Monday, August 1, 2016

Pakistan's Rising Economy; US Democratic Party Convention; Modi's Crackdown on AAP

How's Pakistan's economy doing? What do broad economic indicators of rising consumption of energy, autos, cement and steel show? Do these indicators confirm government's GDP growth figures? How are the investors responding to these indicators? What is the impact of China-Pakistan Economic Corridor (CPEC) projects on the economic activity in the country?

How do the two major party conventions in 2016 compare? Did one party do a better job of appealing to the broad electorate better than the other? Who's more ready to be the next US president? Hillary or Trump? Who's better for ethnic and religious minorities, particularly Pakistani-Americans and Muslim-Americans? How was the DNC speech by Pakistani-American Khizr Khan, the father of slain war hero US Army Captain Humayun Khan, received by the DNC delegates and the broader US public? Was it effective in fighting Trump's overt Islamophobia?

Why is the Modi government arresting nearly a dozen Aam Aadmi Party (AAP) MLAs? Why did the Indian government choose to do it now? Is AAP leader Arvind Kejriwal justified in fearing for his life? Are these AAP leaders' arrests and various forms of intimidation timed to hamstring AAP's chances in upcoming state elections in Goa, Gujarat and Punjab?

Viewpoint From Overseas host Misbah Azam discusses these questions with panelists Ali H. Cemendtaur and Riaz Haq (www.riazhaq.com)


https://youtu.be/RHB1GdVwusk





https://vimeo.com/177084238



Pakistan's Rising Economy; US Democratic Party Convention; Modi's Crackdown on AAP from Ikolachi on Vimeo.


Related Links:

Haq's Musings

Pakistan's Rising Economy

Trump Phenomenon

Trump's Muslim Ban

China-Pakistan Economic Corridor

Is Modi's Honeymoon Over?

Talk4Pak Think Tank

VPOS Youtube Channel

VPOS Vimeo Channel

35 comments:

Srinivasan said...

Pak economy rising ???????? (that's my fixed raised eyebrows).

what have they achieved in 69 yrs in manufacturing or services, not to mention exports that we should believe that the turnaround is finally due.

But then nothing stops you from dreaming.

Riaz Haq said...

Srinavasan: "what have they achieved in 69 yrs in manufacturing or services"

Contrary to the Indian propapaganda you've been fed on, the fact is that the manufacturing value added per capita for India and Pakistan are about the same.

You need to compare manufacturing value added per capita in India ($193) and Pakistan ($167) for 2012, the most recent data available from the World Bank. These are fairly close. India is ranked 142 and Pakistan 146.

http://www.nationmaster.com/country-info/stats/Industry/Gross-value-added-by-manufacturing-per-capita.

From United Nations Industrial Development Organization (UNIDO):

Pakistan Manufacturing Value Added (MVA):

MVA per capita at constant 2005 prices increased from US$135.03 in 2005 to $143.84 in 2014

MVA as percentage of GDP at constant 2005 prices in US$ decreased from 18.05% in 2005 to 17.41% in 2014

http://www.unido.org/Data1/IndStatBrief/A_Industrial_Performance_MVA_GDP.cfm?Country=PAK

India Manufacturing Value Added (MVA):

MVA per capita at constant 2005 prices increased from US$155.73 in 2005 to $168.42 in 2014

MVA as percentage of GDP at constant 2005 prices in US$ decreased from 15.10% in 2005 to 13.85% in 2014


http://www.unido.org/Data1/IndStatBrief/A_Industrial_Performance_MVA_GDP.cfm?Country=IND

China tops the list of world's 10 largest industrial producers. It is followed by the US, Japan, Germany and South Korea, according to United Nations Industrial Organization (UNIDO).

India ranks 6th in the world in terms of total manufacturing output in 2013, up from 9th place in 2008,

http://economictimes.indiatimes.com/news/economy/indicators/india-jumps-to-sixth-place-in-top-10-manufacturers-list-report/articleshow/51663535.cms

India's manufacturing value added (MVA) per capita of 161.7 in 2013 is among the lowest in the world. It's up from 131.9 in 2008.

In fact India's 2008 MVA per capita of 131.9 was lower than Pakistan's 141.1. Since 2008, Pakistan's MVA per capita has slipped to 139.1 in 2013 while India's has increased to 161.7 in this period.

Bangladesh's MVA per capita has jumped from 82.2 in 2008 to 118.3 in 2013.

