Jul 23, 2022·edited Jul 23, 2022Liked by Noah Smith
I was inches away last night from tagging Noah in a tweet to write this exact post, mainly because I hoped he might do the whole South Asian circuit and write a piece on Afghanistan. I was in a Twitter discussion about what's going on with the Afghan banking sector and I realized that some issues, like the implications of the US freezing the assets of the central bank, are over my head.
As it happens I had lunch yesterday with some friends in a rural area of Kabul, at which I was served peaches at three different points during the meal: a little weird although the peaches were very good. Afterwards they took me on a walk through their orchards and I saw what the problem was.
They've got acres of fruit trees and the peaches and plums are fully ripe: you can eat them right off the tree. (Apples and pears not ready yet, I think.) I asked if they were going to hire any labor and they said they would, but clearly most of the crop is going to rot.
They mostly sell in Kabul and they said the main issue was the drop in urban incomes, but Noah's piece made me realize there's another issue as well. Afghanistan also exports a lot of its fruit, mostly to Pakistan, and the fall in the rupee must be hurting sales. (The afghani has also fallen but not as much, so it's strengthened in relative terms.)
I still think it would be great for Noah to write something about this.
Human Capital Flight is also an issue. The lack of medium-term to long-term prospects over many years has meant that large numbers of highly-qualified Pakistanis have voted with their feet.
Jul 23, 2022·edited Jul 23, 2022Liked by Noah Smith
While everyone's looking in other places, this precarious sectarian and tribal society, is one having a nuclear arsenal. And shaky history, shady government.
With the government crumbling, I would be concerned.
We pummel Iran, but the British arbitrary Partition in '48 created a dangerous place. Remember where Osama was masturbating.
Jul 23, 2022·edited Jul 23, 2022Liked by Noah Smith
These country analyses , as well as the macro posts, are my favourite type of posts.
Import substitution, for various understandable reasons, is frowned upon as not an answer and short term it certainly isn't. But where too much of the basic needs of a country are unnecessarily imported the pressure on the domestic currency are continuous.
The problem of food and fuel subsidies is really hard for low income democracies. If you were campaigning in an election, how could you not be tempted to offer them?
Having just started reading your posts, I am really enjoying learning this stuff. It's also pretty scary. Is the developing world always in this much trouble or is this the start of global troubles?
If we defeat inflation by drilling oil and gas and geothermal wells and building lots of nukes and solar and wind and doing sound macroeconomic management, can we prolong periods of moderate inflation without big interest rate hikes and EM blowups?
This got me poking around about child malnutrition in Pakistan. What a terrible situation. In 2018, 40% of the children under 5 were stunted from malnutrition. More than half of Pakistani children are anemic. This doesn't bode well for their economy 20 years from now, since their physical and mental development will lag that of other countries.
None of these places, and maybe few of us anywhere, are ready for the decline of fossil fuels and resulting chaos. Sri Lanka would be better off now if it hadnt done all the boneheaded so called development that gave it darling status for a brief interlude.
With the US drawdown and then departure from Afghanistan, Pakistan lost a not insignificant source of dollars, military aid and possibly economic aid (though I don't have precise numbers). Much of those dollars were spent in port operations in Karachi and transporting vast numbers of seavans up to and past the Afghan border.
I imagine that has contributed to Pakistan's trade deficit and, if nothing else, at least correlates significantly with the rapid increase in that deficit as Noah shows.
Terrorism Brian. Its terrorism. Which in this case involves both army and civilian gov(If we can call it that) of the country actively promoting and funding it.
If terrorism was an significant contributor to economy then US would be the one of the least developed country in the world. Political instability and corruption are the biggest contributor to the state of pakistan.
Considering how critical politics are in Pakistan and how unstable the government is, I would get my money offshore, too, if I were a Pakistani with liquid assets to invest.
I was inches away last night from tagging Noah in a tweet to write this exact post, mainly because I hoped he might do the whole South Asian circuit and write a piece on Afghanistan. I was in a Twitter discussion about what's going on with the Afghan banking sector and I realized that some issues, like the implications of the US freezing the assets of the central bank, are over my head.
