Discus please . . .

Economic inequality is geting worse in pakistan. . . .

The class system is the very product of economic inequality. The main reason behaind concerntration of wealth in few hands is CAPITALISM. well in developed countries where this form of economy is applied is witness for high density of people in middle class but in Pakistan more people are living in miserable condition. According to UN report in 2011 40% people are living below poverty line and this percentage was 30 in 2010. Projection shows that poverty is increasing day by day which is the main evidence of economic inequality.

there is economic crunch all around.capitalism promotes concentration of wealth in few hands and the whole society suffers from it.now the well known slogan of capitalism is"99percent resources of the world are for 1percent and 1 percent resources of the world are for 99percent".the only solution of this problem is a moderate economic system that can be just islamic system of economy.islamic system focuses on each and every member of the society contrary to the capitalism.

I agree. The difference between rich and poor getting bigger day by day. This is due to unequal distribution of wealth.

This scenario is prevailing through out the world

well you are right but is there only class system is factor of inequlity(economic)

Inadequate mobilization and poor allocation of resources, inefficencies in the production structure and low periorty acorded to thd development of human resources have been the major constraints in dvelopment process of pakistan.

Economic inequality in Pakistbn causds great suffering for many citizens.some 39milion peopl in this country live below the poverty line.an estimated 20 million do not get to eat each day. Perhaps 7 million are chronically homeless. Rates of serious mental disorder are highest for poor people.

Ecönomic inequality exacts enormous cost from person who experince serious disadvantage because of it, whethr a soceity's economy is capitalist or socialist.society as a whole loses as well.insofar as economic inequality stifles human potential,everyone suffers. The costs to society of increased crime, disease, and unrest can be very hìgh

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"Leadership is difficult but it is not complex."

What can be an ideal solution?? A fascist economy...

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The precondition for existence of a higher humanity is not the state, but the nation possessing the necessary ability.

solution may be proper Allocation of resources, proper rules of distrbution,a sucesful enployment strategy etc etc;-)

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"Leadership is difficult but it is not complex."

What current or historic economic system maintains all these aspects ideally???

BTW: Under Fascist view of Social Darwinist human relation, economic system would be modeled to 'support superior individuals and weed out the weak' , translate it .

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The precondition for existence of a higher humanity is not the state, but the nation possessing the necessary ability.

lolx . . .:-) have no idea about fascist school of thought. . . I am just beginner here so i need guidline from you people to enhance my analytical approach;-):-D

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"Leadership is difficult but it is not complex."

Economic inequality exists at the smallest personal levels, all the way up to the highest social levels. Truth be told, even so called Marxist/socialist/communist regimes experience an even GREATER economic inequality than capitalist systems. While initially this looks ridiculous as socialism is supposed to be the even distribution of output for all without regard for input, it is in fact very fractured. Those that run/control those regimes often give in to human emotions of greed, jealousy, etc, and since they have the power the swing the largest portions of output their way they often do. In a capitalist regime free market forces often prevent even the biggest players from taking too much as the economic law of diminishing marginal returns takes effect. It is only when, to no big surprise, you involve politics and government opinion/control into the market do we see an ever widening income gap. So in conclusion, economic inequality is the financial manifestation of human greed and our lust for power.

For Example: A man working in the street is digging up a water main to replace a valve, while on the tenth story of the building behind him is a man on the phone with his contacts in Japan working out a business model. The man working in the street is paid Rs.25 an hour to do his job, and it takes him 3 hours to do. The man in the office makes salary, which when broken down by average hours per week comes to be about Rs.45 and hour, and it also takes him 3 hours to discuss and approve the business model. At the end of the day the guy in the street made Rs.75 gross income, while the man in the building made Rs.135 gross income. While we consider both as having equal value for there time, we as a regulated system do not and we value each other's time differently depending upon what we produce with it. While this creates a naturally occurring income gap (inequality) it is often marginal at best and is made up for by the fact that both men have completely different tastes, lifestyles and needs beyond the basic. This is where a FREE MARKET economy would close the gap, as the man making more would spend more, while they guy making less will likely spend less. Therefore the UTILITY achieved by both men is nearly the same.

If we Talk about the Pakistan the picture isn't different, Inside our country excluding this global system, there is lots of other problem do have influence on the financial system of the common men, like strikes directly effect daily wages labor on the other hand if a person is working in the govt office, dint effect by strikes. As he will get the salary as usual, but indirectly it is being effected as strikes also effect the economy of the state at large scale.

Few months back Dr Ashfaque H Khan write about this scenario in national newspaper "The News" in which he states that: There exists overwhelming empirical evidence across countries and across time that political instability is negatively related with economic growth and performance. Political instability lowers private investment, slows economic growth, and gives rise to unemployment and poverty. Political instability breeds corruption, mis-governance, shortens policy-makers’ horizon, inconsistency in policies, and creates volatility in economic performance.

