Comment by Riaz Haq on September 7, 2021 at 1:26pm

China's Xi Pressures Tycoons With 'Common Prosperity' Talk

https://www.nytimes.com/2021/09/07/world/asia/china-xi-common-prosp...

Four decades ago, Deng Xiaoping declared that China would “let some people get rich first” in its race for growth. Now, Xi Jinping has put China’s tycoons on notice that it is time for them to share more wealth with the rest of the country.

As the country’s leader prepares for a likely third term, he is promising “common prosperity” to lift farmers and working families into the middle class.

Mr. Xi says the Communist Party will pursue “common prosperity,” pressing businesses and entrepreneurs to help narrow the stubborn wealth gap that could hold back the country’s rise and erode public confidence in the leadership. Supporters say China’s next phase of growth demands the shift.

“A powerful China should also be a fair and just China,” Yao Yang, a professor of economics at Peking University who endorses the shift in priorities, said by email. “China is one of the worst countries in terms of redistribution, despite being a socialist country. Public spending is overly concentrated in cities, elite schools and so on.”

Officials are pledging to make schooling, housing and health care less costly and more evenly available outside big cities, and to lift incomes for workers, helping more people secure a place in the middle class. The “common prosperity” campaign has converged with a crackdown on the country’s tech giants to curb their dominance. Facing scrutiny, some of China’s biggest billionaires, like Jack Ma, have lined up to pledge billions of dollars to charity.


The pledges hold out the prospect, endorsed by Mr. Xi in a meeting last month, that China is now affluent enough to shift closer to the Communist Party’s longstanding ideal of wealth sharing. For Mr. Xi, the Communist Party’s long-term authority is at stake.

Now that economic growth is moderating, many young Chinese feel that upward mobility is diminishing. Well-paying white-collar jobs can be hard to find. Tech workers complain of punishingly long hours. Families feel they can’t afford to have more children, adding to a looming demographic crisis. For now, Mr. Xi faces little opposition, but longer term that could turn if such grievances pile up.

“Achieving common prosperity is not just an economic issue; it’s a major political matter bearing on the party’s foundation for rule,” Mr. Xi told officials in January. “We cannot let an unbridgeable gulf appear between the rich and the poor.”

The party is keen to show that it is listening to the complaints as Mr. Xi lays the groundwork for a likely third term as the party’s general secretary beginning next year. Mr. Xi wants to stave off any doubts about his claim to another term by arguing that the party can deliver social progress while rivals like the United States stagnate in inequality, said Christopher K. Johnson, a former United States government analyst of Chinese politics​​.

Comment by Riaz Haq on October 31, 2021 at 11:13am

Pakistan’s poverty rate to ease in FY22: World Bank


https://dailytimes.com.pk/827135/pakistans-poverty-rate-to-ease-in-...

In comparison, the poverty rate in other regional countries is much higher than that in Pakistan.

The World Bank report titled “Shifting Gears: Digitization and Services-Led Development” noted that the international or extreme poverty rate in Bangladesh was 12.5pc which would ease to 11.9pc in the next fiscal year.

Similarly, lower middle-income poverty rate and upper middle-income poverty rate in the country is 48.9pc and 82.1pc respectively.

ٹی وی چینل میں اگر غلطی سے پاکستان کی تعریف کر دی جائے تو اکثر اینکر اور حکومت مخالف تجزیا کار بیچ میں بھارت اور بنگلادیش کی معاشی تاریفیں اور پاکستان کو نیچا دیکھاتے ہیں۰ ورلڈ بنک کے مطابق پاکستان میں غربت کی شرح 4.8%، بھارت 22.5%، اور بنگلادیش 12.5%

The World Bank has set the extreme poverty line at $1.9 per person per day, however since 2017, the World Bank has also been reporting poverty rates for all the countries using two new international poverty lines, a lower middle-income International Poverty Line, set at $3.20 per day, and an upper middle-income International Poverty Line, set at $5.50 per day. According to a recent report released by the Bank, Pakistan’s lower middle-income poverty rate would also decline from the current 37pc to 35.7pc in FY22 and 33.8pc in FY 2022-23.

