World Bank: Pakistan Risks Crisis

Society Pakistan & World Affairs
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Re: World Bank: Pakistan Risks Crisis

Brother, I am sure u know that u r joking :).

Fact is that if NS or BB would have been in power, today Pakistan would have become worse than somalia. Allah saved Pakistan by sending Musharraf who lifted Pakistan from getting bankrupt. Before Musharraf came to power, Pakistan was getting around 2 billion dollar plus aid every year that got stopped when martial law came, but in spite of all sanctions and obstacles Pakistan faced due to military rule and countries stopping all aid due to Pakistan not having civilian rule, Pakistan posted unprecedented growth and big reduction in absolute poverty (that started increasing after the death of Zia and kept increasing until Musharraf came to power).

Today Pakistan has around 22 percent people below poverty line when there were over 40 percent of people below poverty line in 1999 (there were around 32 percent below poverty line in 1988).

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Re: World Bank: Pakistan Risks Crisis

sigh 5 years onwards, people still do not under the very basic of economics. Lets recap some simple aspects. Firstly yes our economy has grown tremendously. But in what sectors? Agriculture. Why? Bumper crops. Not innovation. Not diversification. Its just overproduction. Nothing more.

Now the areas in which 90% of the world uses for export and growth is the industrial and services sectors. In Pakistan those are the most heavily taxed sectors are in no way internationally competitive due to such a high tax rate on their products and the raw materials on the products. That is the first aspect of mismanagement. In the past 9 years, Musharraf has not increased the industrial capacity, nor the technological backbone of our industrial sector. Nor has our services sector been given any aid in promoting services internationally.

The only sector that benefits from this help is the Military-Industrial complex, because Musharraf pockets money from such endeavours.

Now back to our stellar growth rate. The growth is amazing yes. But who benefits? The top 5% of the Pakistani establishment. You see since Ayub Khan's time the average farmers income has not increased compared to the world Average. While in Europe, US, Australia and other Agriculture heavy countries, the farmer is by far the richest and most heavily supported segment of the economy, ours still work for the "same price as before" (This is of course not literal, consider it taken in real terms and not nominal terms).

While Agriculture has been our mainstay for export for the past 30 to 40 years. How do you explain that? Simple. No trickle down affect. Lets use a real life example with the Pakistani rupee as the currency. Currently 40 kgs of wheat goes for 1,200 rupees - internationally. The internal (domestic) price following the recent announcements is roughly 600 rupees. Half the international price.

What happens is the landlords - the 50 odd families that function as our "democratic leadership" buy the wheat at the local price and sell it internationally to make a hefty profit. This happens in all economies. It is not new. The difference is that the profit eventually trickles down to the farmer in the form of new machinery provided, innovative techniques and other aspects that make his job easier. In Pakistan that does not happen. Why? Because the landlord keeps the profit and makes the farmer work without any aid or innovation. That is why most people do not fall in to the trap of our stellar growth rate as the average person does not benefit.

India on the other hand got the growth rate/trickle down effect aspect down - for the most part. We need to follow a similar model. But that would require destroying the feudal land system and sending our agriculture sector to hell for a few years.

Now Saleem what is Pakistan's poverty line? Define it. Also what is the difference between the poverty line in 1999 and the one currently?

Can some one do commentary for me?
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Re: World Bank: Pakistan Risks Crisis

Brother, don’t worry, I do understand economics more than you can think :slight_smile: Only differecne is that I do not lie like Nawaz and his goons, especially Daar and Ahsan about economics.

Pakistan poverty line measured traditionally is 2400 calories of intake per adult population, now that level has increased. This level is highest amongst countries of South Asia except Sri-Lanka and is also higher than China. Anyhow, here is a bit of conservative estimates from Wikipedia (with references available on the site) of what happened on Pakistan poverty front during last 25 years.