On UNIDO’s industrial competitiveness index, most industrialized countries lost ground in the last three years. Among the five most competitive are four high-income countries (Germany, Japan, the Republic of Korea and the United States), along with China ranking fifth. The four are among the world’s most industrialized countries and, with China, account for 59 percent of world MVA.

https://www.unido.org/fileadmin/user_media_upgrade/Resources/Publications/EBOOK_IDR2016_FULLREPORT.pdf

Riaz Haq said...

Srinavasan: "But then nothing stops you from dreaming."

Talking about dreaming, here are a couple of headlines which you might consider a nightmare as an ill-wisher of Pakistan:


Move over, India. Pakistan is the hottest equity market in South Asia


http://qz.com/728382/move-over-india-pakistan-is-the-hottest-equity-market-in-south-asia/

#BMI Research puts #Pakistan in top "10 emerging markets". Key Growth Drivers: #Auto & #Textiles #Manufacturing Hub http://read.bi/29mmYQT


"Pakistan will develop as manufacturing hub over the coming years, with the textile and automotive sectors posting the fastest growth at the beginning of our forecast period. Domestic manufacturing investment will be boosted by the windfall from lower energy prices compared to the last decade, and improved domestic energy supply."

A new report from BMI Research has identified the "10 emerging markets of the future" — the countries that are set to become new drivers of economic growth over the next 10 years.

BMI estimates that these countries will cumulatively add $4.3 trillion to global GDP by 2025 — roughly the equivalent of Japan's current economy.

In general, manufacturing and construction are the sectors that will drive the economies. BMI reports that new manufacturing hubs are set to emerge in Bangladesh, Myanmar, and Pakistan, and that these countries will see particularly strong growth in exporting manufacturing industries. And construction growth is going to be widespread throughout all the countries — partly to facilitate increases in urban populations and partly to help develop the manufacturing sector.

Riaz Haq said...

Hunt for returns reaches emerging #Pakistan with KSE-100 new highs with 20% return YTD in US$ terms #CPEC http://on.wsj.com/2aI6nqL via @WSJ

Ross Teverson, head of emerging-market strategy at $49 billion money manager Jupiter Asset Management, has a new star pick: Pakistan.

The country wasn’t even considered an emerging market when he decided to invest. Until earlier this summer, it was a rung lower—a “frontier” market, where stocks are notoriously hard to trade and the political climate is tumultuous. And yet, the benchmark KSE-100 stock index is up 20% in dollar terms this year, Exhibit A in how far global investors are willing to go for returns these days.

Sluggish growth in developed economies has prompted central banks to push interest rates down to zero and beyond, wiping out yields on government debt and sending investors into all sorts of fringe or previously unloved markets such as Pakistan’s.

By estimates, since March more than $67 billion has poured into a group of 30 emerging markets tracked by the Institute of International Finance. That number doesn’t include money heading to markets such as China and Russia, where information on foreign buying is limited.

-------

“Emerging markets have been broadly out of favor with global investors for the better part of four years,” said Mr. Teverson, whose investment in Pakistan helped his fund gain 17% this year through June. “When you have seen an asset class out of favor for so long and you see valuations so low, that inflow can be sustained for a long period.”



Srinivasan said...

India exports Cars, Auto Parts, S/w Services, Pharma. Pak's exports is measly $15 USBD and that too towel/underwear/football.

India is far above in value chain in manufacturing than Pakistan. If Pak was even half as good as you claim, by now they would earned more exports.

Riaz Haq said...

Srinavasan: "India exports Cars, Auto Parts, S/w Services, Pharma."

In India they say: Kabadi ke chappar pe phoos nahin"


Translated in English: " Shoemaker's children go barefoot"


These are descriptions of India's exports at the expense of the needs of its own poor, hungry and illterate population which is the world's largest.


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

Ramesh said...

Are you telling Pakistan opted out of high value addition manufacturing and exports because their leaders want to focus on eradicating poverty. That sounds like a joke.

Riaz Haq said...

Ramesh: "Are you telling Pakistan opted out of high value addition manufacturing and exports because their leaders want to focus on eradicating poverty. That sounds like a joke."

Let me ignore your malicious intent and try and help you understand the difference between Indian and Pakistan economies.


Manufacturing accounts for about 20% of the economy and less than 10% of employment in both countries. The manufacturing value added per capita of both nations is roughly the same.


