Urban Middle Class Estimates in Pakistan

[RiazHaq]

Pakistan is more urbanized with a larger middle class than India as percent of population. In 2007, Standard Chartered Bank analysts and SBP estimated there were 30 to 35 million Pakistanis earning an average of $10,000 a year. Of these, about 17 million are in the upper and upper middle class, according to a recent report.

As to India's much hyped middle class, a new report by Nancy Birdsall of Center for Global Development says it is a myth. She has proposed a new definition of the middle class for developing countries in a forthcoming World Bank publication, Equity in a Globalizing World. Birdsall defines the middle class in the developing world to include people with an income above $10 day, but excluding the top 5% of that country. By this definition, India even urban India alone has no middle class; everyone at over $10 a day is in the top 5% of the country.

According to development economist Lant Pritchett, fewer than 25% of people in the richest quintile in India complete 9 grades of school. "An upper limit of the 95th percentile, while on the high side, is just about sufficient to exclude the country's richest," Birdsall adds.

This is a combination both of the depth of India's poverty and its inequality. China had no middle class in 1990, but by 2005, had a small urban middle class (3% of the population). South Africa (7%), Russia (30%) and Brazil (19%) all had sizable middle classes in 2005.

Haq's Musings: Urbanization in Pakistan Highest in South Asia

DAWN.COM | Columnists | The rise of Mehran man

India has no middle class? - India - The Times of India

 

[sparklingway]

But is the Pakistani middle class, especially the highly upwardly mobile urban middle class contributing to society as favourably as it should? Is it playing its part effectively or has it become a symbol of rising inequality and strengthening of the feudalistic structure of our society?

They are finding abodes in luxurious places abroad and inside the country, they prefer to pay low taxes, if they pay any indirect ones at all and they are almost entirely isolated from the political structure of society.

While it can be called natural, climbing the ladder wile pushing down everybody seems to be the exclusive path. While the small window of opportunities and limited resources are definitely valid arguments for such behaviour, the general lack of social cohesion when it comes to the common good is glaring in the urban middle class, something many are proud of. There's a rising disconnect between the more important sections of society such as farmers, proletariat and the basic working class and the urban middle class.

Our 62 year path of consecutive dictatorships and destructive democracies certainly contributes towards the lack of political, and broadly social will, to improve the class structure of our economy but I am somehow left saddened at this phenomenon.

My ramblings might have been too vague and generalized but this subject requires extensive, extensive writing and I hope I conveyed the message I wanted to. Would like others to comment on these things.

 

[RiazHaq]

The PPP's voter lives in a different world, a world that was dominant up to a decade ago. It is a world that is much more rural, more deferential, more rooted in tradition. Its nationalism is less marked and its Islam less influenced by the international trends of the last 30 years and thus much less politicized and much more based in centuries-old Sufi traditions. Describing this situation, Jason Burke of the Guardian argues that "This is a Pakistan that is disappearing". Burke goes on to say that a PPP candidate in rural Punjab recognized it telling him that his party needed to "re-invent itself".

While many rural residents in Sindh and Southern Punjab who voted for the PPP have remained relatively isolated from major developments in Pakistan in the last decade, the urban middle class has grown dramatically in numbers and influence during the military rule of President Musharraf. The New York Times reported on this expansion of Pakistani middle class in November 2007 in these words: "As he fights to hold on to power, General Musharraf finds himself opposed by the expanded middle class that is among his greatest achievements, and using his emergency powers to rein in another major advance he set in motion, a vibrant, independent news media". Acknowledging this fact, William Dalrymple, a British journalist/author considered knowledgeable about India and Pakistan, recently wrote as follows: "It was this newly enriched and empowered urban middle class that showed its political muscle for the first time with the organization of a lawyers' movement, whose protests against the dismissal of the chief justice soon swelled into a full-scale pro-democracy campaign, despite Musharraf's harassment and arrest of many lawyers. The movement represented a huge shift in Pakistani civil society's participation in politics. The middle class were at last moving from their living rooms onto the streets, from dinner parties into political parties."

Haq's Musings: Middle Class Clout Rising In Pakistan.

 

[FreekiN]

"The rise of Mehran man"

Most epic title I have ever read. Ever.

 

[TechLahore]

While the popular press often finds fault with most everything in Pakistan, the fact that material prosperity across the board has increased is quite apparent to the eye when one travels through cities or villages. Access to communication, entertainment, transportation and jobs is far greater now than it ever has been in the past. We have the Musharraf years to thank for much of this...

Is Pakistan developing inspite of its Government? TechLahore's response to democracyarsenal.org | TechLahore

 

[RiazHaq]

What counts as middle class in developing nations?

