Monday, September 21, 2020

Ambassador Kishore Mahbubani: America Does Not Respect India

"One hard truth that Indians have to contend with is that America has also had difficulty treating India with respect", writes former Singaporean diplomat Kishore Mahbubani in his latest book "Has China Won?". "If America wants to develop a close long-term relationship with India over the long run, it needs to confront the deep roots of its relative lack of respect for India", adds Ambassador Mahbubani. It's not just Mahbubani who suspects the United States leadership does not respect India. Others, including President Donald Trump, former Secretary of State Hillary Clinton and CNN GPS host Fareed Zakaria have expressed similar sentiments. 


Kishore Mahbubani



Kishore Mahbubani:

Kishore Mahbubani is a former top diplomat who served as the head of Singaporean mission at the United Nations. He was born in Singapore in 1948 to Hindu Sindhi parents who migrated from Pakistan to India in 1947, and then to Singapore in 1948. He is currently a Distinguished Fellow at the Asia Research Institute of the National University of Singapore.  In 2019, Mahbubani was elected a member of the American Academy of Arts and Sciences. He is a frequent guest on CNN Global Public Square hosted by Fareed Zakaria. Here's an excerpt from Mahbubani's "Has China Won?": 

 "One hard truth that Indians have to contend with is that America has also had difficulty treating India with respect.....Many Americans, like many of their fellow Westerners, have a higher degree of respect for Chinese civilization than they do of Indian civilization. Many Americans will deny it because it is an uncomfortable truth. They will proclaim loudly that they respect India as much as they respect China. But you cannot feign respect: it is best demonstrated not through words but in deeds. Every country in the world demonstrates its respect for another country by the amount of time and attention it gives to that country, and America has devoted far more time and attention to China than it has to India". 

Trump and Clinton:

There is some evidence to support Ambassador Mahbubani's assertion about America's lack of respect for India. For example, in a diplomatic cable released by WikiLeaks in 2010, Hillary Clinton referred to India as "a self-appointed frontrunner for a permanent UN security council seat."

More recently, US President Donald Trump mocked Indian Prime Minister Narendra Modi about Indian contribution to Afghanistan.  Trump said he got along very well with Prime Minister Narendra Modi, but the Indian leader was "constantly telling me he built a library in Afghanistan". "That's like five hours of what we spend... And we are supposed to say, 'oh, thank you for the library'. I don't know who is using it in Afghanistan," Trump said.

Western Media:

Indians were justifiably very proud of their great scientific achievement when the India Space Agency ISRO successfully launched the nation's Mars Mission back in 2013. The New York Times, America's leading newspaper, mocked India with a cartoon depicting the country as a dhoti-wearing farmer with his cow knocking on the door of the Elite Space Club. 

New York Times Cartoon


In an article titled "Paper Elephant", the Economist magazine talked about how India has ramped up its military spending and emerged as the world's largest arms importer. "Its military doctrine envisages fighting simultaneous land wars against Pakistan and China while retaining dominance in the Indian Ocean", the article said. It summed up the situation as follows: "India spends a fortune on defense and gets poor value for money".

After the India-Pakistan aerial combat over Kashmir, New York Times published a story from its South Asia correspondent headlined: "After India Loses Dogfight to Pakistan, Questions Arise About Its Military".  Here are some excerpts of the report:

"Its (India's) loss of a plane last week to a country (Pakistan) whose military is about half the size and receives a quarter (a sixth according to SIPRI) of the funding is telling. ...India’s armed forces are in alarming shape....It was an inauspicious moment for a military the United States is banking on to help keep an expanding China in check".

Fareed Zakaria: 

CNN GPS host Fareed Zakaria is known to be among the loudest cheerleaders for India and a sharp critic of Pakistan. While he still refuses to say anything that could even remotely be considered positive about Pakistan, it seems that he is souring on his native India.

Speaking with Indian journalist Shekhar Gupta on The Print YouTube channel, Fareed Zakaria called the Indian state an “inefficient state”.“Indian government functions very poorly, even in comparison to other developing countries. Coronavirus has highlighted that reality, " he added. He did not clearly speak about the lynchings of Indian Muslims by people affiliated with the ruling BJP and the brutality of Indian military against Kashmiri Muslims, but he did ask: “What I wonder about (Prime Minister Narendra) Modi is, is he really bringing all of India along with him? He noted sadly:”India seems like roadkill for China".

Has New Delhi's abject failure in containing the coronavirus pandemic finally done what Indian Prime Minister Narendra Modi's extreme brutality and open hatred against Zakaria's fellow Indian Muslims could not do? Has he really had it with Hindu Nationalist government? While he has not used his perch on CNN to do it, it appears that he has started expressing his disapproval of the performance on other platforms.

 Here are a few of the key points Fareed Zakaria made while speaking with Shekhar Gupta:

1. There’s no doubt in my mind that the Indian government, and by that I mean the Delhi government, has handled this crisis (COVID19) very poorly.

2. Indian government functions very poorly, even in comparison to other developing countries. Coronavirus has highlighted that reality.

3. In a way, India seems like roadkill for China’s obsession with absolute control over their borders. I do think there is an opportunity here for diplomacy. I don’t think India needs to be confrontational about it (the LAC issue), but of course it should push back.

4. It is now a bipolar world. US and China are way ahead of the rest of the world. For the long term, India needs to decide it’s position with China.

4. Turkey under Erdogan has become more confident and independent. It is culturally proud. It is telling Americans to buzz off.

5. Popularity of political leaders around the  world is linked to their performance on the coronavirus pandemic. In India, however, the issues of religion and caste are still dominating.