Agriculture accounts for about 18% of Indian economy and 51% of jobs vs 20% Pakistani economy and 45% of jobs. Value added per capita in agriculture in Pakistan is about 2X India's.

http://www.riazhaq.com/2013/11/indias-agrarian-crisis-farmer-commits.html

http://data.worldbank.org/indicator/SL.AGR.EMPL.ZS

The rest of the economy in both countries is services. The average value capita per capita in India's service sector is much higher than in Pakistan. But this average is skewed in India by about 12 million IT workers, a drop in the bucket, who have much higher incomes than the rest of hundreds of millions of Indians toiling in low-paying jobs in retail, transport, mining, government, domestic services and construction sectors.

Ramesh said...

"Manufacturing accounts for about 20% of the economy and less than 10% of employment in both countries. The manufacturing value added per capita of both nations is roughly the same. "

And why is this so important. Do you know Pueritco Rico manufacturing value added per capita is $12,990 vs USA's $5800. What do u want me to conclude? If you conclude that India and Pak are at the same level of Manufacturing, then you have to conclude that PRico is twice better than United States. Can't pick and choose. Pls do not evade this Q.

Fact is, India is at a much higher value added strata in manufacturing than Pakistan is.

Riaz Haq said...

Ramesh: "Do you know Pueritco Rico manufacturing value added per capita is $12,990 vs USA's $5800."

Puerto Rico is part of the United States. American companies do manufacturing in Puerto Rico.

Overall, US is a post-industrial economy where manufacturing is 12% of the economy and declining.

Jimmy said...


Using 2013-14 data, the Pakistan poverty headcount ratio comes out to be 29.5pc of the population. In monetary terms, poverty line stands at Rs3,030 per adult equivalent per month, the minister said.

Under the old poverty line, the percentage of the poor fell by around 25 percentage points, from a high of 34.6pc in 2001-02 to 9.3pc in 2013-14.

Further analysis of the past data under the new poverty line estimates the poverty headcount ratio at 63.3pc in 2001-02, which has now fallen to 29.5pc.

http://www.dawn.com/news/1250694/new-poverty-line-makes-a-third-of-pakistanis-poor?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+dawn-news+(Dawn+News)

Riaz Haq said...

Using $1.90 per day per person international poverty level, poverty in Pakistan is about a third the rate in India.


Pakistan poverty for those living below $1.90 per person per day is 8.3%

http://povertydata.worldbank.org/poverty/country/PAK

India poverty for those living below $1.90 per person per day is 21.3%


http://povertydata.worldbank.org/poverty/country/IND




Anonymous said...

http://economictimes.indiatimes.com/news/economy/indicators/morgan-stanley-revises-up-indias-growth-estimate-to-7-7/articleshow/53266002.cms

Morgan Stanley also part of Modi fudged GDP scam?

Riaz Haq said...

Anon: " Morgan Stanley also part of Modi fudged GDP scam?"

Morgan Stanley's head of emerging markets Ruchir Sharma says that India's GDP is growing 2-3% slower than official figures.


Sharma believes India's pace is probably five percent to six percent.

http://economictimes.indiatimes.com/news/economy/indicators/chinas-gdp-is-managed-indias-shows-incompetence-says-ruchir-sharma/articleshow/53127702.cms

Riaz Haq said...

#GoldStar families publish open letter condemning Donald #Trump. #KhizrKhans http://www.bostonglobe.com/news/politics/2016/08/01/gold-star-families-publish-open-letter-condemning-donald-trump/UlUJ4jLeauIzUQqool1qBJ/story.html?event=event25 … via Boston Globe Events

The families took particular issue with Trump’s comments that implied Ghazala Khan was not allowed to speak publicly because of her faith:

“When you question a mother’s pain, by implying that her religion, not her grief, kept her from addressing an arena of people, you are attacking us. When you say your job building buildings is akin to our sacrifice, you are attacking our sacrifice. You are not just attacking us, you are cheapening the sacrifice made by those we lost,” they wrote.

Khan stood silently by her husband’s side during his speech to the Democratic National Convention last week, but later spoke to MSNBC’s Lawrence O’Donnell and penned an op-ed in the Washington Post.

VFW joins McCain, others in denouncing Trump
The nation’s oldest and largest war veterans group said it will not tolerate anyone berating a Gold Star family member for exercising their free speech.

Seventeen families of fallen service-members signed the letter, which called for Trump to apologize for his statements.

