastating terrorist attacks during 2010, including the March 2010 Moscow Metro bombing, which killed 40 people. Such attacks have raised Russia’s risk profile in the Terrorism Risk Index and Conflict and Political Violence Index. The country’s poor performance is compounded by its ‘extreme risk’ ratings for its business environment, corporate governance and the endemic nature of corruption, which is prevalent throughout all tiers of government.
-----
Jim O’Neil, Chairman of Goldman Sachs Asset Management, states: "Growth is happening where political risk is most challenging. So, meticulous monitoring and mitigation now will enable business to flourish and benefit from the opportunities presented by the future growth economies of the BRICs and Next 11".

Looking to the longer term, the BRICs countries are witnessing increasingly worse structural political risk trends for 2011. China (25), India (32) and Russia (51), rated ‘high risk’ and Brazil (97) medium risk, have all seen risks increase compared to scores from last year’s Atlas.

Riaz Haq said...

Overall, the latest World Bank data shows that India's poverty rate of 27.5%, based on India's current poverty line of $1.03 per person per day, is more than 10 percentage points higher than Pakistan's 17.2%. Assam (urban), Punjab and Himachal Pradesh are the only three Indian states with lower poverty rates than Pakistan's.

Riaz Haq said...

Nominal per capita incomes in both India and Pakistan stand at just over $1200 a year, according to figures released in May and June of 2011 by the two governments. This translates to about $3100 per capita in terms of PPP (purchasing power parity). Using a more generous PPP correction factor of 2.9 for India as claimed by Economic Survey of India 2011 rather than the 2.5 estimated by IMF for both neighbors, the PPP GDP per capita for Indian and Pakistan work out to $3532 and $3135 respectively.

Nominal per capita income of Indians grew by 17.9 per cent to Rs 54,835, or $1218, in 2010-11 from Rs 46,492 in the year-ago period, according to the revised data released by the government in May, 2011 as reported by Indian media.

In June 2011, Economic Survey of Pakistan reported that the nominal per capita income of Pakistanis rose 16.9 percent to $1,254 in 2010-11, up from $1,073 in 2009-2010.

Riaz Haq said...

Here's a Dawn report on the launch of Pakistani economist Shahid Javed Burki's book "South Asia in the new World Order" in Singapore:

ISLAMABAD: Renowned economist and scholar Shahid Javed Burki said that Pakistan’s economy can catch up fairly fast to the developed world, as compared with India, by adopting proper policy and fully mobilizing the available rich natural and human resources.

He was addressing the launching ceremony of his book ‘South Asia in the new World Order’ in Singapore, said a message received here Thursday.

Burki said that Pakistan’s GDP growth had been double of India’s growth rate of 2-3 percent for four decades 1947-1987. He quoted a recent Harvard University study which has mentioned that Pakistan’s higher education sector was performing better than India and Bangladesh.

This, he attributed to the investment made by the private sector in education. Syed Hasan Javed, High Commissioner of Pakistan in Singapore who was guest honour on this occasion said South Asia is blessed with rich heritage and natural, physical and human resources.

He observed that the South Asian states could learn from Confucianism’s teaching of ‘Prosperity they neighbor’ and the role model of ASEAN, in order to promote regional cooperation in the economic sector.

Prof. Kishore Mahbubani, Dean of the Lee Kuan Yew School of Public Policy endorsed the views of Shahid Javed Burki and the High Commissioner in order to generate a new thought process in South Asia.

http://www.dawn.com/2011/08/25/pakistans-economy-has-rich-potential-to-grow-fast-burki.html

Riaz Haq said...

There are a lot of different figures and forecasts floating around different websites and publications that significantly overstate India's GDP and understate Pakistan's.

The figures I have posted in my recent blog posts were released in May 2011 by India and in July 2011 by Pakistan. This is the only apples-to-apples comparison that is valid. The rest is irrelevant.

Economic Survey of Pakistan 2010-11 puts the nation's population at 177 million and nominal gdp at $222 billion or $1254 per person.

And Economic Survey of India 2010-2011 says India's population is 1.2 billion and puts nominal GDP at $1.46 trillion or $1218 per person.

http://articles.economictimes.indiatimes.com/2011-05-31/news/29604458_1_capita-income-national-income-economy-at-current-prices

http://www.infopak.gov.pk/EconomicSurvey/Highlights.pdf

Riaz Haq said...

India's GDP is $1.72 trillion

Riaz Haq said...

