Tuesday, August 19, 2008

Musharraf's Economic Legacy


Regardless of the criticism of President Musharraf's politics or personality, there is general agreement among independent economists that, through his structural reforms and economic management, President Musharraf left Pakistan's economy in much better shape than he found it when he seized power in 1999.

Here are some of the key highlights of the results of Musharraf era economy:

1. Pakistan's tax base and government revenue collection more than doubled from about Rs. 500b to over Rs. 1 trillion.

2. Pakistan's GDP more than doubled to $144b since 1999.

3. Most recent figures in 2007 indicate that Pakistan's total debt stands at 56% of GDP, significantly lower than the 99% of GDP in 1999.

4. Pakistan attracted over $5 billion in foreign direct investment in the 2006-07 fiscal year, ten times the figure of 2000-01. Contrary to accusations by Musharraf's detractors that it was an artificial consumer-led growth, it was really an investment-led boom that Pakistan experienced in Musharraf years.


5. In spite of the election-related political turmoil, Pakistan’s economy maintained its momentum in 2007, growing by 7%, slightly more than the 6.6% for 2006. Agricultural sector growth recovered sharply, from 1.6% in 2006 to 5% in 2007, while the manufacturing sector growth continued at 8.4% in 2007, slightly more moderate than the 10% for 2006. Services grew at 8% in 2007, down from 9.6% in 2006.


6. The strong consumer demand in Pakistan drove large investments in real estate, construction, communications, automobile manufacturing, banking and various consumer goods. Millions of new jobs were created. By all accounts, the ranks of the middle class swelled in Pakistan during Shaukat Aziz's term in office. According to Tara Vishwanath, the World Bank's lead economist for South Asia, about 5% of Pakistanis moved from the poor to the middle class in three years from 2001-2004, the most recent figures available. In 2007, analysts at Standard Chartered bank estimated that Pakistan has a middle class of 30 million which earns an average of about $10,000 per year. And adjusted for purchasing power parity (PPP), Pakistan's per capita GDP is approaching $3,000 per head.


7. The Karachi stock market surged ten fold from 2001 to 2007.

8. Pakistan positioned itself as one of the four fastest growing economies in the Asian region during 2000-07 with its growth averaging 7.0 per cent per year for most of this period. As a result of strong economic growth, Pakistan succeeded in reducing poverty by one-half, creating almost 13 million jobs, halving the country's debt burden, raising foreign exchange reserves to a comfortable position and propping the country's exchange rate, restoring investors' confidence and most importantly, taking Pakistan out of the IMF Program.




9. Funding for higher education was increased five fold resulting in massive new enrollment of students and huge strides in research publications.

10. Pakistan is more egalitarian than its neighbors. The CIA World Factbook reports Pakistan’s Gini Index has decreased from 41 in 1998-99 to 30.6 in 2007-8, lower than India's 36.8 and Bangladesh's 33.2.

The Wall Street Journal did a story in September 2007 on Pakistan's start-up boom that said, "Scores of new businesses once unseen in Pakistan, from fitness studios to chic coffee shops to hair-transplant centers, are springing up in the wake of a dramatic economic expansion. As a result, new wealth and unprecedented consumer choice have become part of Pakistan's volatile social mix."

The one sore spot that sticks out in President Musharraf's and Shaukat Aziz's record is their lack of attention to the rising energy needs of the country. Appropriate planning should have comprehended new power plants to support growth forecasts. There were other mistakes as well, such as the decision to export wheat in 2007 that created shortages and price hikes that helped bring down the PML (Q) government and ultimately led to President Musharraf's departure.


Since the takeover by the PPP-PML(N) coalition, there has been a sharp decline in Pakistan's economy. Summing up the current economic situation,the Economist magazine in its June 12 issue says as follows:" (The current) macroeconomic disarray will be familiar to the coalition government led by the Pakistan People's Party of Asif Zardari, and to Nawaz Sharif, whose party provides it “outside support”. Before Mr Sharif was ousted in 1999, the two parties had presided over a decade of corruption and mismanagement. But since then, as the IMF remarked in a report in January, there has been a transformation. Pakistan attracted over $5 billion in foreign direct investment in the 2006-07 fiscal year, ten times the figure of 2000-01. The government's debt fell from 68% of GDP in 2003-04 to less than 55% in 2006-07, and its foreign-exchange reserves reached $16.4 billion as recently as in October." Please read "Pakistani Economy Returning to the Bad Old Days".



The current government hailed the performance of Pakistan's economy under President Musharraf's watch as follows: "Pakistan's economy witnessed a major economic transformation in the last decade. The country's real GDP increased from $60 billion to $170 billion, with per capita income rising from under $500 to over $1000 during 2000-07". It further acknowledged that "the volume of international trade increased from $20 billion to nearly $60 billion. The improved macroeconomic performance enabled Pakistan to re-enter the international capital markets in the mid-2000s. Large capital inflows financed the current account deficit and contributed to an increase in gross official reserves to $14.3 billion at end-June 2007. Buoyant output growth, low inflation, and the government's social policies contributed to a reduction in poverty and improvement in many social indicators". (see MEFP, November 20, 2008, Para 1)



In addition to the improved economy, President Musharraf's policies enabled halving of poverty from 34% in 2000 to 17% in 2008, proliferation of independent radio and television stations, and an expanded middle class, which ultimately led to his downfall.

It was on "dictator" Musharraf's watch that Pakistan saw unprecedented deregulation of the mass media, prolific growth, and vibrant debate that had never occurred before him. None of the "democrats" or "dictators" who ruled before him gave such a gift to the people of Pakistan.

It is this media freedom that I think is Musharraf's best legacy that can not be easily denied or reversed. It'll serve Pakistan well by shining light on the misdeeds of Pakistan's leaders now, and in the future.

Here's a video titled "I Am Pakistan":



Related Links:

Haq's Musings

FDI in Pakistan

Video: Who Says Pakistan Is a Failed State?
Structural Reforms in Pakistan's Economy

President Musharraf Video Defense on Power Crisis

81 comments:

Anonymous said...

Musharraf was doing a good job under the circumstances,to modernize and raise the std of living in Pak.Its unfair to blame him for energy infrastructure.it needs a lot ofcapital right? The US sponsored democratization deal messed it all up.He also miscalculated that lawyers will take it lying down like before. He could have manipulated the evidence or give himself judicial oversight immunity by NRO than outright dismissing the judges.The Americans paid in millions for Al-queda and other operatives picked up by pak intelligence who where illegally taken out of pak. So it makes economic sense for a cash starved country.Its ridiculous and hypocritical to argue the human rights of those terrorists when those billions of aid could make a huge difference in terms of jobs and economic stability.

Riaz Haq said...

While acknowledging Musharraf's many accomplishments, I believe Musharraf was a flawed leader who made many mistakes, particularly in 2007 that led to his downfall. But he lasted 9 years. His current opponents, I believe, have many more flaws than Musharraf. They will not last as long as Musharraf did, but I hope democracy does take roots in Pakistan through the current chaotic process.

Jazzian Butt said...

Seriously, i am feeling sad on his departure, he was a brave leader who faced crises both internally and externally, but now challenging period has been started for existing government, lets see that what government elected by people can do for them. :-)
Live Long Pakistan!!!

opinion786 said...

Pak Economy in 1999 was: $ 75 billion (Source)
Pak Economy in 2007 is: $ 160 billion (Source) and (Source)
Pak Economy in 2008 is: $ 170 billion (Source)



GDP Purchasing Power Parity (PPP) in 1999: $ 270 billion (Source)
GDP Purchasing Power Parity (PPP) in 2007: $ 475.5 billion (Source)
GDP Purchasing Power Parity (PPP) in 2008: $ 504.3 billion (Source)



GDP per Capita Income in 1999: $ 450 (Source)
GDP per Capita Income in 2007: $ 926 (Source)
GDP per Capita Income in 2008: $1085 (Source)



Pak revenue collection 1999: Rs. 305 billion (Source)
Pak revenue collection 2007: Rs. 708 billion (Source) and (Source)

Pak revenue collection 2008: Rs. 990 billion (Source)





Pak Foreign reserves in 1999: $ 1.96 billion (Source)
Pak Foreign reserves in 2007: $ 16.4 billion (Source) and (Source)
Pak Foreign reserves in 2008: $ 8.89 billion (Source)



Pak Exports in 1999: $ 8 billion (Source)
Pak Exports in 2007: $ 18.5 billion (Source)



Textile Exports in 1999: $ 5.5 billion
Textile Exports in 2007: $ 11.2 billion (Source)



KHI stock exchange 1999: $ 5 billion at 700 points
KHI stock exchange 2007: $ 75 billion at 14,000 points (Source)
KHI stock exchange 2008: $ 46 billion at 9,300 points (Source)



Foreign Investment in 1999: $ 301 million (Source)
Foreign Investment in 2007: $ 8.4 billion (Source)



Debt servicing 1999: 65% of GDP (Source) and (Source)
Debt servicing 2007: 28% of GDP (Source) and (Source)

Debt servicing 2008: 27% of GDP (Source)



Poverty level in 1999: 34% (Source) and (Source)
Poverty level in 2007: 24% (Source) and (Source)



Literacy rate in 1999: 45% (Source)
Literacy rate in 2007: 53% (Source)



Pak Development programs 1999: Rs. 80 billion (Source)
Pak Development programs 2007: Rs. 520 billion (Source)
Pak Development programs 2008: Rs. 549.7 billion (Source)


For sources: http://presidentmusharraf.wordpress.com/2008/07/01/economic-comparison-1999-2007-and-beyond/

Riaz Haq said...

Final resolution of Kashmir issue based on Musharraf's 4-point formula may, after all, turn out to be another positive legacy of the Musharraf rule.

Mirwaiz confirmed to the Indian Express in a recent interview that the four-point formula proposed by former Pakistani President Musharraf is being revived to try and settle the Kashmir issues. The Musharraf formula envisions soft or porous borders in Kashmir with freedom of movement for the Kashmiris; exceptional autonomy or "self-governance" within each region of Kashmir; phased demilitarization of all regions; and finally, a "joint supervisory mechanism," with representatives from India, Pakistan and all parts of Kashmir, to oversee the plan’s implementation.

“India is not ready for the joint-management part of the proposals which talk about joint control of foreign affairs, currency and communications in Kashmir,” Mirwaiz told the Indian Express. “There’s a broader agreement on the other aspects of this settlement model”.

http://www.riazhaq.com/2009/11/chinas-growing-stature-in-south-asia.html

Riaz Haq said...

President Asif Zardari's total assets are estimated at $1.5 billion, according to a NAB filing with Pakistan Supreme Court, reports the News:

ISLAMABAD: The National Accountability Bureau (NAB) on Tuesday submitted in the Supreme Court the list of the NRO beneficiaries, which showed President Asif Ali Zardari possessing assets worth $1.5 billion (Rs 120 billion) abroad and worth Rs 24.14 billion in the country.

Deputy Prosecutor General Abdul Baseer Qureshi presented the list of 248 NRO beneficiaries before the full court, hearing the petitions challenging the infamous ordinance, promulgated in 2007 giving legal cover to the corruption of politicians and bureaucrats

A 17-member bench of the apex court, headed by Chief Justice Iftikhar Muhammad Chaudhry, had directed the NAB the other day to submit authentic details of the NRO beneficiaries. According to the list, there are at least seven abolished references against President Zardari. The list indicates that the assets of President Asif Ali Zardari in foreign countries stand at $1.5 billion, including houses and bank accounts in Spain, France, the US and Britain while his assets in the country stand at Rs 24.14 billion.

In the list, President Zardari’s assets worth Rs 22 billion were mentioned as beyond means and the cases in this regard were withdrawn by the Accountability Court on March 5, 2008, under the controversial NRO.

Similarly, cases of corruption of Rs 268.3 million regarding the purchase of Ursus Tractors (Awami Scheme) and illegal construction of the polo ground at the PM House at the cost of Rs 52.297 million were terminated under the NRO in March 2008.Likewise, the list also includes allegedly causing loss of Rs 1.822 billion to the national exchequer by President Zardari by granting licence to the ARY Gold. The said case was also terminated under the NRO ordinance.

The NAB deputy prosecutor general told the court that information regarding the misuse of authority in affairs of SGS PSI Company by Asif Ali Zardari as well as illegal award of contract to Cotecna for pre-shipment was being collected.

The NAB list included names of Interior Minister Rehman Malik, Pakistan’s Ambassador to United States Hussain Haqqani, Defence Minister Chaudhry Ahmed Mukhtar, former NWFP chief minister Aftab Sherpao Khan, ex MNAs Nawab Yousaf Talpur, Anwar Saifullah Khan, Sardar Mansoor Leghari, Haji Nawaz Khokhar, Pir Mukarramul Haq, Brig (retd) Imtiaz, Usman Farooqi, Salman Farooqi, former president Habib Bank Younus Dalmia, Mirbaz Khetran and many others.

He submitted that the National Assembly’s standing committee approved the NRO, however, the concerned minister took it back from the assembly. During the proceedings, advocates general of the Punjab, the NWFP and Balochistan informed the court that under Section 2-A of NRO, no review boards were constituted in their respective provinces to decide the murder cases.

Advocate General Sindh Yousaf Leghari, however, informed the court that 8,000 cases were dropped under the NRO in Sindh, of which 3,000 were murder cases. He sought time to provide details of the cases decided under Section 2-A of the NRO in Sindh. The court directed the AG Sindh to submit report before the court today (Wednesday).

Abdul Hafeez Pirzada, counsel for Dr Mubashar Hassan, submitted the ordinance as whole was void because it was a fraud ordinance as it violated many substantial provisions of the Constitution.

He submitted that reconciliation meant reconciliation between husband and wife, between parents but this National Reconciliation Ordinance had trampled the rights of the entire nation. Pirzada contended that all stakeholders were not taken into confidence before its promulgation. “The nation is threatened with fragmentation,” Pirzada maintained.

Riaz Haq said...

The corruption of Pakistani politicians is exceeded only by their incompetence. With economy in virtual recession, the FDI is dropping as reported by The News:

Thursday, December 17, 2009
KARACHI: Net foreign investment in Pakistan fell 25.6 per cent to $1.08 billion in the first five months of the 2009/10 fiscal year compared with $1.45 billion in the same period a year earlier, the central bank said on Wednesday.

Out of total foreign investment, foreign direct investment fell 52.2 per cent to $774.0 million in the first five months of the fiscal year which began on July 1 from $1.62 billion for the same months last year, the State Bank of Pakistan said.

But foreign portfolio investment flows reversed, with a $311.3 million inflow in the July to November period compared with an outflow of $162.9 million in the same period last year.

Authorities imposed a floor on the Karachi Stock Exchange benchmark index in August last year as political uncertainty and economic and security worries drained investor confidence.

The floor discouraged new investment and also led to a sharp outflow of funds, as foreign investors sold holdings in off-market trade.

The floor was removed in December. The International Monetary Fund (IMF) saved Pakistan from a balance of payments crisis with a $7.6 billion emergency loan package in November last year. The loan was increased to $11.3 billion on July 31.

Pakistan’s economy is in virtual recession as gross domestic product growth in the 2008/09 fiscal year of 2 per cent is about the same as population growth. The IMF has projected GDP growth flat at 2 per cent this fiscal year.

Security concerns over a Taliban insurgency based in the country’s northwest and chronic power shortages have also put off investors.

Riaz Haq said...

Here's a ranking of ease of doing business in South Asia that puts Pakistan well ahead of India:

Bangalore: The business environment in Pakistan and Bangladesh is far better than in India. According to the latest 'Doing Business Index', India's business environment has become tougher during the years compared to other nations.

Economies are ranked from one to 183 on the basis of their regulatory environment being conducive to business operations. All of India's neighbors except Afghanistan have been ranked better. While India is ranked 133, Pakistan is ranked 85th followed by Sri Lanka (105), Bangladesh (119) and Nepal (123).

"India is a consistent reformer for the past many years. A country's rank in the index is an average of 10 indicators, each with 10 percent weight in the index. India increased the number of judges in the specialized debt recovery tribunals, which led to a major removal of blockages. While India reformed in the area of insolvency, other countries reformed in more than one area," World Bank's Senior Strategy Advisor, Dahlia Khalifa told Economic Times explaining why India has been overtaken by other nations.

The 2010 Doing Business Report prepared by World Bank and the International Finance Corporation averages a country's percentile ranking on 10 topics, made up of a variety of indicators. This includes examining a country's business environment in terms of starting a business, dealing with construction permit, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.

The first place is occupied by Singapore, which is followed by New Zealand, Hong Kong and the U.S.

To see complete rankings and report, click here: http://www.doingbusiness.org/EconomyRankings/"

Riaz Haq said...

Here's an interesting analysis of how Pakistan has changed in this decade by a Ahsan, a blogger on Five Rupees:

In the last decade, this picture has changed dramatically due to three central factors.

The first and most important factor is the explosion of private electronic media. In the 1990s, it was difficult for most Pakistanis -- the vast majority of which cannot or do not read newspapers -- to get information that was not government-sponsored or, less mildly, propagandistic. ....

This picture has changed drastically, as anyone with even a cursory interest in Pakistan will be able to tell you. There are now dozens of news channels in Pakistan, each with their own ideological and partisan bent. Some are national-level, others more regionally and ethnically focused. The trend began in the early part of this decade and has plateaued only recently, as the market gets sated. And while few of these channels will win awards for calm understatement or presciently sedate analysis, the fact remains that the media -- if it can be spoken of as a collective -- has given voice to a mass of the population previously unheard from. It has become a player of truly monumental importance for its ability to shape, mold, and excite the public. It is, at once, sensationalistic, blood-thirsty, xenophobic, conspiratorial, humorous, investigative, and anti-government. And yet its arrival on the scene is more than welcome, first for providing the venue for disenfranchised interests to make themselves known and second because the alternative is much worse.

The second significant factor, related to but distinct from the first, is the rise of communication technologies in Pakistan, particularly cellular phones. In 2002, there were 1.2 million cell-phone subscriptions in the country. By 2008, this number had risen to 88 million -- an increase of more than seven thousand percent. In addition, more than one in ten Pakistanis had access to the internet by the end of the decade; low by advanced countries' standards but an astronomical rise by Pakistan's. These developments in communications meant that political narratives became congealed and disseminated at speeds never heard of before, and that information and the wider "war" for public opinion became incredibly hard to win if a battle was lost at any stage.

The third major factor is the economic growth that took place in Pakistan in the first half of the 2000s. Pakistan's GDP doubled between 1999 and 2007, and more than kept pace with population growth, as GDP per capita increased by almost sixty percent between 2000 and 2008. More to the point, this growth was overwhelmingly powered by expansion of the service sector, which is concentrated, quite naturally, in the urban centers of the country. For the first time since independence, the term "Pakistani urban middle class" was not a contradiction in terms.

This development had two effects. First, and more trivially, the urban middle class did what urban middle classes do: they bought televisions and computers. In turn, that allowed them to plug into the private media explosion in ways simply unimaginable previously. Second, it shattered the elite-only edifice of Pakistani politics, and made challenges to government based on Main Street issues -- the price of flour, the lack of electricity, the selective application of the rule of law -- a viable process. Fifty years ago, Seymour Lipset wrote one of the canonical articles in Political Science on the process of democratization, its relationship to urbanized middle classes, and how the demands and values of the latter lead almost inexorably to support for the former. Here was living proof of Lipset's analysis.

Riaz Haq said...

Here's a Dawn story about the duplicity of Pakistan's "democratic leaders" published Jan 16, 2009:

ISLAMABAD: While publicly it criticizes former President Musharraf for the present economic mess, the government in its official documents has appreciated the economic policies of the previous regime that became a strong base for seeking loans from multilateral donors and friends of Pakistan.

The PPP-led coalition partners have been blaming Musharraf regime in public speeches for fudging economic figures to paint a rosy picture, while its overall policies pushed the country into economic crisis.

The letter of intent (LoI), on the basis of which, Pakistan sought the much-needed $7.6 billion bailout package from the International Monitory Fund (IMF), has bit by bit appreciated the Musharraf policies since 2000.

During the past one decade (1999-2007), the LoI says Pakistan’s economy witnessed a major economic transformation from substantial increase in the volume of gross domestic product (GDP) to greater international trade.

Talking to Dawn on Thursday former Finance Minister Ishaq Dar said whatever he said about the health of economy was based on the balance sheet existed on March 31, 2008. He said the balance sheet was dully approved by the then cabinet headed by Prime Minister Syed Yousuf Raza Gilani.

He said no body denied the contents of the balance sheet. The focus of the previous economic policy was on promotion of consumerism without supporting the industrial base.

Apparently not willing to agree with the LoI contents, he said though he has a different view of the past economic growth but quickly added the same was destroyed in the last 15 months of the military led dictator.

