Economic Inequality in India and Pakistan

Top 1% of Indians own 58% of wealth in India, according to a recent report by Oxfam as published by Wall Street Journal.  The report said the global average for wealth ownership of the top 1% is 51%.

Source: Oxfam



The income and wealth concentration in the hands of the richest top 1% skews the average per capita incomes and makes the material well-being of average citizen look better than it is.  The best way to measure how well or poorly an average citizen is doing is to look at the median income and wealth, not the average or mean. The median income reflects how much the person at the 50th percentile of the income distribution earns, giving us a better picture of the well-being of a “typical” individual in a given country. Similarly, median wealth represents how much wealth a person at the 50th percentile of the wealth distribution has accumulated.

Median Incomes in South Asia:

Centre for Global Development has estimated 2014 median incomes of countries around the world. Here's what it reported for India and Pakistan:

 Pakistan: Median Income per capita: $,1204.50, Median Household Income: $6,022.50 Mean (Average) per capita $4,811.31

India Rural: Median per capita $930.75 Median Household $4,653.75 Mean (Average) per capita $5,700.72

India Urban: Median per capita $1295.75 Median Household $6,478.75 Mean(Average) per capita: $5,700.72

It shows that India's urban median income is slightly higher than Pakistan's median income. However, India's rural median income is significantly lower than Pakistan's.  It should be noted that 70% of India's population lives in rural areas, much higher than Pakistan's 61%, according to the World Bank.

Using India's Census figures of 30% urban and 70% rural population, the median per capita income for all of India works out to $1,040.25, about 15.8% lower than Pakistan's median per capita income of $1,204.50.

Source: Bloomberg

Median Wealth in South Asia:

Average Pakistani adult is 20% richer than an average Indian adult and the median wealth of a Pakistani adult is 120% higher than that of his or her Indian counterpart, according to Credit Suisse Wealth Report 2016. Average household wealth in Pakistan has grown 2.1% while it has declined 0.8% in India since the end of last year.

Source: Credit Suisse Wealth Report 2016

Here are the key statistics reported by Credit Suisse:

Total Household Wealth Mid-2016 :

India $3,099 billion Pakistan $524 billion

Wealth per adult:

India Year End 2000 Average $2,036 Median $498.00

Pakistan Year End 2000 Average $2,399 Median $1,025

India Mid-2016 Average $3,835 Median $608

Pakistan Mid-2016 Average $4,595 Median $1,788

Average wealth per adult in Pakistan is $760 more than in India or about 20% higher.

Median wealth per adult in Pakistan is $1,180 more than in India or about 120% higher




Summary:

Median per capita income in Pakistan is 15.8% higher than in India, according to the World Bank PovcalNet figures. Median per capita wealth in Pakistan in Pakistan is 120% more than in India, according to Credit Suisse Global Wealth Report 2016.  The median figures reflect the financial situation of the people at the 50th percentile of the income and wealth distributions in each country.

The income and wealth concentration in the hands of the richest top 1% skews the average per capita incomes and makes the material well-being of average citizen look better than it is.  The best way to measure how well or poorly an average citizen is doing is to look at the median income and wealth, not the average or mean. Median income and wealth figures in South Asia show that average Pakistanis are better off economically than their counterparts in India.

Related Links:

Haq's Musings

Credit Suisse Global Wealth Report 2016

Pakistan's Middle Class Larger and Richer Than India's

Pakistan Translates GDP Growth to Citizens' Well-being

Rising Motorcycle Sales in Pakistan

Depth of Deprivation in India

Chicken vs Daal in Pakistan

China Pakistan Economic Corridor

Comments

Riaz Haq said…
The Income Of The Average Indian Is Significantly Lower Than The Average Income Of India

http://swarajyamag.com/economy/the-income-of-the-average-indian-is-significantly-lower-than-the-average-income-of-india

"As Charles Wheelan writes in Naked Statistics: “The mean, or average, turns out to have some problems in that regard, namely, that it is prone to distortion by “outliers”, which are observations farther from the center.”

