Pakistan Shinning I - Propoganda or Reality

Hindus are lucky that they have a choice to get rid of incompetent. We are stuck with this manhoos, until ``tiyara fiza main putt gia``.

#1 by Urstruly on March 8, 2007 11:13am PT


Hindus are lucky


luck has nothing to do with it...you need to want democracy...it ain`t a lottery..

a devastating article. thank you.

pakistan needs a house clean from top to bottom if we are ever to get out of this mess.
to begin with a democracy. real democracy. not the crap that musharraf pretends is democracy.
we should copy the scandinavian model as i`ve said before.

the irony is only a dictator probably has the power to do it but this dictator isn`t even a good dictator.

A devastating article???
I stopped reading after the greatest Truth of how 1969-70 elections were oh-so-fair. Another PPP -loving, Bibi sucking guy who has no other goal but to tell people how Pakistan has gone down the drain. How convenient to not mention the bankruptcy Pakistan was going towards during Nawaz and Bibi, not to mention the Surrey palace and raiwand estate and of course the corruption that was prevalent in every facet of the society. Nobody wants a military regime but at least be neutral about what the government has done rather than just shout the mantra of how you were better off with nawaz and Bibi at the helm. For God Sake!!!!

To a non-economist like me this article is very confusing. The author doesn`t actually dispute the GDP numbers or the rate of inflation. Yet he claims that the real growth rate is 2-3% . If that is so then either the GDP numbers are wrong or inflation number is wrong.

His entire argument is that ``annual GDP growth cannot be greater than a third of the ratio of incremental capital formation to GDP`` . Why is that? Can some economist explain, please.

I despise the fauji thugs, and have no doubt in my mind that a lot of these statistics have been doctored. However, their is no denying that things are a hell of a lot better for the middle class, now at least someone with a B.Com degree from KU can get a job at a call centre or some small bank job and make 15,000 a month

Re: # 5
what the author of this article wrote is load of bullshit.

a country can have zero-percent domestic saving rate, yet still can grow.

An apt quote: “statistics prove that statistics can prove anything”

This very partisan article and more politics oriented attacking army ruler than economy etc.
Also he wants to advocate use of coal, no body should be forced. If good cheap coal is available people will use otherwise not. It appears this propaganda by coal Industry.
All this goes hidden. Europe wants pakistan to buy europe made air bus. Now they do not want to say directly but play game of saying aircraft are unsafe and bans entry. Its racism in purest way also forcing PIA to by european made airmachine. They should be taught lesson by banning all european flights till PIA returns to Europe fully.
Present situation demands till elections present ruler should continue. Time has come to usa to shut up and tell them were are not going to find their wars. Clinton had given assurance at Kargil time after withdrawal he will personally give attention to Kashmir. Nothing is still done. We should tell usa if you want go after Talibs go ahead. Neither we support or resit their fighting in Vaziristan. Let them face enemy and we should keep army prepared for eventual american departure .

Re: # 8
I heard something moa and stalin use to feel and say.
If one is killed its news but if millions killed then its statistics.
Stastics is just humbo jumbo cheating artifical syatem of numbers made to cheat people and impress them ,with big name like standard , bionomial, standard, poission dist, mean, median, standard deviation, permutation, combinatin, markov chains etc its bogus. I never believed in statistics. When I did not knew much it use to impress me more I studied and began to understand reasonably then understood is all bogus and for cheating people.
I agree with your attitude about this number crunching.
Incidently I read your contribution and learn few things. Continue posting.

Re: # 10
Graph is other way of cheating. If you use logarithmic scale on one of axis nothing looks much different. Same thing with Bar charts. Its all sofesticated cheating at ultimate analysis

Re: # 6
Are you sure just that degree you can 180,000 rs/ year.
May I should start thinking joing college.
Degree in IT or management(Lahore) can make that magic not with commerce degree. But I can be totaly wrong as have no much connection. All young people are getting too much inflated salaries and burdening people over 35 years as they never made such start salaries even in dream. How indian commerce grad do ? can they get such jumbo salaries at start ?