6.  What I wonder about (Prime Minister Narendra) Modi is, is he really bringing all of India along with him? How many Muslims in Indian government? Or South Indians in BJP? It is much less diverse than Prime Minister Jawaharlal Nehru's cabinet.

7. I have been very sad to see how Indian democracy has developed over the last few years. It has become an illiberal democracy.

8. The India media is slavishly pro-government. Self-censorship is widespread in India.

9. The Indian courts fold in cases where government takes serious interest.

Summary: 

Singaporean diplomat, analyst and writer Kishore Mahbubani has argued in his latest book "Has China Won?" that America does not really respect India. Other, including President Donald Trump, former Secretary of State Hillary Clinton and CNN GPS host Fareed Zakaria, have expressed similar sentiments. It has become increasingly clear that India's loudest cheerleaders like Fareed Zakaria are now starting to see the stark reality of Modi's India as a big failure on multiple fronts. Indian state has failed to contain the deadly COVID19 pandemic. India's economy is in serious trouble. The country's democracy is in decline. India seems like a roadkill for China. This turn of events has created serious problems for Pakistani "liberals" who have long seen and often cited India as a successful example of "secular democracy" at work in South Asia.

Here's a video clip from CNN GPS Show:

https://youtu.be/KpAMVLwBJkM





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Thursday, September 17, 2020

With Covid19 Under Control, Pakistan Enjoys V-Shaped Recovery in Manufacturing

With coronavirus spread contained, Pakistan economy is rebounding with V-shaped economic recovery.   Pakistanis have once again defied all foreign and domestic doomsayers, including media, activists and think tanks of all varieties. The nation's monthly Quantum Index of Manufacturing (QIM) for July 2020 has returned to where it was a year ago in July 2019, according to data released by Pakistan Bureau of Statistics.  Meanwhile, the number of daily new cases has declined from over 6,000 a day in June to around 500 a day now. There has also been dramatic reduction in hospital admissions and the need for intensive care. The LSMI output increased by 5.02% for July, 2020 compared to July, 2019 and 9.54% in June, 2020.  The recovery in manufacturing is quite broad, extending from cement production to fuel sales and growing demand for automobiles to home appliances, according to Bloomberg News.  Pakistan has successfully overcome the challenges posed  by the pandemic and its economic impact. Khan-Bajwa cooperation has been one of the keys to the country's success in dealing with the twin crises.



Covid19 Cases in Pakistan. Source: Our World in Data


Broad Recovery: 

The recovery in manufacturing is quite broad, extending from cement production to fuel sales and growing demand for automobiles to home appliances, according to Bloomberg News. The nation's monthly Quantum Index of Manufacturing (QIM) for July 2020 has returned to where it was a year ago in July 2019, according to data released by Pakistan Bureau of Statistics.  Meanwhile, the number of daily new cases has declined from over 6,000 a day in June to around 500 a day now.  There has also been dramatic reduction in hospital admissions and the need for intensive care. The LSMI output has increased by 5.02% for July, 2020 compared to July, 2019 and 9.54% if compared to June 2020. Month-wise trend of QIM from July, 2018 to July, 2020.    

Pakistan Monthly Quantum Index of Manufacturing. Source: PBS

Cement Sales: 

Pakistan is once again experiencing a construction boom with new incentives under Naya Pakistan Housing Program. Monthly cement sales rose to near all-time high of almost 5 million tons in July 2020 as construction activity picked up in both housing and CPEC-related projects. 

Pakistan Cement Sales. Source: Bloomberg


Car Sales:

Gasoline sales in June, 2020 hit new record  and local car deliveries rose to about 10,000 units as people returned to work after easing of lockdown in May, 2020. Kia Motors Corp.’s local unit is planning to add a second shift at its factory in Karachi from January.  

Pakistan Car Sales Recovery. Source: Bloomberg

Multiple Sectors Growing: 

Sectors including food, beverages & tobacco, coke & petroleum products, pharmaceuticals and non metallic mineral products saw an increase in production in July 2020.  Muzzammil Aslam, chief executive officer at Tangent Capital Advisors Pvt., was quoted by Bloomberg as saying, “It has surprised everybody".  Aslam expects Pakistan economy at 4%-5% in current fiscal year, higher than the government’s 2.1% target. “The growth is led by an aggregate demand push.”

Summary:

Pakistanis have defied all foreign and domestic doomsayers, including media, activists and think tanks of all varieties. Pakistan has successfully fought off the deadly COVID19 virus and begun to bounce back economically. Moody's rating agency has raised Pakistan's economic outlook from "under review for downgrade" to "stable". Pakistan's Planning Minister Asad Umar is talking of a "V-shaped recovery". Monthly cement sales have rebounded to pre-pandemic level, fuel sales have increased, tax collection is up,  exports are rising and the Karachi stock market is booming again. Prime Minister Imran Khan and Army Chief General Javed Bajwa have been on the same page in tackling the health and economic crises faced by Pakistan. Contrary to the critics of Pakistan's civil-military ties,  Khan-Bajwa cooperation has been one of the keys to the country's success in dealing with the twin crises.

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Saturday, September 12, 2020

Thirlwall Law: Why Hasn't Pakistan's GDP Grown Faster Than 5% Average Since 1960s?