So basically, the Ambanis, Adanis, Birlas and Tatas, of the world, essentially India’s rich, push up the average income of India i.e. the per capita income. As Wheelan writes: “The average income...could be heavily skewed by the megarich.”

In this scenario, the average income does not give us a correct picture. Further, it is safe to say, that the income of the average Indian is lower than the average income of India.

At this point it is important to introduce another term i.e. the median. As Wheelan writes: “The median is the point that divides a distribution in half, meaning that half of the observation lie above the median and half lie below.”

Hence, the median income is the income of the average Indian. Given this, the median income is the right representation of the income of the average Indian. This is because the rich outliers (the Ambanis, the Adnanis, the Tatas and the Birlas) are taken into account. Data from World Bank shows that the top 10 percent of India’s population makes 30 percent of the total income. And this pushes up the per capita income."

Riaz Haq said…
Pakistan’s per capita income has marginally grown to $1,561 but targets to increase investment and savings – the two most critical economic indicators after national output goal – have been missed again during the outgoing fiscal year.

The government’s inability to increase investment as percentage of total size of national economy is probably the biggest failure after it failed to achieve outgoing fiscal year’s gross domestic product (GDP) target of 5.5%.

Per capita income: A Pakistani now makes $1,513 a year

Missing of the targets on savings, investment and GDP growth also puts a question mark over the acclaimed structural reforms introduced under the $6.2 billion International Monetary Fund bailout package.

Pakistan has one of the lowest investment and savings rates in the region and the world, obstructing progress towards a sustainable and inclusive economic growth path.

Slow progress on the China-Pakistan Economic Corridor due to lack of political vision and usual bureaucratic inefficiency also pulled back investments.

Sources said in dollar terms the per capita income has grown by only 2.9% to $1,561 – up $44 in the outgoing fiscal year 2015-16. Despite a marginal increase in per capita income, the country continues to be in the league of low middle-income countries. It needs to enhance per capita income to $4,000 to be labelled a middle-income country.

Pakistan faces Rs3.3 trillion revenue black hole, says IMF

In rupee terms, there was a 5.8% growth in per capita income that increased to Rs162,568.

To arrive at the per capita income figure, the Pakistan Bureau of Statistics – the government’s statistical arm – estimated about 2% growth in the country’s population that reached 193.56 million this year. It then divided the total national income with the number of people and arrived at per capita income of $1,561.

In absolute terms, the PBS has estimated addition of about five million people in a single year.

Like the previous year, in the current fiscal year too the federal government has again failed to deliver on the two most critical economic indicators. It missed the targets of investment and savings with wide margins.

The investment-to-GDP ratio slipped to 15.2% against the target of 17.7%, said the sources. The ratio was lower than last year’s revised rate of 15.5%. Savings remained almost stagnant at 14.5% of GDP, shy of the target of 16.8%.

http://tribune.com.pk/story/1108913/par-performance-pakistans-per-capita-income-rises-slightly-1561/
Riaz Haq said…
Reports prepared by the World Bank (WB) have revealed that the per capita income of Indians is often more than the per capita income of the average Pakistani.
Using the globally accepted Purchasing Power Parity or PPP method to analyze and compare the per-capita income of various nations, reports prepared by the World Bank found that every Indian earns around USD 5,630, while a Pakistani earns around USD 5,090.
A closer look at the statistical evidence provided in these WB reports reveals that one U.S. dollar is equal Pakistani Rupees 10.4.56, while one U.S. dollar is equivalent to Indian Rs.67, and therefore, an Indian earns 54,000 Pakistani rupees more than his Pakistani counterpart or Indian Rs 36,100 more than what a Pakistani individual earns in a year.

http://indianexpress.com/article/india/india-news-india/indians-per-capita-income-is-more-than-pakistanis-world-bank-report-2868430/
Riaz Haq said…
The (World Bank) report ( The State of Social Safety Nets 2015) – which identifies India as a “lower middle income group” country – finds that all other BRICS countries, except China, spend a higher proportion of funds on social safety net. Thus, Brazil spends 2.42 per cent, Russia 3.30 per cent, China 0.70 per cent, South Africa 3.51 per cent, and South Africa 3.51 per cent of GDP.
Interestingly, even the two of India’s neighbours – Pakistan and Bangladesh – spend a higher proportion on social safety net, 1.89 per cent and 1.09 per cent.
The report says, “Despite having fewer resources for social safety nets, some lower-income countries allocate considerably more funds than the 1.6 percent average for developing countries”.

