Economic: India, Pakistan playing their ‘Great Game’

[Tiki Tam Tam]

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Great games are conducted by great powers whether they be U.S., China, Russia, Japan, Britian or France. India and Pak. are at best fast growing emerging nations on the global scene. It is a decade or so before India actually becomes a global power (if not longer) and few more before Pak. gets there.

India is no global player.

In fact, Pakistan may become one before India, the way the things are moving.

Everything is moving very sluggishly and the way things are being handled, India is not indicating any movement towards any global reach.

[sigatoka]

1. India is no global player. In fact, Pakistan may become one before India, the way the things are moving.

2. Everything is moving very sluggishly and the way things are being handled, India is not indicating any movement towards any global reach.

1. Why do you say that?

2. So true, sluggish defines India, Pak. and Bangladesh quite aptly especially in terms of their economic policies. Only in the last ten years has growth picked up to make real differences and who knows if it continues or not.

[Tiki Tam Tam]

As far as India is concerned, there does some suggestion it is sluggish.

I am not too sure about Bangladesh, but I think I read a Pakistani commentary that the Pakistani economy has overtaken the Indian economy or words to that effect.

As I have stated earlier, I have no in depth knowledge of economics and so I go by whatever catches my eye in the newspapers.

[Neo]

I am not too sure about Bangladesh, but I think I read a Pakistani commentary that the Pakistani economy has overtaken the Indian economy or words to that effect.

In terms of reforms and leberalisation Pakistan has taken a leap but still lacks behind India in other fields.
Within ten years from now Pakistan will be receiving same amout of FDI as India. Heard that from some Merryl Lynch analyst.

[Tiki Tam Tam]

India would have stagnated by then?

I mean in another 10 years when Pakistan equals India?

[Zeeshan S.]

India would have stagnated by then?

I mean in another 10 years when Pakistan equals India?

After some time economy doesn't grow!

Pakistan will have a space to mature its economy up to 10 years.

[sigatoka]

1. I am not too sure about Bangladesh, but I think I read a Pakistani commentary that the Pakistani economy has overtaken the Indian economy or words to that effect.

Its wrong, per capita of India is slightly ahead of Pak. (too little to actually be noticed by the people). Also both economies are growing at roughly the same speeds at the moment.

[sigatoka]

1. India would have stagnated by then? I mean in another 10 years when Pakistan equals India?

1. FDI is very important because it allows a nation to invest more than it saves and because it brings in a lot of technology transfers (foreign firms produce in the nation using their cutting edge technology which locals learn) in fact the effect of technology transfers can outweigh that of the increased investment effect.

However, India's economy is larger than Pak. by a factor of around 6 at the moment. If there is to be a change in relative sizes, its going to take at least 30 years assuming India takes a nosedive and Pak. continues on very strong growth.

[Tiki Tam Tam]

Sid,

What is the rationale for not replying every "single" post if I have something to say/ or want a clarification?

Is there a quota system?

Do I have the permission to reply to every fifth posts/

Whats up?

You seem to have a problem.

You even removed a whole thread (it is not even in the Trash Can; the one in the Can is the the "shortened" version when I wanted to reproduce the thread) because Zeeshan made a chump of himself attacking Paksitani papers thinking they are Indian papers in the thread "India Squeezes Musharraf"

I thought this was a great Pakistani forum.

And the best part is that my syntax is very controlled.

Are you even afraid of your Pakistani papers?

It is time to remember Webmasters words - Dont reduce it to a PDF.If I have used incorrect syntax inform me but otherwise, I find it childish to delete when you cannot answer.

I am not being obtuse.

The way you are behaving is like as if I am in the Guantanamo Bay prison!

total censorship and muzzling!

[sigatoka]

1. After some time economy doesn't grow!

2. Pakistan will have a space to mature its economy up to 10 years.

1. Yes and No. Mr Solow showed famously that adding more and more capital (that is just building factories roads chemcial plants) will not lead to ever lasting growth because of the fundamental law of diminishing returns. That is, adding more and more capital to a person will lead to decreasing returns to output.

However, technological improvement (i prefer the word technical) which means improving the way we do things and inventing new things like mobile phones allows economies to keep growing unconstrained by diminishing returns of capital to labour. I mean the U.S the worlds highest per capita income nation is growing faster than a lot of poorer nations because of technological improvement. Infact 75% of the economic growth in U.S. occurs because of technolgical improvment, not because of new factories or roads.

