Sunday, October 9, 2011

India and Pakistan Comparison Update 2011

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".

Pakistan Created More Jobs:

Pakistan's employment growth has been the highest in South Asia region since 2000, followed by Nepal, Bangladesh, India, and Sri Lanka in that order, according to a recent World Bank report titled "More and Better Jobs in South Asia".



Total employment in South Asia (excluding Afghanistan and Bhutan) rose from 473 million in 2000 to 568 million in 2010, creating an average of just under 800,000 new jobs a month. In all countries except Maldives and Sri Lanka, the largest share of the employed are the low‐end self-employed.

Pakistan Graduated More People:

Although India has higher rates of literacy and enrollment than Pakistan, Pakistanis spend more time in schools and colleges and graduate at a higher rate than their Indian counterparts in 15+ age group, according to a report on educational achievement by Harvard University researchers Robert Barro and Jong-Wha Lee.

In a recent Op Ed titled "Preparing the Population for a Modern Economy" published by Pakistan's Express Tribune, Pakistani economist Shahid Burki wrote as follows:

"Pakistan does well in one critical area — the drop-out rate in tertiary education. Those who complete tertiary education in Pakistan account for a larger proportion of persons who enter school at this level. The proportion is much higher for girls, another surprising finding for Pakistan."

Upon closer examination of Barro-Lee data on "Educational Attainment for Total Population, 1950-2010", it is clear that Pakistani students stay in schools and colleges longer to graduate at higher rates than Indian students at all levels--primary, secondary and tertiary. While India's completion rate at all levels is a dismal 22.9%, the comparable completion rate in Pakistan is 45.7%.



Here is a summary of Barro-Lee's 2010 data in percentage of 15+ age group students who have enrolled in and-or completed primary, secondary and tertiary education:

Education Level.......India........Pakistan

Primary (Total)........20.9..........21.8

Primary (Completed)....18.9..........19.3

Secondary(Total).......40.7..........34.6

Secondary(Completed)...0.9...........22.5

College(Total).........5.8...........5.5

College(Completed).....3.1...........3.9

Pakistan Has Larger Middle Class:

Over the last two decades, Pakistan has continued to offer much greater upward economic and social mobility to its citizens than neighboring India. Since 1990, Pakistan's middle class had expanded by 36.5% and India's by only 12.8%, according to an ADB report on Asia's rising middle class released recently.

Asia's Middle Class Source: ADB


An ADB report on Asia's rising middle class released this month confirms that Pakistan's middle class has grown to 40% of the population, significantly larger than the Indian middle class of about 25% of its population, and it has been growing faster than India's middle class. The other significant news reported by Wall Street Journal says the vast majority of what is defined as India's middle class is perched just above $2 a day, making it vulnerable to various shocks. This is also true of Pakistan.

Pakistan Has Less Hunger and Poverty:

In spite of recent poverty declines with its rapid economic expansion, India still has higher poverty rates than Pakistan, according to a 2011 World Bank report titled "Perspectives on poverty in India : stylized facts from survey data" released in 2011.

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 comparable or slightly lower poverty rates than Pakistan's.




Based on hunger data collected from 2003 to 2008, IFPRI reported that Pakistan's hunger index score improved over the last three consecutive years reported since 2008 from 21.7 (2008) to 21.0 (2009) to 19.1 (2010) and its ranking rose from 61 to 58 to 52. During the same period, India's index score worsened from 23.7 to 23.9 to 24.1 and its ranking moved from 66 to 65 to 67 on a list of 84 nations.

India's Economic Growth Outpaces Pakistan's

Indian economy has been growing faster than Pakistan for several years. The nominal per capita incomes in the two nation are still about the same at just over $1200, according to 2011 data released by Economic Survey of India and Economic Survey of Pakistan.

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.



Pakistan Has Better Public Hygiene:

India has the worst public sanitation situation in the world today, according to a recent UNICEF survey. In terms of open defecation, India(638m) is followed by Indonesia (58m), China (50m), Ethiopia (49m), Pakistan (48m), Nigeria (33m) and Sudan (17m). In terms of percentage of each country's population resorting to the unhygienic practice, Ethiopia tops the list with 60%, followed by India 54%, Nepal 50%, Pakistan 28%, Indonesia 26%, and China 4%.

18 percent of urban India still defecates in open while the percentage of rural India is as high as 69 percent of the population. It is the key reason why India carries among the highest infectious disease burdens in the world.

To conclude, let me share with you an except from a piece written by Mudassar Mazhar Malik, an MIT (Sloan) and LSE (London) educated Pakistani economist and investment banker,on his assessment of Pakistan today:

"First, despite seven changes in government in the past twenty years, Pakistan has maintained an average growth rate of 5 percent per annum. Until recently, Pakistan was being touted as one of the most dramatic turn-around stories of the last decade. Driven by domestic demand and population growth, GDP growth averaged over 6% a year from 2003-2008. This translated into an investment and infrastructure led growth cycle cycle fueling expansion in the housing, health care, education, food, infrastructure, energy, telecommunications, IT and financial services sector. This has meant that Pakistan's economy has moved progressively from its traditional agricultural base to manufacturing and increasingly to services. In that sense, Pakistan's economic structure is closer to that of India and China, and is unlike many smaller Asian countries, which are more dependent on export growth."

While it still has a very long way to go to improve its ordinary citizens' lives, resilient Pakistan has done reasonably well in terms of economic and social indicators over the last decade in spite of huge challenges. Just imagine how much better Pakistan could have done if it had any semblance of political stability and security.

Related Links:

Haq's Musings

Pakistan Tops Job Growth in South Asia

Pakistan Ahead of India in Graduation Rates

India-Pakistan Compared By Dr. Ishrat Husain

Public Sanitation Worst in India

Pakistan's Middle Class

Per Capita Incomes in India and Pakistan

The Pakistan Story After 64 Years

Resilient Pakistan Defies Doomsayers

49 comments:

Anonymous said...

Well said sir.

Riaz Haq said...

A recent report by a Govt commission in Pakistan found an "Education Emergency" in public education that paints a grim picture.

Here's an excerpt from a Financial Times story on Indian education crisis:

A report on the state of Indian education, the largest study of the country’s rural children, makes for grim reading.

India’s schools are in bad shape, and not getting any better. Maths ability is declining, and reading is way below where it should be.

The Annual Status of Education Report 2010, prepared by Pratham, an education non-governmental organisation supported by many of India’s top companies, has a blunt message. School enrolment is up but quality is unacceptably low. Inadequate state provision is fuelling the expansion of private education, which India’s largely poor people can ill-afford.

Here are some of the report’s key findings:

1. 96.5 per cent of children in the 6 to 14 age group in rural India are enrolled in school. While 71.1 per cent of these children are enrolled in government schools, 24.3 per cent are enrolled in private schools.

2. India’s southern states in particular are moving strongly towards more private sector education provision. The percentage of children in private school increased from 29.7 per cent to 36.1 per cent in Andhra Pradesh, from 19.7 per cent to 25 per cent in Tamil Nadu and from 51.5 per cent to 54.2 per cent in Kerala

3. There has been a decrease in children’s ability to do simple mathematics. The proportion of Standard 1 children who could recognise numbers from 1-9 has declined.

