Pakistan Economy "Not in a Good Place"? Atif Mian's Gloom Justified?

[RiazHaq]

Pakistan Economy "Not in a Good Place"? Atif Mian's Gloom Justified?

Pakistani-American economist Atif Mian has recently analyzed Pakistan's economy in a series of tweets . He has said "Pakistan's economy is ...

www.southasiainvestor.com

Pakistani-American economist Atif Mian has recently analyzed Pakistan's economy in a series of tweets. He has said "Pakistan's economy is not in a good place", adding that the nation's "per capita income has not risen in 3 years (in fact down slightly)". He has particularly mentioned the country's "exaggerated external demand driven by its rentier economy", "flawed energy policy" and "a broken economic decision system" among the main causes for poor economic performance. Is Atif Mian's diagnosis correct? Is the official reported data Atif Mian using accurate? What is the current PTI government doing or not doing to correct the problems identified by Mr. Mian? Let's try and assess the situation.

Economist Atif Mian's Tweet on Pakistan Economy

Per Capita Income:
Pakistan's officially reported GDP and per capita incomes are grossly understated. It is based on the last economic census that was done from April 2003 to December 2003 and published in 2005. The last agriculture census was in 2010, and livestock census in 2006, according to Dr. Ishrat Husain, former governor of The State Bank of Pakistan. The country's economy has changed significantly since then, adding several new economic activities while others have diminished. For example, the Quantum Index of Large Scale Manufacturing (QIM) with 2005-06 base year gives a weight to textiles of 20.9% (Yarn 13.7 and cloth 7.2). But the textile industry has moved up to higher value added products as reflected in its exports. The value added textiles (non-yarn and non-cloth) now make almost 80% of the total textile exports. These changes are not reflected in current GDP calculations.
In its 2014 annual report, the State Bank of Pakistan talked about a number of new sectors that are either under-reported or not covered at all: "In terms of LSM growth, a number of sectors that are showing strong performance; (for example, fast moving consumer goods (FMCG) sector; plastic products; buses and trucks; and even textiles), are either under reported, or not even covered. The omission of such important sectors from official data coverage, probably explains the apparent disconnect between overall economic activity in the country and the hard numbers in LSM."
Bangladesh just rebased its GDP in 2020-21 to 2015-16. This has boosted its per capita income by double digits for every year since 2015-16. Bangladesh's per capita income for the 2015-16 fiscal year has now gone up to $1,737 from $1,465 in the old calculation. For the 2019-2020 fiscal, the per capita income has gone up to $2,335 from $2,024. The new GDP estimate covers 21 sectors, up from 15 sectors previously. India last rebased its GDP in 2015, a change that bumped up its per capita GDP by double digits. Nigeria's last rebasing in 2012 increased the size of its economy (GDP) by nearly 90%. Pakistan's current base year is 2005-6. Rebasing which is now long overdue will almost certainly increase Pakistan's per capita income by double digits.
In this age of big data, it is important for Pakistan to ensure that its bureaucracy at Pakistan Bureau of Statistics (PBS) keeps the national economic data as current as possible. PBS should release the results of the Census of Manufacturing Industries CMI 2015-16 and the finance ministry should rebase Pakistan's economy to year 2015-16 to better reflect the current economic realities. This data is extremely important for businesses, investors, lenders and policymakers.
Energy Mix:
It is true that Pakistan has relied on imported fossil fuels to generate electricity. The cost of these expensive imported fuels like furnace oil mainly used by independent power producers (IPPs) has been and continues to be a major contributor to the "exaggerated external demand driven by its rentier economy" referred to by Atif Mian. However, Pakistan has recently been adding hydro, nuclear and indigenous coal-fired power plants.

Pakistan Power Generation Fuel Mix. Source: Third Pole

Construction of a 1,100 MW nuclear power reactor K2 unit in Karachi has been completed by China National Nuclear Corporation, according to media reports. A similar reactor unit K3 will add another 1,100 MW of nuclear power to the grid, bringing the total nuclear power installed capacity of Pakistan to 3,630 MW (12% of total power) by the end of 2022. Hualong One reactors being installed in Pakistan are based on improved Westinghouse AP1000 design which is far safer than Chernobyl and Fukushima plants. In addition, Pakistan is also generating 9,389 MW (about 28% of total power) of low-carbon hydroelectric power in response to rising concerns about climate change.

Pakistan Exports Trend 2011-21. Courtesy of Ali Khizer

Exports and Overseas Remittances:

Pakistan is the world's sixth largest labor exporter with nearly 10 million Pakistanis working overseas. These workers sent home $31 billion in remittances calendar year 2021 (CY2021), up 19% from CY2020. In addition, Pakistan merchandise exports hit a new record of $28.3 billion in CY2021.

Pakistan Textile Exports Trend 2011-21. Courtesy of Ali Khizer

Exports of textiles that make up the bulk of Pakistani exports jumped 32% from $13.1 billion in CY2020 to $17.3 billion in CY2021. The country's technology exports soared 40% to $2.5 billion in CY2021. “So far, (the) country’s exports of non-traditional products, including information technology, have grown by 60 percent in the last four months," says Special Assistant to the Prime Minister on Commerce and Investment Abdul Razak Dawood.

