Tuesday, January 14, 2020

Pakistan's Middle Class Consumer Population Among World's Fastest Growing

Although the rate of growth has slowed since 2018, Pakistan's middle class consumer population still remains among the fastest growing in the world. In a report titled "Emerging Markets Transforming As Velocity Markets", Ogilvy and Mather, a global market communications firm, has put Pakistan among what it calls "Velocity 12" group of economies that include Bangladesh, Brazil, China, Egypt, India, Indonesia, Mexico, Myanmar, Nigeria, Pakistan, Philippines and Vietnam.  The term velocity describes both the rate of real change in the size of the middle class as well as a priority for companies as they consider business investment and marketing in V12 countries. These 12 countries will be the biggest contributors to the next billion middle class consumers, according to the report.

The Velocity 12 report says that this next billion middle-class group will:

1. Be increasingly defined by women and youth as the change agents, with purchasing power crossing cultural, religious and demographic divides.

2. Comprise the largest block of newly connected consumers on the internet, globally connected as never before – with global connectivity that is projected to double in the next five years.

3. Rapidly increase its social engagement, and brands discussion, as marketers compete in the digital marketplace for greater share of the new middle-class prize.

4. Urbanize faster than other parts of the world, dominating the future list of megacities, while creating a new “urbangea” that connects large swathes of these countries into a virtual trading zone.

5. Propel cities, more than countries, to become the unit of invention, entrepreneurship and investment.

Growth in Middle Class Consumers 2015-25. Source: Ogilvy and Mather

Velocity 12:

Ogilvy and Mather's report on "Velocity 12" begins with the story of Fahima Sarkar, a Pakistani woman entrepreneur who lives in Lahore. Here is an excerpt:

"If you want to catch a glimpse of the global economic future, then meet Fahima Sarkar. In many ways, Fahima – who lives in Lahore, Pakistan – is typical of her group of friends, and a growing number of women across South Asia. After attending college, Fahima worked in sales for a Karachi-based garment company that was rapidly expanding their business in the region. She eventually left the role because she wanted to start a family. Fahima is a lot different than her own mother – both in her outlook and her lifestyle. Rather than being solely a stay at home mom, Fahima has used her time raising her child to develop a new career as an “Instapreneur,” someone who uses social media to start her own business. Her online venture (headquartered on her kitchen table): selling high-end picture frames via the Web to parents who want an upscale way to display their children’s photos at home. That was her first taste of entrepreneurship – and she turned a profit almost immediately."

"Velocity 12" report forecasts Pakistan's middle class consumer population to reach 122 million by 2025, representing a gain of 59 million members over a 10 year period from 2015 to 2025.

Reality Check:

We are almost half way through Ogilvy's 10 year forecast period. How is Pakistan doing? One indicator is the growth in vehicle ownership, particular the ownership of motorcycles.

Vehicle Ownership in Pakistan. Source: PBS

Private vehicle ownership in Pakistan has risen sharply in 4 year period from 2015 to 2016. More than 9% of households owned cars in 2018, up from 6% in 2015. Motorcycle ownership has jumped from 41% of households in 2015 to 53% in 2018, according to data released by Federal Bureau of Statistics (FBS) recently. There are 32.2 million households in Pakistan, according to 2017 Census.

Retail Sales in Pakistan. Source: Statista.com

Retail Sales Growth:

Pakistan has seen retail sales climb from $145 billion in 2015 to $210 billion in 2018, according to Statista.com. Over 60 percent of the Pakistani population is between the aged of 15 to 64 years, which is the prime age of consumer spending.

With the introduction of 3G/4G services, internet penetration has risen rapidly. Internet subscriber growth in Pakistan is averaging over 22% per year and total subscribers crossed the 70 million mark in 2019. Cheap smartphones, low cost of 3G/4G services and a consumer-goods obsessed middle class has meant that Pakistan’s e-commerce sector is “mobile first”: some e-commerce start-ups claim that over 75 percent of their total business is online.

E-Commerce:

Online sales are growing much faster than the brick-and-mortar retail sales. Adam Dawood of Yayvo online portal estimates that e-tail sales are doubling every year. He expects them to pass $1 billion in the current fiscal year (2017-18), two years earlier than the previous forecast. This is being enabled by increasing broadband penetration and new online payment options. Ant Financial, an Alibaba subsidiary, has just announced the purchase of 45% stake in Pakistan-based Telenor Microfinance Bank. Bloomberg is reporting that Alibaba is in serious talks to buy Daraz.pk, an online retailer in Pakistan.

Advertising Revenue:

Growing buying power of rapidly expanding middle class in Pakistan drove the nation's media advertising revenue up 14% to a record Rs. 76.2 billion ($727 million), making the country's media market among the world's fastest growing for FY 2015-16, according to Magna Research.  Half of this ad spending (Rs. 38 billion or $362 million) went to television channels while the rest was divided among print, outdoor, radio and digital media. `



Digital media spending rose 27% in 2015-16 over prior year, the fastest of all the media platforms. It was followed by 20% increase in radio, 13% in television, 12% in print and 6% in outdoor advertising, according to data published by Aurora media market research

Mass Media Growth:

Advertising revenue has fueled media boom in Pakistan since early 2000s when Pakistan had just one television channel, according to the UK's Prospect Magazine. Today it has over 100. This boom has transformed the nation. The birth of privately owned commercial media has been enabled by the Musharraf-era deregulation, and funded by the tremendous growth in revenue from advertising targeted at the burgeoning urban middle class consumers.

Sports and Entertainment:

Sports and entertainment sectors are major beneficiaries of increasing advertising budgets. Commercial television channels' shows and serials are supported by advertisers. A quick look at Pakistan Super League 2018 matches reveals that all major consumer brand names are either directly sponsoring or buying advertising from broadcasters.  These ads and sponsorship have turned PSL into a major business producing tens of millions of dollars in revenue to support cricket in Pakistan.  Last year, Pakistan Cricket Board's budget was over $40 million and a big chunk of it came from PSL. This year, the PSL chairman Najam Sethi estimates the PSL franchise valuation is approaching half a billion US dollars with potentially significant revenue upside.

