Showing posts from September, 2010

Pakistan's Economic History 101

Pakistani economy grew at a fairly impressive rate of 6 percent per year through the first four decades of the nation's existence. In spite of rapid population growth during this period, per capita incomes doubled, inflation remained low and poverty declined from 46% down to 18% by late 1980s, according to eminent Pakistani economist Dr. Ishrat Husain . This healthy economic performance was maintained through several wars and successive civilian and military governments in 1950s, 60s, 70s and 80s until the decade of 1990s, now appropriately remembered as the lost decade. In the 1990s, economic growth plummeted to between 3% and 4%, poverty rose to 33%, inflation was in double digits and the foreign debt mounted to nearly the entire GDP of Pakistan as the governments of Benazir Bhutto (PPP) and Nawaz Sharif (PML) played musical chairs. Before Sharif was ousted in 1999, the two parties had presided over a decade of corruption and mismanagement. In 1999 Pakistan’s total public

India, Pakistan and UN MDG Goals

In year 2000, leaders of rich and poor nations pledged to build a better world by 2015. Among their key goals now called Millennium Development Goals: halving extreme poverty and hunger from 1990 levels, reducing by two-thirds the child-mortality rate and slashing maternal mortality by three-quarters and achieving universal primary education. The good news is that the share of people living on less than $1.25 a day seems on track to meet the goal of halving the extreme poverty rate. However, the bulk of those gains have occurred in China and other East Asian countries. In fact, East Asia, Southeast Asia and North Africa are all on track to achieve almost all of the MDGs by 2015, but South Asia and the rest of the developing world have made insufficient progress so far, according to the current assessment by UN agencies. The three-day summit to press world leaders to meet U.N. MDGs by significantly reducing poverty by 2015 concluded Wednesday with new financial pledges from countries b

Pakistan's Challenge: Raise Exports, Attract Foreign Investments

Gross domestic product (GDP) is calculated by adding up public and private consumption, investments and net exports (exports-imports). Some of the major world economies, most notably Germany and China, are led by exports, while others, such as United States, United Kingdom, India and Pakistan, are primarily domestic consumption driven. With almost 80% of its GDP from consumption , Pakistan has particularly heavy reliance on domestic public and private spending for its economic health. This is much higher than the US consumption accounting for over 70% of its economy, and India's 60% . As Pakistan's GDP has more than doubled over the last decade, its FDI has increased dramatically and its exports have grown at 16% CAGR till 2007, the consumption component has continued to be stubbornly high at about 80%, with about 20% of it coming from investments and exports. By contrast, India's consumption component has declined from 80% to 60% with its investment and export component

Doubling Foreign Remittances to Rebuild Flood-Ravaged Pakistan

Members of Pakistani diaspora must remember their compatriots in distress as we celebrate Eid today. While there have been high-profile recent efforts by overseas Pakistanis to raise millions of dollars to fund rescue and relief efforts after the recent devastating floods, it is now time to begin to shift focus on to the much longer term and significantly more expensive reconstruction phase that will requires billions, not millions, of dollars. World Bank economist Sanket Mohapatra has said in a recent post that remittances by overseas Pakistanis have played a significant role in Pakistan's economic improvement. Not only have such remittances contributed to significant poverty reduction in Pakistan "by an impressive 17.3 percentage points between 2001 and 2008 (from 34.5 percent in 2001-02 to 17.2 percent in 2007-08)", but "continued strong growth in worker’s remittances in the past few years has also contributed to improvements in the external current account ba

$500,000 Raised at Silicon Valley Iftar For Pakistan Flood Relief

For every Pakistani hit by floods, there are eight who are still standing and ready to help . That was the theme that guided the recent Silicon Valley Iftar and Fundraiser organized by Organization of Pakistani Entrepreneurs (OPEN Silicon Valley) at the Computer History Museum in Mountain View, California. About 300 attendees contributed over $500,000 at the event. It was specially gratifying to see that my fellow NED alumni were at the forefront and donated $60,000, with a pledge to give another $40,000 to match any additional contributions made within a week of the event. There was another offer of $70,000 match by an unknown contributor. In addition to various fundraisers to aid twenty million flood victims, Pakistani-American employees have persuaded their high-tech employers to make significant matching contributions for flood relief. For example, Cisco is matching over a million dollars in employee contributions, and Intel's Pakistani employees expect their employer to con