Over the last two decades, Pakistan has continued to offer much greater upward economic and social mobility to its citizens than neighboring India. Since 1990, Pakistan's middle class had expanded by 36.5% and India's by only 12.8%, according to an ADB report on Asia's rising middle class released recently.
The simplest definition of the middle class is a group of people in a society who are neither rich nor poor. The middle class has always been considered vital to a country's political stability and economic growth. The rich and the poor simply distrust each other too much to let the other govern. Nations with large middle class populations find it easier to reach consensus on sustaining good, democratic governance.
Unfortunately for Pakistan, the size of the middle class was very small when it came into existence, and the country was dominated by a small powerful feudal elite created by the British rulers to sustain their colonial rule. And the urban middle class remained small for decades. The situation has, however, finally begun to change in the the last decade of 1999-2009 with a combination of increasing urbanization and faster economic expansion that fueled significant job creation in the industrial and services sectors to enable middle class growth.
An ADB report on Asia's rising middle class released this month confirms that Pakistan's middle class has grown to 40% of the population, significantly larger than the Indian middle class of about 25% of its population, and it has been growing faster than India's middle class. 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, making it vulnerable to various shocks. This is also true of Pakistan.
Here are the details of income levels in India, Pakistan and China as reported by ADB:
Daily Income....Under$2..$2-$4.......$4-$10........$10-$20....Over $20
Pakistan has continued to offer much greater upward mobility to its citizens than neighboring India. Since 1990, China's middle class population has expanded by 61.4%, Pakistan's by 36.5% and India's by 12.8%.
In terms of education, average number of years of schooling in Pakistan is 13 years, 3 years more than India's 10, according to an education comparison published by Newsweek recently. An average Pakistani is, therefore, better educated and more capable of earning higher income than an average Indian.
In terms of absolute numbers in millions of people, China and India are naturally the biggest contributors to the rising population of Asia's middle class that is driving increasing consumption. They are followed by Indonesia and Pakistan vying for the third place.
The ADB report discusses in some detail the impact of Asia's rising middle class on a whole range of social, political and economic developments in the world. The report argues that "Asia’s large population and the rapid expansion of its middle class during a period of global economic rebalancing is fundamentally important as a driver not only of the Asian economy but also the global economy. However greater middle class wealth and consumption is only one factor in the region’s increasing importance. The rise of its middle class is likely to aid not only the growth process, but also result in substantial social, political, and environmental changes. Thus, the contention is that, building on strong growth and continued progress in reducing poverty in Asia, developing a stable middle class requires governments to formulate and implement middle class-friendly policies. In turn, this requires understanding and analyzing the characteristics of the middle class, the factors contributing to its growth, and the various implications—positive and negative—of its rise. These are some of the issues this special chapter addresses".
Here are some of the key points of the ADB report:
1. While 56% of developing Asia’s population, or nearly 1.9 billion people, were already considered part of the middle class based on an absolute definition of per capita consumption of $2–$20 per day in 2008, nearly 1.5 billion Asians were still living on less than $2.0 per day. Moreover, the majority of the Asian middle class still falls in the $2–$4 range, leaving them highly vulnerable to slipping back into poverty due to economic shocks. Thus, for the middle class to become a prominent force it will likely depend on its size and spending levels and characteristics. It will require governments to introduce policies that bolster the incomes of those already in the middle class. It will also require social policies to expand the middle class—such as through greater spending in education and health. Through these, it is possible to build a strong and stable middle class that continues to grow.
2. According to the “political economy” argument, societies with a small middle class are generally extremely polarized, and find it difficult to reach consensus on economic issues; they are overly focused on the redistribution of resources between the elite and the impoverished masses, each of which alternates in controlling political power. Societies with a larger middle class are much less polarized and can more easily reach consensus on a broad range of issues and decisions relevant to economic development (Alesina 1994).
3. Besides helping to reach consensus, Banerjee and Duflo (2008) have discussed three mechanisms through which a large middle class could promote development. First, the middle class may provide the entrepreneurs who create employment and productivity growth in a society. Second, “middle-class values”—that is, the values of accumulation of human capital and savings—are critical to economic growth. And third, with its willingness and ability to pay extra for higher-quality products, the middle class drives demand for high-quality consumer goods, the production of which typically presents increasing returns to scale. This encourages firms to invest in production and marketing, raising income levels for everyone.
4. Middle class is not inimical to the interests of the poor. Indeed, Birdsall (2010) argues that “… in the advanced economies the poor have probably benefited from the rule of law, legal protections, and in general the greater accountability of government that a large and politically independent middle class demands, and from the universal and adequately funded education, health and social insurance programs a middle class wants and finances through the tax system… A focus on the middle class does not exclude a focus on the poor but extends it, including on the grounds that growth that is good for the large majority of people in developing countries is more likely to be economically and politically sustainable, both for economic and political reasons.”
Talking about Pakistan's growing middle class, Professor Rasul Baksh Raees, head of social sciences at the Lahore University of Management Sciences, told the Christian Science Monitor that "the reach and influence of civil society has grown as Pakistan’s middle classes have become more affluent, organized (thanks in no small part to the Internet age), and confident".
The years 2007 and 2008 saw increasing political activism in Pakistan as many members of the nation's newly expanded middle class, most of whom rose to middle class status during Musharraf's economic boom, left the comforts of their homes for the streets to march against the suspension of civil liberties and the firing of Pakistan's chief justice by former President Musharraf. A test of the middle class now is how it responds to the current crises ranging from political instability, poor governance, rising corruption, economic stagnation and the massive flooding that is taking its toll on the nation. At this moment, the greatest need of the hour in Pakistan is greater social activism by the middle class to help their unfortunate fellow citizens devastated by the unprecedented floods sweeping the nation's rural landscape. Early media reports are encouraging, indicating that some Pakistani middle class networks are mobilizing to provide assistance to the flood victims. As the support efforts move from rescue and relief to reconstruction and rehabilitation, my hope is that Pakistan's middle class will be engaged in helping their fellow citizens for the long haul. Such sustained engagement will be a part of Pakistan's defense against religious extremism and radicalization of some in its alienated young population.
Here's a video clip on Pakistan's middle class:
Pakistan: a modern history By Ian Talbot
Disaster Dampens Spirits on Pakistan's 63rd Independence Day
Pakistan's Decade of Middle Class Growth
Comparing India and Pakistan in 2010
Pakistan Wage Structure 1990-2007
Middle Class Clout Rising in Pakistan
Urbanization in Pakistan
The Rise of Mehran Man
Industr ial Sector of Pakistan
India Has No Middle Class
Pakistan's Foreign Visitors Pleasantly Surprised
Escape From India
Reflections on India
After Partition: India, Pakistan and Bangladesh
The "Poor" Neighbor by William Dalrymple
Pakistan's Modern Infrastructure
Video: Who Says Pakistan Is a Failed State?
India Worse Than Pakistan, Bangladesh on Nutrition
UNDP Reports Pakistan Poverty Declined to 17 Percent
Social and Cultural Transformation in Pakistan
Pakistan's Choice: Talibanization or Globalization
Pakistan's Financial Services Sector
Pakistan's Decade 1999-2009
South Asia Slipping in Human Development
Asia Gains in Top Asian Universities
Pakistan's Industrial Sector
Pakistan's Multi-Billion Dollar IT Industry
India -Pakistan Military Comparison
Food, Clothing and Shelter in India and Pakistan
Pakistan Energy Crisis
then why in some of the key indicator of middle class strength, India is clearly ahead of Pak. Number of cars sold in India is around 1.25 million per annum. It is 125K in Pak. That is 10 times more for nearly 7 times in population. Also in recent years auto sales in Pak is tanking, whereas growing 18% to 30% in India. Doesn't jell with rest of your data.
the complete absence of domestic industries to support Pakistan cricket is another example. India's complete financial control of cricket tells where they stand. Players from other countries are willing to end their career for nations and play IPL instead. all bcos of money. where is pakistan.
sorry you can never convince me with fudged up numbers. there is a reason why the west looks for auto sales etc as key economic indicators. there is also a reason why MNCs are rushing towards india and not Pak to sell to middle class. Are you saying that you are smarter than them.
DC: "sorry you can never convince me with fudged up numbers. there is a reason why the west looks for auto sales etc as key economic indicators."
There is none so blind as those who will not see. The data I share is not mine...it's reported by credible international orgs who are far more aware of the situation than you or I.
The West does not look at the car sales numbers as an indicator of the size of the middle class....it's used as one of many numbers used to gauge the changes in the strength of the economy from month to month.
Car sales fluctuate for various reasons. Vehicle sales in one particular month or year is not an indication of the size of the middle class in a country. The drop in vehicle sales in America is not seen as a decrease in the size of its middle class.
As recently as 2008, the annual car sales in Pakistan were nearly 200,000 a year.
In India, a country of over a billion people, the snapshot of a million or more cars this year in a booming economy does not mean they suddenly have a bigger fraction of middle class population than Pakistan.
What is important is the income data over a long period of nearly two decades.
Over the last two decades, Pakistan has continued to offer much greater upward mobility to its citizens than neighboring India. Since 1990, Pakistan's middle class had expanded by 36.5% and India's by only 12.8%, according to the recently released ADB report on Asia's rising middle class that I have cited.
In terms of absolute numbers in millions of people, China and India are naturally the biggest contributors to the rising population of Asia's middle class that is driving increasing consumption. They are followed by Indonesia and Pakistan vying for the third place.
Mr Haq! Very thought-provoking blog, congrats and thanks for the post.
Critics such as DC often offer snapshots of economic data, not trends over a period of time that account for the creation and expansion of middle class in a nation.
If you look at several decades worth of data since independence, Pakistan's CAGR has been well ahead of India's.
Even though Pakistan did not have a middle class to speak of in 1947, it has been urbanizing and growing its middle class faster over the last 60 years. And now it is much more urbanized than India and it has a much larger middle class.
In a recent piece titled "Failed state? Try Pakistan's M2 motorway", Alistair Scrutton of Reuters summed it up as follows:
It (M2) puts paid to what's on offer in Pakistan's traditional foe and emerging economic giant India, where village culture stubbornly refuses to cede to even the most modern motorways, making them battlegrounds of rickshaws, lorries and cows.
There are many things in Pakistan that don't get into the news. Daily life, for one. Pakistani hospitality to strangers, foreigners like myself included, is another. The M2 is another sign that all is not what it appears in Pakistan, that much lies hidden behind the bad news.
