I believe there is lot of confusion amongst some regarding Pakistan GNP at market price: Well, I believe that people should first understand what GNP is. GNP is GDP plus and minus external income. GDP is total output of the country that includes real growth as well as inflationary growth. When Pakistan government says that the economy growth was 7 percent, it does not mean that GDP grown by 7 percent, it only means that real growth in GDP was 7 percent and rest in GDP growth is inflationary growth.
Suppose that real growth was 7 percent and inflationary growth was 8 percent, than GDP in rupees would grow by 1.07 multiply by 1.08 = 1.1556 or 15.56 percent. Pre capita income is GNP divided by total population of the country, that includes men, women and childern of all ages (including old, young and infants, regardless of they are earning anything or not).
Now if rupees did not devalued in dollar terms, than growth in dollar GDP would be 15.56 percent too. If economy is weak and growth is low, than rupee would normally devalue and sometime it can devalue more than inflation, thus it is possible that there is real growth in the economy, still in dollar term GDP could declines. GNP is more important than GDP as it affects people living more, though GNP figure more or less follows GDP.
Here are some figures of Pakistan GNP growth during different periods under different rulers.
http://www.statpak.gov.pk/depts/fbs/statistics/national_accounts/table2.pdf
Pakistan budget comes in June and financial year starts 1st of July and ends on 30th June. Thus, performance of Pakistan during:
Ayub rule 1961 – 1969: (8 years- West Pakistan figures)
[All figures are for West Pakistan only. I am quoting figures for 8 years as I am using data available on above official site. Nevertheless, GDP growth for year 1959-60 was one of the lowest for Pakistan ever at 0.88 percent. Real GDP growth for years 1958 -1961 were:
http://www.statpak.gov.pk/depts/fbs/statistics/national_accounts/table1.pdf
1958-59 growth was 5.48 percent
1959-60 growth was 0.88 percent
1960-61 growth was 4.89 percent
Thus overall effect of these figures if included in final average figures of Ayub era, it would make Ayub era average growth lower. That is, growth from 1958-1969 was lower than growth from 1961-1969 I am quoting]
Total starting GNP July 1961: Rs 20.03 billion = 4.21 billion dollars (Ave ex rate for the yr Rs 4.76 to a dollar). It comes to per capita income of $ 91.
Total end GNP June 1969: Rs 41.95 billion = 8.81 billion dollars (Ave ex rate for the yr Rs 9.91 to a dollar). It comes to per capita income of $ 152.
That means in dollar terms, Pakistan GNP grew by an average of 9.67 percent a year and per capita income increased by an average of 6.62 percent a year during 8 years of Ayub rule (1961-69).
Yahya rule 1969 – 1972: (3 years -West Pakistan figures)
Total starting GNP July 1969: Rs 41.95 billion = 8.81 billion dollars (Ave ex rate for the yr Rs 9.91 to a dollar). It comes to per capita income of $ 152.
Total end GNP June 1972: Rs 54.37 billion = 11.42 billion dollars (Ave ex rate for the yr Rs 4.76 to a dollar). It comes to per capita income of $ 184.
That means in dollar terms, Pakistan GNP grew by an average of 9.03 percent a year and per capita income increased by an average of 6.58 percent a year during 3 years of Yahya rule.
[Note: Growth figure during Yahya rule is high, because of very high real GDP growth of 9.79 percent for year 1969-70, first year of Yahya rule. It was 15.15 percent in dollar terms. Real Growth rate for 1970-71 was 1.23 percent and 1971-72 was 2.32 percent]
Bhutto rule 1972 - 1977: (5 years)
Total starting GNP July 1972: Rs 54.37 billion = 11.42 billion dollars (Ave ex rate for the yr Rs 4.76 to a dollar). It comes to per capita income of $ 184.
Total end GNP June 1977: Rs 156.5 billion = 15.79 billion dollars (Ave ex rate for the yr Rs 9.91 to a dollar). It comes to per capita income of $ 213.
That means in dollar terms, Pakistan GNP grew by an average of 6.69 percent a year and per capita income increased by an average of 2.97 percent a year during 5 years of Bhutto rule.
Zia rule 1977 - 1988 (11 years)
Total starting GNP July 1977: Rs 156.5 billion = 15.79 billion dollars (Ave ex rate for the yr Rs 9.91 to a dollar). It comes to per capita income of $ 213.
Total end GNP June 1988: Rs 704.48 billion = 40.03 billion dollars (Ave ex rate for the yr Rs 17.6 to a dollar). It comes to per capita income of $ 395.
That means in dollar terms, Pakistan GNP grew by an average of 8.83 percent a year and per capita income increased by an average of 5.78 percent a year during 11 years of Zia rule.
Corrupt rule of BB and NS: 1988 - 1999. (11 years)
Total starting GNP June 1988: Rs 704.48 billion = 40.03 billion dollars (Ave ex rate for the yr Rs 17.6 to a dollar). It comes to per capita income of $ 395.
Total end GNP June 1999: Rs 2912.83 billion = 62.25 billion dollars (Ave ex rate for the yr Rs 46.79 to a dollar). It comes to per capita income of $ 468.
That means in dollar terms, Pakistan GNP grew by an average of 4.1 percent a year and per capita income increased by an average of 1.55 percent a year during 11 years of corrupts (BB and NS) rule.