Pakistan's economy has grown at a compounded annual growth rate (CAGR) of about 5% since the 1960s. While Pakistan's average 5% annual economic growth rate is faster than the global average, it falls significantly short of its peer group in Asia. The key reason is that, unlike Pakistan's, the East Asian nation's growth has been fueled by rapid rise in exports. History shows that Pakistan has run into balance of payments (BOP) crises whenever its growth has accelerated above 5%. These crises have forced Pakistan to seek IMF bailouts 13 times in its 73 year history. Pakistan's current account deficits would be a lot worse without 23X growth in remittances from overseas Pakistanis since year 2000.  What Pakistan has experienced is BOP-constrained growth as explained in 1979 by Thirlwall Law, a law of economics named after British economist Anthony Philip Thirlwall.  Another reason why Pakistan has lagged its Asian peers in terms of economic growth is its lower savings and investment rates. The best way for Pakistan to accelerate its growth beyond 5% is to boost its exports by investing in export-oriented industries, and by incentivizing higher savings and investments. 

History of Pakistan's IMF Bailouts

Economic Growth Since 1960: 

The World Bank report released in June, 2018 shows that Pakistan's GDP has grown from $3.7 billion in 1960 to $305 billion in 2017, or 82.4 times. In the same period,  India's GDP grew from $37 billion in 1960 to $2,597 billion in 2017 or 71.15 times. Both South Asian nations have outpaced the world GDP growth of 60 times from 1960 to 2017.

While Pakistan's GDP growth of 82X from 1960 to 2017 is faster than India's 71X and it appears impressive, it pales in comparison to Malaysia's 157X, China's 205X and South Korea's 382X during the same period.


Thrilwall's Model: 

Thrilwall's BOP-constrained growth model says that no country can sustain long-term growth rates faster than the rate consistent with its current account balance, unless it can finance its growing deficits. Indeed, if imports grow faster than exports, the current account deficit has to be financed by borrowing from abroad, i.e., by the growth of capital inflows. But this cannot continue indefinitely. Here's how Jesus Felipe, J. S. L. McCombie, and Kaukab Naqvi describe it in their May 2009 paper titled "Is Pakistan’s Growth Rate Balance-of-Payments Constrained? Policies and Implications for Development and Growth"  published by Asian Development Bank: 

"The reason is straightforward. If the growth of financial flows is greater than the growth of GDP, then the net overseas debt to GDP ratio will rise inextricably. There is a limit to the size of this ratio before international financial markets become distinctly nervous about the risk of private and, especially in less developed countries, public default. If much of the borrowing is short-term, then there is danger of capital flight, precipitating the collapse of the exchange rate. Not only will this cause capital loses in terms of foreign currency (notably United States [US] dollars) of domestic assets owned by foreigners (the lenders), but it will also cause severe domestic liquidity problems. This is especially true of many developing countries as overseas borrowing by banks and firms is predominantly denominated in a foreign currency, normally US dollars. As the exchange rate plummets, so domestic firms have difficulty finding domestic funds to finance their debt and day-today operations, often with disastrous consequences."

Investment as Percentage of GDP Source: State Bank of Pakistan 


Pakistan's Rising Current Account Deficit:

Pakistan's external debt has been rising rapidly in recent years to fund its ballooning twin deficits of domestic budget and external accounts. It pushed the external debt service cost to $12 billion in fiscal 2019-20, and added to the trade deficit of nearly $24 billion. Remittances of $21 billion from Pakistani diaspora reduced the current account deficit to $11 billion, but still forced the new PTI government to seek yet another IMF bailout with its stringent conditions to control both fiscal and current account deficits. These conditions resulted in dramatic slow-down in the country's GDP growth. 

Pakistan's External Debt. Source: Wall Street Journal


Pakistan's Exports: 

Pakistan’s exports have continued to lag behind that of its South Asian competitors since the early 1990s. Bangladesh’s exports have increased by 6.2 times compared to Pakistan’s, measured in terms of exports per capita, and that of India by 6.8 times, according to Princeton's Pakistani-American economist Atif Mian. 

Exports Per Capita in South Asia. Source: Dawn 


Savings and Investment: 

The second reason why Pakistan lagged its Asian peers in terms of economic growth is its lower savings and investment rates. There's a strong relationship between investment levels and gross domestic product. The more a country saves and invests, the higher its economic growth.  A State Bank of Pakistan report explains it as below:

"National savings (in Pakistan) as percent of GDP were around 10 percent during 1960s, which increased to above 15 percent in 2000s, but declined afterward. Pakistan’s saving rate also compares unfavorably with that in neighboring countries: last five years average saving rate in India was 31.9 percent, Bangladesh 29.7 percent, and Sri Lanka 24.5 percent..... Similarly, domestic savings (measured as national savings less net factor income from abroad) also declined from about 15 percent of GDP in 2000s, to less than 9 percent in recent years. Domestic savings are imperative for sustainable growth, because inflow of income from abroad (remittances and other factor income) is uncertain due to cyclical movements in world economies, exchange rates, and external shocks".

Net Foreign Direct Investment Source: State Bank of Pakistan

21X Remittance Growth Since Year 2000:

Remittance inflows from Pakistani diaspora have jumped 21-fold from about $1 billion in year 2000 to $24 billion in 2020, 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.


Meanwhile, Pakistan's exports have declined from 13.5% of GDP in year 2000 to 8.24% of GDP in 2017.  At the same time, the country's import bill has increased from 14.69% in year 2000 to 17.55% of GDP in 2017.  This growing trade imbalance has forced Pakistan to seek IMF bailouts four times since the year 2000.  It is further complicated by external debt service cost of over $6 billion (about 2% of GDP) in 2017. Foreign investment in the country has declined from a peak of $5.59 billion (about 4% of GDP) in 2007 to a mere $2.82 billion (less than 1% of GDP) in 2017. While the current account imbalance situation is bad, it would be far worse if Pakistani diaspora did not come to the rescue.

