Interesting economic comparison of India & Pakistan

[rollindays]

While India has undoubtedly done better than Pakistan in most aspects, Pakistan has done better than India in some of the others.

For example, according to the national data of both countries: Pakistan's Balance of Trade is better than India's (arguable), Pakistan's current account is a positive number, whereas it is negative for India. GDP per capitas under constant prices (Real GDP per capita) for Pakistan is almost the same as India's.

But the figures that interest me the most are the fact that inflation rate in Pakistan is much higher than India's (which is a good thing for India & bad for Pakistan), but Pakistan has a much lower unemployment rate than India. Pakistan also has a lower debt to GDP ratio than India.

According to the IMF data, while India has a much higher GDP (PPP) per capita than Pakistan, Pakistan has a higher GDP per capita at both current & constant prices than India. Pakistan's GDP per capita at current prices in US Dollars is almost equal to India's as well.

All in all, these are some very interesting statistics, & one might say that Pakistan isn't faring too badly despite being badly hit by the WOT. What are your thoughts? Please don't make a mud-slinging, India vs Pakistan contest. I would like serious responses from the members here.

For a clearer image of the statistics:

http://i1004.photobucket.com/albums/af162/watashikoini2/indiapakistan-2.jpg?t=1313616117

 

[Abhishek_]

very interesting find, thx for sharing. Although we dont get to hear much positive about PK in Indian media but I've discovered recently that Pakistan has done far better than India for most of our history post-1947.
It took a near bankcruptcy in the 90s to wake up GOI and enact reforms.
I hope the current conditions in PK will also pressure GOP to take corrective actions so that the current crisis becomes just a blimp in the history books.

 

[Patrician]

Pakistan's Balance of Trade is better than India's (arguable),

Wrong. I suggest you see trade deficit as a percentage of total trade. That will give you a better picture of who stands where.

India trades far more than does Pakistan. Hence, India's trade deficit is not that much of a dampener as is Pakistan's trade deficit as far as trade issues are concerned.

In layman's terms,

Person X does far more business than does person Y. Hence, X runs a far greater risk of facing losses than does Y.

In absolute terms, X's losses are likely to be far greater than Y's losses. However, X's ability to absorb those losses, something measured by the percentage that Trade deficit is of the total trade volume, is far better than Y's ability to absorb its respective losses.

Pakistan's current account is a positive number, whereas it is negative for India.[/QUOTE]

Does not reflect the true picture. India has most of its reserves in Gold, US T-bills etc. This reduces the actual cashg available in current account. Pakistan has little reserves as compared to India's, which means Pakistan has little liquidity as compared to India.

[quote="rollindays, post: 2034006"][IMG]GDP per capitas under constant prices (Real GDP per capita) for Pakistan is almost the same as India's. [/QUOTE]

True.

[quote="rollindays, post: 2034006"][IMG]But the figures that interest me the most are the fact that inflation rate in Pakistan is much higher than India's (which is a good thing for India), [/QUOTE]

True

[quote="rollindays, post: 2034006"][IMG]Pakistan has a much lower unemployment rate than India. [/QUOTE]

True

[quote="rollindays, post: 2034006"][IMG]Pakistan also has a lower debt to GDP ratio than India.[/QUOTE]

Debt to GDP ratio of a measure of how much the govt. owes vs. how much the govt. (country) produces.

A country with a far higher GDP and that too growing at a rapid rate is going to borrow far more money than will a country with little growth in GDP.

Why?

Because it take money and investment to increase GDP. Rapid increase in GDP means rapid requirement of money which increases debt requirement.

Hence, a country growing faster requires more debt, as in money, so that it can keep growing faster.

Hence, debt-GDP ratio is no absolute measure of the health of an Economy.

[quote="rollindays, post: 2034006"][IMG]According to the IMF data, while India has a much higher GDP (PPP) per capita than Pakistan, Pakistan has a higher GDP per capita at both current & constant prices than India. Pakistan's GDP per capita at current prices in US Dollars is almost equal to India's as well. [/QUOTE]

Yes. Which means that an average Pakistani produces more than an average Indian does. That's a positive for Pakistan.

But where India outdoes Pakistan is by means of its huge population.

1.2 billion Indians, in total, produce far more than do 18 million Pakistanis. However, an average Indian produces lesser than does an average Pakistani.

Although, I must say, GDP per capita is, to an extent, a measure of the prosperity of the people of a country.

Hence, an average Pakistani is likely to be more prosperous than an average Indian.

[quote="rollindays, post: 2034006"][IMG]All in all, these are some very interesting statistics, & one might say that Pakistan isn't faring too badly despite being badly hit by the WOT.[/QUOTE]

I wouldn't jump to that conclusion.

Pakistan has little forex reserves which is a widely believed measure of a country's ability to sustain itself in case of any eventuality.

GDP growth rate is another factor where Pakistan fares poorly.

GDP per capita does not matter much.

Why?

Because in international community, the bigger your GDP is, the bigger is your power to negotiate with other countries.