Similarly, the upper middle-income poverty rate has also been projected to ease from 77pc to 76.2pc in FY22 and 75pc in the next fiscal year.



https://openknowledge.worldbank.org/handle/10986/36317

Comment by Riaz Haq on November 8, 2021 at 12:30pm

Bangladesh’s monthly minimum wage lowest in Asia-Pacific region: ILO
Neighbouring country Pakistan topped the chart in South Asia with a monthly minimum wage level of $491, while India has the second lowest minimum wage level of $215

https://www.tbsnews.net/economy/bangladeshs-monthly-minimum-wage-lo...

The monthly minimum wage level in Bangladesh was $48 or around Tk4,070 in 2019 – the lowest among all nations in Asia and the Pacific region, reveals the Global Wage Report 2020–21.

Published by the International Labour Organization (ILO) on Wednesday, the report calculated the "Gross Monthly Minimum Wage Levels in Asia and the Pacific" using the Purchasing Power Parity (PPP) values.

Globally, Bangladesh ranked fifth from the bottom among 136 countries. Neighbouring country Pakistan topped the chart in South Asia with a monthly minimum wage level of $491, while India has the second lowest minimum wage level of $215 in the region, it says.

In the Asia and the Pacific region, the median (average) minimum wage is $381, which is $333 or around Tk18,250 higher than that of Bangladesh. However, the ILO report excluded agriculture and domestic workers while calculating Bangladesh's monthly minimum wage level.

Commenting on the matter, Policy Research Institute's Executive Director Dr Ahsan H Mansur said, "Actually, minimum wage is only applicable to Bangladesh's garments sector, and it has no application in any other ones. Elsewhere, the minimum wage is even lower.

"So, the report is not a real reflection of the true picture, and if the minimum wage is increased artificially, it would not be very beneficial at all. If we increase the minimum wage level only in a particular segment and exclude the whole economy, there will not be any positive."

He added that Bangladesh does not have a minimum wage level in every sector and for every job, so the comparison made by the ILO is not appropriate.

Additionally, the report mentions that Bangladesh's actual monthly minimum wage was only $18 last year.

In the region, Australia has the highest monthly minimum wage of $2,166 in terms of PPP, followed by New Zealand with $2,126 and South Korea with $2,096.

What is the situation in South Asia?

Nepal is following the chart-topper Pakistan with a minimum wage level of $396 in this region, and Afghanistan is just behind Nepal with $306.

At the bottom end, Bangladesh and India is followed by Sri Lanka, which has the third lowest minimum wage level of $247 in the South Asia region.

Bangladesh revises the minimum wage every five years and last did it in December 2018. The report mentions that out of 149 countries, only Bangladesh and Angola have not yet made any schedule for the next adjustment of the minimum wage.

About the issue, Dr Mansur said, "Amid this Covid-19 crisis and the ongoing export situation, if the minimum wage is increased now, unemployment may rise further. Instead, we should focus on increasing our labour productivity.

"Productive workers can get an annual pay rise automatically."

Globally, the median value of gross minimum wages for 2019 is $486 per month, indicating that half of the countries across the globe have minimum wages set lower than this value, and half have minimum wages set higher.

Largest decrease in real minimum wage

Bangladesh has seen 5.9% decrease in real minimum wage growth annually, from the period between 2010 and 2019. This was the largest decrease in Asia and the Pacific region.

Meanwhile, the neck and neck RMG export competitor Vietnam (11.3%) observed the highest increase of real minimum wage growth.

Addressing the issue, Dr Mansur said, "This is not desirable and a matter of deep concern too."

On a separate note, the annual labour productivity growth increased by 5.8% in Bangladesh, compared to 5.1% of Viet Nam for the same period.

Comment by Riaz Haq on December 23, 2021 at 8:46am

World #Inequality report 2022 says #India is one of the world' most unequal countries, with rising #poverty & an affluent elite. Govt policies have had a negative impact on the #poor while making the #rich even richer. #Modi #BJP #Islamophobia #Hindutva https://www.npr.org/sections/goatsandsoda/2021/12/23/1065267029/a-c...

If growth had been distributed more equally since the 1990s, there would be less poverty today and more middle-class families, says Chancel. In order to generate prosperity for the bottom 50% of the population, public investments are key — equal access to basic services such as quality education, transport and health, says Chancel. "This is still lacking in India."


--------------

According to the World Food Program, a quarter of the world's undernourished people live in India. And despite steady economic growth and per capita income having tripled in recent years, the WFP notes that minimum dietary intake fell.
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It's almost as if there are two countries in India: a very small, very rich country (the country of prosperous Indian urban centers) and a very large, poor country, says Lucas Chancel, lead author of the report and co-director of the World Inequality Lab. "For a long time, it has been said that the richer the rich part of the country, the better for the rest," he says.