Summary:

Pakistan's average economic growth of 5% a year has been faster than the global average since the 1960s, it has been slower than that that of its peers in East Asia. It has essentially been constrained by Pakistan recurring balance of payment (BOP) crises as explained by Thrilwal's Law. Pakistan has been forced to seek IMF bailouts 13 times in the last 70 years to deal with its BOP crises. This has happened in spite of the fact that remittances from overseas Pakistanis have grown 24X since year 2000. The best way for Pakistan to accelerate its growth beyond 5% is to boost its exports by investing in export-oriented industries, and by incentivizing higher savings and investments. 

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Wednesday, September 9, 2020

Pak-Austria Fachhochschule: One More Step Toward Building Knowledge Economy in Pakistan

Pak-Austria Fachhochschule Institute of Applied Sciences and Technology (PAF-IAST) campus is ready to open in Haripur, Khyber Pakhtunkhwa, Pakistan. It represents one more step toward building Pakistan's knowledge economy and growing high-value technology-based exports. Pakistan is collaborating with several countries, including the United States and China, to build up high-skills education capacity in the country. Early progress is confirmed by a Nature magazine report that Pakistan's scientific output is growing at the fastest rate in the world. Pakistan's high-tech exports are relatively low but surging by double digits, according to the State Bank of Pakistan.

Pak-Austria Fachhochschule (PAF-IAST) Campus, Haripur, Pakistan


21st Century Workforce:

Pakistan's economy is rapidly transforming from traditional agriculture to modern business and industry.  Accelerating penetration of smartphones, personal computers, flat screens, mobile broadband, indoor plumbing, motorized vehicles, home appliances, air-conditioners, tractors, tube-wells, advanced construction machines and  solar and other technology-based products and services requires a highly skilled workforce to design, manufacture, market, sell, operate and service.

Building this new highly skilled workforce must begin with designing curricula and facilities. It also demands a new crop of trainers and educators and closer collaboration between academia and industry.

PAF-IAST:

PAF-IAST aspires to be a leader in delivering effective education for the 21st century workforce. Currently, only 18% of Pakistanis and 19% of Indians under the age of 24 have the skills required for 21st century jobs, according to a United Nations and Business Coalition for Education study. It's the percentage of all school age children on track to complete secondary AND reach the learning benchmarks spelled out  by National Achievement Test (NAT) 2016 for Pakistan  and NCERT 2017 for India.

Built in collaboration with the Austrian government, Pak-Austria Fachhochschule (PAF-IAST), Haripur will offer specialized courses in artificial intelligence, railway engineering, mining, agriculture, food technologies and other fields. “Set in middle of the campus is natural lake, fed by the springs of surrounding mountains. The campus is just a 3-kilometer drive from the Hazara Motorway,” according to PAF-IAST.

NUTech:

National University of Technology (NUTech), an institution similar to PAF-IAST and chartered institution of higher learning, was launched in Islamabad in 2018.

NUTech will not only produce hands-on engineers and scientists but it will also serve as an umbrella organization for training skilled technicians and tradespeople to build, service and maintain advanced technology-based plant and equipment.

NUTech will work with a national network of technical and vocational training institutes to produce skilled workers.  It will include representatives of business and industry in design of curricula to ensure these workers meet the needs of the industry.

National University of Technology (NUTech) Campus in Islamanad

Specialized Institutions:

Pakistan Air Force's Air University, established in 2002, is an example of a specialized institution aimed at developing human capital in the aviation sector.

Development of a new advanced fighter is a wide-ranging effort that will encompass building human capital in a variety of fields including material science, physics, electronics, computer science, computer software, electrical engineering, mechanical engineering, aerospace engineering, avionics, weapons design, etc.

Air University has added a new campus in Kamra Aviation City. The university already offers bachelor's master's and doctoral degrees in several subjects. Pakistan Air Force Chief Sohail Aman told Quwa Defense News that the campus will “provide the desired impetus for cutting-edge indigenization programs, strengthen the local industry and harness the demands of foreign aviation industry by reducing … imports and promoting joint research and production ventures.”

Higher Education in Pakistan:

There are over 3 million students enrolled in grades 13 through 16 in Pakistan's 1,086 degree colleges and 161 universities, according to Pakistan Higher Education Commission report for 2013-14.  The 3 million enrollment is 15% of the 20 million Pakistanis in the eligible age group of 18-24 years.  In addition, there are over 255,000 Pakistanis enrolled in vocational training schools, according to Technical Education and Vocational Training Authority (TEVTA).

Graduation Day at NED Engineering University For 1300 Graduates in 2013
Pakistani universities have been producing over half a million graduates, including over 10,000 IT graduates, every year since 2010, according to HEC data. The number of university graduates in Pakistan increased from 380,773 in 2005-6 to 493,993 in 2008-09. This figure is growing with rising enrollment and contributing to Pakistan's growing human capital.

Source: UNESCO's Global Education Digest 2009



Higher education in Pakistan has come a long way since its independence in 1947 when there was only one university, the University of Punjab. By 1997, the number of universities had risen to 35, of which 3 were federally administered and 22 were under the provincial governments, with a combined enrollment of 71,819 students. A big spending boost by President Pervez Musharraf helped establish 51 new universities and awarding institutions during 2002-2008. This helped triple university enrollment from 135,000 in 2003 to about 400,000 in 2008, according to Dr. Ata ur Rehman who led the charge for expanding higher education during Musharraf years. There are 161 universities with 1.5 million students enrolled in Pakistan as of 2014. As of 2019, there are 174 universities in the country.



