By Staff Reporter
ISLAMABAD: Pakistan’s economy is stuck in a “poverty trap” due to decades of poor governance and policy mistakes, according to Atif Mian, a noted Pakistani-American economist, who warned that only a fundamental shift in policy can help the country escape its current economic woes.
Mian, a professor at Princeton University, said the country’s growth rate has been declining since the 1980s, with the last two years being the worst on record.
“I plot annual inflation and per-capita GDP growth for each year since 1980 below. 2023 and 2024 stand-out – never has inflation been this high and growth this low. The closest years are global crises of 2009 and 2020, but the recent two years are purely the country’s own making,” Mian said on social media.
“Is this just statistics? … I have personally never seen as much hopelessness on the streets of Pakistan as now – it seems that anyone who can, wants to leave the country. There is some credence to this perception of mine…. The number of people searching for visas abroad has skyrocketed.”
Mian emphasized that incremental change cannot lift Pakistan out of its current economic misery. “The only way out of poverty traps is through a big policy change – a change that is coordinated and credible over a sustained period of time,” he said.
“For now, it’s business as usual in Pakistan. And that is terrible news for its people.”
Mian said poverty is a terrible thing – but it always comes with a silver lining.
“Poor people are willing to work for less, and knowledge they can use to be more productive is already out there. If only a government can help harness this natural advantage, growth and prosperity follows, as countries like Vietnam and Korea have shown.”
“To put it differently, it takes effort to suppress growth for long periods of time. But some countries manage to do so through their collective decisions, and remain stuck in what economists refer to as a poverty trap. There is increasing evidence that Pakistan is stuck in such a trap due to decades of malpractice.”
Mian’s comments come as Pakistan faces stagnation, with high inflation and low growth.
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