4. After five years of schooling, close to half of children are below a level expected after just two years of formal education. Half of these children cannot read. Only one child in five can recognise numbers up to 100.

5. Toilets were useable in only half the 13,000 schools surveyed. Teacher attendance was 63 per cent, lower than pupil attendance.
Kapil Sibal, the new education minister, has breathed some life into a portfolio left moribund by his elderly predecessor Arjun Singh. But lately, Mr Sibal, a lawyer, has been seconded into the telecommunications ministry to clean up a mess surrounding the controversial award of new 2G licences that may have cost the exchequer as much as $39bn.

There are few more important challenges in India than improving its schools. Not for the first time ineptitude and greed at the top are robbing India’s young of resources.

http://blogs.ft.com/beyond-brics/2011/01/17/indian-schools-failing/#axzz1aLbWwL1D

Anil said...

This is Pak vs India as told by Pak's best intellectual.

http://www.youtube.com/watch?v=fkBD2Z7hSEo

See what Dr. Hoodbhoy talks about Indian economy and Indian education.

Don't shoot me Riaz. I am just a messenger.

Sanjay said...

Pls compare sales of cars, IPad and other middle class items. Pak is no where close to India. Latest issue of Economist mentions India has 24 cars per 1000, not too long ago it was less than 10. Pak is still ~12-15 per thousand and already declining.

One look at the advertising industry of Pakistan for 20/20 cricket tells why Pak is rightly called backward economy. No money for cricketers. No wonder they want to shamelessly play in India and make money.

These are real indicators of state of economy. Not fudged up numbers in blogs.

Pakistan economy, like its people, is a joke.

Riaz Haq said...

Anil: "See what Dr. Hoodbhoy talks about Indian economy and Indian education."

Self criticism is a good thing, and every nation needs a few Cassandras to remind them where they are lacking. Pakistan has lots of Cassandras and India has few.

Riaz Haq said...

Sanjay: "Pls compare sales of cars, IPad and other middle class items."

Cars and iPads are not a substitute for better nutrition and more toilets which is what the world's largest population of poor, hungry, illiterate and sick people in India needs.

http://www.riazhaq.com/2010/08/63-years-after-independence-india.html

Besides, Pakistan is also experiencing a consumption boom. Auto sales in Pakistan jumped 61% in July and are continuing to increase by double digits after the crash of 2008.

http://www.riazhaq.com/2011/08/pakistani-middle-class-pushes-car-sales.html

Nestle Pakistan's chief Ian Donald has summed up the rising demand for his company's products as follows: “It’s a common perception that China and India are much bigger in terms of growth than Pakistan. But for Nestle, the per capita consumption of our products in Pakistan is twice as much as we have in China and India.” It should be noted that Nestle is the world's largest packaged food company, and Pakistanis' per capita consumption of milk and dairy products is about 2.5 times higher than in India. According to the FAO, the average dairy consumption of the developing countries is still very low (45 kg of all dairy products in liquid milk equivalent), compared with the average of 220 kg in the industrial countries. Few developing countries have per capita consumption exceeding 150 kg (Argentina, Uruguay and some pastoral countries in the Sudano-Sahelian zone of Africa). Among the most populous countries, only Pakistan, at 153 kg per capita, has such a level. In South Asia, where milk and dairy products are preferred foods, India has only 64 kg and Bangladesh 14 kg. East Asia has only 10 kg.

http://www.riazhaq.com/2011/10/fmcg-companies-profit-from-rural.html

Riaz Haq said...

Here's a Bloomberg report on Karachi stocks rally after rate cut by SBP:

The Karachi Stock Exchange 100 Index, which has climbed 0.6 percent this year, rose 2 percent to 12,092.32 at the 3:30 p.m. local time close, its highest since Aug. 2. Oil & Gas Development Co., the biggest fuel explorer, rose 3.7 percent to 141.03 rupees and Fauji Fertilizer Co., the biggest urea maker, rose 4.5 percent, to 178.06 rupees.

The State Bank of Pakistan reduced the discount rate to 12 percent from 13.5 percent, according to a statement in Karachi on Oct. 8. Three of five economists surveyed by Bloomberg News predicted a 1 percentage point cut, and the remainder forecast a 0.5 percent reduction.

Acting Governor Yaseen Anwar had room to act after Pakistan’s inflation rate dropped 2 percentage points in the past three months. A rate cut might support an economy that’s seen growing less than half the pace of fellow South Asian nations India, Bangladesh and Sri Lanka this year.

‘Attractively Priced’

“With the level of the rate cut, today’s jump was expected,” said Habib ur Rahman, who oversees 7 billion rupees ($80 million) in stocks and bonds at Atlas Asset Management Ltd. in Karachi. “I can see the market continuing to gain till December because high-yielding stocks are attractively priced.”

Global funds sold $47.1 million worth of Pakistani stocks in July and August compared with net buying of $95.6 million last year, according to central bank data.

The Karachi Interbank Offered Rate, the benchmark borrowing rate for commercial banks, fell to 11.97 percent from 12.90 percent, according to Bloomberg data. The yields on the 12-month treasury-bill and the 10-year investment bond both declined by 1 percentage point to to 12.85 percent and 12 percent respectively, according to Arif Habib Ltd., in Karachi.

The rupee, which has shed 2 percent this year and dropped to a record low on Sept. 16, declined 0.3 percent to 87.47 to the U.S. dollar. The central bank conducted what it called a “calibrated intervention” last month to stabilize the currency.

Prime Minister Syed Yousuf Raza Gilani’s government is aiming to boost economic growth to 4.2 percent in the fiscal year ending June 30, from 2.4 percent in the previous year, one of the lowest expansions in the past decade, as the country struggled to cope with floods and militant attacks.

Floods in August forced more than one million people from their homes and damaged crops in parts of southern Pakistan still recovering from last year’s worst ever monsoon inundation that devastated the region. Terror attacks in the South Asian nation have killed at least 35,000 people since 2006, according to government estimates.

Stimulating Investment

The central bank decided to slash its policy rate for a second straight meeting because of a “high probability” of meeting the inflation goal for fiscal 2012 and to stimulate investment, according to central bank’s statement. The State Bank is targeting an average inflation of 12 percent in the year ending June 30, 2012.

Consumer prices rose 10.46 percent in September from a year earlier, after climbing 12.43 percent in July, according to the Federal Bureau of Statistics.

“If the rate cut is backed by other positive factors like an ease in inflation and a pickup in growth activity, we can see the index around 14,000 points by June 2012,” said Mohammad Shoaib, who oversees the equivalent of 32 billion rupees in Pakistani stocks and bonds at Al-Meezan Investment Management Ltd. in Karachi.


http://www.businessweek.com/news/2011-10-10/pakistan-stocks-rally-after-bigger-than-forecast-rate-cut.html

satwa gunam said...

riaz

Let us all accept that pakistan is doing better than india. pls enlighten on following :

how many companies have opened their back office in pakistan

How much is the fdi / fii investment?