http://www.counterview.net/2016/02/india-poor-spender-of-social-safety-net.html

http://documents.worldbank.org/curated/en/415491467994645020/pdf/97882-PUB-REVISED-Box393232B-PUBLIC-DOCDATE-6-29-2015-DOI-10-1596978-1-4648-0543-1-EPI-1464805431.pdf
Riaz Haq said…
#India has been a post-truth society for years. #Modi #Trump #alternativefacts http://theconversation.com/india-has-been-a-post-truth-society-for-years-and-maybe-the-west-has-too-71169 … via @_TCGlobal

India: home of post-truth politics

That was the global context of post-truth politics and its advent in the West. But as the US and UK wake up to this new era, it’s worth noting that the world’s largest democracy has been living in a post-truth world for years.

From education to health care and the economy, particularly its slavish obsession with GDP, India can be considered a world leader in post-truth politics.

India’s post-truth era cannot be traced to a single year – its complexities go back generations. But the election of Narendra Modi in 2014 can be marked as a significant inflection point. Ever since, the country has existed under majoritarian rule with widely reported discrimination against minorities.

India’s version of post-truth is different to its Western counterparts due to the country’s socioeconomic status; its per capita nominal income is less than 3% of that of the US (or 4% of that of the UK). Still, post-truth is everywhere in India.

It can be seen in our booming Wall Street but failing main streets, our teacher-less schools and our infrastructure-less villages. We have the ability to influence the world without enjoying good governance or a basic living conditions for so many at home.

Modi’s government has shown how key decisions can be completely divorced from the everyday lives of Indian citizens, but spun to seem like they have been made for their benefit. Nowhere is this more evident than with India’s latest demonetisation drive, which plunged the country into crisis, against the advice of its central bank, and hit poorest people the hardest.


Despite the levels of extreme poverty in India, when it comes to social development, the cult of growth dominates over the development agenda, a trend that Modi has exacerbated, but that started with past governments.

The dichotomy of India’s current post-truth experience was nicely summed up by Arun Shourie, an influential former minister from Modi’s own party. He disagrees with the prime minister, just as many Republicans share sharp differences of opinion with President Trump.

Shourie said the policies of the current administration were equal to his predecessors’ policies, plus a cow.

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...there is an argument to be made that the US and the UK have been living in denial of facts and evidence for years. In 2003, after all, both the countries went to war in Iraq over the false notion that Saddam Hussein was harbouring weapons of mass destruction.
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Major social change does not happen within the space of a year. Yet, to a large number of observers around the world, the “post-truth” phenomenon seemed to emerge from nowhere in 2016.

Two key events of 2016 shaped our understanding of the post-truth world: one was in June, when Britain voted in favour of leaving the European Union. The other was in November, when political maverick Donald Trump was elected the 45th President of the United States of America. Trump’s administration spent the third day of his presidency speaking of “alternative facts”, and making false claims about the size of the crowds that had attended his inauguration.

For the rest of the world, the importance of both Trump and Brexit can best be gauged by understanding that they happened in the USA and in the UK. The UK was the key driving force of the world from the 19th century until the second world war, the US has been ever since. The US and the UK often have shared a similar point of view on many global geopolitical developments, as strategic allies or by virtue of their “special relationship”.
Riaz Haq said…
India is the second most unequal economy in the world, according to an Oxfam report released recently at the World Economic Forum. Oxfam India CEO Nisha Agrawal tells Himanshi Dhawan that demonetisation has only aggravated this inequality with no significant long-term benefits.

http://blogs.timesofindia.indiatimes.com/the-interviews-blog/57-billionaires-control-70-of-indias-wealth-india-is-second-most-unequal-economy-after-russia/