2. wat do u mean?

[Bull]

The factor of 9 basically means pakistan will match india,if it manages to grow @ 7%, in another 54 years with india remaining at where it is now.

But thats illogical pakistan neednt match indias GDp figure to be a great country,it just have be half or or even 1/3rd of what india is.

[Tiki Tam Tam]

It is good of you to clear the misconception that I had from Zeeshan's post that India would remain moribund and not progress.

Sigatoka, to some extent, explained the issue and you have clarified it further.

[sigatoka]

The factor of 9 basically means pakistan will match india,if it manages to grow @ 7%, in another 54 years with india remaining at where it is now.

But thats illogical pakistan neednt match indias GDp figure to be a great country,it just have be half or or even 1/3rd of what india is.

There is no reason why Pak. can't be bigger than India's, after all Japan has less land and around the same number of people as Pak's yet their economy is more than twice as big as India's. Pak. size is determined only be the economic policies pursued by the govt.

[MastanKhan]

Sigatoka,

Size is not determined by the policies of the government but by the guts and gumption of the people of a nation and also by the policies of people who run the private sector.

It will only happen when pakistan and pakistanis will make a decision to be the number 1. For the moment alots of them are just talk, just waiting to see where the chips fall and then they will join in without taking any chances. There are a very few of those who really have a vision and a gameplan to take the plunge.

America is the # 1 nation because the employers pay a comparatively reasonable wage to the workers. The system is designed as such that as much a person makes, so much he spends and more. This keeps the money in circulation and everybody is happy, wants to work harder to make more and have a better life.

If pakistani employers started paying better wages and profit sharing to their employees, pakistan will be on a fast track to success.

[sigatoka]

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Sigatoka,

1. Size is not determined by the policies of the government but by the guts and gumption of the people of a nation and also by the policies of people who run the private sector.

2. It will only happen when pakistan and pakistanis will make a decision to be the number 1. For the moment alots of them are just talk, just waiting to see where the chips fall and then they will join in without taking any chances. There are a very few of those who really have a vision and a gameplan to take the plunge.

3. America is the # 1 nation because the employers pay a comparatively reasonable wage to the workers. The system is designed as such that as much a person makes, so much he spends and more.

4. This keeps the money in circulation and everybody is happy, wants to work harder to make more and have a better life.

5. If pakistani employers started paying better wages and profit sharing to their employees, pakistan will be on a fast track to success.

1. I could not disagree with you more.

2. The people of U.S., Europe, Japan, China, Africa have no difference apart from the superficial differences in complexion and language. If the govt. of these respective nations pursue good policies that free the people from artificial constraints, you will see an economic boom on a an unimaginable scale in Africa similar to what has/is occured/occuring in China.

3. The people of U.S. are paid more because they are more productive than than employees elsewhere (which is due to a lot of reasons). If what you say is true, than i can start a biz. in Pak. pay far above market rates and clear the competition. This is patently untrue.

4. A classical Keynesian I see, unfortuantely your policy recomendation is a recipe for hyperinflation. What Keynes said was that sometimes in a depression wages are sticky and dont go down, therefore people are laid off and production pluments with factories empty. In such a case, the govt. pumping cash into the economy (with lax monetary policy) can boost it to ful output. Let me tell you a fact, Pak. productive resources at the moment is fully employed, this means that boosting wages (whether by fiat or idiot bosses colluding to do so, or unions) is only going to feed into inflation. All you get is more money chasing after the same amount of goods produced, this should be intuitive, increasing cash doesnt "magically" increase production of the economy.

5. I disagree again. Profit sharing makes sense only for top level managment. The reason is that unless compensation is closely correlated to perfomance, it is not very incentive inducing. For e.g. a worker whether he works hard or poorly is not going to affect the profit of the biz a lot and therefore hard working and poor working workers will get same bonus in a profit sharing scheme. On the other hand, the decisions that high level managers make has a huge effect on the profit of the biz. By giving him share options, you make sure that his decisions are aligned with that of shareholders.

For workers its cheaper to pay supervisors to check on performance and hand out bonus's by observation.

Forcing profit sharing shemes is only going to increase unemployment, reduce investment and training offered by biz to workers and will also lead to some biz. shifting investment overseas.