Summary:

Professor Atif Mian's criticism of Pakistan's economy is partially valid but his pessimism is unwarranted. He is working with flawed data based on an economic census conducted more than 15 years ago. This data does not truly reflect current economic activities, per capita incomes and productivity. Pakistani bureaucracy needs to ensure that the underlying data for GDP and productivity is regularly updated to inform businessmen, investors, lenders and policymakers. Pakistan is also significantly boosting its foreign exchange earnings through exports and remittances from overseas workers. The issue of reliance on expensive fossil fuel imports is also being addressed by building more hydro, nuclear and renewable energy. At the same time, indigenous coal-fired power plants are also being added. Unlike Atif Mian, I do see light at the end of the tunnel.

Related Links:

Haq's Musings

South Asia Investor Review

Pakistan Among World's Largest Food Producers
Naya Pakistan Housing Program
Food in Pakistan 2nd Cheapest in the World

Indian Economy Grew Just 0.2% Annually in Last Two Years
Pakistan to Become World's 6th Largest Cement Producer by 2030
Pakistan's 2012 GDP Estimated at $401 Billion

Pakistan's Computer Services Exports Jump 26% Amid COVID19 Lockdown

Coronavirus, Lives and Livelihoods in Pakistan

Vast Majority of Pakistanis Support Imran Khan's Handling of Covid19 Crisis

Pakistani-American Woman Featured in Netflix Documentary "Pandemic"

Incomes of Poorest Pakistanis Growing Faster Than Their Richest Counterparts

Can Pakistan Effectively Respond to Coronavirus Outbreak?

How Grim is Pakistan's Social Sector Progress?

Pakistan's Insatiable Appetite For Energy

Trump Picks Muslim-American to Lead Vaccine Effort

COVID Lockdown Decimates India's Middle Class

Pakistan to be World's 7th Largest Consumer Market by 2030

Pakistan's Balance of Payments Crisis

How Has India Built Large Forex Reserves Despite Perennial Trade Deficits

Conspiracy Theories About Pakistan Elections"

PTI Triumphs Over Corrupt Dynastic Political Parties

Strikingly Similar Narratives of Donald Trump and Nawaz Sharif

Nawaz Sharif's Report Card

Riaz Haq's Youtube Channel

PakAlumni Social Network

Pakistan Economy "Not in a Good Place"? Atif Mian's Gloom Justified?

Pakistani-American economist Atif Mian has recently analyzed Pakistan's economy in a series of tweets . He has said "Pakistan's economy is ...

www.southasiainvestor.com

 

[Dual Wielder]

Great article, as always.

 

[ziaulislam]

Pakistan Economy "Not in a Good Place"? Atif Mian's Gloom Justified?

Pakistani-American economist Atif Mian has recently analyzed Pakistan's economy in a series of tweets . He has said "Pakistan's economy is ...

www.southasiainvestor.com

Pakistani-American economist Atif Mian has recently analyzed Pakistan's economy in a series of tweets. He has said "Pakistan's economy is not in a good place", adding that the nation's "per capita income has not risen in 3 years (in fact down slightly)". He has particularly mentioned the country's "exaggerated external demand driven by its rentier economy", "flawed energy policy" and "a broken economic decision system" among the main causes for poor economic performance. Is Atif Mian's diagnosis correct? Is the official reported data Atif Mian using accurate? What is the current PTI government doing or not doing to correct the problems identified by Mr. Mian? Let's try and assess the situation.

​

Economist Atif Mian's Tweet on Pakistan Economy

Per Capita Income:
Pakistan's officially reported GDP and per capita incomes are grossly understated. It is based on the last economic census that was done from April 2003 to December 2003 and published in 2005. The last agriculture census was in 2010, and livestock census in 2006, according to Dr. Ishrat Husain, former governor of The State Bank of Pakistan. The country's economy has changed significantly since then, adding several new economic activities while others have diminished. For example, the Quantum Index of Large Scale Manufacturing (QIM) with 2005-06 base year gives a weight to textiles of 20.9% (Yarn 13.7 and cloth 7.2). But the textile industry has moved up to higher value added products as reflected in its exports. The value added textiles (non-yarn and non-cloth) now make almost 80% of the total textile exports. These changes are not reflected in current GDP calculations.
In its 2014 annual report, the State Bank of Pakistan talked about a number of new sectors that are either under-reported or not covered at all: "In terms of LSM growth, a number of sectors that are showing strong performance; (for example, fast moving consumer goods (FMCG) sector; plastic products; buses and trucks; and even textiles), are either under reported, or not even covered. The omission of such important sectors from official data coverage, probably explains the apparent disconnect between overall economic activity in the country and the hard numbers in LSM."
Bangladesh just rebased its GDP in 2020-21 to 2015-16. This has boosted its per capita income by double digits for every year since 2015-16. Bangladesh's per capita income for the 2015-16 fiscal year has now gone up to $1,737 from $1,465 in the old calculation. For the 2019-2020 fiscal, the per capita income has gone up to $2,335 from $2,024. The new GDP estimate covers 21 sectors, up from 15 sectors previously. India last rebased its GDP in 2015, a change that bumped up its per capita GDP by double digits. Nigeria's last rebasing in 2012 increased the size of its economy (GDP) by nearly 90%. Pakistan's current base year is 2005-6. Rebasing which is now long overdue will almost certainly increase Pakistan's per capita income by double digits.
In this age of big data, it is important for Pakistan to ensure that its bureaucracy at Pakistan Bureau of Statistics (PBS) keeps the national economic data as current as possible. PBS should release the results of the Census of Manufacturing Industries CMI 2015-16 and the finance ministry should rebase Pakistan's economy to year 2015-16 to better reflect the current economic realities. This data is extremely important for businesses, investors, lenders and policymakers.
Energy Mix:
It is true that Pakistan has relied on imported fossil fuels to generate electricity. The cost of these expensive imported fuels like furnace oil mainly used by independent power producers (IPPs) has been and continues to be a major contributor to the "exaggerated external demand driven by its rentier economy" referred to by Atif Mian. However, Pakistan has recently been adding hydro, nuclear and indigenous coal-fired power plants.