Downsides of Consumer Boom:

There are a couple of downsides of the consumer boom. First,  a dramatic increase in solid waste. Second, rising consumption could further depress Pakistan's already low private savings rate.

FMCG products come with a significant amount of plastic and paper packaging that contribute to larger volume of trash. This will necessitate a more modern approach to solid waste disposal and recycling in Pakistani towns and cities. An absence of these systems will make the garbage situation much worse. It will pose increased environmental hazards.

Pakistan's savings rate is already in teens, making it among the lowest in the world. Further decline could hurt investments necessary for faster economic growth.

Summary: 

Pakistan's $210 billion retail market is among the fastest growing in the world, according to Euromonitor.  In a report titled "Emerging Markets Transforming As Velocity Markets", Ogilvy and Mather, a global market communications firm, has put Pakistan among what it calls "Velocity 12" that include Bangladesh, Brazil, China, Egypt, India, Indonesia, Mexico, Myanmar, Nigeria, Pakistan, Philippines and Vietnam. These 12 countries will be the biggest contributors to the next billion middle class consumers, according to the report. Expanding middle class, particularly millennials with rising disposable incomes, is demanding branded and packaged consumer goods ranging from personal and baby care items to food and beverage products. Strong demand for fast moving consumer goods is drawing large new investments of hundreds of millions of dollars.  Rapid growth in sales of consumer products and services is driving other sectors, including retail, e-commerce, paper and packaging, advertising, media, sports and entertainment. Potential downsides of soaring consumption include increased amount of  solid waste and decline in domestic savings and investment rates.

Related Links:

Haq's Musings

South Asia Investor Review

FMCG Boom in Pakistan

Pakistan Retail Sales Growth

Advertising Revenue in Pakistan

Pakistan FMCG Market

The Other 99% of Pakistan Story

PSL Cricket League Revenue

E-Commerce in Pakistan

Fintech Revolution in Pakistan

Mobile Broadband Speed in Pakistan

Riaz Haq's YouTube Channel

PakAlumni Social Network

Sunday, January 12, 2020

Are Pakistani Leaders Slaves of Arab Royals?

Are Pakistani leaders slaves of Arab Royals? Or simply doing what is in Pakistan's best interest?

Prime Minister Imran Khan Driving Prince Mohammad Bin Salman in Islamabad

Why did Imran Khan not attend the Kuala Lumpur Islamic Summit that was organized by Malaysian Prime Minister Mahathir Mohammad and attended by Turkish President Erdogan and Iranian President Hasan Rouhani? Why did he yield to Saudi pressure to skip it?

What are Pakistan's key economic and security interests in Gulf Cooperation Countries (GCC)? Is labor Pakistan's biggest export earning over $20 billion a year? What is the biggest export market for Pakistan's labor? What would happen if Pakistan joined Malaysia and Turkey in creating a new Muslim bloc competing with the Arab-led Organization of Islamic Countries (OIC)? Will OIC try to live up to Pakistan's expectation of a tougher stance against India's Modi vis a vis Indian Occupied Kashmir and Indian Muslims?

Who makes Pakistan's foreign and security policies? How influential is Pakistani military in making these policies? Is Imran Khan free to pursue whatever policies he personally prefers? Would any other Prime Minister have pursued a different policy with GCC nations?

ALKS host Faraz Darvesh discusses these questions with Sabahat Ashraf (ifaqeer) and Riaz Haq (www.riazhaq.com).


https://youtu.be/ylEor2XPblQ




Related Links:

Haq's Musings

South Asia Investor Review

Soleimani Was the Hardest of the Hardliner

Confessions of an Economic Hitman

Putin Challenges American Exceptionalism

Remittances to Pakistan Up 21X Since Year 2000

Modi's Kashmir Blunder

Godfather Metaphor for Uncle Sam

Seeing Bin Laden's Death in Wider Perspective

Destructive Power of Drone Swarm on Saudi Oil Installation

US Dominates List of World's Top Universities

Indian RAW Agent Kulbhushan Jhadav Used Chabahar

Iran-Saudi Conflict

Pakistan's Nuclear Program

Iran Nuclear Deal

1971 India-Pakistan War

Chabahar vs Gwadar Ports

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Riaz Haq's YouTube Channel

PakAlumni Social Network

Friday, January 10, 2020

United States of America: Benevolent or Malign Superpower?

Is United States of America a benevolent or malign superpower?


The United States has provided large amounts of aid to developing nations but has also caused a lot of pain by many invasions and wars it has initiated in the Middle East and elsewhere. Is it better or worse than other imperial powers in history? How is it different? What does John Perkins say in his book titled "Confessions of an Economic Hitman"? Has US exercised its immense cultural, technological, economic, political and military power responsibly?


Is Pakistan's US policy good or bad for Pakistan? How should Pakistan balance its relationship with the United States with its growing relations with China emerging as the next superpower? What role should Pakistan play in its immediate neighborhood of South Asia and the Middle East? How can Pakistan help bring peace to Afghanistan? How can Pakistan help keep the peace between Iran and Saudi Arabia?


ALKS host Faraz Darvesh discusses these questions with Misbah Azam and Riaz Haq (www.riazhaq.com)

 https://youtu.be/09pn8tjCjho

 


Related Links:

Haq's Musings

South Asia Investor Review

Soleimani Was the Hardest of the Hardliner

Confessions of an Economic Hitman

Putin Challenges American Exceptionalism

Is America Young and Barbaric? 

US Dollar as International Trade and Reserve Currency

Godfather Metaphor for Uncle Sam

Seeing Bin Laden's Death in Wider Perspective

US Drones and Cyber Warfare

US Dominates List of World's Top Universities

Indian RAW Agent Kulbhushan Jhadav Used Chabahar

Iran-Saudi Conflict

Pakistan's Nuclear Program

Iran Nuclear Deal

1971 India-Pakistan War

Chabahar vs Gwadar Ports

Did America Contribute to the Rise of ISIS?