“We feel we must speak out and demand you apologize to the Khans, to all Gold Star families, and to all Americans for your offensive, and frankly anti-American, comments.”

Srinivasan said...

http://scroll.in/article/813046/climate-change-is-playing-havoc-with-cotton-production-in-pakistan-and-affecting-its-economy

Riaz Haq said...

From #Modi's Guru Golwalkar to #GOP's #Trump: #India's #Hindu Nationalists Cheer & Pray for #Trump. #Islamophobia
http://www.dawn.com/news/1274763/from-golwalkar-to-trump

INDIA’S Hindu right is desperately seeking a role in the American elections even if it’s a walk-on appearance in a crowd scene. It asks if its right-wing friends from Israel can tip the balance in a keen American contest, why can’t the Hindu right be at least a cheerleader. After being rapped on the knuckles by Barack Obama a few times — following the cordial talks with Prime Minister Modi in Delhi, for example — the Hindu right wants a less censorious incumbent in the White House. Public prayers and weird voodoo rituals have been invoked to boost the chances of Donald Trump.

The two have much in common. Mr Trump claims to speak for core American values, passing off contrived fear for nationalist fervour. In India, the Hindu right has laid claim to defining — rather, it has been allowed by a somnolent opposition to prescribe — what is nationalist and what isn’t. Someone’s stand on the Kashmiri uprising is the signal for praise or rebuke. They both hate Muslims. And, as Mr Trump’s aversion of Latinos expands his arena of nurtured prejudices the Hindu right targets the tribal communities of the northeast.

Hindtuva goons, raised on political patronage, periodically bludgeon Manipuri and other people from the northeast in Delhi and elsewhere. Mr Trump’s veiled fear of African Americans mutates in India into physical assaults on students and visitors of dark complexion. As with Muslims and Dalits, African residents find it difficult to rent a house in Delhi.

Mr Trump and the Hindu right have a common ancestor too: Adolf Hitler. As such, they are joined at the hip in their biases. About Muslims, Trump says: “They’re not coming to this country if I’m president. And if Obama has brought some to this country they are leaving, they’re going, they’re gone.”

Trump and the Hindu right have a common ancestor: Adolf Hitler. As such, they are joined at the hip in their biases.
As his wife plagiarised from Michelle Obama’s speech, Trump borrowed without attribution from Guru Golwakar’s book We or Our Nationhood Defined. The early pioneer of the Hindu right wrote: “The non-Hindu people of Hindustan must either adopt Hindu culture and language, must learn and respect and hold in reverence the Hindu religion, must entertain no idea but of those of glorification of the Hindu race and culture ... In a word, they must cease to be foreigners, or may stay in the country, wholly subordinated to the Hindu nation, claiming nothing, deserving no privileges, far less any preferential treatment — not even citizens’ rights.”

There was a notable difference though. Golwalkar’s reference to non-Hindu people included Indian Christians. This should not deter any alliance of two utterly right-wing demagogues. After all, Golwakar’s praise of Germany’s treatment of Jews didn’t deter his followers from bonding with right-wing leaders in Israel.

“To keep up the purity of the race and its culture, Germany shocked the world by her purging the country of the Semitic Races — the Jews,” Golwalkar wrote with approval. “Race pride at its highest has been manifested here. Germany has also shown how well nigh impossible it is for Races and cultures, having differences going to the root, to be assimilated into one united whole, a good lesson for us in Hindustan to learn and profit by. Ever since that evil day, when Moslems first landed in Hindustan, right up to the present moment, the Hindu Nation has been gallantly fighting on to take on these despoilers. The Race Spirit has been awakening.”

Subhash Roy said...

What nonsense? I am BJP but I think Hilary knows India better and understands the double game Pakistan plays. The majority of India prefer Hilary.

Riaz Haq said...

Roy: "What nonsense? I am BJP but I think Hilary knows India better and understands the double game Pakistan plays. The majority of India prefer Hilary."

Right-wing Hindus, the BJP base, love Donald Trump because of his anti-Muslim rehetoric.

#India's Radical #Hindu nationalists celebrate Donald #Trump's 70th birthday | via @telegraphnews

http://www.telegraph.co.uk/news/2016/06/14/radical-hindu-nationalists-celebrate-donald-trumps-70th-birthday/

'He’s our hero': #Hindu nationalists rally for Donald #Trump in #India

A rally would soon follow, and demonstrations outside the US embassy in Delhi urging Indian-origin Americans to vote for Trump will be on the menu for coming months, Gupta said. “He’s our hero,” he said. “We are praying for Trump because he is the only one who can help mankind.”