​

Pakistan Power Generation Fuel Mix. Source: Third Pole

Construction of a 1,100 MW nuclear power reactor K2 unit in Karachi has been completed by China National Nuclear Corporation, according to media reports. A similar reactor unit K3 will add another 1,100 MW of nuclear power to the grid, bringing the total nuclear power installed capacity of Pakistan to 3,630 MW (12% of total power) by the end of 2022. Hualong One reactors being installed in Pakistan are based on improved Westinghouse AP1000 design which is far safer than Chernobyl and Fukushima plants. In addition, Pakistan is also generating 9,389 MW (about 28% of total power) of low-carbon hydroelectric power in response to rising concerns about climate change.

​

Pakistan Exports Trend 2011-21. Courtesy of Ali Khizer

Exports and Overseas Remittances:

Pakistan is the world's sixth largest labor exporter with nearly 10 million Pakistanis working overseas. These workers sent home $31 billion in remittances calendar year 2021 (CY2021), up 19% from CY2020. In addition, Pakistan merchandise exports hit a new record of $28.3 billion in CY2021.

​

Pakistan Textile Exports Trend 2011-21. Courtesy of Ali Khizer

Exports of textiles that make up the bulk of Pakistani exports jumped 32% from $13.1 billion in CY2020 to $17.3 billion in CY2021. The country's technology exports soared 40% to $2.5 billion in CY2021. “So far, (the) country’s exports of non-traditional products, including information technology, have grown by 60 percent in the last four months," says Special Assistant to the Prime Minister on Commerce and Investment Abdul Razak Dawood.

Summary:

Professor Atif Mian's criticism of Pakistan's economy is partially valid but his pessimism is unwarranted. He is working with flawed data based on an economic census conducted more than 15 years ago. This data does not truly reflect current economic activities, per capita incomes and productivity. Pakistani bureaucracy needs to ensure that the underlying data for GDP and productivity is regularly updated to inform businessmen, investors, lenders and policymakers. Pakistan is also significantly boosting its foreign exchange earnings through exports and remittances from overseas workers. The issue of reliance on expensive fossil fuel imports is also being addressed by building more hydro, nuclear and renewable energy. At the same time, indigenous coal-fired power plants are also being added. Unlike Atif Mian, I do see light at the end of the tunnel.

Related Links:

Haq's Musings

South Asia Investor Review

Pakistan Among World's Largest Food Producers
Naya Pakistan Housing Program
Food in Pakistan 2nd Cheapest in the World

Indian Economy Grew Just 0.2% Annually in Last Two Years
Pakistan to Become World's 6th Largest Cement Producer by 2030
Pakistan's 2012 GDP Estimated at $401 Billion

Pakistan's Computer Services Exports Jump 26% Amid COVID19 Lockdown

Coronavirus, Lives and Livelihoods in Pakistan

Vast Majority of Pakistanis Support Imran Khan's Handling of Covid19 Crisis

Pakistani-American Woman Featured in Netflix Documentary "Pandemic"

Incomes of Poorest Pakistanis Growing Faster Than Their Richest Counterparts

Can Pakistan Effectively Respond to Coronavirus Outbreak?

How Grim is Pakistan's Social Sector Progress?

Pakistan's Insatiable Appetite For Energy

Trump Picks Muslim-American to Lead Vaccine Effort

COVID Lockdown Decimates India's Middle Class

Pakistan to be World's 7th Largest Consumer Market by 2030

Pakistan's Balance of Payments Crisis

How Has India Built Large Forex Reserves Despite Perennial Trade Deficits

Conspiracy Theories About Pakistan Elections"

PTI Triumphs Over Corrupt Dynastic Political Parties

Strikingly Similar Narratives of Donald Trump and Nawaz Sharif

Nawaz Sharif's Report Card

Riaz Haq's Youtube Channel

PakAlumni Social Network

Pakistan Economy "Not in a Good Place"? Atif Mian's Gloom Justified?