An official source requesting not to be named said the economic wizards in the finance ministry are not politicians to make only speeches but they have to look into ground realities. ‘We reported to IMF whatever is factual and based on evidence,’ the official added.

The LoI said the country’s real GDP increased from $60 billion in 2000-01 to $170 billion in 2007-08 with per capital income rising from under $500 to over $1000. During the same period, the volume of international trade increased to nearly $60 billion from $20 billion.

For most of this period, real GDP grew at more than 7 per cent a year with relative price stability. The improved macroeconomic performance enabled Pakistan to re-enter the international capital markets in the mid-2000s. Buoyant output growth, low inflation, and the government’s social policies contributed to a reduction in poverty and an improvement in many social indicators.

Former Finance Minister Dr Salman Shah told this scribe the government has made the 170 million people fool while telling them pack of lies in the past nine months about the economic policies of the Mushrraf regime.

He said that as the present government acknowledged in black and white, the impressive past growth made their way easier to make access to the new facility of the IMF for emerging markets hit by the crisis to support the balance of payment problems.

Had growth not been achieved, Pakistan would have to apply for other long term IMF financing facilities like poverty reduction, structural adjustments etc, Shah said adding government should tell truth to the nation if they have confidence.

‘The recruitment made so far for running the finances of this country is very depressing. This shows this government has neither commitment nor capabilities to take the country out of the current crisis,’ Dr Salman said.

Riaz Haq said...

The economic results of the decade of 1999-2009 speak much louder than any denials of the reality by the naysayers and Mush bashers, who are highly politicized but mostly clueless about good governance, economy, investing and business.

They are unaware of the best kept secret that Pakistani markets significantly outperformed those in the much hyped BRIC nations by a wide margin.

Pakistan's key share index KSE-100 was just over 1000 points at the end of 1999, and it closed at over 9727.40 on Dec 31, 2009. Pakistan rupee remained quite stable at 60 rupees to a US dollar until 2008, slipping only recently to about 80 rupees to a dollar. In spite of the currency decline, Pakistan's KSE-100 stock index surged 55% in 2009 in US dollar terms and 65% in rupee terms, after the IMF bailout that forced the current government to acknowledge the good policies and achievements during Musharaf years.

During the same period of 1999-2009, Mumbai Sensex index moved from just over 5000 points to close at 17,464.81. If you had invested $100 in KSE-100 stocks on Dec. 31, 1999, you'd have over $900 today, while $100 invested in the Mumbai's Sensex stocks would be worth $274. Investment of $100 in emerging-market stocks in general on Dec. 31, 1999, would get you about $262 today, while $100 invested in the S&P500 would be worth $91.

Pakistan's KSE-100 stock index surged 55% in 2009 in US dollar terms and 65% in rupee terms, in a year that also saw the South Asian nation wracked by increased violence and its state institutions described by various media talking heads as being on the verge of collapse. Even more surprising is the whopping 825% increase in KSE-100 from 1999 to 2009, which makes it a significantly better performer than the BRIC nations. BRIC darling China has actually underperformed its peers, rising only 150 percent compared with energy-rich Brazil (520 percent) and Russia (326 percent) or well-regulated India (274 percent), which some investors see as a safer and more diverse bet compared with the Chinese equity market, which is dominated by bank stocks. This is the kind of performance that has got the attention of some of the top investors and investment firms around the world.

While such obviously breath-taking results may not mean much to those determined to deny the achievements of a "dictator", they are not lost on smart investors, like those at Goldman Sachs and Franklin Templeton, both of whom are bullish on Pakistan, in spite of its current difficulties. Musharraf's legacy will live on with the investors' faith in Pakistan.

http://www.riazhaq.com/2010/01/karachi-tops-mumbai-in-stock.html

Riaz Haq said...

Dr. Ashfaque H. Khan, Dean of NUST Business School, has written a guest post on this blog. Here are some excerpts from it:

" Pakistan positioned itself as one of the four fastest growing economies in the Asian region during 2000-07 with its growth averaging 7.0 per cent per year for most of this period. As a result of strong economic growth, Pakistan succeeded in reducing poverty by one-half, creating almost 13 million jobs, halving the country's debt burden, raising foreign exchange reserves to a comfortable position and propping the country's exchange rate, restoring investors' confidence and most importantly, taking Pakistan out of the IMF Program.

The present government inherited a relatively sound economy on March 31, 2008. It inherited foreign exchange reserves of $13.3 billion, exchange rate at Rs62.76 per US dollar, the KSE index at 15,125 with market capitalization at $74 billion, inflation at 20.6 per cent and the country's debt burden on a declining path. The government itself acknowledged in the same document that "the macroeconomic situation deteriorated significantly in 2007/08 and the first four months of 2008/09 owing to adverse security developments, large exogenous price shocks (oil and food), global financial turmoil, and policy inaction during the political transition to the new government". (Para 3 of the MEFP, November 20, 2008)"

Riaz Haq said...

Here's an excerpt from William Dalrymple's book "Nine Lives" about Bhuttos:

Benazir was a notably inept administrator. During her first 20-month-long premiership, she failed to pass a single piece of major legislation, and during her two periods in power she did almost nothing to help the liberal causes she espoused so enthusiastically to the Western media.

Instead, it was under her watch that Pakistan’s secret service, the Inter-Services Intelligence (ISI), helped install the Taliban in Pakistan, and she did nothing to rein in the agency’s disastrous policy of training up Islamist jihadis from the country’s madrasas to do the ISI’s dirty work in Kashmir and Afghanistan. As a young correspondent covering the conflict in Kashmir in the late 1980s and early 1990s, I saw how during her premiership, Pakistan sidelined the Kashmiris’ own secular resistance movement, the Jammu and Kashmir Liberation Front, and instead gave aid and training to the brutal Islamist outfits it created and controlled, such as Lashkar-e-Toiba and Harkat ul-Mujahedin. Benazir’s administration, in other words, helped train the very assassins who are most likely to have shot her.

Benazir was, above all, a feudal landowner, whose family owned great tracts of Sindh, and with the sense of entitlement this produced. Democracy has never thrived in Pakistan in part because landowning remains the base from which politicians emerge. In this sense, Pakistani democracy in Pakistan is really a form of “elective feudalism”: the Bhuttos’ feudal friends and allies were nominated for seats by Benazir, and these landowners made sure their peasants voted them in.

Behind Pakistan’s swings between military government and democracy lies a surprising continuity of elitist interests: to some extent, Pakistan’s industrial, military and landowning classes are all interrelated, and they look after each other. They do not, however, do much to look after the poor. The government education system barely functions in Pakistan, and for the poor, justice is almost impossible to come by. According to the political scientist Ayesha Siddiqa, “Both the military and the political parties have all failed to create an environment where the poor can get what they need from the state. So the poor have begun to look for alternatives. In the long term, these flaws in the system will create more room for the fundamentalists.”

Many right-wing commentators on the Islamic world tend to see political Islam as an anti-liberal and irrational form of “Islamo-fascism”. Yet much of the success of the Islamists in countries such as Pakistan comes from the Islamists’ ability to portray themselves as champions of social justice, fighting people like Benazir Bhutto from the corrupt Westernised elite that rules most of the Muslim world from Karachi to Riyadh, Ramallah and Algiers.

Benazir’s reputation for massive corruption was gold dust to these Islamic revolutionaries, just as the excesses of the Shah were to their counterparts in Iran 30 years earlier: during her government, Pakistan was declared one of the three most corrupt countries in the world, and Bhutto and her husband, Asif Zardari — widely known as “Mr 10%” — faced allegations of plundering the country; charges were filed in Pakistan, Spain, Switzerland, the United Kingdom and the United States to investigate their various bank accounts, and they stood accused of jointly looting no less than $1.4 billion from the state.

Riaz Haq said...

Here's an excerpt from Pakistan's consumer electronics market report:

Pakistan’s consumer electronics market, defined as the addressable market for computing devices, mobile handsets and AV products, is projected to be worth around US$1.6bn in 2010. Underlying demand will grow at a CAGR of about 7%, but spending will be restrained by a sizable grey market of smuggled or illegally assembled products.
The market’s considerable potential is currently depressed by a large grey market, poor IP protection, an unstable economic and security situation and weak distribution channels. Growth will be driven, however, by improved ICT infrastructure, and more credit availability. Reform of often high national and provincial taxes and tariffs on products ranging from computers to prepaid mobile cards would also boost the market.
Computer Computers accounted for around 18% of Pakistan’s consumer electronics spending in 2009. BMI forecasts Pakistan’s domestic market computer sales (including notebooks and accessories) of US$283mn in 2010, up from US$264mn in 2009. Computer hardware CAGR for the 2010- 2014 period will be around 7%. The abolition in September 2009 of a minimum sales tax on imported computers should boost the market.
AV AV devices accounted for around 40% of Pakistan’s consumer electronics spending in 2008. Pakistan’s domestic AV device market is projected at US$632mn in 2010. The market is expected to grow at a CAGR of 11% between 2010-2014, to a value of US$946mn in 2014. TV sets remain the core product in this category, but the growing availability of smuggled colour televisions is a market inhibitor.
Mobile Handsets Pakistan’s market handset sales are expected to grow at a CAGR of 1% to 18.8mn units in 2014, as mobile subscriber penetration reaches 91%. Revenue growth will be slower due to lower average selling prices (ASPs) of mobile handsets, with most handsets sold at a under US$40 price-point. Another issue is a declining growth rate of mobile subscriber penetration, which is now above 60%.

Riaz Haq said...

Here's an interesting except from analysis of Pakistan, calling it the Next BRIC, by theglobalguru.com:

...much like Russia, Pakistan also has been one of the top-performing stock markets over the past decade. Had you been able to invest in the Karachi Stock Exchange at the turn of the millennium, you'd be sitting on a much bigger pile of profits than, say, if you had invested in the “China miracle.” Pakistan offers yet another lesson in how gleaming skyscrapers offer little guidance in predicting future stock market performance.

Investing in Pakistan: Surprisingly Big

Teeming with 169 million souls, Pakistan is the world's sixth-largest country by population. That makes it smaller than Brazil , but larger that Russia, as well as the “Next BRIC” candidates, Turkey, Mexico, South Korea and Egypt. Bordered by Afghanistan and Iran in the West, India in the East and China in the far Northeast, Pakistan is just about the size of France and the United Kingdom combined.

Pakistan's real per capita GDP of about $1,250 makes your average Pakistani slightly poorer than his counterpart in India -- and far behind the average in booming China. One third of Pakistan's population lives in poverty, and only half of the population is literate. Yet, Standard Chartered bank estimates that Pakistan has a middle class of 30 million that now earns an average of about $10,000 per year. And adjusted for purchasing power parity (PPP), Pakistan's per capita GDP approaches $3,000 per head. But take away that bit of economic affirmative action, and Pakistan's economy drops from the size of New Jersey's down to that of Alabama.

Investing in Pakistan: Edgy Relations with Uncle Sam

In the bad old days of the Soviet Union, Pakistan was a major U.S. ally. That relationship soured after the United States imposed sanctions on Pakistan after it refused to abandon its nuclear program. The “War on Terror” changed all that. After Pakistan ended its support of the Taliban regime in Kabul, American economic and military aid to Pakistan soared to more than $4 billion within three years of the 9/11 attacks. Indeed, American aid has played no small part in helping Pakistan's economy flourish over the past decade or so.

But as with most forms of handouts, gratitude is the least heartfelt of emotions. Anti-Americanism in Pakistan’s free media is just about as virulent as neighboring Iran. The Wall Street Journal’s Pakistan correspondent was ejected from the country after being charged with spying for the United States and Israel. The U.S. State Department advises U.S. citizens not to visit the country and has forbidden the families of its diplomats in Pakistan to visit since 2002.

Investing in Pakistan: A Solid Start to the Millennium

Economically, the first decade of the 21st century has been good to Pakistan. Thanks to economic reforms introduced in 2000 by the former Musharraf government, Pakistan has privatized $5-billion worth of assets, simplified its tax system and attracted large amounts of foreign direct investment (FDI) compared to its GDP. By mid-2005, the Pakistani economy was growing by 8.6%, and the World Bank named Pakistan as the top reformer in its region and among the top 10 reformers globally.

That changed abruptly with the onset of the “Great Recession.” Pakistan's ensuing balance-of-payments crisis and runaway inflation forced the IMF to step in, and offer a $7.6-billion emergency financing package in late 2008. To its credit, the Pakistani government kept its side of the bargain, maintaining its foreign exchange reserves above target and its fiscal deficit below. The Pakistani economic crisis has eased substantially, and in 2010, the economy is expected to grow at least 4%.

... The stock market index in Karachi has risen by more than 1,000% since 1999. And in 2002, Pakistan was the top-performing stock market in the world.

Riaz Haq said...

Here's an interesting view of Pakistan democracy by Ahmad Qureshi:


FAKE DEMOCRATIC WARRIORS: (Gen Faiz Ali) Chishti said that “Several (democratic) champions became leaders while sitting in the laps of army generals.” He listed them as follows:

1. Zulfiqar Ali Bhutto, former Prime Minister of Pakistan [Benefactor: Field Marshal Ayub Khan].

2. Nawaz Sharif, former Prime Minister of Pakistan [Benefactor: Gen. Zia-ul-Haq]

3. Altaf Hussain, the exiled British-Pakistani leader of MQM [Benefactors: Gen. Zia-ul-Haq and Gen. Pervez Musharraf]

4. Jamaat Islami [Benefactors: Gen. Zia-ul-Haq and Gen. Pervez Musharraf]

The irony is that all of them claim that Pakistan’s military should not be involved in major internal decisions when necessary but they never explained why they accepted military help in ascending to power in the first place. Interestingly, despite being discredited as failed and inept, these politicians keep getting second and third chances thanks to the military’s failure to introduce real reforms after every coup. [Also thanks to frequent US and British meddling in our politics for their own objectives. Unfortunately, the Pakistani military has so far been unable to prevent it and, under Musharraf, even took it to new heights!]

Moreover, Pakistani military has maintained an unwritten alliance with this failed political elite, always handing power back to it after every intervention without any attempt to open doors to middle- and lower-class Pakistanis to participate in running their country, especially when they have proven to be more creative in taking Pakistan forward in many areas.

One example is Gen. Musharraf, who came to power with a promise to inject new faces into a stagnant system. Eight years later, he not only failed to do that but ended up restoring some of the worst failed politicians back to power as his replacement. The only credible new political face from the late Musharraf period is Member of National Assembly Marvi Memon. To be fair to her, she was a late entrant who proved her mettle on her own in the two-and-a- half years since Musharraf’s departure. With her patriotic and inclusive views, a large segment of Pakistan’s younger generation identifies with her. But she stands no chance of moving up in a system designed to keep people like her from exercising real power.

THE LOOPHOLE: Mr. Chishti pointed out another irony that exposes the duplicity of the present political elite in Pakistan. An independent Election Commission is what stops military interventionists from legitimizing their rule. So if someone wants to stop future military interventions being endorsed by the country’s courts and parliaments, creating such an independent election commission is the first step. But strangely, despite all the noise over the recent constitutional amendments, called the 18 th Amendment, none of the political parties pushed for an independent election commission. The reason is that an independent election commission would also enforce democracy within the parties, challenging lifetime party presidents and ‘chairpersons’.

COUP DECISION INSTITUTIONAL: He said the decision to impose military rule, or Martial Law, is never a personal decision of one man but a collective one of the Army High Command and is a result of full spectrum assessment of the state of the nation.

WHY MILITARY INTERVENES: Since a military coup is not a one-man-show and hence there is no question of personal ambition, then the right question to ask, says Mr. Chishti, is ‘Why the military intervenes?’ He suggests that tackling the reasons would reduce the possibility of such interventions.

Wise words. But they are falling on deaf ears. The mother of all ironies is that when Pakistan Army has a chief who has gone out of his way to support democracy, and even rescued it on a couple of recent occasions, Pakistan’s democratic warriors are leading the country to a grand national failure of epic proportions with their failure to perform.

Riaz Haq said...

Here's a recent excerpt from a piece by Dawn columnist Irfan Husain about Pakistan's middle class influencing nation's politics:

While external debt increased from $39bn in 1999 to $50bn in 2009, poverty levels have fallen by over 10 per cent since 2001. Indeed, there are now around 30 million Pakistanis who are considered to be in the middle class with an average income of $10,000 annually, while some 17 million are now bracketed with the upper and upper-middle classes.

Even though this does not approach China’s and India’s spectacular progress in this period, it does represent a solid advance. If one factors in the political turmoil the country has gone through, together with its ongoing insurgencies in the tribal areas and Balochistan, Pakistan’s progress has been impressive by any standard.

How do these numbers translate into day-to-day life in Pakistan? To examine the social transformation the country is undergoing, Jason Burke uses the Suzuki Mehran as a yardstick to measure change. In his ‘Letter from Karachi’ published in the current issue of Prospect, the Guardian reporter writes:

“In Pakistan, the hierarchy on the roads reflects that of society. If you are poor, you use the overcrowded buses or a bicycle. Small shopkeepers, rural teachers and better-off farmers are likely to have a $1,500 Chinese or Japanese motorbike…. Then come the Mehran drivers. A rank above them, in air-conditioned Toyota Corolla saloons, are the small businessmen, smaller landlords, more senior army officers and bureaucrats. Finally, there are the luxury four-wheel drives of ‘feudal’ landlords, big businessmen, expats, drug dealers, generals, ministers and elite bureaucrats. The latter may be superior in status, power and wealth, but it is the Mehrans which, by dint of numbers, dominate the roads.”

This growing affluence has already caused a major power shift, with the urban population now having a bigger say after years of being ruled by feudal landowners. As urbanisation gathers pace, Pakistan’s traditional power elite will increasingly come from the cities, and not from the rural hinterland. This will have a profound impact not just on politics, but on society as a whole. As Burke observes in his Prospect article:

“Politically, the Bhutto dynasty’s Pakistan People’s Party, mostly based in rural constituencies and led by feudal landowners, will lose out to the Pakistan Muslim League of Nawaz Sharif with its industrial, commercial, urban constituency. Culturally, the traditional, folksy, tolerant practices in rural areas will decline in favour of more modernised, politicised Islamic strands and identities. And as power and influence shifts away from rural elites once co-opted by colonialism, the few elements of British influence to have survived will fade faster.”

Often, perceptive foreigners spot social trends that escape us because we are too close to them to see the changes going on around us. For instance, Burke identifies the shift away from English, and sees ‘Mehran man’ as urban, middle class and educated outside the elite English-medium system. He sees Muslims being under attack from the West, and genuinely believes that the 9/11 attacks were a part of a CIA/Zionist plot. Actually, my experience is that many highly educated and sophisticated people share this theory.

Burke continues his dissection of the rising Pakistani middle class: “Mehran man is deeply proud of his country. A new identification with the ummah, or the global community of Muslims, paradoxically reinforces rather than degrades his nationalism. For him, Pakistan was founded as an Islamic state, not a state for South Asian Muslims. Mehran man is an ‘Islamo-nationalist’. His country possesses a nuclear bomb….”

Riaz Haq said...

Here's a recent excerpt from a piece by Dawn columnist Irfan Husain about Pakistan's middle class influencing nation's politics:

While external debt increased from $39bn in 1999 to $50bn in 2009, poverty levels have fallen by over 10 per cent since 2001. Indeed, there are now around 30 million Pakistanis who are considered to be in the middle class with an average income of $10,000 annually, while some 17 million are now bracketed with the upper and upper-middle classes.

Even though this does not approach China’s and India’s spectacular progress in this period, it does represent a solid advance. If one factors in the political turmoil the country has gone through, together with its ongoing insurgencies in the tribal areas and Balochistan, Pakistan’s progress has been impressive by any standard.

How do these numbers translate into day-to-day life in Pakistan? To examine the social transformation the country is undergoing, Jason Burke uses the Suzuki Mehran as a yardstick to measure change. In his ‘Letter from Karachi’ published in the current issue of Prospect, the Guardian reporter writes:

“In Pakistan, the hierarchy on the roads reflects that of society. If you are poor, you use the overcrowded buses or a bicycle. Small shopkeepers, rural teachers and better-off farmers are likely to have a $1,500 Chinese or Japanese motorbike…. Then come the Mehran drivers. A rank above them, in air-conditioned Toyota Corolla saloons, are the small businessmen, smaller landlords, more senior army officers and bureaucrats. Finally, there are the luxury four-wheel drives of ‘feudal’ landlords, big businessmen, expats, drug dealers, generals, ministers and elite bureaucrats. The latter may be superior in status, power and wealth, but it is the Mehrans which, by dint of numbers, dominate the roads.”