Riaz Haq's YouTube Channel

PakAlumni Social Network

Thursday, January 9, 2020

Soleimani Was the Hardest of the Hardliners in Iran

Iran's General Qassem Soleimani was in America's cross-hairs for many years. He was the hardest of the hardliners in Tehran. He was very effective in his role as the head of the elite but ruthless Qods Force which is part of Iran's "Pasdaraan" (Iran Revolutionary Guard Corps). He had made many powerful enemies, both at home and abroad. Some conspiracy theorists are speculating that his assassination was staged by American and Iranian intelligence agencies to get rid of the Iranian general who was getting too big for his boots. American and Iranian Intelligence agencies have cooperated in their common battle against ISIS in recent years. Both sides wanted to eliminate Soleimani for their own reasons but without starting a real US-Iran war.

Soleimani Assassination: 

His assassination on President Donald Trump's orders last week brought Washington and Tehran to the brink of yet another major war in the Middle East as  Iran lobbed over a dozen missiles at two Iraqi airbases housing American troops. The world took a sigh of relief when Trump decided to not escalate the situation. At the same time, conspiracy theorists have speculated that the whole things was staged by American and Iranian intelligence agencies to get rid of the Iranian general who was getting too big for his boots.  American and Iranian Intelligence agencies have cooperated in their common battle against ISIS in recent years. Both sides wanted to eliminate Soleimani without starting a real war.

Soleimani's assassination has raised many questions: Was it just President Trump who wanted the Qods Force chief dead? Are there others, particularly in Teheran, who are privately happy to see him gone? Was the general getting too big for his boots? Did some of the leaders in the Islamic Republic see his growing popularity and arrogance as a threat to their own power?  Let's try and address these questions.




Soleimani's Growing Popularity:

Polling data showed Soleimani was more popular than other major public figures, according to the Center for International Studies at the University of Maryland. It published a survey in 2018 that found Soleimani had a popularity rating of 83%, beating President Hassan Rouhani and Foreign Minister Zarif. 

Soleimani vs Rouhani:

There were reports in 2018 of President Hassan Rouhani lashing out at Soleimani during a meeting with several senior IRGC officers in attendance,  accusing him of hiding the truth from the president and even from the supreme leader. Soleimani left the room in anger. Earlier, when the two met during Friday prayers, Soleimani warned the president about the “folly of not increasing the budget allotted to Quds.”

Soleimani vs Zarif:

Soleimani sat by Imam Khamenei’s side at key meetings, conveying his importance in the eyes of the spiritual leader. He met Syrian leader Bashar Al-Assad in February 2019 together with the supreme leader — but without Iran’s Foreign Minister Mohammad Javad Zarif, triggering resignation threats by Iran's top diplomat.

Soleimani Threatened Pakistan:

In February, 2019, Soleimani threatened Pakistan. He boasted of Iran's "independent power and honor". He said:

"I warn you not to test Iran and anyone who has tested Iran has received firm response. We are speaking to Pakistan with a friendly tone and we are telling that country not to allow their borders to become a source of insecurity for the neighboring countries..... Iran enjoys independent power and honor. Some countries have wealth, but no prowess. Trump tells the Al-Saud that if it hadn't been for the US support, Saudi Arabia would not have survived and Saudi Arabia's coalitions in the region have all ended in failure."

Soleimani's tone in this message to Pakistan is anything but "friendly".

Soleimani's Global Covert Ops:

In 2012, Indian investigators found that five members of Iranian Revolutionary Guard Corps (IRGC) were involved bombing of a car of the wife of the Israeli defense attache in New Delhi.  IRGC was also allegedly linked to a similar attack in Thailand. The 1994 bombing of a Jewish community center in Argentina that killed 85 is believed to be IRGC's revenge in part for the 1992 killing of a Hezbollah leader.

Summary:

General Qassem Soleimani was the hardest of the hardliners.  As the head of the powerful and ruthless Qods Force, he made many powerful enemies at home and abroad.  Some conspiracy theorists are speculating that his assassination was staged by American and Iranian intelligence agencies to get rid of the Iranian general who was getting too big for his boots.  American and Iranian Intelligence agencies have cooperated in their common battle against ISIS in recent years. Both sides wanted to eliminate Soleimani for their own reasons but without starting a real US-Iran war. He was part of Mullah regime in Iran that has ruined a great country by unnecessarily challenging the United States which they refer to as "Shaitan Buzurg" (Great Satan). Even their missiles paraded every year in the streets of Tehran have “Marg Bar Amrika” (Death to America)  painted on them. Iranian Ex President Ahmadinejad brought unwanted and unhelpful US attention when he threatened to nuke Israel. Even as Iranians are suffering due to US sanctions and poor governance by mullahs, Solemani was going around spending money supporting Shia militias to establish Iran as regional hegemon. These policies have badly hurt Iran and its people.

Related Links:

Haq's Musings

South Asia Investor Review

Iran-Pakistan Ties

Iran's Chabahar and Pakistan's Gwadar Ports

Indian RAW Agent Kulbhushan Jhadav Used Chabahar

Iran-Saudi Conflict

Pakistan's Nuclear Program

Iran Nuclear Deal

1971 India-Pakistan War

Chabahar vs Gwadar Ports

Did America Contribute to the Rise of ISIS?

Riaz Haq's YouTube Channel

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Monday, January 6, 2020

Battle For Pakistan 2007-2019: Pak-US Ties and Civil-Military Relations

Shuja Nawaz's "The Battle For Pakistan: The Bitter Friendship and a Tough Neighborhood" looks at key events of the last decade that have characterized US-Pakistan ties and civil-military relations in Pakistan.  One of the biggest developments in the period covered by Shuja Nawaz's book is the rise of Narendra Modi and the Hindu Nationalists in India. His book is a well-written treatise but it is strangely silent on the implications of this major development for South Asia region and the world.