How are the capital market infrastructure with regard ot trading and settlement.

satwa gunam said...

Riaz

India has been and even now is silently working in increasing its own strength.

It has its own weakness, which it is aware of like population, poverty, corruption but the most important factor in india which is missing in pakistan is peace. Peace is the basic fact on which development happens. Why will an investor put his funds in a place where the place could be blown off by people who call themself as true muslims

satwa gunam said...

India Pakistan

percentage

gdp growth 9.1 3.6
Capital formation 36.82 18.96

Billion

fdi /fii 34.57 2.38

There are more statistics available in google explorer but the moot point for the both the country is that both has to go long way in creating basic infrastructure.

Sure india has a better environment for investment compared to that what is perceived for pakistan.

Riaz Haq said...

satwa: "how many companies have opened their back office in pakistan"

Here are a couple of excepts from a piece written for Maleeha Lodhi's compendium "Pakistan Beyond The Crisis State" by Mudassar Mazhar Malik, an MIT (Sloan) and LSE (London) educated Pakistani economist and investment banker on his assessment of Pakistan today:

"Today, over 300 foreign multinationals have well established business operations in Pakistan. The US, European Union and Japan remain the largest three foreign direct investors with new inflows emanating from the Middle East and China."

"As a consequence of geo-political risks, Pakistan is not seen as a friendly investment destination. Despite this, Pakistan's investment to GDP ratio has averaged 17% for the last decade and is 17% today after reaching a peak of 23% in 2007. In many ways, Pakistan's corporate leaders and professionals as amongst the most "battle hardened" pool of managerial talent in the world with the ability to manage risk and still show growth under the most challenging conditions".

Riaz Haq said...

Stock and credit markets respond positively to rate cut by Pak central bank, according to The Express Tribune:

KARACHI: The bond and equity markets have reacted strongly to central bank’s surprise decision of slashing the interest rate to bring it on a par with pre-2008 crisis levels.

Karachi inter-bank offered rate (Kibor), the benchmark six-month lending rate, plummeted 95 basis points in a single day to a 26-month low of 11.96%, according to a Topline Securities research note.

Furthermore, yields of the actively traded one-year treasury bills and the benchmark 10-year Pakistan Investment Bonds fell by 75 basis points and 60 basis points to trade around 11.90-93% and 12.00-05%, respectively.

The State Bank of Pakistan (SBP) on Saturday cut its benchmark discount rate from 13.5% to 12%.

The rate cut has also benefitted well the stock market on account of better earnings for leveraged companies and reduction in risk-free rate, adds the note.

The Karachi Stock Exchange’s benchmark 100-share index opened with a gap of approximately 350 points to skip over 12,000 points for the first time in two months on Monday.

Profits of leveraged companies to jump 2-8%

Heavily leveraged companies from the cement, textile and fertiliser sectors – whose loans are floating and linked with Kibor – will have to bear lower interest charges from January 2012 following quarterly loan re-pricing in December, says the note.

These companies will be the major beneficiaries of the cut in discount rate, the fee commercial banks pay to borrow money from the SBP. DG Khan Cement, Engro and Pakistan State Oil will be some of the major gainers as their annualised earnings will increase by 7.8%, 6.5% and 2.1%, respectively, adds the research note.

Overall, the rate cut will augment earnings growth by 0.5% in 2012.


http://tribune.com.pk/story/271244/chain-reaction-surprise-rate-cut-takes-kibor-to-26-month-low/

Qdoba said...

I think pak needs more generators first then IPADS OR TOYOTAS.
http://www.economist.com/node/21531495

Riaz Haq said...

Car sales are rising by double digits in Pakistan and declining by double digits in India:

SIAM, India's auto-industry lobby, forecasts sales growth will slow to 2% to 4% for the year ending April, about one-tenth of what it was last year, according a report in the Wall Street Journal.

Rising prices are usually something auto makers welcome. Not in India.

As recently as April, some Indian auto makers were struggling to produce enough cars to meet demand as sales hit successive monthly highs.

But thanks to rising interest rates, buyers are hitting the brakes.

Across the industry, sales fell 16% in July compared with last year and 10% in August. September's decline was a relatively mild 1.4%, the Society of Indian Automobile Manufacturers reported Monday, though sales figures in the three ...

http://online.wsj.com/article/SB10001424052970203499704576624454021313240.html


Buying spree was witnessed for locally assembled cars thanks to huge arrival of home remittances, surging farm income, slight increase in car sales through bank financing, etc.

Even rising prices of locally produced cars and high cost of fuel (petroleum products and CNG) did not make any adverse impact on vehicle sales.

Pakistan Automotive Manufacturers Association (PAMA) claimed rise in overall car sales to 38,065 units in July-September 2011 as compared to 30,030 units in the same month of last year.

http://www.dawn.com/2011/10/11/tractor-heavy-vehicles-sale-dip.html

Riaz Haq said...

qdoba: "I think pak needs more generators first then IPADS OR TOYOTAS."

Yes, I agree that the energy crisis needs to be dealt with on a more urgent basis.

Riaz Haq said...

Some commentators have bragged about passenger car ownership figures in India vs Pakistan. The latest available World Bank data (2006-7 shows that they are pretty close: 9 per 1000 in Pakistan vs 10 per 1000 in India.

http://data.worldbank.org/indicator/IS.VEH.PCAR.P3

I believe it does include dangerous contraptions like jugaads often seen plying on Indian roads.

Riaz Haq said...

Here's an excerpt from "Sweet Smell of Success" originally published in The Caravan Magazine before it was censored, by Sidhartha Deb, the author of "The Beautiful and The Damned", on quality of private higher education in India:

A PHENOMENALLY WEALTHY INDIAN who excites hostility and suspicion is an unusual creature, a fish that has managed to muddy the waters it swims in. The glow of admiration lighting up the rich and the successful disperses before it reaches him, hinting that things have gone wrong somewhere. It suggests that beneath the sleek coating of luxury, deep
under the sheen of power, there is a failure barely sensed by the man who owns that failure along with his expensive accoutrements. This was Arindam Chaudhuri’s situation when I first met him in 2007. He had achieved great wealth and prominence, partly by projecting an image of himself as wealthy and prominent. Yet somewhere along the way he had also created the opposite effect, which—in spite of his best efforts—had given him a reputation as a fraud, scamster and Johnny-come-lately.

Once I became aware of Arindam Chaudhuri’s existence, I began to find him everywhere: in the magazines his media division published, flashing their bright colours and inane headlines from little newsstands made of bricks and plastic sheets; in buildings fronted by dark glass, behind which earnest young men imbibed Arindam’s ideas of leadership; and on the tiny screen during a flight from Delhi to Chicago, when the film I chose for viewing turned out to have been produced by him. It was a low-budget Bombay gangster film with a cast of unknown, modestly paid actors and actresses: was it an accident that the film was called Mithya? The word means falsehood, appearances, a lie—things I would have much opportunity to contemplate in my study of Arindam.