Pakistani-American economist Atif Mian has recently analyzed Pakistan's economy in a series of tweets . He has said "Pakistan's economy is ...

www.southasiainvestor.com

Atiaf sahab is right

Pakistan per capital and growth have remained stagrant due to

1- lack of investment, poor savings and lack of external flows due to its juck credit rating due to multiple near defaults/IMF loans due to poor external sector(CAD)
And
2- lack of revenue mobilization due to inabaility to effectively tax and document most of the economy due to political and technical reasons

I dont see any of the above changing especially since these are widely unpopular and a new populist govt in 2023 will roll back any reforms that were tried (& mostly failed in execution) by the current govt
This is why despite huge potential foreign investors stay away from countries like pakistan & nigeria and are heading to vietnam, india and bemgaldesh

They know that public support is with elite corruption and fixing this is unlikely

 

[jupiter2007]

Tax collection and digitalization of economy must be the top priority of every government.
Government approved POS system has to installed in every big and small retailers and all shops in the malls.
Government must engage district government to introduce a system to monitor basic commodities prices.
New startup initiative by current government will slowly improve economy.
New improve and robust judicial system has to be introduced to resolve cases within a month instead of years and decades.
Government must work with tourists industry/local tourists organizations to sell tour packages (transportation, room and boarding and tour guide) to foreign tourists.
Pakistan introducing PR scheme will bring investment to Pakistan.

What are the benefit of digitalization?

1. It will make it easy to collect tax when the whole economy is digitalized.
2. If the whole economy become digitalized, it will be almost impossible to do the money laundering.
3. It will improve our business transactions and banking sector.
4. Pakistan should digitalize all land record to prevent land grabbers and Kabza mafia from taking over other land.
5. It will make it easy to do land reform when land records are digitalized.
6. Buying and selling of vehicles will be easy when the ownership record is digitalized.
7. Easy for government to hire if the background check process is digitalized.
8. If the Criminal record is digitalized then it will be easy to find criminals.

 

[313ghazi]

Gloom is a matter of spin/perception. I read his twitter thread and felt it was objective. What he wrote about the fundementals of our economy is correct.

The Pakistani economy can be seen as glass half full or glass half empty, it's a matter of perception. As mentioned by @RiazHaq there is loads of potential and the data is flawed too.

It's the responsbility of govt to correct data and to maximise potential.

A personal pet peave of mine is our energy policy. We are hugely wasteful in terms of energy use. We should be focused massively on renewable energy, it should be the backbone of our energy requirements and fossil fuels ought to supplement the shortfall. That is the energy policy we NEED to move to NOW.

 

[ziaulislam]

Tax collection and digitalization of economy must be the top priority of every government.
Government approved POS system has to installed in every big and small retailers and all shops in the malls.
Government must engage district government to introduce a system to monitor basic commodities prices.
New startup initiative by current government will slowly improve economy.
New improve and robust judicial system has to be introduced to resolve cases within a month instead of years and decades.
Government must work with tourists industry/local tourists organizations to sell tour packages (transportation, room and boarding and tour guide) to foreign tourists.
Pakistan introducing PR scheme will bring investment to Pakistan.

What are the benefit of digitalization?

1. It will make it easy to collect tax when the whole economy is digitalized.
2. If the whole economy become digitalized, it will be almost impossible to do the money laundering.
3. It will improve our business transactions and banking sector.
4. Pakistan should digitalize all land record to prevent land grabbers and Kabza mafia from taking over other land.
5. It will make it easy to do land reform when land records are digitalized.
6. Buying and selling of vehicles will be easy when the ownership record is digitalized.
7. Easy for government to hire if the background check process is digitalized.
8. If the Criminal record is digitalized then it will be easy to find criminals.

Everyone knows
That but this has no political support

 

[CrazyZ]

Gloom is a matter of spin/perception. I read his twitter thread and felt it was objective. What he wrote about the fundementals of our economy is correct.

The Pakistani economy can be seen as glass half full or glass half empty, it's a matter of perception. As mentioned by @RiazHaq there is loads of potential and the data is flawed too.

It's the responsbility of govt to correct data and to maximise potential.

A personal pet peave of mine is our energy policy. We are hugely wasteful in terms of energy use. We should be focused massively on renewable energy, it should be the backbone of our energy requirements and fossil fuels ought to supplement the shortfall. That is the energy policy we NEED to move to NOW.

Great points. Issues are there but solutions are also there....and things can be turned around (which is already in progress). Key civilian leaders as well as leaders in the military and state bank are focused on economic expansion and development more than ever. Past economic models pursued by PPP and PML are now broadly seen as defunct......and east Asian model is widely seen as the best approach. Energy industry is in transition.....but will be largely domestic with much room for expansion in the near future. Energy is a key factor in expanding productivity through mechanization and automation.....boost in productivity will boost GDP per capita.

Ziaulislam does bring up some good points......financial and investment sectors need to be modernized.

 

[peagle]

Pakistan Economy "Not in a Good Place"? Atif Mian's Gloom Justified?

