Wednesday, February 1, 2023

Pakistanis Remain Hopeful Amid Crises: 69% Think Their Children Will Do Better

Pakistan is in the middle of multiple serious crises. But the vast majority of Pakistanis feel that they have better lives than their parents did, and they think their children will have even better lives than theirs, according to a Gallup International Poll of 64 countries conducted from August to October last year. The poll asked two questions: 1) Do you feel your life is better, worse or roughly similar to that  of your parents? and 2) Do you think your children will have a better, worse or roughly the same life as you? The answers to these questions reveal that Pakistanis are among the top 5 most positive nations among 64 countries polled by Gallup International. Anecdotal evidence in terms of packed shopping malls and restaurants in Pakistan's major cities confirms it. Such positivity augurs well for Pakistan's prospects of successfully dealing with the current crises. It will drive the nation's recovery. 

Doing Better Than Parents. Source: Gallup International

Pakistanis Among Most Optimistic: 

Nearly two-thirds (65%) of Pakistanis said they live better than their parents did. And 69% of Pakistani parents think their children will have better lives than they do. In neighboring India, 54% of respondents feel their lives are better than their parents' while only 43% say their children will have better lives than theirs'.  The global average for the former is 51% and it is 44% for the latter. The poll results put Pakistanis among the world's five most hopeful nations

Optimism For Children. Source: Gallup International

Most of the countries are positive on both questions, but if one looks for instance for countries with both above 50% positive answers, Nigeria stands out with 171 (81% positive for today plus 90% positive for tomorrow), followed by Kosovo (162), the United Arab Emirates (150), Ghana (141) and Pakistan (134), according to Gallup International. 

Sum of Percentages of Positive Answers to Both Questions. Source: Gallup

Pakistan (69% better minus 18% worse) is among the most positive countries. India is much less positive (43% minus 33%). Nigeria (90% minus 6%) tops the list in terms of positivity and the most negative is Slovenia (14% minus 53%). Among the prominent countries where GIA could poll, expectations for their children’s future are highest in Nigeria, followed by Russia (52% minus 10%), Mexico (48% minus 30%) and the USA (43% minus 31%). When combining the two questions, another perspective is added. For instance, Moldova shows a total of 86 (45% saying that their live is worse  than the one of their parents plus 41% expecting a worse life of today’s children), followed in this negative ranking by North Macedonia (82: 35% negative assessments plus 47% negative predictions), Afghanistan (81), Syria and Italy (78), etc.

Economic Mobility in Pakistan: 

Pakistanis' positive responses in the Gallup poll appear to be supported by a World Bank study. Economic mobility across generations, also known as intergenerational mobility (IGM), is a key measure of human progress. It shows that Pakistan is doing relatively well, according to a World Bank sponsored study. The analysis examines whether those born in poverty or in prosperity are destined to remain in the same economic circumstances into which they were born, and looks back over a half a century at whether children’s lives are better or worse than their parents’ in different parts of the world.

Inter-Generational Income Mobility Map of the World 2018. Source: World Bank

Intergenerational Income Mobility Study:

The World Bank study uses a newly created 2018 database—the Global Database of Intergenerational Mobility (GDIM)—that covers more than 95 percent of the global population.  Intergenerational income mobility measures how children's incomes compare with their parents' incomes at similar stages of life over a period of 50 years.

Inter-Generational Income Inequality Scatter Plot of the World 2018. Source: World Bank

The study found that higher intergenerational income mobility is associated with lower income inequality.

Inclusive Development: 

More and more Pakistanis are sharing in their nation's development, according to The World Economic Forum (WEF). Pakistan ranks 47 among 74 emerging economies ranked for inclusive development by the WEF released report at Davos, Switzerland. Inclusive development in the South Asian country has increased 7.56% over the last 5 years. The World Economic Forum assesses inclusive development  based on "living standards, environmental sustainability and protection of future generations from further indebtedness."  