Oxfam’s new report ‘Economy for 99%’ claims that since 2015, eight men own the same amount of wealth as the poorest half of the world. In India, the richest 1% control 60% of the total wealth. Your comments?
In 2016, India is the second most unequal economy after Russia. Inequality is fracturing our economy and the reality is that today 57 billionaires control 70% of India’s wealth. Even International Monetary Fund recently warned that India faces the social risk of growing inequality. As per IMF, India’s Gini coefficient rose to 51 by 2013, from 45 in 1990, mainly on account of rising inequality between urban and rural areas as well as within urban areas.
India is currently too dependent on a regressive tax structure of indirect taxes and should move towards a more progressive taxation system that raises more tax revenues from the wealthy to fund more public expenditures on health and education to create a more equal opportunity country.
What have been the reasons behind this growing inequality? Would you say successive governments have failed to address the concerns of the 99%?
Over the last 25 years, the top 1% has gained more income than the bottom 50% put together. Far from trickling down, income and wealth are being sucked upwards at an alarming rate. Like many other countries, in India too policies have not focussed on raising the incomes of the poorest. India’s liberalisation in the early 1990s has seen an explosion in inequality since it created opportunities in a few high end sectors such as banking, IT, telecom and airlines that only created a handful of jobs for the highly skilled and educated. Not many policy reforms have happened either in agriculture or labour intensive manufacturing that could have created millions of jobs and raised incomes of the poor. Furthermore, not much effort has been made to raise more revenues and spend on basic education and health so that the poor could benefit from the opportunities being created.
Riaz Haq said…
Can, #religion, #caste be banned from #India's politics? #BJP #congressparty #Modi #Hindu #Sikh #Dalit #Muslim

http://www.aljazeera.com/indepth/opinion/2017/01/india-supreme-court-ban-politics-170127131816254.html


India is a nation of caste and religion. It is a nation where caste is policy. Upper caste policy is to move upwards, while lower castes continually struggle in their lowly status.

Everything that happens here is based on caste. At every stage of our life caste becomes important. We are unable to understand what is going on in the country if we disregard caste. We also see Justice T S Thakur, who delivered the court ruling, through the eyes of caste because the surname, Thakur, also represents a caste.

When caste is so integral in our society how can we separate caste and religion - a solid foundation - from politics and elections?

There are three main parties in India today: the Congress Party, the ruling Bharatiya Janata Party (BJP) and the Communist Party. The Congress and BJP are outwardly "secular" parties. The BJP promotes itself as the party for Hindus, and on caste issues it says it is "secular". However they choose to self-define, if we search further, we find that the soul of these parties is brahminical, i.e. belonging to the highest caste.

The prominence of caste also applies to politics before India's independence. Priestly Brahmins who controlled the Bania caste - which had close business connections with them - have unjustly benefited from the new political reality, and that is why India's politics is called Brahmin-Bania politics.

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In the first days of this year, in a landmark ruling, the Supreme Court of India banned political candidates from seeking election on the basis of caste, religion and language. On the surface, this ruling seems to be appealing to secular voters, upholding the secular values of the constitution and implementing the principles of democracy.

But it also seems to be contradicting a 1995 Supreme Court ruling which considered "Hindutva" (Hindu nationalism) and "Hinduism" a "way of life", rather than an ideology that belongs to a certain caste or religion. The court has been silent on reviewing the Hindutva issue.

There has been praise from seculars on the ruling and respect for the judiciary has further increased among ordinary people. But while the verdict is indeed an important new development, there are still questions about its practicality because caste, like religion, remains an integral part of Indian society.
Riaz Haq said…
#Pakistan’s Middle Class Soars as Stability Returns - WSJ. #economy #middleclass
https://www.wsj.com/articles/pakistans-middle-class-soars-as-stability-returns-1485945001

Pakistan, often in the headlines for terrorism, coups and poverty, has developed something else in recent years: a burgeoning middle class that is fueling economic growth and bolstering a fragile democracy.

The transformation is evident in Jamil Abbas, a tailor of women’s clothing whose 15 years of work has paid off with two children in private school and small luxuries like a refrigerator and a washing machine.

