Pakistan has become a Jurassic park: Justice Markandey Katju

[CEO1]

Re: Pakistan has become a Jurassic park: Justice Markandey Katju

@Zafra

You do realize you Pakistan is 27th in real terms when it comes to PPP right? What does that show about income and purchasing power. And of course we have limited man power. A vast majority of our labour force is unskilled. Its not even semi-skilled or skilled. Unlike the ASEAN nations, India, China or many other at our medium economic level.

How can you use the PPP as true indicator of an economy? PPP measures the absolute. It is a tool purely to show general differences between different countries. Pakistan has higher PPP than most European countries, does that mean Pakistan is better? Frankly, it’s a poor indicator to determine if one country is better than another. The issue regarding the skill set of labour is a macro failure by Pakistan however, India, Bangladesh also have large workforces which are poorly trained. Absolutely and relatively.

@Zafra

Egypt, Tunisia are more economically more viable? Do please explain how that is true. I would love to see that it terms of agriculture, industry and services.

Egypt is 79.7% - Egypt Government Debt To GDP
Tunisia is 46.3 - Tunisia Government Debt To GDP
Lebanon is 137.1 -List of countries by government debt - Wikipedia

All 3 of the countries you have listed have far better GDP per capita ratios than Pakistan. Tunisia even has lower debt to gdp ratio than Pakistan. According to Legatum Institute which measures prosperity Pakistan ranks 132/142. Take a look http://www.prosperity.com/Ranking.aspx

In terms of the breakdown of the different sectors, Pakistan is a large producer of agriculture no doubt but that doesn’t necessarily mean its economically strong. In fact services is the largest and most important sector. What is your point? That these countries can’t feed themselves? If I remember correctly if anyones population struggles to feed itself is Pakistan.

@Zafra

So yeah we are much better off then some of these countries. Our GDP to debt ratio is better than most countries in our economic bracket that are not oil producing nations.

Well this has nothing to do with oil producing countries. The fact still remains Pakistan economy is weak. Fluctuating oil prices puts intense pressure on Pakistan and its reserves. Which stand at $9bn. “Pakistan’s state bank currently has about $9 billion, enough to cover about two months’ worth of imports, if cash deposits in private dollar accounts are not counted” IMF. Pakistan spends 35% of its total budget servicing its debt. What does that tell you? It’s strong? lol. Now, they could try to collect more revenue which at the moment stands at 13-14% of gdp but this is again a political failure and further shows instability.

@Zafra

If you are gonna complain about GDP to Debt ratio Austria is at 72.9. Bahrain is 75. Belgium is 98.7. So does that mean Austria, Bahrain and Belgium are weak economies? Hardly.

Maybe those countries have higher debt to gdp but you need to consider their revenues. They’re economies are much more mature and if they increase tax slightly they will make up their losses. They have strong economic and political bases. Pakistan on the other hand has a weak economy, politically constrained and socially out of sorts. It’s more than just the economy. It’s life in general in Pakistan.

@Zafra

Have you been paying to the news of currency wars recently. A weak currency is extremely good for export focused economies like Pakistan. They make our products cheaper. Basic economics.

Congratulation on your knowledge of basic economics but let me explain why your theory in this context doesn’t work or has minimal impact.

Firstly, weak currencies benefit those who export heavily. (China etc) Pakistan on the other hand exported $25bn worth of products. 10% of GDP (nominal)/ 0.4% PPP. This information tells me that Pakistan is not a large exporter relative to its own GDP. It however imports about $40bn. Much larger than exports. Now, this shows me that Pakistan is likes to import more than it exports. Thus if the currency is weak it is going to hurt those who import rather then help those who export. Understood? This is why weak currency is not helpful. I suppose the only negative aspect is the balance of payments as imports exceed exports but apart from that you’re wrong.THIS IS BASIC ECONOMICS.

Thanks.