Pakistan

Last two years worse in Pakistan’s economic history: Atif Mian

  • Country stuck in ‘poverty trap’, needs ‘big policy change’, says noted economist
Published August 19, 2024

Atif Mian, a noted Pakistani-American economist and currently a professor of Economics, Public Policy and Finance at Princeton University, said that Pakistan is stuck in a “poverty trap” and the only way out of it is through “a big policy change”.

In a series of posts on social media platform X, formerly known as Twitter, on Saturday, the economist highlighted that there is increasing evidence that Pakistan is stuck in a poverty trap “due to decades of malpractice”.

“Poverty is a terrible thing - but it always comes with a silver lining,” he stated.

“Poor people are willing to work for less, and knowledge they can use to be more productive is already out there. If only a government can help harness this natural advantage, growth and prosperity follows, as countries like Vietnam and Korea have shown.

“To put it differently, it takes effort to suppress growth for long periods of time. But some countries manage to do so through their collective decisions, and remain stuck in what economists refer to as a “poverty trap”. There is increasing evidence that Pakistan is stuck in such a trap due to decades of malpractice,” said Mian Atif.

Pakistan ‘is bankrupt’ and ‘sinking deeper every year’: Atif Mian

Citing data from the 1980s, the economist noted that Pakistan’s growth rate has progressively declined. In fact, the economy is stagnating, “Pakistan is stuck in a poverty trap”.

Atif Mian said the last two years have been the “worse in Pakistan’s economic history”.

“I plot annual inflation and per-capita GDP growth for each year since 1980 below. 2023 and 2024 stand-out - never has inflation been this high and growth this low. The closest years are global crises of 2009 and 2020, but the recent two years are purely the country’s own making,” he said.

“Is this just statistics?” questioned Atif.

“I have personally never seen as much hopelessness on the streets of Pakistan as now - it seems that anyone who can, wants to leave the country. There is some credence to this perception of mine…. The number of people searching for visas abroad has skyrocketed,” he said.

Atif noted that the thing about poverty traps is that they are “traps” - meaning incremental change cannot take you out of your misery.

“The only way out of poverty traps is through a big policy change - a change that is coordinated and credible over a sustained period of time. I’ll talk about what this means in the future.

“For now, it’s business as usual in Pakistan. And that is terrible news for its people,” he said.

‘Nonsensical’: economist Atif Mian slams Pakistan govt’s policies

The development highlights issues plaguing Pakistan’s economy that has for decades struggled to attract and retain investment. Its constant run-ins with instability, inconsistent policymaking, and a general knack of increasing expenditure in non-productive sectors have pushed away investors that do not see the population of over 240 million as a viable enough market. Bailouts with the International Monetary Fund (IMF) are a frequent event, and the economy has stayed more susceptible to shocks than regional peers.