Every newspaper I came across carried a full-page advertisement for Arindam’s private business school, the Indian Institute of Planning and Management (IIPM), with Arindam’s photograph displayed prominently. It was the face of the new India, in closeup. His hair was swept back in a ponytail, dark and gleaming against a pale, smooth face, his designer glasses accentuating his youthfulness. He wore a blue suit, and his teeth were exposed in the kind of bright white smile I associate with American businessmen and evangelists. But instead of looking directly at the reader, as businessmen and evangelists do to assure people of their trustworthiness, Arindam gazed off at a distant horizon, as if pondering some elusive goal.

There were few details about the academic programme or admission requirements in these advertisements, but many small, inviting photographs of the Delhi campus: a swimming pool, a computer lab, a library, a snooker table, Indian men in suits, a blonde woman. A fireworks display of italics, exclamation marks and capital letters described the perks given to students: “free study tour to Europe etc. for twenty-one days,” “world placements,” “Free Laptops for all.” Stitching these disparate elements together was a slogan: “Dare to Think Beyond the IIMs”—referring to the elite, state-subsidised business schools, and managing to sound promising, admonishing and mysterious at the same time. The new India needed a new kind of university, and a new kind of attitude, and Arindam, said the ads, was the man who could teach you how to find it.

"I'VE SPOKEN TO THE BOSS about you,” Sutanu said. “He said, ‘Why does he want to meet me?’”
Sutanu ran the media division of Arindam’s company from a basement office where there was no cellphone reception, and it took many calls and text messages to get in touch with him. When I finally reached him, he sounded affable enough, suggesting that we have lunch in south Delhi. We met at Flames, an “Asian Resto-Bar” in Greater Kailash-II with a forlorn statue of the Buddha tucked away in the corner...


http://pastebin.com/UBtEqF1L

Anonymous said...

Riaz Bhai, let it go.

This has little to do with disease burden.

Do read isteve.com on this matter.

*Representative* S.Asian samples in Singapore (prior to the new wave of elite immigration ), Fiji, South Africa and the Carribean show that S.Asians are almost one standard deviation behind whites.

The disease burden hypothesis is one of many hypotheses that liberals come up with to pretend that the distribution of IQ is identical across races. This is simply untrue.

Anonymous said...

I believe it does include dangerous contraptions like jugaads often seen plying on Indian roads.

Yup and have a look at Pakistan's answer to Indian Tata Nano...
The Habib Sitara

http://www.liveleak.com/view?i=202_1227636384

I believe its a convertible :D

Riaz Haq said...

Here's Razib Khan of Brown Pundits on Washington Post's piece about "demographic dividend" in India:

"Amid population boom, India hopes for ‘demographic dividend’ but fears disaster. The article is OK, but I feel as usual it doesn’t do a good enough job highlighting the huge variation in fertility across India the nation-state. Tamil Nadu has the fertility of Northern Europe while Uttar Pradesh is like West Africa. Unfortunately the “demographic dividend” is going be driven by the most backward and unproductive regions of the nation on a per unit basis…."

http://www.brownpundits.com/2011/10/15/indias-demographic-dividend-and-despair/

http://www.washingtonpost.com/world/asia_pacific/amid-population-boom-india-hopes-for-demographic-dividend-but-fears-disaster/2011/10/12/gIQA9I4nmL_story.html

Riaz Haq said...

Occasional and isolated but nonetheless tragic suicide cases like Raja Khan's in Pakistan get a lot of media coverage as they should. Meanwhile, over 200,000 farmer suicides in India have passed with little media attention in India.

Here's a Washington Post report on rising suicides in India:

NEW DELHI — Ram Babu’s last days were typical in India’s growing rash of suicides.

The poor farmer’s crop failed and he defaulted on the $6,000 loan he had taken to buy a tractor. The bank’s collectors hounded him, even hiring drummers to go round the village drawing attention to his shame.

“My father found it unbearable. He was an honorable man and he couldn’t take the humiliation. The next day he hanged himself from a tree on his farm,” his son Ram Gulam said Friday.

Babu’s suicide went unreported in local newspapers, just another statistic in a country where more than 15 people kill themselves every hour, according to a new government report.

The report released late Thursday said nearly 135,000 people killed themselves in the country of 1.2 billion last year, a 5.9 percent jump in the number of suicides over the past year.

The suicide rate increased to 11.4 per 100,000 people in 2010 from 10.9 the year before, according to the statistics from the National Crime Records Bureau.

Financial difficulties and debts led to most of the male suicides while women were driven to take their lives because of domestic pressures, including physical and mental abuse and demands for dowry.

A 2008 World Health Organization report ranked India 41st for its suicide rate, but because of its huge population it accounted for 20 percent of global suicides.

The largest numbers of suicides were reported from the southern Indian states of Kerala, Tamil Nadu, Andhra Pradesh and Karnataka, where tens of thousands of impoverished farmers have killed themselves after suffering under insurmountable debts.

The loans — from banks and loan sharks — were often used to buy seeds and farm equipment, or to pay large dowries to get their daughters married. But a bad harvest could plunge the farmer over the edge.

Sociologists say the rapid rise in incomes in India’s booming economy has resulted in a surge in aspirations as well among the lower and middle classes, and the failure to attain material success can trigger young people to suicide.

“The support that traditionally large Indian families and village communities offered no longer exists in urban situations. Young men and women move to the cities and find they have no one to turn to for succor in times of distress,” said Abhilasha Kumari, a sociology professor in New Delhi.


http://www.washingtonpost.com/world/asia-pacific/government-report-says-15-people-commit-suicide-every-hour-in-india/2011/10/28/gIQAVFGWOM_story.html

Riaz Haq said...

Here's WHO data on suicide rates in Asia:

Pakistan has the lowest estimated prevalence of less than 3 per 100,000, followed by Thailand at 7.3 per 100,000. Australia, Malaysia, New Zealand and Singapore have low to medium rates of between 9.9 and 13.1 per
100,000. Higher rates of above 15 per 100,000 are seen in China, Hong Kong Special Administrative Region (Hong Kong SAR), and India and still higher rates of above 20 per 100,000 are seen in China, Japan, the Republic of Korea, and Sri Lanka.


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

Riaz Haq said...

Here are some of the findings of a recent paper by Durre-e-Nayab of Pakistan Institute of Development Economics (PIDE) titled "Estimating the Middle Class in Pakistan":

Depending on the definition applied, it is found that the size of the middle class ranges drastically in the country, as can be seen from Table 2. Applying the definitions having solely an economic rationale, we find the middle class to range from 60 per cent of the population (Table 2, Definition One) to being totally non-existent (Table 2, Definition Five). Translating it in number of people, using the population base of 187 million as it stands on mid-year 2011 (USCB, 2011 and UN, 2009), the size of the middle class ranges from a huge 112 million to no one. This variability, as stressed earlier, reflects the complexities and
arbitrariness associated with defining and measuring the middle class.