As it happens I had lunch yesterday with some friends in a rural area of Kabul, at which I was served peaches at three different points during the meal: a little weird although the peaches were very good. Afterwards they took me on a walk through their orchards and I saw what the problem was.
They've got acres of fruit trees and the peaches and plums are fully ripe: you can eat them right off the tree. (Apples and pears not ready yet, I think.) I asked if they were going to hire any labor and they said they would, but clearly most of the crop is going to rot.
They mostly sell in Kabul and they said the main issue was the drop in urban incomes, but Noah's piece made me realize there's another issue as well. Afghanistan also exports a lot of its fruit, mostly to Pakistan, and the fall in the rupee must be hurting sales. (The afghani has also fallen but not as much, so it's strengthened in relative terms.)
I still think it would be great for Noah to write something about this.
Human Capital Flight is also an issue. The lack of medium-term to long-term prospects over many years has meant that large numbers of highly-qualified Pakistanis have voted with their feet.
While everyone's looking in other places, this precarious sectarian and tribal society, is one having a nuclear arsenal. And shaky history, shady government.
With the government crumbling, I would be concerned.
We pummel Iran, but the British arbitrary Partition in '48 created a dangerous place. Remember where Osama was masturbating.
Timely analysis. Kudos
These country analyses , as well as the macro posts, are my favourite type of posts.
Import substitution, for various understandable reasons, is frowned upon as not an answer and short term it certainly isn't. But where too much of the basic needs of a country are unnecessarily imported the pressure on the domestic currency are continuous.
The problem of food and fuel subsidies is really hard for low income democracies. If you were campaigning in an election, how could you not be tempted to offer them?
And how to remove them once they're established
Thanks for informative post!
Are non US government debts also dollar denominated? I would think China would at least try to use their own currency.
Thank you for the post.
Thank you for explaining this to us. Its very concerning.
Having just started reading your posts, I am really enjoying learning this stuff. It's also pretty scary. Is the developing world always in this much trouble or is this the start of global troubles?
This sort of happens every 10 or 25 years...
If we defeat inflation by drilling oil and gas and geothermal wells and building lots of nukes and solar and wind and doing sound macroeconomic management, can we prolong periods of moderate inflation without big interest rate hikes and EM blowups?
This got me poking around about child malnutrition in Pakistan. What a terrible situation. In 2018, 40% of the children under 5 were stunted from malnutrition. More than half of Pakistani children are anemic. This doesn't bode well for their economy 20 years from now, since their physical and mental development will lag that of other countries.
None of these places, and maybe few of us anywhere, are ready for the decline of fossil fuels and resulting chaos. Sri Lanka would be better off now if it hadnt done all the boneheaded so called development that gave it darling status for a brief interlude.
With the US drawdown and then departure from Afghanistan, Pakistan lost a not insignificant source of dollars, military aid and possibly economic aid (though I don't have precise numbers). Much of those dollars were spent in port operations in Karachi and transporting vast numbers of seavans up to and past the Afghan border.
I imagine that has contributed to Pakistan's trade deficit and, if nothing else, at least correlates significantly with the rapid increase in that deficit as Noah shows.
Wonder why Noah failed to write about the elephant in room. Which is a strong contributing factor for the state of pakistan.
It starts with T.....ism
Wait what is it?
Won't blame Americans for suffering with Amnesia till 9/11
Transcendentalism... Surprisingly big Walden fans in Pakistan.
I assume it’s Tribalism
Terrorism Brian. Its terrorism. Which in this case involves both army and civilian gov(If we can call it that) of the country actively promoting and funding it.
If terrorism was an significant contributor to economy then US would be the one of the least developed country in the world. Political instability and corruption are the biggest contributor to the state of pakistan.
Lollll. This isn't really worth replying
Saves me the time to argue with someone who has absolutely no idea of the current state of pakistan
Pakistan Food is the perfect place to find authentic Pakistani cuisine. From traditional dishes to modern twists, we have something for everyone. https://dev-cookinghub.pantheonsite.io/2022/09/05/pakistan-food/
Considering how critical politics are in Pakistan and how unstable the government is, I would get my money offshore, too, if I were a Pakistani with liquid assets to invest.
I would love a direct comparison of India to Pakistan!