ADB Reports Pakistan's Middle Class Larger Than India's

[muse]

Considering the huge population in India is it even fair to compare Pakistan and India? It is usually easier for countries with smaller population to do better in areas of poverty. Mr Haq always makes this mistake of comparing India and Pakistan which is not correct. For one, Pakistan is no better when it comes to poverty..if people here think its better than India so they are better off..well what can I say?

Friends, Whenever we have had a conversation about topics suchs as defence spending Indian friends point to their spending as a percentage of their GDP -- When we talk poverty, as we did in a recent thread by Mr. Haq, similarly Indian friends preferred to talk about percentages and not total numbers -- The thing to remember is that these are just facts, there is no good, bad or getting angry or embarassed by such things - facts, just are not ammenable to those kinds of petitions.

A question any Indian forum mamber may choose to respond to :

Why, EXACTLY WHY, are some Indian forum members so bent out of shape over this ADB finding?? To read the posts of some Indian members it's as if someone has gone after something very precious to them - what the heck is all that about??

 

[Hulk]

I have got very good analogy for RH analysis.
My nephew showed me his report card, he got 98% in maths but when I asked him questions he knew nothing. On the other hand my daughter got 88% but when you ask her questions she almost know everything.
The questions I asked him was 4 * 4 he said 8. 4 * 5 he said 9.
IMO My daughter is way better but some people just look at reports and ignore ground realities.
By the way RH when will you reply to my question, will it be today?

 

[magg]

i don't know about how much tweaked and misinterpreted are the facts, but Pak seems to need money after every few months atleast since 2008. It's economy remains in shambles and without any foreign aid looks to just fall apart. Moreover do remember that how much poor India is , in the end Pak got $5 million from India.

 

[Kyusuibu Honbu]

It is because the situation has so far "never gone volatile " that India has such deep poverty and hunger and absence of social justice.

Good Observation.
Had Tienanmen protests not taken place the China of today would be very different.

The best hope for the poor in India does not lie in stability, but in a dramatic change to alleviate their serious deprivations.

Sad fact is by the end of this decade they won't see any such "dramatic changes" or atleast by early 2015.

Maybe the Maoists will eventually help change it for the better for India's poor.

Maoist have lost any intellectual support they had in regard with the recent incidents in rural and urban circles,My state Andhra Pradesh in the last 5 years has seen a dramatic drop in Maoist-Naxalite activity ,i guess the same will follow for the other states as political support is also dropping.Eventually with full political and civilian support for Govt military action might extinguish it,

So i don't have much hopes on the Maoist movement.

 

[RiazHaq]

Good Observation.
Had Tienanmen protests not taken place the China of today would be very different.


Sad fact is by the end of this decade they won't see any such "dramatic changes" or atleast by early 2015.


Maoist have lost any intellectual support they had in regard with the recent incidents in rural and urban circles,My state Andhra Pradesh in the last 5 years has seen a dramatic drop in Maoist-Naxalite activity ,i guess the same will follow for the other states as political support is also dropping.Eventually with full political and civilian support for Govt military action might extinguish it,

So i don't have much hopes on the Maoist movement.

There has to be a trigger for awareness and change. I think Maoists provide that in India for now, in the absence of any other similar political or social activism.

 

[majesticpankaj]

i have a questions to ask..

why pakistan per capita income is lower than india ?? since india has so much poverty and having so small middle class. on the other hand pakistan has little poverty and a big middle class.

hoping to get answer from Mr. Haq, since he is a economist

 

[Kyusuibu Honbu]

buddy dont we have our share of problems ?? having a closed economy before 1991, maoist problem, illiteracy problem, corruption problem, population problem, terrorism ?? do you think pakistanis are working for free??

We do, but despite problems current situation matters,also those mentioned above are common to both nations.