This growing affluence has already caused a major power shift, with the urban population now having a bigger say after years of being ruled by feudal landowners. As urbanisation gathers pace, Pakistan’s traditional power elite will increasingly come from the cities, and not from the rural hinterland. This will have a profound impact not just on politics, but on society as a whole. As Burke observes in his Prospect article:

“Politically, the Bhutto dynasty’s Pakistan People’s Party, mostly based in rural constituencies and led by feudal landowners, will lose out to the Pakistan Muslim League of Nawaz Sharif with its industrial, commercial, urban constituency. Culturally, the traditional, folksy, tolerant practices in rural areas will decline in favour of more modernised, politicised Islamic strands and identities. And as power and influence shifts away from rural elites once co-opted by colonialism, the few elements of British influence to have survived will fade faster.”

Often, perceptive foreigners spot social trends that escape us because we are too close to them to see the changes going on around us. For instance, Burke identifies the shift away from English, and sees ‘Mehran man’ as urban, middle class and educated outside the elite English-medium system. He sees Muslims being under attack from the West, and genuinely believes that the 9/11 attacks were a part of a CIA/Zionist plot. Actually, my experience is that many highly educated and sophisticated people share this theory.

Burke continues his dissection of the rising Pakistani middle class: “Mehran man is deeply proud of his country. A new identification with the ummah, or the global community of Muslims, paradoxically reinforces rather than degrades his nationalism. For him, Pakistan was founded as an Islamic state, not a state for South Asian Muslims. Mehran man is an ‘Islamo-nationalist’. His country possesses a nuclear bomb….”

Riaz Haq said...

Huma Yusuf blogs for Pakistan's Dawn.com site in Karachi and is a close watcher of new media in Pakistan. She says that in her country, new media has spawned a pithy brand of citizen journalism. The reason: “unlike Indians, we feel like we’re in a state of war”.

She says that during the Pakistan Emergency of 2006-7, Pakistan’s online population grew from 2.5 million to 18 million.

Click here for an MIT media labs paper she published on activism by Pakistan's online population.

Riaz Haq said...

Pakistan is more urbanized with a larger middle class than India as percent of population. In 2007, Standard Chartered Bank analysts and SBP estimated there were 30 to 35 million Pakistanis earning more than $10,000 a year. Of these, about 17 million are in the upper and upper middle class, according to a recent report.

As to India's much hyped middle class, a new report by Nancy Birdsall of Center for Global Development says it is a myth. She has proposed a new definition of the middle class for developing countries in a forthcoming World Bank publication, Equity in a Globalizing World. Birdsall defines the middle class in the developing world to include people with an income above $10 day, but excluding the top 5% of that country. By this definition, India even urban India alone has no middle class; everyone at over $10 a day is in the top 5% of the country.

This is a combination both of the depth of India's poverty and its inequality. China had no middle class in 1990, but by 2005, had a small urban middle class (3% of the population). South Africa (7%), Russia (30%) and Brazil (19%) all had sizable middle classes in 2005.

Riaz Haq said...

Here's IEMR research report forecasting 135 million mobile phone subscribers in Pakistan by 2014:

(M2 PressWIRE Via Acquire Media NewsEdge) Vancouver, -- IE Market Research Corp. (IEMR), the Canadian-based provider of market intelligence services, announced today the release of its 1Q.2010 Pakistan Mobile Operator Forecast, 2009 - 2014.

"The wireless penetration rate is still low in Pakistan at approximately 60% in 2009, and we expect that the country's wireless market will continue to show strong growth. Our model forecasts that total mobile subscribers in Pakistan will increase from 96 million in 2009 to 134.8 million in 2014," said Nizar Assanie, Vice President (Research) at IEMR. "Mobilink will continue to be the largest player in Pakistan's mobile operator space over the next five years. We expect that Mobilink will have 36 million mobile subscribers in 2014. Also, given the latest quarter numbers, our model predicts that Ufone will have 25.8 million, Telenor will have 29 million, and Warid will have 25.3 million mobile subscribers by the end of 2014." "ARPU levels remain low in Pakistan's mobile operator space. We expect that the industry average ARPU will remain in the range of US$ 2 - US$ 3 over the next five years. Our model predicts that, in 2014, Mobilink's monthly ARPU will be at highest among operators at US$ 2.64. The operator with the lowest monthly ARPU will be Warid Telecom with US$ 1.67 in 2014," said Mr. Assanie.

IEMR's Pakistan Mobile Operator Forecast covers up to 50 financial and operational metrics on wireless operators in Pakistan - Mobilink (Pakistan Mobile Communications Limited), Ufone GSM, China Mobile Ltd. (Zong, formerly Paktel), Instaphone, Telenor ASA, and Warid Telecom International. Notable highlights of the 1Q10 Pakistan Mobile Operator Forecast include: * In terms of shares of total subscribers, we expect that Mobilink's market share will decline over the next five years, from 30% in 2009 to 26.7% in 2014. On the other hand, we expect China Mobile Pakistan's market share to increase from 8% in 2009 to 13.7% in 2014. We also forecast that market shares at Ufone, Telenor, and Warid will be approximately 19.2%, 21.6% and 18.8% respectively in 2014.

* Given the excellent performance by Norway's Telenor in Pakistan's wireless market in the recent past, our model forecasts that its EBITDA margin (calculated as EBITDA / reported revenue) will be increasing from about 23% in 2009 to 35% in 2014. On the other hand, we think that Mobilink will maintain its EBITDA margin of approximately 35% over the forecast period, 2010 - 2014.

Riaz Haq said...

In the last two years since the resignation of President Musharraf, the corruption perception has worsened in Pakistan, according to the latest Transparency International Corruption report 2010. Though the 2009 Corruption Survey Report was an eye-opener, but this year it was shocking Khyber Pakhtoon Khawa Province (former N.W.F.P) beat all the provinces and has the highest rate of corruption in Pakistan. Here Here are some of the highlights of this report.

* The report titled the National Corruption Perception Survey 2010 showed a high rise in corruption from 195 billion rupees in the year 2009 to 223 billion rupees in the year 2010.
* Bureaucracy and Police had maintained their ranking as the two of the most corrupt departments in public sector in 2010.
* Land administration departments were placed third in corrupt practices.
* Corruption in the judiciary, local government and education sectors has also increased as compared to the last year.
* Syed Adil Gilani chairman of TIP said that about 70 % of people believed that the previous military regime of General Pervez Musharraf was less corrupt then the present Pakistan People's Party (PPP) led coalition government.
* In terms of bribery, land administration was the most corrupt sector, where average bribe paid in each incident was 46, 414 rupees.
* KPK (NWFP) is highlighted to be the most corrupt of all the provinces.

Riaz Haq said...

The western media coverage of Pakistan is almost always one dimensional, and sometimes downright venom-filled, as the piece (and its accompanying illustration of scorpion) from the Economist titled "Land of the Impure" shows in abundance. Here is an excerpt from it:

THREE score years and a bit after its founding, Pakistan—which means land of the pure—still struggles to look like a nation. Economically backward, politically stunted and terrorised by religious extremists, it would be enough to make anyone nervous, even if it did not have nuclear weapons. For these shortcomings, most of the blame should be laid at the door of the army, which claims, more than any other institution, to embody nationhood. Grossly unfair? If the army stood before one of its own tribunals, the charge sheet would surely run as follows:

One, a taste for military adventurism on its “eastern front” against giant India, which has undermined security, not enhanced it. No adventure was more disastrous than the one in 1971, which hastened the loss of East Pakistan, present-day Bangladesh. More recently, in 1999, General Pervez Musharraf, then army chief, sent troops into Indian-controlled Kashmir without deigning to inform the prime minister, Nawaz Sharif. Mr Musharraf thus forced a confrontation between two nuclear states. It was an international public-relations debacle for Pakistan. Today the army remains wedded to the “India threat”. India, meanwhile, for all its gross abuses in Kashmir, is more concerned about economic development than invading Pakistan.

Two, endangering the state’s existence by making common cause with jihadism. This policy started with General Zia ul-Haq’s “Islamisation” policies in the late 1970s. After the Soviet Union invaded Afghanistan in 1979, Pakistan (along with the CIA) financed the Afghan mujahideen opposition. The policy turned into support for the Taliban when the movement swept into power in the mid-1990s. Taliban support continues today, even though Pakistan is America’s supposed ally in Afghanistan’s anti-Taliban counterinsurgency. A new report by the London School of Economics claims that not only does Pakistan’s Inter-Services Intelligence (ISI) spy agency finance the Afghan Taliban, but the ISI is even represented on the Taliban’s leadership council. The claims have been loudly rejected, but in private Pakistani military men admit that corners of the army do indeed help the Taliban.

For years both Islamist and liberal generals have also backed jihadists fighting for a Muslim Kashmir. Though vastly outnumbered, the militants have managed to tie down a dozen Indian army divisions. Mr Musharraf and an aide once joked about having such jihadists by their tooti—ie, literally, “taps”, by which he meant their private parts.

Riaz Haq said...

A recent ODI report highlighting India's progress toward MDGs and putting India in the top 20.

Looking at the detailed report, however, it clearly highlights Pakistan along with China in the top 10 in achieving poverty reduction goal MDG1, the most important of MDGs. There is no mention of India on this list in table 4.

http://www.odi.org.uk/resources/download/4908.pdf

Riaz Haq said...

UNDP publishes the Education Index which is measured by the adult literacy rate (with two-thirds weighting) and the combined primary, secondary, and tertiary gross enrollment ratio (with one-third weighting). The adult literacy rate gives an indication of the ability to read and write, while the GER gives an indication of the level of education from kindergarten to postgraduate education.

On this UNDP education index, Pakistan scores 0.665 and ranks 137, ahead of India's score of 0.638 and ranking of 142nd.

Riaz Haq said...

A pre-requisite for a responsive and accountable democracy is a substantial middle class population.

An ADB report on Asia's rising middle class released today confirms that Pakistan's middle class now is 40% of the population, significantly larger than the Indian middle class of about 25% of its population.

The other significant news reported by Wall Street Journal today says the vast majority of what is defined as India's middle class is perched just above $2 a day.

Most of this middle class growth in Pakistan occurred on Musharraf's watch.

Riaz Haq said...

It seems that in India, too, the Army is more honest and competent than the civilians. Here's a rediff report about rapid rebuilding of the collapsed footbridge at Commonwalth Games in Delhi:

It took seven years and Rs. 5 crore for a company to build a Foot Over Bridge (FOB) near the Jawaharlal Nehru [ Images ] Stadium, which then collapsed. The Indian Army [ Images ], which was called in to salvage the Delhi's [ Images ] pride and build a temporary FOB, has done the same job in four days flat and at a fraction of the original cost.

The Indian Army is now applying finishing touches to a Bailey Bridge, after a desperate Commonwealth Games [ Images ] Organising Committee and the Delhi government called them in to erect the temporary structure. The Bailey bridge will be used by spectators to reach the stadium after parking their cars at Safdarjung Airport.

Army officials said that the main structure had been erected by Monday evening, with three piers of varying heights under 20-feet each fixed to support the bridge. Jawans were seen hard at work on the steps going down to the stadium, which technically is the only work remaining to be done. The steps from the parking lot to the bridge had been put in place on Monday. The 12-feet floor of the bridge has also been put in place.

Security personnel from the Delhi police and the Army were seen guarding the worksite. Traffic police had also been deployed to control the traffic on the elevated Barapullah Nullah road to allow the army to carry on with their work.

Over 700 combat engineers from The Madras Engineer Group, informally known as the Madras Sappers (a regiment of the Corps of Engineers of the Indian Army) began work on the bridge on Saturday afternoon. The Indian Army and the Delhi government had said that the bridge, which has three piers and have four spans spread over 250 feet, was expected to be delivered in five days.

"We will conduct a mandatory security test before handing over the bridge.The only addition to a standard Bailey bridge is the insertion of three piers, which we did for safety," Commanding Officer, Colonel Dinesh Khanna told rediff.com

The Bailey bridge is being built at the exact spot where its collapsed predecessor stood. The concrete pillars on either side of Barapullah Nallah road were not damaged when the earlier bridge collapsed and the Bailey bridge will use these pillars as its base, Khanna said.

A Bailey bridge is a temporary military structure used for relief operations like flood or collapsed bridges. All its components are made of metal and are portable. The newly constructed Bailey bridge will be able to accommodate more people than what was estimated of the collapsed bridge, Khanna said.

"The floor of the bridge is about 12-feet wide and can even accommodate vehicles. It will be able to take the weight of more spectators than the current estimates," Khanna added.

The decision to erect the temporary structure was taken after security agencies told civic agencies that the walking route from the parking to the stadium without the bridge would be about a kilometer long.

The 95 metre-long hanging foot-over bridge had collapsed on September 21, injuring 27 people. The bridge was being built along with another over bridge at the cost of Rs 10.5 crore by Chandigarh-based company PNR Infra, which has been blacklisted by the Delhi government.

Riaz Haq said...

Former Pakistani president Gen Pervez Musharraf launched a political party today. Here's a BBC report on his press conference held in London:

Former Pakistan military ruler Pervez Musharraf has apologised for "negative" actions he took while in power, as he launched his new political party, the All Pakistan Muslim League, in London.

Mr Musharraf said: "I... sincerely apologise to the whole nation" for the "negative repercussions".

But he vowed to galvanise Pakistanis and fight a "jihad against poverty, hunger, illiteracy and backwardness".

Correspondents say there is no real likelihood of him returning soon.

Mr Musharraf also appears to lack the kind of political organisation that could win him an election in Pakistan, they say.
'National salvation'

Mr Musharraf unveiled the All Pakistan Muslim League at a gentlemen's club in Whitehall.

There was tight security, with checks on all those entering the room.

Mr Musharraf apologised for some of the actions he took when in power.

"I am aware of the fact that there were some decisions which I took which resulted in negative political repercussions, repercussions which had adverse effects on nation building and national political events, and my popularity also, may I say, plummeted in that last year. I take this opportunity to sincerely apologise to the whole nation."

Mr Musharraf attacked the "total despondency and demoralisation and hopelessness which prevails in society today".

He added: "The time has come to redeem our pledge... to ensure the fruits of freedom are shared by all. The time has come for a new social contract to keep the dream of our forefathers alive... to make Pakistan into a progressive Islamic state for others in the third world to emulate."

Mr Musharraf said he wanted a party of national salvation that would "galvanise all Pakistanis regardless of religion, caste or creed".

Punctuated by chants from supporters, he added: "It is time to unfurl a Muslim league umbrella for all - this umbrella for all shall be the All Pakistan Muslim League."

The former army chief, who now lives in London, earlier told the BBC: "When there is a dysfunctional government and the nation is going down, its economy is going down, there is a clamour, there is a pressure on the military by the people."

He said he was launching the party in London because he risked assassination if he returned to Pakistan. He has survived a number of plots in the past.

Last month, Mr Musharraf told the BBC he would be standing for a seat in the 2013 parliamentary elections. From there he said he hoped to become either prime minister or president.

He made London his base, as a number of Pakistani politicians have done over the years, after his allies lost elections and he was ousted as president in 2008.

If he does go home, he faces legal cases, which he says are politically motivated.

Mr Musharraf seized power in 1999 when, as chief of Pakistan's army, he ousted elected Prime Minister Nawaz Sharif in a coup.

Riaz Haq said...

“Media Subdues The Public. It’s So In India, Certainly”, says Noam Chomsky, Prof Emeritus of Linguistics and Media a MIT.

Here are a few quotes from an Outlook India interview with Noam Chomsky:

"I spent three weeks in India and a week in Pakistan. A friend of mine here, Iqbal Ahmed, told me that I would be surprised to find that the media in Pakistan is more open, free and vibrant than that in India.

In Pakistan, I read the English language media which go to a tiny part of the population. Apparently, the government, no matter how repressive it is, is willing to say to them that you have your fun, we are not going to bother you. So they don’t interfere with it.

The media in India is free, the government doesn’t have the power to control it. But what I saw was that it was pretty restricted, very narrow and provincial and not very informative, leaving out lots of things. What I saw was a small sample. There are very good things in the Indian media, specially the Hindu and a couple of others. But this picture (in India) doesn’t surprise me. In fact, the media situation is not very different in many other countries. The Mexican situation is unusual. La Jornada is the only independent newspaper in the whole hemisphere."

"As soon as the plan to invade Iraq was announced, the media began serving as a propaganda agency for the government. The same was true for Vietnam, for state violence generally. The media is called liberal because it is liberal in the sense that Obama is. For example, he’s considered as the principled critic of the Iraq war. Why? Because, right at the beginning, he said it was a strategic blunder. That’s the extent of his liberalism. You could read such comments in Pravda in 1985. The people said that the invasion of Afghanistan was a strategic blunder. Even the German general staff said that Stalingrad was a strategic blunder. But we don’t call that principled criticism."

"Perhaps the period of greatest real press freedom was in the more free societies of Britain and the US in the late 19th century. There was a great variety of newspapers, most often run by the factory workers, ethnic communities and others. There was a lot of popular involvement. These papers reflected a wide variety of opinions, were widely read too. It was the period of greatest vibrancy in the US. There were efforts, especially in England, to control and censor it. These didn’t work. But two things pretty much eliminated them. One, it was possible for the corporate sector to simply put so much capital into their own newspapers that others couldn’t compete. The other factor was advertising; advertiser-reliance. Advertisers are businesses. When newspapers become dependent on advertisers for their income, they are naturally going to bend to the interest of advertisers.

If you look at the New York Times, maybe the world’s greatest newspaper, they have the concept of news hole. What that means is that in the afternoon when they plan for the following day’s newspaper, the first thing they do is to layout where the advertising is going to be, because that’s an important part of a newspaper. You then put the news in the gaps between advertisements. In television there is a concept called content and fill. The content is the advertising, the fill is car chase, the sexy or whatever you put in to try to keep the viewer watching in between the ads. That’s a natural outcome when you have advertiser-reliance."

Riaz Haq said...

Here is a Daily Times report on inflation in Pakistan:

In Pakistan, 2007, the rate of inflation was 12.5 percent, during 2006-07 it was 21 percent and in July-March 2010 the inflation has been 11.3 percent. The cumulative rate of inflation was 44 percent in three years, from September 2007 to September 2010.

The main reason of food prices inflation was the increase in wheat, petroleum products, electricity and gas responsible to an overall increase in prices. The rising interest rate, high remittances and depreciation of rupee against dollar also fueled the inflation. This situation directly hit the poor and increased poverty level in the country.

A shortfall in the production of some essential commodities also raised food prices. There are 13 food items in essential items’ list which also includes wheat and flour; sugar, poultry, mash pulse, meat, milk, tea, fresh vegetables etc, that account for almost 23 percent of the total weight in the Consumer Price Index (CPI). Prices of food items in general have made food dearer in Pakistan. For instance, the average price of sugar has risen above 41 percent, wheat prices by 17 percent, chicken 24 percent, beef 13 percent and onion prices by 64 percent since July 2008 over April 2009. With a 23 percent weight in CPI, the contribution of these few items to the overall CPI inflation was 18 percent.

Although the world price of sugar has fallen unexpectedly since its peak in January 2010, but it is still up 21 percent year on year (YoY) basis. Dairy prices, on the other hand, have continued to raise their upward march.

Global price increase enhanced inflation sharply and Pakistan has no exception that has affected both globally as well as domestically. India’s food price inflation soared to 19.2 percent in December 2009, 16.7 percent in March. Similarly, food inflation in Bangladesh rose from 3.3 percent in July 2009 to 10.9 percent in February 2010.

Poverty ratio in Pakistan is rapidly rising due to economic slowdown; high inflation and reduction in subsidies compel 40 percent people of the country to lives around the poverty line, as per SBP estimates.

The country’s population has jumped to 184 million in 2010, 119 million in 1990, of which 73 million Pakistanis have fallen below poverty line, SBP said. The poverty level during 2010 rises by 4 percent to 40 percent, from 36.1 percent in 2009.

In the case of Pakistan, the increase in domestic prices of essential commodities remained relatively quiet as compared to the international price movements. However, since January 2010, international prices for some of the commodities like petroleum have fallen more rapidly than in Pakistan.

Riaz Haq said...

Along with healthy economic gowth, the Musharaf era also saw significant reduction in hunger and poverty in Pakistan, according to recent IFPRI and World Bank data.

This reminds us of the whole reason why Dr. Mabhub ul-Haq argued for using social indicators, not just the GDP, as a measure of a nation's well-being.

There is a description of Mahbub ul-Haq's thinking on page 12 of the Human Development Report 2010. It is titled "From Karachi to Sorbonne--Mahbub ul-Haq and the idea of human development".

Dr. Haq was Pakistan's planning commission's chief in 1960s which was seen as a time of great progress because of rapid GDP growth in Pakistan, and every one expected Dr. Mahbub ul-Haq to crow about it and pat himself on the back.

