The Indian Economy Blog

November 4, 2007

Pakistan – Emergency & Economy

Filed under: Basic Questions,Miscellaneous,Politics — Pragmatic @ 9:46 pm

While declaring the emergency on 3 November, the Pakistani President Pervez Musharraf lamented -

I am observing that Capital and Business that was flowing into the country is now stopped – they are now questioning whether to invest here or not Pakistan will remain stable. Our economy, the livelihood of our nation which improved over the last 7 years – in economy, in livelihood, in infrastructure, roads, ports, airports, railways, telecommunication, mobile telephone, landlines, rural telephone, information technology, building and construction, the entrepreneurs across the land, the rapid development across Pakistan, the thousands of industries launched, water irrigation, dams, canals, canals with brick linings, water courses, and then the social sector, education, health on the primary and secondary level, and education at every level – on all these Pakistan was moving forward, all this. I am very saddened, God Forbid, that 7 years of hard work may be washed away. [CM]

Shanta Devarajan, the Chief Economist of the South Asia Region at the World Bank, puts some figures to probate the General’s rhetoric.

Since 1999, the Pakistan government has undertaken a series of macroeconomic and structural reforms and Pakistan’s GDP growth rate has accelerated. It has been averaging well over 7 percent a year over the last three years. Poverty has been declining steadily at about one percentage point a year during this period. Despite rising world oil prices, inflation has largely been kept under control. Nevertheless, there are two sources of concern on the macroeconomic front. The current account has gone from a surplus of one percent of GDP four years ago to a deficit of 4.9 percent of GDP today. And export growth has declined sharply from 14 percent a year two years ago to 3 percent this year.

Moreover, Pakistan suffers from a huge “human development deficit.” In 1997, child mortality rates in Pakistan and Bangladesh were the same, at about 114 child deaths per 1000 births. Today, Bangladesh’s rate is 77 and Pakistan’s 101. In addition to low enrolment rates, especially for girls, there is evidence that the quality of education is extremely poor. In a sample of (better off) Punjabi villages, the share of 10-year-olds who could do single-digit addition and subtraction was 29 percent. These problems of basic service delivery cannot be solved without the active participation of communities and parents. In fact, the number of private schools has risen dramatically–from 32,000 in 2001 and 47,000 in 2005. [EPISA]

The politics of the proclamation has already felled many trees and left many overworked monkeys on the keyboards. The ruse of an economic angle while proclaiming the emergency is indicative of a rather fresh and innovative approach by the General. Trust a Commando for putting forth such avant-garde rationale!

6 Comments »

  1. Democracy too is a farce in Pak. Benezair and her husband amassed billions and more. and nawaz sherif is thug and along with his brother
    beat up all opponents. all hypocrsiy. amd more corrupt.

    atleast it seems Ge.Musharraf is personally ‘less’ corrupt and more
    responsible about nation and economy. more free press and free economy under him.

    the Pak army and ISI usually never obey civilian PM or President and
    act independently. and worse ISI funds itself thru illegal opium trade and needs not much govt funds or control. while Nawaz sherif was talking with Vajpayee Pak army and ISI were planning and launching kargil war without their PM’s knowledge. unthinkable here.

    Muasharaff was the best thing to happen to a divided Pak since 1999.
    he could atleast partially control the jihadis and ISI as he is the
    army boss. in a civilian set up, it will be near impossible. and only mere rhetoric. the americans were lucky to have musharaff during 9/11 and afterward. if it was nawaz shereif, it would be doubtful if they could have launched their ‘war on terror’

    i read one pak journalist writing wo years ago that there was little enthusiasim for democracy of nawaz sherif kind there…

    more inputs needed..

    Comment by K.R.Athiyaman — November 6, 2007 @ 1:26 pm

  2. Thanks for the discussion. Shanta Devarajan, Chief Economist of the World Bank South Asia Region, cites on his blog (http://endpovertyinsouthasia.worldbank.org/) this post on The Indian Economy Blog. He continues to engages with fellow bloggers in his discussions regarding the situation in Pakistan.

    http://endpovertyinsouthasia.worldbank.org/pakistan-emergency-and-poverty-reduction-response-comments

    Comment by Loren — November 9, 2007 @ 10:40 pm

  3. @Athiyaman:
    I agree. Can we have more inputs please?