Gupta’s motives for supporting Trump were simple: “He’s the only many who can put an end to Islamic terrorism.”

Trump’s hardline stance on Muslim immigration to the US and his rhetoric against Isis and other terror organisations seem to have caught the imagination of the young Hindu fringe leader, who has grown up in a political climate where communal strife between Hindus and the Muslim minority has led to violent clashes on both sides.

https://www.theguardian.com/us-news/2016/may/13/donald-trump-india-hindu-supporters-new-delhi

S Roy said...

This is what Clinton said, “And more pernicious, there are elements within the Pakistani intelligence services, the ISI that may be working at cross-purposes with us.

“How we can possibly be funding the Pakistani military if elements of the military or intelligence services are actually working against us and having the effect of killing our troops next door?”

As far as India is concerned I like her tough stance on Pakistan specifically because it is not anti Muslims

Riaz Haq said...

SR: " This is what Clinton said, “And more pernicious, there are elements within the Pakistani intelligence services, the ISI that may be working at cross-purposes with us."

In testimony to the US Congress, former Secretary of State Hillary Clinton said very candidly that "the terrorists we are fighting today we funded 20 years ago".


https://www.youtube.com/watch?v=Dqn0bm4E9yw

James said...

"In testimony to the US Congress, former Secretary of State Hillary Clinton said very candidly that "the terrorists we are fighting today we funded 20 years ago".
"
So why are muslims supporting her in this election? Or is your hatred for Trump so high that you are willing to tolerate a war monger like Hillary. Her husband was no saint either.

Srinivasan said...

A genuine question: Are D presidents more pro muslim or R presidents.

Riaz Haq said...

Srinivasan: "A genuine question: Are D presidents more pro muslim or R presidents."

Neither. US Presidents do what they see as best for the US interests at any given time.

Riaz Haq said...

James: "So why are muslims supporting her in this election?"

A better question is: Why are so many Americans supporting Hillary in this election? And the answer is: Hillary is a far better choice than Trump in terms of US economy, national security and global peace and prosperity.

Anonymous said...

Well, Trump handily won the R nomination. So obviously he has lot of American supporters too. What could be the reason they are supporting him.

Now please don't give only negative reason as it would be funny that Trump is supported for negative reasons and HRC for positive reasons :-)

Nilesh said...

The famous line from Clinton to Pakistan.

YOU CAN'T KEEP SNAKES IN YOUR BACKYARD AND EXPECT THEM NOT TO BITE YOU

Pakistan more than welcomed US support many years ago against USSR however, the eyes were always on India. Therefore Pakistan had every reason to redirect them after USSR left

S. Wadhwa said...

IMF/WORLD BANK relies on statistics from member countries. The statistics gathering in each country is classified from GDDS, SDDS & SDDS+. Only six countries, including the US, has the SDDS+ classification. India has the SDDS classification. The following comment is made regarding Pakistan.

" Pakistani authorities are strongly committed to adhering to internationally accepted standards
and good practices, as demonstrated by their recent participation in the GDDS. Nevertheless,
the mission identified shortcomings in some statistical practices and databases that have the
potential for detracting from the accurate and timely analysis of economic and financial
developments, and the formulation of appropriate policies. The mission made
recommendations to further enhance Pakistan’s adherence to international statistical
standards. While all of the recommendations are considered important, those regarding
national accounts and government finance statistics need to be addressed with the greatest
urgency. Some of these recommendations could be addressed with the current resources.
However, improving the quality of statistics to make possible subscription to the SDDS would require a commitment of additional resources."

Riaz Haq said...

S Wadhwa: "India has the SDDS classification. "


It means nothing when the Central Bank Chief Raghu Rajan questions the GDP results. And the reason is obvious.

"The estimated “evacuation (defecation) rates” are 0.3 kilograms per day for goats and 0.8 kilograms per day for sheep. The study, titled “Positive Environmental Externalities of Livestock in Mixed Farming Systems of India,” was conducted jointly by the Central Institute for Research on Goats, in Makhdoom, Uttar Pradesh, and the National Center for Agricultural Economics and Policy Research in New Delhi. With all those “droplets” added in, the value of India’s livestock sector in the new GDP series is 9.1 billion rupees, or $150 million, higher than it was in the old series." Wall Street Journal on India's GDP Revisions


Animal droppings (BS) is just one of many innovations of Central Statistical Office (CSO) that are being used to support India's claim to be growing faster than China. Until early February, when CSO changed the way it measures economic activity, India was enduring its weakest run of growth since the mid-1980s. Now it is outpacing China, having grown an annual 7.5% in the fourth quarter of last year, reports Business Standard.


http://www.riazhaq.com/2015/04/indias-new-gdp-figures-modi-takes-bs.html

Riaz Haq said...