Anon: "India's GDP is 1.72 trillion."

Yes, you are right.

I just located a document by Economic Survey of India which puts India's GDP at INR 78.78 trillion which is about $1.75 trillion or per capita gdp of $1458 at INR 45 to a US dollar.

http://indiabudget.nic.in/es2010-11/echap-01.pdf

Young Hindu said...

Mr. Riaz, i love you for your focus on India. We are working to overcome those deficits you keep mentioning. And thats not to compare oourselves with Pakistan but for our own upliftment. Ur blog is pretty informative and your criticism tell us that we are moving ahead. Thank you. Keep us posted and may be try some yoga. Too much focus on one particular things is copnsidered maniac and not really good. Please continue. We are loving it. Jai Hind!!

Regards,
Indian

Riaz Haq said...

India will not reach its Millennium Development Goal on sanitation before 2047, while Bangladesh, Pakistan and Nepal will not achieve the target before 2028, according to a United Nations report released on the eve of World Toilet Day 2011.

The WaterAid report titled "Off-track, off-target: Why investment in water, sanitation and hygiene is not reaching those who need it most" says that 818 million Indians and 98 million Pakistanis lack access to toilets. It also reports that 148 million Indians and 18 million Pakistanis do not have adequate access to safe drinking water.

http://www.riazhaq.com/2011/11/india-pakistan-off-track-off-target-on.html

Riaz Haq said...

Indian rupee hit record low amidst high inflation and high twin deficits, according to Wall Street Journal:

The Indian rupee fell to a record low against the U.S. dollar Tuesday as high inflation and a gaping current-account deficit weighed on demand for the local unit, before a recovery in global risk appetite helped trim the greenback's gains.

The dollar was at INR52.30 late Tuesday, up from INR52.16 late Monday, after rising to as much as INR52.725 during the session, its highest ever. The dollar's previous high was INR52.1950 on March 3, 2009.

The pace of the rupee's fall caught most market watchers off guard, forcing firms with unhedged overseas debt to rush for cover, accelerating the fall.

Adding to this, exporters have been wary of locking into a dollar rate for their future revenue, when the dollar's rally may well have more steam.

"The rupee is being swept by a self-fulfilling squeeze--capital is being pulled from hot money markets in Asia, and the rupee is just far more vulnerable than other Asians with its trade deficit," said Sean Callow, a Sydney-based currency strategist at Westpac Bank.

But some argue that the rupee's slide could be on its last legs. UBS, for example, argues that the rupee's fall has less to do with local factors such as inflation and slowing economic growth in India, and more to do with re-rating the rupee to a basket of currencies that's more sensitive to the global economy. The Swiss house advises buying the rupee at this point, as a bet on a global cyclical rebound.

Rupee bulls got a boost when a federal government official told Dow Jones Newswires that the central bank was planning to offer a dollar liquidity window to oil importers. Under the planned window, oil importers would be able to pay for their greenback purchases by selling the central bank the so-called oil bonds, which are issued to them by the government in exchange for selling fuel products at below-market prices.

If this window comes into effect, it would take a key source of greenback demand out of the currency market, helping to ease the rush for the dollar, said the treasury head of a foreign bank.

In the sovereign debt market, Indian government bonds were under pressure on the growing view that the federal government would struggle to stick to its fiscal deficit target.

The benchmark 8.79% 2021 bond ended at INR99.64, from Monday's INR99.76.

Royal Bank of Scotland reckons India's fiscal deficit will overshoot its target of 4.6% of gross domestic product by at least one percentage point because of rising subsidies on food and fuel and dwindling tax revenue.

Traders say an overshoot of the fiscal deficit of that magnitude could push the benchmark bond yield beyond 9%.


http://online.wsj.com/article/BT-CO-20111122-706954.html

Riaz Haq said...

Here's an FT report on India's widening trade deficit:

India’s trade deficit widened to a 17 year high of $19.6bn in October, according to Rahul Khullar, the country’s commerce secretary.

The record number highlights the underlying problems in India’s economy and represents a dilemma for the Indian central bank, already struggling with inflation, that might force it into another rate hike in the future.

According to Khullar, and reported by Bloomberg, India’s deficit was caused by slowing export growth, driven to a two-year low by shrivelling demand in Europe and the impact of higher oil prices on the cost of imports.

The balance of trade for the first seven months of the year that started April 1 was $93.7bn and “that is clearly something to be worried about, because at this rate you’re clearly going to breach the $150 billion mark for the fiscal year”, said Khullar.