For companies like the Swiss food maker Nestlé SA, such hungry consumers signal a sea-change.

“Pakistan is entering the hot zone,” said Bruno Olierhoek, Nestlé’s CEO for Pakistan, saying the country appears to be at a tipping point of exploding demand. Nestlé’s sales in Pakistan have doubled in the past five years to $1 billion.

Although often overshadowed by giant neighbors India and China, Pakistan is the sixth most-populated country, with 200 million people. And now, major progress in the country’s security, economic and political environments have helped create the stability for a thriving middle class.

An unpublished study last year that measured living standards, from Pakistani market research firm Aftab Associates, found that 38% of the country is middle class, while a further 4% is upper class. That’s a combined 84 million people—roughly equivalent to the entire populations of Germany or Turkey.

Such households are likely to have a motorcycle, color TV, refrigerator, washing machine and at least one member who has completed school up to the age of 16, the study found. Official figures show that the proportion of households that own a motorcycle soared to 34% in 2014 from 4% in 1991, and a washing machine to 47% from 13% over that same period. These trends are also attracting international business.

In December, Royal FrieslandCampina NV, a Dutch dairy company, paid $461 million to buy control of Engro Foods, a Pakistani packaged milk producer in a country where most milk is sold unpasteurized from open milk containers.

“What we see is consumer spending is rising and a middle class coming up,” said Hans Laarakker, Engro’s new chief executive.

Late last year, China’s Shanghai Electric Power agreed to pay $1.8 billion for a majority of Karachi’s electric supply company; Turkish electrical appliance maker Arçelik paid $258 million for a Pakistani appliance maker, Dawlance, saying Pakistan has an “increasingly prosperous working and middle class”; and French car maker Renault SA said it was seeking to set up a plant in Pakistan.

Meanwhile, during the past three years, deaths from terrorist attacks have fallen by two-thirds, as the army battles jihadists. Economic growth reached an eight-year high of nearly 5% in the past financial year, and China has begun a multibillion-dollar infrastructure investment program. The Karachi stock market rose 46% last year and continues to soar.

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In the developing world, the ability to purchase durable goods such as motorcycles—which itself can lead to new opportunities in employment, education and leisure—is generally viewed as an indicator of a middle class lifestyle. Motorcycle purchases soared in Pakistan to 2 million a year now from 95,000 in 2000, leading Honda Motor Co. to double its production capacity there. Buyers of Honda’s cheapest motorcycle typically earn between just $200 and $300 a month, which would put them well below the poverty line in the West, but here that gives them disposable income.

“All these big companies globally, if they’re not looking at Pakistan, need to look at Pakistan, because it’s a huge consumption economy emerging,” said Saquib Shirazi, chief executive of Honda’s Pakistan joint venture.
Riaz Haq said…
#Pakistan's PAK ETF up 41.6% in a year. PAK still cheap on P/E basis with rising corporate earnings. http://www.investopedia.com/news/why-pakistan-etf-perky-pak/ …

Pakistan is among the frontier markets that are moving higher, but before jumping into the Global X MSCI Pakistan ETF (PAK), investors should evaluate the risks involved with a market such as Pakistan and the reasons Pakistani stocks are surging.

PAK, the lone exchange trade fund (ETF) listed in the U.S. dedicated to Pakistani equities, is up 41.6% over the past year. That performance is more than 1,500 basis points ahead of a widely followed frontier markets index, in which Pakistan is one of the largest country weights.

While frontier markets are often viewed as less desirable destinations for investors' capital than emerging markets, the reality is frontier economies have some advantages, including lower correlations to developed and emerging equities and, in some cases, less volatility.

With those advantages in mind, investors mulling a position in PAK should note Pakistan's time as a frontier market is limited. Last year, index provider MSCI said Pakistan become part of the widely followed MSCI Emerging Markets Index in May. That announcement was made just seven years after Pakistan was promoted to frontier status from the standalone classification. It also makes Pakistan the first country since Qatar and the United Arab Emirates in 2014 to earn the frontier-to-emerging promotion.

