Addressing an Average Citizen's View of the Economy

Author:Mr Nasim Beg
Profession:Arif Habib Investment Management Ltd
 
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The television news channels and the news papers are constantly reporting about the good things happening to the economy. Pakistan has its highest foreign exchange reserves ever, the unthinkable has happened with Pakistan becoming the save haven for keeping one's wealth and the Pakistan Rupee constantly appreciating against the all mighty US Dollar, our exports are for the first time set to exceed the hitherto elusive mark of ten billion dollars; one cannot remember if interest rates were as low as the current levels ever before and there is talk of these going down further; banks and financial institutions are bending over backwards to lend you money to buy a car, or a house or even a television set; the stock market, the barometer of economic health, is the best performing market in the world.

From all accounts, it appears that Pakistan is the land of opportunities and the young and old should be happy. Any young person seeking a job should have one and all retirees should have the ability to live out old age comfortably. There should be a spate of new businesses being set up and scores of new companies being listed on the stock exchanges. Poverty should be on the decrease if not nearing elimination; there should be enough in the government's coffers to extend social security to all citizens. Yet, this does not seem to be the case. The what is the explanation? And is there hope?

Let us first try and address as to why, in practice, life isn't as good as we would expect from the economic indicators. We should start with looking at why we have a very high level of poverty, which many reports say, has increased rather than having decreased. Never mind how the economists measure poverty, to an average citizen's way of looking at it, if we were to simply take the per-capita income or in simpler words the average income of the citizen, it is stated to be under $500 per year or in Rupee terms, under Rs. 30,000 per year, which translates to under Rs. 2,500 per month. This to an ordinary mind seems to be well below subsistence level. If we recognise the fact the average means that some persons have a much higher income bracket and most if not all readers of this article will indeed have a much higher income, it then only means that the persons on the other side of the average must be at a much lower level. Thus, there is not doubt that a very large segment of the population is living well below the poverty line. This is a curse that we, in this...

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