Pakistani-American economist Atif Mian has recently analyzed Pakistan's economy in a series of tweets . He has said "Pakistan's economy is ...

www.southasiainvestor.com

Pakistani-American economist Atif Mian has recently analyzed Pakistan's economy in a series of tweets. He has said "Pakistan's economy is not in a good place", adding that the nation's "per capita income has not risen in 3 years (in fact down slightly)". He has particularly mentioned the country's "exaggerated external demand driven by its rentier economy", "flawed energy policy" and "a broken economic decision system" among the main causes for poor economic performance. Is Atif Mian's diagnosis correct? Is the official reported data Atif Mian using accurate? What is the current PTI government doing or not doing to correct the problems identified by Mr. Mian? Let's try and assess the situation.

​

Economist Atif Mian's Tweet on Pakistan Economy

Per Capita Income:
Pakistan's officially reported GDP and per capita incomes are grossly understated. It is based on the last economic census that was done from April 2003 to December 2003 and published in 2005. The last agriculture census was in 2010, and livestock census in 2006, according to Dr. Ishrat Husain, former governor of The State Bank of Pakistan. The country's economy has changed significantly since then, adding several new economic activities while others have diminished. For example, the Quantum Index of Large Scale Manufacturing (QIM) with 2005-06 base year gives a weight to textiles of 20.9% (Yarn 13.7 and cloth 7.2). But the textile industry has moved up to higher value added products as reflected in its exports. The value added textiles (non-yarn and non-cloth) now make almost 80% of the total textile exports. These changes are not reflected in current GDP calculations.
In its 2014 annual report, the State Bank of Pakistan talked about a number of new sectors that are either under-reported or not covered at all: "In terms of LSM growth, a number of sectors that are showing strong performance; (for example, fast moving consumer goods (FMCG) sector; plastic products; buses and trucks; and even textiles), are either under reported, or not even covered. The omission of such important sectors from official data coverage, probably explains the apparent disconnect between overall economic activity in the country and the hard numbers in LSM."
Bangladesh just rebased its GDP in 2020-21 to 2015-16. This has boosted its per capita income by double digits for every year since 2015-16. Bangladesh's per capita income for the 2015-16 fiscal year has now gone up to $1,737 from $1,465 in the old calculation. For the 2019-2020 fiscal, the per capita income has gone up to $2,335 from $2,024. The new GDP estimate covers 21 sectors, up from 15 sectors previously. India last rebased its GDP in 2015, a change that bumped up its per capita GDP by double digits. Nigeria's last rebasing in 2012 increased the size of its economy (GDP) by nearly 90%. Pakistan's current base year is 2005-6. Rebasing which is now long overdue will almost certainly increase Pakistan's per capita income by double digits.
In this age of big data, it is important for Pakistan to ensure that its bureaucracy at Pakistan Bureau of Statistics (PBS) keeps the national economic data as current as possible. PBS should release the results of the Census of Manufacturing Industries CMI 2015-16 and the finance ministry should rebase Pakistan's economy to year 2015-16 to better reflect the current economic realities. This data is extremely important for businesses, investors, lenders and policymakers.
Energy Mix:
It is true that Pakistan has relied on imported fossil fuels to generate electricity. The cost of these expensive imported fuels like furnace oil mainly used by independent power producers (IPPs) has been and continues to be a major contributor to the "exaggerated external demand driven by its rentier economy" referred to by Atif Mian. However, Pakistan has recently been adding hydro, nuclear and indigenous coal-fired power plants.

​

Pakistan Power Generation Fuel Mix. Source: Third Pole

Construction of a 1,100 MW nuclear power reactor K2 unit in Karachi has been completed by China National Nuclear Corporation, according to media reports. A similar reactor unit K3 will add another 1,100 MW of nuclear power to the grid, bringing the total nuclear power installed capacity of Pakistan to 3,630 MW (12% of total power) by the end of 2022. Hualong One reactors being installed in Pakistan are based on improved Westinghouse AP1000 design which is far safer than Chernobyl and Fukushima plants. In addition, Pakistan is also generating 9,389 MW (about 28% of total power) of low-carbon hydroelectric power in response to rising concerns about climate change.

​

Pakistan Exports Trend 2011-21. Courtesy of Ali Khizer

Exports and Overseas Remittances:

Pakistan is the world's sixth largest labor exporter with nearly 10 million Pakistanis working overseas. These workers sent home $31 billion in remittances calendar year 2021 (CY2021), up 19% from CY2020. In addition, Pakistan merchandise exports hit a new record of $28.3 billion in CY2021.

​

Pakistan Textile Exports Trend 2011-21. Courtesy of Ali Khizer

Exports of textiles that make up the bulk of Pakistani exports jumped 32% from $13.1 billion in CY2020 to $17.3 billion in CY2021. The country's technology exports soared 40% to $2.5 billion in CY2021. “So far, (the) country’s exports of non-traditional products, including information technology, have grown by 60 percent in the last four months," says Special Assistant to the Prime Minister on Commerce and Investment Abdul Razak Dawood.

Summary:

Professor Atif Mian's criticism of Pakistan's economy is partially valid but his pessimism is unwarranted. He is working with flawed data based on an economic census conducted more than 15 years ago. This data does not truly reflect current economic activities, per capita incomes and productivity. Pakistani bureaucracy needs to ensure that the underlying data for GDP and productivity is regularly updated to inform businessmen, investors, lenders and policymakers. Pakistan is also significantly boosting its foreign exchange earnings through exports and remittances from overseas workers. The issue of reliance on expensive fossil fuel imports is also being addressed by building more hydro, nuclear and renewable energy. At the same time, indigenous coal-fired power plants are also being added. Unlike Atif Mian, I do see light at the end of the tunnel.