But, as the report puts it, "The young economist shocked his audience by delivering a stinging indictment of Pakistan's development strategy" for favoring the elite at the expense of the poor. A few years later, Mahbub ul-Haq persuaded UNDP to push for research reports and social indicators as an alternative to single-minded focus on GDP.

Riaz Haq said...

Here's Pakistani economist Dr. Ashfaque H. Khan writing about "Pakistan: a forgotten economy" in a piece published by The News:

How has that economy been transformed into a forgotten one in just three years? Unfortunately, the economy never featured on the radar screen of the present government. Additionally, the government lacked a credible economic team. In less than three years there have been four finance ministers, four finance secretaries and three governors of the State Bank.

The government wasted time and energy in downplaying the achievements of the previous government, while it lurched from one crisis to another, a rudderless ship with no sense of direction and purpose. The current economic team is weak and lacks the capacity to handle the multidimensional challenges it is confronted with, most of which are self-created.

The country’s economic growth has slowed to an average of three per cent per annum, and unemployment and poverty have risen. Higher double-digit inflation has persisted and items of basic necessity have gone beyond the reach of the common man. The debt burden has reached unsustainable levels and the dependence on donors has grown. Clearly, three years of mis-governance and poor economic management have brought the economy to near-standstill. People have lost confidence in the country’s ability to recover from the ever-deepening economic crisis. The recent unprecedented floods have further aggravated the impact of the economic ills.

It is not only the economy which is in decline. This is true of things in every walk of life. To name just a few, this has been evident in the game of cricket, the inaugural parade at the Commonwealth Games, the Haj operations, the creation of the sugar crisis, the running of public-sector enterprises like PIA, Pakistan Railways, the Steel Mills, National Insurance Corporation and TCP, the crisis in higher education, the deterioration in law and order and the debacle of the recently concluded Pakistan Development Forum (PDF).

The PDF meeting requires special mention. The PDF, the reincarnation of the Aid to Pakistan Consortium, is jointly chaired by the World Bank and the Government of Pakistan, represented through its finance minister. The purpose of this forum is to provide a platform to the government where it can present its economic and social reforms agenda before visiting delegations. The PDF has never been a platform for pledging assistance. Unfortunately, this forum was transformed into a pledging forum because every minister, even the prime minister, made statements about the financial loss caused by the floods and asked for financial support. The minister of interior even pleaded for a debt write-off.

It is unfortunate that we have turned every international forum, including Friends of Democratic Pakistan (FODP), into an opportunity for begging. No self-respecting nation begs forever. A beggar cannot command respect in the comity of nation. Continuing to do so, Pakistan risks nothing less than global oblivion. How long can we keep on begging like this? Is this the fate to which the people of Pakistan must resign themselves?

Riaz Haq said...

Here are excerpts from a report on Pakistan's retail sector:

The ongoing shift in population from rural to urban areas has underpinned the expansion of the retail sector. Strong real GDP growth until fiscal year 2006/07 (July-June) provided the foundation for years of double-digit growth in net retail sales in US dollar terms. However, net retail sales contracted by 1.2% in 2008. Sales then grew by only 5.7%, to US$75bn, in 2009, as the inflationary surge of 2008, which reduced spending power, abated only moderately. In local-currency terms retail sales growth in 2009 is estimated at 22.7%, owing to depreciation in the value of the Pakistan rupee against the US dollar. A gradual shift towards more formal retail facilities will facilitate the expansion of sales in 2012-14, but this process will be slow and confined to urban areas. (In 2010-11 retail sales expansion will be subdued, as overall private consumption growth slows sharply owing to the catastrophic floods that struck Pakistan in August-September 2010. Electronic retailing is almost non­existent in Pakistan because of the low levels of Internet penetration and credit-card use in the country.

Consumer finance accounted for 4.2% of the total stock of credit in the country in June 2010, according to the State Bank of Pakistan (SBP, the central bank). Credit for purchases of consumer durables was down by 25% year on year..... Because of their limited financial resources, most retailers sell on a cash-only basis. This is gradually changing, and credit-card use is likely to become an increasingly important element of personal finance in the long term. However, in the short to medium term credit-card use will be constrained by the poor economic climate: outstanding credit-card loans were down by 25% year on year in June 2010. Large, centralised shops have not been popular in Pakistan, as low levels of car ownership mean that people prefer "corner shops" near their homes. More importantly, frequent and often prolonged power failures reduce the advantages of refrigeration, leading to a preference for fresh goods bought for immediate consumption from neighbourhood retailers. Online retail sales are negligible, owing to the country's extremely low levels of Internet penetration and credit-card ownership and the absence of Internet merchant accounts to facilitate online credit-card transactions.

The retail market is highly fragmented and underdeveloped. There are over 125,000 retail outlets across the country, according to the Small and Medium Enterprise Development Authority, but around 95% of these are tiny corner shops. The few supermarkets that exist are concentrated in Karachi and Lahore. USC is the largest supermarket chain by far, with 5,850 outlets throughout the country in 2009, according to Planet Retail, an international industry consultancy. The other major chains are Whitbread (with 17 outlets in 2009), GNC (with six outlets), Metro (five outlets) and Carrefour (one outlet). However, even USC's market share is virtually insignificant in terms of retailing as a whole, according to Planet Retail, accounting for only 1.2% of total grocery spending in the country. The vast majority of retailers in Pakistan are small family-run shops, and this will remain the case throughout the forecast period (2010-14).

Riaz Haq said...

Here is an excerpt from a Time magazine opinion piece by Hannah Beach on the status of Asian democracies:

Asia gave birth to people power in 1986, when a sea of yellow-clad demonstrators peacefully overthrew a dictator in the Philippines. Other popular uprisings against authoritarianism followed, from Thailand, South Korea and Taiwan to Mongolia and Indonesia. Watching the events unfold in the Arab world, Asia's fledgling democracies can be forgiven for indulging in a moment of nostalgia. While revolutionary zeal may have toppled the region's strongmen, however, too few of their successors have bothered to build the institutions needed to sustain democracy beyond its first flush. Democracy through revolution is heady stuff, but it's not always a template for building lasting freedom and justice.

The withered potential of people power is best examined on its home turf. This month, the Philippines will celebrate the 25th anniversary of the start of its historic uprising. Those following the events in Egypt will find many parallels. Ferdinand Marcos, a corrupt, aging, U.S.-backed dictator, was ousted by a populace that rallied, in part, thanks to technology. (Then it was radio, not Facebook or Twitter.) But a quarter-century later, with the son of people-power heroine Corazon Aquino now serving as President, the Philippines is still beset by the poverty, cronyism and nepotism that provoked the 1986 protests. (See a brief history of people power.)

These failings are not the Philippines' alone. Across Asia, elections are held, but vote buying taints the results. Politics is dominated by the same old families. Economic growth often rewards the few rather than the many. And from Malaysia and East Timor to Taiwan and Thailand, I have met local journalists who passed information on to me because they felt it was too dangerous to write about the issues themselves. Without the crucial check of a free press — or independent legislatures and courts, for that matter — democracy exists in name only.

Still, Asia also offers heartening lessons for the Arab world. There's South Korea, for instance, which overthrew a U.S.-backed military dictatorship, then carefully constructed a prosperous democracy. And then there's Indonesia, the world's largest Muslim-majority nation. In 1998, after 32 years in power, strongman Suharto was forced out by massive street protests. Since then, change in Indonesia has occurred not in one cataclysmic jolt but instead through years of brick-by-brick nation building. That may not sound sexy, but it works. Indonesia has now peacefully cycled through several secular-minded leaders, and its civil society is flourishing. The country's problems are still immense: graft and poverty persist, as does sectarian conflict. But Egypt could do a lot worse than to follow the model of this moderate, Muslim-majority democracy

Riaz Haq said...

Here are some excerpts from an interesting Op Ed by Prof Lev Ginsburg on democracy in developing world, as published in Aljazeera English:

The basic reason for democracy's lack of solutions to such problems (poverty, economic disparity) is that its principles have been formulated in industrialised capitalist societies characterised by considerable cultural homogeneity and relatively small economic gaps.

Democracy is a set of formal principles developed in Western Europe with the aim of facilitating the representation and articulation of the middle and working classes and designed to contain peacefully the conflicts between them and the upper class.

In the absence of a balance of power between classes, and a consensual unifying national identity, the automatic installation of formal democratic principles might only make matters worse.
----------
When there is a systematic link between cultural identity and economic status, democracy becomes a problem, rather than a solution. It exacerbates cultural conflicts to the point of violence, because it provides a formal opportunity for the majority to force their will on the minority.

Political sociologist Michael Mann has shown that in these cases democracy only serves to intensify conflicts among racial and ethnic groups, to which I would add, in the Middle Eastern context, the conflict between confessional groups and between the religious and the secular.
----------
The oldest case, mind you, is the US - the cradle of the democratic constitution which announced a "government of the people" and began the massacre of the American indigenous people because they were not considered part of "we, the people" of America.
--------
Whoever wants democracy under these conditions must first come up with a creative and consensual formula, according to which each cultural group would be free to live its unique cultural life without attempting to force its identity and customs on the entire citizen body.

In other words, demonstrating for democracy is not enough. What the countries of the Middle East require is political consensus on mutual recognition of rights and coexistence, guaranteed by a constitution and institutionalised by electoral procedures and representative institutions.

Egypt does have to worry, however, about economic inequality and the severe daily hardships suffered by most of its population. Without providing solutions to these problems, even the most democratic regime can be toppled by massive protests, possibly leading to new forms of dictatorship. A good example of such a failure of democracy was December 2001 in Argentina, when the masses flooded the streets calling for "all politicians to go home" and toppling five presidents in a row.

This happened only two years after democratic elections swept a broad leftwing front to power, which had promised to bring the country out of its deep economic crisis, but failed. The elected government pursued the policy dictated by the International Monetary Fund (IMF), which protected the interests of foreign investors against those of the local middle and salaried class. The crisis caused all holders of local bank deposits to lose 70 per cent of their money, with the blessing of the IMF.

Therefore, Egypt must realise that although democracy is essential, any formal constitution or system of government will not solve its economic problems. Immediately after the elections, Egypt's new policymakers will have to switch from the formal liberal discourse of democracy to face and discuss the fundamental questions of Egypt's economic structure. In the process, they are liable to discover that it is far more difficult to uproot a corrupt economic regime than to topple a single dictator.

Riaz Haq said...

Here's an excerpt on Pakistan from a recent piece by Indian journalist Akar Patel:

Why is Pakistan such a mess? Some would blame Islam, but they’d be wrong. The problem isn’t religion at all. The problem is lack of caste balance. There aren’t enough traders to press for restraint and there are too many peasants. Too many people concerned about national honour, and not enough people concerned about national economy. Put simply: Pakistan has too many Punjabis and not enough Gujaratis. The majority of Pakistanis live in Punjab, but well over 50% of government revenue comes from just one city in Sindh: Karachi. Why? That is where the Gujarati is.

Gujaratis are less than 1% of Pakistan’s population, but they dominate its economy because they are from trading communities. Colgate-Palmolive in Pakistan is run by the Lakhani Memons, the Dawood group is run by Memons from Bantva in Saurashtra (the great Abdus Sattar Edhi is also a Memon from Bantva). The Adamjee group, advertisers on BBC, are from Gujarat’s Jetpur village and founded Muslim Commercial Bank. The Khoja businessman Sadruddin Hashwani owns hotels including Islamabad’s bombed-out Marriott. Khojas founded Habib Bank, whose boards are familiar to Indians who watched cricket on television in the 1980s. The Habibs also manufacture Toyota cars through Indus Motors. Pakistan’s only beer is made by Murree Brewery, owned by a Parsi family, the Bhandaras. Also owned by Parsis is Karachi’s Avari Hotels.

People talk of the difference between Karachi and Lahore. I find that the rational view in Pakistani newspapers is put forward by letter-writers from Karachi. Often they have names like Gheewala, a Sunni Vohra name (same caste as Deoband’s rector from Surat, Ghulam Vastanvi), or Parekh, also a Surat name.

Today capital is fleeing Pakistan because of terrorism and poor governance. To convince investors things will get better, the Pakistani government has appointed as minister for investment a Gujarati, Saleem Mandviwalla. The Mandviwallas own Pakistan’s multiplexes, which now show Bollywood. The place where Gujaratis dominate totally, as they do also in India, is Pakistan’s capital market. Going through the list of members of the Karachi Stock Exchange (www.kse.com.pk) this becomes clear. However, few Pakistanis will understand this because as Muslims they have little knowledge of caste.

The Gujarati tries to hold up the Pakistani economy, but the peasant Punjabi (Jat) runs over his effort with his militant stupidity. Why cannot the Pakistani Punjabi also think like a trader? Simple. He’s not converted from the mercantile castes. There are some Khatris, like Najam Sethi, South Asia’s best editor, but they are frustrated because few other Pakistanis think like them. Are they an intellectual minority? Yes, but that is because they are a minority by caste. One great community of Pakistani Punjabi Khatris is called Chinioti. They are excellent at doing business but in a martial society they are the butt of jokes. I once heard Zia Mohyeddin tell a funny story about the cowardice of Chiniotis and I thought of how differently a Gujarati would look at the same story.

Riaz Haq said...

UN Human Development Report 2010 shows that Pakistan ranks among the top 10 movers in HDI in the decade of 2000-2010.

See table 3 in Let's Talk Human Development.

Riaz Haq said...

Here are some excerpts from a report of Pakistan's Higher Education Commission (HEC) under attack by crooked politicians:

ISLAMABAD: Parliament’s revenge against the Higher Education Commission (HEC) for its laudable role in identifying the fake degree holding MPs will not only destroy the higher education structure, built in decades, but also threatens huge and committed $550m (Rs47 billion) in foreign assistance.

Informed government sources told The News that the USAID had hinted on Friday of keeping on hold the committed $250 million assistance under the Kerry-Lugar Act to establish three centres of excellence besides pursuing certain other potential goals for higher education development in the country.

Already, the World Bank, which has only recently approved $300 million soft loan for the HEC to support its various programmes for the next five years, has verbally told the commission’s bosses to wait as the Bank is unsure about the future of the HEC.

The sources said that the USAID, in its communication with the HEC officials, has indicated of not doing the cost reimbursement PIL for the next six months because of a meeting the USAID had with the Economic Affairs Division, which has told the American agency that the HEC is going to be devolved.

Out of the $250 million, so far only $45 million has been transferred to the HEC by the USAID, which had agreed to hand over to the HEC all the education related programmes handled by the US Financial Assistance Development (FAD) programme. Now for the HEC officials, all the committed US aid for the HEC is frozen.

The sources said that under the USAID assistance programme, the HEC had designed to set up three centres of excellence (CoE), including the CoE in water resource at the Mehran University of Engineering and Technology, the CoE in food security at the University of Agriculture, Faisalabad, and the CoE in energy at the University of Engineering and Technology, Peshawar.

Already, as reported, the Higher Education Commission (HEC) would lose 300 million dollars of loan approved by the World Bank (WB) to support its various programmes for the next five years.

According to the report, the $300 million equivalent credit was supposed to finance the government’s tertiary education development programme. It is said that the loan deal would automatically come to an end after the devolution of the HEC due to some legal implications. “There is a clause in the agreement between the WB and HEC that any change in the legal status of the HEC would end the agreement at once,” the reporter quoted HEC Executive Director Dr Sohail Naqvi as saying. This is a soft loan.

The HEC is facing the wrath of the parliamentarians after it had refused to accept any pressure for the verification of the MPs’ degrees, more than 50 of which have already been declared invalid whereas above 200 degrees were termed suspected.

The federal and provincial governments and members of parliament and provincial assemblies exerted all sorts of pressure on the HEC to stop it from the verification work but to no avail. Later, more than 200 MPs refused to cooperate despite the apex court’s decision, refusing to provide to the HEC or the universities concerned the details of their qualification certificates and degrees to stop their verification by the HEC.
---------
In its meeting on March 28, 2011, the federal cabinet, instead of devolving all functions of the Education Ministry, decided to retain several of them at the federal level by assigning these functions to different ministries and divisions like the cabinet and foreign ministry.

Riaz Haq said...

The Times Higher Education Supplement for 2011 ranks 6 Pakistani universities among the top 100 Asia for Life sciences and Bio medicine.

NUST ranks 60, UET-Lahore 65, Karachi University 68, University of Lahore 73, Punjab University 91 and Quaid-e-Azam University Islamabad at 94.

On THES IT and Engg rankings, there are 4 Pakistani universities: NUST is 47, Univ of Karachi 91, University of Lahore 89, UET Lahore 90.

Riaz Haq said...

I finally had a chance to see the documentary "Bhutto" by Jessica Hernandez and Johnny O'Hara last Thursday in Oakland, CA. The screening was sponsored by the PACC along with several other orgs.


It seems to me that the documentary is quintessentially a celebration of Benazir Bhutto and her mystique as the first female prime minister of an Islamic nation.

It advances a liberal western view of the Bhutto family through a narrative made up of sympathetic western and Pakistani commentators who see the Bhutto family as outsiders up against "the establishment"...a reference to Pakistani military and the ISI. It even lays the blame for Zardari's moniker as "Mr. Ten Percent" on ISI.

The movie does mention the 1977 poll rigging but it says it was done by "overzealous supporters" of the PPP, while conveniently ignoring the fact that the ISI political cell, created by Zulfikar Ali Bhutto, actively rigged the vote on ZAB's behalf thus laying the foundation for as larger role for "the agencies" in Pakistan's political and electoral processes in 1970s, 80s, 90s, and the last decade.

Former President Musharraf made a reference to it in an interview in which he acknowledged that no new parties are created in Pakistan without "the agencies" influencing the process.

Here is an excerpt of a Dawn report on the Musharraf interview:

"Pervez Musharraf said he had no regrets over the military coup of Oct 12, 1999, and the unconstitutional steps taken on Nov 3, 2007. “It was my good luck that the coup happened.”

When reminded that the Constitution had been abrogated on both occasions, he said the country was more important than the
Constitution, which, according to him, was a piece of paper.

Pervez Musharraf said he had appointed Senator Mushahid Hussain as secretary general of the PML-Q after consulting Chaudhry Shujaat Hussain. He said the PML-Q had virtually fallen apart and most of its leaders would not contest the next
elections from its platform. Many of them had contacted him and some were considering contesting elections as independent candidates, he said.

The former president admitted that setting up a new party without the help of government and intelligence agencies was a difficult job.

He said he had written letters to the former nazims of all districts, inviting them to join his party and had received a good response."

Riaz Haq said...

What a difference 3 years under PPP-led feudal democracy have made.

The failure of the recent bond offering is a serious setback that proves yet again the utter incompetence of the economic team and lack of international investor confidence in the current PPP govt.

It stands in sharp contrast to Pakistan's multiple successful bond offerings from February 2004 to May 2007. Each time the Pakistani paper was oversubscribed substantially. Pakistan emerged as one of the few countries which successfully floated a 30-year bond. This simply reflected the confidence of global investors in Pakistan’s leadership under President Musharraf.

Riaz Haq said...

Deepak: "Also my question is, Can Pakistan follow China model to normalize relations with India."

Yes, it can. But it takes two to make peace.

Indian security analysts and politicians regularly blame Pakistan for the failure of past bilateral diplomatic efforts by citing what they believe is the adverse role of Pakistani military in framing Pakistan's policy toward India. This rationale, however, does not explain why the diplomatic initiatives undertaken by Pakistani military leaders from General Zia to General Musharraf have not borne fruit.

A more rational explanation for the policy failures has recently surfaced in secret US embassy cables leaked by Wikileaks and published by The Hindu. After a meeting with India's National Security Adviser and former Indian intelligence chief M.K. Narayanan in August 2009, American Ambassador Timothy Roemer concluded that Prime Minister Manmohan Singh was isolated within his own government in his “great belief” in talks and negotiations with Pakistan.

Roemer said that although Narayanan's hawkish stance on Pakistan was well known, his willingness to “distance himself from his boss (Manmohan Singh) in an initial courtesy call would suggest that PM Singh is more isolated than we thought within his own inner circle in his effort to "trust but verify" and pursue talks with Pakistan particularly in the wake of the hammering his government took from opposition for the July Sharm al-Sheikh statement with (Pakistan Prime Minister Yusuf Raza) Gilani.”

In the aftermath of the failure of the 2002 Agra Summit with former Indian Prime Minister Atal Behari Vajpayee, former Pakistani President Musharraf said the two leaders were close to a historic agreement until an Indian bureaucrat Vivek Katju conspired with India's entrenched security hawks to insist on last-minute changes unacceptable to Pakistan.

