Economy
Why Pakistan’s economy is drowning while India’s economy is touching the sky
The 2023 biggest Crisis of the economy in South Asia is going on in Pakistan that has never seen such a disaster since it became apart from India(Hindustan) in august 1947 and drew a thick political border. Several challenges have occurred for the Pakistani residents in order to survive as basic food(Ata flour, rice, and vegetables), oil and gas prices are touching the sky. However, it has been perceived that those basic nourishment have 3 times lower cost in India and are affordable to Indian people. GDP nominal of India is 3700 billion dollar in 2023 while Pakistan represents almost zero billion dollar in its GDP. Moreover, liabilities and external debt that Pakistan holds as of december 2022 is $126 billion.
Impact of trade relation between India and Pakistan on Pakistan’s economy
The geographical link between India and Pakistan is the only Wagah border which lies on a grand trunk road and connects from Amritsar to Lahore. Punjab, Rajasthan, Gujarat and Jammu & Kashmir are the four states of India which share their boundary with Punjab(Pakistan), Sind(Pakistan) and POJK(Pakistan occupied Jammu Kashmir).
Over the past 75 years, these two nations which are also known as nuclear power countries have fought war about three times 1947, 1965 and 1999 only for the territory of Kashmir. And this is the primary cause of the worst trade relation between both the countries. Till 1956, India was Pakistan’s largest trading partner but just after that it started fluctuating and the war happened in 1971 which created Bangladesh as a separate state from Pakistan. The trade has completely halted between both the nations after the reorganisation act 2019 of Jammu & Kashmir. In 2018, GDP(nominal) of Pakistan was 356 billion US dollar while it dropped to 321 billion US dollar in 2019 and kept down till 300 billion US dollar in 2020. However, the economy of Pakistan became almost zero in 2023. Pakistan is still doing trade with India but through third countries especially via the United Arab Emirates which led to a hike in every product’s prices in Pakistan. For instance, if tomatoes are 20 rupees per kg in India, suppose after tax the price becomes 40 rupees per kg in UAE. Now when Pakistan is buying tomatoes from the UAE it will cost 60 rupees per kg after tax.
| Year | India (billions) | Pakistan (billions) | Difference (billions) |
|---|---|---|---|
| 1980 | $189 | $35 | $155 |
| 1981 | $197 | $41 | $155 |
| 1982 | $204 | $45 | $159 |
| 1983 | $222 | $42 | $180 |
| 1984 | $216 | $46 | $170 |
| 1985 | $238 | $46 | $192 |
| 1986 | $253 | $47 | $206 |
| 1987 | $284 | $49 | $235 |
| 1988 | $300 | $56 | $243 |
| 1989 | $301 | $59 | $243 |
| 1990 | $327 | $59 | $268 |
| 1991 | $275 | $67 | $208 |
| 1992 | $293 | $72 | $222 |
| 1993 | $284 | $76 | $208 |
| 1994 | $333 | $76 | $257 |
| 1995 | $367 | $89 | $277 |
| 1996 | $400 | $93 | $307 |
| 1997 | $423 | $92 | $331 |
| 1998 | $429 | $91 | $337 |
| 1999 | $467 | $87 | $380 |
| 2000 | $477 | $90 | $387 |
| 2001 | $494 | $87 | $407 |
| 2002 | $524 | $88 | $436 |
| 2003 | $618 | $101 | $517 |
| 2004 | $722 | $119 | $603 |
| 2005 | $834 | $133 | $701 |
| 2006 | $949 | $154 | $795 |
| 2007 | $1,239 | $172 | $1,067 |
| 2008 | $1,224 | $191 | $1,033 |
| 2009 | $1,365 | $189 | $1,176 |
| 2010 | $1,708 | $199 | $1,509 |
| 2011 | $1,823 | $240 | $1,583 |
| 2012 | $1,828 | $253 | $1,575 |
| 2013 | $1,857 | $260 | $1,596 |
| 2014 | $2,039 | $275 | $1,764 |
| 2015 | $2,104 | $304 | $1,799 |
| 2016 | $2,295 | $314 | $1,981 |
| 2017 | $2,651 | $339 | $2,312 |
| 2018 | $2,703 | $356 | $2,347 |
| 2019 | $2,836 | $321 | $2,515 |
| 2020 | $2,672 | $300 | $2,371 |
| 2021 | $3,150 | $348 | $2,802 |
| 2022 | $3,386 | $376 | $3,010 |
| 2023 | $3,737 | $0 | $3,737 |
| 2024 | $4,062 | $0 | $4,062 |
| 2025 | $4,403 | $0 | $4,403 |
| 2026 | $4,766 | $0 | $4,766 |
| 2027 | $5,153 | $0 | $5,153 |
| 2028 | $5,575 | $0 | $5,575 |
Conclusion
Pakistan’s economy started dying at the end of 2022 and the crisis has completely gripped all over the land. People of Pakistan are facing extreme poverty these days because prices of every goods have kept increasing. The value of Pakistani rupees has become valueless where rate of $1 = 300 PKR however rate of $1 is just 82 Indian rupee(INR). There is no comparison of economy between India and Pakistan even though both nations started growing since 1947. India has achieved $3,737 billion in its economy and is predicted to become $5,575 billion in 2028 while no prediction can be made about Pakistan’s economy. Inflation rate in Pakistan has hit 38% as of May 2023 and made the highest record in South Asia.