Related Links:

Haq's Musings

South Asia Investor Review

Pakistan Among World's Largest Food Producers
Naya Pakistan Housing Program
Food in Pakistan 2nd Cheapest in the World

Indian Economy Grew Just 0.2% Annually in Last Two Years
Pakistan to Become World's 6th Largest Cement Producer by 2030
Pakistan's 2012 GDP Estimated at $401 Billion

Pakistan's Computer Services Exports Jump 26% Amid COVID19 Lockdown

Coronavirus, Lives and Livelihoods in Pakistan

Vast Majority of Pakistanis Support Imran Khan's Handling of Covid19 Crisis

Pakistani-American Woman Featured in Netflix Documentary "Pandemic"

Incomes of Poorest Pakistanis Growing Faster Than Their Richest Counterparts

Can Pakistan Effectively Respond to Coronavirus Outbreak?

How Grim is Pakistan's Social Sector Progress?

Pakistan's Insatiable Appetite For Energy

Trump Picks Muslim-American to Lead Vaccine Effort

COVID Lockdown Decimates India's Middle Class

Pakistan to be World's 7th Largest Consumer Market by 2030

Pakistan's Balance of Payments Crisis

How Has India Built Large Forex Reserves Despite Perennial Trade Deficits

Conspiracy Theories About Pakistan Elections"

PTI Triumphs Over Corrupt Dynastic Political Parties

Strikingly Similar Narratives of Donald Trump and Nawaz Sharif

Nawaz Sharif's Report Card

Riaz Haq's Youtube Channel

PakAlumni Social Network

Pakistan Economy "Not in a Good Place"? Atif Mian's Gloom Justified?

Pakistani-American economist Atif Mian has recently analyzed Pakistan's economy in a series of tweets . He has said "Pakistan's economy is ...

www.southasiainvestor.com

Very valid evaluation based on available facts

But, I think we all constantly fail to highlight an important fact, till that changes, Pakistan will continue to face challenges.

Pakistanis have a compulsive almost childish obsession of crying about corruption. Someone needs to tell them that corruption is a fact of life the world over, especially in developing countries, each is more corrupt then the other. But they still manage to develop.

Corruption is a contributing factor for lack of development, but it is not the paramount factor, not by far. When Pakistanis cry about corruption all the time, why would anyone invest in Pakistan.
The investor is thinking if they are crying about it, lets stay away, I'll invest in other countries. Well those other developing countries are just as corrupt, but unlike childlike Pakistanis, they do not cry about it all the time.

A secure environment and incentivised policy framework, combined with suitable infrastructure and trained workforce are far more important factors for development then the mere presence of corruption.

China, Bangladesh, Iran and so many other countries have managed to develop despite corruption. Time to let go of this ridiculous obsession.

 

[RiazHaq]

#Pakistan to burn more domestic #coal for #electricity. Work on 3rd phase of Thar Coal Block II mine is to begin this year at an estimated cost of $93 million. Annual production of lignite to grow from 3.8 million tons to 12.2 million tons by 2023. #CPEC https://asia.nikkei.com/Spotlight/E...urn-more-domestic-coal-despite-climate-pledge

Work on the third phase of the Thar Coal Block II mine expansion is set to begin this year at an estimated cost of $93 million, according to the Sindh Engro Coal Mining Company (SECMC), a public-private enterprise operating the mine since 2019 in the southeastern district of Tharparkar. The second phase of expansion is underway with the help of China Machinery Engineering Corp. and Chinese bank loans, in addition to local financing. The series of expansions will scale up the annual production of lignite from 3.8 million tons to 12.2 million tons by 2023.

The output from the second phase of expansion will feed two 330 MW coal-fired power plants being built under the $50 billion China Pakistan Economic Corridor projects, part of Chinese President Xi Jinping's flagship Belt and Road Initiative. The power plants are expected to come on line this year.

Lignite is brown coal with low calorific value due to high moisture and low carbon content.

The expansion of the Thar coalfields is aimed at curbing coal imports to ease a staggering current-account deficit made worse by soaring international commodity prices and shipping costs. Pakistan's current-account deficit ballooned to an unprecedented $9.09 billion between July and December last year, as imports continued to outstrip exports during the post-COVID economic recovery. Pakistan had to seek a $3 billion loan and a deferred payment facility on the import of petroleum products from Saudi Arabia last year to stabilize forex reserves.

In recent years, high volatility in international oil prices, soaring LNG prices and dwindling local gas reserves have spurred public-private spending, particularly Chinese investment, in Pakistan's coal power sector. Until now, four coal-fired power plants with 4.62 GW of total installed capacity have joined the grid, while another three plants with an aggregate capacity of 1.98 GW are expected to come online over the next two years -- all under CPEC. In addition, growing demand from cement factories banking on a global construction boom has tripled coal consumption over the last five years to 21.5 million tons per annum.