The flood might improve upward mobility if the refugees are given help. Urban Pakistanis are philanthropic, in fuedal country philanthropy is against status quo maintenance policy..
Pakistan = middle class, India = poor. At least during Ramadan, you could bring some new Wine or atleast a new bottle. By the way, there is something about Indo-China power struggle.
NEW DELHI: Despite its shaky empirical foundations, the myth of the Great Indian Middle Class persists. A new Asian Development Bank report lauds the rise of the Indian Middle Class and projects it as the engine of global growth. However, according to the definition used in the report itself, the vast majority of this middle class earns between Rs 1,000 and Rs 2,000 per person per month. Only 0.0009% of Indians earn more than Rs 10,000 per month.
The ADB’s Key Indicators for Asia and the Pacific 2010 report released this week has a special chapter on the Rise of Asia’s Middle Classes. Projecting that the Asian middle class will dominate the next two decades (including crossing a billion in India alone by 2030), the report says that Asia’s emerging consumers are likely to assume the traditional role of the US and European middle classes as global consumers, and to play a key role in rebalancing the world’s economy.
However, the definitions used to arrive at such conclusions scarcely fit with the traditional definition of the middle class, as those who have not inherited wealth, hold regular jobs and enjoy a degree of financial security that allows them to consume and save and support the maintenance of law and order. The ADB report defines the middle class as those earning between $2 and $20 per person per day, measured in international dollars, ie adjusted for purchasing power parity. The ADB does add further nuance by splitting the middle class into three sub-sections: lower middle class ($2 - $4), middle middle ($4 - $10) and upper middle ($10 - $20).
The vast majority of the Indian middle class 82% of it, or 224 million people - however, fit into the first category. Since $1 PPP is Rs 17.256, this means that the vast majority of the Indian middle class earns between Rs 1035 and Rs 2070.
The ADB report shows that middle-class Indians systematically define themselves as poorer than they actually are in surveys. Even by this fairly stingy definition, in all of developing Asia, only Uzbekistan, Lao, Nepal and Bangladesh have a middle class that is a smaller proportion of the total population than in India. China’s middle class is 63% of its population, Sri Lanka’s 59% and Pakistan’s 40%.
Read more: Most of India’s 'middle class' earns between 1K and 2K - India - The Times of India http://timesofindia.indiatimes.com/india/Most-of-Indias-middle-class-earns-between-1K-and-2K/articleshow/6390170.cms#ixzz0xJCKmwZA
Mayraj: "The flood might improve upward mobility if the refugees are given help. Urban Pakistanis are philanthropic, in fuedal country philanthropy is against status quo maintenance policy.."
I agree. Major events like the great deluge in Pakistan always result in migration, and it can have a positive effect on the lives of migrants.
What is needed is a reasonably planned reconstruction and rehab effort that ensures the livelihoods of the migrants.
Pakistan has the wrong government for that. Karachi had a great government but that went against the grain of this government as well.
An article in the Independent also mentioned in this context how African droughts and floods had led to migrants going to cities, which, like Pakistani have had for most of their existence, do not have much of a government.
The local goverments where bureaucrats manage things are essentially status quo governments that fail to account for dynamic changes. I know what that was like, I lived in Karachi under such governance. I did not live in a Karachi with dynamic governance like Karachites have enjoyed under the last two mayors.
There has been a fair amount of coverage of this report here. I
wanted to clarify a point regarding the definition of the middle
class. Any income above $2 to $20 a day is being considered middle
class. Please note that this is not at market exchange rates but at
Purchasing Power Parity Rate which converts to Rs 16 per day for India
and about 24 Pakistani rupees per dollar per day. So this is about
Rs1000 in Indian rupees a month. If we consider a family of 5 then
this translated to a family income of Rs 5000 per month. This is a
ridiculously low figure and will be barely enough to feed five people
if they spend carefully. Barely 25% of the Indian population is
earning this amount and more, 20% being in the Rs 1000 to Rs 2000
range. I think the middle class should be defined at a minimum family
income of Rs 20,000 a month and a lower class from Rs 10,000 a month.
These are the people who are factory workers, Class 2 and 3 employees,
drivers, skilled craftsmen, some better off farmers etc. By no stretch
of the imagination can you call these people middle class in the
classical sense of the term. The amount of Rs 20,000 conforms to the
amount suggested by an earlier study of $ 10 a day. So the Great
Indian Middle Class is a myth. There is an upper class of about 60
million people and then there is a lower class of about 200 million
and then there are the poor about 900 million. Pavan
I agree with your analysis.
But even by this definition, vast majority of middle class in both India and Pakistan is perched at or sightly above $2 a day...making its members very vulnerable to any shocks such as the recent floods in Pakistan or global financial meltdown in 2008.
True. The poor suffer the most. North India is now getting submerged.
Very little coverage since it is the poor who are affected. Pavan.
Riaz, if you want to be credible you will have to use data very carefully. In academia you would fit the definition of a "data miner".
Data miners have a contrived view point they search or mine data to match or fit their point of view.
Furthermore, demographic data inevitably have a considerable amount of variation and is far from exact science.
Your profile indicates you are well educated. Please do justice to yourself.
Usmaan: "Riaz, if you want to be credible you will have to use data very carefully. In academia you would fit the definition of a "data miner".
Data miners have a contrived view point they search or mine data to match or fit their point of view."
The data I have shared in my post is from the ADB report released recently.
I have not massaged or changed anything there.
So you should direct your concern to the ADB which has lots of expertise in data collection, analysis and reporting...far more than individuals like you and me.
A wealthy Pakistani real estate developer has pledged to help the flood victims in Pakistan in a massive way. Here's a report by UAE paper the National:
ISLAMABAD // Malik Riaz Hussain, a billionaire Pakistani developer, has responded to the misery of millions of his flood-stricken compatriots by pledging to spend 75 per cent of his fortune on rebuilding their lives.
The extraordinary offer was made in a television interview in which he told how he had sent a letter before the floods to 100 of Pakistan’s most wealthy and powerful people asking them to pool money into a fund to repair homes, provide vocational training and extend microfinance loans to impoverished Pakistanis.
Mr Hussain is the chairman of Bahria Town, a US$6 billion (Dh22bn) urban development enterprise that has built gated communities for a million people in the central cities of Lahore and Rawalpindi.
Bahria Town has already responded to the current floods by vastly expanding a corporate social responsibility programme called dastarkhwan, or dining spread, to provide two meals a day to more than 150,000 flood refugees in inundated areas and free medical care at mobile hospitals.
Its housing projects, unrivalled in Pakistan as models of highly desirable but affordable suburban living, have revolutionised Pakistan’s real-estate sector over the last decade by targeting the previously untapped middle class, rather than the rich.
The huge popularity of the Bahria Town brand has made Mr Hussain, at the age of 62, one of a handful of Pakistanis believed to be billionaires in US dollar terms, although this cannot be verified as he has never released his tax records.
A man of unremarkable origins, Mr Hussain espouses traditional family values, and has expressed them in the modern family-friendly suburbs he has built.
Reproductions of famous landmarks, such as London’s Trafalgar Square, the Eiffel Tower and the Statue of Liberty, point to his aspirations for Pakistan, while beautiful mosques and Quranic calligraphy suggest that modernity is in harmony with Muslim beliefs.
Careful analysis of the data of adb gives the following details :
1. 33% of Pakistan is in $2-4 where as India is 20.45%.
Pakistan has 61% more people under the lowest slab. It has work a lot to move this further.
gunam: "1. 33% of Pakistan is in $2-4 where as India is 20.45%.
Pakistan has 61% more people under the lowest slab. It has work a lot to move this further. "
Your calculation is wrong.
India has 20.5% out of 25.05% ...about 82% of its middle class in the lowest income bracket.
Pakistan has 32.95% out of 40.12%...also about 82% of its middle class in the lowest bracket.
But Pakistan has 0.15% earning over $20 a day vs India's 0.10% making over $20.
I think you will have to compare apple to apple.
a b c=a/b
Pakistan32.94 40.12 82.10%
India 20.45 25.05 81.64%
India inspite of having larger population has lesser number of people in less than 2$ bucket. Pakistan is hihger by 0.47%.
Report is a nice one, i will go through the same and put facts.
Thanks for your response. However I was trying to impress upon you the variability and problems with some of the data. As a mathematician working for a major firm, I would like to make you aware that macro economic data is very useful when evaluating changes within a country. Country to country evaluations comparisons are much trickier, especially, countries with lower bases.
With regard to ADB, please visit http://www.adb.org/Statistics/reta_6088.asp to help you understand PPP data collection.
Ultimately, you want to keep away from "data mining" because it may actually weaken your analysis.
Usmaan: "you want to keep away from "data mining" because it may actually weaken your analysis."
You are missing the point. I am not doing any "data mining", whatever it means to you.
You can argue with one data point or one report, but you can not dismiss when a dozen or more reports reach the conclusion that average Indians are faring very badly in basics of food, water, shelter, clothing, sanitation, etc when compared with average Pakistanis or average Africans in the poorest countries of sub-Saharan Africa.
Generally it is a known fact that many of the developing countries like india and pakistan has to go a long way to achieve the concept of people above poverty level.
Further every country has its own swot and charter of movement. What maximum that can be done is to reduce the tension between the country which can help the country to spend the money on people rather than defence
You made a grave error in your article on Middle Class using the UNDP Education index. That index clearly shows India at #141 with a 0.638 score whereas Pakistan has 0.492 at #163.
You have 0.665 for Pakistan at #133!
With your educational background, I would expect this not to happen unless you did it deliberately to misinform.
Here's an excerpt from NY Times story about declining power of Pakistan's feudal class:
For years, feudal lords reigned supreme, serving as the police, the judge and the political leader. Plantations had jails, and political seats were practically owned by families.
Instead of midwifing democracy, these aristocrats obstructed it, ignoring the needs of rural Pakistanis, half of whom are still landless and desperately poor more than 60 years after Pakistan became a state.
But changes began to erode the aristocrats’ power. Cities sprouted, with jobs in construction and industry. Large-scale farms eclipsed old-fashioned plantations. Vast hereditary lands splintered among generations of sons, and many aristocratic families left the country for cities, living beyond their means off sales of their remaining lands. Mobile labor has also reduced dependence on aristocratic families.
In Punjab, the country’s most populous province, and its most economically advanced, the number of national lawmakers from feudal families shrank to 25 percent in 2008 from 42 percent in 1970, according to a count conducted by Mubashir Hassan, a former finance minister, and The New York Times.