Author Shuja Nawaz

US Raid in Abbottabad:

On May 2, 2011, US commandos raided a house in Pakistani city of Abbottabad and killed Al Qaida leader Osama Bin Laden. There are many stories about who led the Americans to Bin Laden's hideout. The story that Shuja Nawaz appears to confirm is the one about ex Pakistani spy Lt Col Iqbal Saeed Khan walking into the US Embassy in Islamabad to tell the CIA station chief the exact location of Bin Laden. This spy was apparently well rewarded for it. He now lives in San Diego, California where he owns a multi-million dollar home and drives a BMW convertible.

“Col. Saeed, who ran a security firm in Islamabad, may have been responsible for providing logistic and surveillance assistance to the Americans in tracking and locating movements related to what turned out to the final lair of bin Laden in Abbottabad,” says Shuja Nawaz in his book. “Col. Saeed’s office in Abbottabad is reported to have been used as a listening and staging post. He is reported to have been recruited by Lt. Col. Hafeez, his predecessor at the helm of the 408 Intelligence battalion, who had been hired by the U.S., and according to one report, was even in the U.S., and that CIA Director George Tenet once brought him to a meeting with Gen. Kayani,” it adds.

Imran Khan's 2014 Dharna (Sit-in):

Shuja Nawaz confirms what was widely reported by Pakistani media in 2014: Pakistan ISI was behind Imran Khan's Islamabad dharna. He cites US Ambassador Richard Olson as his source. Olson said the following in a January 2017 interview with the author:

"We received information that Zahir [-ul-Islam, the DG-ISI] was mobilizing for a coup in September of 2014. [Army chief] Raheel [Sharif] blocked it by, in effect, removing Zahir, by announcing his successor...[Zahir] was talking to the corps commanders and was talking to like-minded officers....He was prepared to do it and had the chief been willing, even tacitly, it would have happened. But the chief was not willing, so it didn't happen."

Pakistan Military Dominance:

Shuja Nawaz argues in the book that "the armed forces, and in particular the army, continue to dominate decision making in Pakistan" in spite of the fact "the constitution of Pakistan established civilian supremacy". He explains that it is "largely because of its (army's) experience in running the country through successive military regimes and, to some extent, by the inability of civilian regimes to exhibit the political vision and will necessary to exert their constitutional control over the military".

Going back to the 1970s, Shuja Nawaz says in his book:

"The elder Bhutto (Zulfikar Ali Bhutto) had wished to cut the military down to size, demoting the commanders-in-chief of the services to chiefs-of-staff. But, he failed to understand that their power stemmed from their disciplined and organized institutions, while the political party that he headed, not unlike other political parties, tended to be fractured and weak, especially on governance.....family rule was the order of the day. Civilian leaders failed to empower the people who elected them time and again, and they failed to deliver on the promise of economic development."

Shuja Nawaz's Silence on Rise of Hindutva:

The biggest development in the period covered by Shuja Nawaz's book is the rise of Narendra Modi and the Hindu Nationalists in India. His book is strangely silent on the implications of this development for South Asia region and the world.

Clearly, Nawaz did not foresee what has happened in India and Indian Occupied Kashmir with the revocation of Article 370 of the Indian constitution and the passage of highly discriminatory Citizenship Amendment Act. Nor did he see Modi's dangerous gambit with attack on Balakot in Pakistan. The Indian action drew strong Pakistani response with Pakistan Air Force crossing the Line of Control in Kashmir and shooting down two Indian fighter jets.  Pakistan also captured an Indian fighter pilot shot down down in Azad Kashmir. It was Pakistani Prime Minister Imran Khan's deft handling of the regional crisis that prevented further escalation into a full-blown India-Pakistan war that could have gone nuclear.

Summary:

"The Battle For Pakistan" by Shuja Nawaz covers the period from 2007 when President Musharraf fired former Chief Justice Iftikhar Muhammad Chaudhry to the beginning of 2019 before Balakot attack by Indian Air Force. The book is strangely silent on the implications of far-right Indian Prime Minister Modi's rise for South Asia region and the world.  Most of the book is devoted to discussion of US raid on Osama Bin Laden's hideout in Abbottabad, Salala incident that took the lives of 24 Pakistani soldiers, Memogate that led to Husain Haqqani's ouster, Dawn Leaks incident that soured relations between Prime Minister Nawaz Sharif and the military and Pakistan Army operations to defeat Pakistani Taliban. The author appears to confirm stories about an ex ISI colonel helping CIA find Bin Laden and Pakistan ISI's instigation Imran Khan's 2014 Islamabad  dharna (sit-in). One of the biggest developments in the period covered by Shuja Nawaz's book is the rise of Narendra Modi and the Hindu Nationalists in India. His book is strangely silent on the implications of this development for South Asia region and the world.

Related Links:

Haq's Musings

South Asia Investor Review

India: A Paper Elephant?

Modi's Hindutva

Imran Khan's 2014 Dharna in Islamabad

Seeing Bin Laden's Killing in Wider Perspective

Top US CIA Agent on Pakistan ISI

Shuja Nawaz on Civil-Military Relations in Pakistan

China-Pakistan Economic Corridor

Ownership of Appliances and Vehicles in Pakistan

CPEC Transforming Pakistan

Pakistan's $20 Billion Tourism Industry Boom

Riaz Haq's YouTube Channel

PakAlumni Social Network

Sunday, December 29, 2019

Pakistan's Year 2019 in Review: Economic and Security Challenges

Pakistan started the year 2019 in the midst of a very serious economic crisis with very high twin deficits and extremely low foreign exchange reserves. While Pakistan's internal security challenges subsided, the external security concerns grew with India's attack on Balakot in 2019. Tough actions by PTI government have started to pay off at the end of year 2019.  Toward the end of the year, Pakistan's twin deficits declined substantially and credit rating agency Moody's upgraded Pakistan's outlook from negative to stable. Mass migration continued both within and outside Pakistan. About 600,000 Pakistanis went to work overseas in 2019. And at least 4 times more Pakistanis moved from rural to urban areas.  Pakistan had high profile visits of the royal families from the UK and the Netherlands as well as the visit of the Sri Lankan cricket team, the first foreign team to play test series in Pakistan in a decade. Conde Nast Travel picked Pakistan as the top tourism destination for 2020. Regional security situation worsened with Indian and Kashmiri Muslims facing the threat of genocide at the hands of newly re-elected Indian government of Hindu fanatic Prime Minister Narendra Modi.