Where does the Data fetch from?
Data Source: Data for GDP are fetched from International Monetary Fund(IMF)” from the year 1980 to 2028(future). Several information are taken from Wikipedia, USIP, Le Monde, High commission of India, The print and Live mint.
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References
- Niti.gov.in. (2022). India Climate & Energy Dashboard. [online] Available at: https://iced.niti.gov.in/economy-and-demography/key-economic-indicators/gdp.
| Country | Bar | Outflows |
|---|---|---|
China | -15,200 | -15,200 |
United Kingdom | -9,500 | -9,500 |
India | -4,300 | -4,300 |
South Korea | -1,200 | -1,200 |
Russian Federation | -1,000 | -1,000 |
Brazil | -800 | -800 |
South Africa | -600 | -600 |
Taiwan (Chinese Taipei) | -400 | -400 |
Nigeria | -300 | -300 |
Vietnam | -300 | -300 |
China is expected to see the most millionaires leaving the country this year, with a whopping 15,200 predicted to move out. The UK is next in line to lose 9,500 millionaires by the end of 2024, followed by India with an expected loss of 4,300 millionaires. This trend shows that many wealthy people are choosing to relocate, possibly due to changes in the economy, society, politics, life style and tax.
For many years, London has been a top choice for millionaires moving from Europe, Africa, Asia, and the Middle East. However, things have changed in the last decade. More millionaires are now leaving the UK than coming in. After Brexit, from 2017 to 2023, the UK lost 16,500 millionaires. The outlook for 2024 is also concerning, with a projected net loss of 9,500 millionaires in just one year. This shift suggests big changes ahead for London’s economy and population. This trend is driven by a combination of Brexit fallout, political uncertainty, and controversial changes to the non-domicile tax rules. As a result, the UK is losing its appeal as a destination for wealthy individuals, signaling challenging times ahead for its economic and political landscape.
India is expected to see a notable decline of 4,300 millionaires leaving the country this year. Although this number is lower than the 5,100 who departed in 2023, India continues to rank among the leading countries for high-net-worth individuals (HNWIs) moving abroad. Indian millionaires frequently leave the subcontinent in search of a better quality of life, safer and cleaner environments, and access to higher-quality health and education services. These motivations drive many affluent individuals to relocate abroad, seeking opportunities that enhance their overall well-being and that of their families.
China is experiencing significant net outflows of millionaires (15200) due to its robust economy creating many new wealthy individuals. However, the slowdown in wealth growth in China in recent years suggests that these ongoing losses could have increasingly negative effects over time.
| Country | Bar | Inflows |
|---|---|---|
United Arab Emirates | +6,700 | +6,700 |
United States of America | +3,800 | +3,800 |
Singapore | +3,500 | +3,500 |
Canada | +3,200 | +3,200 |
Australia | +2,500 | +2,500 |
Italy | +2,200 | +2,200 |
Switzerland | +1,500 | +1,500 |
Greece | +1,200 | +1,200 |
Portugal | +800 | +800 |
Japan | +400 | +400 |
The UAE is the top place for millionaires moving in 2024. It has no income tax, offers golden visas, a luxurious lifestyle, and a great location. It’s expected to attract almost twice as many millionaires as the US, which is the next popular choice with 3,800 millionaires moving there.
Singapore maintains its 3rd position this year with a net inflow of 3,500 millionaires, while Canada and Australia continue as popular choices, ranking 4th and 5th with net inflows of 3,200 and 2,500 millionaires respectively. In Europe, Italy (+2,200), Switzerland (+1,500), Greece (+1,200), and Portugal (+800) also secure spots in the Top 10 for net millionaire inflows in 2024. Additionally, Japan is set to welcome 400 wealthy migrants, driven partly by a growing trend of Chinese high-net-worth individuals relocating to Tokyo following the Covid-19 pandemic.
In Europe, Italy (+2,200), Switzerland (+1,500), Greece (+1,200), and Portugal (+800) are notable destinations among the top 10 for net millionaire inflows. Japan is also set to welcome +400 wealthy migrants, fueled in part by an increasing trend of Chinese high-net-worth individuals relocating to Tokyo post-Covid-19. These trends underscore a dynamic global landscape where tax incentives, quality of life, and strategic locations play pivotal roles in millionaire migration patterns.
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