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In a decade Pakistan reduced poverty by 50%

Windjammer

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Pakistan has made substantial progress in reducing poverty since the turn of the century, declining from 64.3% percent in 2001 to 29.5% percent in 2014. 38% of all households are now considered to be middle-class, while another 4% are upper class.

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Hurricane-Strength Tailwinds Traverse Pakistan
Feb. 3.17 | About: Global X (PAK)


Steve Auger


Research analyst, special situations, long/short equity, ETF investing

Pakistan, known for unrest, coups and poverty, has been making progress in the areas of security, politics, and economics over the past few years.

Economic growth is showing signs of sustained recovery, driven primarily by initiation of the China Pakistan Economic Corridor.

Pakistan will be reclassified from MSCI Frontier Markets to Emerging Markets coinciding with the May 2017 Semi-Annual Index Review. History shows that inclusion in the EM Index causes large stock.



The proposed trade is to buy PAK and hold until May 2017, when the MSCI Pakistan Index is formally included in the MSCI Emerging Markets Index.



The trade has multiple risks, including the working-age population, protectionism, weather, tensions in the South China Sea, and political instability.

Pakistan has been making progress in the areas of security, politics, and economics over the past few years. The first democratic transition from one elected government to another occurred in 2013, with the Pakistan Muslim League-N of Nawaz Sharif forming the government, based on a platform of private sector-led economic growth. The country has since struggled through three tough years aided by low energy prices and government reforms, with the end result being a more stable economy and a bright outlook, more than can be said for many other countries.



Less poverty and increasing middle class



Pakistan has made substantial progress in reducing poverty since the turn of the century, declining from 64.3% percent in 2001 to 29.5% percent in 2014. 38% of all households are now considered to be middle-class, while another 4% are upper class.



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Source: WSJ.com



As per the Wall Street Journal:



[These middle class] households are likely to have a motorcycle, color TV, refrigerator, washing machine and at least one member who has completed school up to the age of 16, the study found. Official figures show that the proportion of households that own a motorcycle soared to 34% in 2014 from 4% in 1991, and a washing machine to 47% from 13% over that same period. These trends are also attracting international business.




http://seekingalpha.com/article/4042606-hurricane-strength-tailwinds-traverse-pakistan
 
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This what really matters. Reduction in poverty and increase in median income of families is the way to go.:tup:
Education, skill development and empowerment of women are the pillars of success for any country in today's world.
 
Don't put too much pressure on your brain, WSJ would be the last source to exaggerate these figures.
I am just questioning their methodology which is just projection and estimation based on the last recorded data couple of decades ago. Without a proper census everything is mere speculation.
 
I think we should only use 4$ a day povery benchmark that will reveal real poverty figure
The benchmark was raised from 1 dollar to 2 dollars just 2 years ago so I guess you will need to wait for few years (may be 20) for the world bank to set such benchmark.

I am not sure if they have data for 4 dollars a day as that is technically very high income for many households.

PS: You buy roti/naan for 10 cents in Pakistan and it costs even cheaper at home. Families with low income gets subsidy from approved utility stores and they even get subsidy from utility bills. I really get surprised to see the electricity bill of my workers in Pakistan who pay roughly 300-500 rupees for electricity as the first 300 units are heavily subsidized... compare it to my electricity bill of 20,000 to 35,000 rupees per month depending on the month
 
24 % is still high... hopefully in next 5 years it can go down to early 10s
 
Without any census in the last 2 decades, these numbers hold no ground
You are right but the estimation of population is very close

The NADRA records for example have data of almost every Pakistani and even the children's database is linked with each adult. So they have rough estimation of the population. There was a household census in 2011 if I am not wrong so they did have a brief input on expected population

In 1998 the population was around 135 million and the growth rate is estimated around 2% since then. The world bank usually estimate the population of Pakistan to be around 199 million something... and the IMF often calculate with 200 million.

If the population is below this estimate, it also means there is less poverty. I remember based on the 1 dollar a day data, the poverty was estimated to be around 13% couple of years ago and around 40% for 2 usd a day of earning... but its been a while now since the 2usd a day benmarch is reporting below 30% and 24% in 2016... the figures are very consistant based on the population estimates of around 200 million
 
You are right but the estimation of population is very close

The NADRA records for example have data of almost every Pakistani and even the children's database is linked with each adult. So they have rough estimation of the population. There was a household census in 2011 if I am not wrong so they did have a brief input on expected population

In 1998 the population was around 135 million and the growth rate is estimated around 2% since then. The world bank usually estimate the population of Pakistan to be around 199 million something... and the IMF often calculate with 200 million.

If the population is below this estimate, it also means there is less poverty. I remember based on the 1 dollar a day data, the poverty was estimated to be around 13% couple of years ago and around 40% for 2 usd a day of earning... but its been a while now since the 2usd a day benmarch is reporting below 30% and 24% in 2016... the figures are very consistant based on the population estimates of around 200 million
The census is around the corner. We will have credible data soon enough. If Pakistan population turns out to be less than 200 million then socioeconomic data will improve, but it has its own demerits.
 
The definition of middle class is not unique, some authors put it 5-100 dollars a day, others put 2 dollars to 100 dollars a day. Unless the middle class is defined explicitly, given percentage is debatable.
P.S Census is need of the hour. The new findings may shock many of us.
 

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