Former Chairman of HEC summed up the country's higher education progress well in a piece he wrote for The News in 2012: "Pakistan has achieved critical mass and reached a point of take-off. For this phenomenal growth to continue, it is important for the government and other stakeholders to support and further strengthen the HEC as a national institution and protect its autonomy. If this momentum continues for another 10 years, Pakistan is certain to become a global player through a flourishing knowledge economy and a highly literate population".

Summary:

Pakistan is expanding science and technology education with institutions like PAF-IAST and NUTech. These represent progress toward building Pakistan's knowledge economy and grow high-value technology-based exports. Pakistan is collaborating with several countries, including the United States and China, to build up high-skills education capacity in the country. Early progress is confirmed by a Nature magazine report that Pakistan's scientific output is growing at the fastest rate in the world. Pakistan's high-tech exports are relatively low but surging by double digits, according to the State Bank of Pakistan.

Here's an introductory video about Pak-Austria Fachhochschule Institute of Applied Sciences and Technology (PAF-IAST) Pakistan:
https://youtu.be/IJDjDisjy_c




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Sunday, September 6, 2020

Pakistan to Grow Hemp For Manufacturing & Export of Industrial and Medicinal Products

Pakistan government has decided to permit hemp farming for industrial and medicinal use, according to Mr. Fawad Chaudhry, Minister of Science and Technology. Initially, the government will control hemp production, Chaudhry said, but private businesses and farmers will be allowed to enter the market at a later date, according to the French news agency AFP.

Hemp ( بھنگ ) plants grow wild like weeds in many parts of Pakistan, particularly in Potohar region where the nation's capital Islamabad is located. Hemp is one of the oldest plants on record as having been used to benefit humans. Hemp is known to have at least 50,000 different uses.  In South Asia, people have been cultivating hemp to make ropes and bags and to smoke hashish for centuries.

The government has picked International Center for Chemical and Biological Sciences (ICCBS) to help regulate hemp products in Pakistan, according to HempToday, a publication that covers the hemp industry. Located at the University of Karachi, it has all the equipment and expertise needed for validation and compliance certification of hemp products in the country, according to Dr. Iqbal Chaudhry, the Center’s Director. He said Pakistan can develop value-added products for export using ICCBS’s research facilities.


Hemp (بھنگ) Applications

It is hard to tell hemp and marijuana plants apart. Both look the same. However, unlike marijuana, hemp does not contain large amount of high-inducing tetrahydrocannabinol (THC) which can be addictive. However, it can still be used to produce CBD (cannabinoid) for medical purposes.  US Law requires that hemp not contain more than 0.3% THC.

In addition to using CBD in food and medicine, there are many different industrial uses of hemp as well. It can be used in textiles, paper, building materials and body care products.

Pakistan can export CBD to European Union and the United States where it has been legalized and being used to fight the side effects of cancer chemotherapy. The estimated global current market opportunity for CBD is about $25 billion."This hemp market could provide Pakistan with some $1 billion (in export earnings) in the next three years and we are in a process of making a full-fledged plan for this purpose," Mr. Chaudhry told the media recently. He also said that with cotton production in Pakistan declining due to various factors, hemp provided farmers with a viable alternative.

Hemp is probably the strongest natural fiber known to man. It has been used to make ropes, bags and textile fabrics for centuries. Rope beds, known as charpais, are still a common sight in rural Pakistan. Using hemp instead of trees in making paper and packaging materials can help save Pakistan's meager forests, and help diversify exports to earn valuable foreign exchange.

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Friday, September 4, 2020

Defense of Pakistan Day: Has Pakistan Lost All Wars to India?

As the South Asian nation of 220 million celebrates Defense of Pakistan Day, it is a good time to ask: Has Pakistan lost all wars to India? Indian defense analyst Pravin Sawhney says NO! In fact, Sawhney argues that Pakistan has never lost to India. Not in 1965, nor in 1971 nor Kargil!! Who is Pravin Sawhney? What makes him an authority on such matters?

Pakistan JF-17s Flying National Colors on Defense of Pakistan Day
Who is Pravin Sawhney?

Pravin Sawhney is a retired Indian Army officer who currently publishes "FORCE" magazine, along with Ghazala Wahab. Both deal with defense matters. Here's how FORCE introduces Pravin Sawhney:

"An author of two books, The Defence Makeover: Ten Myths That Shape India’s Image and Operation Parakram: The War Unfinished, a widely circulated monograph, Ballistic Missile Imperatives Between India And Pakistan, which he co-authored with Pakistani scholar Nazir Kamal at Sandia National Laboratories, Albuquerque, US, Pravin writes on strategic, defence and foreign policy issues. He also writes a monthly column, Bottomline in FORCE. Before starting FORCE, Pravin was the South Asia correspondent based in New Delhi with Jane’s International Defence Review, Jane’s Information Group, Surrey (UK) for six years. Taking premature retirement from the Indian Army (artillery), Pravin started his journalistic career with Business and Political Observer newspaper from where he moved on to the Times of India and Indian Express newspapers, finally leaving defence reporting in 1996 as defence editor, The Asian Age. He has also been a visiting fellow at the Royal United Services Institute, Whitehall, London, UK and a visiting scholar at Sandia National Laboratories, Albuquerque, US."