Consequently, the share of coal in Pakistan's import bill for the year ended June 2021 shot to 24% from over 2% in previous years, according to data from the Pakistan Bureau of Statistics. Currently, only the power plant at Thar Coal Block II is running on indigenous coal.

A spike in coal power generation is in line with global trends, where countries including China, the U.S. and India have turned to coal to meet heightened demand following the lifting of COVID-19 restrictions.

------------

Authorities contend that the expansion of Thar Coal Block II will reduce the price of indigenous coal from $60 to $27 per ton -- making it the country's cheapest power source and leading to annual savings of $420 million. Pakistan is currently importing coal at around $200 per ton.

"We are compelled to use this cheap source of energy because we cannot keep using dollars to run power plants running on expensive furnace oil and RLNG (re-gasified liquefied natural gas)," Sindh Provincial Energy Minister Imtiaz Shaikh told Nikkei Asia. "We would like to mix 20% Thar coal [in power plants running] with imported coal. Then we will move towards converting coal to liquid and coal to gas."

The cost of operating thermal plants has become punishing due to expensive fuel and the cost of diverting scarce freshwater, which leads to underutilization of the plants, said Omar Cheema, director of London-based renewable energy consultancy Vivantive.

 

[RIP Pak LAW]

Anyone remember his doomsday prediction about Pakistan's corona virus daily cases during first weeks of pandemic. He was tweeting all over the place by comparing Pakistan virus cases with Italy and US.

 

[CrazyZ]

Anyone remember his doomsday prediction about Pakistan's corona virus daily cases during first weeks of pandemic. He was tweeting all over the place by comparing Pakistan virus cases with Italy and US.

My opinion is that many vocal Pakistan's in west are left wing idiots that want to bring down the current order or are on the RAW payroll.....or both. Hussain Haqqani is another one.

 

[ziaulislam]

Very valid evaluation based on available facts

But, I think we all constantly fail to highlight an important fact, till that changes, Pakistan will continue to face challenges.

Pakistanis have a compulsive almost childish obsession of crying about corruption. Someone needs to tell them that corruption is a fact of life the world over, especially in developing countries, each is more corrupt then the other. But they still manage to develop.

Corruption is a contributing factor for lack of development, but it is not the paramount factor, not by far. When Pakistanis cry about corruption all the time, why would anyone invest in Pakistan.
The investor is thinking if they are crying about it, lets stay away, I'll invest in other countries. Well those other developing countries are just as corrupt, but unlike childlike Pakistanis, they do not cry about it all the time.

A secure environment and incentivised policy framework, combined with suitable infrastructure and trained workforce are far more important factors for development then the mere presence of corruption.

China, Bangladesh, Iran and so many other countries have managed to develop despite corruption. Time to let go of this ridiculous obsession.

No corruption is not fact of life
And no countries develop with wide spread corruption

Untill public support changes from "کرپشن پر ہمارا بی حق ہے " to "احتساب" pakistan will continue to suffer for some(while other will prosper)

No country in the world can develop with open corruption..pakistan is an exception we manage to linger on..it is a miracle of 21th century

#Pakistan to burn more domestic #coal for #electricity. Work on 3rd phase of Thar Coal Block II mine is to begin this year at an estimated cost of $93 million. Annual production of lignite to grow from 3.8 million tons to 12.2 million tons by 2023. #CPEC https://asia.nikkei.com/Spotlight/E...urn-more-domestic-coal-despite-climate-pledge

Work on the third phase of the Thar Coal Block II mine expansion is set to begin this year at an estimated cost of $93 million, according to the Sindh Engro Coal Mining Company (SECMC), a public-private enterprise operating the mine since 2019 in the southeastern district of Tharparkar. The second phase of expansion is underway with the help of China Machinery Engineering Corp. and Chinese bank loans, in addition to local financing. The series of expansions will scale up the annual production of lignite from 3.8 million tons to 12.2 million tons by 2023.

The output from the second phase of expansion will feed two 330 MW coal-fired power plants being built under the $50 billion China Pakistan Economic Corridor projects, part of Chinese President Xi Jinping's flagship Belt and Road Initiative. The power plants are expected to come on line this year.

Lignite is brown coal with low calorific value due to high moisture and low carbon content.

The expansion of the Thar coalfields is aimed at curbing coal imports to ease a staggering current-account deficit made worse by soaring international commodity prices and shipping costs. Pakistan's current-account deficit ballooned to an unprecedented $9.09 billion between July and December last year, as imports continued to outstrip exports during the post-COVID economic recovery. Pakistan had to seek a $3 billion loan and a deferred payment facility on the import of petroleum products from Saudi Arabia last year to stabilize forex reserves.

In recent years, high volatility in international oil prices, soaring LNG prices and dwindling local gas reserves have spurred public-private spending, particularly Chinese investment, in Pakistan's coal power sector. Until now, four coal-fired power plants with 4.62 GW of total installed capacity have joined the grid, while another three plants with an aggregate capacity of 1.98 GW are expected to come online over the next two years -- all under CPEC. In addition, growing demand from cement factories banking on a global construction boom has tripled coal consumption over the last five years to 21.5 million tons per annum.