Among all the definitions given above, Definition Eight and Definition Thirteen, based on gradation of income and expenditure per person per day, respectively, are currently the most
extensively used measure employed to estimate the middle class (as also used by Chun (2010) and Bhandari (2010) among others)3. This definition too, however, suffers from the same drawback of relying solely on one criterion. As also pointed out by Eisenhauer (2008), Atkinson and Bourguignon (1982), Kolm (1977), Bourguignon and Chakravarty (2003) and Gilbert (2003), being a part of the middle class should be ascertained by a person’s socio-economic attributes holistically. Income is an important aspect but other qualities like level of health, wealth,
education and specialised knowledge are also significant factors for constituting a class. Technically speaking too, most of the definitions suffer from serious drawbacks. For instance, the ‘quintile approach’ can be useful in measuring or comparing income or expenditure growth but cannot be used as a method to estimate the middle class as the size cannot shrink or expand and by definition would permenantly remain at 60 percent. Any denomination of the median income should also be used with caution in low income countries like Pakistan. Taking 75 per cent of the median income might lead to the inclusion of people below the poverty line in countries with very low income levels. In the above-stated definitions and resulting estimates there are issues with the lower bounds
set for inclusion in the middle class. While some of the definitions (like Definition Three and Five) set the limit too high4, resulting in a very small middle class or in the absence of a middle class altogether, there are other definitions that set the limit too low, like those that set the lower
bound at $2 per person per day. Does the middle class begin where poverty ends? Ravallion (2010: 446) supports, “the premise that middle class living standards begin when poverty ends”.
This paper, however, supports the argument forwarded by Horrigan and Haugen (1988:5) when they posit, “to ensure that the lower endpoint of the middle class represents an income
significantly above the poverty line”. The middle class should, hence, include only those households that do not face the risk of experiencing poverty at all, and are not just those who
are outside the the realm of poverty at a particular time.


http://www.pide.org.pk/pdf/Working%20Paper/WorkingPaper-71.pdf

Riaz Haq said...

Here's an excerpt from Dr. Ishrat Husain's comp of India-Pak economy:

Pakistan is one of the few developing countries that has achieved an average annual
growth rate of over 5 percent over the six decades. Consequently, the incidence of poverty has
declined from 40 percent to 24 percent. The salient features of Pakistan’s economic history are
summarized below:
• A country with 30 million people in 1947 that couldn’t feed itself and had to import all its
food requirements is not only able to fulfill the domestic needs of 170 million people at a
much higher per capita consumption level, but also exports wheat and rice .
• An average Pakistani earned about $ 1050 in 2009 compared to less than $ 100 in 1947.
In US current dollar terms the per capita income has expanded almost ten fold.
• Agriculture production has risen five times with cotton attaining a level of more than 12
million bales compared to 1 million bales in 1947. Pakistan has emerged as one of the
leading world exporter of textiles.
• Manufacturing production index is well over 13,000 with the base of 100 in 1947. Steel,
cement, automobiles, sugar, fertilizer, cloth and vegetable ghee, industrial chemicals,
refined petroleum and a variety of other products are manufactured for the domestic
market and in many cases for the world market too.
• Per capita electricity generation has reached 10,160 kwh compared to 100 in 1947.
Pakistan’s vast irrigation network of large storage reservoirs and dams, barrages, link
canals constructed during the last five decades has enabled the country to double the area
under cultivation to 22 million hectares. Tubewell irrigation provides almost one third of
additional water to supplement canal irrigation.
• The road and highway network in Pakistan spans 250,000 km-more than five times the
length inherited in 1947. Modern motorways and super highways and four lane national
highways link the entire country along with secondary and tertiary roads.
• Natural gas was discovered in the country in the 1950s and 32 billion cubic feet of
natural gas is generated, transmitted and distributed for industrial, commercial and
domestic consumption accounting for 50 percent of the country’s energy needs.
• Private consumption standards have kept pace with the rise in income. There are 52 road
vehicles for 1000 persons relative to only one vehicle for the same number of population
in 1947. Phone connections have reached 100 million from almost scratch. TV sets which
were non-existent adorn 62 out of every 1,000 houses.


http://www.iba.edu.pk/News/speechesarticles_drishrat/Indo_Pak_economies_compared.pdf

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...

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...

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.
----------
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.
------------
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.
------------
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.
-----------
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...

Here are "Ten Things for India to Achieve its 2050 Potential", brought out by Jim O'Neill, Head Global Research at Goldman Sachs, and Tushar Poddar, V-P Research, Asia Economic Research Team at Goldman Sachs India, as reported by India's Economic Times:

1. Improve governance

2. Raise educational achievement

3. Increase quality & quantity of universities

4. Control inflation

5. Introduce credible fiscal policy

6. Liberalize financial markets

7. Increase trade with neighbors

8. Increase agricultural productivity

9. Improve infrastructure

10. Improve environmental quality

http://economictimes.indiatimes.com/quickiearticleshow/3137357.cms

Anonymous said...

Mr. Riaz you are talking a lot about India and trying to reflect the black side of the coin. This clearly demonstrates your concern for India and Indians.

Let me know how many PhD's pass out of Pakistan as compared to 5000 a year in India.

How many companies like Tata, Reliance, Infosys, Vedanta are operating in Pakistan.

What's the share of scientists and engineer from Pakistan in world. Let me also give you statistics from India(26% scientist in NASA, 34% in Microsoft, 38% Indian Doctors in America, 28% Indian employee in IBM and the list goes on.)

Just update yourself with latest GDP and per capita income (both nominal and PPP)

Comparing the present GDP it seems like Pakistan is no where as compared to India.

I would like to suggest you one thing DO and DON'T just speak, its your work which represents Who you are.

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.
------------
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

Anonymous said...

Dr. Haq,

We seem have a lot of juggling going on in terms of taking nominal per capita GDP figures from some place and PPP ratios from another place and so on.

Since this article already includes a link for implied-PPP from the Trading Economics database service, I think it would be more consistent to use the WB/IMF data from that source to make your point.

Here is the point you were trying to make:

http://www.tradingeconomics.com/bangladesh/gdp-per-capita-ppp-us-dollar-wb-data.html
http://www.tradingeconomics.com/india/gdp-per-capita-ppp-us-dollar-wb-data.html
http://www.tradingeconomics.com/sri-lanka/gdp-per-capita-ppp-us-dollar-wb-data.html
http://www.tradingeconomics.com/pakistan/gdp-per-capita-ppp-us-dollar-wb-data.html

What do we see?

