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

[ghazi52]

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

BR Web Desk
February 12, 2024
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Atif Mian, a noted Pakistani-American economist and currently a professor of Economics, Public Policy, and Finance at Princeton University, has said that Pakistan “is bankrupt” and “sinking deeper every year”.

In a series of tweets on Sunday, the economist highlighted the impact of the February 09 General Elections for Pakistan that remains engulfed in a myriad of economic challenges including “inflation, growth, debt and investment.”






“Pakistan’s economy has consistently fallen behind globally – last year was one of the worst, with the economy actually contracting,” he said. “Every macro fundamental is flashing red: inflation, growth, debt, investment, to name a few.”

Criticising the government’s inability to generate revenue, Atif said the federal government has no money.

“It cannot even afford to pay the salary of a peon or a soldier without borrowing,” he said.

The economist said Pakistan’s entire tax revenue is consumed after paying provinces their share, pensions to retirees, and interest on debt.

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

“Inflation cannot be controlled when the entire government is run on deficit,” he said.

Whereas, “growth is impossible when government has no money to invest in the future, and lack of growth makes every problem worse,” he said.

“The country is bankrupt. It is sinking deeper every year,” he exclaimed while highlighting the state of affairs in the South Asian country.

“I have never seen such despondency. So many wanting to leave, established firms are no longer comfortable investing.

“Yet no leader has a viable economic plan for the future,” he said.

“People are mad – and they have every right to be. 442,353 children died in Pakistan just last year due to poverty, which is almost half a million dead kids every year.”

The General Elections 2024 have been marred with unclarity as the Election Commission of Pakistan (ECP), to date, has not announced the results of all constituencies.

Meanwhile, the economist warned that after the latest elections, the distance between the ruler and the ruled has never been wider.

“Do they understand how dangerous that is?” he questioned.

“There is an attempt – once again – to cobble together a compromised group.

“No one has a plan to fix the economy. But even if they magically did somehow, they cannot do anything because they have lost all trust in their people they are foreigners in their own land,” concluded Atif.

 

[Oscar]

Yep - that’s what they don’t understand

“No one has a plan to fix the economy. But even if they magically did somehow, they cannot do anything because they have lost all trust in their people they are foreigners in their own land,” concluded Atif.

 

[SaadH]

Did Atif Mian have the magic wand that would have compelled Bajwa to let the tax on retailers stand or what economic theory he would have presented to Bajwa and rest of the sepoy brass to bow down to him and allow tax on real estate. Better yet, what academic ingenuity and innovation he would have employed to force the sepoys to allow fair market competition against the latter's $100 bn worth of monopolies or put a stop to their multi-billion dollar worth of smuggling? Even better, what magic spell would have have cast to prevent billions worth of capital flight through money laundering from all comers sepoys, their political minions, businessmen and etc.?

If he couldn't have done any of the above, why is he being sold as a panacea to Pakistan's economic problems when everyone knows you can't make an iota of economic reform/change without dismantling the sepoy enterprise and their partners in crime the elites who have both hijacked/captured the country and its resources for their personal enrichment.

 

[kambhakt]

Did Atif Mian have the magic wand that would have compelled Bajwa to let the tax on retailers stand or what economic theory he would have presented to Bajwa and rest of the sepoy brass to bow down to him and allow tax on real estate. Better yet, what academic ingenuity and innovation he would have employed to force the sepoys to allow fair market competition against the latter's $100 bn worth of monopolies or put a stop to their multi-billion dollar worth of smuggling? Even better, what magic spell would have have cast to prevent billions worth of capital flight through money laundering from all comers sepoys, their political minions, businessmen and etc.?

If he couldn't have done any of the above, why is he being sold as a panacea to Pakistan's economic problems when everyone knows you can't make an iota of economic reform/change without dismantling the sepoy enterprise and their partners in crime the elites who have both hijacked/captured the country and its resources for their personal enrichment.

That is not his job. He is just making comments on social media like you and me. But given his background, his comments have a lot more value than ours.

 

[Quwa]

Yep - that’s what they don’t understand

Yep. Not only that, but our elites live in a different world entirely, such that they aren't connected to Pakistan in any real way. Their own life goals usually center on settling in the West while also having a posh vacation bubble in Pakistan. There's no desire to build Pakistan.

It's basically as if the British left and these guys took their seats, but didn't change anything else.