Economic Crisis:

The year 2019 began with Pakistan battling massive twin deficits, deteriorating foreign currency reserves, low exports, diminishing tax revenues, a weak currency, unsustainable external debt payments, and soaring sovereign debt. This crisis has forced the country to seek IMF (International Monetary Fund) bailout, the 13th such request in Pakistan's 72 year history.

Tough actions by PTI government have started to pay off at the end of year 2019.  In October 2019, Pakistan saw a monthly trade surplus of $99 million, its first in decades. Pakistan's exports in November 2019  jumped 9.6% to $2.02 billion while imports dropped 17.53% to $3.815 billion over corresponding month of last year, the Ministry of Commerce data showed.

Pakistan Trade Data 2019

In December 2019, IMF's Pakistan representative Maria Teresa Daban Sanchez said as follows: “Pakistan has put behind its difficult years of security. Now, it is time for the business community and society in general to enjoy this new time and to really unleash the potential of Pakistan.”

Moody's credit rating agency upgraded Pakistan's outlook from negative to stable as the year 2019 came to a close.

Security Challenge:

While newly elected PTI government was still dealing with the economy, the Indian Air Force entered Pakistani airspace and dropped bombs in Balakot on the orders of India's far-right Prime Minister Narendra Modi. The Indian action drew strong Pakistani response with Pakistan Air Force crossing the Line of Control in Kashmir and shooting down two Indian fighter jets.  Pakistan also captured an Indian fighter pilot shot down down in Azad Kashmir. It was Pakistani Prime Minister Imran Khan's deft handling of the regional crisis that prevented further escalation into a full-blown India-Pakistan war that could have gone nuclear. The year 2019 ended with Pakistani economy stabilizing and Indian and Kashmiri Muslims facing the threat of genocide at the hands of newly re-elected Indian government of Hindu fanatic Prime Minister Narendra Modi.

The Indian action drew strong Pakistani response with Pakistan Air Force crossing the Line of Control in Kashmir and shooting down two Indian fighter jets.  Pakistan also captured an Indian fighter pilot shot down down in Azad Kashmir. It was Pakistani Prime Minister Imran Khan's deft handling of the regional crisis that prevented further escalation into a full-blown India-Pakistan war that could have gone nuclear. The year 2019 ended with Pakistani economy stabilizing and Indian and Kashmiri Muslims facing the threat of genocide at the hands of newly re-elected Indian government of Hindu fanatic Prime Minister Narendra Modi.

Source: South Asia Terrorism Portal

Pakistan saw lowest terror related fatalities in a decade with 228 deaths in the first half of 2019. This is a huge improvement from 2009 when Pakistan had nearly 12,000 deaths in terrorism related incidents.

Source: Conde Nast Traveller 

Improved security helped Pakistan earn number one spot among top tourism destinations picked by Conde Nast Travel magazine.  Pakistan hosted Prince William and his wife Kate Middleton as well as Queen Maxima of the Netherlands among other top foreign dignitaries. In December, Pakistan had its first cricket test series at home in a decade with the visit of the Sri Lankan cricket team.

International Relations:

Pakistan's relations with India sank to a new low when Prime Minister Narendra Modi ordered bombing of Balakot in February 2019 and Pakistan responded by crossing the Line of Control and shooting down two Indian fighter jets in Kashmir and capturing an Indian pilot.  It was Pakistani Prime Minister Imran Khan's deft handling of the regional crisis that prevented further escalation into a full-blown India-Pakistan war that could have gone nuclear. The year 2019 ended with Pakistani economy stabilizing and Indian and Kashmiri Muslims facing the threat of genocide at the hands of newly re-elected Indian government of Hindu fanatic Prime Minister Narendra Modi.

Prime Minister Imran Khan's visit to the White House and meeting with President Trump helped warm up ties with the United States. Speaking with the media in a joint press conference with Prime Minister Imran Khan in the Oval Office, President Trump said: "It's my honor to have the very popular and great athlete, the Prime Minister of Pakistan at White House". The President added that Pakistan was helping the US to "extricate" US troops from Afghanistan, through political negotiations.

Prime Minister Imran Khan's rally drew nearly 30,000 Pakistani-Americans to Capital One Arena on Sunday, July 21, 2019. It was the largest ever public gathering of any diaspora to welcome a foreign visiting leader in the United States until the more recent Howdy Modi rally in Houston that drew nearly 60,000 people. Earlier record of 18,000 was set by Indian Prime Minister Narendra Modi's rally at New York City's Madison Square Garden in 2014.

China, Saudi Arabia and United Arab Emirates maintained close ties with Pakistan and offered valuable assistance to Islamabad to deal with its economic difficulties. United States and the European Union (EU) nations also supported IMF's bailout of Pakistan.

Massive Migration:

Nearly 600,000 Pakistanis went overseas for work in the first 11 months of 2019, according to figures recently released by Pakistan Bureau of Emigration and Overseas Employment. This phenomenon helped contain unemployment in a country where about 2 million young people are entering the job market each year. It has also helped remittances soar nearly 21X to nearly $21 billion since the year 2000.

Emigrants From Pakistan 1990-2019. Source: Pakistan Bureau of Emigration


Pakistan is in the midst massive migration, both internal and external. Over half a million Pakistanis are migrating overseas while about 2 million are migrating internally from rural to urban areas. These trends are transforming the nation. Overseas remittances are soaring. Pakistan is becoming more urban. The country is also seeing growing foreign cultural influences from both the West and the Middle East.