Comments

200 characters
Az_Iz Aug 19, 2024 04:47pm
The last time around, he said the country was bankrupt and sinking.This time around, his assessment is, just a tiny bit, not as harsh.
thumb_up Recommended (0) reply Reply
hooman Aug 19, 2024 04:48pm
He warned against the increasing reliance on imported fuel for power generation years ago. He foresaw rising electricity prices.
thumb_up Recommended (0) reply Reply
ENGR Hamid Shafiq Aug 19, 2024 05:29pm
No bodly require your opinion its truth for us who live in the country. We dont need your advises becuase you people live abroad and enjoy the life. its our country we shall solve our own issues.
thumb_up Recommended (0) reply Reply
T Aug 19, 2024 06:10pm
@ENGR Hamid Shafiq , so when will you stop solving your own problems by begging money from others?
thumb_up Recommended (0) reply Reply
Zia Ullah Khan Aug 19, 2024 06:13pm
Atif Mian( wish his name was different) is stating the obvious but in a forceful way. Pakistan should regularly appoint economists instead of bankers / accountants/ politicians as Finance Ministers.
thumb_up Recommended (0) reply Reply
Irfan Azam Aug 19, 2024 07:53pm
All good Pakistani professionals live out of Pakistan and that's the only good thing about Pakistan !
thumb_up Recommended (0) reply Reply
Nauman Maqbool Shah Aug 19, 2024 08:14pm
when he talks,just listen-you will do good to your self .what an unfortunate nation to lose such intellect
thumb_up Recommended (0) reply Reply
ENGR Hamid Shafiq Aug 19, 2024 09:01pm
@T, I always live in hope with optimistic thinking one day we shall solve our problems you don't need to worry
thumb_up Recommended (0) reply Reply
HashBrown® Aug 19, 2024 09:07pm
@ENGR Hamid Shafiq , Yes, you're right. In fact let's cancel all our remittances as well because they come from people who are overseas. Let's ban all foreign investment.
thumb_up Recommended (0) reply Reply
Mdx Aug 19, 2024 09:08pm
These statistics truly reflect the dire situation in Pakistan. innovation and creativity is found in those people, having the most thirst of knowledge. Sadly, only 2-3% of funds are allocated for it
thumb_up Recommended (0) reply Reply
Fouzi. Aug 19, 2024 09:40pm
the foreign debt to GDP ratio is down to 21%(and 12% if black economy is included).bank deposits have crossed 28tr
thumb_up Recommended (0) reply Reply
Fouzi. Aug 19, 2024 09:42pm
80% of the ppl are using less than 200 units of electricity and the rich are shifting to solar(almost 3k already installed)
thumb_up Recommended (0) reply Reply
Super moon Aug 19, 2024 10:14pm
Hopefully our current leadership and SIFC will turn things around and we will become Asian Tiger.
thumb_up Recommended (0) reply Reply
Yasir Mehmood Aug 19, 2024 10:31pm
Holds a grudge agnst own (?) country? Isn't Imran's ~24B wastd on sehat card sort o extravaganza haunting us? Payin bak needs more borrowin and an errosion of society, no? Excelt. design! Cant b Korea
thumb_up Recommended (0) reply Reply
نعیم ںھائ Aug 20, 2024 12:05am
We will rise InshaAllah. The despondency spreaded by a "fittna khan" will wither away soon. Economy needs a respite from heated route of import and consumption.
thumb_up Recommended (0) reply Reply
Razi Aug 20, 2024 12:14am
He is a good economist and the things he said are obviously right. Remember what we did to him, When he was in an Economic Council in 2018?
thumb_up Recommended (0) reply Reply
balloon Aug 20, 2024 12:22am
Everybody knows everything now but who will make things right? We all are waiting for that right one. And have hopes too that one day we will be governed by that right one.
thumb_up Recommended (0) reply Reply
Hamid Malik Aug 20, 2024 12:23am
Bloomberg,Moody's or Fitch, all apriciated macroeconomic,decreasing inflation, record domestic revenue collection toPKR 9400 billn,current&external deficit improvement,record Agri & industrial pr
thumb_up Recommended (0) reply Reply
Sr Aug 20, 2024 12:26am
@ENGR Hamid Shafiq, he was selected as our economist we drove him out due to petty mindsets.
thumb_up Recommended (0) reply Reply
Sohail Aug 20, 2024 01:18am
@ENGR Hamid Shafiq , your education "Engineering" is sufficient to explain your ignorance
thumb_up Recommended (0) reply Reply
Sohail Aug 20, 2024 01:20am
@Fouzi., 3k is very small number. At least 1 lac roofs have solars
thumb_up Recommended (0) reply Reply
Warisha Ahmed Aug 20, 2024 01:32am
@ENGR Hamid Shafiq , unfortunately, you are not solving neither listening...
thumb_up Recommended (0) reply Reply
Arsalan Aug 20, 2024 01:58am
