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mogol-bakruptcy

Source: TW

I’ve often described it as a successor state of Mughals- extreme wealth concentration, no middle class, rent seeking military that consumes most of the resources.

But in modern times, not controlling population growth and no energy source-> imports shoot up each year. So as pop grows, your energy, consumer goods, food, all kinds of imports grow. But you cant get more exports w.o being competitive globally in goods/services. What are the inputs? infra, energy, labour costs or innovation. Unless you can get a clear edge in these, it doesnt work.

China built great infra, supressed cost of capital with low rates, got cheap labour + innovated later. Japan went the same route. as did taiwan. None were strong democracies when they passed this phase.

In India, kulaks rent seek land so infra takes 50y to build. Labour has strong unions, no skills, so adjusted for productivity, the wages aren’t cheap. Capital is expensive. So only industry that needs neither, IT, did well here- though some gormints did actively help.

In Germany, the Euro makes German goods artificially cheaper in rest of EU. Wages arent high relatively. Capital cheap, and russian gas was the secret ingredient. All 4 covered. Also explains why Germany is very reluctant to be anti Russia, others can supply gas but not cheap.

Bangladesh specialized in textiles, very low skill area w. wage suppression to get its exports. Replaying its historical role.

Pk has none of these factors in its favour, all the downsides of the subcontinent, but w.o the upsides. With PK, foreign aid has to continue indefinitely