Summary:

Pakistan faced serious economic and security challenges in 2019. While Pakistan's internal security challenges subsided, the external security concerns grew with India's attack on Balakot in 2019. Tough actions by PTI government have started to pay off at the end of year 2019.  Toward the end of the year, Pakistan's twin deficits declined substantially and credit rating agency Moody's upgraded Pakistan's outlook from negative to stable. Mass migration continued both within and outside Pakistan. About 600,000 Pakistanis went to work overseas in 2019. And at least 4 times more Pakistanis moved from rural to urban areas.  Pakistan had high profile visits of the royal families from the UK and the Netherlands as well as the visit of the Sri Lankan cricket team, the first foreign team to play test series in Pakistan in a decade. Conde Nast Travel picked Pakistan as the top tourism destination for 2020. Regional security situation worsened with Indian and Kashmiri Muslims facing the threat of genocide at the hands of newly re-elected Indian government of Hindu fanatic Prime Minister Narendra Modi.

Related Links:

Haq's Musings

South Asia Investor Review

Pakistan's Debt Crisis

India's Attack on Balakot and Pakistan's Response

Internal and External Mass Migration in Pakistan

Retired Justice Katju: Dark Clouds Over India

Pakistan Tourism Boom

Digital BRI: China and Pakistan Building Fiber, 5G Networks

LNG Imports in Pakistan

Growing Water Scarcity in Pakistan

China-Pakistan Economic Corridor

Ownership of Appliances and Vehicles in Pakistan

CPEC Transforming Pakistan

Pakistan's $20 Billion Tourism Industry Boom

Riaz Haq's YouTube Channel

PakAlumni Social Network

Friday, December 27, 2019

Over Half Million Pakistanis Migrating Abroad Each Year

Nearly 600,000 Pakistanis have gone overseas for work in the first 11 months of this year, according to figures recently released by Pakistan Bureau of Emigration and Overseas Employment. This phenomenon has helped reduce unemployment in a country where about 2 million young people are entering the job market each year. It has also helped remittances soar nearly 21X since the year 2000.



Emigrants From Pakistan 1990-2019. Source: Pakistan Bureau of Emigration

Migration Overseas:

Over 11 million Pakistanis have left home for employment in Europe, America, Middle East and elsewhere since 1971, according to Pakistan Bureau of Emigration. The pace has particularly picked up over the last 10 years with over half a million Pakistanis migrating abroad each year.  This phenomenon has helped reduce unemployment in a country where about 2 million young people are entering the job market each year.

Emigrants From Pakistan 1971-2019. Source: Pakistan Bureau of Emigration


More Pakistanis have migrated overseas in the last 9 years (2011-2019) than in previous 30 years (1971-2010).  The average figure has been about 500,000 each year since 2011. The highest was 946,571 in 2015 while the lowest was 382,439 in 2018.  These figures do not include Pakistanis who went abroad for education and never returned.


Remittance inflows from Pakistani diaspora have jumped 21-fold from about $1 billion in year 2000 to $21 billion in 2018, according to the World Bank. In terms of GDP, these inflows have soared nearly 7X from about 1% in year 2000 to 6.9% of GDP in 2018.

Composition of Pakistan Emigrants. Infographic Courtesy of Gulf News

Myths About Emigration:

A common myth about emigration is that it is driven by poverty. But the fact is that the poorest and least developed people tend to stay put where they are; they do not migrate. It's only people who have a certain level of income and skills who are more likely to migrate to other countries for better opportunities. This fact has been well-established by multiple studies conducted in Africa.

Here's an except of African Development Bank report on migration:

"Results show that despite increase in the absolute number of migrants, Africa, particularly SubSaharan Africa has one of the lowest rate of emigration in the world .... Poorer countries generally have lower rate of emigration ......Bad socio-economic conditions generally seem to lead to higher rate of emigration by highly skilled individuals. Generally, migration is driven by motives to improve livelihoods with notable evidence on changes in labor market status. Often, self-employed or unemployed émigré ended up in wage employment. The paper outlines policy issues emerging from the migration trend in Africa."

Migration vs Human Development Source: Hein de Haas










Data shows that increased human and economic development is initially associated with increasing emigration. Any form of development in the poorest countries of the world is therefore likely to lead to accelerating emigration. Such findings contradict conventional thinking and force us to radically change our views on migration. Such rethinking can be achieved by learning to see migration as an intrinsic part of broader development processes rather than as a problem to be solved, or the temporary response to development “disequilibria”, according to The Conversation, a US publication.

Migration to Non-English Speaking OECD Nations:

Migration data for 2016 released by Organization for Economic Cooperation and Development, the club of rich industrialized nations of Europe, North America and East Asia, shows that a growing number of Pakistanis are migrating to its non-English Speaking member countries. Traditionally, most Pakistanis migrating to rich industrialized nations have preferred to go to English-Speaking nations. The biggest factor driving such migrations appears to be the growing labor shortages caused by aging populations and declining birth rates in OECD member nations.

Among the biggest non-English Speaking OECD destinations in 2016 for Pakistani migrants are Italy (14,735)  , Germany (12,215), Spain (6,461), South Korea (2,724), Japan (1,486), France (1,350) and Sweden (1.211). 

Pakistani Migration to Non-English Speaking OECD Nations in 2016. Source: OECD


Among English Speaking OECD nations, the top destination for Pakistani migrants continues to be the United States (19,313) followed by Canada (11,335), United Kingdom (11,000) and Australia (6,958). 

Internal Migration:

Internal migration in Pakistan far exceeds external migration. Estimates from the 2014-2015 Labor Force Survey (LFS) indicate that the internal migrant population is roughly four times larger than the emigrant population. This means that some 13% of the Pakistani population is an internal migrant, according to Pakistan Migration Snapshot published in August, 2019.

Like most developing nations, the internal migration in Pakistan is linked to the differences in level of development between urban and rural regions with people moving for better employment and to overcome poverty. Pakistan has also experienced many natural hazards, which have caused numerous waves of internal displacement and internal migration (Sadia et al., 2017; Cibea et al, 2013).

Summary:

Pakistan is in the midst massive migration, both internal and external. Over half a million Pakistanis are migrating overseas while about 2 million are migrating internally from rural to urban areas. These trends are transforming the nation. Overseas remittances are soaring. Pakistan is becoming more urban. The country is also seeing growing foreign cultural influences from both the West and the Middle East.