Consequently, the share of coal in Pakistan's import bill for the year ended June 2021 shot to 24% from over 2% in previous years, according to data from the Pakistan Bureau of Statistics. Currently, only the power plant at Thar Coal Block II is running on indigenous coal.

A spike in coal power generation is in line with global trends, where countries including China, the U.S. and India have turned to coal to meet heightened demand following the lifting of COVID-19 restrictions.

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Authorities contend that the expansion of Thar Coal Block II will reduce the price of indigenous coal from $60 to $27 per ton -- making it the country's cheapest power source and leading to annual savings of $420 million. Pakistan is currently importing coal at around $200 per ton.

"We are compelled to use this cheap source of energy because we cannot keep using dollars to run power plants running on expensive furnace oil and RLNG (re-gasified liquefied natural gas)," Sindh Provincial Energy Minister Imtiaz Shaikh told Nikkei Asia. "We would like to mix 20% Thar coal [in power plants running] with imported coal. Then we will move towards converting coal to liquid and coal to gas."

The cost of operating thermal plants has become punishing due to expensive fuel and the cost of diverting scarce freshwater, which leads to underutilization of the plants, said Omar Cheema, director of London-based renewable energy consultancy Vivantive.

Someone should have thought about RLNG being expensive

Why wasnt money thrown in thar coal?

Aftr all RNLG plants were not developed in emrgency..we wait three years before giving a go ahead

And why the hell did we even go for imported coal..i understand RNLG(fast to build/clean) but i have no idea why imported coal

It would have been better the PMLN govt thrown some money in thar coal

Instead it let PPPP & private sector to do it

Kooduz to zardari for sticking with thar coal

 

[peagle]

No corruption is not fact of life
And no countries develop with wide spread corruption

Untill public support changes from "کرپشن پر ہمارا بی حق ہے " to "احتساب" pakistan will continue to suffer for some(while other will prosper)

No country in the world can develop with open corruption..pakistan is an exception we manage to linger on..it is a miracle of 21th century

I'm sorry but in which world are you living?
It certainly isn't planet earth.

Go and check the history of corruption in the USA,
We have a torrid history of corruption in the UK, very much into the modern age, it even exist now. For anyone to claim it doesn't exist just lives in a fools paradise.
These are developed countries.

In the developing countries, corruption is a pandemic, if you seriously do not this basic fact, then I suggest please do a little reading and a little research, because you clearly do not know anything.

Corruption is a fact of life, that is an obvious simple fact.
Furthermore, every country, that means every single country on planet earth has develop despite corruption, not after it's elimination.
I repeat, corruption is a fact of life the world over, 100% in developed and developing countries, the only difference being how widespread it is,
in the developed countries, corruption only reduced after they developed, but it still exists, even now.

In the developing countries, corruption is a pandemic, in all countries, in every single developing country, it is a pandemic, an evil that is widespread.
You clearly need to educate yourself, at least regarding this topic.

And, please tone down the Pakistani self-loathing, it really is sickening.

 

[ziaulislam]

I'm sorry but in which world are you living?
It certainly isn't planet earth.

Go and check the history of corruption in the USA,
We have a torrid history of corruption in the UK, very much into the modern age, it even exist now. For anyone to claim it doesn't exist just lives in a fools paradise.
These are developed countries.

In the developing countries, corruption is a pandemic, if you seriously do not this basic fact, then I suggest please do a little reading and a little research, because you clearly do not know anything.

Corruption is a fact of life, that is an obvious simple fact.
Furthermore, every country, that means every single country on planet earth has develop despite corruption, not after it's elimination.
I repeat, corruption is a fact of life the world over, 100% in developed and developing countries, the only difference being how widespread it is,
in the developed countries, corruption only reduced after they developed, but it still exists, even now.

In the developing countries, corruption is a pandemic, in all countries, in every single developing country, it is a pandemic, an evil that is widespread.
You clearly need to educate yourself, at least regarding this topic.

And, please tone down the Pakistani self-loathing, it really is sickening.

Show me one xample where a convicted criminal cases are brushed under the carpet and he is elected as PM

In any of the countries you mention

Please enlight me when a money launderer is asked to come and deliver speeches to young students in universities(ayyan ali)

Show me an example where a encounter killing master mind walks free(roa anwar)

You are confused between hidden corruption and "corruption per hamara be haq hey" attitude

 

[SaadH]

Show me one xample where a convicted criminal cases are brushed under the carpet and he is elected as PM

In any of the countries you mention

Please enlight me when a money launderer is asked to come and deliver speeches to young students in universities(ayyan ali)

Show me an example where a encounter killing master mind walks free(roa anwar)

You are confused between hidden corruption and "corruption per hamara be haq hey" attitude

We war criminals and billionaire thieves roam free in US with impunity, it's not the corruption that's the issue. America is plagued with corruption at all levels, however their corruption is incidental to their primary goal of furthering American interests home and abroad and if the politicians and businessmen can enrich themselves in the process, all the better.

In Pakistan's case, it's to actively seeking to harm/damage Pakistan's interests as agents of foreign powers and economic hitmen as well as getting rich while doing so.

Also, on the topic of Atif Mian, his doom and gloom is perfectly in line with the Rabwah cultists portraying Pakistan in a negative light.