 

[inddef]

Why, EXACTLY WHY, are some Indian forum members so bent out of shape over this ADB finding?? To read the posts of some Indian members it's as if someone has gone after something very precious to them - what the heck is all that about??

my opinion is that most indians don't realize the sheer magnitude of the problems facing india.

i for one do realize how big a challenge this country faces.

i am not very optimistic about these problems getting solved myself usless the electorates wake up and select growth minded governments at the state level. there is some horrible governance at the level.

i see rapid urbanization in the well governed states as the only ray of hope to pull the rest of the country along.

that said, it is still unfair to compare india to pakistan and i don't do that either way. just UP has bigger social welfare problems to tackle than all of pakistan

 

[muse]

I'm with you on that and it was confirmed to me on the previous poverty thread by Mr. Haq - I realized that most of the indian posters hadn't a clue, they had to google things up -- so, yes, I am very much with you on the question of the size of the problem - but there is a silver lining in there, which is the size of the ambition to be rid of the problem - Silly stuff like "our poor are not as poor as your poor" is just that silly stuff.

Now, can any Indian can please explain why they are hot, so inflamed, so opposed to the information the ADB has released and which Mr. Haq has been kind enough to present as a thread?? How can such responses as we have seen by Indian posters be made sense of, given that the information is from the ADB?

 

[RiazHaq]

i have a questions to ask..

why pakistan per capita income is lower than india ?? since india has so much poverty and having so small middle class. on the other hand pakistan has little poverty and a big middle class.

hoping to get answer from Mr. Haq, since he is a economist

First, I am not an economist, but I do understand economics.

Second , Pakistan's per capita income in terms of nominal US dollars is about the same as India's...a little over $1000. The PPP calcs are not reliable as pointed out by the ADB's detailed ICP (Income Comparison Program) study published in 2008.

Third, the economic growth and income averages are not as important as income distribution for alleviation of poverty and growth of middle class.

India is a particularly skewed case. In spite of its deep and widespread poverty, India has more billionaires than most of the richest countries of the world.

 

[Patriot]

I am not sure why Indians are getting angry.These are cold hard facts from Asian Development Bank and i am sure as most indians are aware Asian Development Bank is not run by Pakistan.

 

[linkinpark]

Can't remember anything such happening. In fact, the numbers were fudged by current government to show a higher poverty rate compared to the actual rate.



Actually it completely adds up if you don't use such a narrow analysis.

Pakistan was had decent growth up until 2008 and the middle class grew considerably. Poverty was always not too high which helps.

When you use the phrase "virtually no industries to speak of", you're suggesting you have no idea about the ground realities. Pakistan has a decent sized IT industry, huge telecom industry, growing service industry, etc. Stop speaking out of your ***. I don't start things with people but when you speak so dismissively and disrespectfully, that too incorrectly but this post really deserves it.

An economy on the verge of bankruptcy? Again, we're stuck in WoT. And the fact that we accumulated a lot of growth previously allowed us to have a big middle class.

This is coming from a person whose country is known to fudge GDP growth rates, industrial data, crops produce, inflation, poverty -very rich indeed. Anyways, I'm going to post all the articles coming out of Pakistani media on the figure fudging in the past 10 years or so. There are a lot of articles. I hope muse will read it.

 

[linkinpark]

Caretakers see through cooked up growth​

Sunday, January 27, 2008
Body to study figure fudging by Aziz govt
ISLAMABAD: In a shocking development, the interim government headed by Muhammadmian Soomro has expressed no-confidence in the figures firmed up by the Shaukat Aziz government about various major economic indicators such as the GDP growth, major crops produce, inflation, poverty, and industrial data.

Quite disturbed with the flour crisis, energy crisis, and the economic data of FBS, particularly food inflation, employment and poverty figures, which mostly do not match with ground realities, Prime Minister Muhammadmian Soomro has constituted a high-powered committee to ascertain the accuracy, reliability and credibility of the data gathered by the Federal Bureau of Statistics (FBS).