Since the post-Cold-War reforms began all over South-Asia in 1992, the following are clearly observable:

1) Bangladesh's per capita GDP on PPP basis has increased from 550$ to 1650$ (3 times)
2) India per capita GDP on PPP basis has increased from 950$ to 3600$ (4 times)
3) Sri-Lanka's per capita GDP on PPP basis has increased from 1650$ to 5000$ (3 times)
4) Pakistan's per capita GDP on PPP basis has increased from 1400$ to 2700$ (2 times)

At the start of the South-Asia-wide post Cold War reforms, the 1992 ranking were:
1) Sri-Lanka at 1650$
2) Pakistan at 1400$
3) India at 950$
4) Bangladesh at 550$

In 2010, 18 years later, the rankings were as follows:
1) Sri-Lanka at 5000$
2) India at 3600$
3) Pakistan at 2700$
4) Bangladesh at 1650$

Note the following general trends that are observable in the World Bank (WB) data linked above:

1) Bangladesh is rapidly catching up with Pakistan. In 1992, Pakistan was 160% richer than Bangladesh (Pakistan 1400$, Bangladesh 550$). While Pakistan stagnated under Bhutto/Sharif, Bangladesh surged forward to finish 2003 with Pakistan now only 80% richer (Pakistan 1800$, Bangladesh 1000$). Pakistan and Bangladesh then both boomed, to finish in 2010 with Pakistan now only 60% richer (Pakistan 2700$, Bangladesh 1650$).

2) Similarly, Pakistan was 50% richer than India in 1992 (Pakistan 1400$, India 950$). Pakistan then stagnated under Sharif/Bhutto and India managed to catch-up by 2003 (Pakistan 1800$, India 1800$). Pakistan and India then both boomed, although at different growth rates, to finish with India 33% richer in 2010 (Pakistan 2700$, India 3600$)

3) Sri-lanka and Pakistan were comparable in 1992, with sri-lanka only 15% richer (Pakistan 1400$, Sri-Lanka 1650$). While Pakistan stagnated under Bhutto/Sharif, Sri-lanka surged forward to finish 2003 with Sri-lanka now 66% richer than Pakistan (Pakistan 1800$, Sri-Lanka 3000$). Pakistan and Sri-Lanka then both boomed, with Sri-lanka pulling even further ahead to finish with Sri-Lanka now 85% richer (Pakistan 2700$, Sri-Lanka 5000$).

4) Over the 1992-2010 period Pakistan showed the smallest expansion, with Pakistan's per capita GDP PPP basis only doubling over than period. Sri-Lanka and Bangladesh experienced faster expansion, with their per capita GDP PPP basis trebling over that period. India showed the fastest expansion, with a quadrupling of its per capita GDP PPP basis over the 1992-2010 period.

If Pakistan continues to stagnate (GDP Growth Rate < Population Growth Rate) under Zardari/Chaudhary/Sharif, there is a very real danger that everyone else in South Asia will move forward and even Bangladesh will surpass us in terms of per capita GDP PPP basis in 10 years time.

The sooner we recognize the reality, the sooner we will be able to deal with our problems in Pakistan. Denial and figure-juggling is not going to get us anywhere. Convoluted arguments in cyberspace do not change the physical facts on the ground.

Thank you.

Riaz Haq said...

HopeWins: "Since this article already includes a link for implied-PPP from the Trading Economics database service, I think it would be more consistent to use the WB/IMF data from that source to make your point."

I have taken the nominal per cap gdp figures from the primary sources; Economic Surveys published by the govts of India & Pak.

India's per capita income for 2011-12 Rs 60,972, according to Economic Survey of India 2011-12. It translates into US $1143.09, using INR 53.25 to a US dollar.

http://indiabudget.nic.in/survey.asp

The preliminary official estimates by Economic Survey of Pakistan are indicating that Pakistan's nominal per capita income has increased by 9% to $1,372 in 2011-12 from $1,258 in 2010-11.

http://www.finance.gov.pk/survey/chapter_12/ExecutiveSummary.pdf

India's PPP factor of 2.9 appears to be bogus because WB and IMF use 2.3 as PPP for the income range for India and Pakistan.

http://www.thehindubusinessline.com/opinion/columns/harish-damodaran/article1540678.ece

Anonymous said...

@Indians: PAKISTAN has Riaz type peoples, who never run after seeing critical situation, they tackle it always. thats why we never try to do propagenda like SHINING PAKISTAN but we showed....... PAKISTAN IS GROWING, PAKISTAN IS ON ITS OWN WAY...... GO GREEN, BLEED GREEN.....

Hopewins said...

QUOTES from a 1999 Article:

(1a) India cut itself off from the world economy for 40 of its 50 years of independence,
(1b) whereas Pakistan remained relatively open.
(2a) Pakistan had constant balance-of-payments crises,
(2b) whereas India was a rare suppliant at the IMF.
(3a) India poured money into heavy industry, developing huge steel and refining industries.
(3b) Pakistan has little industry worth mentioning.
(4) Nonetheless its economy outgrew India’s until recently,
(5) And its GDP per head is a good 20% higher

The Economist (1999): http://www.economist.com/node/205915
----------

How many of these things are true today (2012)? And how many have changed?

How many of these trends have magnified since 1999? And how many diminished?

Anonymous said...

It’s hit an all-time low. Pakistan’s commitment to the higher education sector has been scaled back by 10 percent at the same time that India has raised its higher-education budget by 25 percent. This reduction is in addition to the 40 percent cut imposed last year. This shortsightedness imperils economic growth by stunting prospects of a viable middle class.

India has a population six times the size of Pakistan’s. Its GDP, at $1.8 trillion, is 10 times larger than ours. Its growth rate is 8.5 percent, ours is 2.4 percent. Its value-added exports, at $250 billion, are more than ours by a factor of 15; and its FDI, at $26 billion per year, dwarfs ours by a factor of 22. India is set to surpass Japan to become the world’s third largest economy by 2014. This has all been made possible, in no small measure, because of India’s human capital. Pakistan needs to take a leaf out of their book to realize the possible.

The World Bank identifies several key factors to achieve and sustain economic growth: education, a skilled workforce, information and communication technologies, and innovation. These are the veritable pillars of a knowledge economy. Likewise, the World Economic Forum’s Global Competitiveness Report 2010-2011 lists higher education and training, technology readiness, and innovation as essential for competitiveness.

Catching up to the rest of the world must start now. And there is much ground to cover. For Pakistanis between the ages of 17 and 23, access to higher education is at 5.1 percent—one of the lowest in the world. (India is at 12.2 percent and aiming for 30 percent by 2020.) Pakistan has 132 universities for a population of 180 million and a student population of about 1.1 million. India has 504 universities with an enrollment of over 15 million (its enrolment target is 40 million by 2020). Pakistan has approved funding for two new universities. Over the next five years, India will have established 29 universities and 40 other institutes. Pakistan can today produce about 700 Ph.D.s every year (up from a dismal 200 in 2002) while India can produce 8,900 and China some 50,000.

It’s the middle class that makes the difference. India’s represents 32 percent of the total population and is growing at 1 percent annually. By investing heavily in education and entrepreneurship, they hope half the population will qualify as middle class by 2040. Pakistan’s middle class is about 12 percent of the population, and struggling as more and more people slip below the poverty line each year.

India’s political leadership is putting out all the right signals. India has a Knowledge Commission headed by a world-renowned expert serving as an adviser to the prime minister; a Ministry of Human Resource Development, and a strong and centralized University Grants Commission. New Delhi alone is spending 3.5 percent of GDP on education, with 1.03 percent, or $11.5 billion, on higher education alone. This federal allocation is in addition to the states financially supporting university budgets, in some cases covering up to 80 percent of their costs. Pakistan is spending only about 1.3 percent on education and 0.22 percent on higher education.