“Man can live about forty days without food, about three days without water, about eight minutes without air...but only for one second without hope.”  American author Hal Lindsey


Majumdar said...

Brofessor sb,

This is a very encouraging finding. Optimism is very important in supporting consumer and investor sentiment- it encourages consumption, savings and investment. This may help in turning Pakiland's economic fortunes.

Riaz Haq said...

“Man can live about forty days without food, about three days without water, about eight minutes without air...but only for one second without hope.”

by American author Hal Lindsey






डोभाल का डर, पाक कांपा थर-थर!
Pakistan में अब दूसरा 'धमाका' होगा?
14 दिन की 'जिंदगानी'जिन्नालैंड की खत्म कहानी
जासूसी साजिश रचने वाले चीन और पाकिस्तान की घंटी बजाओ


Riaz Haq said...

68% of young Pakistanis want to stay in Pakistan, according to a British Council survey "Pakistan -The Next Generation Report 2023"

Preference for Pakistan
Pakistan’s brain drain has always been a major
concern for the country’s fledgling growth.
According to statistics available with the Bureau of
Emigration and Overseas Employment , over three
quarters of a million people left Pakistan for abroad
in 2022, nearly triple the departures in 2021. The
deteriorating economic and political situation has
much to contribute to the uncertainty that drives
people to leave their homeland for financial security
and safety.
However, the Next Generation, despite these
uncertainties, prefers to stay in Pakistan instead of
moving abroad.
As in the case of identity, variations exist between
those who want to move abroad, and those who
want to stay. Young people preferring the former are
more likely to be male, privately educated, with
access to and utilization of the internet. They are
also more educated, with many receiving graduate
and postgraduate education. Regionally,
respondents from Khyber Pakthunkhwa, Gilgit
Baltistan and Azad Jammu and Kashmir were more
likely to prefer moving abroad.

Riaz Haq said...

Sajid Amin Javed
Two studies, two different worlds.

62% wanted to leave Pakistan

British Council:
68% wanted to stay in Pakistan.

Ahmed said...

Dear Sir

Pls check the latest news , mashallah the worlds 1st virtual cricket stadium has been made in Islamabad using meta varse technology . It is the 1st kind in the world .

Ahmed said...

Dear Sir

I hope you are doing well, Sir a bad and very sad news for you . Yesterday General Musharaf has expired . He has served the country not just as a millitary commander and general but also served 10 years as a president . Can you pls make a blog about it ?


Ahmed said...

Dear Sir Riaz

I hope you are doing well , I don’t understand one thing why is Pakistani media so negative ? What are the credentials of the most of the news reporters and news journalists who are working in the media of Pakistan ? When Imran Khan was the PM of the country . The news journalists in most of the news channels of Pakistan speak against him and criticised him although many good things happened in Pakistan when he was the PM.

Similarly their is a news journalist or a news reporter who talks crap about western countries and calls them hypocrite .Now the question is that if western countries are so bad and is not a right place to live then why millions of Muslims from different countries live their ?

If the western countries are so bad then why Pakistan takes financial aid from IMF , World Bank , UK and America ?

Riaz Haq said...

Coffee trumps economic crisis as Tim Hortons opens in Pakistan

LAHORE, Pakistan Feb 14 (Reuters) - Pakistanis are queuing for hours to grab coffee and pastries from Canadian chain Tim Hortons, which opened its first outlet in the South Asian country this week just as its economic crisis took a turn for the worse.

In less than a month, Pakistan's currency has lost more than a quarter of its value against the U.S. dollar, and fuel prices have risen by almost a fifth as the government implemented fiscal measures that are prerequisite to unlocking funds from an International Monetary Fund bailout.

Inflation in January spiked to 27% year-on-year, the highest in more than a decade, and the government only has enough foreign reserves to pay for just over three weeks of imports.

All that hasn't stopped scores of Pakistanis from thronging to the cafe since it opened on Saturday at an upmarket Lahore shopping mall.