“Feudals are a dying breed,” said S. Akbar Zaidi, a Karachi-based fellow with the Carnegie Foundation. “They have no power outside the walls of their castles.”
I was born in the US and visited Pakistan for the first time ever at the begining of Ramadan to do my Islamic duty and perform charity work.
I know you talk from a much higher Ivory Tower when talking about Pakistan's middle class. The hard reality shocked me with disbelief. In Karachi, filth was everywhere, flies were buzzing around like mad and the stench of open sewers was nauseating. People dying of disease like in the middle ages!1
I don't think the Government or the middle class that you describe is doing anything to help people living in these sub-human conditions. Why?
This is the challenge people should respond to. When you glorify the so-called Middle Class the poor masses are simply ignored.
Do your Islamic duty and highlight their plight in your blog. NOW!
nizar: "I was born in the US and visited Pakistan for the first time ever at the begining of Ramadan to do my Islamic duty and perform charity work."
I am not surprised by your reaction when you, an American, saw a developing nation for the first time.
When visitors like you see a squatter city in India or Pakistan or Bangladesh, they observe overwhelming desperation: rickety shelters, little kids working or begging, absence of sanitation, filthy water and air. However, there are many benefits of rural to urban migration for migrants' lives, including reduction in abject poverty, empowerment of women, increased access to healthcare and education and other services. Historically, cities have been driving forces in economic and social development. As centers of industry and commerce, cities have long been centers of wealth and power. They also account for a disproportionate share of national income. The World Bank estimates that in the developing world, as much as 80 percent of future economic growth will occur in towns and cities. Nor are the benefits of urbanization solely economic. Urbanization is associated with higher incomes, improved health, higher literacy, and improved quality of life. Other benefits of urban life are less tangible but no less real: access to information, diversity, creativity, and innovation.
Pakistan is a poor, developing nation with lots of problems in large urban centers like Karachi...some of which are created as a result of rapid, unplanned migration from rural to urban areas.
What Pakistan's slum dwellers need is not pity or charity, but a hand up to stand on their own two feet. And a number of individuals and organizations are doing exactly that through community development projects such as sanitation (Orangi Pilot Project), schools, clinics, and provision of microfinance to improve the economic situation by facilitating grassroot level entrepreneurship.
I believe it's part of the urbanization and development process that will ultimately be good for Pakistan.
Here is an excerpt from the World Bank blog on poverty reduction in Pakistan from 2000-2008:
A World Bank report released on July 30 finds that poverty in Pakistan fell by an impressive 17.3 percentage points between 2001 and 2008 (from 34.5 percent in 2001-02 to 17.2 percent in 2007-08). Three out of Pakistan’s four major provinces – Khyber Pakhtunkhwa (formerly NWFP), Punjab, and Sindh – saw significant declines in poverty during this period. The largest fall in poverty was in Khyber Pakhtunkhwa (KP). According to the Bank report “high level of remittances, both foreign and domestic, seem to have facilitated” the decline in poverty in KP.
Pakistan saw migrant remittances reach a record $ 8.9 billion in fiscal year 2010, an increase of 14 percent compared to the 2009 fiscal year despite the global economic crisis (Pakistan’s fiscal year runs from July to June). The World Bank report says “Continued strong growth in worker’s remittances in the past few years has also contributed to improvements in the external current account balance” and “have facilitated improvement in the country’s external position”.
Migration and remittances have provided a source of income for households in Khyber Pakhtunkhwa (KP) and other provinces in Pakistan. A recent Asian Development Bank study found that foreign remittances constituted 9.4 percent of household income in KP, compared to 5.1% for Punjab, 1.5% for Baluchistan, and 0.7% for Sindh.
There is now a risk that devastating floods that have hit Pakistan, killing more than 1,200 people and leaving 2 million people homeless, could reverse some of the gains in poverty achieved in the last few years, which were already believed to have been weakened in the wake of the recent financial crisis and rise in food prices.
During past natural disasters, migrants have sent additional remittances to help their families and friends in need – for example, during the Pakistan earthquake in 2005, in Philippines after typhoons Ondoy and Pepeng in 2009, after an earthquake in Haiti in early 2010, and in other countries in Asia, Africa and Latin America. It is likely that the Pakistani diaspora will send additional financial resources to help their family, friends and even larger communities. These person-to-person transfers could complement official aid efforts.
The official aid community and Pakistan’s government should welcome and facilitate the overseas Pakistanis’ help by quickly restoring the payments and financial infrastructure in affected areas, so that family members affected by the floods can continue to receive remittances. Some useful lessons can be learned from the example of the recent US-led efforts to keep remittances flowing to Haiti after the earthquake in early 2010.
World Bank blog on Pakistan poverty contd:
Some issues for discussion:
1. How can the Pakistani migrant community continue to provide assistance through remittances to their friends and relatives, and help their communities through direct giving? How can the international aid community and Pakistan’s government facilitate this process?
2. How can the payments and settlement infrastructure for remittances be quickly restored in the flood- affected areas to enable these person-to-person flows to reach the intended beneficiaries?
3. How can the international aid community and Pakistan’s government involve (and coordinate with) the Pakistani migrant communities in North America, Europe and the Gulf for post-disaster relief and reconstruction?
Here's a Dawn report about wheat situation in Pakistan:
ISLAMABAD: The government has shelved plans to export two million tons of wheat because of an estimated loss of about one million tons in the floods.
An official told Dawn on Wednesday that Punjab had asked the federal government not to consider its earlier wheat export proposal.
He said Punjab’s three major wheat producing districts — Rajanpur, Rahimyar Khan and Muzaffargarh — had been badly affected and stocks in government warehouses had been inundated. Private stocks of producers have also been damaged.
The provincial food department has reported a loss of about 550,000 tons of wheat, although final estimates are still being worked out.
Another 80,000 tons have been washed away in Khyber Pakhtunkhwa.
The official said the estimates of stocks lost in Sindh had not yet been prepared because several areas in the province were still inundated, but the overall losses were likely to be around one million tons.
Officials said there was no cause of concern in the local market because the government had sufficient stocks to meet domestic requirements.
The nation consumes about 23 million tons of wheat a year and it has about two million tons of surplus even after the estimated loss of one million tons.
For the past couple of years, the government has been maintaining about one million tons of buffer stocks to meet any shortage.
“Even after keeping the buffer stock, the government still has around a million tons in surplus, but it cannot take the risk offloading it, just in case there is a bad crop next season,” an official said.
He, however, expressed the hope that Punjab and Khyber Pakhtunkhwa would reap bumper crops next season because of fresh fertile layer brought in by the floods. “The floods may be a blessing in disguise for the wheat crop in Punjab, the country’s food basket, which will more than compensate for a lower output in Sindh.”
The government had decided in July to export two million tons of wheat, but rescinded the decision because of lower international prices. The exports required about Rs15 billion subsidy and the Economic Coordination Committee of the cabinet vetoed the export proposal, saying the amount should be passed on to consumers.
The next wheat sowing begins in October.
CIA 2010 REPORT as of 09/03/2010
Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal political disputes and low levels of foreign investment. Between 2001-07, however, poverty levels decreased by 10%, as Islamabad steadily raised development spending. Between 2004-07, GDP growth in the 5-8% range was spurred by gains in the industrial and service sectors - despite severe electricity shortfalls - but growth slowed in 2008-09 and unemployment rose. Inflation remains the top concern among the public, jumping from 7.7% in 2007 to 20.3% in 2008, and 14.2% in 2009. In addition, the Pakistani rupee has depreciated since 2007 as a result of political and economic instability. The government agreed to an International Monetary Fund Standby Arrangement in November 2008 in response to a balance of payments crisis, but during 2009 its current account strengthened and foreign exchange reserves stabilized - largely because of lower oil prices and record remittances from workers abroad. Textiles account for most of Pakistan's export earnings, but Pakistan's failure to expand a viable export base for other manufactures have left the country vulnerable to shifts in world demand. Other long term challenges include expanding investment in education, healthcare, and electricity production, and reducing dependence on foreign donors.
Singh: "Pakistan, an impoverished and underdeveloped country.."
Pakistan is much less impoverished, and more developed than India when it comes to meeting basic human needs of food, shelter, clothing and sanitation.
India, not Pakistan, is poorer than the poorest of African nations, according to recent multi-dimensional poverty index report published by Oxford researchers.
India, not Pakistan, has two-thirds of its population defecating in the open.
India, not Pakistan, is home to the world's largest population of poor hungry and illiterate people in the world.
So let;s get your facts straight!
CIA INDIA REPORT AS OF 09/03/10
India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization, including reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with only one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers. An industrial slowdown early in 2008, followed by the global financial crisis, led annual GDP growth to slow to 6.5% in 2009, still the second highest growth in the world among major economies. India escaped the brunt of the global financial crisis because of cautious banking policies and a relatively low dependence on exports for growth. Domestic demand, driven by purchases of consumer durables and automobiles, has re-emerged as a key driver of growth, as exports have fallen since the global crisis started. India's fiscal deficit increased substantially in 2008 due to fuel and fertilizer subsidies, a debt waiver program for farmers, a job guarantee program for rural workers, and stimulus expenditures. The government abandoned its deficit target and allowed the deficit to reach 6.8% of GDP in FY10. Nevertheless, as shares of GDP, both government spending and taxation are among the lowest in the world. The government has expressed a commitment to fiscal stimulus in FY10, and to deficit reduction the following two years. It has increased the pace of privatization of government-owned companies, partly to offset the deficit.
Singh: "CIA INDIA REPORT AS OF 09/03/10 India is developing into an open-market economy.."
The writers of this report should visit India and see for themselves the reality portrayed in Peepli Live...the reality of 200,000 farmers who have taken their own lives in the last ten years and the reality that 70% of Indians still defecate in the open.
The State of Food Insecurity in the World 2009 Report : 1990 & 2004
UN FOOD & HUNGER INDEX ( % Hunger )
PAKISTAN 22% 23%
INDIA 24% 22%
Are your % defecation ##s cited from a reliable source or is it arbitrarily made up?
( I live in India thus I know the country has a long way to go but we stopped comparing ourselves to Pakistan in economic and development terms about 10-15 years ago)
Singh: "we stopped comparing ourselves to Pakistan in economic and development terms about 10-15 years ago) "
But from what I can see your comments so far, you are still comparing yourself with Pakistan. Isn't that a contradiction?
