In 73 years of independence, Pakistan has faced its ups and downs in the financial industry and yet also progressed on many social and economic levels. Comparatively, Pakistan has shown improvement in the infant mortality rate, average life expectancy, enhanced exports, and increased income levels.
There are certain factors that indicate progress in the country’s economic performance.
GDP per capita
The GDP( gross domestic product) per capita of any country calculates the standard of living of people in the country.
GDP per capita= Country’s economic output/total population
The GDP per capita of Pakistan has been lower compared to India, Malaysia, and Sri Lanka. India has higher standard of living compared to Pakistan with 39% of gap between them. Since 1960 to 2019 , Pakistan’s GDP increased 15 times. Pakistan had much better standard of living than Bangladesh back in 1971 with a gap of 34% which has now shifted to Bangladesh with 31% of gap. Bangladesh is in a much better place now.
Exports generate income and enhance foreign exchange earnings. Pakistan lags behind in exports from India and Malaysia whose exports increased 325 and 234 times where Pakistan’s reached 105 times since 1960.
To sell internationally, the products must be good quality for the world to purchase it as exports define the country’s international competitiveness.
Pakistan is weak in international competitiveness as only 10% of GDP is comprised of exports whereas, India has allotted 19%, Bangladesh 15%, Malaysia 65% and Sri Lanka 23% in 2019.
India and Bangladesh have surpassed Pakistan in terms of exports-to-GDP ratio as well which shows Pakistan’s lesser competitvity in international market. Pakistan hardly managed to increase its exports as a percentage of GDP by 1.44% since 1960.
Infant Mortality and Life Expectancy
The positive aspect of economic growth is providing a better standard of living which leads to resources, also improving health. The development economists define two important health indicators are life expectancy at birth and infant mortality rates. Pakistan’s progress in these has been much slower than in other countries.
Pakistan’s people average age expectancy in 2019 reached at 67.5 years as compared to 68.7, 72.4, 76.1, and 76.9 years for India, Bangladesh, Malaysia, and Sri Lanka respectively.
Pakistan managed to reduce its infant mortality rate (per 1,000 live births) by one-third from 186 (per 1,000 live births) in 1960 to 60 (per 1,000 live births) in 2019.
Bangladesh and India have an infant mortality rate of 26 (per 1,000 live births) and 31 (per 1,000 live births) respectively. Malaysia and Sri Lanka are way ahead with infant mortality rates of 6 and 7 (per 1,000 live births) respectively.
Need Fresh Industrial Policies
The policymakers and politicians in Pakistan should encourage export to bring some relief to the trade deficit. The international competitiveness is wrongly linked to price competitivity. REER (real effective exchange rate) and ULC (unit labor cost) are most important measures to analyze price competitiveness.
A rise in ULC or stronger currency would devastate the international competitiveness. However, over long term, the market share of exports and relative unit costs or prices tend to move together.
Pakistan is in dire need of fresh industrial policies focusing on short-term economic relief measures and boost the falling industrial base towards higher productivity and value addition.