Khullar told reporters in Delhi that although merchandise exports rose 10.8 per cent to $19.9bn in October, compared to a year earlier, imports gained 21.7 per cent to $39.5bn, leaving a gap of $19.6 billion, the highest recorded since at least 1994.

But as Andrew Kenningham of Capital Economics told beyondbrics: “India’s trade numbers are not usually a source of real interest as they are normally quite good. The current account deficit was only 2.5 per cent a year ago but the number for October is quite nasty and reverses the previous positive trend. However, it isn’t a complete picture of the current account as it does not include services figures or remittances – the current account deficit is always lower than the trade deficit.”

And Kenningham thinks October’s import figures may be a one-off anyway. India’s trade deficit is particularly vulnerable to fluctuations in world oil prices as it imports almost three-quarters of its oil requirements and Kenningham argues that “it is probable that this month’s import figure will be an outlier – the oil price has not moved dramatically and slowing internal demand should push down overall imports.”

Kenningham sees these figures as more of a problem for the Indian central bank “which considers a 3 per cent current account deficit to be the maximum sustainable level. A weaker rupee will but further upward pressure on inflation. Investors may have been expecting a downward rate move next rate year but this raises a few question marks over that.”

And the rupee has continued to weaken as the eurozone crisis drives demand away from EM currencies and weakens demand for India’s exports.

India’s currency has now depreciated more than 11 per cent against the dollar this year but Kenningham told beyondbrics India’s exports shouldn’t count on any major boost from the weakening rupee: “The rupee is only about 10 per cent below its average level for the last five years so I wouldn’t think India’s exports would get too much of a boost from there.”

Thus, although Kenningham is not particularly concerned about India’s balance of payments as “it has $310bn of foreign reserves, low external debt and low levels of portfolio investment in the fixed income market,” he does see it as “a sign of stress in the economy and a further complication for the central bank.”


http://blogs.ft.com/beyond-brics/2011/11/08/indias-widening-trade-deficit/#axzz1eSmmeDzP

Riaz Haq said...

Here's a critical analysis of Tom Friedman's "Flat World" on India:

In the first chapter of his bestseller on globalization, The World Is Flat, three-time Pulitzer Prize–winning foreign affairs columnist for The New York Times Thomas Friedman suggests that his repertoire of achievements also includes being heir to Christopher Columbus. According to Friedman, he has followed in the footsteps of the fifteenth-century icon by making an unexpected discovery regarding the shape of the world during an encounter with “people called Indians.”

Friedman’s Indians reside in India proper, of course, not in the Caribbean, and include among their ranks CEO Nandan Nilekani of Infosys Technologies Limited in Bangalore, where Friedman has come in the early twenty-first century to investigate phenomena such as outsourcing and to exult over the globalization-era instructions he receives at the KGA Golf Club downtown: “Aim at either Microsoft or IBM.” Nilekani unwittingly plants the flat-world seed in Friedman’s mind by commenting, in reference to technological advancements enabling other countries to challenge presumed American hegemony in certain business sectors: “Tom, the playing field is being leveled.”

The Columbus-like discovery process culminates with Friedman’s conversion of one of the components of Nilekani’s idiomatic expression into a more convenient synonym: “What Nandan is saying, I thought to myself, is that the playing field is being flattened… Flattened? Flattened? I rolled that word around in my head for a while and then, in the chemical way that these things happen, it just popped out: My God, he’s telling me the world is flat!”

No compelling justification is ever provided for how a war against deterrables will solve the problem of undeterrables who by definition cannot be deterred.

The viability of the new metaphor has already been called into question by Friedman’s assessment two pages prior to the flat-world discovery that the Infosys campus is in fact “a different world,” given that the rest of India is not characterized by things like a “massive resort-size swimming pool” and a “fabulous health club.” No attention is meanwhile paid to the possibility that a normal, round earth—on which all circumferential points are equidistant from the center—might more effectively convey the notion of the global network Friedman maintains is increasingly equalizing human opportunity.

An array of disclaimers and metaphorical qualifications begins to surface around page 536, such that it ultimately appears that the book might have been more appropriately titled The World Is Sometimes Indefinitely Maybe Partially Flat—But Don’t Worry, I Know It’s Not, or perhaps The World Is Flat, Except for the Part That Is Un-Flat and the Twilight Zone Where Half-Flat People Live. As for his announcement that “unlike Columbus, I didn’t stop with India,” Friedman intends this as an affirmation of his continued exploration of various parts of the globe and not as an admission of his continuing tendency to err—which he does first and foremost by incorrectly attributing the discovery that the earth is round to the geographically misguided Italian voyager.

