Consider Pakistan's national savings are 50% offshored (20 billion at home, 20 billion among Pakistanis living outside) i.e the extremely low base of the domestic saving/investment causing this kind of obscene ratio....leading to
single digit capital formation.
The data shows 20 years ago, this was roughly the same situation...except the amount offshored was somewhere around 10 billion.
This has come about by the establishment there being a long term junkie regarding some very critical things, sociopathic ways of thinking and insular indulgence (still) protecting it all.
It is only by being such a junkie you have savings stuck at 20 billion for 20 years at this low base.
That junkie needs to go to rehab for a thorough purge to attempt change. Otherwise this (along with the continued reel of other attempted quick fixes/hits) is all just old hat from this junkie that wont learn.
FATF (and the
at least 40 billion USD cost so far) is a push in that direction from the outside...but most of it will have to come from the Pakistani population themselves. They will need their bastille moment at some point to try set things right. What the pressure condition for that to happen is for that society to bear witness to on its own time and dime.
In mean time India must simply pay attention to itself....that 1 trillion in gross savings needs to double. The 100 - 200 billion offshored should be retained at about the same level or ratio.
It is imperative in couple years we get our capital formation back in the mid 30s and approach 40% again.
There are promising signs regarding this showing up this year already (surprisingly strong expansion in credit to MSME for example).
Exports will be their highest ever at close to 650 billion USD and look to reach a trillion dollars (along with forex) in a few years time.
It needs lot more of that. That is where our focus and interest must lie primarily....along with learning and implementing more from those ahead of us. Not behind us and stuck there.