Kashmir remains the single most explosive unresolved issue between India and Pakistan, and President Musharraf devoted a lot of his energies with Prime Minister Manmohan Singh to try and resolve it. The formula envisioned soft or porous borders in Kashmir with freedom of movement for the Kashmiris; exceptional autonomy or "self-governance" within each region of Kashmir; phased demilitarization of all regions; and finally, a "joint supervisory mechanism," with representatives from India, Pakistan and all parts of Kashmir, to oversee the plan’s implementation. It appears now that the hawkish Indian security establishment has succeeded in scuttling the peace efforts based on the Musharraf formula.

A new and significant factor that stands in the way of peace and security in South Asia is the emergence and growth of Indian think tanks, making India second only to the United States in numbers of such think tanks.

They exaggerate terror threats with the help of the media and intelligence folks to promote greater defense and security spending. As a result, India has already become the world's largest importer of weapons last year, according to SIPRI. These weapons imports are done at the expense of other far more pressing needs of the world's largest population of poor, hungry and illiterate people who call India home.

Deepak said...

During 2010 Pakistan flood in which about 24 Million people or 15% of total Pakistan population was affected. Pakistan asked for foreign aid for this people.Even though help was not as expected as Haiti earthquake too all aid. I was watching BBC News, Even in the month of January and February they were showing suffering of flood victims and how they didn't get proper aid.

Then in 2011-2012 budget, Pakistan increased her defense budget by 12% because India increased her by 11%. When there are 24 millions suffering from flood and there is severe power crisis in whole of Pakistan where load shedding of 12-16 hours is common. Don't you think it was unwise for Pakistan to increase its defense budget at that moment.

Riaz Haq said...

Deepak: "I saw many Pakistani politicians or analysts abusing Hindus openly on TV program. Once I was watching some documentary regarding distortion of History in Pakistan. And one point of distortion was to insult Hindus for every Pakistan's problem. In India we do have communal riots but we are never told to hate Muslims and Christians in our text book. ...."

Your textbooks are filled with anti-Muslim propaganda which manifests itself in frequent violence against Indian Muslims and continuing hatred of Pakistan.

Gujarat textbooks are among the worst in India in promoting anti-Muslim and anti-Pakistan hatred.

The following is a report at India Together Website about Gujarat textbooks:

An ongoing study of school textbooks in four states has found stereotypes and biases in Gujarat's textbooks. The Social Studies textbook for standard five has nine stories on mythology masquerading as history. Deepa A reports.

*Gujarat is a border state. Its land and sea boundaries touch the boundaries of Pakistan which is like a den of terrorism. Under such circumstances, it is absolutely necessary for us to understand the effects of terrorism and the role of citizens in the fight against it

*If every countryman becomes an ideal citizen and develops patriotism, the National Population Policy can definitely be achieved

*When people used to meet earlier, they wished each other saying Ram Ram and by shaking hands. Today, people enjoy their meeting by speaking Namaste. Is it not a change?



Indian Supreme Court Justice Katju recently said the myth-making against Muslim rulers, which was a post-1857 British project, had been internalised in India over the years. Thus, Mahmud Ghazni's destruction of the Somnath temple was known but not the fact that Tipu Sultan gave an annual grant to 156 Hindu temples. The judge, who delivered the valedictory address at a conference held to mark the silver jubilee of the Institute of Objective Studies, buttressed his arguments with examples quoted from D.N. Pande's History in the Service of Imperialism.

Dr. Pande, who summarised his conclusions in a lecture to members of the Rajya Sabha in 1977, had said: “Thus under a definite policy the Indian history textbooks were so falsified and distorted as to give an impression that the medieval period of Indian history was full of atrocities committed by Muslim rulers on their Hindu subjects and the Hindus had to suffer terrible indignities under Islamic rule.”

Justice Katju said Dr. Pande came upon the truth about Tipu Sultan in 1928 while verifying a contention — made in a history textbook authored by Dr. Har Prashad Shastri, the then head of the Sanskrit Department in Calcutta University — that during Tipu's rule 3,000 Brahmins had committed suicide to escape conversion to Islam. The only authentication Dr. Shastri could provide was that the reference was contained in the Mysore Gazetteer. But the Gazetteer contained no such reference.

Further research by Dr. Pande showed not only that Tipu paid annual grants to 156 temples, but that he enjoyed cordial relations with the Shankaracharya of Sringeri Math to whom he had addressed at least 30 letters. Dr. Shastri's book, which was in use at the time in high schools across India, was later de-prescribed. But the unsubstantiated allegation continued to masquerade as a fact in history books written later.


http://www.thehindu.com/news/national/article1704204.ece

Riaz Haq said...

Here's an excerpt from Dr. Ishrat Husain's lecture remembering Pakistan finance minister Shoaib in 2009:

The period from 1958 to 1969 during which President Ayub ruled and Mr.
Shoaib served as Finance Minister for most of these years is considered as the
golden era of Pakistan’s economic history. The period had strong macro
economic management and the economic indicators were extremely impressive.
Agriculture grew at a respectable 4 percent while remarkable rates were
achieved in manufacturing (9 percent) and trade (7 percent) GNP growth rates
exceeded 6 percent on average throughout the period. Economic growth was
very strong on all fronts.
Structural changes that took place under the stewardship of Mr. Shoaib
laid the foundation for Pakistan’s subsequent economic performance.
Manufacturing sector which was quite nascent increased to nearly 15 percent of
DGP. Pakistan’s economic model was considered a benchmark for the
developing countries. By the end of the decade, Pakistan’s manufactured
exports wee higher than the combined manufactured exports of the Philippines,
Thailand, Malaysia and Indonesia. It is purely a matter of conjecture as to where
Pakistan would have stood today in terms of per capita incomes if it had
continued the economic policies of 1960s.
A country’s economic outcomes depend upon a host of factors (a) Initial
resource endowment; (b) External environment; (c) Strategy and policy
framework; (d) Administration capacity; (e) Political stability.
Pakistan inherited a weak resource endowment as the part that
constituted India was relatively advanced in terms of natural, human and physical
resources while the two wings of Pakistan separated by 1,000 miles of Indian
territory were quite backward.
Delivered as the 19th Shoaib Memorial
External environment facing Pakistan in the decade of the 1960s was
mixed. The war of 1965, however, caused immense economic damage to
Pakistan and foreign aid flows did suffer in the post 1965 period.
The strength of the economic performance in this decade can mainly be
explained by the strategy and economic policies pursued during this period, the
efficiency with which these policies were executed due to improvement in
administrative capacity and the political continuity and stability that prevailed until
late 1968.
------------
Economic policies pursued by Ayub-Shoaib administration in the 1960s
were outward-oriented, liberal and supportive of the private sector. State played
a facilitating and enabling role by providing incentives, supplying infrastructure
(particularly in irrigated agriculture), institutions and technology. Macroeconomic
management was sound and prudent and fiscal and external balances were
managed well. Inflation remained in check and the annual rate of growth in
prices was only 3.3 percent. However, rapid economic growth and
industrialization resulted in income inequalties and regional disparities that had
serious political repercussions subsequently. Social sectors were neglected and
industries for capital goods were not set up. Import substitution strategy had a
positive pay off but also nurtured rent-seeking and pressures for protection
against external competition thus masking the inefficiencies of domestic
industries. Exchange rate policies created distortions and arbitrage
opportunities. But the positive contribution that made Pakistan self-sufficient in
wheat and rice was the adoption and diffusion of Green Revolution technologies
that also helped uplift the living standards of the rural population.

Riaz Haq said...

India and Pakistan had through “back channels” agreed to a non-territorial solution to Kashmir between Prime Minister Manmohan Singh and the then President Pervez Musharraf, reveals a recent WikiLeaks cable as reported by The News:

According to the US embassy cable - dated April 21, 2009 - Singh confirmed this to a visiting US delegation, led by then House Foreign Affairs Committee chairman Howard Berman in April, 2009, saying that the solution included free trade and movement across LoC.

Singh told the US delegation that Delhi and Islamabad had made great progress prior to February 2007, when President Musharraf ran into trouble. “We had reached an understanding in back channels,” he related, says the cable, in which Musharraf had agreed to a non-territorial solution to Kashmir. Singh went on to add that India wanted a strong, stable, peaceful, democratic Pakistan and makes no claim on “even an inch” of Pakistani territory.

Singh, however, does not make any direct reference to Musharraf’s template in the WikiLeak cable. Musharraf had said, unlike in the case with PM Vajpayee, it was actually with Singh that Pakistan moved towards an agreement over the issue.
--------
Also, Prime Minister Manmohan Singh and former National Security Advisor M K Narayanan held different opinions about talks with Pakistan, another cable released by WikiLeaks revealed.

The former advisor described Dr Singh as a “great believer” in talks and negotiations with Islamabad, while Narayanan himself was “not a great believer in Pakistan”. He added that after the prime minister spoke about India’s “shared destiny” with Pakistan, he told the PM “you have a shared destiny, we don’t”.

After a series of blunders, WikiLeaks on Friday dumped its entire archive of 251,287 unfiltered and unedited secret US diplomatic cables online, drawing an angry response from its media collaborators.


http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=8540&Cat=13

Riaz Haq said...

Pakistan's employment growth has been the highest in South Asia region since 2000, followed by Nepal, Bangladesh, India, and Sri Lanka in that order, according to a recent World Bank report titled "More and Better Jobs in South Asia".

Increased load shedding in Pakistan alone has cost 400,000 jobs in recent years, according to the World Bank. Although the World Bank report does not address it directly, the anecdotal evidence suggests that almost all of Pakistan's job growth for the decade occurred from 2000-2007 when the economy showed robust gdp growth. During 2000-2007, Pakistan's economy became one of the four fastest growing economies in Asia with its growth rate averaging 7.0 per cent per year for most of this period. As a result of strong economic growth, Pakistan succeeded in reducing poverty by one-half, creating almost 13 million jobs, halving the country's debt burden, raising foreign exchange reserves to a comfortable position and propping the country's exchange rate, restoring investors' confidence and most importantly, taking Pakistan out of the IMF Program. Contrary to its public criticism of the Musharraf-era economy, the preceding facts were acknowledged by the current government in a Memorandum of Economic and Financial Policies (MEFP) for 2008/09-2009/10, while signing agreement with the IMF on November 20, 2008.

Riaz Haq said...

Based on hunger data collected from 2003 to 2009, IFPRI reported that Pakistan's hunger index score worsened this year to 20.7 (2011) after four consecutive years of improvement reported since 2008 from 21.7 (2008) to 21.0 (2009) to 19.1 (2010) to and its ranking dropped to 59 in 2011 after rising from 61 to 58 to 52.

During the same period, India's index score improved to 23.7 in 2011 to where it was in 2008 after worsening from 23.7 (2008) to 23.9 (2009) to 24.1 (2010) and its ranking moved to 67 in 2011 from 66 to 65 to 67 on a list of 81 nations.

http://www.ifpri.org/sites/default/files/publications/ghi11.pdf

Riaz Haq said...

In a recent book titled "The Pakistan Cauldron" by James Farwell, the author argues that when Mr. Khan’s proliferation network was exposed in the early 2000s, Mr. Musharraf orchestrated a brilliant strategic communications campaign designed to absolve Islamabad of complicity. On public television, the president extracted a forced confession from Mr. Khan, who unconvincingly pleaded he had acted alone.

President Musharraf then pardoned the scientist (Mr. Khan remains a hero in Pakistan) before putting the serial proliferator into “forced retirement” to shield him from international investigators. “[W]ith his phone line severed, newspaper deliveries halted, and access to television denied. … No one was prosecuted. No intelligence was shared.” Perhaps most troubling, the Bush administration applauded Mr. Musharraf’s handling of the situation and Mr. Khan has yet to face a single question from U.S. or international investigators.

http://www.washingtontimes.com/news/2011/nov/8/inside-pakistans-murky-politics/

Riaz Haq said...

Here's an Express Tribune story on a discussion at Inst of Business Admin in Karachi, Pakistan:

A vigorous difference of opinion among technocrats, economists and corporate leaders on a number of socio-economic issues was witnessed during an interactive session held at the Institute of Business Administration (IBA) on Saturday. And at the end it was unclear whether democracy was the answer, or a dictatorship, as advocates for both arguments came up with pretty convincing logic.

Speaking at the session organised by IBA in collaboration with Blinck, a youth resource group, under the title of “New Year Resolutions for the Economy of Pakistan,” panellists candidly expressed disagreements over the questions of foreign aid, democracy and the interplay of policy-making and implementation at the national level.

“Many people think that a non-democratic set-up is a panacea for the economic problems of Pakistan. They’re wrong. A non-democratic government is not sustainable,” said Ishrat Husain, former governor of the State Bank of Pakistan, who is currently serving as dean and director of IBA. “Democracy is slow and messy. It takes two steps forward and four steps backwards. Yet it’s the only option. The democratic process shouldn’t be interrupted.”

Husain said military regimes do make an extra effort in the beginning to improve the economy because they have not yet developed a constituency of their own. “But later on, they start making compromises.”

Claiming that a democracy needs low poverty and high literacy rates to prosper, Gillette Pakistan CEO Saad Amanullah Khan said Pakistan had only two eras of development: first, in the early 1960s, and second, during the first three years of the Musharraf government. “I don’t care if a dictator is there as long as he revamps the economy,” Khan said.

He said that the idea of a government led by technocrats that could bring the economy back on its feet had its relative merits. Khan emphasised the need for adopting a national vision for long-term growth, adding that the entire nation should work towards its realisation. “Go to Proctor & Gamble or Gillette, and they’ll tell you their five-year goals in detail. But ask a government representative what the vision for Pakistan is for the next five years, you won’t get any definite answer.”

Disagreeing with Khan, Husain said Pakistan did not need any more “visions,” as the problem existed in their implementation only. “The country is full of pious documents. These are beautifully written policy papers that nobody reads. We all agree on the substance of policy, but the implementation is the real issue.”

Responding to a question, former Asia editor for The Economist Simon Long said it was wrong to attribute Pakistan’s dismal economic performance of six decades to its culture or laid-back attitude to work. He said that 35 years ago people often assumed China’s poor economy was a consequence of Confucianism. He said it was now obvious that Confucianism had nothing to do with the slow growth in the economy of China.

Talking about Pakistan’s economic indicators, Long said an economy with a tax-to-GDP ratio of less than 9% was not sustainable. He said it was hard for him to understand how Pakistan’s economic managers would bring down the fiscal deficit in next two to three years.

In response to the comment of a business student that Pakistan should stay away from all kinds of foreign aid and assistance to achieve self-reliance, Husain said the assumption that the Pakistani economy depended on US aid to survive was wrong. “Isolationism won’t solve our problems. Transfer of knowledge and technology is important. You’ve to be outward-oriented.”


http://tribune.com.pk/story/301827/failed-rescue-act-too-many-visions-for-pakistan/

Riaz Haq said...

Here's a report in The News on the PPP's unwillingness to face rising poverty in Pakistan:

The World Bank has said that poverty assessment is underway in Pakistan, which will provide the basis for an update on poverty trends, sources said on Saturday.

But the government is making efforts to drag its feet away from revealing any poverty figures in a bid to avoid controversy, they said. In its latest report on Country Partnership Strategy (CPS), the World Bank took conscious decision to sticking the poverty figures of 17.2 percent on the basis of survey done in 2007/08.

The figure of 17.2 percent was not endorsed by the PPP-led government, despite validation extended by the World Bank, they said. There is a sharp divide among the economists over this issue as some are favouring to concede poverty figures validated by the World Bank, but some close to the incumbent regime are raising doubts about the credibility of the data compiled by the Federal Bureau of Statistics (FBS).

“There is a need to form high-powered committee with clear cut terms of reference to decide this matter once and for all,” the sources said, adding that the methodology of calculating poverty figures should also be analysed to update it in accordance with the ground realities. Now, the Federal Bureau of Statistics (FBS) has once again accomplished Pakistan Social and Living Standard Measurement (PSLM) Survey 2010/11. But the Planning Commission has not yet done analysis to come up with the latest poverty figures, the sources said.

However, the World Bank’s country partnership strategy report said that as reported there are indications that Pakistan saw an impressive decline in poverty trends during most years of the last decade, with the poverty rate falling from 34.5 percent in 2001/02 to an estimated 17.2 percent in 2007/08.

Over the last two years, the WB said, there have been signs that poverty levels may be rising, due to the downturn in the economy, floods and inflation. The rapid post-floods recovery in parts of the agriculture sector (those not hit by back-to-back floods), market price for wheat, and a surprisingly strong growth in remittances would likely to have benefitted the poorest (mainly rural) income groups, according to the report.

While Pakistan’s overall level of inequality remains steady and relatively low as compared to other developing countries, some of the volatile border regions and some rural areas within other provinces have a higher than average level of poverty, it said. Increased migration to the cities has also strained their capacity to deliver the much-needed basic services.


http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=84002&Cat=3

Riaz Haq said...

Here's an interesting story in Express Tribune on the rise of the middle class via banking sector:

Hasan Rizvi used public transport to get around the city, and didn’t have a house of his own 10 years ago, while he studied for a Bachelor of Commerce degree at a college affiliated with University of Karachi. Today, he owns two motorcycles, one car and a modest apartment in a middle-class neighbourhood that he rents out to supplement his monthly income.

Rizvi’s upward movement on the social ladder corresponds with the growth in Pakistan’s banking sector that he has been part of since 2004.

In 2000, the combined profit-before-tax of all Pakistani banks was Rs4.5 billion. It reached Rs80.7 billion in 2009 – almost 17-fold increase over nine years!

With more than 8,000 branches of 41 scheduled banks all over the country, the banking sector has witnessed phenomenal growth in the past 10 years: assets of the banking system have been growing at an average of 14.8 per cent since 2001.

The exceptional growth in the banking sector has created thousands of private-sector jobs. The public sector controlled almost 80 per cent of the banking industry in 1997. However, after privatisation of several banks, the figure reduced to 20 per cent in 2004.

Rizvi said that to buy his apartment he took out a loan from his bank in 2008 at a reduced interest rate. Generally, the mark-up on home loans for ordinary customers is around 20 per cent. But the interest rate Rizvi is paying on his home loan as a bank employee is just five per cent.

He said he now lets out the apartment for Rs14,000 a month. The monthly instalment he pays to his bank is Rs.13,000, which means that without paying a single rupee out of his pocket, Rizvi not only bought his own apartment, but also makes an additional Rs1,000 every month – thanks to the fringe benefits of his bank job.

Similarly, car financing is also cheap for bank employees. While ordinary customers pay a 16-18 per cent mark-up on car loans, a bank employee gets it at a nominal rate of about five per cent.

“Every banker out there drives his own car and lives in, or rents out, his own flat. Banks pay well. And they give you facilities no other employer can afford to give its employees,” Rizvi said.

High profits for commercial banks over the past decade have resulted in the expansion of the banking sector, creating more jobs and promising better compensation packages for middle-class young men and women with tertiary education.

There are many reasons for the expansion in the banking sector in Pakistan. Most importantly, privatisation of nationalised banks spurred growth and increased overall banking standards in the 2000s. The share of private-sector banks in aggregate assets of the banking industry surged from 44 per cent in 2000 to over 77 per cent in 2005....


http://tribune.com.pk/story/311896/the-resurgence-of-pakistans-middle-class-moving-up-the-social-ladder/

Riaz Haq said...

Here's an Express Tribune report on TI findings in Pakistan:

The latest perception report from Transparency International Pakistan (TIP) shows a limited number of respondents see centres of corruption in Pakistan in the following descending order, of being perceived as the most corrupt to the least: 1) land administration; 2) police; 3) income tax; 4) judiciary; 5) tendering & contracting; 6) customs, plus state corporations and the last is the army. Once again TIP has expressed its shock at the mounting lack of honesty in public affairs and has listed some of the reasons why the graph of evil is creeping upwards every year.

It is not surprising that land administration is the first among the perceived culprits. It is vastly the domain of the provinces where the politician has yet to begin to take responsibility for sorting-out maintenance and collection. Land record is still in primitive shape and the low bureaucracy that handles the sector is not upgraded and made competitive. Most of the trouble takes place away from the big cities because the writ of the state languishes in smaller districts and abdicates to three power centres: the feudal landlord (often a politician), the police and the judiciary. It will take a long time to sort-out this mess and it will not happen at the same speed in all the provinces. The police has endemic ills that most states in the Third World have failed to tackle. The recruitment of policemen has been pegged to good education only recently, but the provinces — whose domain this is — have been remiss in making the kind of allocations needed to upgrade the institution’s performance. The ratio of policemen to population is abysmal, training standards — though imitative of the army — are nowhere near being practically useful and low status has kept the average policeman tied to slavish behaviour towards the seniors and a brutish one towards the common man.