Leaving aside for the moment the blunders that plague Friedman’s writing, the comparison with Columbus is actually quite apt in other ways, as well. For instance, both characters might be accused of transmitting a similar brand of hubris, nurtured by their respective societies, according to which “the Other” is permitted existence only via the discoverer-hero himself. While Columbus is credited with enabling preexisting populations on the American continent to enter the realm of true existence by reporting them to European civilization, Friedman assumes responsibility for the earth’s inhabitants in general without literally having to encounter them.


http://www.guernicamag.com/features/3284/fernandez_12_1_11/

Riaz Haq said...

According to The Fiber Report 2009/10, Indians consumed 4.18 million tons of cotton while Pakistanis consumed 2.558 million tons.

Assuming a population of 1.2 billion for India and 180 million for Pakistan, the per capita cotton consumption works out to 3.48 Kg in India and 14.2 Kg in Pakistan.

http://www.oerlikontextile.com/desktopdefault.aspx/tabid-1763/

Riaz Haq said...

Here are excerpts from a Dawn report on World Bank's assessment of Pakistan's economy:

...Pakistan is South Asia’s second largest economy, representing about 15 per cent of regional GDP.
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The portion on Pakistan points out that the country’s economy firmed in the second half of 2011. Industrial production surged to grow at a robust 32.1pc annualised pace during the three months ending in October, after falling at 9.1 and 10.1pc rates during the first and second quarters, respectively.

Part of the strengthening in growth reflects base effects due to the widespread flooding that had hampered activity in the second half of 2010. Since the floods occurred in July and August 2010, GDP growth on a fiscal year basis (ending June-2011) slowed to 2.4pc.

The report notes that Pakistan’s weak growth outturns are also tied to “worsening security conditions, accompanied by greater political uncertainty and a breakdown in policy implementation”.

The report also notes that “infrastructure bottlenecks, including disruptions in power delivery,” remain widespread.

A notable bright spot has been a strengthening of exports, evident particularly in the first half of 2011, led by textiles that surged 39pc in the first half of the year.However, like India, Pakistan’s export volume growth saw a sharp fall-off in October.

Indeed, Pakistan’s export volumes fell to a minus 46pc rate in the three-months ending October.

Along with an upswing in worker remittances inflows, robust exports have supported Pakistan’s external positions and contributed to an improvement in the current account from a deficit of 0.9pc of GDP in 2010 to a surplus of close to 0.5pc of GDP in the 2011 calendar year.

The World Bank notes that monetary tightening in Pakistan brought about positive real lending rates in early 2011 as well, the first time since late 2009.
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The bank points out that for South Asian nations, including India and Pakistan, domestic crop conditions and price controls are more important determinants of domestic food price inflation.
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Regional monetary policy authorities face several challenges in reducing inflation.

More recently, currency devaluation has contributed to inflation as well. In Pakistan, monetary authorities have also been monetising the deficit, complicating the efficacy of other monetary policy efforts to reduce inflation.

A key factor working against monetary policy efforts is the overall stance of fiscal policy, which despite some consolidation, remains very loose.

Monetary authorities in Pakistan have responded to persistent price pressures by raising policy interest rates and/or introducing higher reserve requirements.

Lower revenue growth has contributed to larger fiscal deficits in Pakistan. Terms of trade losses are estimated at about 1.9pc of GDP for the region in aggregate. India and Pakistan saw negative impacts of close to 1.8pc of GDP – estimated January through September 2011 terms of trade impacts relative to 2010.

Remittance inflow to Pakistan rose by an estimated 25pc in 2011, partly in response to the widespread flooding in the second half of 2010.

International reserve positions in South Asia have generally improved since mid-2008. Latest readings of foreign currency holdings were equivalent to at least three-months of merchandise imports in Pakistan.
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A good crop year (2011-12) in much of South Asia and sustained high regional stocks are providing a buffer for grain prices and import demand in 2012....


http://www.dawn.com/2012/01/19/pakistans-economy-recovering-wb.html

http://siteresources.worldbank.org/INTPROSPECTS/Resources/334934-1322593305595/8287139-1326374900917/GEP_January_2012a_FullReport_FINAL.pdf

Riaz Haq said...