Tim Hortons is owned by Restaurant Brands International Inc (RBI) (QSR.TO), , a Toronto-based company that also owns other fast food brands including Burger King and Popeyes.

"Higher prices don't really matter for the class of people coming here," Ahmad Javed, a medical student who used to go to Tim Hortons while he was living in Canada, told Reuters as he queued up.

"Rich people in Pakistan are getting richer, the poor are becoming poorer while the middle class is struggling."

According to its online menu, a small brewed coffee costs 350 rupees ($1.30), while a large flavoured coffee is twice as much. By comparison, the average government-mandated minimum wage is 25,000 rupees ($94) a month.

With a population of more than 230 million and a $350-billion economy, Pakistan remains a growth market for fast-food companies. McDonald's (MCD.N), Retail Food Group (RFG.AX)-owned Gloria Jean's Coffee and Yum Brands Inc (YUM.N)-owned Pizza Hut are among the international brands with outlets in Pakistan.

Tim Hortons is set to open another two outlets in Lahore, RBI said in a statement. Pakistani firm Blue Foods operates the franchise. Both companies declined to give any details about the outlet's sales in the opening week.

For students such as Pareeshay Khan, the brand's social media traction trumps the cost of the coffee. "I'm here to taste the coffee that's the top social media trend. I don't know about the price, nor do I care."

Riaz Haq said...

What are the top 5 things Pakistan must do for long term improvement in its economy?

1. Incentivize domestic savings

2. Prioritize investing in export oriented sectors

3. Broaden tax base with agriculture, service sector income

4. Incentivize documentation of economy

5. Ensure political stability/security for investors

Anonymous said...

^^ Everyone knows that..The question is HOW? Within the present political economy in which elites both civilian and military actively benefit from the present state of affairs!

Anonymous said...

@Anon Yes even India with a much superior political economy hasn’t been able to bring Agricultural income in the tax net.Though at 20% their tax to GDP ratio is slightly higher than China despite China being much richer so the Indian political economy has evidently figured out how to collect high taxes without people rioting in the streets.

You think Shariff and Bhutto bring in legislation which would force them to pay tax on their vast agricultural income?

Anonymous said...

It’s actually 11% central taxes and 7% state taxes + other earnings like auction of 5G spectrum and profits from PSU(Indian PSU are on average profitable and collectively give the government 100 billion USD + income )

So yes the Indian state has 20% of GDP plus deficit financing of 5% so around 25% of a 4 Trillion USD economy so around a TRILLION US Dollars to spend EVERY YEAR!!

Riaz Haq said...

GDP Growth Rate in Pakistan averaged 4.92 percent from 1952 until 2018, reaching an all time high of 10.22 percent in 1954 and a record low of -1.80 percent in 1952.

Pakistan is one of the poorest and least developed countries in Asia. Pakistan has a growing semi-industrialized economy that relies on manufacturing, agriculture and remittances. Although since 2005 the GDP has been growing an average 5 percent a year, it is not enough to keep up with fast population growth. To make things even worst, political instability, widespread corruption and lack of law enforcement hamper private investment and foreign aid.,of%20%2D1.80%20percent%20in%201952.

Riaz Haq said...

Severe dollar crisis hobbles Bangladesh businesses | Business and Economy News | Al Jazeera

Severe dollar crisis hobbles #Bangladesh businesses.The #import-dependent nation is facing #economic hardship in the wake of #Russia’s invasion of #Ukraine as prices shoot up. #Hasina #Modi | Business and Economy News | Al Jazeera


Dhaka, Bangladesh – Spice trader Mohammed Enayet Ullah has made at least four attempts since November to open a letter of credit to pay for imports of cumin, cardamom and cloves, some of the most essential spices used in Bangladeshi cooking, only to be refused by banks due to a shortage of dollars.

Importers in Bangladesh need to open letters of credit with one of the country’s 61 scheduled banks to buy foreign goods and services. It is essentially a financial contract issued by an importer’s bank that guarantees payment to the seller in dollars. In case a buyer doesn’t pay up, the bank has to take on the liabilities.

