AASIM M. HUSAIN
As the military confrontation between Pakistan and India continues to rumble, Pakistan’s economy could be caught in the crossfire. Two weeks after a terrorist attack in the Indian-administered part of Kashmir, India launched a series of strikes on Pakistani territory. The ongoing crisis has fueled concerns that India may try to halt the flow of the Indus River into Pakistan – a threat that Pakistan’s struggling economy can ill afford.
Five decades ago, Pakistan had the strongest economy in South Asia, outperforming India, Bangladesh, and even Sri Lanka in terms of per capita income. Today, the opposite is the case: Pakistan’s per capita income is half that of its neighbors, and it trails them in education, health care, and most other development indicators. While macroeconomic mismanagement has contributed to this decline, an often overlooked – but equally significant – factor is rapid population growth.
When population growth outpaces income growth, per capita income falls. The long-term consequences are far-reaching: a larger population – especially one with a high dependency ratio – means lower household savings, less investment, and slower economic growth. Pakistan’s population has more than quadrupled over the past half-century, and 36% of its residents today are under 15 – far higher than the 22-25% share in Bangladesh, India, and Sri Lanka, where population growth has slowed dramatically in recent decades. As a result, the share of working-age Pakistanis remains below 60%, compared to just over two-thirds in the rest of South Asia.
No comments:
Post a Comment