What Does Sawhney Say About India-Pakistan Conflict:

In an interview with Pakistani journalist Israr Kasana that was published on YouTube on June 3, 2020, Pravin asserted that "Pakistan has never lost (to India) in any war, be it 1965 or 1971 or any other." "If Pakistan had lost, there would be no line-of-control or ceasefire line on the ground," he added.  Here's more from that interview:

"If Pakistan had lost we (India) would have erased the LOC...why do I say that? I have explained it in my book. Pakistan has been strong in the western sector. It's a myth that Pakistan is weak, a myth that Pakistan itself perpetrates...India says we (India) are strong when in fact it is not.....CPEC is extremely important...China will share a lot of military capability with Pakistan....China shares platforms and assures unlimited supply of spare parts which is crucial in war...China and Pakistan do frequent joint military exercises...to assure interoperability.

What Has Sawhney Said About Balakot?

After the February 2019 conflict triggered by India's bombing in Balakot in Pakistan, Sawhney argued that India’s conventional deterrence has been compromised. India's war-fighting capabilities – pivoted on air power – have been blunted without a fight.  Meanwhile, Pakistan maintained credibility of both its first combined civil-military government and its air power.

Sawhney said, "Pakistan was faced with the dilemma of how to avenge India’s unprecedented action: to use or not to use the PAF. It was decided that the PAF too would breach Indian airspace while calling it a non-military strike. Unlike the IAF, the PAF strike would be done with menacing force in broad daylight ensuring that Indian military installations close to the Line of Control were not damaged enough to compel India to raise the ante."

Here's Pravin Sawhney talking about February 2019 action:'
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https://youtu.be/YX4qXrR34PI




Related Links:

Haq's Musings

South Asia Investor Review

Is India a Paper Elephant?

CPEC & Digital BRI

Pakistan's National Resilience, Success Against COVID19

China-Pakistan Defense Production Collaboration Irks West

Balakot and Kashmir: Fact Checkers Expose Indian Lies

Is Pakistan Ready for War with India?

Pakistan-Made Airplanes Lead Nation's Defense Exports

Modi's Blunders and Delusions 

India's Israel Envy: What If Modi Attacks Pakistan?

Project Azm: Pakistan to Develop 5th Generation Fighter Jet

Pakistan Navy Modernization

Pakistan's Sea-Based Second Strike Capability

Who Won the 1965 War? India or Pakistan?

Tuesday, September 1, 2020

What is the "Evidence" of "Corruption" Against Retired General Asim Saleem Bajwa?

Pakistani reporter Ahmad Noorani has alleged that CPEC Authority Chairman Asim Bajwa's wife Farrukh Zeba is a shareholder in Bajwa family business. Noorani, currently on Alfred Friendly fellowship in the United States, further alleges that the value of these holdings has been under-reported by General Asim Bajwa in his declaration of assets that he made recently in his position as Special Assistant to the Prime Minister (SAPM).  What Bajwa family business is Mr. Noorani referring to? It is Bajco, a business that Asim Bajwa's brother Nadeem Bajwa built in the United States. Noorani has made multiple allegations of corruption against CPEC Authority Chairman Asim Bajwa. Of these allegations, the only one that may require further investigation is that General Asim Bajwa may have deliberately understated the value of his wife Farrukh Zeba's shares in Bajco, a company built by Asim Bajwa's brother Nadeem Bajwa who is a self-made millionaire. Undervaluing assets is the kind of allegation that many apply to many Pakistani politicians, judges, bureaucrats and others who are required by law to disclose their assets.

General Asim Bajwa's Wife's Shareholdings



Evidence Cited:

Ahmad Noorani has cited a document signed by Asim Bajwa's brothers and his wife as proof of ownership by Mrs. Asim Bajwa. They have also shared General Asim Bajwa's declaration of assets which clearly says "shares in family business" held "in wife's name" and values them at Rs. 3.1 million. Noorani says the value of shares is significantly understated.  Noorani also alleges that "(T)he growth of the Bajwa family’s business empire in the United States and later in Pakistan directly matches the rise in power of retired general Asim Saleem Bajwa, who is now chairman of the country’s massive China-financed infrastructure project and a special assistant to the prime minister".  Noorani implies that Nadeem Bajwa's success is built on his brother Asim Bajwa's corrupt earnings.

General Asim Bajwa's Declaration of Assets


Who is Nadeem Bajwa?

Nadeem Bajwa is General Saleem Bajwa's younger brother. While it is true that Nadeem Bajwa owns a large Papa Johns' franchise business in the United States, there is nothing to support the allegation that this business has been built with funds stolen and remitted from Pakistan. Nadeem Bajwa is a self-made millionaire. His story is, in fact, typical of many successful Pakistani immigrants who have worked hard to achieve entrepreneurial success in America.  The best example of a Pakistani immigrant's franchise success story is that of Shoukat Dhanani whose Dhanani Group's annual revenue is over $2 billion, according to Forbes magazine. Other examples of Pakistani immigrant multi-restaurant franchise success stories include Aziz HashimAslam KhanTabassum MumtazAli ButtShoukat Dhanani and many more. Most of them started as drivers, cooks or cashiers and then bought and built up their franchise successes.

Nadeem Bajwa's Success Story:

Nadeem Bajwa came to the United States as a student in 1991. He took a job as a pizza delivery driver for Domino's while going to college in Indiana. “The delivery driver job was one of the easiest when going to school,” Bajwa told Nation's Restaurant News in 2014. “There wasn’t a lot of stress or pressures and other students were doing it. I heard they made good pay, and every day you just deliver pizzas and make decent tips.”

In 1994, Bajwa took a job with Papa John’s as a driver, was quickly promoted to general manager and then operating partner within 10 months — all while continuing his education. “I was busy, and then when I got promoted I was still finishing up school,” he said. “But when you have goals in mind, you just keep going. Sometimes anxiety isn’t such a bad thing.”  Bajwa signed his first franchise in 2002 and then grew his business from there.

