How well Pakistanis have done in the last 60 years?
This is a question often posed in our chai parties, or any gathering of sorts. People seem to be so negative about Pakistan that we need to provide them a reality check. This check can be accomplished using empirical as well as formal methods. I call the empirical method as “border test”, and one of the possible formal methods is “budget factor”. The following essay elaborates on the two and then suggests some examples for Pakistan’s economic future.
Border test
What has a “border test” anything to do with Pakistan? Just to help you out, Look across Canada US border and you will see somewhat similar living. No border jumping, no illegal aliens dying to get in. Look at US Maxican border and situation is different.
This is what I call “border test”. This is the most effective and true test to compare Pakistan with its neighbors and you do not need a degree from Harvard to figure this one out.
I simply ask you to stand on the border and look at your neighboring areas all around Pakistan. That needs real work instead of cut and paste job from some Gross Domestic Product (GDP) numbering mumbo jumbo.
People just criticize Pakistan only for criticism sake. They say Pakistan is “far behind” compared to his “peers”. The best peers for anyone are his immediate neighbors. So I ask you to perform the border test and look for answers for the following:
Do you find 100 story sky scrappers on the other side of Sindh border?
Do you find better and shinier airports and mansions on the other side of Punjab border?
Do you see Iranian Balochis flying private jets on the other side of Balochi border?
Do you see canals filled with milk and honey on the other side of Sarhad border?
It doesn’t matter if India is big or small. If they are governing their territories better, it should have shown up in the last 60 years. If Afghanis were doing better job in governing their people, it should have shown up in 60 years. Same way if Iranians were better at managing their Balochistan, it must be evident after 60 years of Pakistani existence.
Pakistan’s critics must show some documentary evidence or go back and do more homework. I hate whiners especially those who whine about Pakistan.
Why GDP is not a good criterion to compare Pakistan with her neighbors
As far comparing Pakistan on per capita GDP, it is helpful to look at the numbers broadly rather than focusing on the absolute number because of different accounting methodologies, assumptions, base year etc. for example it cant be concluded that a country with per capita GDP of $900 is much better off than a country with per capita GDP of $930. What can be ascertained is that both countries would enjoy fairly similar standard of living which would be lower than that of a country with per capita GDP of say $1,500. [Thanks to fellow guppies for this paragraph]
Also important to remember that area now Pakistan was not exactly and industrial hub before partition. Fast forward to current times and Pak is now one of the biggest cotton, wheat and dairy producers in the world. And given the poverty in the rural areas and population dependent on agriculture, its very important for Pak to pay attention to this sector rather then getting caught in some sort of phony economic competition with India.
Annual Budget is a better metric that GDP
I’d dare to add different criterion that is relatively better (and hence realistic) for comparing different economies. It is the annual budget of a country. Yes there is a fudge factor in budgets as well so one has to take it with a grain of salt. However the fudge factor in annual budgets is relatively small compared to the GDP and other measures. This is due to many reasons:
- Budget numbers are small compared to GDP so hera phairy is smaller as well.
- Budget deals with revenues and expenses divided in specific categories
- Budget numbers are only for one year and must be updated every year at a predetermined time.
So a budget per person for country is a better measure about the state of economy compared to other measures.
Here are some examples of budget based comparisons (the figures are available on many sources such as CIA factbook).
Most of these numbers (income or expenses whichever is larger and rounded) are from 2006
- American budget is roughly $2660 billion / population 300 million
- Japanese budget ………….. $1650 billion / population 130 million
- Pakistani budget…$26 billion /… 160 million
- Indian budget …$145 billion/… .1,130 million
- China …$490 billion/…1,322 million
- Bangladesh $9 billion/… .150 million
**Budget factor: **
Budget/population (larger number means the better economy and higher taxes)
- USA ……..= 8.87
- Japan……. = 12.69
- Pakistan ….= 0.16
- Indian …= 0.13
- China……. = 0.37
- Bangladesh = 0.06
Times Pakistani budget (more than 1 good, less than 1 not good)
- USA = 54.56
- Japan = 78.11
- Pakistan = 1.00
- India = 0.79
5.China = 2.28
- Bangladesh = 0.37
It simply shows that in future we have to do what Japanese have been doing since the end of WWII. Study them, copy them and our budget factor will soon be 78 times where we are now. This translates to our budget as whopping $2 trillion a year. Think about the wonders this level of budget could do our standard of living, our defense forces, our schools, and our road infrastructure.
However we must not do what India is doing. Their budget factor is 21% lower than Pakistan’s. And never ever do what Bangladesh has done, they are 63% lower than Pakistan’s.
Just for the sake of discussion, if we do what China is doing, we’ll roughly double our budget. That will show up as our budget to be around $50 billion a year.
So it is up to us to follow Japan, or may be China. But never India or Bangladesh (until Indian or Bangladesh ratio is more than 1).
Can we copy anything from our neighbors especially India?
Yes off course. Indians are blessed with few things that Pakistan should copy. Economy however is not one of them.
Here are India’s strengths.
- Indian nationalism (for internal cohesion at the expense of minorities)
- Indian humility (nice people with sidways shaking heads)
- Indian mega-industrialist dynasties (Tata, Birla, Mittels and the list goes on)
- Indian army as it is an exact replica of the Pak army.
Indian show-shaw-lism (socialism) and secularism are pathetic so I didn’t mention them.
Bottom line is that Pakistanis should be proud of what they have ( Pakistani mega-farmers, one of the finest armies in the world), and Pakistan’s prosperity that puts every neighbor to shame. Even Chinese province adjacent to Pakistan is not much better than Pakistani side. However Pakistani side is much more open.
Dear readers, you can see I have presented both simple and complex comparisons. In summary we should admire Pakistan for what it has, and strive to get what it doesn’t have. That’s what I call constructive attitude (instead of whining all the time - Mar gayee main baajee mar gayee).
p.s. This essay came to be what it is now thanks to the discussions in gs. So thanks to everyone who either critiqued it or contributed in it.
