Comment by Riaz Haq on December 24, 2015 at 9:31am

#Pakistan infrastructure: #CPEC project with #China could boost Pakistan economy- Nikkei Asian Review http://s.nikkei.com/1kin3Ef

The China-Pakistan Economic Corridor initiative, a planned $46 billion network of transport links, appears to be gaining momentum, which is good news for Pakistan's sluggish economy. Still, security and funding issues remain an obstacle.

The CPEC project, agreed to by Chinese Prime Minister Li Keqiang and his Pakistani counterpart, Nawaz Sharif, in May 2013, would connect the Arabian Sea port of Gwadar in southwestern Pakistan with the Xinjiang region of northwestern China upon its scheduled completion in three years.

The corridor is part of China's "One Belt, One Road" initiative to establish a network of transcontinental land and sea routes. China views Gwadar as a potential hub for trade with the Middle East, Africa and Europe. The project is also aimed at promoting development in Xinjiang and Tibet.

Gwadar, a deep-sea port that is widely expected to become Pakistan's biggest, started container ship operations in May.

Claude Rakisits, senior fellow at the South Asia Center of U.S. think tank the Atlantic Council, said the project could be good for Afghanistan, too. "If peace eventually does come to Afghanistan, CPEC will help that country integrate more closely economically with Pakistan and Iran," he said. "And, of course, it will provide direct access to western China and its hinterland ... a vast and fast-growing region in need of development."

Added Rakisits, "Needless to say, with better roads and railroads, the huge Pakistan market will be easier to access for foreign investors."

Comment by Riaz Haq on December 30, 2015 at 10:35pm

SBP Report for 2015 as seen by economist Kamal Monnoo:

First, Growth: As per the report the real GDP growth rate for the FY 2015 was 4.20% with 2.90% coming from agriculture, 3.60% from industry and 5.0% from services. Clearly this 4.2 falls short of 5.20%, the benchmarked target, but then from government’s perspective its defence could be that this is a better showing than in FY 2013 — when they took over — and that it has performed well to put the growth back on an upward trajectory. In FY 2013 we witnessed a fall in growth to 3.70% from 3.80%, but thereon it has been rising, 4.0% in FY 2014 and now 4.20% in FY 2015. A reasonable argument, but the problem is that when we dissect this growth performance, a rather troubling picture emerges. Pakistan, a country with high mix of existing employable youth and a population growth rate that requires more than 200,000 new jobs a year, essentially needs to grow in sectors that optimise job creation, meaning industry and agriculture.

However, these are the very sectors where we either saw stagnation or a decline: growth rates in industry fell to 3.60% from 4.50% (a staggering 3.20% off the target) and in agriculture a marginal movement of +0.20% (but 0.40% off the target). Even worse, the decline in industry came largely on the back of falling exports (not ‘stagnating’ exports as being claimed in the report) and that too in textiles – the most labour intensive industrial sector. Exports from developing economies, as we know, basically capitalise on cheap labour to gain competitive edge in international markets, in turn directly touching the lives of low-wage labourers and serving the twin purpose of mass employment generation cum distribution of income to low-income strata.

The simultaneous erosion of industry and exports depicts a dangerous trend, which if not quickly arrested can lead to serious social unrest. Add to this the dismal performance of agriculture in 2015 — the largest employment providing sector — and the picture becomes even gloomier. The mess-up in agriculture actually makes up for a perfect storybook tale of corruption, incompetence and neglect, qualifying for criminal investigation. A story of greed of seed and insecticide/pesticide mafia resulting in devastating outcomes where nearly one third of Punjab’s cotton crop stands wiped out and its quality badly bruised, once robust fields of sugarcane now reduced to low yield harvests, and the image of legendary Pakistani Basmati rice seriously dented.

Second, Financial Industry, Debt and Credit-to-GDP ratio: This dodgy saga of underlying growth does not end at the poor showing of industry and agriculture, but also goes on to manifest itself in the services sector, which presumably in 2015 has been the economy’s engine of growth. The services sector grew by 5%, up 0.60% from the previous year and with it taking the overall growth to a respectable level. But then again, scratch the surface and beneath it one finds the malaise of our banking and financial industry. Its growth mainly came on the back of governmental services, finance (debt) to the government, and insurance that also primarily catered to governmental borrowings. Nearly 1.90% out of the 4.20% GDP growth or 75% of the service-sector’s growth can be attributed merely to the government. And this policy of high state loans from commercial bank — in the process crowding-out the private sector — by itself is very counterproductive since in essence capital flows away from the efficient user (private sector) to the less efficient user (government). Moreover, it retards investment, employment generation, and creates an incremental debt in the economy, which otherwise could have been avoided.


http://www.pakistantoday.com.pk/2015/12/30/comment/sbps-report-on-e... 

Comment by Riaz Haq on January 26, 2016 at 10:31am

#Pakistan plans its first mega nuclear 2000 MW power plant - The Economic Times http://ecoti.in/N4OqxZ 
Energy-starved Pakistan will set up a mega nuclear power plant with power generation capacity of 2,000 megawatts, the first in the country's history.

"It will be the first time in the history of the country that a mega nuclear power plant would be set up with power generation capacity of 2,000 megawatts," Minister for Planning and Development Ahsan Iqbal said today.

Iqbal said that Thar is enriched with natural coal deposits and the government is committed to utilising the res .. 

"Super critical technology will be used in the coal power plant, which will be established with the financing of the Asian Development Bank in Jamshoro to ensure a safe environment," he was quoted as saying by the Radio Pakistan.

Pakistan faces about 5,000 MW energy shortages and the government has launched several projects to bridge the gap.

Comment by Riaz Haq on September 6, 2016 at 4:12pm

Pakistan PPP GDP has increased 4.5X since 1990 in terms of current international dollar, according to the World Bank:

1990 GDP $212 billion

2016 GDP $952 billion (IMF puts it at $982 billion)

http://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD

The Geary–Khamis dollar, more commonly known as the international dollar (Int'l. dollar or Intl. dollar, abbreviation: Int'l.$ or Intl.$), is a hypothetical unit of currency that has the same purchasing power parity that the U.S. dollar had in the United States at a given point in time. It is widely used in economics.

Comment by Riaz Haq on March 18, 2017 at 12:54pm

IMF estimates Pakistan's per capita income at Intl$ 5,402.8 (2017, estimate), putting the country's PPP GDP at more than a trillion dollars.

It has risen from 0.56% of the global GDP in 1980 to 0.81% in 2017. 

https://www.gfmag.com/global-data/country-data/pakistan-gdp-country...

It's currently ranked as the 24th largest economy in the world. PwC forecasts it to rise to the 20th largest by 2030 and 16th largest by 2050, overtaking Italy, Canada and South Korea. 

http://www.pwc.com/gx/en/world-2050/assets/pwc-the-world-in-2050-fu...

Comment by Riaz Haq on May 16, 2017 at 11:02am

IMF estimates that Pakistan's PPP GDP crossed the trillion dollar mark in 2017. 

Intl$ 1,059.9 billion (2017, estimate)

https://www.gfmag.com/global-data/country-data/pakistan-gdp-country...

Comment