The fact is that most Indians are obsessed with Pakistan, and India's crown prince Rahul Gandhi confirmed it last year, according to news by America's NPR Radio:
"I actually feel we give too much time in our minds to Pakistan," says Rahul Gandhi of India's ruling Congress Party. He thinks it's time for attitudes to change.
His mother, Sonia Gandhi, is the party's president. His grandmother was former Prime Minister Indira Gandhi, the assassinated daughter of Jawaharlal Nehru, India's first prime minister.
Rahul Gandhi, who many observers believe will one day lead India, would like to see his nation spending much less time obsessing about Pakistan.
I am simply responding to your comparisons.
RE : Rahul Gandhi Comments on India & Pakistan
If you listen to him or read his many articles, he is asking Indians to move away from making comparisons because it is just not fruitful and is an exercise in futility. The exception is Foreign Relations with Pakistan.
He is asking Indians to focus on much harder tasks like concentrating on the economic and social well being of the country. Accordingly, he points out we have a lot of work to do.
Here's another report, this one by Christian Science Monitor from Muzaffargarh, alleging that powerful feudal lords inundated and devastated poor populations to protect there own lands and crops from flood water:
One of the most flood-ravaged districts of Pakistan would not be under water today if flood management recommendations had not been overruled at the last moment by powerful political interests, according to senior officials here.
In Muzaffargarh, the deaths of 51 people, displacement of 1.5 million, and destruction of 337 schools could have been mostly avoided if water had been diverted onto land set aside as a flood basin. The basin is vacant except for fields of sugar cane and cotton grown there surreptitiously by feudal families of the elite.
In a long interview with five dam engineers entrusted with the upkeep of the Taunsa Barrage, the engineers reiterated that belief. "This is nothing more than a political game, but we aren't hopeful the truth will come out," said one engineer.
One of only two officials willing to criticize the government on the record is Asrar ul-Haq, chief engineer of the Irrigation & Power Department whose office is located at the provincial capital of Lahore.
Mr. Haq said that breaching the right-hand side would have brought its own danger. But, he conceded: "In hindsight, the people of Muzaffargarh can rightly feel very, very miserable about this. The flooding in their area would have been far less severe [if the right bank had been breached]."
Similar stories emerging all over the country suggest that while nature sent the waters, powerful men directed some of the deluge. The allegations threaten already tenuous confidence in the Pakistani government, among both its own citizens and Western reconstruction donors.
"Most of the flood damage would simply not have occurred in Muzaffargarh district if the right side of the dam had been breached [in] time," says a senior town official, waving his arms around a map of the district. "You can say this was man-made." The official, fearing for his job, asked that his identity be withheld.....
On Aug. 2, as the Indus waters swelled perilously close to the known breaking point of the Taunsa Barrage, officials led by the Punjab secretary of irrigation made the decision not to breach the right bank. In the early hours of Aug. 3, the Indus burst through the left bank instead, inundating some 400,000 acres of the district.
Standing on the Taunsa Barrage, the contrast between the two areas cannot be clearer. The vast tracts of unharmed land, which fall in the neighboring district lie to the west, while the inundated Muzaffargarh district is to the east.
Many locals allege that two powerful families, the Hinjras and the Khosas, both from the PML-N party, which rules Punjab, Pakistan's most populous province, illegally occupy the flood-basin area.
"They put pressure on the irrigation secretary and the district coordination officer," says Jamshed Dasti, a politician from an opposing party.
Workers on the land did not dispute the identity of their bosses. "Many of us villagers who work for the Hinjras cross the river each day to till the fields or graze the animals," Noman, a man traveling to the area on foot, added.
When asked about the land, Ahmad Yaar Hinjra, a member of the provincial government, denied the land was his. "Neither I nor any member of my family hold any land on the right-hand side of the barrage," he said, adding: "Who are these people who named me? Tell me their names. They are being used by my political enemies to ruin my name."
More striking still was the denial offered by Zulfiqar Khan Khosa, a former governor of Punjab who is known to have very close ties with the Sharif brothers – both Nawaz Sharif, the twice-former prime minister of Pakistan, and Shahbaz Sharif, Punjab's chief minister.
Here's an excerpt from a recent piece, titled "Is Pakistan a failed state? No." by C. Christine Fair, professor at George Washington University and a visiting scholar at the Lahore University of Management Science, published in June 24, 2010 issue of Foreign Policy Magazine:
Once again, Pakistan looms as a country deemed to be "critical" in Foreign Policy's annual Failed State Index. But Pakistan is not a failed state, even though some of its institutions have declined in capacity, while others never worked well from the start. This year, Pakistan ranks tenth, below several African countries, Afghanistan, and Iraq, and above Haiti, which has recently been devastated by an earthquake.
In short, the Failed States Index is clearly only one side of the die. While sitting at a computer crunching numbers, even with expert input as the index apparently uses, the larger story is missed. Pakistan has its problems and enormous challenges lay ahead, but it is far from a failed or even failing state.
European textile firms are protesting EU trade concession for Pakistani textile imports to help Pakistan after the massive floods. Here's a Wall Street Journal story on it:
European Union trade concessions for flood-ravaged Pakistan have triggered a backlash among European manufacturers, led by an EU textile sector already imperiled by Chinese imports.
The tensions show how the economic downturn is increasing anxieties over trade to the point where even targeted humanitarian efforts to lower tariff barriers are called into question.
The European Commission, the EU's executive, Wednesday approved tariff waivers on 75 categories of imports from Pakistan for up to three years. The gesture followed an order by EU leaders eager to show they're helping some 10 million Pakistanis left without shelter after violent flooding this summer.
Pakistan isn't a big exporter to the EU, shipping only $4.2 billion worth of goods to the bloc last year. It ranked a distant 46th among EU trading partners, between the United Arab Emirates and Serbia.
However, more than 75% of those exports are textiles, clothing, leather or related products, and those goods will make up a majority of the roughly $140 million in total extra trade the EU says the deal will generate from eliminating the EU tariffs.
That's a problem for European textile manufacturers, mostly located in Europe's southern rim, from Portugal to Italy to Romania. Thousands of small shops and their workers have been getting crushed ever since China joined the World Trade Organization in 2001, partially opening up European textile markets. Some of these European economies are suffering slow growth because of the euro zone's debt problems.
Here's a piece by Jacqueline Novogratz saying Pakistan needs more servant leadership:
I'm in the office of Dr. Sono, one of Pakistan's most extraordinary social entrepreneurs. Born a Hindu Dalit or "untouchable," he has worked for his country since his youth and emerged as one of the most important grassroots leaders in Sindh. He runs the Sindh Rural Support Organization, a nonprofit company that has emerged as the leading coordinator of local relief during the floods, providing food, sanitation, water and healthcare to six provinces, and serves 60,000 individuals two hot meals a day. With him are Sabiha Bhutto and Asma Soomro who Dr. Sono introduces as his "commandants." Both women carry serious expressions that give them gravitas and weight. Asma wears a black shalwar and an olive-and-rust-colored tropical print shawl over her head. Saibiha wears red-and-white narrow striped cotton. These two women led others to mobilize 80,000 people during the flood emergency.
I ask what they learned from the experience. Asma responds, "We learned to really go to their level, speak their language, feel what they would feel, and build trust." This is classic social-organizing language. "During these three weeks, I met a 90-year-old woman. She wanted to see how other people were coping in the disaster because she herself had gone through crises and was herself prepared for what might come. This inspired me a lot."
Sabiha speaks as much with her eyes as her hands. She remembers the sense of panic among people in Shikarpur who were understandably terrified by the threat of floods. "I spread calm to the people, and promised that Shikarpur would make it through the floods. I urged them to help those who were really in need." When local residents wanted to cross the river, she stopped them. She could see what others could not -- buffalos flying through the churning rapids, most of them drowning. Her neighbors trusted her, and lives were saved. I ask what she had learned. "I realize what it means to be brave," she answers.
Neither Sabiha nor Asma consider being a woman a hindrance, even in conservative parts of Pakistan. "People know that we are here for them," says Sabiha. "We've earned their trust." Between them, they've delivered sixteen women to the hospital to enable them to give birth during the crisis period.
Dr. Sono jumps in and says, "Last week, I received a phone call from a nearby village. The caller said people were drowning. And you know, I love that village." His eyes twinkle so that you can feel that love. I adore Dr. Sono for being so exquisitely alive and caring. He continues:
I called Sabiha and Asma and told them to go to the village and help people escape before the flood waters came. It was 10:30 at night, and still they went. This is a dangerous area, and women especially can be killed going out at night. But they went. And by midnight, the village was empty and there was not a single drowning.
The conversation turns to Pakistan's future, and what can be done about corruption.
Corruption is a big problem here. But we are seeing changes. We have minimized corruption at the district level, and now we have to translate that to the top level. We also have to focus on educating people at the grassroots, too, so that they begin to question government. This way, we can start to end corruption.
This way, the world can change.
Here's a BBC report about Hilary Clinton demanding Pakistan's rich do more for nation's flood recovery:
Mrs Clinton said: "It's absolutely unacceptable for those with means in Pakistan not to be doing their fair share to help their own people while taxpayers in Europe, the United States and other contributing countries are all chipping in."
The EU and US have contributed some $450m (£280m) each to the Pakistan flood aid effort and the EU has also offered a trade deal to lift certain duties.
Mrs Clinton went on: "The most important step Pakistan can take is to pass meaningful reforms to expand its tax base.
"The government must require that the economically affluent and elite support the government and people of Pakistan."
The BBC's Syed Shoaib Hasan in Islamabad says Pakistan's tax system has come in for a great deal of criticism in recent years.
Tax collection remains abysmal, he says, and Pakistan's elite routinely evade taxation by using political influence.
The worst offenders include landlords and industrialists, some of whom are part of the current government, our correspondent says.
Following the floods, hospitals, schools, bridges and thousands of kilometres of roads need to be rebuilt with a total reconstruction bill that could stretch into tens of billions of dollars.
The floods, caused by heavier than usual monsoon rains in July, inundated a fifth of the country, destroying or damaging almost two million homes.
The floods that swept across Pakistan since July caused an estimated $9.7 billion in damage to infrastructure, farms, homes, as well as other direct and indirect losses, the Asian Development Bank (ADB) and the World Bank said today.
