Haq's Musings: HPI

Wednesday, October 3, 2012

Pakistanis Rank High on Happy Planet Index

Pakistan ranks 16th among 151 countries of the world on the Happy Planet Index (HPI) 2012, slightly behind Bangladesh in 11th place but well ahead of India in 32nd spot.

Earlier, Gallup 2012 Wellbeing survey reported that 20% of Pakistanis say they are "thriving", down from 32% last year. However, the report also showed that more of them are still better off than their neighbors in Bangladesh (16% thriving) and India (11% thriving). The number of those "thriving" increased in Bangladesh by 3% and declined in India by 6%.

Here are some of the possible reasons:

1. 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.

2. Rising consumption of durables (cars, motorcycles, tractors, Appliances) and non-durables (FMCGs or fast-moving consumer goods) as well as increasing cement sales are indicative of the underlying strength of the economy.

3. Pakistan's undocumented economy is continuing to thrive as seen in packed shopping malls and restaurants.

4. There are double digit increases in cash remittances flowing in to Pakistan from the world's seventh largest diaspora, rising 21.45 percent to $9.73 billion in the first nine months of the 2011/12 fiscal year.

5. Karachi stock index is booming, hitting new 4-year highs. Share prices are driven by healthy profits and foreign buying, making KSE-100 the third fastest growing index in the world.

6. Even the preliminary official estimates 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.

7. Preliminary estimates are showing that poverty rate in Pakistan has declined from 17.2 per cent in 2008 to slightly over 12 per cent in 2011.

The Gallup survey confirms that only 28% of Pakistanis have confidence in their national government. In my view, it stems from the obvious failure of the state in delivering basic services such as rule-of-law, security and electricity to the people . The best way to improve the wellbeing of the people is to improve governance, reduce corruption and persuade people to pay taxes to give the state more resources.

Coming back to HPI 2012, the Happy Planet Index website says that "the new HPI results show the extent to which 151 countries across the globe produce long, happy and sustainable lives for the people that live in them." "The overall index scores rank countries based on their efficiency, how many long and happy lives each produces per unit of environmental output", it adds.

There are three components of HPI – life expectancy, experienced well-being and Ecological Footprint - that each country is measured on. The scores for each component are color-coded green (good), yellow (middling) and red (poor). An additional color-code deep red is used for countries with poor score in one of the three components of overall HPI score.