By Dr. Nayyer Ali

June 18 , 2010

Annual Economic Survey of Pakistan

At the end of the fiscal year, the government releases its annual Economic Survey of Pakistan.  This lengthy report gives an overall picture of the state of the economy and society.  The big headline this year is that the GDP growth came in at 4.1%, improved from last year’s dismal 1.2%, but still much slower than the average 6.8% of the last six years of Musharraf’s rule.  The pickup in growth is welcome, but too slow to meaningfully raise living standards, and the gap with India is widening as India is growing at 8% per year.
In late 2007 two problems emerged in Pakistan’s economy that likely cost Musharraf the 2008 election.  First was electricity shortage with load-shedding affecting major cities, and the second was inflation, which accelerated from 3% to 7% in late 2007.  The PPP government vowed to rectify both these issues, but in the last two years load-shedding remains widespread, while inflation galloped up to 20% last year and still came in at 12% this year. Investment rates also declined from over 22% of GDP in 2007 to 16.6%.  Meanwhile, development spending declined from a high of 4.9% of GDP in 2007 to 4.1% of GDP.  National debt held steady at 54% of GDP, down from the 100% level it was at in 1999.  
Pakistan does continue to develop slowly. Literacy rate reached 57%, with 69% for males and 45% for females.  Gross enrollment rates in primary schooling is around 91% now, which suggests that literacy rates will continue to rise.  The total number of students in colleges and universities has reached 1.4 million, compared with 450,000 back in 2000.   Pakistan still drastically underfunds education, spending only 2.1% of GDP on education compared with 3.3% in India.   Life expectancy reached 66.5 years in 2008, compared with 63.7 in India, but infant mortality is still 65 per 1000 births, and under age five mortality is 95 per 1000, compared to 30 and 79 in India. This means that every year almost 400,000 Pakistani children below age five are dying, an unacceptable number.
Poverty rate in Pakistan is measured using an absolute level of extreme poverty so severe as to result in malnutrition.  This is the World Bank definition used globally of 1.25 dollar per day income in PPP terms.  By this very low standard, poverty rate in Pakistan is around 23%, much lower than the 58% in 1990.   India by contrast had a 50% poverty rate in 1990, but was still at 41% in 2005 based on World Bank data.  This reflects much less income inequality in Pakistan, whereas in India the benefits of two decades of growth have gone mostly to the upper sections of society.
Sixty-three years ago the experiment of Pakistan was begun. Despite many ups and downs, including coups, civil wars, terrorism, and a nuclear-armed and hostile giant of a neighbor, the country has made remarkable progress.  Just consider that in the early 1960s there were only 2000 doctors in the country, and now there are 140,000, with another 20,000 working abroad.  The female literacy rate was only 18% in 1980, and now is getting close to 50% of a population that has more than doubled.  In 2000 there were four million vehicles on the road, and now there are 10 million.  Electrical generating capacity currently is 20 gigawatts, which is about 20% too low, but far higher than the 1.2 gigawatts that powered the country in the early 1970s. There were only 100,000 phones in Pakistan in the 1960’, and even in 2000 it was a mere three million, but the cell phone revolution has put 100 million phones into service.
Pakistan has a long way to go.  It needs to spend 4% of GDP on education and 1% on health.  Every child must be getting a proper education. Infant mortality needs to be cut in half.   Economic growth needs to be accelerated to 7% and kept there for three decades to make Pakistan a developed nation.  

The scourge of religious extremism must be defeated, and a stable democratic government that provides good governance must be instituted.  It is a bit amusing that after hammering Musharraf as being the source of all evil, the economic difficulties of the current government have resulted in their appointing as the new Finance Minister Abdul Hafeez Shaikh, who was one of the core members of the economic team of the Musharraf era, when he served as head of the Privatization Commission.  I guess the Musharraf era wasn’t so terrible after all.  

Comments can reach me at



Deflating Japan

Bush’s Axis of Evil

Speaking to Non-Muslims

If Arafat Were Jinnah

The Shape of Things to Come

South Asia Expert Calls for Negotiations on Kashmir

Kashmir After the Cold War

Kashmir Quagmire: How It Started

Kashmir: Where We’ve Been

Make Way for the Euro

Will there Be a Muslim Palestine?

