Economically speaking not much good news comes out from Pakistan these days though it is the world's 25th largest economy, a per capita gross domestic product (GDP) of $ 1468 and growth of 5.7 per cent. With a population of 200 million it has a massive GDP of $ 283 billion in spite of all the stresses and volatility of its internal politics. It's also a bigger country than Bangladesh, yet in GDP we have totted up $ 285 billion, per capita GDP is $ 1754 and with a growth of around 7.0 per cent, it's the second fastest in the world.
The taka is a stronger currency pegged currently at 1:1.37 to the Rupee suggestive that the economy has more variety than ours -in itself a very positive sign. Much of what we produce is weighted by garments exports and crop production thereby leaving options open for heavy industry investments. With banks cutting interest rates and even putting a 6.0 per cent deposit rate for government funds, the climate for investment should be more attractive provided the stomach is there. Though the common moaning by industries of infrastructure i.e. gas, electricity and roads accessibility has become almost banal, every industry worth its salt proudly talks of its alternate stand-by power supply whenever they seek to attract buyer confidence. Poverty has reduced in both countries though the figures vary depending on which source is quoted. Pakistan has been hit by a slowing down of donor funding while Bangladesh has found ways around unavailability of funding due to its gradual upgradation towards middle-income status that automatically stifles readily available and low-cost financing. The difference has been determined leadership.
An area where there's something to be learnt from is vegetable and staple prices that still seem more reasonable in Islamabad compared to Dhaka. Pakistan has the added difficulty of accessing Indian produce, unlike Bangladesh. How they keep their costs down is an interesting phenomenon. The country, despite being bigger and with more arable land has increased production but their poverty levels deny market access unlike ours. That and the very favourable terms of trading with China keeps them propped up even though the US administration chooses to frown on them. That's a matter for politicians to sort out.
The tricks being missed by our policy planners is prising open the seven sister states in India for our produce in return for the generous transit facilities that are being offered. The trade deficit with our neighbours are going from bad to worse for all the promises by the Indian leadership. Backward linkage industries have developed significantly in our economy to take on even the Chinese. The more wealthy that nation becomes, the more are the possibilities. The deficit with India is around $ 5.5 billion. As per figures available, out of the $15 billion trade with China, our exports are only $ 1.0 billion. Quite a chunk of change to chew on.