    @Loren:

    Thanks to Shanta for pinting this post out and to you for pointing Shanta’s post and the discussion thereon.

    Comment by Pragmatic — November 10, 2007 @ 4:52 pm

  4. true musharaf is the best thing which happened to pakistan, but on the long run it is only democracy which has been the tool for the developement of a morden day nation ,be it india ,brazil or china(vitrualy).
    a PM must have control of the army activities, what musharaf is doing to control terrorist activities can be done by any effictive leader , soner or later democracy will produce one.
    the steps taken by mussharaf hint a possibility that the supreme court was on verge of declining musharafs eligibility to contest in predencial elections.
    sugession:the pakistan contitution ammendders must take another look at the powers it offers to the army.

    Comment by anand puntambekar — November 14, 2007 @ 8:03 pm

  5. a country can be as strong as its people. the fact that democracy has had a terrible track record here tells a story by it self to the world. a country plagued with generally weak political leaders and an out of leash millitary is the prime reason of concern here. for this efforts must be made by intellectual population of pakistan.enough is enough. we are talking about a country’s pride….in this context i would like to appreciate the efforts of imran khan,former cricketer. more and more of the youth of pakistan must rise to the occasion and fight for what is right ..your political system will become strong only if responsible citizens take control and enter into active politics.

    Comment by bhrigu kaushal — November 14, 2007 @ 8:16 pm

  6. [...] Re: Pakistan as a superpower? While declaring the emergency on 3 November, the Pakistani President Pervez Musharraf lamented – I am observing that Capital and Business that was flowing into the country is now stopped – they are now questioning whether to invest here or not Pakistan will remain stable. Our economy, the livelihood of our nation which improved over the last 7 years – in economy, in livelihood, in infrastructure, roads, ports, airports, railways, telecommunication, mobile telephone, landlines, rural telephone, information technology, building and construction, the entrepreneurs across the land, the rapid development across Pakistan, the thousands of industries launched, water irrigation, dams, canals, canals with brick linings, water courses, and then the social sector, education, health on the primary and secondary level, and education at every level – on all these Pakistan was moving forward, all this. I am very saddened, God Forbid, that 7 years of hard work may be washed away. [CM] Shanta Devarajan, the Chief Economist of the South Asia Region at the World Bank, puts some figures to probate the General’s rhetoric. Since 1999, the Pakistan government has undertaken a series of macroeconomic and structural reforms and Pakistan’s GDP growth rate has accelerated. It has been averaging well over 7 percent a year over the last three years. Poverty has been declining steadily at about one percentage point a year during this period. Despite rising world oil prices, inflation has largely been kept under control. Nevertheless, there are two sources of concern on the macroeconomic front. The current account has gone from a surplus of one percent of GDP four years ago to a deficit of 4.9 percent of GDP today. And export growth has declined sharply from 14 percent a year two years ago to 3 percent this year. Moreover, Pakistan suffers from a huge “human development deficit.” In 1997, child mortality rates in Pakistan and Bangladesh were the same, at about 114 child deaths per 1000 births. Today, Bangladesh’s rate is 77 and Pakistan’s 101. In addition to low enrolment rates, especially for girls, there is evidence that the quality of education is extremely poor. In a sample of (better off) Punjabi villages, the share of 10-year-olds who could do single-digit addition and subtraction was 29 percent. These problems of basic service delivery cannot be solved without the active participation of communities and parents. In fact, the number of private schools has risen dramatically–from 32,000 in 2001 and 47,000 in 2005. [EPISA] The Indian Economy Blog ? Pakistan – Emergency & Economy [...]

    Pingback by Pakistan as a superpower? - Page 8 — November 26, 2007 @ 7:18 am

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