The estimate was presented in the Damage and Needs Assessment (DNA), a survey conducted nationwide by ADB and the World Bank to assess the extent of the flood damage. The concluded survey was earlier submitted to the Government of Pakistan and today made public at the Friends of Democratic Pakistan (FoDP) meeting in Brussels, Belgium.
Here are some excerpts from Bloomberg-Businessweek on Pakistani companies prospects after floods:
Toyota Motor Corp. and Unilever affiliates in Pakistan said the worst floods in the nation’s history may sap growth and force production cuts as consumers struggle to cope with the destruction of crops and houses.
“The economy is fragile,” Parvez Ghias, chief executive officer of Toyota-backed Indus Motor Co., Pakistan’s largest automaker by market value, said by phone yesterday from Karachi. “The prices of food and essentials have gone up significantly.”
“The overall impact of the floods is going to be very serious for the economy,” said Nasim Beg, who helps manage $200 million at Karachi-based Arif Habib Investments Ltd. “In the long term, something like cement might look alright, but in the immediate term, I think everything will be under stress.”
“The damage is going to be significant,” said Muhammad Adil Ghani, plant operations head at Lahore-based Nishat Mills. “We have to reevaluate the forecast for the coming year.”
One of the group’s power plants, in Punjab province, northern Pakistan, was closed for at least five days because of floods, he said. The company’s four textile factories around Karachi, Faisalabad and Lahore haven’t been directly affected.
Nationwide car sales may fall as much as 25 percent this quarter because of the floods, said Indus Motor’s Ghias. The automaker, 38 percent owned by Toyota and an affiliate, may cut output in October because of the expected slowdown, he said. The company has enough orders to maintain its 200 cars-a-day production rate until then, he said.
Pakistan’s major cities and industrial areas, such as Karachi and Faisalabad, have escaped the flooding, which has limited damage at factories and may also curb the impact on earnings. Unilever’s local unit gets about 8 percent of revenue from the worst affected areas, CEO Malik said.
“So far there hasn’t been a major impact on sales,” he said. A reduction in costs may offset any decline in revenue, safeguarding profit, he said.
Mark Mobius, who oversees about $34 billion in developing- nation assets as executive chairman of Templeton Asset Management Ltd.’s emerging markets group, is also buying Pakistani shares in anticipation of a rebound from the floods. Local stocks’ valuations are “very, very attractive,” he said earlier this week.
Unilever Pakistan has maintained production through steps including re-routing shipments of goods, Malik said. Nestle Pakistan Ltd., a unit of the world’s biggest food company, has continued operations at its factories, which are concentrated in Sheikhupura, Kabirwala and Islamabad.
The full impact of the disaster on foodmakers will become clearer over the next week or so as they work through inventories of goods such as fruit pulp, used to make juices, said Syed Fakhar Ahmed, a spokesman for Nestle Pakistan.
Engro Foods’ milk tankers have been unable to reach areas of Sindh and Punjab provinces because of the floods, CEO Rehman said. Retail milk prices may eventually rise by as much as 4 rupees (5 cents) a liter, he said. In the short term, the effect on food prices has been mitigated by Ramadan, a month of fasting for Muslims that began on Aug. 11, he said.
“After the people return and transportation resumes, the supply chain will recover but not completely,” Rehman said.
The country will need to import 1 million head of livestock within five months to replenish stocks, according to the nation’s Meat Merchants Welfare Association. Livestock accounted for 11 percent of gross domestic product in the year ended June 30, according to the government’s economic survey.
“Agriculture is a very significant part of the economy,” Indus Motors’ Ghias said. “If we’re going to see negative growth there, other sectors will be impacted.”
In addition to significant foreign institutional investments (FII) in Karachi shares last year, the reports of surging remittances by overseas Pakistanis and the nation's growing exports are the only two other pieces of good news amidst an avalance of bad news on the economic front in Pakistan in 2010.
The State Bank of Pakistan has reported that overseas Pakistanis sent home $5.291 billion during July-Dec, 2010, an increase of $761 million or 17 per cent year over year, according to Pakistan's Dawn newspaper.
Remittances of $863 million were sent by overseas Pakistanis last month, up 23.72 per cent or $165 million compared to December, 2009.
Exports in the July-December 2010 touched almost $11 billion – $1.8 billion, or 20.6per cent, higher than last year’s exports in the corresponding period. Meanwhile, imports stood at $19.2 billion, marking a growth of 19.6 per cent, or $3.2 billion, in the first half, according to the Express Tribune.
Pakistani government has been relying heavily on remittances by overseas Pakistanis to fund the massive trade imbalance, which exceeded $8 billion during the first six months of this fiscal.
The increased remittances and rising exports have helped bring down the nation's current account deficit to $504 million for six months, or 0.6 percent of GDP, about 30% lower than the same period in the previous year.
Here's an excerpt from a Wired.com report on how Pakistani techies are helped in the flood-relief effort:
One of the biggest problems in flood relief is locating people displaced by the flood who need food, shelter or medicine. So Sohaib Khan, a computer-science professor at the Lahore University of Management Scientists, put together a widget to help. Floodmaps relies on Google Earth and Google Maps to track the path of the flood and monitor devastation like washed-out bridges that need to be rebuilt. His maps page provides detailed views of over 9000 villages affected by the downpour, broken down by region.
The primary customer for Khan’s maps are non-governmental organizations at work in Pakistan. “Our goal is to get as much data out there as possible,” he says. “We are now working with other NGOs to help them with their mapping needs, both for the current phase as well as planning for the upcoming rehabilitation phase.” But it’s not just independent aid groups that have made use of Floodmaps. The Punjab government’s detailed flood-relief website runs Floodmaps on its mapping page.
Khan’s website makes it easy to get one of his widgets: Just file a request through a provided form and receive a Floodmap. But that’s about as far as his efforts go in terms of social media. The maps themselves track data provided by affiliated aid groups about broken dams, damaged roads and other affected infrastructure. But those groups — or citizens themselves — can’t adjust the maps themselves. “We have not yet really exploited crowdsourcing,” Khan says.
That falls to a group called PakReport, an impromptu collection of Pakistani technologists and their mostly-American academic friends. PakReport is a donor-supported SMS effort that allows people affected by the flood to send in their location and a message about their need. Using a mapping tool called Ushahidi, flood-stricken Pakistanis can find their emergency information tracked by type and location, giving official and independent aid agencies a view into the evolving landscape of people’s needs. Text to 3441 and help create a distributed database of crisis information.
One of the measures of the goodness of a nation, particularly its middle class, is its level of civic engagement.
By this measure, advanced western nations lead the pack with the United States in #1 position, followed by Ireland, Australia, New Zealand, Britain, Holland, Canada, and lo and behold! Sri Lanka.
In South Asia, Pakistan is a distant second to Sri Lanka's 51% participation rate. Pakistan's participation rate of 42% ranks it at 27, the same as Israel.
India lags far behind with the participation rate of only 28% ranking it at 48 among 130 nations, according to a recent Gallup poll on civic engagement that included 130 nations.
While 53% of Sri Lankans gave money to charity and 53% volunteered time, 51% of Pakistanis contributed money and 27% volunteered time. In India, 28% donated money and 18% volunteered time. Comparable figures for the top-ranking United States are 65% and 43%.
Here are a few excerpt from an Op Ed piece by Francis Fukuyama in today's Wall Street Journal. It's titled "Is China Next?":
Observing the high levels of political instability plaguing countries in the developing world during the 1950s and '60s, Mr. Huntington noted that increasing levels of economic and social development often led to coups, revolutions and military takeovers. This could be explained, he argued, by a gap between the newly mobilized, educated and economically empowered people and their existing political system—that is, between their hopes for political participation and institutions that gave them little or no voice. Attacks against the existing political order, he noted, are seldom driven by the poorest of the poor in such a society; they tend to be led, instead, by rising middle classes who are frustrated by the lack of political and economic opportunity.
All of these observations would seem to apply to Tunisia and Egypt. Both countries have made substantial social progress in recent decades. The Human Development Indices compiled by the United Nations (a composite measure of health, education and income) increased by 28% for Egypt and 30% for Tunisia between 1990 and 2010. The number of people going to school has grown substantially; Tunisia especially has produced large numbers of college graduates. And indeed, the protests in Tunisia and Egypt were led in the first instance by educated, tech-savvy middle-class young people, who expressed to anyone who would listen their frustrations with societies in which they were not allowed to express their views, hold leaders accountable for corruption and incompetence, or get a job without political connections.......
It is certainly true that the dry tinder of social discontent is just as present in China as in the Middle East. The incident that triggered the Tunisian uprising was the self-immolation of Mohamed Bouazizi, who had his vegetable cart repeatedly confiscated by the authorities and who was slapped and insulted by the police when he went to complain. This issue dogs all regimes that have neither the rule of law nor public accountability: The authorities routinely fail to respect the dignity of ordinary citizens and run roughshod over their rights. There is no culture in which this sort of behavior is not strongly resented....
Indeed, there is some reason to believe that the middle class in China may fear multiparty democracy in the short run, because it would unleash huge demands for redistribution precisely from those who have been left behind. Prosperous Chinese see the recent populist polarization of politics in Thailand as a warning of what democracy may bring.
The fact is that authoritarianism in China is of a far higher quality than in the Middle East. Though not formally accountable to its people through elections, the Chinese government keeps careful track of popular discontents and often responds through appeasement rather than repression. Beijing is forthright, for example, in acknowledging the country's growing income disparities and for the past few years has sought to mitigate the problem by shifting new investments to the poor interior of the country. When flagrant cases of corruption or abuse appear, like melamine-tainted baby formula or the shoddy school construction revealed by the Sichuan earthquake, the government holds local officials brutally accountable—sometimes by executing them.
Here are some excerpts from an Op Ed by Bilal Baloch published in The Guardian:
China's trade presence in Pakistan has been growing for decades. The steady, indirect approach is something either to marvel at for the emerging superpower's foresight, or to note down for its good fortune. In 2010, trade between the two countries reached a whopping $8.7bn: not bad for a nation wrestling with militancy. Above all else, the Chinese have come to represent reliability in Pakistan in a way that the Americans simply have not – despite the fact that the US, too, pumps billions of dollars into Pakistan every year.
The Americans, clearly, are not getting the right kind of bang for their buck. China has truly won the hearts of the populace, if not minds; this, in turn, has cultivated trust between the two countries. Yet, for the Chinese to nurture and build connections in Pakistani civil society may be a long way away, as the hyper-politicised people of Pakistan are far removed from the political leanings of the Chinese. Enter, America.