Related Links:

Haq's Musings

South Asia Investor Review

Pakistan is the 7th Largest Source of Migrants in OECD Nations

Pakistanis Mini-Invasion of China

Inspirational Story of Karachi Rickshaw Driver's Daughters

Pakistan Remittance Soar 21X

Pakistan's Growing Human Capital

Two Million Pakistanis Entering Job Market Every Year

Pakistan Most Urbanized in South Asia

Hindu Population Growth Rate in Pakistan

Do South Asian Slums Offer Hope?


Monday, December 16, 2019

Is Pakistan Ready For Clean Energy Revolution?

Rising worries about climate change have recently made me join the Clean Energy Revolution by installing rooftop solar and leasing an electric car. What is the Clean Energy Revolution? It is the growing use of solar panels, battery storage and electric vehicles to reduce carbon emissions. Is Pakistan ready to join the Clean Energy Revolution?

Tesla Surpasses China's BYD in EV Sales. Courtesy Electrek

Tesla Electric Cars:

Silicon Valley is at the forefront of this clean energy revolution led by Tesla. Tesla is more than an electric car company; the company also supplies solar panels and batteries. Other automakers are also taking their cues from Tesla.  China's BYD Auto has only recently been surpassed by Tesla in production volumes. Auto giants General Motors and BMW are both building electric cars and planning to build "gigafactories" like Tesla's to manufacture battery packs for vehicles and homes. Pakistan is building up renewable power generation capacity. The country has also recently announced its National Electric Vehicle Policy that offers incentives to transition to clean energy.

Bloomberg estimates that Batteries and electric transmission account for about 40% of passenger cars’ costs. European demand is met by mainly Japanese and South Korean battery makers like Panasonic, LG Chem Ltd. and Samsung SDI Co. In the U.S., Tesla has built its own battery cells at its Gigafactory to manage costs and satisfy demand for the cars it produces. Chinese demand for battery packs is met by BYD.

Battery Backed Renewable Energy Costs:

High-capacity battery pack costs have dropped nearly 40% since 2015, according to Wood Mackenzie data as reported by Wall Street Journal. The prices of lithium and vanadium—two of several key raw materials that are used in such batteries—also have declined over the past year or so.

Battery storage costs have fallen nearly 90% in the past decade, according to NextEra Energy.  Cost reductions are expected to continue to only $8 to $14 per MW-hour by 2020, or about a penny per kW-hour. For perspective, the average kW-hour of electricity costs about 13 cents for retail users.

NextEra Energy forecasts that post-2023, wind plus energy storage costs will be $20 to $30 per MW-hour, and solar plus energy storage will be $30 to $40 per MW-hour. Natural gas is expected to match the solar-plus-storage costs.

Pakistan Electric Vehicle Policy:

Pakistan has a low level of motorization with just 9% of the households owning a car. Nearly half of all households own a motorcycle. Motorization rates in the country have tripled over the last decade and a half, resulting in nearly 40% of all emissions coming from vehicles. Concerns about climate change and environmental pollution have forced the government to to take a number of actions ranging from adoption of Euro6 emission standards for new vehicles with internal combustion engines (ICE) since 2015 and announcement of a national electric vehicle (EV) policy this year.

Private vehicle ownership in Pakistan has risen sharply over the last 4 years. More than 9% of households now own cars, up from 6% in 2015. Motorcycle ownership has jumped from 41% of households in 2015 to 53% now, according to data released by Federal Bureau of Statistics (FBS) recently. There are 32.2 million households in Pakistan, according to 2017 Census.


Vehicle Ownership in Pakistan. Source: PBS

Pakistan's National EV Policy is a forward looking step needed to deal with climate concerns from growing transport sector emissions with rapidly rising vehicle ownership. It offers tax incentives for buyers and sellers. It also focuses on development of nationwide charging infrastructure to ease adoption of electric vehicles.

Low Carbon Energy Growth:

In recent years,  Pakistan government has introduced a number of supportive policies, including feed-in tariffs and a net metering program to incentivize renewables. These have been fairly successful, and renewables capacity in the country surged substantially over 2018 when 1245 MW was added, of which 826MW was contributed by the solar sector, according to Fitch Solutions.

Non-Hydro Renewables in Pakistan. Source: Fitch Solutions

Pakistan’s Alternative Energy Development Board (AEDB) recently signed deals for projects that will see the country expand its wind power capacity by 560 MW.  Fitch Solutions forecasts Pakistan's solar capacity to grow by an annual average of 9.4% between 2019-2028, taking total capacity over 3.8GW by the end of our forecast period.

Sindh government has recently signed a deal for 400MW solar park at Manjhand, 20MW rooftop solar systems on public sector buildings in Karachi and Hyderabad, and 200,000 solar home systems for remote areas in 10 districts of the province. The project is estimated to cost USD105million, with the World Bank funding USD100 million.

The biggest and most important source of low-carbon energy in Pakistan is its hydroelectric power plants. Pakistan ranked third in the world by adding nearly 2,500 MW of hydropower in 2018, according to Hydropower Status Report 2019.  China added the most capacity with the installation of 8,540 megawatts, followed by Brazil (3,866 MW), Pakistan (2,487 MW), Turkey (1,085 MW), Angola (668 MW), Tajikistan (605 MW), Ecuador (556 MW), India (535 MW), Norway (419 MW) and Canada (401 MW).

New Installed Hydroelectric Power Capacity in 2018. Source: Hydroworld.com

Hydropower now makes up about 28% of the total installed capacity of 33,836 MW as of February, 2019.   WAPDA reports contributing 25.63 billion units of hydroelectricity to the national grid during the year, “despite the fact that water flows in 2018 remained historically low.” This contribution “greatly helped the country in meeting electricity needs and lowering the electricity tariff for the consumers.”

Chinese BYD in Pakistan:

Multiple media reports suggest that China's BYD is about to enter Pakistan market following the announcement of Pakistan National EV Policy.   These reports indicate that Toyota, one of the largest automakers in Pakistan, has signed a deal with BYD to manufacture electric vehicles.

Other reports indicate that Pakistan's Rahmat Group is in talks with BYD to set up an electric vehicle plant at Nooriabad in Sindh province.