Unlike poverty line which is defined by the World Bank as people living on $1.25 a day or less, there is no widely accepted definition of who counts as the middle class.

In India, for example, a scooter company aims ads at a schoolteacher who earns $2,500 a year and lives in a tiny brick house with no running water. Why? Because that teacher, according to marketers, is middle class, according to MSN Money.

Economist Nancy Birdsall is attempting to establish a $10 (PPP) a day line as the low end of the middle class, while excluding the top 5% of the population in a country from the middle class.

In India's case, everyone who makes $3,650 a year is in the top 5% (about 55 million people) of the nation's population. It is on this basis that economist Birdsall concludes that India has no middle class.

Based on Birdsall's proposed definition, Pakistan does have a middle class of ten of millions (at least 10% of the population), as its 30 to 35 million people earning more than $10,000 a year account for about 17% of Pakistan's population.

According to development economist Lant Pritchett, fewer than 25% of people in the richest quintile in India complete 9 grades of school. "An upper limit of the 95th percentile, while on the high side, is just about sufficient to exclude the country's richest," Birdsall adds.

This is a combination both of the depth of India's p overty and its inequality. China had no middle class in 1990, but by 2005, had a small urban middle class (3% of the population). South Africa (7%), Russia (30%) and Brazil (19%) all had sizable middle classes in 2005.

India has no middle class? - India - The Times of India

Who in the world is middle class? - MSN Money

 

[RiazHaq]

While the popular press often finds fault with most everything in Pakistan, the fact that material prosperity across the board has increased is quite apparent to the eye when one travels through cities or villages. Access to communication, entertainment, transportation and jobs is far greater now than it ever has been in the past. We have the Musharraf years to thank for much of this...

Is Pakistan developing inspite of its Government? TechLahore's response to democracyarsenal.org | TechLahore

As you acknowledge in your post, Musharraf era policies created the environment for economic growth and brought in the necessary investments to fuel job growth and middle class expansion in Pakistan from 1999 to 2008. Unfortunately, the economy has been stagnant since Mush's departure.

What I am hoping is that Musharraf's undisputed legacy of a significantly expanded middle class, including professionals and entrepreneurs, will help in Pakistan's recovery in spite of the incompetence and corruption of the current leadership.

Haq's Musings: Pakistan's Economic Performance 2008-2010

Haq's Musings: Pakistan's Decade of 1999-2009 in Review

 

[bc040400065]

Although i havn't been mostly infavor of musharaf but i must acknowledge the fact that Musharaf's 8 years were of great improvement in terms of economy and emergance of middle class specialy in urban areas... but the thing that failed him was that he failed to get together a political systems going for the country.... but yes pakistan did gained alot in economy... the only thing needed is now that we should implement land reforms and end this feudal systems... or tax the agriculture sector as well.. the main issue of pakistan is low revenue collection and that is because we have not brought the 25% of the GDP i.e. agriculture sector under taxes... also the tax net needs to be expanded because only 2 million pay direct taxes and others just get a free ride.

 

[RiazHaq]

Although i havn't been mostly infavor of musharaf but i must acknowledge the fact that Musharaf's 8 years were of great improvement in terms of economy and emergance of middle class specialy in urban areas... but the thing that failed him was that he failed to get together a political systems going for the country.... but yes pakistan did gained alot in economy... the only thing needed is now that we should implement land reforms and end this feudal systems... or tax the agriculture sector as well.. the main issue of pakistan is low revenue collection and that is because we have not brought the 25% of the GDP i.e. agriculture sector under taxes... also the tax net needs to be expanded because only 2 million pay direct taxes and others just get a free ride.

I agree with you that the feudal politicians should not get way with their farm income being tax free by insisting on exempting agriculture from taxation. It is an issue that needs to be addressed, and I am hoping that IMF will force this issue.

Haq's Musings: Comparing US and Pakistani Tax Evasion

But I don't think the revenue collection is the core problem in Pakistan. I think the core issue is the massive incompetence of the ruling feudal elite that deprives the nation of the good governance it so badly needs.

Haq's Musings: Incompetence Worse Than Graft in Pakistan

 

[Airtel]

Pakistan is more urbanized with a larger middle class than India as percent of population. In 2007, Standard Chartered Bank analysts and SBP estimated there were 30 to 35 million Pakistanis earning more than $10,000 a year. Of these, about 17 million are in the upper and upper middle class, according to a recent report.

As to India's much hyped middle class, a new report by Nancy Birdsall of Center for Global Development says it is a myth. She has proposed a new definition of the middle class for developing countries in a forthcoming World Bank publication, Equity in a Globalizing World. Birdsall defines the middle class in the developing world to include people with an income above $10 day, but excluding the top 5% of that country. By this definition, India even urban India alone has no middle class; everyone at over $10 a day is in the top 5% of the country.