[Note: By October 1999, dollar was already trading at around Rs 54.
This 11 year corrupt period was such that before this period started, Pakistan per capita income in dollar was higher than India, but at the end of this period, Pakistan dollar per capita income became lower than India. Now during last few years, Pakistan per capita dollar income has gone above India again.]
Musharraf rule 1999 - 2007 (8 years)
Total starting GNP June 1999: Rs 2912.83 billion = 62.25 billion dollars (Ave ex rate for the yr Rs 46.79 to a dollar). It comes to per capita income of $ 468.
Total end GNP June 2006 (after 7 years) Rs 7864.48 billion = 131.6 billion dollars (Ave ex rate for the yr Rs 59.76 to a dollar). It comes to per capita income of $ 847.
Total end GNP June 2007 is expected to be approximately Rs 8835 billion = 146 billion dollars (Ave ex rate for the yr Rs 60.5 to a dollar). It comes to per capita income of $ 925.
That means in dollar terms, Pakistan GNP grew by an average of 11.24 percent a year and per capita income increased by an average of 8.89 percent a year during last 8 years of Musharraf rule, from 1999 - 2007.
**Effect of rebasing: **It is one off effect that increased the GDP base value for that particular year. It does not affect percentage growth figure or overall economy substantially. In most countries rebasing is done every 5 years.
For instance: rebasing in Pakistan was done in 2000. Here is effect of rebasing:
GNP for year ending June 1999 was Rs 2912.83 billion. GNP for year ending June 2000 was Rs 3778.15 billion.
That is an increase of 29.7 percent in GNP between 1999 and 2000. But actual real growth was 3.91 percent and inflationary growth was around 4 percent between year 1999-2000. Thus overall growth should have been around 8 percent in GDP.
Anyhow, if one takes 2000 as start year for President Musharraf rule, affect of rebasing of GNP gets discarded from the figures. Thus, here is what happened since 2000 to 2007 (7 years):
Total starting GNP June 2000: Rs 3778.15 billion = 72.98 billion dollars (Ave ex rate for the yr Rs 51.77 to a dollar). It comes to per capita income of $ 531.
Total end GNP June 2007 is expected to be approximately Rs 8835 billion = 146 billion dollars (Ave ex rate for the yr Rs 60.5 to a dollar). It comes to per capita income of $ 925.
**That means in dollar terms, Pakistan GNP grew by an average of 10.41 percent a year and per capita income increased by an average of 8.25 percent a year during last 7 years of Musharraf rule, from 2000 – 2007 (that exclude rebasing affects) **
Thus, if one discards effect of rebasing, still the figures are as good as with effect of rebasing included. If one include expected next year growth, figures would become even better.
Expected total GNP by June 2008 is approximately Rs 10020 billion (if real growth for coming year is 7 percent and inflation is 6 percent) = 164 billion dollars (if Ave ex rate for the yr gets to Rs 61 to a dollar). That would be a rise of 13.4 percent in rupees or 12.3 percent in dollars (I believe that this increase is quite conservative, as most likely it could be higher).
President Musharraf period of rule gave fasted ever growth rate for Pakistan in dollar terms as well as in terms of real GNP and GDP growth rate. This period also represent Pakistan fasted per capita income growth rate in dollar terms as well as in real terms.
Now, I know that some would not understand that how come when growth is 7 percent, GNP would increase by 12.3 percent in dollars. Well, dollar GNP is actually rupees GNP converted to dollar. Rupees GNP increase has two components, one is real growth and other is inflationary growth. Normally rupees would devalue to take care of inflationary growth in the economy. But if economical growth and economical strength of a country become strong, as it happened during President Musharraf rule, rupee does not devalue and hence, dollar GNP grows faster.
Another thing many could not understand is that, when one talks about per capita income, that is not household income but it is per capita income. That means, if there are 10 people in a particular household (that includes olds, infants, earning and non-earning members of household), and their household income is average of the country, than it means their household income should be 10 times per capita income. That for Pakistan, in 2007 would be 9250 dollars a year or Rs 47000 per month household income if there are 10 people in the household with average per capita income.
Reality is that, there are people in Pakistan that are earning Rs 50,000 a month and their wife is also earning Rs 50,000 a month, but they have one kid and thus their household income is Rs 100,000 a month between 3 people. That is per capita income ofthe family is Rs 400 thousand or around 6667 dollars a year (household income is $20000 a year).
On the other hand, there are many who earn Rs 10,000 a month and their household do not have any other earner (most of the time intentionally as they do not let their wife go to work). On top of that, they would breed like rabbit and would have 15 children. They also look after their parents (who also bred like rabbit and saved no money, hence completely dependent on their kids). Thus with 19 people in household, their per capita is Rs 6315 per person a year (120000 divided by 19), or 105 dollars a year. Now, these people cry that they are poor and cannot afford to live.
What anyone can do about these rabbits as they are bound to stay poor whatever the condition of economy. Even if that would happen in USA, these rabbits would be poor and would be living on charity (Just imagine a guy with 15 kids and parent to look after, earning around 20000 dollars a year in USA with no other income, how would they live?). Unfortunately, Pakistan is a very poor and corrupt country with population of 160 million plus, but have less than 2 million tax payers, how can such country support rabbits breading like hell and have no skills to earn their living decently?
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