Careful, Careful

Our Growing Community

Pakistan’s Golden Opportunity

Musharraf’s Reform Plans

Pakistan’s Afghan Dilemma

Humanity on the Move

Strategies of America, Pakistan and Benazir

Winners and Losers

America’s Strategy Defang the Fundamentalists

The Noose Tightens

Pakistan in America

Musharraf’s Moment

A Sad Day for America, A Sad Day for Islam

Repeal the Blasphemy Law

Bush’s Stem Cell Compromise

The Depressing Stock Market

An Evening on Human Development

“Benazir” Takes Over in Indonesia

Race Riots in Britain

Global Warming or Just Hot Air?

Milosevic on Trial

Russia’s Collapse

Economic Recovery in Pakistan?

President Khatami’s Re-election

Lifting Sanctions on Pakistan

Israel’s Moral Burden

A Break in the Logjam?

The Second American Century

Pakistan’s Constitution

Dr. Lodhi in Los Angeles

Literacy: The Road Forward

Why Yusuf Can't Read

Literacy: The Glass is Half Full

Blowing Up Buddha

A Truth and Reconciliation Commission for Pakistan

Did You See the Moon?

Cornrows, Ali Khan, and Culture

Will the Children Go To Harvard?

Muslim Political Progress

Information Technology Gets A Boost

Sand and Oil

On Lieberman

Pakistan Builds A Tank

Kashmir in the Nuclear Age

Full Speed Ahead on Privatization

A Muslim France?

Too Much Food

Watching the Election Why Are We Hollywood’s Villains?

A Tyrant Falls

Taliban Victorious

The Walking Whale of Pakistan
The Joy of Air Travel?

The Amazing American Economy
Arafat and Jerusalem

Names For The Children

Population: Too Many or Too Few?

It Does Matter

Aziz Goes For Growth

The Military Government's First Budget

L'Affaire Salam

End Sanctions on Iraq

Third World Democracy

Light Weapons Trade on the Rise

Iran Reforms

Back to the Future

The Saudis and OPEC Mature

How Can We Help Pakistan Develop?

Report Card on Musharraf

IMF Vs Pakistan

A Candid Discussion on Foreign Policy Issues

A Sad Tale of Missed Opportunities

Cold War In Kashmir

Whither Afghanistan?

National Security and Literacy

Pakistan Votes

The People Win

What is an Islamist?

Selling the Crown Jewels

Still Not Government

One Year After the Taliban

Benazir's Folly

Iraq and Oil

Saddam and Iraq - I

Saddam and Iraq - 2

Muslim Democracy

Zakat and Capitalism

Zakat and Capitalism - 2

The Economy Picks Up

The American Military: Power without Limit?

Good Foreign Policy is Good Anti-Terrorism Policy

The Arrest of Khalid Shaikh Mohammad

Bush Takes a Gamble

Bush Attacks

Besieging Baghdad

Darkness in Saddam's Bunker

Piccadilly It Aint Qissa Khani Is Still Qissa Kahani

Ed Asner and Afghanistan's Progress

Bush Delivers a Roadmap

Liberation or Imperialism

The Roadmap

Economic Rebound

Musharraf in Los Angeles

Economic Growth will lead to Democracy

Trapped by Myths and Fantasies

The Surge in Karachi Stocks

Bush's Busted Budget

America's Broken Healthcare

Time to Buy Stocks?

Islam, the State, and Human Rights

30 Years after the Oil Shock

The Future of Oil Wealth

Pakistan, India and Human Development

Pakistan's Eid Present

Iraq, Democracy and Islam

The End of Saddam Hussein

Three Wins for Pakistan

The Islamabad Declaration

Kerry's Big Wins

Repeal Hudood and Blasphemy

Bush's Growing Vulnerability

What Has Aziz Done?

Bits and Pieces

The Growth of India

Chaos in Iraq

Bush Caves in to Sharon

Abuse at Abu Ghraib

Too Harsh, Musharraf

The BJP Loses

What Do the Jihadis Want?

The Pak Economy: Bigger than We Think

Is America Richer than Europe?

Prime Minister Aziz

Unbundling WAPDA

Musharraf's Uniform

Chess Game in Kashmir

Three States, Three Debates

What's Wrong with the Democrats?

Can Elections Bring Peace to Iraq?

Elections in Iraq

Can Generals Yield to Democrats?

IMF Give Pakistan an “A”

Improve Higher Education in Pakistan

A Framework for Reconciliation

Iraq’s Elections By

Privatizing Power

Bullish in Karachi

Palestinians Should Abandon Suicide Bombings

The F-16’s

Bush’s Social Security Plan

Growth and Investment

Patronage Versus Policy

Aziz, the PML, and 2007

Are We Running out of Oil?

