So - someone explain to me some basic facts since I am no financial whiz.
If Pakistan is claiming an underground informal economy then what about Bangladesh? Is IMF counting or not counting Bangladesh' informal economy (which I know exists)?
Same thing about Mr. Dar's claim about GDP calculation methods for calculating Pakistan's GDP. Won't those Calculation methods apply to calculation of Bangladesh' GDP too?
How does this change anything? Not taking sides - just some basic questions.....
I found it a bit odd that a South Asian Finance minister can lecture and give 'assignments' to the World Bank (or for that matter IMF) on calculating something like Pakistan's GDP. Maybe Pakistan can come up with their own calculation done by Pakistani financial experts which is more accurate than either the World Bank or IMF. The calculation method can be transparent and open so it can be scrutinized by all.
Too many times calculation of GDP is such an nationalistic and egotistical issue (trying to hide reality), and when we are making silly arguments about which govt. in South Asia is actually more direly f*ck*d, separated by a few measly dollars. Excuse my French.
What we ideally should be doing, is to complement each others economies, which is what we need more than ever.
Our economies aren't cricket matches, no one really is supposed to win against each other.
I believe we have far better chances to win together.
The colonial powers started this distrust, and we continue to the benefit of their military industrial complex, and to the severe detriment of each of our fragile economies.
Let me answer your question one by one.
Pakistan, Bangladesh and all other low income countries have informal economies but it depends on their way of governance to bring it to formal.
Indian experts are claiming that their informal economy has shrunk to 17.22% of their GDP.
Pakistani experts have come up with their estimates and back in
2008-09 they come up with figure of up to 91% of GDP.
There is something known as base year which is described as:-
A
base year is the first of a series of years in an
economic or financial index. A
base year in an index is normally set to an arbitrary level of 100. New, up-to-date
base years are periodically introduced to keep data current in a particular index.
Now India & Bangladesh updated their base year but Pakistan tried along with India & Bangladesh but couldn't do so due to political tensions in 2005-06. We are still using 1999-2000 as base year so Pakistan informal economy is definitely bigger than India & Bangladesh.
When Nigeria updated their base year after such a long time their GDP grew by 89%.
And our Finance Minister authorized World Bank to re-calculate our GDP because World Bank is a neutral source and they have the expertise & right to do so not Pakistan or any other country.