For both legal and security reasons, the US does not carry out extensive trade in Pakistan. After all, without the necessary security for Americans, Pakistan represents a high-risk destination; and of this Pakistanis themselves are perhaps most disadvantaged. But this does not mean that trade relationships in the future should be discounted. Looking at the success of the Chinese approach, a long-term strategy to create jobs and business opportunities for Pakistanis and Americans is plausible. Currently, however, Pakistanis are disenchanted by American foreign policy.
Pakisatani anti-Americanism has always been interpreted as ideological abhorrence of the US. This may be the case for the militant minority that causes the biggest headache, but, in fact, that anti-Americanism may be driven more generally by an asymmetry of information – and what Pakistanis perceive as US support for a government that does not cater well to the needs of its own people. But the current most significant American exports to Pakistan – Facebook and Twitter – have changed the face of communication opportunities available to regular Pakistanis. Some 20 million Pakistanis are frequently online: that's 10-15% of the population. This incidental creation of a virtual civil society has not gone unnoticed: last week, the American consulate organised an international social media summit in Karachi, where internet-savvy journalists and bloggers came together from neighbouring countries and throughout Pakistan to discuss ventures such as "Harass Map" in Pakistan. It's these citizen connections, enabling Pakistanis themselves to build civil society in Pakistan, that can overcome security concerns both locally and internationally.
China may have discovered trade as a key to Pakistan's strategic value; but the US is better-placed to make the relationships that will count.
Here's an inspirational story of a young man from rural Balochistan who graduated from Harvard University:
Located on the outskirts of Quetta, is the barren valley of Mariabad where the Hazara lead slow-paced lives. These tribal people, living in narrow brick huts speckled along the rugged hillside, typically sell loose cloth, sweaters or tea for their livelihood.
Like most poor people, their aspirations rarely go beyond sustaining themselves in this underdeveloped nook of Balochistan. Many of them live and die in Mariabad — unaware of the complex concerns and tremendous pace of life in urban centres like Karachi and Lahore.
But one student — the son of a trader who sold Quaid-e-Azam style caps in Mariabad for a living — dared to tread a radically different path. Karrar Hussain Jaffar transcended the confines of an obscure town in Balochistan, where people rarely educate themselves beyond matriculation, to study at the prestigious Harvard University. His story — a narrative about the wondrous possibilities of equal educational opportunities — is truly inspirational.
“My childhood friends, with whom I spent my youth playing cricket, drive suzukis and rickshaws in Quetta for a living, while I am a PhD student in the US,” says Karrar in a humble tone. “I often wonder why God chose me, out of all the people in my community, to get ahead in life?”
But his herculean struggle with English often left him frustrated.
Often feeling like a misfit during his first year at university, Karrar mostly spent his days with other NOP students. “But after a year I managed to befriend other students from Lyceum and Karachi Grammar school.”
He sheepishly adds, “After a year I figured out that ‘what’s up?’ is equivalent to saying salaam.”
Karrar graduated on the Dean’s honour list, with a cumulative grade point average of 3.7 and 3.68 in his majors, Maths and Economics, respectively.
“I got job offers in the banking industry after graduating but I turned them down because I wanted to tread an academic path,” he explains in a categorical tone.
A year after graduating, Karrar got a Fulbright scholarship to study in the US.
“I simply told the interview panel that I want to come back to Balochistan after completing my studies. That’s where my home is; that’s where I belong,” he explains passionately.
But perhaps the most memorable moment in his life — an incident he recalls quite animatedly — was when he found out that he made it to Harvard University.
“I had no internet at home in Mariabad so I walked 15 minutes or so to a nearby internet cafe to check my email for Harvard’s decision,” he explains. “When I saw the acceptance email, I just thought it was too good to be true.”
Yet after he raced back home to reveal the news to his parents, his moment of rapture soon transformed into a session of lengthy clarification.
“My mother asked me what Harvard was and my father asked me to wait for potential offers by other universities” he says with a laugh. “It took a while to convince them that I got into the world’s top university.”
But ironically for a student, who was left disconcerted by the ‘westernised’ student body at LUMS, adjusting to life at an American institution was smooth sailing.
“After LUMS, I was very used to being around different types of people so studying and living in the US was not such a problem.”
Karrar completed his Master’s last year and is currently pursuing a PhD in Economics from the University of Southern California.
“I can make them realise the value of education,” he says.
Here's a brief summary of Pakistan foreign education market put together by the British Council:
Pakistan is one of the six countries which accounts for 54 percent of the UK’s (non-EU) international students. After September 2001, it has become the market leader, a place traditionally taken by the US, but the US is picking up after a long time, owing to simplified visa procedures and increased marketing efforts, not to forget the excellent scholarship opportunities that thy have to offer Pakistani students.
There were 5222 students from Pakistan studying in the United States in 2009/2010 (Source:IIE Opendoors). Pakistan now has the largest Fulbright Scholarship Programme in the world. There is an upward trend of Pakistani students studying in Australia. 2557 students studied in Australia in 2009/2010 compared to 2190 in 2008/2009 (Source: AEI). Other European countries have also become quite active in marketing their education in Pakistan. Countries such as Thailand, Malaysia and Singapore are more visible and perceived as offering quality education at lower prices. UK has remained the highest in this with 10,420 students studying in the UK in 2009/2010 (HESA, 2011).
Pakistan is predominantly a postgraduate market, of the students currently studying in the UK, approximately 71 per cent are postgraduate and 29 per cent undergraduate. While the further education market is still relatively small, there is potential for growth, as there is a greater need for skills in a more service sector-led economy.
One-year Master's programmes are popular, due to their shorter duration compared to competitors. A further major aspect of the postgraduate market is the relatively wide availability of scholarships by UK institutions and Government funding agencies. In addition to the Pakistan Government‘s new overseas scholarship schemes, this target group also has access to scholarships offered by international organisation such as IMF, Commonwealth and World Bank. Popular subject areas are for 2009- 2010 are Business Studies, Engineering, Computer Sciences, Social Sciences followed by law.
Based on HESA statistics, the total number of Pakistani students enrolled in the UK was 10,420 in 2009 / 2010, a 2 percent growth on 2008/2009.
There is also significant growth in GCE O- and A-levels conducted in Pakistan, which naturally leads to demand for UK undergraduate study. More than 46,000 students took these examinations in 2010 / 2011. Popular subjects include business, law, accountancy, IT, management and engineering.
Foundation programmes have a market in Pakistan as a pathway from 12-year study into UK higher education.
Vocational programmes are a new market in Pakistan, with increasing student awareness of the opportunities. National Vocational and Technical Education Commission (NAVTEC) is a regulatory body for promoting linkages among various stakeholders to address challenges aced by Technical and Vocational Education Training (TVET)....
Pakistan is among the biggest sources of foreign students for OECD countries' colleges and universities. Here's how the Australians see Pakistan's education market:
The education and training sector has been one of the major contributors of Australian services exports into Pakistan market.
Australia is increasingly being recognised as a supplier of a quality education services, with very significant advantages in terms of cost vis a vis UK and USA. To ensure that Australian education providers remain interested and committed to the market, Austrade works closely with both agents and institutions to value add and extend full cooperation and assistance to sustain and increase market share.
The market demand has doubled over the last three years but one of the major constrain to this growth has been the political and economic instability in addition to travel advisory with certain travel restrictions, issues such as lengthy student visa process (now shifted to Adelaide), and less participation/visit of institutions’ representative in the education events or interview/seminar programs.
There is substantial demand in Pakistan from students, parents and employers for private quality higher education along with a willingness and capacity to pay comparatively high fees. Private institutions are seeking affiliations with universities abroad to ensure they offer information and training that is of international standards.
International donor agencies such as DFID and USAID are funding various projects focusing on teacher’s training and capacity building of the public sector institutions.
In response to increased trade competition and need for a high performing work force, the Government of Pakistan is strongly emphasising vocational training.
Australia’s vocational education and training (VET) system delivers training that is practical and career-oriented could service some of this demand.
The online delivery of programs has potential where Pakistani residents wish to enhance their skills, but are not able to undertake long-term study out of the country. Hospitality is one area where distance education is a preferred option.
Doing business in Pakistan is not without hurdles. Security concerns, inadequate infrastructure and differences in business culture are some of the major challenges faced by Australian institutions or exporters, but the opportunities are not to be underestimated.
The USA, the UK and Australia are the three destinations most popular with Pakistani students. Most students at the Bachelor’s or Master’s Degree level locally are looking for opportunities to study abroad, often while they complete their Pakistani studies.
An overseas qualification improves chances of gaining a better opportunity in the job market.
Here's an excerpt from an Express Tribune story on Pakistan's middle class:
So what is the ‘right’ approach to quantify the Pakistani middle class?
“The middle class shouldn’t be confused with ‘middle income,’ as class is a multidimensional phenomenon, which can’t be explained by income alone,” said Dr Durre Nayab, who heads the department of population studies at the Islamabad-based Pakistan Institute of Development Economics (PIDE).
Nayab recently published a paper titled, “Estimating the middle class in Pakistan,” in which she used a weighted composite index of five sub-indices, namely income, education, housing, lifestyle and occupation.
The fact that her study allows for education, housing, lifestyle and occupation while determining the size of the Pakistani middle class makes it more credible than a solely income-based estimation.
Using Pakistan Social and Living Standards Measurement Survey (2007-08), Nayab’s paper says the size of the broadest middle class in Pakistan is 35% of the total population.
“The middle class is associated with non-manual professions,” Nayab said while talking to The Express Tribune. “As we go up the class ladder, more and more people employed in ‘professional’ occupations are found. Also, the middle class is associated with college education.”
Her paper also concludes that the middle class is more of an urban phenomenon with a bigger presence in urban areas of Pakistan.
Considering that The Economist estimates more than half the world’s population is part of the middle class, the idea that Pakistan has roughly 60 million middle-class people doesn’t seem implausible.
This matters a great deal because as the rest of the world progresses economically, their companies and governments are increasingly focused on their middle classes. If Pakistan is to join that race, and compete effectively, then our companies and government must acknowledge the size, scope and contours of our middle class in their planning.
The Express Tribune is launching this series of articles in which we hope to help explore just who our middle class is, how they got there and exactly how money is being made by those who cater to their changing lifestyles.