But the police may not be intrinsically as bad as the circumstances of its functioning make it. State policies favouring non-state actors involved in terrorism on the side have hamstrung the police. Unwillingness to prosecute has instilled in the department a habit of not trying too hard to convict, say, terrorists from a shady jihadi organisation simply because it is being clandestinely supported by the state. Because of this ambience of state-backed criminality, many policemen themselves indulge in crime and get away with it. Many senior policemen live beyond their means and own properties they could not have bought with honest money. As for the tax administration, if one were to look at the statistics, things may be getting better — and that is why it is no longer number one in corruption. Pakistan’s revenue collection is one of the lowest in the world (with the tax-collection machinery believed to be riddled with corruption and inefficiency) and that impacts directly the capacity of the state to spend on development. The reigning theory is to erect a system in which the income tax officer comes into least contact with the taxpayer.


http://tribune.com.pk/story/314181/pakistans-perceived-corruption/

Riaz Haq said...

Here's a report on Fortune magazine's interview with Pakistan's former leader Shaukat Aziz:

Despite the regular eruptions of bad news from Pakistan, Shaukat Aziz, a former finance and prime minister there, remains cautiously bullish about his country's prospects, including the peace dividend that could come with the orderly exit of U.S. troops from Afghanistan. But that depends, he says, on a Marshall Plan-like reconstruction of Afghanistan -- and the U.S. delivering on tribal economic development plans.

That might seem overly ambitious for distracted Western capitals with tapped out coffers. But the 'mostly-sunny' technocratic vision is not unusual for Aziz, a former Citibank (C) executive who presided over strong growth as finance minister after General Pervez Musharraf staged a coup in 1999. (Musharraf just announced he would shortly be returning to Pakistan -- and risking arrest -- from Dubai where he has been since leaving office.)

Aziz, 64, was elected prime minister in 2004 (surviving an assassination attempt while campaigning) and was the first of 23 predecessors to serve out a full term, until 2007. He took up residence in London soon after and now serves on the board of the British hotel chain Millennium and Copthorne Hotels, and as an advisor to the Blackstone Group (BX).

Aziz recently spoke with Fortune about the state of Pakistan's economy, how to rebuild Afghanistan, and why Pakistan deserves a free trade agreement with the U.S. Below is an edited transcript of that discussion.

It's been more than six years since Goldman Sachs (GS) recognized Pakistan among the Next Eleven newly industrialized countries -- inflation is up, investment is at a 40-year low, and infrastructure is deteriorating, particularly in the power sector. By just about any measure things are not particularly good, so what is the source of your optimism about the Pakistani economy?

The problems of the world economy have obviously leaked to Pakistan. Yes, investment is down, trade also, but in Pakistan's case a lot of this is due to the security situation, the war on terror. We have to pay a huge price in terms of damaging our investor confidence -- both domestic and foreign.

On the other hand, we should bear in mind that more than two-thirds of the population lives in rural areas and agriculture has done well, especially in cotton -- prices and exports are up and the farmer is relatively more comfortable.

The country's human capital is a strong suit, the Pakistani people are very talented, their skills levels are impressive and they are hard-working. There's a huge number of Pakistanis working overseas and we can export a few more million and there won't be an iota of difference because there is a whole pipeline of trained – and untrained - people coming.
-------------


http://finance.fortune.cnn.com/2012/01/09/pakistan-shaukat-aziz/?section=magazines_fortune

Riaz Haq said...

Here are some excepts of a Washington Post story on President Musharraf's speaking circuit and hiring of a lobby firm in Washington:

Former Pakistani president Pervez Musharraf, a regular on the foreign policy speaking circuit in this country, is seeking access to top U.S. lawmakers as he plans his return home after several years of self-imposed exile. And so he’s hired a local lobbying firm, to the tune of $25,000 a month, to help facilitate the effort.

So far, the investment appears to have paid off. Early this month, Musharraf met with six U.S. senators — including Armed Services Committee Chairman Carl Levin (D-Mich.) and ranking committee Republican John McCain (R-Ariz.), as well as Saxby Chambliss (R-Ga.), the senior minority member of the Senate Select Committee on Intelligence.

Musharraf also sat down with former House speaker Nancy Pelosi (D-Calif.), who just four years ago denounced him as delusional and undemocratic after he suspended Pakistan’s constitution and imposed emergency rule.

The congressional meetings were widely publicized in Pakistan, where Musharraf has struggled to maintain an image as an international player as he plans to return and run for president.
----------------
According to a foreign agent registration filed here last month, Musharraf has retained Advantage Associates International, a lobbying group of seven former House members headed by three-term Texas Democrat Bill Sarpalius, who was unseated by the Republican House takeover in 1994.

The seven-month, $175,000 contract is financed by Philadelphia-based Pakistani-American Raza Bokhari, a wealthy physician-turned-entrepreneur and long-time Musharraf backer.

Advantage “helped facilitate those meetings” with Congress, Sarpalius said in a telephone interview. “We just help open up some of those doors where he can meet with some of those members and tell his story.”

Musharraf, Sarpalius said, is “not looking for any endorsements or anything like that. He’s basically been letting people know that he is looking at going back and running for president, and wants these members to understand his views and what he sees are some of the main issues facing Pakistan.”

Along with Vice President Biden and House Speaker John Boehner (R-Ohio), Musharraf spoke recently at the Washington Ideas Forum, co-sponsored by the Aspen Institute and The Atlantic. He called on the United States to be more understanding of Pakistan’s “sensitivities” about India, and said the two South Asian countries were engaged in a “proxy conflict” in Afghanistan. India, Musharraf said, was “trying to create an anti-Pakistan Afghanistan.”

Musharraf also said he had no knowledge, while president, that Osama bin Laden had been living for years in the town of Abbottabad, where a U.S. Special Operations raid found and killed the al-Qaeda leader in May. He said Pakistan may be guilty of “negligence” in failing to find bin Laden, but not of “complicity” in his concealment.

As part of his current 12-city U.S. tour, Musharraf will speak this month at the Clinton presidential library in Arkansas and the Council on Foreign Relations in New York. He also plans to return to Washington for an appearance at the Carnegie Endowment for International Peace....


http://www.washingtonpost.com/blogs/checkpoint-washington/post/musharraf-with-lobbyists-gets-back-in-the-game/2011/10/18/gIQA0aeOuL_blog.html

http://www.fara.gov/docs/6062-Exhibit-AB-20110910-1.pdf

http://www.harrywalker.com/speaker/Pervez-Musharraf.cfm?Spea_ID=1169

Riaz Haq said...

Here are excerpts of an article by Dr. Ata-ur-Rehman published in Pakistan Herald:

On July 23, 2006, an article was published in the leading daily Indian newspaper Hindustan Times, titled “Pak threat to Indian science.” It was reported that Prof C N R Rao (chairman of the Indian prime minister’s Scientific Advisory Council), had made a detailed presentation to Indian Prime Minister Manmohan Singh about the rapid strides that Pakistan was making in the higher education sector after the establishment of the Higher Education Commission in October 2002 and my appointment as its first chairman. The article began with the sentence “Pakistan may soon join China in giving India serious competition in science.”

Serious apprehensions were expressed before the Indian prime minister at the rapid progress being made by Pakistan in the higher education and science sectors, first under the ministry of science and technology after my appointment as the federal minister of science and technology of Pakistan in 2000, and later under the Higher Education Commission. It was stressed during the presentation to the Indian prime minister that if India did not take urgent measures to upgrade its own higher education sector, Pakistan would soon take the lead in key areas of higher education, science and technology.

Something remarkable happened in Pakistan during the short period from 2000 to 2008 that rang alarm bells in India. It also drew unmitigated praise from neutral international experts. Three independent and authoritative reports, praising the outstanding performance of the HEC, were published by the World Bank, Usaid and the British Council. Pakistan won several international awards for the revolutionary changes in the higher education sector brought about under the leadership of the writer. The Austrian government conferred its high civil award “Grosse Goldene Ehrenzeischen am Bande” (2007) on the writer for transforming the Higher Education sector in Pakistan. The TWAS (Academy of Sciences for the Developing World, Italy) Award for Institutional Development was conferred on the writer at the academy’s 11th general conference in October 2009.

Prof Michael Rode, the chairman of the United Nations Commission on Science, Technology and Development and presently heading a Network of European and Asian Universities (ASIA-UNINET), wrote: “The progress made was breathtaking and has put Pakistan ahead of comparable countries in numerous aspects. The United Nations Commission on Science and Technology has closely monitored the development in Pakistan in the past years, coming to the unanimous conclusion that (the) policy and programme is a ‘best-practice’ example for developing countries aiming at building their human resources and establishing an innovative, technology-based economy.”

-------------------
Pakistan was poised to make a major breakthrough in transitioning from a low value-added agricultural economy to a knowledge economy. Alas, corrupt politicians with forged degrees plotted to destroy this wonderful institution where all decisions were merit-based, a trait unacceptable to many in power. A government notification was issued on Nov 30, 2010, to fragment the HEC and distribute the pieces. At this point I intervened. It was on my appeal to it that the Supreme Court declared the fragmentation of the HEC to be unconstitutional. The development budget of the HEC has, however, been slashed by 50 percent and most development programmes in universities have come to a grinding halt.

The Indian government need not have worried. We Pakistanis, alas, know how to destroy our own institutions.


http://www.pakistanherald.com/Articles/Pak-threat-to-Indian-science-2904

Riaz Haq said...

Pak threat to Indian science

Hindustan Times

Pakistan may soon join China in giving India serious competition in science. “Science is a lucrative profession in Pakistan. It has tripled the salaries of its scientists in the last few years.” says Prof C.N.R. Rao, Chairman of the Prime Minister’s Scientific Advisory Council.

In a presentation to the Prime Minister, Rao has asked for a separate salary mechanism for scientists. The present pay structure, he says, is such that “no young technical person worth his salt would want to work for the Government or public sector”.

He adds, “You needn’t give scientists private sector salaries, but you could make their lives better, by say, giving them a free house.”

Giving his own example, he says, “I have been getting a secretary’s salary for the last 35 years. But I have earned enough through various awards.

But I can raise a voice for those who aren’t getting their due.” Last year, Rao won the prestigious Dan David Award, from which he created a scholarship fund. So far, he has donated Rs 50 lakh for scholarship purposes.

The crisis gripping Indian science seems to be hydra-headed. “None of our institutes of higher learning are comparable with Harvard or Berkeley,” points out Rao. The IITs, he says, need to improve their performance: a faculty of 350 produces only about 50 PhD scholars a year. “That’s one PhD per 5-6 faculty members,” says the anguished Professor.

Rao fears that India’s contribution to world science would plummet to 1-1.5 per cent if we don’t act fast. At present, India’s contribution is less than three per cent. China’s is 12 per cent.

“We should not be at the bottom of the pile. When I started off in the field of scientific research at 17-and-a-half, I had thought that India would go on to become a top science country. But now, 55 years later, only a few individuals have made it to the top grade,” he laments.


http://www.hindustantimes.com/News-Feed/NM13/Pak-threat-to-Indian-science/Article1-124925.aspx

Riaz Haq said...

Here's a News report of losses at sta6e-owned Pakistan Steel Mills:

The Federal Cabinet that met here on Wednesday with Prime Minister Yousaf Raza Gilani in the chair turned down the loss making Pakistan Steel Mills’ (PSM) request for Rs9 billion to bail it out of financial crisis.



PSM, a few days ago, had moved a summary to the federal cabinet through the Ministry of Production to seek a Rs9 billion bailout package from the government as it was in severe financial crisis; and the Mills was running below 20 percent of its capacity. The cabinet deferred the Mills request until the next meeting of the cabinet.



It is worth mentioning that PSM remained a profit-making entity for seven years, from 2000 to 2007, but as the PPP-led coalition government came into office, the entity started accumulating billions of rupees losses and continues to nosedive. The Mills is spending about Rs1.2 billion a month under different heads, whether it is making profit or raking up losses. The giant holds a constant burden of 21,000 employees despite suffering from low productivity.



The Ministry of Production is also now distancing itself from this politically sensitive entity and believes that the Mills is more in control of the Cabinet Committee on Restructuring of State-Owned Enterprises, headed by the Finance Minister Dr Hafeez Sheikh, well-placed sources told The News.



Interestingly, last year in November, the federal minister for production Chaudhry Anwar Ali Cheema also gave a blatant statement by calling the Mills “nothing but a burden on the economy of the country” and had advised the government that it is better to get rid of it rather than feeding it with billions of rupees every year.



Official sources, while giving a blue print of the Mills performance, said that during 2007-08, PSM production attainment stood at 82 percent of its capacity utilisation and after that, it took a declining course to 64 percent in 2008-09, 40 percent in 2009-10 and 35 percent in 2010-11.



This year too, due to shortage of raw material including iron ore and coal, the Mills is running on less than 20 percent of its capacity.



As far as the sale of PSM products is concerned, it was recorded at Rs42.938 billion in 2007-08 and has been on the decline since then, with Rs34.340 billion in 2008-09, Rs23.832 billion in 2009-10 and Rs27.379 billion in 2010-11.



The last time PSM had fetched Rs2.38 billion in profit was in 2007-08, while after that it continuously racked up losses. In 2008-09, its losses were 26.53 billion in 2009-10 it was Rs11.52 billion and in 2010-11 it was Rs11.49 billion.



According to PSM data, during the first quarter (July-September 2011-12) it accumulated losses of about Rs4.3 billion.


http://www.thenews.com.pk/Todays-News-3-102456-Pakistan-Steel-Mills-denied-Rs9bn-bailout-package

Riaz Haq said...

Here's a News report of losses at sta6e-owned Pakistan Steel Mills:

The Federal Cabinet that met here on Wednesday with Prime Minister Yousaf Raza Gilani in the chair turned down the loss making Pakistan Steel Mills’ (PSM) request for Rs9 billion to bail it out of financial crisis.



PSM, a few days ago, had moved a summary to the federal cabinet through the Ministry of Production to seek a Rs9 billion bailout package from the government as it was in severe financial crisis; and the Mills was running below 20 percent of its capacity. The cabinet deferred the Mills request until the next meeting of the cabinet.



It is worth mentioning that PSM remained a profit-making entity for seven years, from 2000 to 2007, but as the PPP-led coalition government came into office, the entity started accumulating billions of rupees losses and continues to nosedive. The Mills is spending about Rs1.2 billion a month under different heads, whether it is making profit or raking up losses. The giant holds a constant burden of 21,000 employees despite suffering from low productivity.



The Ministry of Production is also now distancing itself from this politically sensitive entity and believes that the Mills is more in control of the Cabinet Committee on Restructuring of State-Owned Enterprises, headed by the Finance Minister Dr Hafeez Sheikh, well-placed sources told The News.



Interestingly, last year in November, the federal minister for production Chaudhry Anwar Ali Cheema also gave a blatant statement by calling the Mills “nothing but a burden on the economy of the country” and had advised the government that it is better to get rid of it rather than feeding it with billions of rupees every year.



Official sources, while giving a blue print of the Mills performance, said that during 2007-08, PSM production attainment stood at 82 percent of its capacity utilisation and after that, it took a declining course to 64 percent in 2008-09, 40 percent in 2009-10 and 35 percent in 2010-11.



This year too, due to shortage of raw material including iron ore and coal, the Mills is running on less than 20 percent of its capacity.



As far as the sale of PSM products is concerned, it was recorded at Rs42.938 billion in 2007-08 and has been on the decline since then, with Rs34.340 billion in 2008-09, Rs23.832 billion in 2009-10 and Rs27.379 billion in 2010-11.



The last time PSM had fetched Rs2.38 billion in profit was in 2007-08, while after that it continuously racked up losses. In 2008-09, its losses were 26.53 billion in 2009-10 it was Rs11.52 billion and in 2010-11 it was Rs11.49 billion.



According to PSM data, during the first quarter (July-September 2011-12) it accumulated losses of about Rs4.3 billion.


http://www.thenews.com.pk/Todays-News-3-102456-Pakistan-Steel-Mills-denied-Rs9bn-bailout-package

Riaz Haq said...

Here's a News report of losses at sta6e-owned Pakistan Steel Mills:

The Federal Cabinet that met here on Wednesday with Prime Minister Yousaf Raza Gilani in the chair turned down the loss making Pakistan Steel Mills’ (PSM) request for Rs9 billion to bail it out of financial crisis.



PSM, a few days ago, had moved a summary to the federal cabinet through the Ministry of Production to seek a Rs9 billion bailout package from the government as it was in severe financial crisis; and the Mills was running below 20 percent of its capacity. The cabinet deferred the Mills request until the next meeting of the cabinet.



It is worth mentioning that PSM remained a profit-making entity for seven years, from 2000 to 2007, but as the PPP-led coalition government came into office, the entity started accumulating billions of rupees losses and continues to nosedive. The Mills is spending about Rs1.2 billion a month under different heads, whether it is making profit or raking up losses. The giant holds a constant burden of 21,000 employees despite suffering from low productivity.



The Ministry of Production is also now distancing itself from this politically sensitive entity and believes that the Mills is more in control of the Cabinet Committee on Restructuring of State-Owned Enterprises, headed by the Finance Minister Dr Hafeez Sheikh, well-placed sources told The News.



Interestingly, last year in November, the federal minister for production Chaudhry Anwar Ali Cheema also gave a blatant statement by calling the Mills “nothing but a burden on the economy of the country” and had advised the government that it is better to get rid of it rather than feeding it with billions of rupees every year.



Official sources, while giving a blue print of the Mills performance, said that during 2007-08, PSM production attainment stood at 82 percent of its capacity utilisation and after that, it took a declining course to 64 percent in 2008-09, 40 percent in 2009-10 and 35 percent in 2010-11.



This year too, due to shortage of raw material including iron ore and coal, the Mills is running on less than 20 percent of its capacity.



As far as the sale of PSM products is concerned, it was recorded at Rs42.938 billion in 2007-08 and has been on the decline since then, with Rs34.340 billion in 2008-09, Rs23.832 billion in 2009-10 and Rs27.379 billion in 2010-11.



The last time PSM had fetched Rs2.38 billion in profit was in 2007-08, while after that it continuously racked up losses. In 2008-09, its losses were 26.53 billion in 2009-10 it was Rs11.52 billion and in 2010-11 it was Rs11.49 billion.



According to PSM data, during the first quarter (July-September 2011-12) it accumulated losses of about Rs4.3 billion.


http://www.thenews.com.pk/Todays-News-3-102456-Pakistan-Steel-Mills-denied-Rs9bn-bailout-package

Riaz Haq said...

Here are excepts of an interview of Elliot Theorist Mark Galasiewski who's bullish on Pakistan:

To answer your question, there are various ways to make long-term investment decisions. For example, Warren Buffett has shown that picking individual stocks can provide good returns over time. But it's a very labor-intensive and time-consuming process, to research companies thoroughly enough to have the kind of conviction that he does. And his “buy and hold” strategy means that he suffers significant drawdowns in his portfolio at times -- like during the 2007-2009 crash.

Elliott wave analysis gives you the opportunity to make long-term bets with a similar conviction -- but with a fraction of the elbow grease. Instead of pouring over hundreds of quarterly reports and legal documents, you look for Elliott wave patterns in the charts of market indexes. Those patterns reflect investors' collective bias, bullish or bearish. (I won't go into details of why this is so; our Club EWI has tons of free reports explaining the mechanics of the Elliott Wave Principle.)

So, knowing what part of the Elliott wave pattern your market is in, you know how the pattern should progress from there, ideally. And that gives you a probabilistic forecast for the trend. It doesn't work 100% of the time (what does), but our subscribers remember more than one successful forecast we've made using Elliott waves.

For example, on March 23, 2009 -- at the time when almost no one felt bullish -- we issued a special report to our subscribers forecasting a multi-year bull market in Indian stocks. Two weeks later, we identified three more markets in the region -- Pakistan, Sri Lanka, and Indonesia -- that we believed were also likely to enjoy an "Indian Ocean Renaissance."

India, Pakistan, Sri Lanka, Indonesia have all since generated some of the best returns among global stock markets. Without knowledge of the Elliott Wave Principle, it would have been difficult to forecast the boom -- especially given the dismal news events at the time. Do you remember the headlines in early 2009?

The world was engulfed by the global financial crisis, and most people believed the worst was still ahead. The currencies of India, Pakistan, Sri Lanka, and Indonesia had collapsed. Pakistan and India were on the brink of conflict over the Mumbai terrorist attacks of late 2008. A civil war was still raging in Sri Lanka. Who would turn bullish on stock under those "fundamental" conditions? We did, and only because Elliott wave patterns in the price charts of those four markets told us to "buy."

And by the way, the terrible conditions in India, Pakistan and Sri Lanka mostly reversed along with the market rally over the next year.
---------
The Wave Principle is how the market works. Financial markets are non-rational and counter-intuitive. Investing according to conventional assumptions eventually leads to financial ruin, since the market too often does the opposite of what most people expect.

