Comparing Pakistan regionally

The reality is that economically, politically & socially Pakistan is falling behind even its immediate neighbours.

Many patriotic Pakistanis lament Pakistan’s inability to keep pace with countries like South Korea and Malaysia over the decades. However, a more realistic analysis would be to see how Pakistan is doing presently in comparison with other countries within the Saarc neighbourhood. I focus here on comparing Pakistan with the other three large Saarc countries — Bangladesh, India and Sri Lanka — to keep the comparison meaningful. Moreover, I look at a broad range of economic, social and political indicators instead of cherry-picking indicators to give a favourable picture for any one country, as is often done in heated exchanges among Indians and Pakistanis. I derive my figures largely from the World Bank’s online statistical database and focus on 2010 or the latest year for which figures are available.

Economically, the most important comparison base is per capita income. However, given its many limitations, I also look at additional indicators which reflect economic vulnerability, technological progress and economic competitiveness. Sri Lanka had by far the highest per capita income in 2010 in South Asia ($2,375), followed by India ($1,475), Pakistan ($1,000) and Bangladesh ($675). Except, Bangladesh, all the other countries are considered middle-income ones. However, Pakistan comes last in export performance in terms of its export-GDP ratio as well as the technological content of its exports. In terms of external economic vulnerability, only Bangladesh managed a positive current account balance (i.e., its trade and other current incomes were greater than imports and other current payments) in 2010, though Pakistan did have the consolation of having a smaller current deficit-GDP ratio than India and Sri Lanka. In attracting foreign direct investment, Pakistan comes second, behind India. Finally, on the overall economic competitiveness index, Pakistan is last with Sri Lanka and India being the top two.

Moving on to social indicators, I look at overall equality, gender issues, health and education. In terms of overall inequality as measured by the Gini index, Pakistan comes out as the least unequal and Sri Lanka as the most unequal, although having travelled extensively across the length and breadth of both countries, I find this hard to believe as I found Sri Lanka a much more egalitarian society. Healthwise, Pakistan just beats Bangladesh on life expectancy but no one on infant mortality. Educationally, Pakistan shares the bottom rank with Bangladesh with a literacy rate of 54 per cent while Sri Lanka takes the cake with 91 per cent. Finally, in terms of gender issues, the female literacy rate in Pakistan is much lower than that of Bangladesh and Sri Lanka (data for India was not available). Finally, politically, I look at the corruption, governance and failed state indices. Unfortunately, Pakistan comes last on all of them.

Thus, Pakistan comes last or second last on 11 of the 14 indicators above. Of course, there are many issues with the reliability of some of these indicators. However, it would be foolish to think that these errors have made a huge contribution to Pakistan’s sorry rankings. The reality is that economically, politically and socially Pakistan is falling behind even its immediate neighbours, who themselves are not highly developed. Even if one considers many more indicators, the situation will not change much.

What explains this malaise? One obvious reason is Pakistan’s heavy military investment and consequent disregard of economic and social development. Pakistan comes behind only Sri Lanka on this dimension. But as Sri Lanka’s example reveals, it is possible to cater to national security threats but still do relatively well economically and socially. So, Sri Lanka does better than the other three on educational, health and gender indicators as well as on overall economic and export competitiveness despite focusing more on military matters. At the same time, its heavy military investment has yielded tangible benefits as it has succeeded in eradicating terrorism while Pakistan is still struggling to do so. So it is also a question of governance and of using resources effectively. Clearly, neither Pakistan’s political managers nor its military managers (who often double up as political managers too) have shown the value for money that Sri Lankan managers have. Points to ponder, food for thought!

Published in The Express Tribune, October 28^th, 2011.