pakistan socio economy data
-
Upload
muhammad-zubair -
Category
Documents
-
view
220 -
download
0
Transcript of pakistan socio economy data
-
8/13/2019 pakistan socio economy data
1/26
Dr. Vaqar Ahmed
Sustainable Development Policy Institute
Implications of Growing Middle Class for
Pakistans Socio-Economy
-
8/13/2019 pakistan socio economy data
2/26
2
Global GDP Growth 1961 - 2010
-6-4
-2
0
2
4
6
8
10
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
%G
rowth
Middle income countries High income countries
Low income countries
Middle income countries are now drivers of global growth
-
8/13/2019 pakistan socio economy data
3/26
3
Regional Comparison of GDP Growth
-6
-4
-2
0
2
4
6
8
10
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
%G
rowth South Asia
High income
World
South Asian has grown at a faster pace
-
8/13/2019 pakistan socio economy data
4/26
4
Household Consumption Expenditure
-6
-4-2
0
2
4
6
8
10
12
197
1
197
4
197
7
198
0
198
3
198
6
198
9
199
2
199
5
199
8
200
1
200
4
200
7
201
0
%G
rowth South Asia
High income
World
Rising growth shows in higher consumption expenditures
-
8/13/2019 pakistan socio economy data
5/26
5
Pakistan: Changes in Population Structure
Labour force
growth higher
than population
growth
Increasingworking age
population
-
8/13/2019 pakistan socio economy data
6/26
Middle class:
Is a precondition of stability in the social
structures
Is a measure of mitigating inequality in a society
Easterly (2001): Nations with a large middle
class tend to grow faster
English middle class of 18th & 19th century
Todays China and India
6
What makes middle class important?
-
8/13/2019 pakistan socio economy data
7/26
Collier (1999): Middle class forms alliance withlower classes in order to demand an inclusivepolitical system
Acemoglu (2003): Decisive voters in democracyare from middle class
Bannerjee (2007): middle class is a source of newentrepreneurs and this class stresses onaccumulation of human capital and savings
7
What makes middle class important?
-
8/13/2019 pakistan socio economy data
8/26
Warning:
Basu (2003): If venues for channeling middle class
human capital and savings not provided, then
tendency towards consumption expenditure puts
sustainability of growth in danger
8
What makes middle class important?
-
8/13/2019 pakistan socio economy data
9/26
9
How big is middle class in Pakistan?
Class Proportion (%)
Lower lower (< $1.25) 21.3
Lower ($ 1.25-2) 34.8
Lower Middle ($2-4) 32.4
Middle Middle ($4-10) 9.8
Upper Middle ($10-20) 1.3
Upper (>20) 0.4
81.5
millionpeople
Method 1: Expenditure from PPP $2 to $20 per person per day
-
8/13/2019 pakistan socio economy data
10/2610
How big is middle class in Pakistan?
32.5
million
people
Method 2: Computation by Weighted Composite Index
Class Categorisation Proportion (%)
Lower lower Destitute 41.9
Middle lower Aspirants 23
Upper lower Climbers 15.8
Lower middle
Fledgling middle
class 8.5
Middle middle
Hard-core
middleclass 4.3
Upper middle Elite middle class 6
Upper Privileged 0.4Source: Dur-e-Nayab (2011)
-
8/13/2019 pakistan socio economy data
11/2611
How big is middle class in Pakistan?