Bank credit rises on uptick in #Pakistan economy as interest rates hit 42-year low of 5.25%

http://www.khaleejtimes.com/international/pakistan/bank-credit-rises-on-uptick-in-pakistan-economy


Commercial bank credit and bank investments are on the rise in Pakistan on the back of a significant uptick in the economy.

The new monetary policy and the benchmark discount rate, expected to be announced later this week, are likely to strengthen this trend.

International financial organisations, the ministry of finance and the State Bank of Pakistan (SBP), the central bank, report that the economy is in an expansionary mode and will continue to be so in the next two years.

"We expect gross domestic product [GDP] growth to rise further in fiscal year 2017. The actual GDP growth in fiscal year 2016 was 4.7 per cent - a record high for the last 12 years despite international challenges," say economists.

According to the SBP, the government envisages a higher GDP growth of 5.7 per cent in fy-17. The banking system will gain further strength and earn larger profits as economic growth increases.

The SBP issued a review of the country's macroeconomic performance, with a specific reference to the recent monetary policy which ensured a rapidly declining benchmark discount rate and the lowest interest rate of 5.25 per cent charged by commercial banks, a 42-year low.

Reforms
Finance Minister Ishaq Dar said: "All stakeholders are satisfied with the country's macroeconomic stability, but they should continue the reform process and pursue policies that will enhance and fast-track growth and include all sections of society, business and the economy."

Saeed Ahmed, acting governor of SBP, said: "The monetary performance remained satisfactory during the quarter ended June 2016. Forex reserves reached the highest level of $23 billion." It will expand exports and imports, which, in turn, will benefit banks, the financial, economic and industrial sectors.

All these stakeholders are upbeat on the economy's growth after positive reports from the International Monetary Fund (IMF), the World Bank and Manila-based Asian Development Bank.

The IMF said: "Pakistan's economy is growing at its quickest rate in eight years. Investor confidence has slowly returned to a country that was battered by the global financial crisis."

Bank investments are rising but deposits are not growing that much, reported the SBP. Credit and investments provided by banks rose in the first half of 2016 compared to the like period of 2015, it said.

"This was despite the fact that deposits saw a fall in growth in the same period. The banks provided additional funds for credit and investment from money they borrowed from SBP."

Liquidity crunch
The central bank injected Rs1.79 trillion on July 11 and Rs1.13 trillion on July 15 into banks to help overcome their liquidity crunch and expand credit to the private sector. One of the key causes of the commercial banks' liquidity crunch was "the borrowing by the government to cover its budgetary gap."

"Banks' deposit growth fell by almost 50 per cent in the first nine months from July to March of the previous fiscal year," the SBP reported.

In a report for the third quarter of fiscal year 2016, the SBP said private sector deposits increased by Rs149.4 billion during July-March, less than half the rise in deposits recorded in the like period of fy-15.

But the plus point is that banks' advances rose at an eight-year high of seven per cent in the first half of 2016 on the back of growing credit demand.

The banking sector advances-to-deposits ratio increased by 51 per cent in June 2016, up from 50 per cent in June 2015. At the same time, the investment-to-deposit ratio increased to 75 per cent in June 2016, up from 64 per cent in June 2015.

Anonymous said...

"You need to compare manufacturing value added per capita in India ($193) and Pakistan ($167) for 2012, the most recent data available from the World Bank. These are fairly close. India is ranked 142 and Pakistan 146."

You make a good point. But look at the relative performance in manufacturing growth in South Asia since the 2008 crisis:
http://data.worldbank.org/indicator/NV.IND.MANF.KD?locations=IN-PK-BD

A) 2008 Manufacturing Value Added (Constant 2010 $)
Pakistan: 23.9 billion$
Bangladesh: 16.3 billion$
India: 194.3 billion$

B) 2014 Manufacturing Value Added (Constant 2010 $)
Pakistan: 26.6 billion$
Bangladesh: 26.9 billion$
India: 286.9 billion$

I) Cumulative Percentage Increase between 2008 and 2014
Pakistan: 11%
Bangladesh: 65%
India: 48%

II) Cumulative Annualized Growth rate between 2008 and 2014
Pakistan: 1.8%
Bangladesh: 8.7%
India: 6.8%

Anonymous said...