According to development economist Lant Pritchett, fewer than 25% of people in the richest quintile in India complete 9 grades of school. "An upper limit of the 95th percentile, while on the high side, is just about sufficient to exclude the country's richest," Birdsall adds.

This is a combination both of the depth of India's poverty and its inequality. China had no middle class in 1990, but by 2005, had a small urban middle class (3% of the population). South Africa (7%), Russia (30%) and Brazil (19%) all had sizable middle classes in 2005.

20% people middle class in pakistan and 3% in china.

Hard to believe.

 

[RiazHaq]

Here's an interesting Op Ed by George Fulton in Pakistan's edition of International Herald Tribune:

We haven’t got a lot to be thankful for these days in Pakistan.

But at least we are not Dubai.

Fed up with loadshedding, bombs, and TV cynicism pervading Pakistan, I recently escaped to Dubai for a holiday. Big mistake. Huge. Ten days later I returned, gasping for Karachi’s polluted, but far sweeter, air. Dubai may have the world’s tallest building and the world’s largest shopping mall, but it also has the world’s tiniest soul. It’s a plastic city built in steel and glass.

It has imported all the worst aspects of western culture (excessive consumption, environmental defilement) without importing any of its benefits (democracy, art). This is a city designed for instant gratification a hedonistic paradise for gluttons to indulge in fast food, fast living and fast women. It’s Las Vegas in a dish dash. You want to eat a gold leaf date? Munch away.

You want to drink a Dhs 3,000 bottle of champagne? Bottoms up. You want a UN selection of hookers at your fingertips? Tres bien. Let’s start with the malls. These cathedrals of capitalism, these mosques of materialism are mausoleums of the living dead. Slack jawed zombies roam around consuming food, clothes and electronics in a desperate attempt to fill the emptiness of their existence.

Whilst at the Mall of the Emirates the azan goes off. Nobody appears to move to the prayer room; everyone’s too busy performing sajda before Stella McCartney, genuflecting before Gucci, and prostrating themselves at Prada. With Dubai, one recalls F Scott Fitzgerald’s The Great Gatsby.

The people are modern day Gatsbys, buying shirts that they will never wear and books they will never read. Like Fitzgerald’s roaring 20s America, Dubai is a moral failure a society obsessed with wealth and status. Everyone is trying to keep up with the Jones’ or the Javaids. You see the goras with their perma-tans, streaked highlights and their flabby cleavages.

At least we are not Dubai – The Express Tribune

 

[k_n]

Sir Riaz

You have a seriously BAD reputation on Pakistani Forums due to your delibrate attempts on comparing APPLE to ORANGES

MYTH BUSTED --> Chowk: Personal: Middle class in India and Pakistan(with actualy facts and numbers)


Note : People interested in further debate on this may refer the link provided above

 

[k_n]

1 Question : What Nancy Birdsall has to say about Pakistani Middle Class in her report ?

Don't give us estimates by SCB and State Bank of Pak and then compare the two to present a rosy picture !

 

[k_n]

Sir , Here is the report -> http://www.cgdev.org/doc/commentary/birdsall/WIDERlecture_inequality.pdf

Since you have been 'researching' quite a bit we'll like you to go through and come up with some FACTS .

Another one -> World development report 2006 ... - Google Books

Probably all this will help u a lot !

 

[RiazHaq]

Sir Riaz

MYTH BUSTED --> Chowk: Personal: Middle class in India and Pakistan(with actualy facts and numbers)


Note : People interested in further debate on this may refer the link provided above

The Chowk post you are referring to is a story from "The News", a Pakistani newspaper, that cites no real data from any credible source in it. What I have provided is real data from Standard Chartered Bank, and endorsed by former State Bank governor Dr. Ishrat Husain.

Measured by purchasing power, Pakistan has a 30 million strong middle class, according to Dr. Ishrat Husain, Ex-Governor (2 December 1999 - 1 December 2005) of the State Bank of Pakistan.[22] It is a figure that correlates with research by Standard Chartered Bank which estimates that Pakistan possesses a "a middle class of 30 million people that Standard Chartered estimates now earn an average of about $10,000 a year."[23] Latest figures put Pakistan's Middle Class at 35 million strong.[24] In addition, Pakistan has a growing upper & upper middle class, which was estimated at 6.8 million in 2002[25] and has now grown to 17 million people as of 2010, with relatively high per capita incomes.[26]

Economy of Pakistan - Wikipedia, the free encyclopedia