"The economy about which the previous government used to make tall claims was exposed in the four-day wheel jam strike after the assassination of Ms Bhutto and the government has been compelled to readjust all economic indicators," a senior government official told The News.

The committee has been constituted with Deputy Chairman Planning Commission Dr Akram Shiekh as the head. The committee comprises Special Secretary to Finance Ministry Dr Ashfaq H Khan, Secretary FBS Asad Illahi, DG FBS SECP Chairman Raziur Rehman, and Secretary Ministry of Industries Shahab Khawaja.

When contacted, Dr Akram Sheikh confirmed the development and said that the prime minister had constituted the committee on quality figures about the economy headed by him in the last ECC meeting.

He said that primarily the committee had been tasked to bring unorganised industrial sector in the final figures about industrial growth estimates and to this effect, the Ministry of Industries had been directed to compile and capture the data about the unorganised industry across the country. To a question about the figures firmed up by the previous regime about the GDP growth, inflation, poverty and crops production, Akram Sheikh said the committee would start work on the said issues later. "However, it would take up the accuracy issue of the industrial data first."

In the terms of reference (ToRs) of the committee, a copy of which is available with The News, the assignment of the newly-constituted body is to appraise critically the input data of the FBS and assess the accuracy, reliability and credibility of various economic indicators.

The official said in the first meeting of the committee on quality FBS figures, it was decided that industrial data would now be collected by the Ministry of Industries, not the Federal Bureau of Statistics, arguing that the data collected by the FBS did not match the ground realities.

There is no denying the fact that the country experienced unprecedented food inflation that hovered around 14 per cent as per the FBS figures, but the ground realities speak of something different and according to independent economists, the food inflation stands above 20 per cent.

When contacted, Qaiser Bengali, a well-known independent economist, said the move to constitute a committee on quality figures about the economy was itself not less than a no-confidence in the credibility of the previous regime.

He reminded that he was highlighting how the government was manoeuvering and fudging the economic data since 2001. Qaiser Bengali said, although, the constitution of the committee was a good step in the right direction, but the main thing was to see the composition of the committee and how much credibility it commanded to fulfill its responsibility.

Bangali doubted that the committee comprising all government functionaries would come up to the expectation of the people by revealing the shocking disclosures in figure fudging that the previous government had committed just to show its economic output.

Donor agencies also, time and again in their various reviews of Pakistan's economy, have doubted figures of some economic indicators, but the previous government headed by Shaukat Aziz took on many donors for issuing such statements.The wheat produce claims of 23.5 million tonnes are also questionable keeping in view the wheat and flour crisis that has hit the country in a big way.

Many are of the view that most of the figures are manipulated to show maximum economic output. Efforts were made to seek the comment of secretary FBS Asad Illahi on the development, but he was stated to be in the Combined Military Hospital to look after his ailing son.

 

[linkinpark]

Aziz govt overspent Rs558bn, fudged figures: Dar​

Thursday, April 10, 2008
Macro-economic projections revised downward

By Mehtab Haider

ISLAMABAD: Holding the Shaukat Aziz government responsible for "figure fudging" and creating mess on the economic front, Finance Minister Ishaq Dar said that all findings would be tabled before parliament for action against those who violated their own Fiscal Responsibility Law.

The economic situation is so alarming that the government had to revise downward all macro-economic projections including GDP growth target from 7.2 per cent to six per cent, fiscal deficit target surged from 4.5 per cent of GDP to over six per cent, FBR target from Rs1025 billion to Rs990 billion, inflation going up from six per cent to 10 per cent, current account deficit up from 5.5 per cent to 10 per cent of GDP, possibility of raising basis points on Pakistan's issued bonds from 200 points to 600 basis points over LIBOR (London Inter-Bank Offering Rates) by June 30, 2008.

"The mismanagement of economy has resulted in overspending of Rs558 billion and if the government does not take corrective measures then fiscal deficit will touch 9.5 per cent of GDP by June 2008."

