Towards a more Sustainable Growth of Pakistan

Bbabu.....agreed that a nation`s well being should not come at the cost of its future generations. point well taken.

This is Usama...and here`s a response to some of your comments.

Thank you..ShoreSahib & HP...for validating some of my points.

HP... before i answer your concerns...try to answer one of my questions: Can democaracy work in Pakistan? If your answer is no, then you would know what I am trying to stress here. The much hackneyed recipe for economic progress....industrialization (and other sectors being a distant second)....just isnt a one-stop solution for all the countries of the world. Its like saying democracy can work anywhere in the world.

The principles of the theory of comparative advantage state that all nations are better off as a whole if they continue to produce and trade in the areas of business that they are most efficient in. If Pakistan`s agriculture can produce XX number of cotton more cheaply than ..say...Brazil...then Pakistan should focus on producing cotton in return for getting cocoa from Brazil.

Why do u think despite all the positive economic indicators being boasted of by the government...poverty remains a perennial problem that just wont recede. Because agriculture, wherein lies 50% of the population`s livelihood, just isnt getting the reaps of the so-called reforms. My article calls for a change in focus.

Finally, I just hope and wish that the kind of text books on economics/business that I have gone thru in my academic life wont preach a solution that works only for certain countries...and not for all. That is why...HP....I give you the benefit of doubt for your comments, because I know exactly where you are coming from.

Cheers..:)

HP #1

“Finally, industrial growth is harmful for sustainable development as it causes widespread environmental deterioration.”

`` Are you really kidding or this is serious stuff from you?

So industrial growth is harmful for “sustainable development”. You really like 7th century Arabian peninsula don’t you. ``

I do not want to live in the 7th century. But societies like India and Pakistan have to weigh in environmental costs as they industrialize. It does not make sense to locate a Intel semiconductor factory in the middle of a desert. Semiconductor plants require a lot of water.

Editorial Dawn Pakistan
Curbing inflation



PRIME Minister Shaukat Aziz has once again acknowledged inflation being one of the major challenges facing his government. While speaking after the minister of state for finance, Omar Ayub Khan, had wound up the budget debate in the National Assembly on Tuesday, the prime minister briefly explained the reasons for the sudden and steep jump in the price level in the last 12 months and assured the house that his government was making serious and sustained efforts to tackle the problem of inflation. Prices do heat up when the economy grows at a fast pace. Over the last three years Pakistan’s economy has experienced very high growth rates after having remained almost stagnant in the previous three years when the government was following a tight-fisted economic policy under instructions from the IMF. According to official documents released before the announcement of the budget for 2005-06, the phenomenal rise in aggregate demand of the economy, on the one hand, was compounded by supply shocks, on the other.

Besides, the documents claimed, adverse external developments, had an impact on the price level during the current fiscal year, included a surge in international oil prices coupled with an unprecedented rise in world prices of commodities as a result of massive demand from China. The government has claimed that it responded to the developing situation by adopting a strategy of regular monitoring of domestic stocks of key commodities and their prices. The government also did not pass the entire increase in the international price of oil to general consumers. And to ease the demand pressure generated by the rising level of economic activity, the State Bank of Pakistan began to tighten its monetary policy rather aggressively. The government believes that by improving the supply situation of food items either through raising their production or through imports and applying timely and prudent monetary policies, it will be able to bring down the general price level in the coming months. One hopes that this strategy will effectively slow down the hike, especially, in relation to prices of food and other essential items that make up the basket of livelihood of people living below the poverty line.

The recent decision of the government to liberalize food imports from India over land route is a welcome step. One hopes that in due course of time all the necessary arrangements would be made for immediate import of food items in short supply in the country through the Wagah border. Also, a more rational method should be adopted for calculating the impact of house rent on the overall price level while, at the same time, steps should be taken to bring down the prices of construction material by encouraging their increased production. When prices of essentials go up, it is the poorer sections of society which suffer most as the purchasing power of whatever little they have in their pockets gets drastically reduced. As it is, under the current system of distribution, when the economy grows by one rupee, 40 paisa go to the richest 20 per cent of the population while the poorest 20 per cent get only seven paisa. So, the poorest sections of society need to be protected when prices of food items start soaring and an element of justice needs to be introduced in the distribution system so as to ensure equity while the economy grows at an accelerated pace.

“The first burst of growth has to be broad based and affect a large number of the rural population.”
“Agricultural growth not only helps reduce poverty and increase farmers’ incomes…”


Array Bhai Siddiqui sahib kyon hum ghariboon say mazaq kartay ho?

Where did you get this voodoo economics recipe for disaster? You are pointing to agriculture for prime economic activity. Which Economics book you read in kindergarten?

“Agriculture has been the ‘leading’ sector to have accelerated growth in countries like China and India.”

Is this statement meant to be a joke? And, how about this:

“Finally, industrial growth is harmful for sustainable development as it causes widespread environmental deterioration.”

Are you really kidding or this is serious stuff from you?

So industrial growth is harmful for “sustainable development”. You really like 7th century Arabian peninsula don’t you.

Couple of more economists like you, and the country would continue to languish in the 17th century.

Bless you for your entertaining article, it is a spoof, isn`t it?