till we dont tax the rich and reduce govt leisure expenditures plus renegotiste with ipp's this trap is going to grow. welcome to hell
thumb_up Recommended (0) reply Reply
Az_Iz Aug 20, 2024 04:21am
6 months ago,he had said,Pakistan was bankrupt and sinking.Is that still true? CAD,revenues,exports,foreign exchange inflation are slightly better.Cannot call that sinking,although lot more needs done
thumb_up Recommended (0) reply Reply
Imran Malik Aug 20, 2024 06:06am
Atif Mian lives in a adopted country which has world's highest debt, 36 trillion USD. He should give his advise to them.
thumb_up Recommended (0) reply Reply
B P Samal Aug 20, 2024 06:09am
@ENGR Hamid Shafiq , Then please solve. Atleast start trying to solve....
thumb_up Recommended (0) reply Reply
Aam Aadmi Aug 20, 2024 07:43am
I deeply appreciate that BR published Atif Mian's views. I concur 100% with his assessment. Only a 'jahil', 'ganwar' and ' bewaqoof' will disagree with him. BR! Please publish my comment unedited.
thumb_up Recommended (0) reply Reply
Aam Aadmi Aug 20, 2024 07:47am
@ENGR Hamid Shafiq , If you are really an Engineer, you hold a fake degree purchased with money. Alternatively, you are government's 'chamcha'. The country is going down because of the people like you
thumb_up Recommended (0) reply Reply
Amjad Maqsood Aug 20, 2024 08:11am
Since 1990,s PERA, all the successive govts relied on the "financial wisdom" of bankers, stock brokers & money changers - Result: a hollow economy, no growth, high inflation and severe debt burden
thumb_up Recommended (0) reply Reply
Sparkling Waters Aug 20, 2024 10:04am
@ENGR Hamid Shafiq, Get a life dude !!! Which day ???
thumb_up Recommended (0) reply Reply
Sparkling Waters Aug 20, 2024 10:06am
@T, we will not solve problems rather we will solve our Own problems !!!!
thumb_up Recommended (0) reply Reply
Akhtar Khan Aug 20, 2024 10:29am
@ENGR Hamid Shafiq , are we really solving our problem? And. May I ask how? Don't be jealous..
thumb_up Recommended (0) reply Reply
ENGR Hamid Shafiq Aug 20, 2024 10:41am
@Sparkling Waters, Be relax Be patient
thumb_up Recommended (0) reply Reply
Rebirth Aug 20, 2024 02:18pm
By October 1st, US debt will be 37 trillion. That’s about 150% of their GDP. High interest rates couldn’t control high inflation. You wonder if he can’t help the US from Princeton, how’ll he help us?
thumb_up Recommended (0) reply Reply
Khaja Aug 20, 2024 02:37pm
This is true. No doubts. This is what the people in power are supposed and allowed to do since the birth of Pakistan as they got picked to maintain this vicious circle and structure.
thumb_up Recommended (0) reply Reply
Aamir Aug 20, 2024 02:39pm
Why does he not talk about overpopulation? Which is destroying society! Put in place a one child policy and then see after 15 years all issues will be resolved. Need to go from 25 back to 10 crores.
thumb_up Recommended (0) reply Reply
Imtiaz Ahmad Aug 20, 2024 03:47pm
@ENGR Hamid Shafiq , man they are lucky people. Let them do it. We are unfortunate because we are burning. We donot have enough resources to go abroad. Still he shows some apathy for us
thumb_up Recommended (0) reply Reply
Imtiaz Ahmad Aug 20, 2024 03:50pm
@نعیم ںھائ, we are waiting for this news since our childhood. Our parents used to say that
thumb_up Recommended (0) reply Reply
Re=== Aug 20, 2024 04:50pm
@Rebirth, Do the people in USA look like they need help? Are they standing in line for Atta?
thumb_up Recommended (0) reply Reply
Pakistani Aug 20, 2024 08:33pm
Government can help. Reduce its expenses, Use the savings to provide education, healthcare and build infrastructure. Above will increase employment and circulation of money, benefitting citizens.
thumb_up Recommended (0) reply Reply
Asad Amjad Aug 20, 2024 11:04pm
@T, Your real ID please
thumb_up Recommended (0) reply Reply
Test Aug 21, 2024 09:13pm
@Pakistani, education already free cannot motivate all people to study. only few people can study who have passion govt should not force education to everyone. how many things we invented
thumb_up Recommended (0) reply Reply
Zarzan khan Aug 22, 2024 04:20am
@ENGR Hamid Shafiq , How you solve with President, PM, CM punjab all had corrupttion cases against them?
thumb_up Recommended (0) reply Reply
Abdul Rasheed Aug 22, 2024 06:20am
@Imran Malik , USA HAS 5000 BILLION RRESERVES TOO. DONT WORRY AMERICAN DO NOT DO CORRUPTION ON COUNTRY LOAN LIKE PAKISTANIS
thumb_up Recommended (0) reply Reply
Daar Aug 25, 2024 08:01pm
@ENGR Hamid Shafiq , this is what we call arrogance and irrationality
thumb_up Recommended (0) reply Reply