Poverty in Pakistan, is a major economic issue. Nearly one-quarter of the population is classified poor as of October 2006.[1]](Poverty in Pakistan - Wikipedia). The declining trend on poverty in the country seen during the 1970s](1970 - Wikipedia) and 1980s](1980 - Wikipedia) was reversed in the 1990s](1990 - Wikipedia) by poor Federal policies and rampant corruption.[2]](Poverty in Pakistan - Wikipedia). This phenomenon has been referred to as the “Poverty Bomb”****[3]](Poverty in Pakistan - Wikipedia). The government of Pakistan has prepared an “Interim Poverty reduction Strategy Paper” that suggest guidelines to reduce poverty in the country. According to the world bank, the program has had tangible success, with the World Bank stating that poverty has fallen by 5 percent since 2000[4]](Poverty in Pakistan - Wikipedia).

As of 2006, Pakistan’s Human Development Index is 0.539, higher than that of nearby Bangladesh (0.530), which was formerly a part of Pakistan, but lower than that of neighbouring India (0.611).

Incidences of poverty in Pakistan rose from 22–26% in the Fiscal Year 1991 to 32–35% in the Fiscal Year [1999. They have subsequently fallen to 25-26% according to the reports of the World Bank and UN Development Program reports.These reports contradict the claims made by the Government of Pakistan that the poverty rates are only 23.1%[5]. The CIA factbook places the 2006 poverty rate at 24 percent. [6]

**So, thugs (NS and BB) increased poverty in Pakistan from 22 percent in 1991 to 35 percent in 1999. since 1999, under President Musharraf, Pakistan poverty rate has fallen from around 35 percent to 23 percent. **

**Did you notice the tamgha (award) given to thugs period? It is ****poor Federal policies and rampant corruption **that caused increase in poverty.

Now Pakistan is back to same position bar an overseeing, powerful and concerned Presidential office. I hope for the sake of Pakistan, that similar ‘poor federal policies and rampant corruption’ does not start again, though I fear that same thing may start again even though one mega corrupt element, that is BB is not there.

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Re: World Bank: Pakistan Risks Crisis

Saleem, if you do know about economics, then you know that you can sit 24 economists in a room and they will never agree. Secondly statistics lie all the time.

Now back to the poverty line. As you state yourself it is now 2400 calories. But it has changed. The poverty line of a country constantly changes and is never constant. Secondly the poverty line method is purely subjective. Tell me this with a poverty line of 2400 calories, how many people in Somalia are below the poverty line?

See purely subjective with no basis in objective mathematical analysis. Next year Gilani can say the Poverty line is 1800 calories. Yay! We just had more people move above the poverty line. Wonderful. What great economic development.

Now on to your statistics. Have we got increased FDI? Yes. Have we got increased investment? Yes. Have we got more cash than before? Yes.

Is it being felt and used by the common man on the street. And in real terms that is all that matters, if the standard of living of your people increases.

From your own link I quote:

[quote]
Pakistan is home to a large feudal landholding system where landholding families hold thousands of acres and do little work on the agriculture themselves. They enlist the services of their serfs to perform the labor of the land [24]. 51% of poor tenants owe money to the landlords. [25] The landlords' position of power allows them to exploit the only resource the poor can possibly provide: their own labor.
[/quote]

No trickle down affect at all.

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Re: World Bank: Pakistan Risks Crisis

CM, Saieem,

One other thing I have been thinking about when it comes to the subject of well being of people and the role of inputs.

We cannot always and in fact, in a increasing number of cases, conclude that increasing investments and expenses in some areas necessarily mean better outcome.

Just because US spends billions more now than 10 years ago in health care doesn't mean, the poorest strata gets better health care now.

Or just because India and Pakistan hire 1M more workers in the government that the services improve.

That is why measures of end result (such as the HDI) make more sense for this discussion than single dimension input numbers such as GDP, FDI etc.