Even thinking contrarily is insufficient, because sometimes it’s necessary to run with the herd. But Elliott wave analysis helps you to determine which psychological stance is most appropriate at any given time. Often, the news at the time would be suggesting you do the opposite.


http://www.elliottwave.com/freeupdates/archives/printer/2012/04/26/India,-Pakistan,-Sri-Lanka,-Indonesia-How-Elliott-Wave-Analysis-Turned-BULLISH-When-Few-Dared.-Part-.aspx

Riaz Haq said...

Here's a Daily Times story on higher education growth in Pakistan:

Shaikh also highlighted the performance and achievements of government during last 10 years. He said that there are 71 universities in Pakistan in 2002, but in last 10 years, 66 new universities have been added in Pakistan. Previously, female enrolment was 37 percent, now it is 45 percent. Previously, numbers of PhDs were 1,500, now 10,000 new students have been enrolled in PhD, added the minister. He also mentioned that federal government has spent Rs 160 billion on promotion of higher education in the country. The federal minister said that federal government has transferred additional Rs 800 billion to provinces during the last four years to enable the provinces to provide their population best social services like health education. He also advised students to be proud and loyal Pakistanis. Shaikh said that it is a great day for the degree holding students, so they must thank their parents and teachers. He also assured that the government is doing every effort for the promotion of education sector in Pakistan.

http://www.dailytimes.com.pk/default.asp?page=2012\05\20\story_20-5-2012_pg5_1

Riaz Haq said...

Here are excerpts of a Nature magazine article on higher education support in Musharraf years:

Despite the problems, science has been flourishing in Karachi and other Pakistani cities, thanks to an unprecedented investment in the country's higher-education system between 2002 and 2008 (see 'Rollercoaster budget'). As funding increased more than fivefold in that time, new institutes focusing on proteomics and agricultural research sprouted, and the University of Karachi's natural sciences department rose from nowhere to 223 in the 2009 QS World University Rankings.
-----------
The surge in higher-education investment occurred after the rise to power of General Pervez Musharraf in 1999, who as leader of the army had led a low-key coup d'état and installed himself as de facto president. Musharraf was a liberal progressive who hoped to modernize Pakistan. "It was a moment in Pakistani history that now seems so distant," says Adil Najam, an expert in international development at Boston University in Massachusetts.

With the economy booming in the early 2000s, Pakistani academics sensed an opportunity. Higher education had never had much popular support in the country, where literacy hovers at about 50%, but in Musharraf they saw a champion. In a series of reports, Najam and others made the case that if the nation could mobilize its universities, it could transform from a poor agricultural state into a knowledge economy (see Nature 461, 38–39; 2009). The group called for a new Higher Education Commission (HEC) to manage the investment, as well as better wages for professors, more grants for PhD students and a boost in research funding.
-------------
Rahman, a chemist at the University of Karachi and, at the time, the minister for science and technology, enthusiastically set out to overhaul the nation's universities. With Musharraf's support, annual research funding shot up 474% to 270 million rupees (US$4.5 million in 2002) in the first year alone. The HEC set aside money for PhD students and created a tenure-track system that would give qualified professors a monthly salary of around US$1,000–4,000 — excellent pay by Pakistani standards.

Rahman's strong scientific background, enthusiasm for reform and impressive ability to secure cash made him a hit at home and abroad. "It really was an anomaly that we had a person of that stature with that kind of backing," says Naveed Naqvi, a senior education economist at the World Bank, based in Islamabad. "Atta-ur-Rahman was a force of nature."
--------
Between 2003 and 2009, Pakistan churned out about 3,000 PhDs, roughly the same number awarded throughout its previous 55-year history. More than 7,000 PhD students are now in training at home and abroad. Meanwhile, scientific research publications have soared from roughly 800 in 2002 to more than 4,000 in 2009 (see 'Publishing power')...


http://www.nature.com/news/2010/100922/full/467378a.html

Riaz Haq said...

Here's an interesting perspective on Pak economy in a Dawn Op Ed by Akbar Zaidi:

Is the analysis that this is Pakistan’s worst-ever economic performance valid, or is this merely point-scoring and political posturing by those who represent different political dispensations?

Many of the key economic numbers which are to be announced later this month in the Economic Survey will show that some are, indeed, the worst ever, or at least the worst in the last 50 years. While inflation was higher during the Z.A Bhutto government, there has hardly been a month of the 51 months in power of this government, when it has not been in double digits; this is a notorious first.

Similarly, the fiscal deficit has been in the range of 4-6.5 per cent under this government, but was higher — often more than eight per cent of GDP — under Gen Ziaul Haq’s military rule. The growth rate in the pre-9/11 Musharraf three years 1999-2002, after which his government received a bonanza and huge windfall, was a mere three per cent, but it has been lower, though only slightly so, over the last four years.

Overall domestic debt, which has been growing over the last four years, is still much lower than that which was accumulated over the Ziaul Haq period and in the period between 1988-1999. However, two indicators which are considerably worse and are particularly worrying are the falling tax-to-GDP ratio and investment.

There are numerous other indicators related to the economy, which have never been this good, despite problems in slowing trends. Per capita income continues to rise albeit at a slower pace; remittances and exports have also improved; and poverty is probably lower than many were expecting, given Pakistan’s slow growth and rising and persistent food inflation.

Any fair, unbiased account of the state of Pakistan’s economy shows that while parts of Pakistan’s economy have been in a poor state, this is certainly not the worst period ever. Moreover, many of the factors which have affected the current state of affairs have their origin in the policies of the Musharraf era.

Nevertheless, what is perhaps striking about the last four years has been the poor and wavering economic management and leadership of the economic team. The absence of vision, insight and any clear idea of what needs to be done, given Pakistan’s persistent and, in many cases serious and growing, economic problems, has been the most striking aspect in the leadership of the Ministry of Finance and the Planning Commission.

A committed and more able leadership was critical to improving Pakistan’s economic situation, and in this perhaps lies the government’s biggest failure. While it is clear that the economy’s overall performance has certainly not been the ‘worst ever’, the verdict on the economic team and its leadership, is less certain.


http://dawn.com/2012/05/21/the-worst-ever/

Riaz Haq said...

Here's a Nature report on financial crunch hurting university research in Pakistan:

Pakistani universities are grappling with yet another financial crisis after parliament’s approval of a 2012–13 higher-education research budget of 15.8 billion rupees (US$166 million), 10 billion rupees less than the Higher Education Commission (HEC) had asked for.
-----------
The HEC, which governs and distributes funds to Pakistan’s 74 government-funded universities, was set up in 2002, and it brought about revolutionary changes in the country’s higher-education system. University enrolment tripled between 2003 and 2008 and the number of international research publications from Pakistani institutions rocketed from 600 per year to more than 4,300. The HEC’s research funding rose from 270 million rupees in 2002 to 22.5 billion rupees in 2009, but fell to 14 billion rupees last year.

The financial stress has already led to the closure of many research and higher-education projects, including a programme of ‘Core Groups’ to promote life sciences, chemistry and physics. Most of the 175 new projects funded by HEC last year are going at a slow pace or have been halted for want of funds.
---------------
The main reason behind the low funding for the HEC is a constitutional amendment enacted in 2010 that devolved responsibility for several federal ministries, including the education ministry, to the provinces. The government has tried to devolve the HEC as well, even though it was not under the control of the education ministry. This led to mass protests in April 2011, and Pakistan’s Supreme Court declared the plan unlawful.

Academics say that devolving the HEC to the provinces would undo the recent improvements in higher education, and some believe that the federal government considers the HEC a financial liability, as spending money on an institution that will eventually be devolved to the provinces is an unfruitful investment.

Imtiaz Gilani, vice-chancellor of the University of Engineering and Technology in Peshawar, says: “Funding cuts and the non-provision of promised money shows that the government wants to get rid of higher-education responsibility, but this would badly affect universities and research in Pakistan.”

The government issued a notification on 11 June bringing the HEC under the control of the Ministry of Professional and Technical Education, paving the way for devolution. This move was widely opposed by academics, who fear that it will damage the commission’s autonomy.

Kaleem Ullah, president of the Federation of All Pakistan Universities Academic Staff Association (FAPUASA), which organised the 25 June protests, says that his group will not be satisfied until all withheld funds are released. FAPUASA has threatened to stage continuous protests until the funding issue is resolved.


http://www.nature.com/news/academics-protest-shrinking-funds-in-pakistan-1.10935

Riaz Haq said...

Here's a Washington Post story on Pakistans' nostalgia for Musharraf's days:

Beckoned by public spigots promising free, pure drinking water, tourists lined up last week to refresh themselves along the main drag in Murree, a summer resort town perched at 7,500 feet in the Himalayas.

They soon discovered that the taps were dry.

“We’ve gotten nothing,” said one thirsty visitor, Abdul Sattar, 47. And he wasn’t just talking about pani (water), which hasn’t reached Murree for weeks because severe power shortages have shut down pumping stations in the valley below.

Nothing has come from democracy, either, a frustrated Sattar said — at least not as it is practiced by the barely functioning federal government in Islamabad, an hour’s drive down the mountains.

The economy is bad enough to make Sattar and others nostalgic for military rule, when the generals at least kept the nation’s lights on.

“The military is better,” said Amir Iqbal, who co-owns Mr. Food, a small eatery which had just two lunchtime customers. At 44, he recalls fondly the relative prosperity and higher economic growth rates that marked the nine-year regime of Gen. Pervez Musharraf. And, although he was young at the time, he speaks positively of the era of an earlier strongman, Gen. Muhammad Zia ul Haq.

“When the army is in government they keep inflation low,” Iqbal said. “They are good at governance and better organized.”

Such yearnings for order are certainly not new in Pakistan’s 64-year history: The army, generally with popular support, has stepped in three times to topple weak governments and impose martial law.

Judicial obeisance to the generals used to be the norm. But, styling itself as a corruption-battling people’s advocate, the current Supreme Court has inverted the narrative. It has spearheaded investigations into misdeeds of the executive branch and the military.

Some experts call Chief Justice Iftikhar Muhammad Chaudhry the country's most powerful man. Critics accuse him of mounting a “judicial coup” in the name of the rule of law.

His court picked off long-serving Prime Minister Yousuf Raza Gilani last month for refusing to follow its orders and is poised to oust his successor for the same thing. A power struggle among the judiciary, the executive branch and, to a lesser extent, the army, threatens to destabilize the nuclear-armed nation at a time when its counterterrorism partnership with the United States has essentially fallen apart.
---------------
Pakistanis continue to express overwhelming support for the military as an institution, with 77 percent calling it a good influence, the poll found. And the powerful army chief, Gen. Ashfaq Parvez Kayani, is viewed favorably by slightly more than half of those surveyed by Pew in March and April.

But several analysts said they see little likelihood of a coup d’etat. The government may have inoculated itself against one thanks to its own incompetence: The economic situation is so dire that the military lacks the economic resources to fix the country’s intractable problems and would rather avoid taking the rap for failure.

“The army doesn’t want to be held responsible for this,” said Marvin Weinbaum, a Pakistan expert at the Middle East Institute in Washington. “And in some ways there is no reason for them to move in: They’ve got control over the things that they want to control. They still have a veto over any domestic policy that affects them in any substantial way.” ...


http://www.washingtonpost.com/world/asia_pacific/in-pakistan-political-and-economic-crises-stir-nostalgia-for-military-rule/2012/07/04/gJQAnaqhMW_story_1.html

Riaz Haq said...

Here's a Bloomberg story titled "Pakistan, Land of Entrepreneurs":

On a warm Sunday morning in November, Arif Habib leaves his posh home near the seafront in southern Karachi and drives across town in a silver Toyota Prado SUV. About half an hour later, he arrives to check up on his latest project: a 2,100-acre residential development at the northern tip of this city of 20 million. He hops out, shakes hands with young company call-center workers who are dressed for a cricket match, and joins them at the edge of the playing field for a traditional Pakistani breakfast of curried chickpeas and semolina pudding. After a quick tour of the construction site, he straps on his leg pads, grabs his bat, and heads onto the field. “The principles of cricket are very effective in business,” says Habib, 59. “The goal is to stay at the wicket, hit the right balls, leave the balls that don’t quite work, and keep an eye on the scoreboard. I feel that my childhood association with cricket has contributed to my success.”

Habib, who started as a stockbroker more than four decades ago, has expanded his Arif Habib Group into a 13-company business that has invested $2 billion in financial services, cement, fertilizer, and steel factories since 2004. His group and a clutch of others have become conglomerates of a kind that went out of fashion in the West but seem suited to the often chaotic conditions in Pakistan. Engro (ENGRO), a maker of fertilizer, has moved into packaged foods and coal mining. Billionaire Mian Muhammad Mansha, one of Pakistan’s richest men, is importing 2,500 milk cows from Australia to start a dairy business after running MCB Bank, Nishat Mills, and D.G. Khan Cement.

These companies have prospered in a country that, since joining the U.S. in the war on terror after Sept. 11, has lost more than 40,000 people to retaliatory bombings by the Taliban. Political violence in Karachi has killed 2,000 Pakistanis this year, and an energy crisis—power outages last as long as 18 hours a day—has led to social unrest. Foreign direct investment declined 24 percent to $244 million in the four months ended Oct. 31, according to the central bank.

At the same time, some 70 million Pakistanis—40 percent of the population—have become middle-class, says Sakib Sherani, chief executive of Macro Economic Insights, a research firm in Islamabad. A boom in agriculture and residential property, as well as jobs in hot sectors such as telecom and media, have helped Pakistanis prosper. “Just go to the malls and see the number of customers who are actually buying in upscale stores and that shows you how robust the demand is,” says Azfer Naseem, head of research for Elixir Securities in Karachi. “Despite the energy crisis, we have growth of 3 percent.”

Sherani of Macro Economic Insights estimates the middle class doubled in size between 2002 and 2012. “Those who understand the difference between the perception of Pakistan and the reality have made a killing,” Habib says. “Foreigners don’t come here, so the field is wide open.” The KSE100, the benchmark index of the Karachi Exchange, has risen elevenfold since mid-2001. Shares in the index are up 43 percent this year alone. Over the past decade, stocks have been buoyed by corporate earnings, which were bolstered in turn by rising consumer spending.
---------
Today, Habib has 11,000 employees and annual revenue of 100 billion rupees. He plans to expand into commodities trading and warehousing. “I’ve created all my wealth in Pakistan and reinvested all of it here,” says Habib, who drives himself to his cricket matches and is never accompanied by security guards. In 1998, when Pakistan’s share index fell to a record low after the government tested nuclear weapons, Habib bought shares even though “people thought I was mad.”...


http://www.businessweek.com/articles/2012-11-29/pakistan-land-of-entrepreneurs

Riaz Haq said...

Here's ET on management of Punjab development budget under Sharifs:

LAHORE:

The Punjab government has spent just Rs70 billion of its Rs250 billion development budget for fiscal 2012-13 in the first seven months of the year, around half of it in Lahore alone, The Express Tribune has learnt.

Under finance rules, the Punjab government should have spent around Rs145 billion on development by the end of January, but had only spent Rs70 billion. Of this, Rs34.19 billion was spent on projects in Lahore, the vast majority of it, Rs31 billion, on the Metro Bus Service.

A senior Finance Department official said it was normal for utilisation of the Annual Development Programme (ADP) to remain low in the first six months of the financial year, and for spending to pick up in the remaining six months. He said that the low utilisation was due to the poor financial position of the province.

Last year, the Punjab government utilised only Rs150 billion of the Rs220 billion ADP presented for 2011-12.

In Lahore in 2012-13, apart from the spending on the Metro Bus Service, the Punjab government has spent Rs1.65 billion on the Kalma Chowk underpasses and Rs540 million on the Model Town underpass. Another Rs1 billion came out of the provincial kitty for the purchase of 100 buses, originally meant to be plied on the MBS corridor, but later given to girls colleges.

Other notable expenses included Rs4 billion for the procurement of 100,000 laptops, which are being handed out to students who perform well in exams. The Energy Department spent Rs2.5 billion on solar lamps, being handed out to 240,000 students under the Ujala programme.

Around Rs1.447 billion has been spent on the Pirwadhai Mor underpass and flyover project.

Another Rs1.25 billion has been spent on the Abdullahpur underpasses in Faisalabad, which involved the construction of three underpasses beneath the Tariqabad bridge leading to Chak Jhumra Road.


http://tribune.com.pk/story/514954/development-budget-half-of-punjabs-spending-concentrated-in-lahore/

Riaz Haq said...

Here's an ET report on social sector development during Musharraf years:

According to the report’s HDI list, between 2000 and 2007, which roughly corresponds with General Pervez Musharraf’s regime, the Human Development Index rose 18.9 per cent — an annual average of 2.7 per cent.

From 2007 to 2012 it only went up by 3.4 per cent, just under 0.7 per cent per annum. Somehow, things got even worse in the last three years of that time frame, with HDI increases crashing down as low as 0.59% — a negligible average annual increase of under 0.20 per cent.

The 2013 Human Development Report “The Rise of the South: Human Progress in a Diverse World” is instrumental in the context of Pakistan, especially given the challenges faced today due to poor policy choices that have been confronted in the report.

Meeting a small group of journalists here, Marc André Franche, UNDP Pakistan’s Country Director launched the report and said it is important for what it says and there are lessons to be learnt from countries with preconditions similar to Pakistan.


http://tribune.com.pk/story/527474/human-development-report-2013-the-rise-of-the-south-as-others-rise-pakistan-parks-the-bus/

Riaz Haq said...

Here's an excerpt of an Express Tribune blog on Musharraf's accomplishments:

1. Nine world class engineering universities were developed and 18 public universities further developed.

2. Pakistan was ranked third in world banking profitability.

3. The IT industry was valued at around $2 billion, including $1 billion in exports and employed around 90,000 professionals.

4. The CNG sector attracted over $70 billion in investment in the past five years and created 45,000 jobs.

5. The telecommunications sector attracted around $10 billion in investments and created over 1.3 million jobs.

6. Industrial parks were set up throughout the country for the first time.

7. Mega projects such as the Saindak, Rekodiq, marble production, coal production, mining and quarrying were pursued.

8. Foreign reserves increased from $700 million to $17 billion.

9. The Karachi stock market went from 700 points to 15,000 points.

10. The literacy rate improved by 11 per cent.

11. Poverty decreased by 10 per cent.

12. Four dams were built: Mirani, Subakzai, Gomalzam, Khurram, and Tangi,

13. Seven motorways were completed or were under construction,

14. Gwadar, an advanced sea port, was developed,

15. 650 kilometres of coastal highways were constructed.

16. A historic 100% increase in tax collection (amounting to Rs1 trillion) was observed.

17. Large scale manufacturing was at a 30-year high, and construction at a 17-year high.

18. Copper and gold deposits were found in Chagai, worth about $600 million annually if sold.

19. A new oil refinery with the UAE that could process 300,000 oil barrels a day was established.

20. The industrial sector registered 26 per cent growth.

21. The economy was the third fastest growing economy after China and India .

22. The Institute of Space Technology was established.

23. Sardar Bahadur Khan Women University Quetta was established.

24. The University of Science and Technology, Bannu, was established.

25. The University of Hazara was founded.

26. The Malakand University in Chakdara was established.

27. The University of Gujrat was established

28. The Virtual University of Pakistan was established

29. Sarhad University of IT in Peshawar was established

30. The National Law University in Islamabad was established

31. The Media University in Islamabad was established

32. University of Education in Lahore was established

33. Lasbela University of Marine Sciences, Baluchistan, was established

34. Baluchistan University of IT & Management, Quetta (2002)

35. The Pakistan economy was worth $ 160 billion in 2007

36. GDP Purchasing Power Parity (PPP) was $ 475.5 billion in 2007

37. The GDP per Capita in 2007 was $ 1000

38. Revenue collection in 2007/08 was Rs1.002 billion

39. Exports in 2007were worth $18.5 billion

40. Textile exports in 2007 were worth $11.2 billion

41. Foreign direct investment in 2007 was $8.5 billion

42. Debt servicing in 2007 was 26 per cent of the GDP

43. The poverty level in 2007 was 24 per cent

44. The literacy rate in 2007 was 53 per cent

45. Pakistan development programs in 2007 were valued at Rs520 billion

46. The Karachi stock exchange in 2007 was $70 billion at 15,000 points

47. Exports in 2007: $18.5 billion

48. Pakistan now has a total of 245,682 educational institutions in all categories, including 164,579 in the public sector and 81,103 in the private sector, according to the National Education Census (NEC-2005).

49. There are now more than 5,000 Pakistanis doing PhDs in foreign countries on scholarship. 300 Pakistanis receive PhD degrees every year, in 1999, the number was just 20.

50. In total, 99,319 educational institutions increased in Musharraf’s era!


http://blogs.tribune.com.pk/story/2092/50-reasons-pakistan-needs-musharraf/

Riaz Haq said...