It is official: India has the world's most toxic air, according a news report in The Hindu:

In a study by Yale and Columbia Universities, India holds the very last rank among 132 nations in terms of air quality with regard to its effect on human health.

India scored a miniscule 3.73 out of a possible 100 points in the analysis, lagging far behind the next worst performer, Bangladesh, which scored 13.66. In fact, the entire South Asian region fares badly, with Nepal, Pakistan and China taking up the remaining spots in the bottom five of the rankings.

These rankings are part of a wider study to index the nations of the world in terms of their overall environmental performance. The Yale Center for Environmental Law and Policy and Columbia's Center for International Earth Science Information Network have brought out the Environment Performance Index rankings every two years since 2006.

In the overall rankings — which takes 22 policy indicators into account — India fared minimally better, but still stuck in the last ten ranks along with environmental laggards such as Iraq, Turkmenistan and Uzbekistan. At the other end of the scale, the European nations of Switzerland, Latvia and Norway captured the top slots in the index.

India's performance over the last two years was relatively good in sectors such as forests, fisheries, biodiversity and climate change. However, in the case of water — both in terms of the ecosystem effects to water resources and the human health effects of water quality — the Indian performance is very poor.

The Index report was presented at the World Economic Forum currently taking place in Davos, where it's being pitched as a means to identify the leaders and the laggards on energy and environmental challenges prior to the iconic Rio+20 summit on sustainable development to be held in Brazil this June.


http://www.thehindu.com/sci-tech/energy-and-environment/article2837739.ece

http://epi.yale.edu/epi2012/rankings

Riaz Haq said...

India is the deadliest country for girl child, according to a report published by the Times of India:

NEW DELHI: It's official - India is the most dangerous place in the world to be a baby girl. Newly released data shows that an Indian girl child aged 1-5 years is 75% more likely to die than an Indian boy, making this the worst gender differential in child mortality for any country in the world.

Newly released United Nations Department of Economic and Social Affairs ( UN-DESA) data for 150 countries over 40 years shows that India and China are the only two countries in the world where female infant mortality is higher than male infant mortality in the 2000s. In China, there are 76 male infant deaths for every 100 female infant deaths compared with 122 male infant deaths for every 100 female infant deaths in the developing world as a whole.

The released data has found that India has a better infant mortality sex ratio than China, with 97 male infant deaths for every 100 female, but this is still not in tune with the global trend, or with its neighbours Sri Lanka (125) or Pakistan (120).

When it comes to the child mortality sex ratio, however, India is far and away the world's worst. In the 2000s, there were 56 male child deaths for every 100 female, compared with 111 in the developing world. This ratio has got progressively worse since the 1970s in India, even as Pakistan, Sri Lanka, Egypt and Iraq improved.

The UN report is clear that high girl child mortality is explained by socio-cultural values. So strong is the biological advantage for girls in early childhood that higher mortality among girls should be seen as "a powerful warning that differential treatment or access to resources is putting girls at a disadvantage", the report says.

"Higher female mortality from age 1 onwards clearly indicated sustained discrimination," says P Arokiasamy, professor of development studies at Mumbai's International Institute for Population Studies, who has studied gender differentials in child mortality in India. "Such neglect and discrimination can be in three areas: food and nutrition, healthcare and emotional wellbeing. Of these, neglect of the healthcare of the girl child is the most direct determinant of mortality," says Arokisamy. Studies have shown that health-related neglect may involve waiting longer before taking a sick girl to a doctor than a sick boy, and is also reflected in lower rates of immunization for girls than boys.

Moreover, since the outrage over India's poor child sex ratio came out of census data for children aged 0-6 years, the UN data on child mortality indicates that a campaign against female foeticide alone is not a complete solution. "Pre-natal and post-natal discrimination are complementarily contributing to gender imbalance," agrees Dr Arokiasamy. While pre-natal discrimination in the form of sex-selective abortions is more common among better educated upper income households, post-natal discrimination or neglect is more common among poorer, less educated rural households, he adds.


http://articles.timesofindia.indiatimes.com/2012-02-01/india/31012468_1_child-mortality-infant-mortality-infant-deaths

Riaz Haq said...

Pakistan is the third largest arms importer after India and South Korea, according to SIPRI:

Asia and Oceania accounted for 44 per cent of global arms imports, followed by Europe (19 per cent), the Middle East (17 per cent), the Americas (11 per cent) and Africa (9 per cent).

