Pakistan: poor economy, rich country

[T-Faz]

Pakistan is among the richest countries in the world, but also suffers from a poor economy.

It was January 2008, a relatively cold morning in Dubai. I was walking on Shaikh Zayed Road after parking my car about 300 meters from the meeting point with my client. I stopped suddenly before Crown Plaza upon hearing a Pakistani labourer arguing with a guy, claiming that UAE was not a rich country.

I went up to the gentleman and said “Khan Sahab are you crazy? You are standing on Shaikh Zayed Road, the heart of Dubai and you are saying that this country is not rich?”

He smiled and responded with a statement that I can never forget. He asked me to ignore all the big buildings, the infrastructure and the trade and then see what the country really had to offer.

These days I have been reading articles on the forthcoming budget and Pakistan’s economy. Being an analyst I am also involved in debates on VAT, capital gain tax and other technical issues. But I am still intrigued by Khan Sahab’s statement, and for the sake of analysis there is no harm in taking a look at where Pakistan stands.

The country has the second largest salt mine in the world, fifth largest gold mine, seventh largest copper mine, fifth largest coal reserves, seventh largest wheat and rice production capacity (can be enhanced to be the largest), is eighth in the rankings of fresh water availability with 2,053 cubic meters of water per person in 1995.

I must stop the count here for I already feel ashamed.

Khan Sahab you were right. Dubai is not a rich country. Dubai is actually a rich economy. Pakistan on the other hand is among the richest countries in the world, but also suffers from a poor economy.

It is quite amazing that the country that is chasing the realization of coalition support funds of 349 million dollars from the USA also happens to possess 185 billion tonnes of Thar coal which is worth an estimated 25 trillion dollars.

The country that faces a severe energy crisis has the potential to generate power supply for the next 100 years by utilizing the same coal reserves.

This coal utilization can save four billion dollars by reducing oil import costs. Dr Murtuza Mughal of Economic Watch stated that coal power generation can cost Pakistan Rs 5.67 per unit for power generation while IPPs cost Rs9.27 for the same. Other than coal, Pakistan is also rich in wind and bio resources of energy.

The point is simply to understand that the way our finance ministers portray the situation does not represent our true economic potential. It is really a shame that we declare it our success and best planning to successfully acquire aid packages from IMF, World Bank or the USA on time.

It is really worrying to think that the financial success of the government in our country is on the basis of financial arrangements rather than economic management.

Our governments feel happy to appoint IMF, World Bank or investment banking professionals as economic chiefs of the country. They either simply ignore the important economists for these positions, or they are just interested in short term fiscal management.

It is high time that our focus on economic planning and budgets to shifted towards clear cut economic goals for developing an industrial base in the country.

We need to come up with policies that ensure a culture of entrepreneurship in the country. Income support programmes cannot serve the objective of economic freedom. It is actually the facilitation of doing business and converting ideas into returns that can change the economic outlook of Pakistan.

We sit over a resource bank of trillions of dollars while we chase millions to survive. This myth of the poor economy of the richest country has to end.

Our prime issues are not VAT, capital gain tax etcetera. The biggest issue is the under utilization of the massive resources available in this land, where our federal budgets has been silent for years. This issue is directly related to poverty reduction as well as developing confidence in the people of Pakistan and about their future.

We need to see beyond fiscal management and look towards true economic management of our country.

Saqib Omer Saeed is a Financial/Business Researcher Analyst and adjunct faculty for Investments and Finance in CBM, SZABIST, BIZTEK & University of Karachi and blogs at www.bizomer.com

http://tribune.com.pk/story/18181/pakistan-poor-economy-rich-country/

(Express Tribune is now officially my favourite newspaper.)

 

[Hyde]

so true,

we are blessed with Natural reserves but lacking infrastructure, technology, equipments, money, leadership to utilize these reserves.

Once we are done with most of the problems mentioned above our economy growth rate will take a dramatic turn and i wouldn't be surprised if it surpasses 10% every year for the next couple of decades

 

[Durrak]

its our bad luck
tht evry tym v found insincere leaders
who dsnt utilize these natural resources 4 da sake of cntry

 

[T-Faz]

Its the coward leaders we have, they do not posses the courage to take initiatives and utilise all our resources. They are too scared of the Mullah's and the western leaders.