Ishaq Dar presented these startling and disturbing figures about Pakistan's economy at a press conference along with Information Minister Sherry Rehman here at the PM Secretariat on Wednesday.

He said that these figures would be presented before parliament, the National Assembly Standing Committee on Finance and the Public Accounts Committee for scrutiny of the facts where Shaukat Aziz and his entire team would be asked to explain this sad state of economy.

He said the caretaker government was also responsible for this mess, as they too took no step to control the situation. Instead, they hiked POL prices and power tariff. He also said that over 73.6 per cent population lived below poverty line, according to two dollar a day definition.

Flanked by Special Finance Secretary Dr Ashfaque Hassan Khan, Secretary Finance Dr Waqar Masood and Chairman FBR Abdullah Yousaf, Ishaq Dar said the government would take tough measures to put the economy back on the right track by rationalising the POL prices, focusing on agriculture and manufacturing sectors and tackling energy crisis through conservation for achieving the desired results.

To improve the economic situation, he said, the government would generate $2.5 billion from foreign inflows, reducing expenditure and by mobilising revenue generation from various avenues to revive the derailed economy.

The public debt, he said, touched new height during the last eight years. It rose to Rs 2946 billion from 1947 to 1999, but climbed to Rs5695 billion by June 2008, showing an increase of Rs2749 billion in the last eight years. "Those who claim to have broken the begging bowl have actually enlarged it," Ishaq Dar observed.

He said external debt has climbed to $42.5 billion from $37.5 billion in 1999 despite receiving significant inflows. He also said the credit rating of the country could also be downgraded.He said the growth in money supply (M2) is fuelling inflationary pressure as it is projected to grow by 19% till June 2008, resulting into CPI inflation exceeding 10% and food inflation 14%.

The money in circulation was Rs643 billion in 1999, which grew to Rs4065 billion by June 2007. It is projected that the money circulation will reach Rs4837 billion by June 2008. Answering a question about the strategy to reduce the fiscal deficit to 6per cent of GDP, he said that the decision on imposition of new taxes could be taken in the budget on the basis of progressive taxation. However, he said the POL prices could be rationalized and the cabinet would take a decision in this regard.

To another question about the officials who were part of the team of the previous regime and are still sitting with him, he said that the standing committees of the National Assembly, the Senate and the Public Accounts Committee have the right to summon any one to question about these figures.

He also outlined the coalition government's strategy to revive the economy, saying that the government would focus on hitherto neglected agriculture and manufacturing sectors in the months ahead.

 

[majesticpankaj]

I'm with you on that and it was confirmed to me on the previous poverty thread by Mr. Haq - I realized that most of the indian posters hadn't a clue, they had to google things up -- so, yes, I am very much with you on the question of the size of the problem - but there is a silver lining in there, which is the size of the ambition to be rid of the problem - Silly stuff like "our poor are not as poor as your poor" is just that silly stuff.

Now, can any Indian can please explain why they are hot, so inflamed, so opposed to the information the ADB has released and which Mr. Haq has been kind enough to present as a thread?? How can such responses as we have seen by Indian posters be made sense of, given that the information is from the ADB?

Mr.Muse thanks for the nice words.

Welcome in the world of ADB

now do a reality check for urself, the report is based on 2005 data, we all know that what happened after 2005, we had severe recession, but india and china remain largely unscratched. we achieved a good rate of 6.8 and 7.4 during recession apart from 9% growth.

now, i take you back to the ADB report.

http://www.adb.org/Documents/Books/Key_Indicators/2010/pdf/Special-Chapter-02.pdf

now i request you to pls visit this link and see page no 16 it has shown the projection for yr 2010, 2020 and 2030. now if you observe carefully, india's middle class population stood around 320 mn and pakistan at less than 85mn. 360mn would be like 28.3% . so from 21% to 28.3% rise within five yrs is phenomenal. along with that, the problems that you have faced it is highly unlikely that you achieve forecast. what do you say??