Rising per capita income and a growing, young population spending more time online and at Western movies are helping build a mass market in Pakistan, according to Businessweek:
One way to take a city’s economic pulse is to check out where locals shop. In Karachi, Pakistan, shoppers are flocking to Port Grand, which opened in May. Built as a promenade by the historic harbor for almost $23 million, the center caters to Pakistanis eager to indulge themselves. This city of 20 million has seen more than 1,500 deaths from political and sectarian violence from January to August. At Port Grand the only hint of the turmoil is the presence of security details and surveillance cameras. “The whole world is going through a new security environment,” says Shahid Firoz, 61, Port Grand’s developer. “We have to be very conscious of security just as any other significant facility anywhere in the world needs to be.”
Young people stroll the promenade eating burgers and fries and browsing through 60 stores and stalls that sell everything from high fashion to silver bracelets to ice cream. Ornate benches dot a landscaped area around a 150-year-old banyan tree. “Port Grand is something fresh for the city, very aesthetically pleasing and unique,” says Yasmine Ibrahim, a 25-year-old Lebanese American who is helping set up a student affairs office at a new university in Karachi.
One-third of Pakistan’s 170 million people are under the age of 15, which means the leisure business will continue to grow, says Naveed Vakil, head of research at AKD Securities. Per capita income has grown to $1,254 a year in June from $1,073 three years ago.
The appetite for things American is strong despite the rise in tensions between the two allies. Hardee’s opened its first Karachi outlet in September: In the first few days customers waited for hours. It plans to open 10 more restaurants in Pakistan in the next two and a half years, says franchisee Imran Ahmed Khan. U.S. movies are attracting crowds to the recently opened Atrium Cinemas, which would not be out of place in suburban Chicago. Current features include The Adventures of Tintin and the latest Twilight Saga installment. Mission: Impossible—Ghost Protocol is coming soon. Operator Nadeem Mandviwalla says the cinema industry in Pakistan is growing 30 percent a year.
Exposure to Western lifestyles through cable television and the Internet is raising demand for these goods and services. Pakistan has 20 million Internet users, compared with 133,900 a decade ago, while 25 foreign channels, such as CNN (TWX) and BBC World News, are now available. And for many Pakistanis, reruns of the U.S. sitcom Everybody Loves Raymond are a regular treat.
The bottom line: With per capita income rising quickly, Pakistan is developing a mass market eager for Western goods.
Here's an Express Tribune story of a Pakistani young man of humble origins helping terror victims after studying Emergency Medicine at Yale:
.Today, Razzak is a renowned emergency medicine expert and the executive director of the Aman Foundation. He started his schooling at a humble primary school in Lyari, completing his secondary education from Nasira School in Depot Lines. Not one to be held back, the hard-working student subsequently attended Adamjee Science College where his impressive grades and unbounded enthusiasm won him a scholarship at the prestigious Aga Khan University Hospital (AKUH), the top private medical institution in the country.
In collaboration with the Edhi Ambulance Service, an arm of the philanthropic Edhi organisation and the largest volunteer ambulance network in the world, he researched and analysed road traffic injuries and emergency cases. Edhi had a mountain of documentation for every call and every case it had handled in the last two decades. The downside? None of it was digitised, so he spent days sifting through it manually.
The experience stayed with him, and the data revealed a disturbing pattern. Gruesome injuries, often suffered by the poorest members of society, were often improperly handled by well-meaning doctors, simply because of a lack of know-how. These mistakes frequently, and literally, led to the loss of life and limb.
Yet, Razzak soon realised that he needed more professional training and specialisation courses before he could progress further. He sat for the US Medical Licensing Exams (MLE) and had observations at the Beth Israel Medical Centre, New York, and the Yale-New Haven Hospital, Connecticut. In 1996, his residency and training programme at Yale University’s School of Medicine started and in 1999, he was given the ‘Best Trainee’ award by the State of Connecticut.
On the personal front, Yale was also important for the doctor since he met his future wife there. Following graduation, the two stayed in the US for a few years, always looking forward to the time when they would return home. “The plan was always to come back,” says Razzak. “That’s why we never bought a house, never completely settled in.”
Before they could come back, Razzak did his PhD in Public Health at the world-renowned Karolinska Institutet in Sweden, where he focused on the use of ambulance data for monitoring road traffic accidents. Finally, in 2005, the studious boy from Kharadar returned to Pakistan as a successful, qualified expert in emergency medicine.
He joined his alma mater, AKUH as a faculty member and went on to successfully found Pakistan’s first emergency medicine service (EMS) training programme at the university. “There were many doctors who were awarded their degrees without ever administering cardiopulmonary resuscitation (CPR) as it wasn’t a requirement,” he reveals.
This changed when his EMS programme became a mandatory rotation that all students had to serve. Subsequently, Razzak went on to build and head a new emergency department. Yet, the battle was just half won. Students in the new department faced a dilemma, similar to the one Razzak had as a student. They were required to go to the United Kingdom to sit for their exam, otherwise they would not be considered qualified.
Determined to remove, for others, the hurdles that he himself had crossed only after many toils, Razzak collaborated with the College of Physicians and Surgeons Pakistan (CPSP) to organise a curriculum for the specialised field. The first batch for this course was enrolled last year. Now students wanting to specialise in emergency medicine will be able to obtain certification in their chosen field, without having to travel abroad....
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....
Here's an Express Tribune story on social mobility and a middle class suburb in Karachi:
The decision by Abdul Manan Shaikh’s family to move to Gulshan-e-Hadeed 10 years ago marked the beginning of his upward social mobility. Hailing from Larkana, where he learned the English alphabet at a government-run ‘taat’ school in sixth grade at an annual fee of less than Rs50, Shaikh has since attended three elite business schools of Karachi in the past decade.
Although he now drives a company car to a textile mill located in SITE every day, and attends evening classes at a business school in Clifton on weekends, he does not want to move out of Gulshan-e-Hadeed. In fact, his family bought a modest house there just three years ago.
So what makes Shaikh stay in a place as far removed from Karachi’s city centre as Gulshan-e-Hadeed?
Real estate in Gulshan-e-Hadeed is affordable. A 120-squareyard independent housing unit with a lounge, drawing room and two bedrooms with attached bathrooms costs somewhere around Rs2.5 million. Similarly, 240- and 500-squareyard housing units are available for around Rs5 million and Rs6.5 million, respectively.
The average monthly rent for a 120-squareyard, single-unit house in Gulshan-e-Hadeed is between Rs4,000 and Rs6,000. Compared with other middle-class areas of Karachi, that rate is cheap.
Moreover, an improvement in the city’s inner highways means that it takes almost the same time from these areas to go to the centre of the city. Gulshan-e-Hadeed may be a remote place in terms of kilometres, but an easy drive through National Highway and Sharae-Faisal makes it a choice neighbourhood for mid-level corporate managers, like Shaikh, who have company cars and receive subsidised fuel.
Peaceful and suburban
Although Gulshan-e-Hadeed is 48 kilometres from SITE, and 42 kilometres from Clifton, it offers what many localities closer to the centre of the city do not: better security.
Gulshan-e-Hadeed connects to the main city through National Highway and Shahrah-e-Faisal. Even during the worst law and order situations, one can expect these two roads to stay clear of trouble. Moreover, the ethnic and religious harmony within Gulshan-e-Hadeed, thanks to a heterogeneous population mix, has kept the crime rate under control for years.
All streets in Gulshan-e-Hadeed are paved and have ample space to park vehicles. There are no slums. Public transport is easily available, as buses leave for Karachi’s financial district every two to three minutes for the most part of the day.
Other than several degree colleges offering a decent standard of education, Gulshan-e-Hadeed is dotted with both government and private schools, including a cadet college and a branch of Beaconhouse School System in the adjoining Steel Town.
“A school, mosque and market are always at a walking distance from your home no matter which street of Gulshan-e-Hadeed you live on,” a local real estate dealer told The Express Tribune. “How many localities in Karachi offer that kind of closeness to these places?”
The real estate agent’s question is rhetorical. The fact that is that many of Pakistan’s largest cities now have similar suburban areas, which are in many ways similar to the Levittowns that sprouted around the United States after the World War II. Pakistan’s middle class has grown rapidly, and this is where many of them increasingly live.
Indeed, many of the villages that used to surround cities in Punjab’s GT Road belt have since turned into suburbs, no longer truly rural and offering an affordable option of the good life to many of the Pakistan’s up-and-comers. Indeed, these areas are acquiring a character of their own...
Here's an Express Tribune story on the opening of British Dept store Debenhams:
When Pizza Hut opened its first franchise in Pakistan in 1993, few were familiar with the concept of franchising. Soon it became a household name, and was followed by other fast food franchises. Many observers viewed these import-oriented luxuries in an underdeveloped country like Pakistan, with scepticism and considered it a waste of our precious foreign exchange. However, the trend of foreign retail outlets continues to expand into other products, services, and brands.
The press launching of the 200 years old British department store, Debenhams’ branch in Karachi earlier this month on 27,000 square feet space, at the upbeat Dolmen City Mall, was attended by important personalities, like, UK Minister of State for Trade and Investment, Lord Stephen Green and UK Cabinet Minister Baroness Sayeeda Warsi. It appears to have pushed the retail franchising business to another level. The skeptics are turning into fans.
This will be the first international department store in Pakistan offering a complete range of product categories synonymous with Debenhams, including a full range of women’s, men’s and children’s clothing, as well as, home, beauty and accessories. It is promised to be a truly world class shopping experience.
“I am very bullish on retail, not just for local but also foreign brands,” said Yasin Paracha, Managing Director, Team-A Ventures (Pvt) Ltd, which is the franchisee in Pakistan for Debenhams. “Foreign brands will perhaps give Pakistan that softer image we need; that we are normal people, with normal tastes and preferences and actually do drive in cars and wear western clothes! Furthermore, foreign brands will give the local brands the required positioning on the brand scene and will give customers the choice to decide where they want to spend their money.”
It is worth noting that before the fast food franchises, auxiliary industries like the home-delivery service and suppliers of quality poultry, meat etc, according to modern quality standards, hardly existed.
Paracha is very upbeat about the employment possibilities this presents. “This creates immense number of jobs; the average requirement per 1,000 square foot, of retail space is around six, which means Dolmen City, with a leasable area of 650,000 square feet will provide jobs to around 4,000 people! These will be mostly undergrads who might struggle to find good jobs in offices. Here they have the chance to work in a comfortable environment, look nice, and develop the discipline to deal professionally with customers. It also provides students the opportunity to work. Almost every teenager in the UK has worked in a retail environment.”