The coconut seller Pachavarnam hasn't felt that, though. And experts like Chancel acknowledge that this is an outlook that's left many families vulnerable.

A coconut vendor says she's 'terrified of the future'
Panchavarnam, who goes by one name, has sold tender coconuts on the streets of Madurai for the last 40 years and remembers a time when the bustling residential neighborhood where she now sells her wares used to be a forest. Today, it's filled with signs of development. There's a highway close by. Busy streets brim over with traffic. In the last decade, apartment complexes, department stores and schools have sprung up around her.

For the 50-year-old, however, little has changed.

She still works 12 hours a day. It's a job she's been doing since the age of 9 helping her dad. That's when she first learned how to hold a sickle to slice into the thick, fibrous coconut. She and her husband begin their workday at 5 a.m., when she buys the coconuts from a wholesale market to fill their rented cart.

She may sell her coconuts at a higher price than she did ten years ago, but her family's daily living expenses and rental for her cart have increased too. Inflation has skyrocketed. But even though her profit may be wafer thin, she's grateful she can at least work.

"During the lockdown, we suffered a lot," she says. "It struck me then how little we had saved. For the first time, I was terrified of the future. What would happen to me and my family if we could no longer work?"

Panchavarnam is one of India's many informal workers, an estimated 485 million people — which according to a 2014 survey by the government of India's Labour Bureau is roughly 50% of the national workforce. Some reports estimate that their numbers are far higher — almost 80% of the workforce. While Panchavarnam is self-employed, other informal workers are hired by companies. But their situation isn't necessarily any easier.

A female construction worker's dusty burden
Selvi, 37, is a construction worker in Chennai, a city in Southern India, who earns Rs 350 ($4.60) a day, carrying heavy loads of cement, bricks and gravel. She winds a thick cloth turban style over her head and places her loads directly on it.


https://wir2022.wid.world/www-site/uploads/2021/12/Summary_WorldIne...

Top 1% Income Share: India 22%, Pakistan 9%

Comment by Riaz Haq on November 7, 2022 at 10:55am

Miftah Ismail
@MiftahIsmail
I gave a talk at Habib University a few days ago. This one clip has touched a nerve with a lot of people. Let know what you think. (Hopefully for a little bit you can come out of your partisan posture and judge the argument on its merits).

https://twitter.com/MiftahIsmail/status/1589659579822243841?s=20&am...

Former finance minister Miftah Ismail said on Monday Pakistan is “intolerant as hell” and “belligerently uneducated” as the elite capture of resources has left no space for reforms.

https://www.dawn.com/news/1715551

Speaking at Habib University, the businessman-turned-politician wore the hat of an economics professor to talk to students in the uneasy presence of the educational institute’s rich benefactors who have “invented their own economies” in an otherwise poor country.

He referred to the families of the Dawoods and Habibs — some of their members sat in the front row — as evidence of poor upward social mobility in Pakistan. They’re the richest Pakistanis of today just like their fathers were the richest Pakistanis of yesteryear, he said. “What shot at success does the son of an ordinary Pakistani have against my son?” he asked, rhetorically.

Mr Ismail’s address mostly consisted of views and anecdotes that he’s already told many times over — word for word, in some cases — since his latest five-month stint at the top of the finance ministry. He reiterated the I-saved-Pakistan-from-default message while calling the idea of the finance ministry controlling the exchange rate “nuts”.

His hour-long talk was salted with the seasoning of doom and gloom. Pakistan will likely be a country for the top one per cent even in 2047, he said. “Which problem have we ever solved?” he said while referring to the decades-old issues of low literacy, terrorism and the circular debt that still plague the nation of 220 million.

Responding to a question about the likelihood of the country receiving climate reparations — dollars that the world’s biggest polluters are supposed to give to developing nations for suffering the consequences of climate change — Mr Ismail said their likelihood was minimal.

Quoting from two meetings he had with a group of ambassadors from European nations, Mr Ismail said the country shouldn’t be expecting any climate reparations whatsoever. “Pakistan isn’t a well-liked country, to put it diplomatically,” he said.