Re: # 7 I agree with you regarding saving.
Poor people save and rich people spend and make business grow up. I think at least 20% of economic growth is due to borrowing( Credit cards) and not saving. Poor people save is not virtue but necessity. American save -0.5% on average and so rich every man in world wants to go there even people opposed to them go and settle there and bitch all time. Saving keeps you and society poor and is bad habit, borrowing and buying proper stocks is better way to become well to do..

you can cry about the bias of the author or whatever..the point is that in a country of 166 million peole you cannot find leadership that can develop sectors of growth for an enterprising people and you cannot survivie without handouts from US gov`t or foreign remittances. it is a sad flucking situation and istead of shooting the messenger you should, as a pakistani, try to recognize this disease and try to find a cure. ullu kay pathays..

Re: # 13
thanks madani sahab
growth is the function of investment, in pakistan`s case billions have poured in AID,FDI and FOREIGN BORROWING. which the author of the article fails to mention.

#5 khurram,

Actually one can either use one`s own savings or invite/borrow someone else`s from where these are in excess. Pakistan did the latter.

For example, USAs domestic savings is around 2% of GDP. It borrows and uses everyone else`s savings.

But the author is being unduly stingy. Many good things have occured in the Pakistani economy. You`ll find an earlier post directly relevant:

You know, one lives and learns. And, I have learnt lately that regardless of how strongly one believes he may be right, he may actually be wrong. I have lately come to realize that the `consumerism` driver and the liquidity boom let loose by this economic team in Pakistan (for whom I have now developed some respect after watching results) was the only `real` workable option under Pakistan`s politico-economic as well as it`s foreign relations stance post 9/11.

Let me elaborate as suggested:

I have been on record as voiceforously criticising Pakistan`s decision not to mop-up the post 9/11 influx of some $ 18 billion by issuance of fresh Government bonds for infrastructure development, and instead to let it remain in the money market. This would have been perfect in any other scenario, but the Debt/GDP ratio at that time was close to 100%, and the Government taking on further debt would have driven the ratio through the roof, plus multiplying the fiscal deficit, both reflecting negatively in Pakistan`s sovereign ratings. Instead, the excess liquidity did the following (much in the same order):

1) Drove commercial borrowing interest rates down from 21% to 2.25%, boosting corporate profits, re-investment and capacity utilization.

2) Stock market boom and foreign portfolio investment resulting from (1).

3) Real Estate market escalation and influx of high-quality foreign builders/developers, cement and allied 200 (+) tertiary industries growth.

4) Consumer finance and auto-manufacturing /household appliances boom resulting in huge capacity additions and entry of manufacturers/assemblers.

5) Banking sector profits tripling due to all of above strengthening their balance sheets and entry of large foreign players/take-overs/mergers.

6) Reduction of direct borrowing from central bank, fiscal deficit, and budget deficit and sufficient fiscal space for increase in Public Sector Development Programmes (PSDP).

7) Reduction in debt/GDP from 100% to 56% and improvement in sovereign ratings.

8) Entry and bench-marking in international sovereign as well as corporate bond/GDR markets with over $ 4 billion hugely oversubscribed issues due to (7).

9) Reduction of cost in foreign borrowing due to reduction of country-risk premiums, and in domestic borrowing through lowering of rates in National Savings Schemes.

10) Overall FDI conducive atmosphere beginning to attract serious long-term foreign flows.

In short, although myself personally have always favoured a domestically/internally driven growth, but Pakistan did the opposite i.e. taking the externally driven path. At the end of the day, I guess whatever works is the best. The above is working very well.

The risks, are (a) the savings/investment to GDP is very low. This must improve with increase in wealth and dis-incentivizing capital flight by residents and; (b) the current account deficit. This was inevitable given the above route. However, in the words of the Resident Director of World Bank based in Islamabad - ``It is fixable ``.

Cheers!

(P.S. Thoroughly enjoyed your exchange with Dr.Sohail on the other board .. have some mercy ... !!!)