Take China for example. It has far smaller GDP per capita than has Singapore, for example. But China wields far large a power than does Singapore simply because China's absolute GDP is incomparable with Singapore's.

FDI is another important factor of economic activity.

Pakistan has little FDI as compared to India.

The more the FDI, the more is the ability of the govt. to generate money for investment. The more the investment, the faster the growth is.

In short, growth begets growth. Up to a certain extent, of course.

Pakistan's growth is stalled, as shown by the poor GDP growth rate.

 

[rollindays]

Wrong. I suggest you see trade deficit as a percentage of total trade. That will give you a better picture of who stands where.

I said it was arguable. And you are right there I guess, although the gap is still wide.

Does not reflect the true picture. India has most of its reserves in Gold, US T-bills etc. This reduces the actual cashg available in current account. Pakistan has little reserves as compared to India's, which means Pakistan has little liquidity as compared to India.

Again, there is still a lot of gap between India's $-5.4 billion & Pakistan's $+604 million (0.604 billion).

True.

It's interesting, because according to the IMF data, India has a higher average inflation (13.16%) than Pakistan (11.50%), but on the national statistics; India has reported a much lower inflation figure than Pakistan. High inflation can also be a 'good' thing, as high inflation can result in high nominal GDP growth rates.

A country with a far higher GDP and that too growing at a rapid rate is going to borrow far more money than will a country with little growth in GDP.

Why?

Because it take money and investment to increase GDP. Rapid increase in GDP means rapid requirement of money which increases debt requirement.

Hence, a country growing faster requires more debt, as in money, so that it can keep growing faster.

Hence, debt-GDP ratio is no absolute measure of the health of an Economy.

Again, when you see that GDP per capita between Pakistan & India are almost the same, even though India has a much larger (overall) GDP & economy than Pakistan, I am not sure if debt-GDP ratio is irrelevant as you think it is.

Pakistan has little forex reserves which is a widely believed measure of a country's ability to sustain itself in case of any eventuality.

Here is some interesting data I found on forex reserves:

I am sure you can see that Pakistan & India aren't too different either when it comes to forex reserves - external debt results.

GDP growth rate is another factor where Pakistan fares poorly.

GDP growth rate is positive & increasing (unlike the US that had negative GDP growth rate when Obama took office) shows that the economy is expanding, shows that the WOT is only a temporary phase that will pass by soon.

GDP per capita does not matter much.

Why?

Because in international community, the bigger your GDP is, the bigger is your power to negotiate with other countries.

Take China for example. It has far smaller GDP per capita than has Singapore, for example. But China wields far large a power than does Singapore simply because China's absolute GDP is incomparable with Singapore's.

GDP overall might be good for an international image, but GDP per capita is important in knowing the true conditions inside your country.

FDI is another important factor of economic activity.

Pakistan has little FDI as compared to India.

The more the FDI, the more is the ability of the govt. to generate money for investment. The more the investment, the faster the growth is.

India is at number 23, with the stock of FDI at home equal to $ 191,100,000,000. Pakistan is at number 61, with the stock of FDI at home equal to $ 30,090,000,000. Considering that India is five times the size of Pakistan by land (meaning much more natural resources & opportunities for FDI), & 7 times by population (meaning a big market for FDIs), the results in FDI aren't too different either.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2198rank.html

 

[fd24]

Guys looking at it very simply one can say that both countries, considering the poor quality leadership and wranglings havent done bad. Can you imagine if we eliminated the leaders embezzling and back handers where we would be? Thanks for the stats

 

[TARIQ BN ZIYAAD]

I m no economic guy don't understand all this stuff but if i take Patrician's analysis still pakistan have done good to its self with all this wot and looting in part of our leaders AND NOT TO FORGET THE LOST DECADE.

TARIQ

 

[Imran Khan]

please ladies dont make this thread as VS we can talk in better way .BTW i agree every country has own policy and goals and pakistani policy is fill swiss bank loot as much as you can lolz

 

[RiazHaq]

The World Bank classifies both India and Pakistan as middle-income nations.

But, going by the percentage of poor people, Pakistan has fared and continues to fare better than India.

In spite of recent poverty declines with its rapid economic expansion, India still has higher poverty rates than Pakistan, according to a 2011 World Bank report titled "Perspectives on poverty in India : stylized facts from survey data" released in 2011.

Overall, the latest World Bank data shows that India's poverty rate of 27.5%, based on India's current poverty line of $1.03 per person per day, is more than 10 percentage points higher than Pakistan's 17.2%. Assam (urban), Punjab and Himachal Pradesh are the only three Indian states with lower poverty rates than Pakistan's.

Haq's Musings: World Bank on Poverty Across India in 2011

 

[Abhishek_]

^the report is using data from 04-05, that's a seven year old snapshot and a lot has changed in both countries since then.
just my .02

 

[rollindays]

My intention for this thread was not to make this an India vs Pakistan one, I believe without question India has overall done better than Pakistan in a lot of areas, but I wanted to show a bit of reality & perspective, that Pakistan hasn't fared badly either, despite some people here thinking Pakistan is a failed nation with a failed economy, & everything else, when the statistics suggest otherwise.

