Pakistan has become a Jurassic park: Justice Markandey Katju

[Zafra]

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

Maybe not as bad as Somalia/Afghanistan but no better than most countries. Its quite easy to point to rankings but even you know they're primarily misconstrued. Pakistan is in a very bad position now. Weak economically, politically, socially. The reality is things are simply messed up to a point where its hard to be optimistic.

How are they misconstrued? After all these are World Bank figures? Bad is a relative term? Bad compared to who? Sudan? Nope. Somalia? Nope. Afghanistan? Nope. Syria? Nope. Lebanon? Nope. Egypt? Tunisia? Algeria? Mali?

You are welcome to your point of view but if you wish to assert that we are weak economically please back it up because the economic figures say otherwise and that includes a Balance of Payments default.

[CEO1]

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

How are they misconstrued? After all these are World Bank figures? Bad is a relative term? Bad compared to who? Sudan? Nope. Somalia? Nope. Afghanistan? Nope. Syria? Nope. Lebanon? Nope. Egypt? Tunisia? Algeria? Mali?

You are welcome to your point of view but if you wish to assert that we are weak economically please back it up because the economic figures say otherwise and that includes a Balance of Payments default.

ECONOMICS:-

A) Absolute GDP does not define a countries wealth B) The wealth distribution is highly unequal. ie 20% of the Richest people control 40% of total wealth.

I would accept gdp/gnp/gni per capita as a fair assumption. However, it's just an average.

You mentioned in an earlier post that Pakistani exports had increased with limited amount of manpower? Lol, where are you getting your figures. If I recall correctly, Pakistan has one of the largest labour forces in the world. In fact it is the 6th largest in the world. About 57 million people and still has enough workers to export to other countries particularly middle east.

Well if you want to compare relatively, which is the right way to go than surely, you would accept countries such as 'Lebanon, Egypt, Syria, Tunisia and Algeria' are far more economically stable than Pakistan.

Pakistan's debt to GDP ratio is at 60% far higher than the countries listed above. FX reserves stand at $13.5bn. In comparison Bangladesh has about $10bn even though it's GDP is half of Pakistan's. I won't even compare to the countries listed above.

Pakistan's economy grew at real rate of 2.4%. Far below other countries.
gdp per capita at: $1200 again nothing special. No real growth as inflation is currently at about 12% (eroding any purchasing power that was there)

Currency has depreciated by 55% since PPP took power.

POLITICS:-

Where do I even start with this? I mean just look at the PPP making alliances every other day with different parties. Collapse of the energy sector, leading to chronic energy shortages. PIA (probably the worst airline in the world and half of its fleet is grounded), Railways (What railways? There are no frickin trains that work and the ones that do are not much use to poor management of tracks etc), Terrorism (Pakistan government supports terrorism or is not doing much to solve it. You know the policy of kill and dump is their formula of resolving issues) I COULD GO ON FOREVER.

SOCIETY:-

Well everyone is busy blowing something up, to killing each other, or if they have enough time killing Shia and blowing up a mosque (killing two birds with one stone) The security forces are not in control or I should say have no control.

I'm tired now and besides, kinda bored. I hope this was enough to convince you Pakistan is not hunky dory.

Thanks

[Anwer_Pasha]

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

http://sphotos-b.ak.fbcdn.net/hphotos-ak-ash3/s480x480/602087_365722270208042_1725684656_n.jpg

[CEO1]

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

Awaits the dinosaurs.

[Zafra]

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

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.

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

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.

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.

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.

[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.

[Doppleganger]

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

GDP PPP is relative, so how is Pakistan ahead of europe in dollar terms?

[CEO1]

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

@Doppleganger

GDP PPP is relative, so how is Pakistan ahead of Europe in dollar terms?

PPP is only relative through exchange rates. Essentially, What a country can purchase from another country. Yes, this is done in a common currency which is the dollar. My answer was in relation to Zafra.

Here is a list of GDP PPP. List of countries by GDP (PPP) - Wikipedia, the free encyclopedia

It shows what a country can buy. It doesn’t mean one country is richer than another per se. As different country purchases and has different needs. Mostly, in reference to population, inflation and price of basket of goods.

Hope that helps.

[Zafra]

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

@CEO1

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.

Its amazing really. I guess all the leading world institutions when it comes to Macro-economics are wrong when they measure prosperity by these terms. But do tell me this. What would you consider a good indicator of an economy. You have already said real GDP not a true indicator. Nor is the fact that Pakistan has moved from 50 to roughly 46 on the list indicating a decent growth rate. Neither is GDP PPP.

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 The 2012 Legatum Prosperity Index

Yes but Egypt doesn’t. Neither does Austria or Bahrain. But by your point of view that makes them weak economies. That is your entire contention is that a high GDP to Debt ratio means its a weak economy.

Also if we go by GDP per capita ratios the Seychelles has a stronger economy then Pakistan. So does Barbados. And Latvia. And the Maldives.
List of countries by GDP (PPP) per capita - Wikipedia, the free encyclopedia

So you basically stating that these economies are stronger than Pakistan.

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.

Show economic data. Your opinion holds no value.

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.

Prove it with data. Quoting the Dawn doesn’t mean much. As for debt servicing. Just a question for you how much of Japan, Canada or the US budget is on debt servicing? If its higher than Pakistan by your contention that would mean they are also weak economies?

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.

So you agree that higher debt to GDP ratio is not a good indicator of economic viability? Good. You should have never brought up in the first place.

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.

Ah great. So that is why export led growth is hailed as a solid economic strategy. I guess many economists made that mistake and should not have consider it beneficial. More so since weak currency countries in the ASEAN region and Latin America also imported far more than they exported on a weak currency and benefited for years. Yeah those real life examples are wrong but you are right. Basic economics indeed.

Now can you state an indicator which you consider viable to judge the strength of a country.

So far you have stated: GDP is not a good indicator. GDP PPP is not a good indicator. Growth in GDP is not an indicator. And you have agreed that GDP to debt ratio is also not a good indicator. So what is?