Sixty-four years ago, Pakistan and India started out evenly enough in terms of education and skilled-workforce levels. India has overshot us and is now competing with the big boys, swiftly and dedicatedly catching up with the developed world in higher education, science, technology, innovation, and research. Pakistan cannot afford to be left behind. We cannot allow security threats, the financial and ideological allure of Islamist radicalism, and bad governance to defeat us. Shoring up higher education and innovation are the solutions that will yield tangible, long-lasting benefits. Yet we are only capable it seems of dialing down attention to areas that can guarantee our success. Pakistan must push to improve and expand higher education. With so much at stake and so much we can do, this is the wise way forward.

Riaz Haq said...

Anon: " Pakistan’s middle class is about 12 percent of the population, and struggling as more and more people slip below the poverty line each year."

Nonsense! Pakistan's middle class is 40% of the population vs India's 25% of its population.

And Pakistan has continued to offer much greater upward economic and social mobility to its citizens than neighboring India over the last two decades. Since 1990, Pakistan's middle class had expanded by 36.5% and India's by only 12.8%, according to an ADB report titled "Asia's Emerging Middle Class: Past, Present And Future.

http://www.riazhaq.com/2012/08/upwardly-mobile-pakistan-on-66th.html

Hopewins said...

Dr. Haq,

Please see figure 1.5 on page 12 of this FY12 GOP report:
http://www.finance.gov.pk/survey/chapter_12/01-GrowthAndStabilization.pdf

Notice the following in that graph:

A) BOOM during Musharraf's Reign

Per Capita GDP went from 663$ in FY04 to 1015$ in FY08.

The increase was 352$ over 4 years.

B) BUST during Zardari's Reign

Per Capita GDP went from 1015$ in FY08 to 1372$ in FY12.

The increase was 357$ over 4 years.

----

Can you believe that?

We did >>BETTER<< during the last 4 years of the Zardari-Bust than we did in the preceding 4 years of the Musharraf-Boom.

Can you explain how this happened?

Thank you.

--
PS: By way of reference, please also see fig 1.1 on Page 2 of the same file linked above.

A) BOOM during Musharraf's Reign
GDP Growth Rate FY03: 4.7%
GDP Growth Rate FY04: 7.5%
GDP Growth Rate FY05: 9.0%
GDP Growth Rate FY06: 5.8%
GDP Growth Rate FY07: 6.8%

B) BUST during Zardari's Reign
GDP Growth Rate FY08: 3.7%
GDP Growth Rate FY09: 1.7%
GDP Growth Rate FY10: 3.1%
GDP Growth Rate FY11: 3.0%
GDP Growth Rate FY12: 3.7%

Hopewins said...

^^RH on Oct 10, 2011: "Here are a couple of excepts from a piece written for Maleeha Lodhi's compendium "Pakistan Beyond The Crisis State" by Mudassar Mazhar Malik, an MIT (Sloan) and LSE (London) educated Pakistani economist and investment banker on his assessment of Pakistan today:
..Pakistan's investment to GDP ratio has averaged 17% for the last decade and is 17% today after reaching a peak of 23% in 2007."
-----

Even assuming a low initiating ICOR of 3, we will still need an average investment-to-GDP ratio of 21-24% to achieve an sustainable 7-8% average growth rate in the medium-term.

So what is our "investment to GDP ratio" now?

Perhaps Malik (educated at MIT, Sloan, LSE, London) should look up the latest GOP report...

Table 1.6 Page 13:
http://finance.gov.pk/survey/chapter_12/01-GrowthAndStabilization.pdf

Riaz Haq said...

According to World Values Survey done by two Swedish researchers, India, Jordan, Bangladesh and Hong Kong by far the least tolerant.

In only three of 81 surveyed countries, more than 40 percent of respondents said they would not want a neighbor of a different race. This included 43.5 percent of Indians, 51.4 percent of Jordanians and an astonishingly high 71.8 percent of Hong Kongers and 71.7 percent of Bangladeshis.

Unfortunately, the Swedish economists did not include all of the World Values Survey data in their final research paper. So I went back to the source, compiled the original data and mapped it out on the infographic above. In the bluer countries, fewer people said they would not want neighbors of a different race; in red countries, more people did.

Pakistan, remarkably tolerant, also an outlier. Although the country has a number of factors that coincide with racial intolerance – sectarian violence, its location in the least-tolerant region of the world, low economic and human development indices – only 6.5 percent of Pakistanis objected to a neighbor of a different race. This would appear to suggest Pakistanis are more racially tolerant than even the Germans or the Dutch.


http://www.washingtonpost.com/blogs/worldviews/wp/2013/05/15/a-fascinating-map-of-the-worlds-most-and-least-racially-tolerant-countries/

Riaz Haq said...

Here's a Dhaka Tribune report comparing Bangladesh, India and Pakistan:

South Asia is one of the fastest growing regions of the world and is home to one-fifth of the global population. India, Pakistan and Bangladesh, the three largest economies of the region, hold the key to lifting several millions out of the vicious poverty cycle into economic prosperity. Although traditionally India and Pakistan generated the most interest around the globe,

Bangladesh has come into the spotlight over the past decade with drastically improving social indicators and a growth rate of around 6% throughout the financial crisis and global recession.

So how has the Bangladeshi economy performed over the past decade compared to the Indian and Pakistani economies?

The simplest measure of economic well-being of a country is its GDP per capita which is a measure of the value of total goods and services produced in a country divided by the total population. From the graph below, one can see that all three nations have more than doubled their GDP per capita with India and Pakistan bringing larger absolute increase compared to Bangladesh.

Sadly, Bangladesh continues to remain poorer than India and Pakistan with the gap increasing over the decade and the gaps in absolute terms have more than doubled with India and Pakistan (see graph 1).

A much more dynamic performance of the economy can be seen from observing the trend in the economic growth rate of the three nations. The Bangladeshi economy maintained a near constant growth rate of around 6% throughout the decade compared to the large gyrations in growth rate of India and Pakistan and it managed to do so throughout the global financial crisis of 2008-12.....
---------
Long term growth potential in an economy can usually be seen from gross savings (% of GDP). Gross savings is gross national income and net transfers less total consumption in the economy. Saving in an economy is important as it in turn provides internal fund for borrowing and investment in the economy.

Bangladesh did manage to attain the highest gross savings as a proportion of GDP by 2011. It saved over 30 cents for every $1 of goods and services produced from year to year since 2003. This broadly shows that the country has a large potential to bring about significant investment from its own fund just like India and unlike Pakistan which saw a drastic fall in gross savings over the decade (see graph 4).

However, capital formation has been rather sluggish in Bangladesh despite growth in savings. Gross capital formation (Gross domestic investment) as a proportion of GDP remained constant at 25% throughout the decade unlike India, which increased it significantly. This shows that, in general, Bangladesh has been building less infrastructure and investing less in industries than it can, something that the government needs to take look into account.
--------


http://www.dhakatribune.com/long-form/2013/jul/11/how-does-bangladesh-measure

Riaz Haq said...

