Pakistan needs high growth rate to meet China, India

LAHORE: Pakistan’s economy has to grow at a higher pace to come at par with its neighbouring China and India, economists said.
The economists said China with the Gross Domestic Product (GDP) of more than $10.3 trillion and India with $2.02 trillion of GDP size are much ahead of Pakistan’s $260 billion economy.
“The size of Chinese economy is so large that it added $900 billion in its GDP last year when even its growth rate slowed down,” said senior economist Naveed Anwar Khan.
Khan said this was higher than an addition of $840 billion in the Chinese Gross Domestic Product in 2010 when its economy grew more than 10 percent.
Considering Pakistan’s GDP, China is adding more than three times the total Gross Domestic Product of the former every year.
Pakistan added only $92 billion in its Gross Domestic Product in last 15 years compared with $1.5 trillion added by India during the same period.
In 2000, Indian GDP was a little over three times the GDP of Pakistan and now it is eight times larger.
“If we continue to grow at lower rate than India and China this gap in national wealth will continue to enlarge,” he warned.
“Slow growth rate fuelled poverty in Pakistan,” he said.
A World Bank’s report said GDP growth rate in Pakistan was 6.2 percent in 2006, 4.8pc in 2007, 1.7pc in 2008, 2.8pc in 2009, 1.6pc in 2010, 2.7pc in 2011, 3.5pc in 2012, 4.2pc in 2013 and 4.24pc in 2014.
Growth rates in China were in the range of 7.7 and 14 percent during the past decade.
India posted plus seven percent growth rate during this period touching 10 percent once and over nine percent thrice.
Its growth dipped to 3.9 percent after 2008 global economic crisis but it recovered quickly after that shock.
Economist Faisal Qamar said bad governance is the main reason behind pathetic growth rates.
“Pakistan was well ahead of India in per capita GDP. Today, India’s per capita GDP is 20 percent higher than Pakistan,” he said.
“Every government is responsible for this.”
Qamar said institutions and regulators have been strengthened both in India and China.
“In India, they operate according to their given mandate and do not allow state intrusion in their autonomy.”
Heads of the regulatory institutions in Pakistan have been provided tenure protection by the constitution. However, the heads are removed with impunity one way or the other.
Qamar said eformer governor Shahid Kardar at the State Bank of Pakistan resigned when he was forced by the government to print currency notes to finance the government deficit.
He said the next governor faced the same fate during the present government.
He said chiefs of Pakistan Electronic Media Regulatory Authority and National Electric Power Regulatory Authority (NEPRA) were removed and reinstated later by the courts, but finally they had to go as they could not resist the government pressure that was not exerted on them but on their dear ones.
Likewise, Qamar said chairman of National Database and Registration Authority, after having been reinstated by the courts, had to resign and leave the country.
“You cannot make mockery of your regulatory institutions and still hope for accelerated growth,” he said.
“A regulator loses control over their subjects if its orders are overruled by the rulers.” He said when National Electric Power Regulatory Authority (NEPRA) reduces power tariff the government jacks up taxes to nullify the impact of the cut for consumers.
Similarly, he added that when Oil and Gas Regulatory Authority recommends a cut or hike in prices of petroleum products the government comes up with its own arbitrary decision. “If the whims are supreme there is no need for regulators,” Qamar concluded.