The franchisees such as Nadeem Bajwa's main asset is the prior franchise operations experience they bring. Franchisee and his/her partners/investors must also come up with 10-20% of the total funds needed to start operations. The rest of the money comes from commercial banks or other lenders such as the US Small Business Administration (SBA). Borrower must be creditworthy, typically must contribute some equity, and are expected to repay the loan out of the franchise's cash flow. The franchise loans from US Small Business Administration (SBA) offer the lowest rates. Some franchisers may also offer internal financing, according to Wall Street Journal.

Summary:

Pakistani reporter Ahmad Noorani has made multiple allegations of corruption against CPEC Authority Chairman Asim Bajwa. Of these allegations, the only one that may require further investigation is that General Asim Bajwa may have deliberately understated the value of his wife Farrukh Zeba's shares in Bajco, a company built by Asim Bajwa's brother Nadeem Bajwa who is a self-made millionaire. Undervaluing assets is the kind of allegation that may apply to many Pakistani politicians, judges, bureaucrats and others who are required by law to disclose their assets.  Nadeem Bajwa started in a low-level job in a pizza restaurant and worked his way up. His story is a typical immigrant success story like many other immigrant success stories in America.  Other examples of Pakistani immigrant multi-restaurant franchise success stories include Aziz HashimAslam KhanTabassum MumtazAli ButtShoukat Dhanani and many more. Most of them started as drivers, cooks or cashiers and then bought and built up their franchise successes.

Related Links:

Haq's Musings

South Asia Investor Review

Did Musharraf Steal Public Money? 

Pakistani Leaders in London After Panama Leaks

Edible Arrangements: A Pakistani-American Franchisor's Success Story

Culture of Corruption in Pakistan

Zardari Corruption Probe

President Pervez Musharraf's Legacy

We Hang Petty Thieves and Appoint Great Ones to High Offices

Capitalism's Achilles Heel by Raymond Baker

Nawaz Sharif's Report Card

Riaz Haq's Youtube Channel

Monday, August 31, 2020

Have Modi's Misguided Policies Turned India Into A Beggar Nation?

India is set to receive nearly $500 million in emergency aid from Japan to cope with rising covid19 cases and worsening economy, according to Hindustan Times. This is the largest amount of financial assistance announced by any country so far to support India’s response to the Covid-19 crisis, which has had widespread impacts on the Indian economy and health sector. India’s economy in the organized sector shrank nearly 24% last quarter. It is likely a 40% decline in GDP after the government takes the unorganized sector into account, according to the New York Times. Meanwhile, India is seeing record new daily coronavirus cases and becoming the new epicenter of the covid19 pandemic. Have Indian Prime Minister's misguided policies turned India into a beggar nation? The fact is that India was already the world's biggest recipient of foreign aid even before the pandemic. Pakistan is not even among the top 15 recipients of foreign aid.

India in Crisis:

Many in the world, including India's biggest cheerleader Fareed Zakaria, are beginning to see the stark reality of Modi's India as a big failure on multiple fronts. Indian state has failed to contain the deadly COVID19 pandemic. India’s economy in the organized sector shrank nearly 24% last quarter.  It is likely a 40% decline in GDP after the government takes the unorganized sector into account, according to the New York Times. Meanwhile, India is seeing record new daily coronavirus cases and becoming the new epicenter of the covid19 pandemic.  The country's democracy is in decline. India seems like a roadkill for China. This turn of events has created serious problems for Pakistani "liberals" who have long seen and often cited India as a successful example of "secular democracy" at work in South Asia.
Top Aid Recipients and Their Donors in 2017. Source: Wristband Resources

India World's Top Aid Recipient: 

The Japanese emergency aid of $500 million to India is only the latest instance of multi-billion dollar aid Tokyo has provided to New Delhi in recent years. In fact, India is currently the world's largest recipient of official development assistance (ODA) and Japan is its biggest donor. India's $4.21 billion in assistance is followed by Turkey $4.10 billion, Afghanistan $2.95 billion, Syria $2.77 billion, Ethiopia: $1.94 billion, Bangladesh $1.81 billion, Morocco $1.74 billion, Vietnam $1.61 billion, Iraq $1.60 billion and Indonesia $1.48 billion. Pakistan is not even among the top 15 recipients of foreign aid.

India: Epicenter of COVID19:

India is rapidly becoming the world’s new coronavirus epicenter, setting a record for the biggest single-day rise in cases as experts predict that it’ll soon pass Brazil -- and ultimately the U.S. -- as the worst outbreak globally, according to Bloomberg. Over 78,000 new cases were added in a single day taking the total tally to over 3.6 million. This represented the highest ever one-day surge among all major countries. At the current growth rate, India’s virus cases will eclipse Brazil’s in about a week, and the U.S. in about two months. And unlike the U.S. and Brazil, India’s case growth is still accelerating seven months after the reporting of its first coronavirus case on Jan. 30. The pathogen has only just penetrated the vast rural areas where the bulk of its 1.3 billion population lives, after racing through its dense mega-cities.

COVID19 Growth Fastest in India. Source: Bloomberg


Private International Charity to India:

India tops the list of charity recipients from private foundations while Pakistan is ranked as the 12th largest recipient of philanthropic giving in the world, according to a report released by OECD (Organization for Economic Co-operation and Development).

Private Foundation Philanthropy in Asia. Source: OECD 


Global Philanthropic Foundations:

Philanthropic contributions of major international private foundations in Pakistan totaled  $267 million out of the $42 billion global contribution in  2013-2015.  This compares with $1.6 billion in top-ranked India and $498 billion in second-ranked China.  US-based Bill and Melinda Gates Foundation (BMGF) contributed nearly half of the $42 billion in global charity by private foundations.