Pakistan is witnessing a prolonged period of political instability (almost five years) and as such its adverse consequences for the economy are quite visible. Despite a free, fair and relatively peaceful election of Feb 2008 and smooth transfer of power, the present government failed to find its feet on the ground and continued to lurch from one crisis to another. Political instability persisted throughout with a heavy toll on economy.

The government found itself clueless in addressing socio-economic problems in general and external shocks in particular. For a protracted period there were no finance, commerce, petroleum and natural resources and health ministers. It gave the impression of having little sense of direction and purpose. The government continued to change its economic team frequently and continued to appoint weak and frivolous economic teams with serious consequences for the economy.

It is strange that the current government, claiming to have a strong majority in the parliament, failed to generate political stability in the country. People within and outside the country had a lot of expectations about political stability, strengthening of democracy, rule of law, and respect for judiciary. The present coalition government thoroughly disappointed the friends of democracy within and outside the country. Print and electronic media continued to highlight the stories of corruption and bad governance which certainly have weakened the government and the writ of the state.

A series of events over the last four years followed by their inept handling contributed to the persistence and acceleration of political instability in the country. The refusal to restore judges of various courts including the Supreme Court, the widespread criticism from almost every walk of life against the insulting language and the conditionalities attached with the Kerry-Lugar Bill, the judgment of the Supreme Court on the National Reconciliation Ordinance, the Abbottabad incidence and the Memogate to name a few, continued to weaken the government and breaded political instability.

Why political instability is bad for the economy? Because it weakens governance as the government continues to strive for its survival with economy getting the least attention. Political instability shortens the horizon of the government, disrupting long-term economic policies conducive to a better economic performance. The government is forced to take short-term but populist measures to win the heart and mind of the people. Such short-term populist measures never improve economic performance and hence, economy continues to suffer.

Political instability is associated with greater uncertainty regarding future economic policy, it certainly affects investment adversely, slows economic growth, increases unemployment and poverty, which in turn, further fuels political instability by giving rise to violence, civil unrest, and strikes. A higher degree of political instability is associated with lower productivity growth, lower physical and human capital accumulation thus weakening the foundation of long-term economic growth and prosperity.

Pakistan’s current state of the economy is the mirror image of the adverse consequences of political instability. Over the last four years, Pakistan witnessed its investment rate decelerating, economic growth slowing, unemployment rising, millions slipping below the poverty line, women and children dying in stampedes for a few kilogrammes of wheat, inflation persisting at double digits for 50 months in a row, public debt doubling and exchange rate depreciating and fuelling inflation and contributing to the surge in public debt.

Pakistan also saw its relations with international financial institutions deteriorating, the Friends of Pakistan showing reluctance in providing financial support and hence overall balance of payments turning negative, foreign investors losing confidence on Pakistan’s economy and on its economic managers with consequent nosediving of foreign investment. In short, a relatively stable and resurgent economy has been destroyed in the last four years owing mainly to mis-governance breaded by political instability.
Pakistan’s current state of the economy and political instability raises many questions. When a strong coalition government like the present one fails to bring political stability, what is the guarantee that a new government (most probably a coalition one) would bring political stability in the country after the elections? Given the nature of politics in Pakistan which has evolved over the years, it appears that political stability would continue to be a distant dream for the people of Pakistan. With political stability not in sight even after the election, what would happen to the already fragile economy? Is there anything wrong with the structure of our political parties or political system? Do we need wide-ranging political reform along with economic reform?

The political parties must sign a Charter of Economy before going for election. They must agree on certain economic policies and reform agenda for the future of economic growth and prosperity of the people of Pakistan. In particular, they must agree on widening of the tax base, bringing every sector and every person earning above the threshold level under the tax net, rationalising and prioritising of expenditure bringing the budget deficit down to 3 percent of the GDP in the next three years, making the NFC Award work for fiscal stability, privatising the bleeding PSE, handling of power sector reform, addressing energy issues, to name a few.

No political party alone can undertake these reforms. It requires commitment from all the major political parties under the Charter of Economy. They must remember that economic stability and political stability are deeply interconnected. No amount of foreign assistance will propel growth unless conditions like a stable and honest government, market-oriented policies, and willingness to undertake reforms are in place. Aid that goes into poor policy environment does not work. Instead, it contributes to debt and restrains future economic growth.

on the other hand IMF reports states that:

Inflation has dropped from 25% to less than 13%
Current Account deficit has dropped from 8% of GDP to less than 3% of GDP
Pakistan’s CDS (Credit Default Swap) has dropped from 9% to less than 7.5%. it may also be noted that Pakistan has successfully matured its Euro Bond in 2010 and no default has ever taken place.
On the matter of foreign direct investment (FDI), they have halved to just $1.77 billion while in comparison a country like Vietnam received more than $10 billion in 2010.
Their report is also cognizant that portfolio investment has improved which means that foreign investors view the capital markets of Pakistan as a better option to invest than going through the FDI.

So, These all factors combining the particular problem of Pakistan, and country is going further and further deep into economic instability.

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