Purchasing Power

Economic Progress

Social Progress

PTCL and the Privatization Roller-coaster

Bombing in Britain

The Ummah is Not a Tribe

Is the US Oppressing the Muslims?

Is Iraq Dissolving?

Sharon Retreats

Pakistan and Israel

The Earthquake

The Other Earthquakes

The Battle for the Supreme Court

Pakistan’s Physician Exports

Beginning of the End in Palestine

Intelligent Design and Other Religious Beliefs

Shifting Populations in South Asia

Sharon’s Stroke

Building Dams

Hamas in Charge

Free Elections in 2007

Muslim Perspectives on Zionism

Iraq Falls Apart

Big Successes in Privatization

Iran’s Nuclear Ambitions

Global Warming

Dennis Ross on the Middle East

What Makes an Islamic State?

The Iraq War

Strong Growth, Falling Poverty

Buffett and His Billions

Why Peace Is Elusive in the Middle East

How Poor is Poor?

How Poor is Poor?
Pakistan’s Growth Moment

Declare a Palestinian State

The London Bomb Plot

Who Won the Lebanon War?

Iran, Israel, and the Bomb

The Pope’s Speech

Democrats Win!

The Republicans Lick Their Wounds

Finally, Some Enlightened Moderation

The Error in the War on Terror

Economic Challenges for Pakistan

Reshaping the Middle East - Part 1

Reshaping the Middle East - Part Two

The Surge to Defeat

Whither Palestinians?

Pakistan and Afghanistan

Blind to the Future?

Musharraf Goes Too Far

Letter from Lahore

Can Musharraf Escape His Own Trap?

Will Healthcare Swallow the Economy?

Israel’s Surprise Offer

The Economy Surges Again

Al Gore Should Run

Pakistan’s Arms Industry

Any Exit from Iraq?

Deal, No Deal, or Many Deals

Nawaz Comes and Goes

Will Musharraf Wriggle Through?

Can We Stop Global Warming?

Bush’s Sputtering “War on Terror” Loses Again

Mental Health at Guantanamo Bay

What a Mess!

Will Musharraf’s Errors Prove Fatal?

How About Some Good News?

Anyone but Nawaz

China, India, and Pakistan: Whose Citizens Live Best?

Electing the Next President

Benazir’s Tragedy

Pakistan Election

Democracy and Pakistan

False Hopes in Palestine

Dinner with Shaukat Aziz

How Real Were Aziz’s Reforms?

The State of Pakistan

A Real Debate on Iraq

Stop Negotiating

Severe Challenges Face Pakistan’s Economy

Mindless Obsession with Musharraf

After Musharraf, More Musharraf?

Can Obama Do It?

Pakistan’s Poverty Profile

Economic Crisis in Pakistan

Can Obama Beat McCain?

Was the Aziz Boom a Mirage?

Pakistan’s Presidency

The Failed Presidency of George W. Bush

McCain Is Not Finished

The Economic Meltdown

A Year after the Annapolis Peace Conference

The Significance of Obama’s Win

Pakistan’s Economic Challenge

New Finds in Qur’anic History

The Assault on Gaza

Is a Trillion Dollar Stimulus Really Needed?

Bush’s Economic Legacy

How Big a Problem is Global Warming?

The Collapse of Oil Prices

Barack and the Banks

Pakistan Surrenders to the Taliban

The Collapse of the Republicans

Will Debt Defeat Obama?

Will Debt Defeat Obama?

The Torture Debate

Israel and Iran: Tyrants Cling to Power

Healthcare Reform

Is Israel Held to A Higher Standard?

Pak Economy Needs Growth

How to Really Control Health Care Costs

Do Not Attack Iran

Obama Confronts Failure in Afghanistan

Why Does the Islamic World Under-perform?

Final Chance for Palestine?

What Killed the Pak Economy in 2008?

Should Obama Fight Global Warming?

Obama’s Good Start

The Twisted Logic of the Extremists

Should France Ban the Burqa?

Slow Progress in Pakistan

Palestinians Resume Negotiations

The Farce of Islamic Creationism

Obama’s Secret Plan to Raise Taxes

Democratic Steps in Pakistan

Faisal Shahzad and the Taliban

Can Obama Win in Afghanistan?

The Meaning of Israeli Piracy

Editor: Akhtar M. Faruqui
© 2004 . All Rights Reserved.