 

[nahtanbob]

Did Atif Mian have the magic wand that would have compelled Bajwa to let the tax on retailers stand or what economic theory he would have presented to Bajwa and rest of the sepoy brass to bow down to him and allow tax on real estate. Better yet, what academic ingenuity and innovation he would have employed to force the sepoys to allow fair market competition against the latter's $100 bn worth of monopolies or put a stop to their multi-billion dollar worth of smuggling? Even better, what magic spell would have have cast to prevent billions worth of capital flight through money laundering from all comers sepoys, their political minions, businessmen and etc.?

If he couldn't have done any of the above, why is he being sold as a panacea to Pakistan's economic problems when everyone knows you can't make an iota of economic reform/change without dismantling the sepoy enterprise and their partners in crime the elites who have both hijacked/captured the country and its resources for their personal enrichment.

What is the problem with taxing retail sales ? Just pass it to the end consumer

 

[hussain]

What is the problem with taxing retail sales ? Just pass it to the end consumer

Already being done, local goods at 18% imported at 25%, and internet at 37%.

Dont ask about mobiles.

 

[Oscar]

Yep. Not only that, but our elites live in a different world entirely, such that they aren't connected to Pakistan in any real way. Their own life goals usually center on settling in the West while also having a posh vacation bubble in Pakistan. There's no desire to build Pakistan.

It's basically as if the British left and these guys took their seats, but didn't change anything else.

The problem that I saw is in that mindset going everywhere. Included the military- that is why we’re in this mess. Not because it’s isolated to an institution but that status is considered a tool rather than a privilege and service.

Here in the US (while there are exceptions) the majority of veterans (and there are many beyond the 5-10 Fox news keeps showing) have the idea of service as a selfless duty - as something done without asking for anything in general. Ive met more than a few vets from all branches and roles(and with the exceptions who are documented as well) and they don’t wave their status around as some tool (@dbc can correct me if I exaggerate). Which is why you have this organic love for the military for the most part regardless of political affiliation(notwithstanding the views of the military industrial complex which vary and are more and more negative).

On the other hand, as a general observation (Always exceptions and there are many but not the majority) of Pakistan military the attitude is “I am a so and so.. who the hell are you to say anything to me” and it seems to begin right after 2-3 years of service. That idea that somehow serving the country isn’t a selfless duty but puts you above all others and makes you a god’s gift stems from the inheritance of the Colonial Raj military (and is still somewhat prevalent in how ranks create greater furor for the UK military than for US) and that goes into civil service culture and then into the “brown sahibs” that would work then with the Brits and now with the military to rule.
The level of “stiff neck” has the worst offenders in the Civil service, politicians and then the Army , air force and maybe in the Navy(because the Army treats them like 2nd grade so does everyone else).

But that is the crux of the selfishness that defines the effectiveness of statecraft and results in the situation you see today.

 

[Quwa]

The problem that I saw is in that mindset going everywhere. Included the military- that is why we’re in this mess. Not because it’s isolated to an institution but that status is considered a tool rather than a privilege and service.

Here in the US (while there are exceptions) the majority of veterans (and there are many beyond the 5-10 Fox news keeps showing) have the idea of service as a selfless duty - as something done without asking for anything in general. Ive met more than a few vets from all branches and roles(and with the exceptions who are documented as well) and they don’t wave their status around as some tool (@dbc can correct me if I exaggerate). Which is why you have this organic love for the military for the most part regardless of political affiliation(notwithstanding the views of the military industrial complex which vary and are more and more negative).

On the other hand, as a general observation (Always exceptions and there are many but not the majority) of Pakistan military the attitude is “I am a so and so.. who the hell are you to say anything to me” and it seems to begin right after 2-3 years of service. That idea that somehow serving the country isn’t a selfless duty but puts you above all others and makes you a god’s gift stems from the inheritance of the Colonial Raj military (and is still somewhat prevalent in how ranks create greater furor for the UK military than for US) and that goes into civil service culture and then into the “brown sahibs” that would work then with the Brits and now with the military to rule.
The level of “stiff neck” has the worst offenders in the Civil service, politicians and then the Army , air force and maybe in the Navy(because the Army treats them like 2nd grade so does everyone else).

But that is the crux of the selfishness that defines the effectiveness of statecraft and results in the situation you see today.

For now, the PN seems to attract a different sort of person compared to the Army and Air Force. Joining the PN is uniquely challenging because it's taxing (e.g., long deployments, and at sea no less), technically intensive (with increasing complexity), and not as prestigious.

The PN may not get as many people coming to its doors as the PA or PAF, so it has to do some level of outreach to what it considers ideal personas for officers. I also sense that it has a preference for conservative middle-class people.

OTOH, the tough nature of PN service (relative to PA/PAF) may weed more opportunistic types out because they'd need a lot more patience and grit to get to their ideal state in PN service vs. PA or PAF.

