Has Bangladesh Really Left India and Pakistan Behind in Per Capita Income?

[Maula Jatt]

It doesn't matter because Pakistan problem isn't GDP but CAD/DEBT. Look at Sri Lanka, practically bankrupt country. Its GDP can crash any day if they default, see Lebanon. Sri Lanka 80% of revenues goes to debt servicing. Pakistan this year 45% of revenue will go to debt servicing.

For India its like 15-20% of revenues going to debt servicing. It doesn't matter how many cars are sold in Pakistan if we cannot control debt and CAD to manageable level like BD and India have done so far.


Domestic air travel is another stupid point Indians make. Considering 49% of all domestic travel is done by 1% of population. India definitely have bigger inequality problem in south asia.

Yep, I agree
Look I don't want to ruffle feathers (visit and experience the country if it ruffling any feathers) but living standards in Pakistan are not a issue compared to others in the region, people live a very decent life (compared to the region minus Sri Lanka)
Our issue is not living standards but debt,

this can be solved steadily by increasing direct tax, tax to GDP ratio(lowest in the region), exports, economic digitalization (indias demobilization helped) etc

Infact our issue is as our economy rises our debt problem becomes an issue
So the buying spree we are experiencing rn with motorcycles, tractors, cars is actually kinda scaring me ngl
Making it sustainable is something that we need

 

[ARMalik]

One way to estimate the size of the informal economy is by looking at the amount of currency in circulation relative to overall money supply. This data is published regularly by all central banks in South Asia. Pakistan's currency in circulation to M2 ratio is more than double the percentages in Bangladesh and India, indicating that the informal economy in Pakistan is much bigger.

True, but then currency circulation data is again FAKED in Pakistan.

 

[Maira La]

you picked up travel as a parameter to counter the argument? what about 30 other parameters he discussed ?

No thanks, I wouldn't waste my time on 30 other amateurish BS. For instance he says Mumbai's GDP is bigger than entire BD's. As a counter argument I can say Dhaka's GDP alone is bigger than each of 23 Indian states. So on average we are better off per capita.

 

[Paitoo]

These kinds of subjects are good for academicians. The reality is what it is and I don't think anyone on this forum is qualified to know how the lives of the poor really are, which is what matters when talking about per capita. I don't want to go on a tangent, but obsession with GDP needs to go, especially in South Asia, otherwise it just become a stupid d*** measuring contest.

While people do care about how their incomes are increasing, they equally care about crime, freedoms, a healthy living environment, opportunities to relax, job security (ie. future rather than present conditions) etc. South Asia, particularly India and Bangladesh have high population density, which results in squalid housing for the poor and in turn breeds disgruntled youth. People care about safety of their children, about corruption because it eats away their wealth and many other things.

 

[Bilal9]

People are getting jealous of Bangladesh to be honest. First, it was Pakistanis who got jealous, then comes Indians who got peanut butter and jelly when Bangladesh surpassed them in per capita income. Now, it seems like both of them are joining hands in getting jealous of Bangladesh the new economic tiger. Let me tell you a simple solution, jealously won't take you anywhere, only hardwork will. Work hard like Bangladesh, get filthy rich and only then you'll be able to walk with a swagger.

Bhaisaab no Bangladeshi should beat their chest until (and unless) their GDP per capita reaches at least US$5000 nominal.

That said, BBS is known to fudge numbers to some extent, just like their analogs in India. I don't know about Pakistan.

So insert a few drops of oil in the nose @Sudarshan - and sleep well.

Bangladesh is no richer than India. All is good.

These kinds of subjects are good for academicians. The reality is what it is and I don't think anyone on this forum is qualified to know how the lives of the poor really are, which is what matters when talking about per capita. I don't want to go on a tangent, but obsession with GDP needs to go, especially in South Asia, otherwise it just become a stupid d*** measuring contest.

While people do care about how their incomes are increasing, they equally care about crime, freedoms, a healthy living environment, opportunities to relax, job security (ie. future rather than present conditions) etc. South Asia, particularly India and Bangladesh have high population density, which results in squalid housing for the poor and in turn breeds disgruntled youth. People care about safety of their children, about corruption because it eats away their wealth and many other things.

The proof of the pudding will be when even more tech-expert Indians (or Pakistanis) start taking up employment opportunities in Bangladesh as expat workers. This will be win-win for everyone.

There is no loser in India or Pakistan - if Bangladesh is indeed rising.

I am waiting for that situation.

 

[ziaulislam]

Has Bangladesh Really Left India and Pakistan Behind in Per Capita Income?