But there is a severe shortage of greenbacks in Bangladesh due to its dwindling foreign reserves and a sharp drop in the value of its taka currency against the dollar. In the past six months, Bangladesh’s foreign reserves have dropped below $32bn from $39bn while the value of the taka has fallen by 27 percent from 84 to the dollar to 107.

The South Asian nation has been facing severe economic hardship since Russia’s invasion of Ukraine a year ago. In its import-dependent economy, rising global fuel oil and other commodity prices have caused nearly double-digit inflation and depleted foreign reserves.

To protect the declining reserves, the government had stopped all non-essential imports and reduced the supply of dollars to commercial banks. This has not only forced banks to refuse new letters of credit applications but also has made their promised payments to foreign suppliers for previous imports uncertain.

Local media reported that at least 20 banks with negative balances in their foreign currency holdings could not make these payments.

According to Bangladesh Bank, the central bank, the number of new letters of credit slumped 14 percent year-on-year in the July-to-December period, and payments of those debts declined by 9 percent, indicating defaults.

These numbers, however, don’t fully convey the perils of medium-sized importers like Ullah.

Ullah owns the spice trading company Hedayet & Brothers, which usually imports half of its annual $2m of essential spices ahead of Ramadan, the Muslim holy month, in which local consumption at least triples in the South Asian nation. But now, with barely a month left until the start of Ramadan, he is worried that a failure to secure new supplies would put a big dent in his balance sheet.

“I will lose a huge business,” Ullah, who also acts as the president of the Bangladesh Spices Traders Association, told Al Jazeera, “Traders will be compelled to increase the prices of spices because of the increasing gap between demand and supply. Ultimately consumers will be the biggest losers.”

Fear of losing credit rating
Large businesses also have not been able to insulate themselves from the dollar crisis. In January, multiple ships carrying goods like sugar and cooking oil for the importer Meghna Group of Industries (MGI), a Bangladeshi conglomerate with $1.2bn in revenues, got stuck in Chattagram port for weeks as the guarantor Agrani Bank couldn’t make the payment to the foreign supplier due to a shortage of dollars. MGI, however, had paid the full amount to the bank for the products in local currency.


“In addition to direct IMF financing, such programmes have a ‘crowding in’ effect as other international lenders will become more amenable to finance the current account deficit of Bangladesh,” said Rahman, who is hopeful that will happen soon.

Riaz Haq said...

#India’s #Economy Looks Shaky Under the Hood.
The key driver of India’s economy—#domestic consumer #demand—is weakening after a brief post-#pandemic spurt . #Modi #G20Summit

India’s economy is losing steam in the one place that has been the South Asian nation’s strongest bulwark against a possible global recession: robust domestic demand.

India’s economy slowed further in the December quarter, figures released this week showed, as postpandemic pent up demand ebbed and the country’s manufacturing sector continued to weaken. Asia’s third largest economy recorded year-over-year growth of 4.4% last quarter, down from 6.3% in the September quarter.

Weakness in private consumption stood out the most. India’s private consumer spending, which comprises about 60% of India’s gross domestic product, rose just 2.1% year over year, compared with an 8.8% increase in the September quarter. It was mainly hurt by higher interest rates and elevated inflation. Slower growth in rural spending after some pandemic-era subsidies were cut could have also played a role.

Higher borrowing costs will probably continue to pinch pocketbooks, especially in urban areas, as the Reserve Bank of India remains laser-focused on reining in stubborn inflation. It has raised benchmark interest rates by 2.5 percentage points since May last year and will probably hike by another 0.25 point to 6.75% in April, squeezing household budgets further. Despite an aggressive rate-raising cycle, retail inflation jumped to a three-month high of 6.52% in January.

A closer look at other numbers in the GDP data also paints a worrisome picture. Import growth fell more sharply than export growth, again signaling weak domestic demand. And while fixed investment growth was a relative bright spot, it still slowed for the second quarter in a row.