We need a man who stands up to everyone and says I am going to do things my way, then he/she would proceed to clean up our country and make us an example that we ought to be. The way Jinnah had dreamed of Pakistan.

 

[My-Analogous]

If we want to success in the world then we must do the following

1. We must make more administrative block so no more Punjabi, Sindhi, Urdu speaking politics create by our beloved politician and we now that small thing always easy to handle.
   
2. Every appointed in Ministry (including Minister) is based on previous experience so that he already have knowledge about his job and today we need to utilize only our expert of the same field as it is been adopted to all over world and Chinese invented this logic.
   
3. We should focus on our natural resources because without utilizing we cann't become great nation and see all big country when they utilize her resource only they became great nations.
   
4. We should focus on our imports and try to replace finish goods into half finished or raw materials that will save our money and we can use this money for our economy.

May Allah bless my country and raise my country raise. May raise fastest the the world Amen.

 

[khanz]

I am an optomist and believe we will get honest and sincere leaders one day and when it comes we'll be able to utilize all our resources and massive manpower properly and fulfill our full potential the whole world will see what pakistan is capable off.

 

[Hyde]

Its the coward leaders we have, they do not posses the courage to take initiatives and utilise all our resources. They are too scared of the Mullah's and the western leaders.

Bhai is main Mullah kahan se aa gaye? they never objected on any issue. These are our politicians who create hurdle in making dams or fight for provional rights. Mullahs has nothing to do with our economy

I am an optomist and believe we will get honest and sincere leaders one day and when it comes we'll be able to utilize all our resources and massive manpower properly and fulfill our full potential the whole world will see what pakistan is capable off.

Insha'Allah and i am very optimistic that once we start utilizing our coal reserves of thar, it will be our first step towards New Economy Rich Pakistan.

 

[Icarus]

My God, this article is so beautiful, all the complexities and technical terms removed and satisfied with a single, simple line:"Pakistan is a rich country but a poor economy". Hats off to the writer.....

 

[Siv_anand]

Forget abt the coal reserves..its such low quality..read the same elsewhere here in this forum...
but thr r still more options
#1
MAKE PEOPLE UNDERSTAND THAT THEY HAVE TO PAY TAXES TO THEIR MOTHERLAND.

 

[T-Faz]

Forget abt the coal reserves..its such low quality..read the same elsewhere here in this forum...
but thr r still more options
#1
MAKE PEOPLE UNDERSTAND THAT THEY HAVE TO PAY TAXES TO THEIR MOTHERLAND.

You are slighltly correct regarding the quality of coal, it has high Surface moisture but it is still usable given the right procedures are followed and the equipment is available. Even then not all of it has high surface moisture, the coal is feasable as studies on it have shown and the whole reserves are valued at $25 trillion and rising.

Also the tax to GDP ratio is increasing, someone posted news on it. We have the potential, just require the right policies to move forward.

 

[Icarus]

Forget abt the coal reserves..its such low quality..read the same elsewhere here in this forum...
but thr r still more options
#1
MAKE PEOPLE UNDERSTAND THAT THEY HAVE TO PAY TAXES TO THEIR MOTHERLAND.

You are correct, the coal in it's raw form is lignite which has a high moisture and ash content, however, if it is heated in the absence of oxygen it becomes Coking Coal(Coke) which has great commercial value for it's use in iron manufacturing and electricity production

 

[Siv_anand]

# 2. Thrz abundance of manpower..what else u need ?

 

[Icarus]

# 2. Thrz abundance of manpower..what else u need ?

Yeah, but you need some good human resource management, something we SEVERELY lack...........

 

[Chanakyaa]

The Leaders and Politicians are chosen be us... The common man its up to a large extent we are to be blamed who choose corrupt leaders.

Perhaps some pakistani members at pdf should contest elections.

 

[VerticalEye]

Natural resources are one of the most important factors responsible in the development of a country, but not the most important factor.
The most important factor would be the human resource of that country or to be precise people of that country who have to tap that resourse.