India and Pakistan at 75: A Tale of Two Divergent Economic Paths

[Indus Pakistan]

Nothing hurts young people like me more than seeing our peers and rivals progress while we are condemned to the stagnation and since the turn of the century, a fast-paced descent in nearly every sphere of national life.

Look mate, lets be honest. Cut the crap. The real truth is India and Pakistan were always ahead of us even during the Moghul era and subsequent Raj. Did you know that most of tax raised by the Raj was from what is now India?

On the other hand did you know that disproportionate share of that tax was then spent in what is now Pakistan. I can't source this but I have read so many books and I still the shock when I read about this - which was written by a British Raj official. He went on to say that there was concerns expressed about what amounted to wealth transfer to the Indus basin from Ganga region and Deccan.

What is Pakistan was not economically viable. Two channels led to this region rising. First was massive recruitment by the Raj armies from regions in what is now Pakistan. This led to entire local economy in these regions living off the sepoys paychecks.

This was further aomplified by building of massive military installations and or military motivated railways. All this again created employment and sunk money into the region. Cities like Rawalpindi housed the largest combat command of the Raj army and you can see even today our 'jenerals' are still lording in Chaklala. What is today PAF base was major air transport and fighter base in the Raj times.

Secondly Indus region is mostly dry semi desert and incapable of supporting large populations. The British invested in what became one of the largest man made irrigation systems in the world - the Indus Irrigation system. This involved building dams, barrages and 1,000s miles of canals. Again the money came from what is now India for this massive investment that measuired by todays standards would be CPEC 20 times.

But all this fact hid that Pakistan was a unproductive territory generating minus wealth. This is why Nehru said Pakistan would insolvent and fall apart within few years. He knew India was paying 'rent' to keep what is today Pakistan afloat. And he was right.

The point to note here is Pakistan was well behind India in 1947 and this fact was masked by the policies of the British as highlighted above. I will cover post 1947 in next post.

@SoulSpokesman thoughts?

 

[Olympus81]

Interesting theory.

But also be mindful of the fact that a huge educated muslim populace migrated from UP to Pakistan.

Pakistan’s bureaucracy and Karachi that hosted the migrating population benefited greatly during the first 2 decades.

My theory is Bhutto’s nationalization policy and the political instability has degraded Pakistan.

 

[Joe Shearer]

Look mate, lets be honest. Cut the crap. The real truth is India and Pakistan were always ahead of us even during the Moghul era and subsequent Raj. Did you know that most of tax raised by the Raj was from what is now India?

On the other hand did you know that disproportionate share of that tax was then spent in what is now Pakistan. I can't source this but I have read so many books and I still the shock when I read about this - which was written by a British Raj official. He went on to say that there was concerns expressed about what amounted to wealth transfer to the Indus basin from Ganga region and Deccan.

What is Pakistan was not economically viable. Two channels led to this region rising. First was massive recruitment by the Raj armies from regions in what is now Pakistan. This led to entire local economy in these regions living off the sepoys paychecks.

This was further aomplified by building of massive military installations and or military motivated railways. All this again created employment and sunk money into the region. Cities like Rawalpindi housed the largest combat command of the Raj army and you can see even today our 'jenerals' are still lording in Chaklala. What is today PAF base was major air transport and fighter base in the Raj times.

Secondly Indus region is mostly dry semi desert and incapable of supporting large populations. The British invested in what became one of the largest man made irrigation systems in the world - the Indus Irrigation system. This involved building dams, barrages and 1,000s miles of canals. Again the money came from what is now India for this massive investment that measuired by todays standards would be CPEC 20 times.

But all this fact hid that Pakistan was a unproductive territory generating minus wealth. This is why Nehru said Pakistan would insolvent and fall apart within few years. He knew India was paying 'rent' to keep what is today Pakistan afloat. And he was right.

The point to note here is Pakistan was well behind India in 1947 and this fact was masked by the policies of the British as highlighted above. I will cover post 1947 in next post.

@SoulSpokesman thoughts?

It might also be argued that far from being a burden on the combined state, the eastern province not only held its own but had a positive balance to contribute to the earnings; possibly, the western provinces together had a negative balance, although this has to be checked with figures. One clue is that after the devastating separation, the eastern province as an independent country has shot ahead of all other South Asian nations, even as the western, the 'Indus' provinces, have faltered, and decelerated at a faster and faster pace.

Interesting theory.

But also be mindful of the fact that a huge educated muslim populace migrated from UP to Pakistan.

Pakistan’s bureaucracy and Karachi that hosted the migrating population benefited greatly during the first 2 decades.

My theory is Bhutto’s nationalization policy and the political instability has degraded Pakistan.

The question raised is whether the western provinces were by themselves ever economically viable. It would seem not.

 

[MultaniGuy]

Why are we comparing Pakistan to that cesspit called India.

Pakistan should become more like China or Japan.

 

[hydrabadi_arab]

@hydrabadi_arab

War with India is least of our problem.

Hyd bhai, You misunderstood me; or rather I was very clumsy in conveying my thought. The 1965 War undermined FM Ayub's regime, which was leading Pakistan into a tiger economy status. (There was a financial implication of the war as well but that was secondary). After the war came 1971 and the socialist mess of Bhutto followed by Ziaist sectarian strife and Pak never got back on its feet properly.

Sri Lanka is first south asian country to default and they didn't fight war with anyone.

They didnt need to. They were busy enough massacring their Tamil and Muslim minorities.

Regards

You again dont understand Pak economics. Our debt crisis started post 18th amendment when provinces got larger share in revenues while 0 debt. Thats like 10 years ago.

Now federation is in debt trap. Bhutto party/PPP is responsible for this no doubt.

There is a way around this and thats is for federal govt to take very very hard decisions. Like selling of PIA which is again opposed by PPP. Its like they want federation to bankrupt.