Pakistan's GDP as percentage of world GDP remained flat 0.58% from 1990 to 2000, and then increased to 0.63% in 2010, according to Global Finance website.

http://www.gfmag.com/gdp-data-country-reports/204-pakistan-gdp-country-report.htm

Riaz Haq said...

Here's an interesting debate on democracy vs dictatorship in terms of development:

Dictatorship does not necessarily result in development, defined by human well-being(which incorporates education, health, income, and safety from internal and external threats)and even by personal discipline. Furthermore, there is no conclusive evidence proving that either dictatorship nor democracy cause development. Nonetheless, we will prove dictatorships incorporate more control over the variables that define development so in consequence are a better course to get to it. Also, that dictatorships guarantee the Social Order, which is a very necessary prerequisite for any kind of economic accumulation process to be feasible. A form of government in which absolute power is concentrated in a dictator or a small clique, dictatorships are subject to retaliatory actions. We propose this should end.
Democratic nations should not take retaliatory actions against dictatorial governments in order to diminish their legitimacy, their power, and to promote their overthrown in exchange for a democratic alternative. This actions account for the diminishing of economic & diplomatic relations with Burma and Iran and the cut of economic aid to Honduras’ “de facto” Government.
We will prove that these sort of actions can only undermine the possibility of development finally kicking in this countries, since dictatorship is the best way to achieve it.


All the Yes points
Dictatorships breed development though efficient and straighfoward decision making
Dictatorship is a good breeding ground for personal discipline and order
Dictatorships better control the variables of human development
Dictatorships resist to income Redistribution Pressures
Dictatorship is a more economic institution: elections are a luxury reserved for developed countries.
Dictatorships regimes can be a path for countries move on from civil wars and focus on development
Dictatorships have a flexibility in economic policy that breeds growth
Dictatorship helps achieve social stability
The loger lasting and biggest economic miracles have ocurred under dictatorships
Dictatorship outperforms democracy in growth and economic develpment
A dictatorship breeds order and it's a needed step for both development and liberal democracy
Dictators have incentives to promote development and diminish social differences
Summary
All the No points
Opposition defines ambiguity
Opposition baffled yet undeterred!
Dictator’s decisions undermines the people and are unaccountable
Development is not possible when there is no succession in the government
Dictatorship priority is to maintain power
Dictatorship brings profit to dictators and its clique, but not to the citizens
Dictatorship is a threat to diversity and multi ethnicity
Dictatorship transforms national policies into irregularities
Good development should ensures freedom
Development occurs when a dictatorship revert into democracy


http://debatewise.org/debates/1001-dictatorship-is-the-best-path-to-development/

Riaz Haq said...

Here’s some of what Nyhan found, according to Salon:

People who thought WMDs were found in Iraq believed that misinformation even more strongly when they were shown a news story correcting it.

People who thought George W. Bush banned all stem cell research kept thinking he did that even after they were shown an article saying that only some federally funded stem cell work was stopped.

People who said the economy was the most important issue to them, and who disapproved of Obama’s economic record, were shown a graph of nonfarm employment over the prior year – a rising line, adding about a million jobs. They were asked whether the number of people with jobs had gone up, down or stayed about the same. Many, looking straight at the graph, said down.
But if, before they were shown the graph, they were asked to write a few sentences about an experience that made them feel good about themselves, a significant number of them changed their minds about the economy. If you spend a few minutes affirming your self-worth, you’re more likely to say that the number of jobs increased.

In Kahan’s experiment, some people were asked to interpret a table of numbers about whether a skin cream reduced rashes, and some people were asked to interpret a different table – containing the same numbers – about whether a law banning private citizens from carrying concealed handguns reduced crime. Kahan found that when the numbers in the table conflicted with people’s positions on gun control, they couldn’t do the math right, though they could when the subject was skin cream. The bleakest finding was that the more advanced that people’s math skills were, the more likely it was that their political views, whether liberal or conservative, made them less able to solve the math problem.

I hate what this implies – not only about gun control, but also about other contentious issues, like climate change. I’m not completely ready to give up on the idea that disputes over facts can be resolved by evidence, but you have to admit that things aren’t looking so good for a reason. I keep hoping that one more photo of an iceberg the size of Manhattan calving off of Greenland, one more stretch of record-breaking heat and drought and fires, one more graph of how atmospheric carbon dioxide has risen in the past century, will do the trick. But what these studies of how our minds work suggest is that the political judgments we’ve already made are impervious to facts that contradict us.

Maybe climate change denial isn’t the right term; it implies a psychological disorder. Denial is business-as-usual for our brains. More and better facts don’t turn low-information voters into well-equipped citizens. It just makes them more committed to their misperceptions. In the entire history of the universe, no Fox News viewers ever changed their minds because some new data upended their thinking. When there’s a conflict between partisan beliefs and plain evidence, it’s the beliefs that win. The power of emotion over reason isn’t a bug in our human operating systems, it’s a feature.

http://www.salon.com/2013/09/17/the_most_depressing_discovery_about_the_brain_ever_partner/

Riaz Haq said...

Here's a WSJ story on Pakistan's return to bond market:

Pakistan is returning to the international bond markets for the first time in six years, joining a host of other emerging market governments and companies who are selling debt while borrowing costs remain low.

Pakistan's offering, expected to be up to $1 billion, comes as money flows back to Asia in search of higher yields amid new expectations that the U.S. Federal Reserve will now keep in place for the time being the aggressive stimulus measures that has pumped the world full of cash.

Other countries such as Brazil, Kenya and Honduras are also raising cash to fund infrastructure projects and alleviate heavy debt burdens.

Interest in emerging markets, including their sovereign debt, has been renewed in the past couple of months as the Fed has held off starting to wind down its bond-buying program, said Mr. Rajeev DeMello, head of Asia fixed income in Singapore at Schroders Investment Management, which manages $388 billion globally.

Mr. DeMello said Schroders holds Pakistani bonds and expects the new debt to attract investors, given that it will offer a high yield and that the country's bonds are not highly correlated to those of other markets in the region.

During the summer selloff in global emerging markets, prompted by expectations that the Fed would soon begin withdrawing its stimulus program, Pakistani bonds held up relatively well because most holders are large institutional investors with longer-term outlooks, Mr. DeMello said.

With global interest rates still low and emerging market investors venturing back into Asia, the country is planning to issue debt due in five to 10 years.

Bond yields throughout Asia have fallen over the last few weeks as investors have jumped back in. The yields on government bonds in Indonesia, Malaysia and Thailand have all fallen since early September.

Pakistan's five-year yield is at 12.3%.

"We have started the process [of the bond sale] and are waiting for the appointment of a lead adviser who will take the process forward," said Shafqat Jalil, a finance ministry spokesman.

Still, Pakistan isn't without its problems. Though its economy is humming, its finances are weak, with revenues from taxes floundering and foreign-exchange reserves falling 34% since October last year. Pakistan is already heavily in debt, with its financing needs one of the highest in emerging markets, according to the International Monetary Fund. Rating firm Moody's MCO +1.08% downgraded the country's government bonds to junk in July last year.

The Pakistani government is raising cash to plug its dwindling foreign-exchange reserves, which are symptomatic of the country's economic woes and trade imbalance.

The government's financial history hasn't been without blemishes, either. It last defaulted on debt in 1999 as it struggled with a balance-of-payments crisis aggravated by international sanctions and a military coup.

Pakistan last issued debt in 2007, with $750 million of 10-year bonds intended for general government spending and budget management. At the time, investors snapped up the bond with bids worth seven times the amount of debt on offer.


http://online.wsj.com/news/articles/SB10001424052702304391204579177021163516220

Riaz Haq said...

Here's a book review of "How Asia Works" by Amb Maleeha Lodhi published in The News:

An important new book explains why some countries have become economic tigers in East Asia while others are relative failures or paper tigers. ‘How Asia Works’ by Joe Studwell is a bold and insightful work that is essential reading for anyone interested in understanding the ingredients for economic success in this continent.

It challenges much conventional wisdom in the development debate. Most significantly the book questions key tenets of the so-called Washington consensus, which prescribes free market ‘solutions’ for all economies regardless of their level of development. Studwell establishes that a nation’s development destiny is shaped most decisively by government action and policies. History, writes the author, shows that markets are created, shaped and re-shaped by political power.

---------------

At the very outset, Studwell identifies three critical interventions that successful east-Asian countries and China (after 1978) employed to achieve accelerated economic development. The first, “often ignored”, and now “off the political agenda” in developing countries, is land reform. This restructured agriculture into highly labour-intensive household farming. In the early phase of development, with the necessary institutional support, this helped to generate a surplus, create markets and unlock great social mobility.

The second intervention, as countries cannot sustain growth only on agriculture and must transition to the next phase, is to direct entrepreneurs and investment to industrial manufacturing. Manufacturing allows for trade and technology learning. And trade, says the author, is essential for rapid economic development. Studwell then demonstrates – while challenging the champions of free trade – how nurturing and protection, along with instituting “export discipline”, builds the capacity to compete globally. Manufacturing policy is a key determinant of success he says, as an infant industry strategy offers the quickest route to restructuring the economy towards more value-added activities.

Holding that development is quintessentially a political undertaking, the author sees the relationship between the state and private entrepreneurs as a critical variable. History, he writes, teaches that governments should not run everything themselves. But governments have to use their power and the right policy tools to make private entrepreneurs do what industrial development requires.

The third intervention necessary for accelerated development is in the financial sector, aimed at directing capital initially to intensive, small scale agriculture and to manufacturing rather than services. Studwell argues persuasively that it was the close alignment of finance with agriculture and industrial policy objectives that produced north-east Asia’s economic success.

Detailing the role of financial policy, he illustrates how premature bank deregulation exacted a high price in Thailand and Indonesia. China, on the other hand, and other north-east Asian countries resisted that, instead using financial management to serve development needs and an accelerated economic learning process.



http://www.thenews.com.pk/Todays-News-9-211468-Asian-tigers-and-paper-tigers

Riaz Haq said...

Here are a few excerpts from a recent book "Street Smarts" by Hedge Fund Manager Jim Rogers:

"Many Asians say that the Asian Way is first to open your economy, to bring prosperity to your country, and then, only after that, to open up your political system. They say thar the reason the Russians failed is that did it the other way around. Russia opened up its political system in the absence of a sound economy, everybody bitched and complained, and chaos inevitably ensued. As an example of the Asian path to political openness, they point to South Korea and Taiwan, both of which were once vicious dictatorships supported by the United States. Japan was at one time a one-party state supported by the US military. Singapore achieved its current status under one-party, authoritarian rule. All these countries have since become more prosperous and more open.

Palto,in The Republic, says that the way societies evolve is by going from dictatorship to oligarchy to democracy to chaos and back to dictatorship. It has a certain logic, and Plato was a very smart guy. I do not know if the Asians ever read The Republic, but the Asian way seems to suggest that Plato knew whereof he spoke."

Not only is the Asian model different from that of the Soviets, it stands China in marked contrast to those thirty-year dictatorships previously mentioned. Chinese leaders have put a high premium upon changing the country's economy, presumably to seek prosperity for the 1.3 people who live there."
------------
"And yet,in 1947, when it achieved independence, India was one of the more successful countries in the world, a democratic country. But despite democracy, or maybe because of it, India has never lived up to its potential. China was a shambles as recently as 1980. India was far ahead of it. Bt since then China has left India, literally in the dust....As China rises, India continues to decline relatively. Its dent-to-GDP ratio is now 90 percent, making a strong growth rate virtually impossible."



http://books.google.com/books?id=t_t9swbrmAoC&printsec=frontcover&dq=street+smart+jim+rogers&hl=en&sa=X&ei=mN-lUsDxEYbuyAHw6oGIBA&ved=0CEgQ6AEwAA#v=snippet&q=ASEAN&f=false

Riaz Haq said...

Here's a News Op Ed by Dr. Ata ur Rehman Khan on Musharraf's time in office:

In the agricultural sector a number of important irrigation projects were initiated. The Diamer Bhasha Dam was launched. The Mangla Dam was raised by 30 feet increasing 2.9 maf water storage capacity and 100MW electricity. A number of new dams and canals were built (Mirani Dam for Balochistan, Subukzai Dam for Balochistan and Gomal Zam Dam for KP; Kachi Canal from Taunsa to Dera Bugti and Jhal Magsi to irrigate 713,000 acres of barren cotton producing land, the Thal Canal for Punjab, Rainee Canal for Sindh).

Overall three million acres of barren land were brought under cultivation. The Right Bank Outfall Drain (RBOD) was constructed through Sindh, thereby saving Indus River and Manchar Lake (Sind) from pollution. The steps taken led to an increase in wheat production from 14 million tons to 22 million tons, and increase in cotton production from nine million bales to 13 million bales.

Price control was exercised on essential items. The prices of edible household items (flour, naan, milk, tea, sugar, meat, vegetable oil etc) have tripled or quadrupled in the last five years. A rotational loan system was introduced through banks for poor farmers and loan facility for farmers increased from Rs35 billion through ZTBL only, to Rs160 billion from all other private banks.

Overall 2900MW of electricity was added to national generation capacity. The new energy projects initiated included the Ghazi Barotha hydro electricity project (1600MW), the Chashma-II nuclear electricity plant (300MW). The Neelum-Jhelum hydroelectricity project was initiated (1800 MW), the Satpara Power project in Skardu, and the Naltar power project in Gilgit.

A true revolution was brought about in the telecommunications sector. The number of mobile phones increased from 600,000 in the year 2000 to over 7 crore in 2006. Tele-density was increased from 2.9 percent to over 70 percent, and millions of jobs were created in the telecom sector. The IT sector also saw a phenomenal growth with internet connectivity spreading rapidly, particularly during 2000-2003 from 40 cities to over 2000 towns of Pakistan.

Fibre optic connectivity increased from 30 cities to over 1500 towns of Pakistan in the same period. The bandwidth cost of two megabytes was reduced sharply from $86,000 to $3,000 per month. Pakistan’s first satellite PakSat 1 was placed in space. Industry prospered as never before and industrial growth was in double figures throughout the nine-year period.

A revolution was brought about in the higher education sector with the establishment of the Higher Education Commission. The annual allocation for higher education was increased from only Rs500 million in 2000 to Rs28 billion in 2008, thereby laying the foundations of the development of a strong knowledge economy. Student enrolment in universities increased from 270,000 to 900,000 and the number of universities and degree awarding institutes increased from 57 in 2000 to 137 by 2008.

This rapid transformation deeply worried India and a detailed presentation was given to the Indian prime minister on July 22 about the dramatic progress in Pakistan.

A number of steps were taken to strengthen democracy at the grassroots. A large number of new TV channels were allowed and the media given full freedom. The local government system was launched to empower the people through a third tier of government. Women were empowered politically through reserved seats at all tiers of government. Minorities were provided with the system of joint electorate. ....


http://www.thenews.com.pk/Todays-News-9-222331-Lest-we-forget

Riaz Haq said...

In addition to the economic revival, Musharraf focused on social sector as well. Pakistan's HDI grew an average rate of 2.7% per year under President Musharraf from 2000 to 2007, and then its pace slowed to 0.7% per year in 2008 to 2012 under elected politicians, according to the 2013 Human Development Report titled “The Rise of the South: Human Progress in a Diverse World”.


Overall, Pakistan's human development score rose by 18.9% during Musharraf years and increased just 3.4% under elected leadership since 2008. The news on the human development front got even worse in the last three years, with HDI growth slowing down as low as 0.59% — a paltry average annual increase of under 0.20 per cent. Going further back to the  decade of 1990s when the civilian leadership of the country alternated between PML (N) and PPP,  the increase in Pakistan's HDI was 9.3% from 1990 to 2000, less than half of the HDI gain of 18.9% on Musharraf's watch from 2000 to 2007.



Acceleration of HDI growth during Musharraf years was not an accident.  Not only did Musharraf's policies accelerate economic growth, helped create 13 million new jobs, cut poverty in half and halved the country's total debt burden in the period from 2000 to 2007, his government also ensured significant investment and focus on education and health care. The annual budget for higher education increased from only Rs 500 million in 2000 to Rs 28 billion in 2008, to lay the foundations of the development of a strong knowledge economy, according to former education minister Dr. Ata ur Rehman. Student enrollment in universities increased from 270,000 to 900,000 and the number of universities and degree awarding institutions increased from 57 in 2000 to 137 by 2008. In 2011, a Pakistani government commission on education found that public funding for education has been cut from 2.5% of GDP in 2007 to just 1.5% - less than the annual subsidy given to the various PSUs including Pakistan Steel and PIA, both of which  continue to sustain huge losses due to patronage-based hiring.


http://vimeo.com/84504051

http://www.riazhaq.com/2014/01/musharraf-accelerated-financial-and.html

Riaz Haq said...

"Speaking fee for #Musharraf in $150K-200K range for a day," says Embark USA President David B. Wheeler. #Pakistan

http://www.newsweek.com/pakistans-musharraf-lucrative-speaking-fees-88033

"The [speaking] fee for Musharraf would be in the $150,000-200,000 range for a day," says Embark President David B. Wheeler, "plus jet and other V.I.P. arrangements on the ground." Wheeler says Clinton, for whom Embark has arranged speaking engagements in the Middle East, commands up to $250,000 per appearance. "If we did multiple events in multiple cities, [Musharraf] could get closer to the $500,000 to $1,000,000 range [for a series of talks]," he said. Embark, which promises "unique experiences that educate, entertain and enlighten," has also booked speeches for former U.S. President George H.W. Bush and former U.S. Secretary of State Colin Powell.

Pakistanis who know Musharraf well say this is good news for the former president, who is not believed to have salted away a fortune as some of his predecessors have done (Musharraf will only receive a modest army retirement pension). But he is a long way from the poor house. Workers are putting the finishing touches on a mansion, said to be worth some $2 million dollars, that he is building on five acres of prime land just outside Islamabad. Since his resignation he has been playing golf and tennis with friends, surrounded by heavy security, and is also planning to write a sequel to his successful 2006 autobiography, "In the Line of Fire," which could easily net him another seven-figure windfall.

Riaz Haq said...

Musharraf, Rove among speakers heading to Portland in 2010

The folks who attract big international names to Portland each year have done it again, landing Pervez Musharraf, Pakistan's former president, to speak here in March.

he World Affairs Council of Oregon's 2010 speaker series will also feature Nobel Prize-winning economist Joseph Stiglitz; Jane Lubchenco, National Oceanographic and Atmospheric Administration chief administrator; and -- in a face-off --Howard Dean, former chairman of the Democratic National Committee, and Karl Rove, strategist for President George W. Bush.
The speakers will take the stage at the Arlene Schnitzer Concert Hall in four events scheduled for February through May. The first will be at 7 p.m. Feb. 10, as Rove and Dean clash over America's role in the world.

They will kick off the 10th year of what has become the nation's biggest annual international series in terms of audience size and speaker stature.

Musharraf, who held what Time magazine termed the world's most dangerous job from 2001 to 2008, is the most enigmatic of the bunch. Derided as a dictator, Musharraf became a key U.S. ally during the Bush war on terror, balancing Washington's calls to crack down on extremism against demands from anti-American Islamist constituents.

"We don't get to hear very often what President Musharraf really thinks," said Wim Wiewel, Portland State University president and a series subscriber. "He was certainly a critical partner for the U.S. who nonetheless had to make all kinds of compromises with people who are enemies of the U.S."
Tickets
Series prices run $125 to $500, $90 for students. Go here or call 503-274-7488.The World Affairs Council is a nonpartisan membership organization that sponsors talks, helps schools provide international education and hosts emerging foreign leaders.
Staff members strive to outdo themselves with luminaries for series. The task becomes more challenging each year -- past speakers include Mikhail Gorbachev, the Dalai Lama and Sandra Day O'Connor -- as speakers' bureaus demand higher fees.

Musharraf, set to appear March 15, is the most controversial and highest-profile speaker of this year's series. He declined requests to be interviewed, as did Stiglitz.


Musharraf seized power in 1999 during a coup. As head of the military, Musharraf said he wanted to move away from Pakistan's "sham democracy." In 2007, Musharraf staged what many Pakistanis termed his "second coup," suspending the constitution, firing the supreme court's chief justice and declaring martial law.
After the Sept. 11, 2001, attacks on the United States, Musharraf agreed to join the Bush administration's so-called war on terror. Suddenly the man denounced by some Westerners as a tin-pot dictator became a close U.S. ally.


http://www.oregonlive.com/portland/index.ssf/2009/12/musharraf_rove_among_speakers.html

Riaz Haq said...

Here's an announcement of Peninsula Speaker Series in the San Francisco Bay Area that include Musharraf as a featured speaker, along with Condeleeza Rice, Laura Tyson and Paul Krugman.


Ticket prices ranged from $294 to $403 per person

http://speakerseries.net/pdf/series2009_2010.pdf