Markets #ForeignAffairs
JAN 15, 2017 @ 11:58 AM 17,008
The Little Black Book of Billionaire Secrets
Bangladesh Won't Be The Next Pakistan, And That's OK
Panos Mourdoukoutas , CONTRIBUTOR
TRENDING ON LINKEDIN
What Pakistan has that Bangladesh is missing? The right geopolitics.
Pakistan benefits from a unique geographic location that has attracted the interest of the world’s two largest economies, America and China. In fact it has been in a sweet geopolitical spot twice. Once back in 2001, when US sought a regional ally for its Afghan operations, and more recently as China has come to seePakistan as a western route to its Middle East and Africaninterests, also know as China-Pakistan Economic Corridor (CEPC).
Pakistan's American ties brought debt relief and foreign currency stability that ignited a fifteen-year rally, while ties with China brought foreign investments and diplomatic leverage against India's territorial claims, and have kept that rally going.
The trouble is that Pakistan may be running out of luck. It will be increasingly difficult to please both America and China, as tensions between the two in the South China Sea intensifies.
Ranking
Bangladesh
Pakistan
Population (millions)
159.90
186.10
Per Capita GDP ($, Dec2016)
$1286.87
$1449.88
Human Development Index (2014)
0.57
0.53
Competiveness Index (2016)
107
126
Entrepreneurship Index (2016)
133
122
Corruption Index (2015)
139
117
Economic Freedom Index (2016)
137
126
If that happens, Pakistan may end up finding itself in the wrong geopolitical spot. That would put an end to the country’s bull market, and its equity market performance would revert to frontier market levels.
As for Bangladesh, by contrast, it may find its own sweet spot in the global economy, as a low cost manufacturer.
“Foreign direct investment into Bangladesh has picked up in recent years, particularly in the manufacturing sector,” writes Marko Dimitrijevic in
Frontier Investor (New York: Columbia Business School, 2017)
. “As production costs rise in China and India, I believe that Bangladesh, with its young, growing low cost labor force, is ideally positioned to capture a larger share of the next round of outsourcing,” he adds.
Index/Fund
12-month Performance
IShares China (FXI)
13.00%
Global X Pakistan (PAK)
43.84
Bangladesh Stock Market (DSE General)
9.00
iShares S&P India 50 (INDY)
8.49
While Bangladesh’s sweet spot may never deliver the phenomenal investment returns Pakistan has enjoyed, it will handsomely reward patient – and adventurous -- investors.
https://www.forbes.com/pictures/579f71e34bbe6f3582082197/50-best-us-colleges-for-i/
When BD will overtake Pak in per capita terms ? 2019 or 2020
Pakistan could become 16th largest economy by 2050: PwC
Dilawar HussainUpdated February 09, 2017
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KARACHI: Pakistan’s economy could become the 16th largest by 2050 based on its gross domestic product (GDP) at purchasing power parity (PPP), said a report prepared by PricewaterhouseCoopers (PwC), a multinational professional services network headquartered in London and considered among the ‘Big Four’ auditors.
This means the country would overtake Italy and Canada, which currently rank at 12th and 17th places, respectively.
The report, titled
‘The Long View — How Will the Global Economic Order Change by 2050’ and released earlier this month, projected a number of new emerging markets taking the centre stage. Emerging economies such as Indonesia, Brazil and Mexico are likely to be larger than the UK and France, it said.
A table appended to the report indicated that on the basis of PPP, Pakistan would climb from its current 24th place (with GDP at PPP amounting to $988bn) to 20th place ($1.87tr) by 2030 and to 16th place ($4.2tr) by 2050.
Projected GDP rankings (at PPPs) as published in the PwC report.
In terms of GDP at real market exchange rate (MER), Pakistan’s economy is projected to rise from 28th place ($284bn) at present to 27th by 2030 ($776bn) and to 19th ($2.8tr) by 2050.
GDP at PPP adjusts for price level differences across countries and provides a better measure of the volume of goods and services produced in an economy.
Projected average real GDP growth per annum 2016-2050.
In contrast, GDP at MER provides a better measure of the value of goods and services produced in an economy and converts a country’s GDP in national currencies to the US dollar based on current market exchange rates, it said.
China has already overtaken the United States to become the world’s largest economy in PPP terms, said the report. India currently stands in third place and is projected to overtake the US by 2050.
France will no longer be among the world’s 10 largest economies on this basis, with the UK falling to 10th place, while Indonesia could rise to 4th place. “By 2050, six of the seven largest economies in the world could be today’s emerging economies in PPP terms according to our projections,” the report said.
Key findings of the report projected that the world economy could more than double in size by 2050. Assuming broadly growth-friendly policies, emerging markets would continue to be the growth engine of the global economy.
Published in Dawn February 9th, 2017