Is Bangladesh's officially reported GDP figure credible? Do consumption figures support Bangladesh's claim of higher per capita income tha...

www.southasiainvestor.com

Is Bangladesh's officially reported GDP figure credible? Do consumption figures support Bangladesh's claim of higher per capita income than India and Pakistan? If Bangladesh has higher GDP per capita, why is its per capita consumption of energy, cement and steel so much lower than India's and Pakistan's? Does Pakistan really have a much larger informal economy than Bangladesh or India? Is there a lot more currency in circulation in Pakistan than in Bangladesh and India? Let us try and answer these questions!

Energy consumption:

Life in modern times is heavily dependent on energy. Per capita energy consumption, a key barometer of economic activity, is significantly lower in Bangladesh than in India and Pakistan. Use of electricity per capita in Bangladesh is significantly less than in India and Pakistan.

​

​ Energy Consumption Comparison in Bangladesh, India and Pakistan. Source: NationMaster

Commercial energy use (kg of oil equivalent per capita) above refers to apparent consumption, which is equal to indigenous production plus imports and stock changes, minus exports and fuels supplied to ships and aircraft engaged in international transport. It's only 142 Kg of oil per capita in Bangladesh, much lower than 463 Kg in Pakistan and 494 Kg in India.

Cement Consumption:

Use of cement is another important indicator of economic and development activities, particularly in the infrastructure and housing construction sector. China and the United States, the world's biggest economies, also have the highest consumption of cement.

​

Cement Consumption. Source: International Cement Review

Steel Consumption:

Per capita steel consumption is another important indicator of economic activity in both construction and manufacturing sectors. It goes into building housing and infrastructure as well manufacturing vehicles and home appliances. The United States and China, the world's biggest economies, are the largest consumers of steel.

Bangladesh is among the lowest consumers of steel products in the world. Per capita consumption of finished steel in Bangladesh (41 Kg) is lower than the regional peer Myanmar (40.5), India (75.3), Pakistan (45.7), Sri Lanka (53.5), according to the World Steel Association (WSA).


Pakistan's Informal Economy:
Dr. Lalarukh Ejaz, an assistant professor at the Institute of Business Administration in Karachi, has estimated that the size of Pakistan’s informal economy at 56% of the country’s GDP (as of 2019). This means that it’s worth around $180 billion a year, and that is a massive amount by any yardstick.
Vehicles and home appliance ownership data analyzed by Dr. Jawaid Abdul Ghani of Karachi School of Business Leadership suggests that the officially reported GDP significantly understates Pakistan's actual GDP. Indeed, many economists believe that Pakistan’s economy is at least double the size that is officially reported in the government's Economic Surveys. Pakistan's GDP has not been rebased in more than a decade. It was last rebased in 2005-6 while India’s was rebased in 2011 and Bangladesh’s in 2013. Just rebasing the Pakistani economy will result in at least 50% increase in official GDP.

​

Estimates of Informal Economies in Asia in 2012. Source: IMF

A research paper by economists Ali Kemal and Ahmad Waqar Qasim of PIDE (Pakistan Institute of Development Economics) estimated in 2012 that the Pakistani economy’s size then was around $400 billion. All they did was look at the consumption data to reach their conclusion. They used the data reported in regular PSLM (Pakistan Social and Living Standard Measurements) surveys on actual living standards. They found that a huge chunk of the country's economy is undocumented.

​

Currency in Circulation to M2 Ratio Trends. Source: Business Recorder

Pakistan's Service Sector:
Pakistan's service sector which contributes more than 50% of the country's GDP is mostly cash-based and least documented. Compared to Bangladesh and India, there is a lot of currency in circulation in Pakistan. According to the State Bank of Pakistan (SBP), the currency in circulation has increased to Rs. 7.4 trillion by the end of the financial year 2020-21, up from Rs 6.7 trillion in the last financial year, a double-digit growth of 10.4% year-on-year. Currency in circulation (CIC), as percent of M2 money supply and currency-to-deposit ratio, has been increasing over the last few years. The CIC/M2 ratio is now close to 30%, according to the State Bank of Pakistan. The average CIC/M2 ratio in FY18-21 was measured at 28%, up from 22% in FY10-15. This 1.2 trillion rupee increase could have generated undocumented GDP of Rs 3.1 trillion at the historic velocity of 2.6, according to a report in The Business Recorder. In comparison to Bangladesh (CIC/M2 at 13%), Pakistan’s cash economy is double the size. Even a casual observer can see that the living standards in Pakistan are higher than those in Bangladesh and India.
Summary:
Based on published data on energy, cement and steel consumption, Bangladesh's claim of having a per capita GDP than India and Pakistan does not seem credible. In this age of growing energy-intensive industrialization, it does not make sense to have significantly lower use of key inputs like energy to produce higher gross domestic product. For Pakistan, it is important for policymakers to promote ways of documenting more of the economy. It's also important for finance officials to rebase the country's to a more recent year than the year 2006 when it was last done.
Related Links:

Haq's Musings

South Asia Investor Review

Pakistan Among World's Largest Food Producers
Naya Pakistan Housing Program
Food in Pakistan 2nd Cheapest in the World

Indian Economy Grew Just 0.2% Annually in Last Two Years
Pakistan to Become World's 6th Largest Cement Producer by 2030
Pakistan's 2012 GDP Estimated at $401 Billion

Pakistan's Computer Services Exports Jump 26% Amid COVID19 Lockdown

Coronavirus, Lives and Livelihoods in Pakistan

Vast Majority of Pakistanis Support Imran Khan's Handling of Covid19 Crisis

Pakistani-American Woman Featured in Netflix Documentary "Pandemic"

Incomes of Poorest Pakistanis Growing Faster Than Their Richest Counterparts

Can Pakistan Effectively Respond to Coronavirus Outbreak?

How Grim is Pakistan's Social Sector Progress?

Pakistan Fares Marginally Better Than India On Disease Burdens

Trump Picks Muslim-American to Lead Vaccine Effort

COVID Lockdown Decimates India's Middle Class

Pakistan Child Health Indicators

Pakistan's Balance of Payments Crisis

How Has India Built Large Forex Reserves Despite Perennial Trade Deficits

Conspiracy Theories About Pakistan Elections"

PTI Triumphs Over Corrupt Dynastic Political Parties

Strikingly Similar Narratives of Donald Trump and Nawaz Sharif

Nawaz Sharif's Report Card

Riaz Haq's Youtube Channel

PakAlumni Social Network

Has Bangladesh Really Left India and Pakistan Behind in Per Capita Income?

Is Bangladesh's officially reported GDP figure credible? Do consumption figures support Bangladesh's claim of higher per capita income tha...

www.southasiainvestor.com

Pakistan economy has highly undocumented and has been counted pretty wrong..
Its obvious that size is much bigger with respect to purchasing power it is still bigger

But its only matter of time

 

[Black Tornado]

Why not simply accept the whole subcontinent is fugged and move on.

 

[N.Siddiqui]

BD's HDI in many indices like infant mortality, health cover, birth rate decline, sanitation, no open defecation, literacy rate(female esp.) and many more looks to be better than Pakistan and India.

Per capita income is not a holistic measurement of wealth distribution as it is a blanket division of pop. against the total GDP, doesn't mean the lower strata of the people are getting that GDP per capita.

 

[SaadH]

Motorcycle sales IMO is quite valid to see real GDP since I believe countries will not tax motorcycle sales too much.



For rail way case in India, large majority of the rail tract is inherited from British India, so comparing railway system in India and Bangladesh can create huge bias since BD is literally starting from zero.

OP and others are not talking about the starting point, the intention is to look at the realistic GDP at the current. Even though India may have inherited more developed infrastructure it still needs to be counted into the calculation.

BTW, Pakistan was also in the same boat, most of Pakistan was considered wild frontier of British raj and there was very little development in this area. New roads, highways, heck even a mint and armory had to be established, factories had to be build, dams, power plants etc. etc. We even created two cities basically from scratch, Karachi one of the biggest metropolis in the world and Islamabad one of the most beautiful capitals of the world. I believe just Karachi's GDP would be equivalent of all of Bangladesh.

 

[RangeMaster]

I believe just Karachi's GDP would be equivalent of all of Bangladesh.

You are wrong.....! Sir. Karachi GDP is not equivalent of all of Bangladesh.

 

[Maula Jatt]

OP and others are not talking about the starting point, the intention is to look at the realistic GDP at the current. Even though India may have inherited more developed infrastructure it still needs to be counted into the calculation.

BTW, Pakistan was also in the same boat, most of Pakistan was considered wild frontier of British raj and there was very little development in this area. New roads, highways, heck even a mint and armory had to be established, factories had to be build, dams, power plants etc. etc. We even created two cities basically from scratch, Karachi one of the biggest metropolis in the world and Islamabad one of the most beautiful capitals of the world. I believe just Karachi's GDP would be equivalent of all of Bangladesh.