The promotion of Pakistan to emerging markets status means that active fund managers that benchmark to the MSCI Emerging Markets Index will have to buy Pakistani stocks to stay in-line with that index. With that promotion already widely known, Pakistani equities, including some of the 38 found in PAK, could already be soaring in anticipation of the frontier-to-emerging switch.

Several members of the KSE 100, Pakistan's benchmark equity index, have more than doubled over the past six months, including some financial services names. That sector represents over a third of PAK's weight. Materials and energy stocks combine for 46% of the ETF's lineup.

Although news of Pakistan's emerging markets promotion has been well telegraphed, Pakistani stocks still are not expensive. The KSE 100 trades at an earnings multiple of just under 11, a slight discount to the MSCI Emerging Markets Index. However, valuations on Pakistani stocks have been steadily rising since the third quarter.

Investors willing to wager on a further upside for PAK can take heart in knowing that earnings growth for Pakistani stocks is outpacing the relatively modest increase in the KSE 100's price-to-earnings ratio while also topping earnings growth for the broader emerging markets universe.



Read more: Why The Pakistan ETF Is Perky (PAK) | Investopedia http://www.investopedia.com/news/why-pakistan-etf-perky-pak/#ixzz4Yfr2dBw2
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Riaz Haq said…
#Tesco products launched in #Karachi #Pakistan for sale at Alpha Supermarkets | Business - http://Geo.tv https://www.geo.tv/latest/131228-Tesco-products-launched-in-Pakistan …

The launch of Tesco Label products at Alpha Supermarkets in Pakistan was announced by the British High Commissioner Thomas Drew and Limestone Private Limited at the British Deputy High Commission in Karachi.

According to a statement issued by British Deputy High Commission here on Wednesday, the Tesco PLC is one of the world’s biggest companies and is a British multinational grocery and general merchandise retailer with stores in 12 countries across Asia and Europe.

Tesco products will soon be available at Alpha Supermarkets in Pakistan including food and nonfood items in three categories: Tesco Goodness, Tesco Finest and Tesco Everyday.

British High Commissioner to Pakistan, Thomas Drew, said on the occasion that ‘UK brands- especially those as big as Tesco’ have a real advantage in Pakistan, as British brands are so recognisable already to the many people in Pakistan who have visited the UK.

This is a particularly important year for this to be happening in Pakistan, as we are celebrating 70 years of UK-Pakistan relations.

While we will, of course, be remembering all the things that have linked us over the last 70 years, we are just as focused on the future of our relationship. At the heart of this will be increased trade between our two countries and I hope Tesco’s launch is just the start of a new era of British-Pakistani trade’.

Riaz Haq said…
World Happiness 2017 ranks Pakistan well ahead of the rest of SAARC nations. Nepal's at 99, Bhutan at 97, Bangladesh at 110, Sri Lanka at 120, India at 122 and Afghanistan at 141 among 155 nations surveyed.


http://www.hindustantimes.com/india-news/norway-named-happiest-country-in-the-world-india-among-the-saddest/story-zxfv1HSduc5skZRV8saH1H.html


Norway moved from No. 4 to the top spot in the report’s rankings, which combine economic, health and polling data compiled by economists that are averaged over three years from 2014 to 2016. Norway edged past previous champ Denmark, which fell to second. Iceland, Switzerland and Finland round out the top 5.

Studying happiness may seem frivolous, but serious academics have long been calling for more testing about people’s emotional well-being, especially in the United States. In 2013, the National Academy of Sciences issued a report recommending that federal statistics and surveys, which normally deal with income, spending, health and housing, include a few extra questions on happiness because it would lead to better policy that affects people’s lives.

The entire top ten were wealthier developed nations. Yet money is not the only ingredient in the recipe for happiness, the report said.

In fact, among the wealthier countries the differences in happiness levels had a lot to do with “differences in mental health, physical health and personal relationships: the biggest single source of misery is mental illness,” the report said.

“Income differences matter more in poorer countries, but even their mental illness is a major source of misery,” it added.

Another major country, China, has made major economic strides in recent years. But its people are not happier than 25 years ago, it found.