The IMF said: "Pakistan's economy is growing at its quickest rate in eight years. Investor confidence has slowly returned to a country that was battered by the global financial crisis."

This is true. Without a doubt, the economy is growing at its quickest pace in eight years.
Here is the 2016 Economy Survey report:
http://www.finance.gov.pk/survey/chapters_16/01_Growth_and_Investment.pdf

Look at Table 1.4 on page 14 to see how this 'fastest in eight years' GDP growth was generated. Look carefully at the 'consumption' row to see its sky-high 7.05% contribution and then compare that to the pitifully-small 0.89% contribution by investment.

The domestic savings-rate was already the lowest in South Asia.
http://data.worldbank.org/indicator/NY.GDS.TOTL.ZS?locations=PK-IN-BD

By now generating consumption-led fast growth, it has gone further downward. See Table 1.7 on page 18 of that file to see the lowering of the domestic savings-rate to an abysmal 8.3%.

This is not sustainable. The smallest amount of non-domestic capital flight will collapse growth altogether.

Anonymous said...

Look at the relative labor productivity increases in South Asia since the reforms began in 1991:
http://data.worldbank.org/indicator/SL.GDP.PCAP.EM.KD?locations=IN-PK-BD

A) 1991 Labor productivity (output per worker) in constant 2011$
Pakistan: 11,286$
Bangladesh: 2,533$
India: 4,910$

B) 2015 Labor productivity (output per worker) in constant 2011$
Pakistan: 13,749
Bangladesh: 5,661
India: 15,352

I) Cumulative Percentage Increase between 1991 and 2015
Pakistan: 21.8%
Bangladesh: 124%
India: 213%

II) Cumulative Annualized Growth Rate (CAGR) between 1991 and 2015
Pakistan: 0.8%
Bangladesh: 3.4%
India: 4.9%

We had a HUGE head start thanks to Ayub (60s) & Zia (80s). We threw it all away via Bhutto, Bhutto, Sharif, Zardari, Sharif, Bhutto merry-go-round of democracy.

Riaz Haq said...

The ministry of planning, development and reforms would launch an economic long march on August 11 on the occasion of the second anniversary of the government's Vision 2025 programme.

A scorecard of government's achievements during the last two years as well as targets set for next 10 years would be presented.

The slogan of the economic long march would be "Lets work harder, better and smarter", a senior official said here on Friday.

The Vision 2025 was announced two years ago after complete consultation with all the stakeholders while provinces were also taken on board to make the country a model economy.

Pakistan, he pointed out, was being termed as an emerging economy and all the leading and credible international organizations were viewing us a turned-around economy.

He gave statistics regarding GDP growth which has increased from 3.7% to 4.7%, remittances have doubled to $ 20 billion, Foreign reserves have swelled from $10 billion to record $23 billion while Pakistan Stock Exchange (PSX) index has rocketed from 12,000 to nearly 40,000.

Out of US$ 46 billion under China Pakistan Economic Corridor (CPEC), projects worth more than US$ 10 billion had already hit the ground while remaining schemes were in advanced stages of the pipeline.

Giving details of power production in next few years, he said, 3600 MW electricity would be produced through LNG, Under CPEC, 1320 MW by Port Qasim and 1320 mw by Sahiwal will also come in production next year, Chashma Nuclear Plants are also expected to add 600 mw. Jamshoro Power Project being completed by Asian Development Bank, would start producing 1320 MW by year 2018.

Work was under progress on 2000 MW Thar project and 1320 MW HUBCO project which would be completed by the year 2018-19, he added.

About infrastructure development, he said, Motorway from Havalian to Thakot and Multan-Sukkur of Lahore-Karachi Motorway was being completed at a fast pace.

On the Western route of the CPEC, he said, Gawadar port would be linked with Quetta by end of this year opening enormous opportunities for Balochistan.

The road from Burhan to DI Khan would be completed by June 2018, he said and added, the Gilgit-Baltistan would be developed as a model of environmental economy.

He mentioned about the work on Dasu and Diamir-Bhasha dams and the generation of wind and renewable energy as well.