Private foundations are filling the huge gaps in public funding of health and education sectors in developing nations. . They contributed  $11 billion for the health sector alone in the three year period, ranking third behind the United States and a global fund for fighting disease.

Massive Western Aid to India:

In addition to being the biggest recipient of private foreign charity,  India has been the number one recipient of official US aid since 1947, according to the US government data.   The country India's first Prime Minister turned to for help during the 1962 China-India war was also the United States.



India has received $65.1 billion in US aid since its independence, making it the top recipient of American economic assistance. Pakistan, with its $44.4 billion, is at number 5 on the list.  US data also shows that Pakistan is not among top 10 for military or total economic and military aid.

Local Charity in Pakistan:

Pakistanis donate generously to local charities in the country in the form of religiously mandated donations such as "zakat, sadaqa and fitrana".  One of the key measures of empathy is generosity to others, the kind of generosity demonstrated in Pakistan by the likes of  late Abul Sattar Edhi. The Edhi Foundation set up by the great man is funded mainly by small donations from ordinary people in Pakistan.

 Anatol Lieven, author of "Pakistan: A Hard Country" wrote the following tribute to the Mr. Edhi:

"There is no sight in Pakistan more moving than to visit some dusty, impoverished small town in an arid wasteland, apparently abandoned by God and all sensible men and certainly abandoned by the Pakistani state and its elected representatives - and to see the flag of Edhi Foundation flying over a concrete shack with a telephone, and the only ambulance in town standing in front. Here, if anywhere in Pakistan, lies the truth of human religion and human morality."  

What Professor Anatol Lieven describes as "human religion and human morality" is the very essence of the Huqooq-ul-Ibad (Human Rights) in Islam. Abdus Sattar Edhi understood it well when he said, "there's no religion higher than humanity".

Edhi understood the meaning of what the Quran, the Muslim holy book, says in chapter 2 verse 177:

"Righteousness is not that ye turn your faces towards the east or the west, but righteous is, one who believes in God, and the last day, and the angels, and the Book, and the prophets, and who gives wealth for His love to kindred, and orphans, and the poor, and the son of the road, beggars, and those in captivity; and who is steadfast in prayers, and gives alms."

A recent article written by Shazia M. Amjad and Muhammad Ali and published in Stanford Social Innovation Review said that "Pakistan is a generous country. It contributes more than one percent of its GDP to charity, which pushes it into the ranks of far wealthier countries like the United Kingdom (1.3 percent GDP to charity) and Canada (1.2 percent of GDP), and around twice what India gives relative to GDP."

OECD says corporate donations in Pakistan have increased from  $4.5 million to $56.4 million over the last 15 years. Corporate donations are dwarfed by individual donations made as zakat, sadaqa and fitrana as commanded by the Quran.

In addition to zakat, sadaqa and fitrana, Pakistanis spent about $3.5 billion on Eid ul Azha in 2017, according to analysts. This included sacrifice of $2.8 billion worth of livestock and another $700 million on clothes,  shoes, jewelry and various services. This amount represent a huge transfer of wealth from urban to rural population, including many rural poor, in the country. It also brings philanthropic donations of Rs. 2.5 billion to Rs. 3 billion ($25-30 million) worth of animal hides which are sold to the nation's leather industry.

Empathy Study:

A Michigan State University (MSU) study of 63 countries finds that Pakistanis have higher empathy for others than people in their neighboring countries. It also finds that the United States is among the most empathetic nations in the world.





The MSU researchers, led by William J. Chopik,  analyzed the data from an online survey on empathy completed by more than 104,000 people from around the world.

The survey measured people’s compassion for others and their tendency to imagine others’ point of view. Countries with small sample sizes were excluded (including most nations in Africa). All told, 63 countries were ranked in the study, according to MSUToday, a publication of Michigan State University.

Summary:

India's biggest cheerleaders, including Fareed Zakaria, are beginning to see the stark reality of Modi's India as a big failure on multiple fronts. India is set to receive nearly $500 million in emergency aid from Japan to cope with rising covid19 cases and worsening economy, according to Hindustan Times. This Japanese emergency aid of $500 million to India is only the latest instance of multi-billion dollar aid Tokyo has provided to New Delhi in recent years. In fact, India is currently the world's largest recipient of official development assistance (ODA) and Japan is its biggest donor. India was already the world's biggest recipient of foreign aid even before the pandemic. Pakistan is not even among the top 15 recipients of foreign aid.  This $500 million is the largest amount of financial assistance announced by any country so far to support India’s response to the Covid-19 crisis, which has had widespread impacts on the economy and health sector. India’s economy in the organized sector shrank nearly 24% last quarter. It is likely a 40% decline in GDP after the government takes the unorganized sector into account, according to the New York Times. Meanwhile, India is seeing record new daily coronavirus cases and becoming the new epicenter of the covid19 pandemic. Have Indian Prime Minister's misguided policies turned India into a beggar nation?

Related Links:

Haq's Musings

South Asia Investor Review

Is Fareed Zakaria Souring on India? 

Pakistan Success Against COVID19

Study Says Pakistanis Have Higher Empathy Than Neighbors

Comparing Median Wealth and Income in India and Pakistan

Eid ul Azha Economy

Foreign Aid Pouring in India

Huqooq-ul-Ibad in Islam

Philanthropy in Pakistan

Panama Leaks Scandal

Misaq-e-Madina Guided Quaid-e-Azam's Vision of Pakistan

Interfaith Relations in Islam


Riaz Haq's Youtube Channel