India was the world’s largest recipient of arms, accounting for 10 per cent of global arms imports. The four next largest recipients of arms in 2007–2011 were South Korea (6 per cent of arms transfers), Pakistan (5 per cent), China (5 per cent) and Singapore (4 per cent).

‘Major Asian importing states are seeking to develop their own arms industries and decrease their reliance on external sources of supply,’ said Pieter Wezeman, senior researcher with the SIPRI Arms Transfers Programme. ‘A large share of arms deliveries is due to licensed production.’

China shifts from imports to exports

China, which was the largest recipient of arms exports in 2002–2006, fell to fourth place in 2007–11. The decline in the volume of Chinese imports coincides with the improvements in China’s arms industry and rising arms exports.

Between 2002–2006 and 2007–11, the volume of Chinese arms exports increased by 95 per cent. China now ranks as the sixth largest supplier of arms in the world, narrowly trailing the United Kingdom.

‘While the volume of China’s arms exports is increasing, this is largely a result of Pakistan importing more arms from China’, said Paul Holtom, director of the SIPRI Arms Transfers Programme. ‘China has not yet achieved a major breakthrough in any other significant market.’
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Other notable developments

In 2011 Saudi Arabia placed an order with the USA for 154 F-15SA combat aircraft, which was not only the most significant order placed by any state in 2011 but also the largest arms deal for at least 2 decades.

Greece’s arms imports decreased by 18 per cent between 2002–2006 and 2007–11. In 2007–11 it was the 10th largest arms importer, down from being the 4th largest in 2002–2006. Greece placed no new order for major conventional weapons in 2011.

Venezuela’s arms imports increased by 555 per cent between 2002–2006 and 2007–11 and it rose from being the 46th largest importer to the 15th largest.

The volume of deliveries of major conventional weapons to states in North Africa increased by 273 per cent between 2002–2006 and 2007–11. Morocco’s imports of major weapons increased by 443 per cent between 2002–2006 and 2007–11.

The comprehensive annual update of the SIPRI Arms Transfers Database is accessible from today at www.sipri.org.


http://www.sipri.org/media/pressreleases/rise-in-international-arms-transfers-is-driven-by-asian-demand-says-sipri

Riaz Haq said...

Here are excerpts of a Bloomberg piece by Indian journalist Pankaj Mishra on Pakistan's "unplanned revolution":

However, I also saw much in this recent visit that did not conform to the main Western narrative for South Asia -- one in which India is steadily rising and Pakistan rapidly collapsing.

Born of certain geopolitical needs and exigencies, this vision was always most useful to those who have built up India as an investment destination and a strategic counterweight to China, and who have sought to bribe and cajole Pakistan’s military-intelligence establishment into the war on terrorism.

Seen through the narrow lens of the West’s security and economic interests, the great internal contradictions and tumult within these two large nation-states disappear. In the Western view, the credit-fueled consumerism among the Indian middle class appears a much bigger phenomenon than the extraordinary Maoist uprising in Central India.
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Traveling through Pakistan, I realized how much my own knowledge of the country -- its problems as well as prospects -- was partial, defective or simply useless. Certainly, truisms about the general state of crisis were not hard to corroborate. Criminal gangs shot rocket-propelled grenades at each other and the police in Karachi’s Lyari neighborhood. Shiite Hazaras were being assassinated in Balochistan every day. Street riots broke out in several places over severe power shortages -- indeed, the one sound that seemed to unite the country was the groan of diesel generators, helping the more affluent Pakistanis cope with early summer heat.
Gangsters with Kalashnikovs

In this eternally air-conditioned Pakistan, meanwhile, there exist fashion shows, rock bands, literary festivals, internationally prominent writers, Oscar-winning filmmakers and the bold anchors of a lively new electronic media. This is the glamorously liberal country upheld by English-speaking Pakistanis fretting about their national image in the West (some of them might have been gratified by the runaway success of Hello magazine’s first Pakistani edition last week).

But much less conspicuous and more significant, other signs of a society in rapid socioeconomic and political transition abounded. The elected parliament is about to complete its five- year term -- a rare event in Pakistan -- and its amendments to the constitution have taken away some if not all of the near- despotic prerogatives of the president’s office.

Political parties are scrambling to take advantage of the strengthening ethno-linguistic movements for provincial autonomy in Punjab and Sindh provinces. Young men and women, poor as well as upper middle class, have suddenly buoyed the anti-corruption campaign led by Imran Khan, an ex-cricketer turned politician.