He said, Pakistan Railways was being modernized with Rs.117 billion investment while the number of PIA aircraft had been doubled.

He said, unemployment was decreased from 6.24 percent in 2013 to present 5.94 percent, adding, while the country has witnessed reduction in poverty. However, due to energy crisis it couldn't be faster. As energy situation improves, there will be more investment and jobs, which will help in fighting unemployment.

He said, government has more than doubled allocation for Higher Education from Rs 100 billion to Rs 215 billion. Pakistan is becoming hotspot for IT entrepreneurship and start ups.

He said, Rs.173 billion were allocated for improvement in the existing transmission and distribution systems to bear burden of increased electricity production in the next two years.

http://www.brecorder.com/pakistan/general-news/312503-economic-long-march-to-put-pakistan-in-top-25-economies-by-2025.html

Riaz Haq said...

Via @NPR: #India's Lagging #Manufacturing Sector Slows Job Creation. #Modi #Achhedin #BJP

http://www.npr.org/2016/08/11/489584349/india-s-lagging-manufacturing-sector-slows-job-creation

India needs an uptick in manufacturing to employ millions who enter the labor force every year. The slow expansion is imperiling India's ability to create jobs and lift millions out of poverty.

And you often hear about India having the world's fastest-growing economy. And it is growing at 7.6 percent. But beneath that headline is another reality. Manufacturing in the country is lagging, and that's hurting India's ability to create jobs and lift millions of people out of poverty. Let's go to New Delhi and NPR's Julie McCarthy.

JULIE MCCARTHY, BYLINE: Manish Dhariwal, chief financial officer of PPAP Automotive Limited, steps onto the factory floor as a downsized second shift punches in.

MANISH DHARIWAL: Each part has a different design.

MCCARTHY: He sweeps his hand across a display case of strips that seal car doors and windows, components he sells to the largest Japanese car manufacturers. PPAP enjoys a 90 percent market share, but Dhariwal says sales are flat, and his operation is running at just 65 to 70 percent capacity.

DHARIWAL: There's a big problem because facilities are already there, and they are not, then, getting fully utilized. And the cost of manpower increases on an annual basis. So how do I find the money for that if there's no sales growth?

MCCARTHY: Dhariwal's company is hiring no new workers. That undercuts Prime Minister Narendra Modi's pet project, to make manufacturing the engine of employment. Ten million Indians enter the workforce every year. But according to the Labour Bureau, eight labor-intensive sectors, including automobiles, created only 135,000 jobs last year, the lowest in seven years...

RAJIV KUMAR: It's a ticking time bomb.

MCCARTHY: ...Meaning social instability. Rajiv Kumar adds, if you have no new jobs...

KUMAR: You don't, therefore, address poverty in any real sense. And you exaggerate inequalities in our country.

MCCARTHY: Kumar is former head of the Federation of Indian Chambers of Commerce. He says India's nearly 8 percent growth rate reflects a jump in the service sector but disguises sluggishness in manufacturing. Kumar urges the government to stop boasting about the GDP and focus on the number of jobs created.

KUMAR: Because that's what is the key. And if you have that as the key macroeconomic target, then growth will follow.

MCCARTHY: But Mihir Sharma, author of "Restart: The Last Chance For The Indian Economy," says India can unleash growth only if it becomes easier to do business. He says roads here are so bad, the bureaucracy so hidebound, it's often cheaper to fly raw materials in from overseas than to clear the hurdles within India. That includes, he says, India's labor laws, which make it hard to fire workers in shops with more than 100 employees.

MIHIR SHARMA: It might take months. It could take years. And that's to fire one person. We are not competitive because we just can't get the scale and get the flexibility that every other country in the world has.

MCCARTHY: Flexibility in the workforce is useful in the lean periods, says Vishal Lalani, whose factory churns out dashboards for commercial vehicles, a sector that tumbled. A recovery has kicked in. But Lalani says 6 to 8 percent inflation is eating at his bottom line. And Lalani echoes other entrepreneurs who say Prime Minister Modi's campaign, Make in India, is more slogan than substance.

VISHAL LALANI: That's the way I see it. And it's probably boosting India's image and giving people a feel-good factor. But there's not that much happening on the ground.

MCCARTHY: Demand in India's auto sector is picking up, but the number of new jobs created is negligible. Even in aspirational India, demand can only go so far without gainful employment. Julie McCarthy, NPR News, New Delhi.