The United States meanwhile slipped to the number 14 spot due to less social support and greater corruption; those very factors play into why Nordic countries fare better on this scale of smiles.

“What works in the Nordic countries is a sense of community and understanding in the common good,” said Meik Wiking, chief executive officer of the Happiness Research Institute in Copenhagen, who wasn’t part of the global scientific study that came out with the rankings.

The rankings are based on gross domestic product per person, healthy life expectancy with four factors from global surveys. In those surveys, people give scores from 1 to 10 on how much social support they feel they have if something goes wrong, their freedom to make their own life choices, their sense of how corrupt their society is and how generous they are.


http://worldhappiness.report/


https://s3.amazonaws.com/sdsn-whr2017/HR17_3-20-17.pdf
Riaz Haq said…
Facets of inequality (in Pakistan) by Sakib Sherani Op Ed in Dawn

WEALTH and income inequality have risen sharply around the world in the past few decades, with data suggesting an acceleration in the trend over the recent past. This state of affairs has occurred despite massive economic prosperity having been generated over the same period of time, which has lifted millions around the globe out of extreme poverty.

However, economic prosperity has not been shared equitably. According to Oxfam, “since 2015, the richest one per cent has owned more wealth than the rest of the planet”. Earlier this year, Oxfam reported that eight of the richest men in the world now owned the same amount of wealth as the poorest half of the world (3.6 billion people).

Between 1988 and 2011, incomes of the poorest 10pc increased by just $65 per person — or less than $3 annually — compared to the incomes of the richest 1pc which grew by $11,800 per person, or 182 times as much. In the US, the situation with regards to income inequality is even more extreme. According to research by the French economist Thomas Picketty, over the last 30 years the growth in the incomes of the bottom 50pc has been zero, whereas incomes of the top 1pc have grown 300pc.

The situation in Pakistan appears to have followed a similar trend. While the Planning Commission has stopped making public statistics on income inequality for the past few years, evidence suggests that the disparity between the richest and the poorest households has increased. According to the Household Integrated Economic Survey (HIES) 2015-16, the share of the top 20pc of households in overall income is nearly 45pc, while for the bottom 20pc the share is slightly less than 9pc — a multiple of 5 times.

Inequality has broader dimensions beyond wealth or income.

While looking at inequality through the prism of income or wealth distribution is instructive, it tells a less than complete story. For a country like Pakistan, the inequality in society is multidimensional — with deep structural as well as institutional roots. The poor and vulnerable are discriminated against, face exclusion and marginalisation in a structured and institutionalised manner. Hence, for a proper understanding of the issue, one has to map the broad areas and extent of ‘non-inclusion’ of citizens, not just the inequitable distribution of wealth/income.

https://www.dawn.com/news/1338328
Riaz Haq said…
Per Capita Income in dollar terms has witnessed
a growth of 6.4 percent in FY 2017 as
compared to 1.1 percent last year. The per
capita income in dollar terms has increased
from $ 1,531 in FY 2016 to $ 1,629 in FY
2017. Main contributing factors for the rise in
per capita income are higher real GDP, growth,
low population growth and stability of Pak
Rupee.


http://www.finance.gov.pk/survey/chapters_17/overview_2016-17.pdf

Riaz Haq said…
Pakistan ranks 52 among 79 countries ranked by WEF for inclusive development, ahead of India at 60 but behind China at 15 and Bangladesh at 36


http://www3.weforum.org/docs/WEF_Forum_IncGrwth_2017.pdf


Pakistan has lower inequality than India as measured by Gini coefficient.


http://www.indiatimes.com/news/world/india-ranks-60th-among-79-developing-economies-in-the-world-economic-forum-s-inclusive-development-index-269629.html
Riaz Haq said…
Are we entering into a "jobless" growth phase in South Asia?

