Take a look at the following chart. It shows the GDP per Capita (Income per Person) growth trend of Pakistan since 1951. Charting six decades, it starts at less than $200 dollars in 1951 and ascends to a dizzying height of over $3000 in 2009. With a constant upward trajectory, the curve never dips and any kinks in it are few and far between.
Impressive, yes? With an average growth rate of 5.3% annually and not a single year of negative growth apart from 1951, it looks like a performance that many nations would kill for.
But is it really?
Let’s conduct a little experiment...
It’s widely acknowledged that the 1960’s was Pakistan’s ‘golden era’. Through wise governance and a hands-off economic policy, industrial capacity multiplied rapidly, generated an average growth rate of 6.8% during that decade, a performance never since surpassed. Poverty decreased quickly as the dynamism of market forces revolutionised agriculture and light industry. As all economic indicators gave the impression that Pakistan was on the verge of economic ‘take-off’, delegations from far as and wide as South Korea and Chile came to Islamabad to jot down lessons and learn tips.
It was the economic catastrophe of the 1970’s that put paid to the nations aspirations. Forced nationalisations, draconian industrial policies and extreme government intervention in the economy decimated the private sector base. Socialism was a policy that was neither efficient nor sustainable, leading to the growth rate being slashed.
But what if the policies (and thus the economic growth rate) of the 1960’s had continued? Take a look:
The blue line that you see soaring above the now rather feeble looking red one is the growth trajectory that would have been occurred if the growth rate of the 1960’s had remained. And before you say that it would have been an impossible achievement, bear in mind that the red line (showing the actual growth that occurred) constitutes an average growth rate of 5.3%. The blue line’s average rate is only a single percentage point higher at 6.3%. A tiny difference, and yet the effects are astounding. A difference of a single percentage point would have left the income of the average Pakistani at over $6000 today. That’s double, yes, double, what it is now.
To illustrate, it’s the same as the average income of ‘medium income’ countries like China and Jordan. Have you seen pictures of the soaring skyscrapers in Shanghai and Beijing? Well, that could have been Karachi and Islamabad. Remember, just a single measly percentage point more and we would have generated a national output of over a trillion dollars a year, eliminated extreme poverty and expanded the middle-classes to well over 100 million people. With the military power and diplomatic credibility that comes with economic success, Pakistan would have been the undisputed leader of the Muslim world.
Are you paying attention now?
Let’s take this experiment a little further...
In my new book ‘Pakistan - Manifest Destiny’, (available free to download here), I repeatedly stress the enormous potential of our great nation and how and why we have fallen short and how we could regain our economic vitality. Yet many have said that the aspiration to superpowerdom is mere wishful thinking. Being in a state of perpetual despondency, many scoff at the idea that Pakistan could achieve superpower status in a few short years.
Nonsense. All it takes is a slightly higher economic growth - achieved through wiser economic policies and a little determination. Many nations have performed well in this regard. In the grand scheme of things, even our 1960’s average of 6.3% is a little pathetic. After all, South Korea achieved an average rate of over 8% for over 40 years, and China a 10% rate for over 30 years.
What if Pakistan had done the same?
Let’s take a look:
The red and blue lines are the same as before, but now both look jaded with the addition of the green and purple lines. The green line indicates the growth trajectory if Pakistan had maintained an average ‘South Korean’ rate of 8% after 1970. If we had, the income of the average Pakistani on the street today would have been over $10,000. That’s almost triple what it is now, and it would have catapulted Pakistan into the league of Turkey, Malaysia and Russia. Wait - Russia is supposed to be a superpower right?
The purple line indicates the growth trajectory of Pakistani GDP per Capita if after 1970, we had sustained an average ‘Chinese’ rate of 10%. Not unprecedented, as we achieved this rate on a few occasions in the 1950’s and 60’s. The average Pakistani on the street would have been earning over $21,000 a year. Now we’re talking South Korea, Britain and Israel. We would have a GDP of over $3.6 trillion, putting us 4th in the global rankings behind the US, China and Japan - and catching up on Japan fast. Pakistan would be an undisputed global superpower with a defence budget of around $200 billion dollars - with all the associated high-tech aircraft carriers and stealth bombers that come with it.
Or put it this way, Palestinians, Kashmiri’s, and Chechens today would no longer be suffering.
Doe this seem fantastical to you? If so, why? Really, how hard can it be to push up the growth rate by a point or two? It’s not rocket science. It can be done by abandoning the catastrophic and still failing policies of our socialistic leaders and instead implementing ones that optimise production, employment, trade and entrepreneurial activity. If we reform our economy, we can even elevate our growth rate beyond 10%. We could average 12%-15% by abolishing our counterfeit fiat currency, instituting the gold dinar standard and eliminating all trade barriers. In 10 years we could triple the size of our economy. It doesn’t take long! Think of all the time we’ve wasted already.
If Pakistan was wealthy and powerful do you think Israel and India would dare to look us in the eye for more than a second? But that’s the point. They know this. Why do you suppose they are ferociously trying to destabilise, demoralise and dismantle the Pakistani nation? It’s because they know our potential even if we do not. Well, we may have lost our way temporarily, but I hope I have proven how close Pakistan was to achieving the vision of Quaid-e-Azam and how close we are still. If we put our minds to it and empowered a wise, competent and visionary leadership, we could ascend higher than any nation has gone before us.
So please, do not despair. Recognise your own awesome potential and the awesome potential of your country. Have faith in Pakistan. The world is at our feet - a little effort is all it takes to shape it to the way we want it to be.
Pakistan Zindabad
Posted on
Wednesday, August 12, 2009
by Atif F Qureshi