He made a strong case for privatising the twin gas distribution companies, which were losing one-fifth of their supplies under the head of unaccounted-for gas (UFG). “The issue of UFG will be solved within one year if you privatise the two companies,” he said while implying that their directors lack the so-called skin in the game to bring about any real change in the state-owned enterprises.

Mr Ismail gave assurances that the central bank was going to penalise eight commercial banks that were caught manipulating the exchange rate to make billions in profit while he sat at the helm of the finance ministry.

Replying to a question, the former finance minister acknowledged the outsized role of the military in politics. “It isn’t a good thing. The influence of the military must come down over the years,” he said.

Comment by Riaz Haq on March 5, 2023 at 8:29am

Hanging out with Pakistan’s 1%

https://tribune.com.pk/story/2404547/hanging-out-with-pakistans-1

Australian anthropologist rubbed shoulders with Pakistan's wealthiest people for 14 months to understand how they live


Choosing Pakistan for her PhD research project, she set out to investigate Pakistan’s elite. Her research based on interviews of many people from elite families revealed that beneath the formal structure lie networks of power and influence linked by family, social connections and marriages through which economic and political competition, deals and alliances are made.

Initially, her focus was going to be about the aspirations of the middle class, but a car ride to Lahore, changed the course of her research. “I wanted to learn more about middle-class Pakistanis as I spent a lot of time with my colleagues and my friends,” she says. “But one day, I had to go to Lahore to meet some academics at LUMS and was all set for a Daewoo trip, but my friend who I was staying with suggested that I go with a friend of hers who was driving to Lahore. Over the three and a half hours of this car ride to Lahore, I started asking questions and this amazing story came out about this person’s family business as a cigarette manufacturer, his family, networks of uncles and cousins and family members involved in trade with China, and of the bribes they’d recently been asked to pay.”

By the time they arrived in Lahore, Armytage had made up her mind to write a book about big business families. “A few days later, I sat with an industrialist, his brother and his cousin and one of their family friends, the son of a prominent Lahore politician and they drew this three-page long list of the wealthiest and most powerful business people in Pakistan to be interviewed,” she recalls. “They marked at least 20 people off that list that they could access either through work or friends.”

Eventually, Armytage had several interviews lined up with some of the biggest business families in Lahore.

“Every person that I interviewed introduced me to more,” says Armytage. “Some I met multiple times for second interviews or to meet more people and it just spiralled. There were challenges, but it opened up in a way that I hadn’t expected. A lot of these families had gone through turbulence because of the instability in Pakistan so was plenty to tell. Sometimes they would speak for hours and I would be exhausted.”

Did they enjoy talking to her or thought she was being nosy? “People were clear about what I was doing,” says Armytage. “I had to form relationships of trust with people who I would be introduced to and I told them that I am writing a book. People enjoy talking about what they do and it’s surprising how much they tell you if you’re genuinely interested in their lives,” she says. “Pakistanis are so used to being asked about terrorism and political instability that I think they were delighted to be asked about their success. Mostly, it would be about their work, families and friendships. Also I could gauge how much freedom I had to ask. There were some areas, however, where I was advised to not go too far.”

Comment by Riaz Haq on March 5, 2023 at 8:31am

Hanging out with Pakistan’s 1%

https://tribune.com.pk/story/2404547/hanging-out-with-pakistans-1

Did being a foreigner and a woman help in these influential people loosening up?

“I have an entire chapter in the book about my position as a middle-class foreign woman enabling me to access often older, Pakistani, wealthy men who were far above me in social class and from a different culture,” she responds. “Being a woman changes the dynamic significantly. That type of access is difficult for Pakistani journalists.”

Armytage claims to be well-accustomed to the Pakistani society, since she has been exposed to it for 22 years in different capacities.

Her research points out that the wealthy in Pakistan are not a homogenous group, but divided along various lines such as region, ethnicity, religion, and business sector. Armytage argues that these divisions are important for understanding the micro politics of wealth in Pakistan, as they shape the ways in which the wealthy interact with each other and the society.

Hence, the central message of her book is that Pakistan is run by a small group of elite families who comprise different power blocks in business, politics, bureaucracy and military. “They determine the direction of the country, make laws and benefit from that,” she says. “The book looks at how they have power that they have maintained since Partition and in times of major upheavals such as the 1965 and 1971 wars. Basically, the elite creates regulation, but does not have to follow it. They get wealthier and more powerful as they shape up for a better control on things. The book also looks at strategic socialising and marriages and the ‘culture of exemptions.’”