By Dr. Selim Raihan, Professor, Department of Economics, University of Dhaka, Bangladesh, and Executive Director, South Asian Network on Economic Modeling (SANEM).

http://www.thedailystar.net/opinion/economics/are-we-entering-jobless-growth-phase-south-asia-1459387

The relationship between economic growth and employment is an important issue in economics discourse. Promotion of inclusive growth also requires economic growth processes to be employment friendly. The measure that captures the employment effect of economic growth is the "employment elasticity" of economic growth, which is the ratio of percentage change in employment to the percentage change in real gross domestic product (GDP).

We have calculated the employment elasticity with respect to the change in real GDP for the South Asian countries for three different periods from 2001 to 2015. There are mixed patterns among the South Asian countries. During 2001 and 2005, Maldives had the largest employment elasticities (1.39) and Sri Lanka had the lowest one (0.08). India, with a share of 75 percent of the total population in South Asia, had the employment elasticity of only 0.38, one of the lowest in South Asia. Two other large countries, Pakistan and Bangladesh, had employment elasticities of 0.70 and 0.77 respectively.

For the period of 2006-2010, India experienced a drastic fall in employment elasticity to only 0.03 despite the fact that the average GDP growth rate of India increased from 6.6 percent (2001-2005) to more than 8 percent (2006-2010). Over these periods, Bangladesh also had a similar experience where employment elasticity declined from 0.77 to 0.4 in the wake of a rising average GDP growth rate from 5 to 6 percent. While Afghanistan, Maldives, and Nepal also experienced a decline, Pakistan and Sri Lanka could increase the elasticities.

Over the recent period between 2011 and 2015, Bangladesh experienced a further fall in the employment elasticity to 0.28, while India's improvement is meagre (from 0.03 to only 0.09). Despite the slower economic growth rates during this period, Afghanistan, Maldives, Nepal, and Pakistan could increase their employment elasticities. Sri Lanka had a further fall in employment elasticity to only 0.14. During this period, India had the least employment elasticity among all South Asian countries.


The aforementioned analysis points to the concern that two major South Asian countries, India and Bangladesh, experienced a substantial reduction in employment elasticities throughout the periods of high economic growth. While during 2001 and 2005, the annual average job creation in Bangladesh and India were 1.6 million and 11.3 million respectively, in 2011-2015, such numbers declined to 1 million and 3.2 million for Bangladesh and India respectively. Most of the other South Asian countries experienced either volatile, or slow or stagnant economic growth, and therefore, despite a rise in employment elasticities, the actual employment generation in these countries had not been substantial. It is also important to mention that while SDG 8 talks about ensuring "decent" jobs for all, South Asian countries are seriously lagging far behind. In most of the South Asian countries, there are persistent employment challenges such as lack of economic diversification, poor working conditions, low productivity and a high degree of informality. This is reflected by the fact that among the top five countries in the world with very high proportion of informal employment in total employment, four are from South Asia (Bangladesh, India, Nepal, and Pakistan).
Riaz Haq said…
Credit Suisse Wealth Report 2019

India Average Per Adult $2,127 Pakistan Average Per Adult $1,168

India Median Per Adult $596 Pakistan Median Per Adult $506.

https://www.credit-suisse.com/about-us/en/reports-research/global-wealth-report.html

Pakistan's wealth declined mainly because its currency devalued by 24% and its market cap dropped by 42%.


Much of the year-on-year variation in wealth levels is due to changes in asset prices and exchange rates. Exchange-rate fluctuations are frequently the source of the biggest gains and losses. However, exchange rates have been relatively stable over the past 12 months. Among the countries reported in Figure 3 (G7 countries plus China, India and Russia), the largest changes affected China and the United Kingdom – both depreciating about 3.5% versus the US dollar. Currency falls were modest elsewhere in the world, except for Turkey (–21%), Pakistan (–24%) and Argentina (–32%). Currency appreciation was even rarer, with Thailand (+8%) and Egypt (+7%) recording the biggest gains.


Equity prices showed greater regional fluctuations. Market capitalization rose in North America, but declined in much of Europe by an average of about 10%. Markets rose significantly in Russia (+15%), and by an even greater extent in Kuwait (+25%), Brazil (+35%) and Romania (+36%). In Pakistan, market capitalization dropped by 42%, compounding the impact of exchange rate losses.

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