After radically increasing the size of the consumerist middle class to 30 million, Pakistan’s formal economy, which grew only 2.4 percent in 2011, currently presents a dismal picture. But the informal sector of the economy, which spreads across rural and urban areas, is creating what the architect and social scientist Arif Hasan calls Pakistan’s “unplanned revolution.” Karachi, where a mall of Dubai-grossness recently erupted near the city’s main beach, now boasts “a first world economy and sociology, but with a third world wage and political structure.”

Even in Lyari, Karachi’s diseased old heart, where young gangsters with Kalashnikovs lurked in the alleys, billboards vended quick proficiency in information technology and the English language. Everywhere, in the Salt Range in northwestern Punjab as well as the long corridor between Lahore and Islamabad, were gated housing colonies, private colleges, fast- food restaurants and other markers of Pakistan’s breakneck suburbanization....


http://www.bloomberg.com/news/2012-04-22/pakistan-s-unplanned-revolution-rewrites-its-future.html

Riaz Haq said...

In an Op Ed piece titled "Knowledge Economy" published in The News, Pak HEC chair Javaid Laghari argues for greater investment in education by the govt.

While the author's intent to goad Pakistani govt into higher funding of education is laudable, his use of stats to make his case makes little sense. He talks about 504 universities and 80 million Internet users in India which represent a lower percentage penetration for India's 1.2 billion people when compared with 143 universities and 20 million Internet users in Pakistan. I think we should expect more persuasive data from this gentleman.

http://www.thenews.com.pk/Todays-News-9-109558-Knowledge-economy

http://www.riazhaq.com/2011/10/india-and-pakistan-comparison-update.html

Riaz Haq said...

Here's an interesting perspective on Pak economy in a Dawn Op Ed by Akbar Zaidi:

Is the analysis that this is Pakistan’s worst-ever economic performance valid, or is this merely point-scoring and political posturing by those who represent different political dispensations?

Many of the key economic numbers which are to be announced later this month in the Economic Survey will show that some are, indeed, the worst ever, or at least the worst in the last 50 years. While inflation was higher during the Z.A Bhutto government, there has hardly been a month of the 51 months in power of this government, when it has not been in double digits; this is a notorious first.

Similarly, the fiscal deficit has been in the range of 4-6.5 per cent under this government, but was higher — often more than eight per cent of GDP — under Gen Ziaul Haq’s military rule. The growth rate in the pre-9/11 Musharraf three years 1999-2002, after which his government received a bonanza and huge windfall, was a mere three per cent, but it has been lower, though only slightly so, over the last four years.

Overall domestic debt, which has been growing over the last four years, is still much lower than that which was accumulated over the Ziaul Haq period and in the period between 1988-1999. However, two indicators which are considerably worse and are particularly worrying are the falling tax-to-GDP ratio and investment.

There are numerous other indicators related to the economy, which have never been this good, despite problems in slowing trends. Per capita income continues to rise albeit at a slower pace; remittances and exports have also improved; and poverty is probably lower than many were expecting, given Pakistan’s slow growth and rising and persistent food inflation.

Any fair, unbiased account of the state of Pakistan’s economy shows that while parts of Pakistan’s economy have been in a poor state, this is certainly not the worst period ever. Moreover, many of the factors which have affected the current state of affairs have their origin in the policies of the Musharraf era.

Nevertheless, what is perhaps striking about the last four years has been the poor and wavering economic management and leadership of the economic team. The absence of vision, insight and any clear idea of what needs to be done, given Pakistan’s persistent and, in many cases serious and growing, economic problems, has been the most striking aspect in the leadership of the Ministry of Finance and the Planning Commission.

A committed and more able leadership was critical to improving Pakistan’s economic situation, and in this perhaps lies the government’s biggest failure. While it is clear that the economy’s overall performance has certainly not been the ‘worst ever’, the verdict on the economic team and its leadership, is less certain.


http://dawn.com/2012/05/21/the-worst-ever/

Riaz Haq said...