Armytage explains that this culture enables the elite to maintain and buttress their positions and thwart competition. The use of law as a mechanism, plus extralegal and sometimes illegal activities constitute the means of wealth accumulation and preservation as well as tax avoidance.

“Much like the global elite of which they are a part, the Pakistani elite direct the legal and regulatory structures that determine wealth flow and opportunity within the country, while simultaneously operating outside of, and above these structures,” she explains. “There are two groups of established elite. Firstly, those who acquired their wealth pre-partition through land grants and other perks from the Mughal empire all from association with the British and through benefitting from that particular regime, and also in the first couple of decades after Pakistan. Then there are those who acquired their wealth mostly post-1977 in relation to the military regime of the time and other regimes that followed. Within the established elite group, there are a couple of different groups. There is the group of mainly middle-class Gujrati traders who Muhammad Ali Jinnah relied on to establish the new Pakistani nation and that becomes really important when we look at Pakistani elite today. They were called upon to help establish the industry that Pakistan needed. At the time of Partition, all the industrial infrastructure of united India remained in India and an enormous vacuum needed to be filled to justify the needs of the new Pakistan. So these middle-class groups were lured over to Pakistan by Jinnah and his government and given tax concessions and other perks to make business lucrative for them. As a result they really thrived within that community. Most of those traders moved to Karachi while the established elite settled in Lahore, which is closer to the Indo-Pak border that they crossed over.”

Armytage observes that marriages among the elite create bonds between families and promote ‘political dynasties’ which helps protect their power and influence.

Comment by Riaz Haq on March 5, 2023 at 8:32am

Hanging out with Pakistan’s 1%

https://tribune.com.pk/story/2404547/hanging-out-with-pakistans-1

“Interestingly, military officers prefer industrialist girls or even the daughters of bureaucrats with good standing and they seem to shy away from politicians,” she says. “Marital strategies continue to be one of the most powerful mechanisms employed by the Pakistani elite to protect their economic assets and their social status, to foster inter-elite networks and to gather information on other elite families.”

Many of the established elite families that Armytage spoke to view themselves as having really high culture and elite dispositions. “Often they have actually lost a lot of wealth that they originally had, but they continue to own property and have high status, even though they’re no longer the most-wealthy people in Pakistan. Many wealth holders are the nouveau riche families but they don’t have old-money prestige and hence feel stigmatised. Often the established elite as gatekeepers, keep out the nouveau riche from institutions such as the elite social clubs of Lahore and Karachi and established elite schools that they want to be part of and where business and marriage decisions are made. They try to keep them out because these families are losing income comparative to the nouveau riche families. Marriages blend the wealth of one family with the status of another, provide an overall security and stability, and protect these families from political volatility. Some influential families have connections to the princely states in India so it’s all about propelling upward mobility.”

Armytage explains why, for instance, people from solid middle-class backgrounds who were in the military weren’t able to break into the social forums of the established elite and weren’t even able to do business with a certain group of people. “It is because they were never invited to the right parties,” she says. “But when they go about setting up marriages with the daughters or sons of some of those most established elite families, it brings a huge influx of capital to families who are running on fumes despite huge properties.”

Another interesting deduction Armytage makes is that Pakistani elites don’t like to dominate and be competitive in the world because they enjoy being big fish in a little pond. “A number of elites in other parts of the world also find that when they leave their country, they lose their status and access that they had before,” she points out. “When the Russian elites came to London, they brought in enormous wealth, much more than the Londoners they were spending time with. Yet they couldn’t break into these elite circles because they were viewed as too ostentatious and crass.”

Since most of her research done in 2014 was a turbulent time for Pakistan, many people told Armytage they couldn’t possibly move overseas permanently, because it would be dull without the excitement of Pakistani politics and being in the centre of the constant drama.

Towards the end of the book she discusses that the contemporary Pakistani elite are closer to their colonial predecessors in their abuse of power and moral grounds than they would like to acknowledge.

Armytage sees food insecurity, climate change, and uneducated youth population as serious challenges for Pakistan and she hopes that the country would increase its wealth base and that as a result of moving into middle-income status, there could be more wealth available and less people living in poverty. She believes that good policy making can transform people’s access to resources, their ability to grow their own income and to improve the lives of a larger number of people, which has happened to some degree in each of the decades post-partition.

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