Tbf centeral Punjab at the time of independence was developed especially Lahore and surrounding areas (including areas in IP)

(To keep the soldiers happy, fend off/loyalty centeral Asian invasion from Russians...)
Same in Kolkata to keep the babbu class happy

Every Pakistani should thank British in Thier prayers
Gave us canals (although we also did a lot of work after independence but they started the process) which give us agricultural output, increased our pop
Gave us independence without fighting a war for it
Devaloped CP, and Karachi was no Mumbai but was decently devaloped
Recruited men from punjab which meant our armed force legacy/institutional brain was good

 

[RealNapster]

People are getting jealous of Bangladesh to be honest. First, it was Pakistanis who got jealous, then comes Indians who got peanut butter and jelly when Bangladesh surpassed them in per capita income. Now, it seems like both of them are joining hands in getting jealous of Bangladesh the new economic tiger. Let me tell you a simple solution, jealously won't take you anywhere, only hardwork will. Work hard like Bangladesh, get filthy rich and only then you'll be able to walk with a swagger.

We need this jealousy. This will force us to work and actually do something this time.

It doesn't matter because Pakistan problem isn't GDP but CAD/DEBT. Look at Sri Lanka, practically bankrupt country. Its GDP can crash any day if they default, see Lebanon. Sri Lanka 80% of revenues goes to debt servicing. Pakistan this year 45% of revenue will go to debt servicing.

For India its like 15-20% of revenues going to debt servicing. It doesn't matter how many cars are sold in Pakistan if we cannot control debt and CAD to manageable level like BD and India have done so far.


Domestic air travel is another stupid point Indians make. Considering 49% of all domestic travel is done by 1% of population. India definitely have bigger inequality problem in south asia.

Higher GDP figures show promising picture fo economy, reduces debt to GDP ratio etc and attract FDI. Higher GDP figures in itself do no good but they catalyses the economic growth

 

[khail007]

Seems Bangladesh's economy is moving positively step by step. In UAE market.
If one refers to exports, India holds the number one slot, which may be due to most of the traders/importers are being Indian nationals and the Indian community being the most larger one.
It is also evident that if Bangladesh is not surpassing but neck to neck with Pakistani products.
About three to four years ago, I was able to find only the 'Leechi Drink (my favourite)' as BD product. Now at any shelf of supermarket, one could find edible oil (Mustard)/biscuits/spices/garments/canned food products from BD. A significant development seen.
Pakistani products are spices (Shan, Mehran, National)/Pickles/Jams/rice/frozen poultry (K&Ns products)/mutton & beef/vegitables (aalo & piyaz seasonal) and fruit (mango & kino) seasonal. Since long same inventory Pakistan is maintaining.
India is far ahead in auto/engineering/elctronics products with Bangladesh and Pakistan is nowhere to seen.

 

[Arulmozhi Varman]

It doesn't matter because Pakistan problem isn't GDP but CAD/DEBT. Look at Sri Lanka, practically bankrupt country. Its GDP can crash any day if they default, see Lebanon. Sri Lanka 80% of revenues goes to debt servicing. Pakistan this year 45% of revenue will go to debt servicing.

For India its like 15-20% of revenues going to debt servicing. It doesn't matter how many cars are sold in Pakistan if we cannot control debt and CAD to manageable level like BD and India have done so far.


Domestic air travel is another stupid point Indians make. Considering 49% of all domestic travel is done by 1% of population. India definitely have bigger inequality problem in south asia.

On what basis you claim 49% of air travel is done by 1% of the population? Do you know what is 1%? It's 1.4 crore people? Do you honestly think GoAir, Spice, Indigo, air India would have such large fleets for just 1% of the population? My family never had the luxury of traveling in car (forget air travel, 10 years back). Now me, my family, extended family has travelled domestic lots of times for events and functions in the last 5 years. I am sure there are millions of families just like me.

One have to give credit to Capt Gopinath for bringing in an revolution and air travel has taken off ever since.
Do we have inequality problem? Yes, a lot. But are people progressing from low class to middle class? Hell yes. Now progressing from middle class to upper middle class could still be achieved. But from there to high class it doesn't happen to 99999 people out of 100000. India's priority should be get people to middle class first.

 

[hydrabadi_arab]

We need this jealousy. This will force us to work and actually do something this time.


Higher GDP figures show promising picture fo economy, reduces debt to GDP ratio etc and attract FDI. Higher GDP figures in itself do no good but they catalyses the economic growth

Higher GDP is good as long as growth isn't led by imports like is the case with Pakistan and constant CAD crisis. Look at India and BD trade deficit vs us. This is why numbers of imported cars sold is irrelevant since we don't export enough to compensate for that.