Under that, we all have a looooong way to go

Now you may kiss the bride :D
Now you may kiss the bride :D
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Re: World Bank: Pakistan Risks Crisis

Well, you are right that there are some subjective matters economics would not have consensus, but broadly they could and would (except when some are not willing to accept obvious and keep hiding behind lies, like Daar and Ahsan)

[quote]
Now back to the poverty line. As you state yourself it is now 2400 calories. But it has changed. The poverty line of a country constantly changes and is never constant. Secondly the poverty line method is purely subjective. Tell me this with a poverty line of 2400 calories, how many people in Somalia are below the poverty line?
[/quote]

I have to look for Somalia calories intake figure that I do not have offhand, but nevertheless, I believe that it is much lower than 2400 calories. Actually, Pakistani figure of 2400 calories (I think today it is more than 2400) is much higher than many third world countries including China and India, and if one measures the poverty in Pakistan using criteria of poverty adopted in India or China then Pakistan would have much lower poverty level than even 23 percent.

[quote]
See purely subjective with no basis in objective mathematical analysis. Next year Gilani can say the Poverty line is 1800 calories. Yay! We just had more people move above the poverty line. Wonderful. What great economic development.
[/quote]

Well, one has to compare apple with apple, not banana. Poverty line for Pakistan in 1999 (I think 2350 calories) was lower than what it is in 2007, so one cannot say that present figures when compared to 1999 has any fiddling, rather one can say that if one uses 1999 creteria of poverty, figures would have been much better today. Actually, what I know, poverty line for calories intake during Zia time and during corrupt periods of 90s were same, and thus one can say with certainity that poverty increased a lot in Pakistan during corrupt periods of NS and BB.

[quote]
Now on to your statistics. Have we got increased FDI? Yes. Have we got increased investment? Yes. Have we got more cash than before? Yes.

Is it being felt and used by the common man on the street. And in real terms that is all that matters, if the standard of living of your people increases.

From your own link I quote:

No trickle down affect at all.
[/quote]

I do not agree that trickledown effect has not happened as one can see huge increase in consumptions of durables as well as consumables in Pakistan (both urban and rural areas), increase much more than population increase, and that shows that trickledown effect has happened, else mass scale increase in consumptions of durables and consumables would not have happened.

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Re: World Bank: Pakistan Risks Crisis


Yes Allah fell in love with Pakistan in 1999 only and sent Musharraf to save Pakistan, before that he hated Pakistan and sent Nawaz Sharif and Benazir. After 8-9 years of Musharraf's rule Allah hated Pakistan again and sent them back to power.

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Re: World Bank: Pakistan Risks Crisis

Well, that is irony of Pakistan :)

When Allah sees that Pakistan is going down the drain and is near to falling into the gutter, Allah saves Pakistan hoping that Pakistanis would learn, but unfortunately when situation reverts, things get repeated again and people start praying so saving happens again :)

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Re: World Bank: Pakistan Risks Crisis

I didn’t know Allah takes action with “hope”, I thought he was all knowing, thanks for info :k:

Altaf Hussain: desperate times
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Re: World Bank: Pakistan Risks Crisis

Just like how you are using the poverty line to define an economic concept?

Then I have one simple question, if the country is doing so well why take an economic data set that is nearly 30 years old? Its extremely easy to correlate an increase in the poverty line factoring in all the great economic development. Its rather simple. The poverty line is no way an indicator of the wellbeing of the average Pakistani. Hell people do not have electricity for gods sake, in major cities like Lahore and Karachi.

Now on to your statistics. According to SDPI reference the Pakistan Planning Commission, our Poverty line in 2002 was 700 rupees. Do you really think a Pakistani can live with 700 rupees a month?

Lets just quote the UNDP which said in 2002 120 million people in Pakistan earned less than 2 dollars a day. An increase from 1997, which had 72 million.

I am sorry but the fact that ata being twice as expensive as before does not indicate in anyway increased consumption of durables. It is an inflated figure with no real value. Also the trickle down affect is simply not linked to increased consumption of services. It is linked instead directly with increase in standard of living. Has the health standard of people increased? Has the education standard increased? Do more people have access to electricity (No just the opposite), or water (no just the opposite), hospitals etc? If we take the very basic levels of standard of living: Can people buy more food for the same amount of money they earn? Has their PPP increased? The answer again is No.

PPP has not increased. It has decreased. Thus no trickledown.