Using Siddharth Vij's interpretation, here's how BL data looks for Pakistan:

1. No Schooling 38% vs 32.7% India

2. Prim Total 21.8% vs 20.9% India

3. Prim Complete 19.3% vs 18.9% Ind

4. Sec Total 34.6% vs 40.7% India

5. Sec Complete 22.5% vs 1.3% India

6. Ter Total 5.5% vs 5.8% India

7. Ter Complete 3.9% vs 3.1% India

If you add up serial numbers 1, 2, 4 and 6, you reach 100%. This is the entire universe – each and every Pakistani above the age of 15 is assigned to one and only one of these buckets. 38 out of every 100 Pakistanis (vs 32% of Indians) above the age of 15 in 2010 have had no formal schooling. 22 have been only to primary school, 35 reached as far as secondary school while the rest made it all the way to college...... All that BL tells us is that for 34.6% of Pakistanis (vs 40.7% of Indians) above the age of 15, the highest level of educational attainment is secondary schooling. If to this 34.6% you add the 5.5% who have some tertiary education, you come up with a figure of 40.1% Pakistanis (vs 46.5% of Indians) above the age of 15 having had some secondary schooling during their life time.

http://broadmind.nationalinterest.in/2011/09/23/so-how-many-indian-kids-complete-school/


Another important point to note in Barro-Lee data is that Pakistan has been enrolling students in schools at a faster rate since 1990 than India. In 1990, there were 66.2% of Pakistanis vs 51.6% of Indians who had no schooling. In 2000, there were 60.2% Pakistanis vs 43% Indians with no schooling. In 2010, Pakistan reduced it to 38% vs India's 32.7%.

http://www.barrolee.com/

keshav said...

thank you for your valuable information. we must try to improve our self
once again thank you very much !

Riaz Haq said...

Here's a Business Standard report about Indian GDP shrinking on US $ terms:

The size of the country's gross domestic product (GDP) grew to Rs 100 lakh crore in 2012-13, about 11.7 per cent higher than the Rs 89 lakh crore a year before. However, it contracted in dollar terms due to the rupee's depreciation.

GDP at market prices (including indirect taxes) had grown 15.1 per cent in 2011-12.

The GDP size, at Rs 1,00,20,620 crore in 2012-13, is only just short of the advance estimate of Rs 10,028,118 crore issued in February this year by the Central Statistics Office.

In dollar terms, the economy's size fell to $1.84 trillion in 2012-13 against $1.87 trillion the previous financial year. It was so because the rupee depreciated to 54.3 against the dollar on an average in 2012-13, against 47.8 in 2011-12.

India's per capita income grew to Rs 68,757 in 2012-13, growing 11.7 per cent over Rs 61,564 the previous year. In dollar terms, per capita income fell to 1,266.2 in 2012-13 against 1,287.9 in 2011-12. (SECTOR-WISE QUARTERLY ESTIMATES OF GDP GROWTH FOR 2012-13)

According to recent estimates of the Organisation for Economic Co-operation and Development, India's economy has probably surpassed Japan for the third highest slot in world GDP, in terms of purchasing power parity (PPP) at 2005 prices. Both economies had seven per cent share in world output in 2011. However, OECD projected that in 2012 or a year after, India would replace Japan as the third largest economy. Also, India's economy might grow larger than the euro area in about 20 years.

However, in current prices, India's economic size might have shrunk a bit due to fall in the rupee value against the greenback. The OECD estimated that on PPP at current prices, India's share in world GDP was six per cent in 2010 and Japan's was seven per cent.


http://www.business-standard.com/article/economy-policy/rupee-fall-shrinks-fy13-gdp-size-in-terms-113060100014_1.html

Riaz Haq said...

Pakistan's annual GDP rose to $252 billion (184.35 million pop times $1368 per capita) in fiscal 2012-13, according to Economic Survey of Pakistan 2012-13 estimates based on 9 months data.

http://www.finance.gov.pk/survey/chapters_13/executive%20summary.pdf

Riaz Haq said...

Sharp fall in Indian currency against the US dollar and slower economic growth have caused India's GDP for Fiscal  Year 2012-13 to shrink in US $ terms to $1.84 trillion from $1.87 trillion a year earlier. The Indian rupee has plummeted from 47.80 in 2012 to 54.30 to a US dollar in 2013, according to Business Standard. Since this report was published in Business Standard newspaper, Indian rupee has declined further against the US dollar to Rs. 59.52 today. At this exchange rate, India's GDP is down to $1.68 trillion, about $200 billion less than it was in  Fiscal 2011-12.

Meanwhile,  Pakistan's economy continues to struggle with its annual GDP rising just 3.6% to $252 billion ($242 billion at Rs. 100 to a USD exchange rate)  in fiscal 2012-13, according to Economic Survey of Pakistan 2012-13 estimates based on 9 months data. The country is facing militancy and energy shortages impacting its economy.