 

[praveen007]

here is nice artical regarding
similarity and dis-similarity between India and Pakistan.
Its a good read if you read with open mind.
.
http://opendemocracy.net/lakhmir-chawla/india-and-pakistan-what’s-differencehere is nice artical regarding
similarity and dis-similarity between India and Pakistan.
Its a good read if you read with open mind.
.
http://opendemocracy.net/lakhmir-chawla/india-and-pakistan-what’s-difference

 

[Patrician]

I said it was arguable. And you are right there I guess, although the gap is still wide.

The gap is meaningless. It does not mean anything to compare two things which cannot be compared.

Again, there is still a lot of gap between India's $-5.4 billion & Pakistan's $+604 million (0.604 billion).

Oh bhai mere!

Ok listen.

Consider two companies, Apple and Nokia.

Apple has $10,000 of liquid assets. (comparable to forex reserves in case of a country)

Nokia has $5,000 of liquid assets.

Apple has $2,000 out of $10,000 in the form of cash in its current account and $8,000 in the form of Gold.

Nokia has $3,000 out of $5,000 in the form of cash in its current account and $2,000 in the form of Gold.

Does that mean that Nokia is richer than Apple?

Hell no!

It just means that Nokia has more of its liquid assets in the form of cash than does Apple. In simple terms, Nokia has pocket change in the form of quarters. Apple has in bills of $100.

I hope you now understand the difference.

Again, when you see that GDP per capita between Pakistan & India are almost the same, even though India has a much larger (overall) GDP & economy than Pakistan, I am not sure if debt-GDP ratio is irrelevant as you think it is.

Debt-GDP ratio is ambiguous and does not give a clear picture always.

Debt-GDP ratio can, though, indicate the prosperity of the citizenry of the country but that too not always.

Here is some interesting data I found on forex reserves:

I am sure you can see that Pakistan & India aren't too different either when it comes to forex reserves - external debt results.

That graph is again meaningless.

Why?

Watch closely. You have intervals of $2.67 trillion in the graph.


India's forex reserves are around $320billion.

Pakistan's forex reserves are around $19 billion.

But since the interval is itself sooooooooooo large, hence, both India and Pakistan fall in the same interval.

If you want the actual picture, just contrast $320billion with $19 billion

GDP growth rate is positive & increasing (unlike the US that had negative GDP growth rate when Obama took office) shows that the economy is expanding, shows that the WOT is only a temporary phase that will pass by soon.

GDP growth rate of Pakistan is, at present, far lower than that of India. Fair to say it's stalled right now.

It could be because of WoT. We do not know for sure yet.

GDP overall might be good for an international image, but GDP per capita is important in knowing the true conditions inside your country.

GDP per capita is at most a measure of human indicators. It only tells that the average Pakistani produces more than an average Indian does.

It does not show, though, that Indians collectively produce far more than do Pakistanis.

The more the GDP, the more that trade volume.

The more the trade volume, the more influence a country exercises over another.

Take the case of China, India and Japan, for example.

China has far more trade with Japan than does India. Hence, China exercises far greater influence on Japan than does India.

India is at number 23, with the stock of FDI at home equal to $ 191,100,000,000. Pakistan is at number 61, with the stock of FDI at home equal to $ 30,090,000,000. Considering that India is five times the size of Pakistan by land (meaning much more natural resources & opportunities for FDI), & 7 times by population (meaning a big market for FDIs), the results in FDI aren't too different either.

India's size being far greater than that of Pakistan is merely an excuse.

That does not change the fact that India DOES invite far greater FDI than does Pakistan.

More FDI means more money to grow.

India has more money to grow and hence, India has far better chance of growing and growing fast than does Pakistan.

 

[third eye]

If it makes posters here any happier..

Pak is doing MUCH better than India.

 

[Patrician]

The World Bank classifies both India and Pakistan as middle-income nations....

Don't try to be over-smart, Mr. Haq.

You present to me a blog and a graph based on 2005 data and you use it to prove how somehow India is faring far poor than Pakistan.

I say humbug!

Bakwaas! Bilkul bakwaas!

If you really want to contrast India and Pakistan on human indicators, take the UN Human Development Index.

India has a rank of 122. Pakistan is 128.

...and you think India is doing worse than Pakistan?

...or you're telling me that you know more than the UN.

Please stop spreading your lies online.

You're not the smartest man alive. There are smarter people around.

BTW, we're still waiting for your prophecy of India collapsing economically by the end of 2011.

 

[Chinese-Dragon]

More FDI means more money to grow.

India has more money to grow and hence, India has far better chance of growing and growing fast than does Pakistan.

FDI is important for economic growth, but I think you are overestimating how important it is.

The USA receives the largest amount of FDI, yet their economy is currently growing at only 0.8%.