Sense of Well-being Declines in Pakistan But Still Higher Than Neighbors

[Riaz Haq]

Gallup 2012 Wellbeing survey reports that 20% of Pakistanis say they are "thriving", down from 32% last year. However, the report shows that more of them are still better off than their neighbors in Bangladesh (16% thriving) and India (11% thriving). The number of those "thriving" increased in Bangladesh by 3% and declined in India by 6%.

 The fact that the number of Pakistanis who consider themselves thriving is down from 1 in 3 last year to 1 in 5 now is understandable because of  many serious and worsening crises Pakistan  is facing today. The real question is who are these 20%? And why do they say they are thriving?

Here are some of the possible reasons:

1. Rising consumption of durables (cars, motorcycles, tractors, Appliances) and non-durables (FMCGs or fast-moving consumer goods) as well as increasing cement sales are indicative of the underlying strength of the economy.

2. Pakistan's undocumented economy is continuing to thrive as seen in packed shopping malls and restaurants.

3. There are double digit increases in cash remittances flowing in to Pakistan from the world's seventh largest diaspora, rising 21.45 percent to $9.73 billion in the first nine months of the 2011/12 fiscal year.

4. Karachi stock index is booming, hitting new 4-year highs. Share prices are driven by healthy profits and foreign buying, making KSE-100 the third fastest growing index in the world.  

5. Even the preliminary official estimates are indicating that Pakistan's nominal per capita income has increased by 9% to $1,372 in 2011-12 from $1,258 in 2010-11.

6. Preliminary estimates are showing that poverty rate in Pakistan has declined from 17.2 per cent in 2008 to slightly over 12 per cent in 2011.

The Gallup survey confirms that only 28% of Pakistanis have confidence in their national government. In my view, it stems from the obvious failure of the state in delivering basic services such as rule-of-law, security and electricity to the people .  The best way to improve the wellbeing of the people is to improve governance, reduce corruption and persuade people to pay taxes to give the state more resources.

 Related Links:

Haq's Musings

Economic Survey of Pakistan 2011-12

US Technical Analyst Bullish on Pakistan

Pakistan on Goldman Sachs' Growth Map

Pakistan's 64 Years of Independence

Goldman Sachs & Franklin-Templeton Bullish on Pakistan

Emerging Market Expert Investing in Pakistan

Pakistan's Demographic Dividend

Genomics & Biotech Advances in Pakistan

The Growth Map by Jim O'Neill

Pakistan Rolls Out 50Mbps Broadband Service

More Pakistan Students Studying Abroad

Inquiry Based Learning in Pakistan

Mobile Internet in South Asia

Online Courses at Top International Universities

[Riaz Haq]

Here's a BBC report on power cut and sanitation problems at the Indian parliament: A foul smell emanating from sewage in a toilet in India's upper house of parliament, the Rajya Sabha, forced it to adjourn twice on Thursday.

Congress party lawmaker Rama Chandra Khuntia first complained of the smell when a minister was replying to a question in the House.

The first adjournment lasted for 15 minutes. But the continuing stink forced lawmakers to exit again.

Mr Khuntia told the BBC the smell was due to "poor maintenance".

"Everyone in the Rajya Sabha, panicked. Initially, we thought it was a gas leak. But then we realised the stench emanated from the toilet."

"We were told the smell from a toilet adjacent to a canteen found its way inside the House through air-conditioning ducts," Mr Khuntia said.

The incident comes three days after brief power cuts interrupted parliament proceedings.

Television news channel NDTV quoted the main opposition party BJP's Ravi Shankar Prasad as saying: "We talk of nuclear safety, we should at least ensure safety of smell in the House."

http://www.bbc.co.uk/news/world-asia-india-18024831

[Riaz Haq]

Here's a Businessweek story on risks to Pak economic growth:

akistan will seek to reduce inflation to less than 10 percent for the next fiscal year as it grapples with the fastest pace of price increases in Asia.

The inflation goal for the 12 months starting July 1, 2012 is 9.5 percent, the prime minister’s office said in a statement in Islamabad yesterday. Earlier this month, the government projected gross domestic product will rise 4.3 percent in the period, up from 3.7 percent in the current fiscal year.

Pakistan’s economy has been hurt by blackouts, a trade deficit, diminished aid flows and an insurgency on the Afghan border. The government plans to boost spending on roads, health care and education to support growth and is due to present its last federal budget next week before elections that must be held by February.

“The economy is facing huge challenges,” said Khalid Iqbal Siddiqui, head of research at Karachi-based United Bank Ltd. “Power blackouts, reduced aid inflows and the law and order situation are the key constraints that will keep growth depressed in the next fiscal year.”