Method 2: Computation by Weighted Composite Index
Class Urban (%) Rural (%)
Lower lower 23.6 55.2
Middle lower 21.8 23.9Upper lower 20.8 12.3
Lower middle 12.5 5.7
Middle middle 8.1 1.6
Upper middle 12.3 1.3
Upper 0.9 0.1
The middle class is an urban phenomenon lives and works in cities
Urban: 22.6m
Rural: 9.8m
-
8/13/2019 pakistan socio economy data
12/2612
Occupational Proportion in Middle Class (%)
The middle class is an urban phenomenon lives and works in cities
OccupationLowerMiddle
MiddleMiddle
UpperMiddle
Armed forces 1.1 0.6 1.3
Senior Officials 2.9 8.2 20.7
Professionals 18.3 15.7 26.4
Technicians 19.3 14.2 21.3Clerks 14.5 11.8 12.9
Service /retail 30 28.9 17.1
Agriculture 5.9 8.6 0.1
Crafts 2.6 5 0
Plant operators 2.1 3.1 0Elementary
occupations 3.3 3.9 0
Total 100 100 100
Dominant
presence in civil
service
-
8/13/2019 pakistan socio economy data
13/2613
Occupational Proportion in Middle Class (%)
The middle class is an urban phenomenon lives and works in cities
OccupationLowerMiddle
MiddleMiddle
UpperMiddle
Armed forces 1.1 0.6 1.3
Senior Officials 2.9 8.2 20.7
Professionals 18.3 15.7 26.4
Technicians 19.3 14.2 21.3Clerks 14.5 11.8 12.9
Service /retail 30 28.9 17.1
Agriculture 5.9 8.6 0.1
Crafts 2.6 5 0
Plant operators 2.1 3.1 0Elementary
occupations 3.3 3.9 0
Total 100 100 100
Dominant
presence in
engineering &
medicine
-
8/13/2019 pakistan socio economy data
14/26
-
8/13/2019 pakistan socio economy data
15/2615
Occupational Proportion in Middle Class (%)
The middle class is an urban phenomenon lives and works in cities
Industry Lower Middle
Middle
Middle
Upper
Middle
Agriculture 6.2 8.9 1.4
Mining 0.8 0.5 0.9
Manufacturing 7.6 9.7 11.6
Power & fuel 2.6 2.6 2.7Construction 2.5 2.7 2.1
Wholesale/retail 25.6 27 15.5
Transport/commu
nication 4.3 4.8 4.9
Banking &Insurance 3.6 6.9 9.4
Community
services 46.8 36.8 51.5
Total 100 100 100
Domestic
commerce
-
8/13/2019 pakistan socio economy data
16/26
16
Proportion of Occupational Status (%)
Barriers to entrepreneurship holding back the middle class
Occupational
Status Lower Middle
Middle
Middle
Upper
MiddleEmployer with < 10
employees 1.1 1.6 1
Employer with > 10
employees 1.4 3.9 4
Self employed non-agriculture 27.5 27 16.9
Paid employee 64.5 60.1 78
Unpaid family
worker 0 0 0
Own cultivator 4.7 6.3 0.1Share cropper 0.3 0 0
Contract cultivator 0.3 0.6 0
Own Livestock 0.3 0.5 0
Total 100 100 100
Moving from
wage to self
employment
-
8/13/2019 pakistan socio economy data
17/26
They want:
Education
Jobs
Nayab (2011):
When compared to its neighbours Pakistan has a
bigger middle class The middle class in Pakistan has actually grown
with time
17
What does this middle class want?
-
8/13/2019 pakistan socio economy data
18/26
Average years of schooling (age 15-19) has not
changed since 1990 (currently at 7.6 years)
Labour force with tertiary education under
22%
18
Two facts about education in Pakistan
-
8/13/2019 pakistan socio economy data
19/26
19
What about jobs?
0
2
4
6
8
10
12
Percent
GDP growth (annual %)
Unemployment, total (% of total labor force)
Education without opportunity
DecliningGrowth, Rising
Unemployment
-
8/13/2019 pakistan socio economy data
20/26
20
Migration Increase Since 1972
20
16
20
0 5 10 15 20 25
Highly Qualified
Highly Skilled
Skilled
% Growth
Remittances and Dutch Disease Phenomenon
-
8/13/2019 pakistan socio economy data
21/26
Currently no space for middle class (physical & intellectual)
Reforms for engaging middle class
21
Choices
-
8/13/2019 pakistan socio economy data
22/26
The rise inconsumption
Thedevelopmentof urbanmarkets
Backwardlinking of
urban with
rural markets
Changes inconsumption
pattern
Opportunitiesand challenges
22
Accommodating Middle Class
McKinsey 2007
-
8/13/2019 pakistan socio economy data
23/26
23
Annual Projected Consumption Growth - 2030
46
78
9
1213 14
0
2
4
6
8
10
12
14
16
%Growth
Emphasis has already shifted from food to durable goods Choice driven consumption
-
8/13/2019 pakistan socio economy data
24/26
Births and migration will drive growth
Labour market shortages:
Design
Engineering
Middle management
Financial markets that provide savings instruments
Opportunity for niche cities
Backward linkages with farm activity
Diversification towards higher value addition
24
Urban Growth and Management
-
8/13/2019 pakistan socio economy data
25/26
Infrastructure governance reform of PSEs
Social sector governance
18
th
Amendment
Legal and judicial reforms for inclusive markets
Efficiency of public expenditure results
based management
25
Inclusive Governance for Middle Class
-
8/13/2019 pakistan socio economy data
26/26
26
Thank You