Anyway no govt who win votes by promising moon will do hard reforms on federal level.

Btw provinces may have gotten more money but its in rupees, real value barely have increased since 2016 for them. So provinces and country is stuck in a loop as long as federal govt doesnt get out of debt trap. PPP doesnt care as they rule Sindh unopposed. Thats all they care about.

 

[El Sidd]

None of these people are willing to move to India to prove their own words. Most of them sit in western countries and advocate for Indian supremacy.

 

[Pak Nationalist]

I love how the usual liberal and self loathing clowns are so obsessed with comparing Pakistan to India in every single thing, they push this idea down our throats that we must be jealous of and strive to be like a "civilised" and "developing" society and country that India is. Pakistan would be perfectly fine focusing on itself and finding its own model, it annoys me how they try to push this idea that we must take inspiration from India and be "jealous" of its "successes".

Being regional peers, it is only natural that comparisons would be drawn. Forget India, even Bangladesh has left Pakistan behind in most metrics. When would folks like you begin asking the right questions rather than shooting the messengers?

I use to make fun of India but the reality is that India is now a different cattle of Fish - comparing India and Pakistan is embarrassing. How about we compare Pakistan and Bangladesh?? See the comparison table below which shows that Bangladesh is FAR AHEAD OF PAKISTAN, AND pathetic PAKISTAN NEEDS TO BE COMPARED TO AFGHANISTAN AND ETHIOPIA !!!

	Pakistan	Bangladesh	Afghanistan	Ethiopia
Foreign Reserves	9-Billion	43 billion	9-Billion	3.5 billion
Exchange rate US dollar	$1 : Rs 211	$1 - BD 92	$1 - Afg 89	$1 - ET 52
Economic GDP	$250-Billion	$325Billion	$20-billion	$107 Billion
GDP per Person	1190​	1968​	500​	936​

We also rank above Afghanistan only in South Asia when it comes to youth literacy. The engines of future intellectual and material growth do not even have fuel to run on and propel the country forward!

None of these people are willing to move to India to prove their own words. Most of them sit in western countries and advocate for Indian supremacy.

That was not the point of this thread. It is a very wholesome discussion of what went right and what went wrong with both countries in the economic domains.

Why are we comparing Pakistan to that cesspit called India.

Pakistan should become more like China or Japan.

Regional peers.

 

[SaadH]

Interesting theory.

But also be mindful of the fact that a huge educated muslim populace migrated from UP to Pakistan.

Pakistan’s bureaucracy and Karachi that hosted the migrating population benefited greatly during the first 2 decades.

My theory is Bhutto’s nationalization policy and the political instability has degraded Pakistan.

Despite a bad start Pakistan pulled ahead of India on all indicators until Bhutto's nationalization and socialization of the 70's.

 

[Pak Nationalist]

Look mate, lets be honest. Cut the crap. The real truth is India and Pakistan were always ahead of us even during the Moghul era and subsequent Raj. Did you know that most of tax raised by the Raj was from what is now India?

On the other hand did you know that disproportionate share of that tax was then spent in what is now Pakistan. I can't source this but I have read so many books and I still the shock when I read about this - which was written by a British Raj official. He went on to say that there was concerns expressed about what amounted to wealth transfer to the Indus basin from Ganga region and Deccan.

What is Pakistan was not economically viable. Two channels led to this region rising. First was massive recruitment by the Raj armies from regions in what is now Pakistan. This led to entire local economy in these regions living off the sepoys paychecks.

This was further aomplified by building of massive military installations and or military motivated railways. All this again created employment and sunk money into the region. Cities like Rawalpindi housed the largest combat command of the Raj army and you can see even today our 'jenerals' are still lording in Chaklala. What is today PAF base was major air transport and fighter base in the Raj times.

Secondly Indus region is mostly dry semi desert and incapable of supporting large populations. The British invested in what became one of the largest man made irrigation systems in the world - the Indus Irrigation system. This involved building dams, barrages and 1,000s miles of canals. Again the money came from what is now India for this massive investment that measuired by todays standards would be CPEC 20 times.

But all this fact hid that Pakistan was a unproductive territory generating minus wealth. This is why Nehru said Pakistan would insolvent and fall apart within few years. He knew India was paying 'rent' to keep what is today Pakistan afloat. And he was right.

The point to note here is Pakistan was well behind India in 1947 and this fact was masked by the policies of the British as highlighted above. I will cover post 1947 in next post.

@SoulSpokesman thoughts?

We can moan about the hollow foundations all we want. I would like to counter that with the example of East Pakistan which was considered a burden by the West Pakistani elites that refined the raw material produced in EP in the factories of WP. Where is that land which was devoid of economic promise today compared to Pakistan? We cannot continue to be haunted by the Ghosts of the past. These rationalizations of our deepening impoverishment need not go so much back in time. Our political economy is the source of our miseries. It is something that is very much of the 21st century. The destruction ZAB caused post-nationalization of the private enterprises is what birthed the political economy of today's Pakistan, rewarding speculation and penalizing avenues of real wealth creation (recent 10% super tax on wealth-creating businesses while letting unproductive avenues of investment go with a slap on the wrist i.e. low fixed taxes) are what ail Pakistani economy and its productivity.

2 million out-of-school children (an entire generation that would be lost) and having the highest youth illiteracy after Afghanistan in South Asia is what should explain our fortunes today.

Despite a bad start Pakistan pulled ahead of India on all indicators until Bhutto's nationalization and socialization of the 70's.

Precisely. Selective amnesia. Even till the late 1980s, Pakistan was ahead of India in many indicators. I argue that the nature of the Pakistani political economy was undergoing a change and what it morphed into is responsible for the stagnation and descent of Pakistan in all spheres of national life.