 

[nahtanbob]

The problem that I saw is in that mindset going everywhere. Included the military- that is why we’re in this mess. Not because it’s isolated to an institution but that status is considered a tool rather than a privilege and service.

Here in the US (while there are exceptions) the majority of veterans (and there are many beyond the 5-10 Fox news keeps showing) have the idea of service as a selfless duty - as something done without asking for anything in general. Ive met more than a few vets from all branches and roles(and with the exceptions who are documented as well) and they don’t wave their status around as some tool (@dbc can correct me if I exaggerate). Which is why you have this organic love for the military for the most part regardless of political affiliation(notwithstanding the views of the military industrial complex which vary and are more and more negative).

Even if what you say is true it does not answer the question why Pakistan is bankrupt.

Pakistan is bankrupt because Pakistanis live above their means

 

[dbc]

Here in the US (while there are exceptions) the majority of veterans (and there are many beyond the 5-10 Fox news keeps showing) have the idea of service as a selfless duty - as something done without asking for anything in general. Ive met more than a few vets from all branches and roles(and with the exceptions who are documented as well) and they don’t wave their status around as some tool (@dbc can correct me if I exaggerate). Which is why you have this organic love for the military for the most part regardless of political affiliation(notwithstanding the views of the military industrial complex which vary and are more and more negative).

My father-in-law is ex-Navy, it's funny to hear him rage when he gets a speeding ticket. Unlike Pakistan, servicemen and women in the US are respected but they have no special privileges in civilian life. There is a variety of reasons why people choose to serve, for some it is a family tradition for others its the adventure. And still many see it as a means to gain skills and advance their careers, get a green card or pay for that university degree.

I believe the men and women that serve or have served see themselves as a kinship, they'd jump on that grenade not due to patriotism or fealty to their branch of service but to their absolute commitment to their fellow comrade in arms.

But as you advance in the military to a senior rank many are frustrated by the senseless bureaucracy and constant political interference. As for public opinion, it is a fickle thing. One day they are the good guys (911), the next they’re an eye soar (Vietnam war).

 

[Oscar]

Even if what you say is true it does not answer the question why Pakistan is bankrupt.

Pakistan is bankrupt because Pakistanis live above their means

We’re not looking to answer that question - we’re looking to answer how did that get to this point based on years of mismanagement and ignorance of expert opinions due to this arrogance which included living Beyond the means.

And it’s not confined to the establishment even though everyone makes them the usual suspects - its a Pakistan wide disease.

 

[kambhakt]

What is the problem with taxing retail sales ? Just pass it to the end consumer

The chairman FBR has given an interview where he said that he was called to the office of some very big bigwig of the army or ISI. There is front of representatives of traders, he was told not to collect taxes from them.

 

[nahtanbob]

We’re not looking to answer that question - we’re looking to answer how did that get to this point based on years of mismanagement and ignorance of expert opinions due to this arrogance which included living Beyond the means.

And it’s not confined to the establishment even though everyone makes them the usual suspects - its a Pakistan wide disease.

you got to this point because you are living beyond your means. I promise you that you will not win any popularity contests telling people that. No one wants to hear it. The mismanagement happens when you need to juggle things because you are living beyond your means. There is no interest in listening to the experts if the choices are unpleasant

the narrative on PDF has always been is that we will increase the pie and all our problems will go away. Most of the ideas to increase the pie has been bunch of horseshit. Not because there are necessarily bad ideas. But no one believes the government in charge can implement those ideas. If the old PDF was alive it would be easy to point to the individual threads & posts. I have tried telling only to be poo poohed away

 

[hulk]

Yep - that’s what they don’t understand

The problem is that people come to politics primarily to make money. It's not a Pakistan-centric issue, it's worldwide. Growth and economics come along even when corruption is there. Pakistan's problem is bigger due to other issues, like a strong focus on making decisions based on ideologies. e.g. Trade with India, ego issue. Even when Pakistan's economy was not doing well, Imran (After 370 revocation) took a call to stop trade with India when you could ill afford it. Such decisions cannot be taken without deep thought, sometimes you have to swallow the ego and take the fight to a later time. During a similar timeframe, he also damaged the relationship with the Saudis so much that the plane given to him was recalled. I just remember a few examples during his tenure where he did not make any smart moves. I know you all are in love with him and do not want to see faults at all.

Corruption is there everywhere, no country is free of political corruption. In the United States, they have come up with a legal cover for corruption. Bottom line, corruption alone is not Pakistan's problem. I feel the bigger problem is putting constraints on the government on what they should be doing on fake ego. Even with corruption, if Pakistan stops these fake ego issues with countries, the economy will thrive.