Fizzling momentum at a time of high global economic uncertainty and tightening global financial conditions also spells trouble for the country’s monetary policy stance. A weak external environment wasn’t entirely unexpected, but the emerging evidence of rapidly slowing domestic demand makes the central bank’s job much harder. A heat wave or subpar monsoon could make things even more difficult by hitting agricultural output, and boosting food price inflation.

Nomura economists Sonal Varma and Aurodeep Nandi think markets are still significantly underappreciating the risks to India’s growth. They say the country’s growth cycle has peaked, and a combination of weaker global growth and tight domestic and global financial conditions could spell further trouble for exports, investment and discretionary consumption.

The International Monetary Fund still projects India will be the fastest-growing major economy in 2023—largely on the back of resilient domestic demand. The Indian government forecasts that India will grow 7% in the year ending in March 2023, and another 6.5% the following year.

Those numbers may turn out to be optimistic if private consumption doesn’t pick up the pace again soon.

Riaz Haq said...

In spite of their recent troubles, the Pakistanis (rank 108) are still happier than Indians (rank 126) and Bangladeshis (rank 119), according to the World Happiness Report 2023 released today.

The country rankings show life evaluations (answers to the Cantril ladder question) for each country, averaged over the years 2020-2022.

This is the Cantril ladder: it asks respondents to think of a ladder, with the best possible life for them being a 10 and the worst possible life being a 0. They are then asked to rate their own current lives on that 0 to 10 scale. The rankings are from nationally representative samples for the years 2019-2021.

World Happiness Rankings 2023 based on 3 year average among 137 countries

Finland Rank 1 Score 7.804

China Rank 64 Score 5.818

Pakistan Rank 108 Score 4.555

Bangladesh Rank 119 Score 4.282

India Rank 126 Score 4.036

Lebanon Rank 136 Score 2.392

Afghanistan Rank 137 Score 1.859

Happiness Gap Between Top Half and Bottom Half

Pakistan 4.427

India 4.64

Country name Ladder score Standard error of ladder score upper whisker lower whisker Logged GDP per capita Social support Healthy life expectancy Freedom to make life choices Generosity Perceptions of corruption Ladder score in Dystopia Explained by: Log GDP per capita Explained by: Social support Explained by: Healthy life expectancy Explained by: Freedom to make life choices Explained by: Generosity Explained by: Perceptions of corruption Dystopia + residual

Finland 7.804 0.036 7.875 7.733 10.792 0.969 71.150 0.961 -0.019 0.182 1.778 1.888 1.585 0.535 0.772 0.126 0.535 2.363

China 5.818 0.044 5.905 5.731 9.738 0.836 68.689 0.882 -0.041 0.727 1.778 1.510 1.249 0.468 0.666 0.115 0.145 1.666
5.818 0.044 5.905 5.731 9.738 0.836 68.689 0.882 -0.041 0.727 1.778 1.510 1.249 0.468 0.666 0.115 0.145 1.666

Pakistan 4.555 0.077 4.707 4.404 8.540 0.601 57.313 0.766 0.008 0.787 1.778 1.081 0.657 0.158 0.511 0.141 0.102 1.907

Bangladesh 4.282 0.068 4.416 4.148 8.685 0.544 64.548 0.845 0.005 0.698 1.778 1.133 0.513 0.355 0.617 0.139 0.165 1.361

India 4.036 0.029 4.092 3.980 8.759 0.608 60.777 0.897 0.072 0.774 1.778 1.159 0.674 0.252 0.685 0.175 0.111 0.979

Lebanon 2.392 0.044 2.479 2.305 9.478 0.530 66.149 0.474 -0.141 0.891 1.778 1.417 0.476 0.398 0.123 0.061 0.027 -0.110

Afghanistan 1.859 0.033 1.923 1.795 7.324 0.341 54.712 0.382 -0.081 0.847 1.778 0.645 0.000 0.087 0.000 0.093 0.059 0.976