Minister for Science and Technology Fawad Chaudhry has claimed that in three years Pakistan will become the first country to manufacture electric buses, which will be driven by an electric motor and obtains energy from on-board batteries.

Summary: 

It appears that Pakistan is starting to get serious about joining the Clean Energy Revolution to deal with rising climate change concerns. The country has set targets for renewable energy growth and announced National Electric Vehicle Policy.  In recent years,  Pakistan government has introduced a number of supportive policies, including feed-in tariffs and a net metering program to incentivize renewables. These have been fairly successful, and renewables capacity in the country surged substantially over 2018 when 1245 MW was added, of which 826MW was contributed by the solar sector, according to Fitch Solutions.  High-capacity battery pack costs have dropped nearly 40% since 2015, according to Wood Mackenzie data as reported by Wall Street Journal.  Cost reductions are expected to continue to only $8 to $14 per MW-hour by 2020, or about a penny per kW-hour. While production and use of renewable energy are growing, the electric vehicles in Pakistan have yet to find traction. Hopefully, the National EV policy will encourage production and adoption of electric vehicles in the country.

Related Links:

Haq's Musings

South Asia Investor Review

Pakistan Electric Vehicle Policy

Nuclear Power in Pakistan

Recurring Cycles of Drought and Floods in Pakistan

Pakistan's Response to Climate Change

Massive Oil and Gas Discovery in Pakistan: Hype vs Reality

Renewable Energy for Pakistan

Digital BRI: China and Pakistan Building Fiber, 5G Networks

LNG Imports in Pakistan

Growing Water Scarcity in Pakistan

China-Pakistan Economic Corridor

Ownership of Appliances and Vehicles in Pakistan

CPEC Transforming Pakistan

Pakistan's $20 Billion Tourism Industry Boom

Riaz Haq's YouTube Channel

PakAlumni Social Network

Tuesday, December 10, 2019

India's Retired Justice Katju at Interfaith Event in Silicon Valley

Justice Markandey Katju, retired judge of Supreme Court of India, talked of "dark clouds over India" in a speech to about 200 people of all faiths at an interfaith event in Silicon Valley.  He said "Muslims making up only 15% of the population are on the receiving end" but the rest of India is also paying the price. India's economy is in serious trouble. There is rampant poverty and high rates of malnutrition in the country. There are heavy job losses across the entire labor market.  The event was organized by Ibadatkhana Foundation led by Tasawar Jalali. Other organizers included Javed Ellahie, Naren Singh, Santosh Addagulla and Prabakar Karuppiah .



"Indian Supreme Court has surrendered, Indian media have surrendered" to the "dark forces" of Modi's "Hindutva", he said. He said "there was no communalism in India before 1857", the year Delhi fell to the British colonizers. The colonial rulers from Britain then proceeded to "divide and conquer India" by using what Justice Katju described as "history in the service of colonialism", an apparent reference to Professor B.N. Pande's 1977 speech to Rajya Sabha, the upper house of India's  parliament.

Ibadatkhana:

Justice Katju described "Ibadat Khana" as part of a brief history lesson on Mughal Rule in India.  Ibadat Khana was built by Emperor Akbar in Fatehpur Sikri in 1575 as a place where scholars of various faiths could discuss theology. The establishment of this center of learning was motivated by the emperor's desire for "Sulh-e-Kul, meaning "universal peace" among various faiths.

This was about the same period as St. Bartholomew Massacre in Europe. Catholic mobs attacked and killed tens of thousands of Protestants in France. These religious wars raged in Europe for centuries. In fact, Ireland witnessed sectarian massacres as recently as the 1990s.

India's Diversity:

Justice Katju said India is a very diverse land of immigrants. He said 92% of the population descended from ancestors who arrived from other lands to settle in India. The original inhabitants of India make up about 8% of the population.



He said people migrate from harsh to more comfortable places. India with its rivers and valleys offered rich fertile soil for agriculture that dominated the world economy for thousands of years before the Industrial Revolution. There have been only two periods when people left India in large numbers to go elsewhere: Indentured service after the end of slavery in 1800s and more recently the migration of better educated Indian to America and Europe.

Modi's India:

Mr. Katju said "dark clouds" are gathering over India with courts and media surrendering to Modi's despotic rule. He said "Muslims making up only 15% of the population are on the receiving end" but the rest of India is also paying the price. India's economy is in serious trouble. There is rampant poverty and high rates of malnutrition in the country. There are heavy job losses across the entire labor market.

A diverse country like India can not afford Hindutva. This is a time to bring back Emperor "Sulh-e-Kul" to save India.

Panel Discussion:

There was a panel discussion with Justice Katju, Dr. Jasbir Kang, Mr. Javed Ellahie and Prof. Randolph Langenbach. The panel was moderated by Ritu Jha and Mariam Turab. During the panel discussion, Justice Katju brought up the idea of reunification of India and Pakistan. He argued "if East and West Germany can reunify, so can India and Pakistan". The idea was contested by Mr. Javed Ellahi and Dr. Jasbir Kang who talked about the idea of pushing for more trade and people-to-people exchanges which could eventually lead to replication of European Union in South Asia. But Hindutva stands in the way of peace in South Asia.

Summary:

In a speech to about 200 people of various faiths in Silicon Valley, Justice Markandey Katju, India's retired Supreme Court judge, talked about "dark clouds over India". The event was organized as an interfaith event by Ibadatkhana Foundation. A diverse country like India can not afford Hindutva. This is a time to bring back Emperor Akbar's "Sulh-e-Kul" to save India, he said.

Related Links:

Haq's Musings

South Asia Investor Review

Hindutva: Legacy of British Raj

Balakot and Kashmir: Fact Checkers Debunk Indian Claims

South Asian Contrasts: Kartarpur and Ayodhya

Hindu Nationalists Admire Nazis

Lynchistan: India is the Lynching Capital of the World

Hindu Supremacist Yogi Adiyanath's Rise in UP

Hinduization of India

Globalization of Hindu Nationalism

Hindutva Distortion of Indian History Textbooks