Pakistan’s rupee has weakened about 6.5 percent against the dollar in the past 12 months. Domestic risks and the threat to global growth from Europe’s debt crisis have curbed demand for the currency.

Farm output will climb 4 percent next fiscal year, up from 3.1 percent in 2011-2012, according to yesterday’s statement. The industrial sector may expand 4.1 percent, from an estimated 3.6 percent this financial year, the projections showed.
Inflation Risk

The targets were set in a meeting of the National Economic Council, which is headed by Prime Minister Yousuf Raza Gilani.

Pakistan’s inflation accelerated to an eight-month high of 11.27 percent in April, limiting scope to cut interest rates to support the $200 billion economy. The pace of price increases is the fastest in a basket of 17 Asia-Pacific economies tracked by Bloomberg.

The central bank left borrowing costs unchanged at 12 percent last month for a third straight meeting, after cutting them by 2 percentage points in 2011.

The International Monetary Fund said in February that Pakistan should broaden the tax base, curb some subsidies and curtail central bank financing of the budget deficit. It described the economy as “highly vulnerable.”

The council proposed to spend 873 billion rupees ($9.5 billion) on development projects in the year starting July 1, up 19.5 percent from 730 billion rupees in the current fiscal period. The council originally proposed expenditure of 863 billion rupees yesterday, before increasing the planned outlay by 10 billion rupees in a revised statement later the same day.

The Asian Development Bank has said the power deficit in Pakistan and damage to the cotton crop from floods last year may restrict economic growth to 3.6 percent in the year ending June.

The government will unveil the federal budget in parliament in the first week of next month, according to local media reports.

http://www.businessweek.com/news/2012-05-25/pakistan-seeks-inflatio...

[Riaz Haq]

Here's a CNN report on Pakistani city of Sialkot which manufactures musical instruments, surgical equipment and sports goods:

Which cities can boast more than a dozen bagpipe factories? Edinburgh? Glasgow? How about, Sialkot, Pakistan?

Sialkot is located in north-east Pakistan, some 125 kilometers from the capital Lahore. Legend has it that the city started making bagpipes during the British Raj, when a Scottish businessman came to town and set up a factory.

More than a century later Sialkot is one of the world’s biggest manufacturers of bagpipes, with more than a dozen bagpipe factories, both big and small.

The bagpipe business became so successful that manufacturers started making and exporting other specialty items - including staples of American culture such as vintage basketballs, American footballs and even replica civil war uniforms.

Today the city manufactures hundreds of items. Sports companies such as Nike and Adidas make their soccer balls here. Dozens of kinds of musical instrument, and even surgical equipment, are made in Sialkot.

Naeem Qureshi, of the Sialkot chamber of commerce, told CNN’s Reza Sayeh that the city's exports are increasing, and are now worth $1.4 billion.

While Pakistan often makes headlines these days because of militant attacks and extremism, local manufacturers say security concerns are overblown. Pakistan has plenty of space, as well as cheap raw materials and labor. And local businesses say Sialkot is a perfect example of why it pays to invest in Pakistan and do business there.

http://business.blogs.cnn.com/2012/07/05/bagpipes-made-in-pakistan/

[Riaz Haq]

Here's a PakTribune report on new plant for producing BOPET for packaging of FMCG products in Pakistan:

Novatex Limited has successfully commissioned a project to produce Biaxially Oriented Poly Ethylene Terephthalate (BOPET) film.

This is a pioneer industry for Pakistan, bringing in technology and machinery, which is so far non-existent in the country.

Habib Bank Ltd, United Bank, Faysal Bank and Standard Chartered financed this project and the plant commenced operations in June 2012.

BOPET Polyester film, which will be produced by Novatex, has due to its superior attributes become a necessary packaging material for food, etc allowing the introduction of strong aroma retention and beautiful printed small as well as bulk pouches for tea, ketchup, mayonnaise, salad dressings, spices, fruit and vegetables packaging, food pastes as well as milk powder, good quality biscuits/snacks washing powder and shampoos, etc.

The current consumption of BOPET in Pakistan is over 16,000 tonnes and it will cross 20,000 tonnes following its availability locally.

Pakistan will become self sufficient in BOPET polyester film and save import of $40 million besides will generate export in excess of $30 million.

BOPET polyester film is also used for LCD/LED TV panels, solar panels, cable interior, salma sitara type decorations and x-ray film.

The project of Novatex has been set up with the latest German technology supplied by Lindauer Dornier of Germany.

It has a capacity to produce 31,000 tonnes BOPET per annum with 8.7 metre width and is the largest capacity and width currently available in the world for BOPET film lines.

http://paktribune.com/business/news/Pakistans-first-BOPET-polyester...