haqeeqat.org
BANNED
New Recruit
- Joined
- Dec 24, 2008
- Messages
- 12
- Reaction score
- 0
Pakistani Economy | A Shift Toward Thrift Required
One wealthy man wrote this advice,
True economy consists in always making the income exceed the outgo. Wear the old clothes a little longer if necessary; dispense with the new pair of gloves; mend the old dress; live on plainer food, if need be; so that, under all circumstances, unless some unforeseen accident occurs, there will be a margin in favour of the income. A penny here, and a dollar there, placed on interest, goes on accumulating, and in this way the desired result is obtained. It requires some training, perhaps, to accomplish this economy; but when once used to it, you will find there is more satisfaction in rational saving than in irrational spending.
In the household and in business, little savings amount to more than one would suppose. Savings provides the most important economic link between past, present and future of any country. The aggregate savings of a country have three components namely private, corporate and public sector savings. These components are dependent on spending behaviors of the people and government. The more they spend, the less is left to save and that results in less investment, because Savings are equal to Investments in economics. It is possible to make money off your savings is because these savings are used by other agents in the economy who have the ability to pay you back later on; fundamentally these savings are used to invest.
A low rate of savings if maintained over a long period of time, an economy entraps in a vicious cycle of low investment, low per capita income, low growth, and low productivity and so on. A higher savings is the only solution for getting out of low saving low growth equilibrium. Sadly, far too many Pakistanis spend more than they earn and rely too heavily on plastic money and borrowed funds, and most are not saving enough (if anything) for their futures.
The national savings rates of Pakistan is estimated at 13 percent of GDP, where as our neighbouring country Indias current national savings rate is about 24% of GDP. The difference in the saving and consumption within both countries can be clearly seen in the manner Pakistanis spends on marriages, social functions and religious ceremonies. The Indian culture is pro-saving, while Pakistani culture is pro-consumption. This pro-consumption culture is actually compelling our government and financial institutions for tight monetary policy to tackle problems like high inflation and low savings.
Its clear that we drifted badly from two bedrock virtues: thrift and personal financial responsibility. And now that the economy is struggling, were all well, paying the price. A shift toward thrift is required for economic stability and growth in Pakistan.
One should be a civilized man, saving something, and not a savage, consuming every day all that which he has earned. Some of the most famous sayings stress thrift and the foolishness of wasteful spending like A penny saved is a penny earned, He that goes a borrowing goes a sorrowing and The wise man saves for the future, but the foolish man spends whatever he gets.
Be it ever so humble, is a sentiment that does not appeal to the modern home. Individuals and nations would be better if they would love the home more and its furnishings less. There would be more happy homes if there were more thrift and economy, a writer writes in his book The Real Home.
Lets strive and pray to conduct our future financial affairs with wisdom. Lets add our share in the growth of Pakistans economy by strictly following thrift as a ruling habit. Lets practice it from today because Thrift is of great revenue (Marcus T. Cicero).
REFERENCES
Since I'm a newbie and not yet allowed to post urls, kindly check for references and bibilography to this article on my blog; Haqeeqat . Org
One wealthy man wrote this advice,
True economy consists in always making the income exceed the outgo. Wear the old clothes a little longer if necessary; dispense with the new pair of gloves; mend the old dress; live on plainer food, if need be; so that, under all circumstances, unless some unforeseen accident occurs, there will be a margin in favour of the income. A penny here, and a dollar there, placed on interest, goes on accumulating, and in this way the desired result is obtained. It requires some training, perhaps, to accomplish this economy; but when once used to it, you will find there is more satisfaction in rational saving than in irrational spending.
In the household and in business, little savings amount to more than one would suppose. Savings provides the most important economic link between past, present and future of any country. The aggregate savings of a country have three components namely private, corporate and public sector savings. These components are dependent on spending behaviors of the people and government. The more they spend, the less is left to save and that results in less investment, because Savings are equal to Investments in economics. It is possible to make money off your savings is because these savings are used by other agents in the economy who have the ability to pay you back later on; fundamentally these savings are used to invest.
A low rate of savings if maintained over a long period of time, an economy entraps in a vicious cycle of low investment, low per capita income, low growth, and low productivity and so on. A higher savings is the only solution for getting out of low saving low growth equilibrium. Sadly, far too many Pakistanis spend more than they earn and rely too heavily on plastic money and borrowed funds, and most are not saving enough (if anything) for their futures.
The national savings rates of Pakistan is estimated at 13 percent of GDP, where as our neighbouring country Indias current national savings rate is about 24% of GDP. The difference in the saving and consumption within both countries can be clearly seen in the manner Pakistanis spends on marriages, social functions and religious ceremonies. The Indian culture is pro-saving, while Pakistani culture is pro-consumption. This pro-consumption culture is actually compelling our government and financial institutions for tight monetary policy to tackle problems like high inflation and low savings.
Its clear that we drifted badly from two bedrock virtues: thrift and personal financial responsibility. And now that the economy is struggling, were all well, paying the price. A shift toward thrift is required for economic stability and growth in Pakistan.
One should be a civilized man, saving something, and not a savage, consuming every day all that which he has earned. Some of the most famous sayings stress thrift and the foolishness of wasteful spending like A penny saved is a penny earned, He that goes a borrowing goes a sorrowing and The wise man saves for the future, but the foolish man spends whatever he gets.
Be it ever so humble, is a sentiment that does not appeal to the modern home. Individuals and nations would be better if they would love the home more and its furnishings less. There would be more happy homes if there were more thrift and economy, a writer writes in his book The Real Home.
Lets strive and pray to conduct our future financial affairs with wisdom. Lets add our share in the growth of Pakistans economy by strictly following thrift as a ruling habit. Lets practice it from today because Thrift is of great revenue (Marcus T. Cicero).
REFERENCES
Since I'm a newbie and not yet allowed to post urls, kindly check for references and bibilography to this article on my blog; Haqeeqat . Org