India on verge of financial crisis, says The Guardian:

The Reserve Bank of India (RBI) in Mumbai. The country is facing its own financial crisis. Photograph: Vivek Prakash/REUTERS
India's financial woes are rapidly approaching the critical stage. The rupee has depreciated by 44% in the past two years and hit a record low against the US dollar on Monday. The stock market is plunging, bond yields are nudging 10% and capital is flooding out of the country.

In a sense, this is a classic case of deja vu, a revisiting of the Asian crisis of 1997-98 that acted as an unheeded warning sign of what was in store for the global economy a decade later. An emerging economy exhibiting strong growth attracts the attention of foreign investors. Inward investment comes in together with hot money flows that circumvent capital controls. Capital inflows push up the exchange rate, making imports cheaper and exports dearer. The trade deficit balloons, growth slows, deep-seated structural flaws become more prominent and the hot money leaves.

The trigger for the run on the rupee has been the news from Washington that the Federal Reserve is considering scaling back - "tapering" - its bond-buying stimulus programme from next month. This has consequences for all emerging market economies: firstly, there is the fear that a reduced stimulus will mean weaker growth in the US, with a knock-on impact on exports from the developing world. Secondly, high-yielding currencies such as the rupee have benefited from a search for yield on the part of global investors. If policy is going to be tightened in the US, then the dollar becomes more attractive and the rupee less so.

But while the Indonesian rupee and the South African rand are also feeling the heat, it is India – with its large trade and budget deficits – that looks like the accident most likely to happen. On past form, emerging market crises go through three stages: in stage one, policymakers do nothing in the hope that the problem goes away. In stage two, they cobble together some panic measures, normally involving half-baked capital controls and selling of dollars in an attempt to underpin their currencies. In stage three, they either come up with a workable plan themselves or call in the IMF. India is on the cusp of stage three.


http://www.theguardian.com/business/economics-blog/2013/aug/19/india-financial-crisis-rupee-stock-markets

Riaz Haq said...

India and Pakistan are running neck and neck in per capita GDP in both nominal US dollar terms and purchasing power parity terms, according to data available from multiple sources.


CIA World Factbook reports that the 2013 official exchange rate GDP of India is $1.67 trillion while that of Pakistan is $237 billion. It's a ratio of 7, about the same as the population ratio between the two countries.


http://www.riazhaq.com/2014/10/india-pakistan-economic-comparison-2014.html

Riaz Haq said...

The Emerging Middle Class in Pakistan: How it Consumes, Earns, and Saves
Dr. Jawaid Abdul Ghani
Professor, Strategy and Marketing Research,
Karachi School of Business and Leadership
jawaid.ghani@gmail.com

During the first decade of the twenty first century, and for the first time in the history of
Pakistan, over half of the households in the country belonged to the middle class (M-class).
During this period (2002-2011) the M-class, defined as households with daily per capita
expenditures of $2-$10 in 2005 purchasing power parity dollars1
, grew from 32 percent to 55
percent of all households in the country, and the number of people in this class doubled from 38
million to 84 million. Real aggregate national consumption increased by about $60 billion, of
which $55 billion was accounted for by the increase in consumption of the M-class. As a result
90 percent of the increase in national consumption during this decade came from the increase in
consumption of the M-class2
. It is not surprising that the Asian Development Bank listed
Pakistan as among the top five countries3
in the Asia Pacific region with the fastest growing Mclass
during 1990-2008 (Chun 2010).
What characterizes the M-class? Bannerjee and Duflo (2008) suggest that holding a relatively
secure job is the single most important characteristic of the M-class. Individuals with higher
levels of “permanent income” are less vulnerable to economic shocks, have lower discount rates
for future rewards and thus invest more in health, education, and other “rent generating”
credentials. Professionals and others in the “service class” with large amounts of human capital
and stable employment relationships are considered the most likely to invest in securing their
own and children‟s future. Indeed, according to Sorenson (2000) it is the level of uncertainty in
“lifetime wealth” and resulting living conditions which result in differences among social
classes4
. M-class values are described as optimism and confidence regarding the future, a
preference for moderation and stability, a willingness to pay a little extra for quality, the “ability
to defer gratification”, and income often based on specialized skills. As a result the M-class has
the “base amount of income to invest in productive activities that contribute to economy-wide
welfare” (Chun 2010), and is more likely to accumulate human capital and savings, and more
inclined towards entrepreneurship (Lopez 2012, Meyer 2012).

http://iba.edu.pk/testibaicm2014/parallel_sessions/ConsumerBehaviorCulture/TheEmergingMiddleClassPakistan.pdf

Unknown said...

Dear Sir,

I respect you for your in-depth knowledge but I just want to know few things:-

1)How many Management Institutes are there in Pakistan which can figure among top 100 Business Schools of the World? India has IIM(A), IIM(B), & ISB.
2) Again I want to understand is there any Medical College in Pakistan which can match AIIMS?.
3) Also I want to understand what is strength of PAK Non-Residents, and names of some women/men who made it to the list of Forbes Most Powerful persons list?.
4) Also want to know the strength of Pakistan Film Industry, and what is the average remuneration they receive for acting?
5) Also I want to know the strength of Pakistan's Television Industry?
6) Milk Production in Pakistan?
7) Sports other than Cricket & Hockey? like Chess, Soccer, Tennis, etc
8) Pakistan's Space Program?
9) Telecommunication Industry?
10) Software & Hardware Industry?
11) Railway Industry? Aviation Industry? Are they indigenous?
12) Banking & Insurance Industry? Mutual Funds Industry?
13) How many people are covered under Pension Scheme?

If according to your report if India is so backwards than Pakistan then why it is so major players are investing in India?

Riaz Haq said...

Frankly Indan: " I just want to know few things:-"

I have blogged about most, if not all, of the questions you are asking. Please search my blog to get your answers.

Unknown said...

Irrespective of the relation between both the countries, no one can deny that both the countries have some high caliber intellectuals. You are surely one of them. I respect you for your knowledge and seek blessings from you. I only hope that one day we both shed our differences and be united. Thanks. I shall continue to follow your blog.

Riaz Haq said...

India is far ahead of Pakistan in more ways than I can count :-)

Here are some:

1. India leads the world in open defecation....in absolute numbers and percentages.

2. India leads the world in child marriages....in absolute numbers and percentages.

3. India has more poor, hungry and illiterate people than any other country in the world. In percentage terms, the poverty rate in India is 2X higher than in Pakistan.

4. More farmers have killed themselves in India than any other country in the world.

5. Top 1% of Indians own 58% of India's wealth, 2nd only to Russia's 70%.

6. India has a mass murderer Modi as its elected leader.

7. India has more slaves than any other country in the world.

8. India has had more anti-minority riots than any other country in the world.

9. India is only one of only two countries where Apartheid is still rampant....the other is Israel.

10. There are more active insurgencies in India than any other country in the world.

And yet, India is a "secular democracy"!!!!!

All of the above are easily verifiable facts from credible sources which track such data.