About government revenue and taxation, Mr. Paracha says, “This adds immense revenue, as most brands will progress towards declaring and paying taxes, they are too much ‘in your face’ to avoid it. Furthermore, instead of considering this as an outflow of foreign exchange, it actually saves it, as most people spend on shopping when they travel, they will convert to shopping within the country if they have the option and the right environment.”...
Here are excerpts of a Bloomberg piece by Indian journalist Pankaj Mishra on Pakistan's "unplanned revolution":
However, I also saw much in this recent visit that did not conform to the main Western narrative for South Asia -- one in which India is steadily rising and Pakistan rapidly collapsing.
Born of certain geopolitical needs and exigencies, this vision was always most useful to those who have built up India as an investment destination and a strategic counterweight to China, and who have sought to bribe and cajole Pakistan’s military-intelligence establishment into the war on terrorism.
Seen through the narrow lens of the West’s security and economic interests, the great internal contradictions and tumult within these two large nation-states disappear. In the Western view, the credit-fueled consumerism among the Indian middle class appears a much bigger phenomenon than the extraordinary Maoist uprising in Central India.
Traveling through Pakistan, I realized how much my own knowledge of the country -- its problems as well as prospects -- was partial, defective or simply useless. Certainly, truisms about the general state of crisis were not hard to corroborate. Criminal gangs shot rocket-propelled grenades at each other and the police in Karachi’s Lyari neighborhood. Shiite Hazaras were being assassinated in Balochistan every day. Street riots broke out in several places over severe power shortages -- indeed, the one sound that seemed to unite the country was the groan of diesel generators, helping the more affluent Pakistanis cope with early summer heat.
Gangsters with Kalashnikovs
In this eternally air-conditioned Pakistan, meanwhile, there exist fashion shows, rock bands, literary festivals, internationally prominent writers, Oscar-winning filmmakers and the bold anchors of a lively new electronic media. This is the glamorously liberal country upheld by English-speaking Pakistanis fretting about their national image in the West (some of them might have been gratified by the runaway success of Hello magazine’s first Pakistani edition last week).
But much less conspicuous and more significant, other signs of a society in rapid socioeconomic and political transition abounded. The elected parliament is about to complete its five- year term -- a rare event in Pakistan -- and its amendments to the constitution have taken away some if not all of the near- despotic prerogatives of the president’s office.
Political parties are scrambling to take advantage of the strengthening ethno-linguistic movements for provincial autonomy in Punjab and Sindh provinces. Young men and women, poor as well as upper middle class, have suddenly buoyed the anti-corruption campaign led by Imran Khan, an ex-cricketer turned politician.
After radically increasing the size of the consumerist middle class to 30 million, Pakistan’s formal economy, which grew only 2.4 percent in 2011, currently presents a dismal picture. But the informal sector of the economy, which spreads across rural and urban areas, is creating what the architect and social scientist Arif Hasan calls Pakistan’s “unplanned revolution.” Karachi, where a mall of Dubai-grossness recently erupted near the city’s main beach, now boasts “a first world economy and sociology, but with a third world wage and political structure.”
Even in Lyari, Karachi’s diseased old heart, where young gangsters with Kalashnikovs lurked in the alleys, billboards vended quick proficiency in information technology and the English language. Everywhere, in the Salt Range in northwestern Punjab as well as the long corridor between Lahore and Islamabad, were gated housing colonies, private colleges, fast- food restaurants and other markers of Pakistan’s breakneck suburbanization....
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.
Here's an LA Times story on gated communities in Pakistan:
Reporting from Rawalpindi, Pakistan — The houses and manicured lawns slope up the artificial hill edged by unbroken sidewalks and white picket fences, as children play and residents exchange pleasantries.
This sprawling subdivision called Bahria Town — "Come home to exclusivity," it boasts — operates its own garbage trucks, schools, firehouse, mosques, water supply and rapid-response force — a kind of functioning state within a nonfunctioning one. And all supplied without the bribes you'd pay on the outside, residents say.
"I like living here," said Abdul Rashid, a sixtysomething retired government worker. "It's like you're in a little protected country — tidy, utilities work, the family can relax. If there's any problem, you just ring up security."
The jarring presence of a middle- and upper-class retreat in this increasingly violent nation has been paved, in part, by the involvement of the country's powerful military. Benefiting from laws put in place during British Empire days to reward friendly armies and militias with land grants, the military now controls about 12% of Pakistani state land, by some accounts. And its privileged position allows it to partner with and otherwise route valuable tracts to favored developers.
Bahria Town and its partner, the military-run developer Defense Housing Authority, occupy twice as much land as Rawalpindi, the garrison city 30 minutes from the capital, Islamabad.
In the posh Safari Villas subdivision, past Sunset Avenue and College Road, Mohammad Javed, 69, surveys his pocket garden before heading into his three-bedroom corner house with a beige sofa ensemble and Samsung flat-screen TV. Houses in the neighborhood run from $25,000 to $60,000, well out of reach of most Pakistanis.
Bahria Town has been a hit not only with moneyed Pakistanis but also with returnees. Javed, who owned a gas station in Canada before retiring, hopes to replicate his North American lifestyle. Bahria's protective walls bring security, he said, although he still won't let his grown children visit lest something bad happen beyond its confines. "We meet in Thailand or Canada," he said.
"No one besides the military has such access," she said. Bahria Town advertised on a recent Sunday for retired major generals and lieutenant generals to fill positions at the company, Siddiqa said: "These are his keys" to greater access.
But for resident and food industry entrepreneur Shaheryar Eqbal, these are minor issues relative to what Bahria Town delivers.
"The government should take these communities as a model and replicate them," he said. "The army already has a joint venture with Bahria Town. Things work. Pakistan must get through this terrorism phase, but this could really be the future."
Here's a Dawn story on trendy restaurants Ramadan menu choices in Karachi:
Who would have ever imagined that one day chicken schezwan and prawn on toast would be considered as food items to break the fast with? Not just that, these days there are restaurants in Karachi that serve juicy cheese burgers with fried chips as Iftar deals.
Those who believe only technology has taken giant steps to help the world progress by leaps and bounds, they should know that traditional food has given way to newer cuisines with a great degree of success too.
Traditionally things that one gets to eat at Iftar is a plate of fruit chaat, a bowl of chick pea and potato mix, dates, pakoras and a pitcher of sherbet. This is very much the case even now.
But for those who like to eat out, and Karachi now brims with food lovers who love to step out of their houses to eat, their taste buds for Iftar yearn for something ‘different’. The myriad of restaurants in the city provide them with just that: something different.
Nowadays among the many eateries that (fasting or not fasting) Karachiites turn to minutes before Iftar include a seafood restaurant (of all the places), a burger joint and a pizza parlour.
Seafood, for some odd reason, is making its presence felt. There are people who love to indulge in prawn-chomping at dusk. This has even surprised those who work at the restaurant.
“We have special Iftar deals in boxes. These boxes contain all kinds of food, including seafood. And foodies like that. If you ask about the number of people who visit us, I can tell you that each year the number increases. While we serve food at Iftar, we also deliver our stuff at people’s doorsteps,” said Talha, an order-taker at a seafood restaurant.
This may all sound mouth-watering, but when it comes to the rates at which these deals are sold, not everyone can afford them. A pack of a dozen chicken wonton costs no less than Rs300. But then only those who have enough money generally eat out. And there is no dearth of such people in Karachi.
Add to all of this a new trend. Chinese food is in with a certain section of the fasting public. In this case, they order food for home delivery as not many Chinese restaurants offer dine-in facilities at Iftar. “People order all kinds of dishes. It may be hard to believe, but there are some who call us to home-deliver sushi to them. Chicken manchurian and chicken schezwan are also regular items. Perhaps the one dish that never loses its charm is chicken chowmein,” said Imran who works at a known Chinese takeaway restaurant.
There is a different side to this scenario as well. The mushrooming of restaurants, especially in upscale localities, has dented the business of established eateries. A case in point is a restaurant at Khayaban-i-Tauheed. Anil, who works here, said: “This year we are getting 40 to 50 customers on a daily basis. Last year, and the years before that, the situation was different. We used to have a much bigger crowd. A few reasons could be given for it, for example inflation has skyrocketed. Perhaps the more convincing reason is that each year countless new eating places and coffee shops open up. This affects the business of the ones already in the market. As far as what food people prefer at Iftar, well, it’s the normal stuff (pakoras and dates), but for the main course they like to have all kinds of cuisines ranging from Italian to continental to desi.”
The eating-out trend has its pluses and minuses. If, on the one hand, it refreshes traditional values with a dash of contemporariness, on the other, it also points to a certain kind of commercialism that has crept into every aspect of our lives.
Pizza Hut withdraws all-you-can-eat Ramadan deals in Pakistan, reports Telegraph:
Pizza Hut has withdrawn its all-you-can eat Ramadan offer in Pakistan prompting howls of fury from thousands of hungry Muslim families used to breaking their fast with plate after plate of deep pan or thin crust.
Instead the chain said it wants to reduce "gluttony" by limiting customers to a single regular pizza in its Ramadan Fiesta offer.
In previous years Pizza Hut restaurants would be packed for the evening meal of Iftar, as diners starving from a day of fasting would fill their bellies with pizza after pizza for as little as £7 – a figure industry analysts said was unsustainable.
Furious fast food fans have taken to social media to complain at the new, cheaper deal, which is still advertised as an "all-you-can" offer.
"Pathetic and a misleading deal. It's only one regular pizza with bottomless Pepsi, not all you can eat," said one post on Pizza Hut Pakistan's Facebook page.
Imran Khan, a student and regular customer at a branch in Karachi, said: "The place was always packed in the evening. For a lot of people it had become a Ramadan tradition so this change is very sad."
Marya Khan, of Pizza Hut Pakistan, said the offer was more in keeping with the spirit of the holy month of Ramadan.
"The former all-you-can-eat format served as an unrestrained invitation to gluttony and waste, colliding with the very spirit of Ramadan," she said.
"For those who do not consider Iftar deal as a means of just gorging after sunset, then the new Ramadan Fiesta offered by Pizza Hut is a well-balanced and valuable deal to enjoy finest pizza at a value price."
Pizza Hut in Pakistan was one of many fast food restaurants to have benefited from a move away from the traditional Iftar meal of spiced fruit salad, chickpeas and dates.
As an alternative, many people are turning to Chinese buffets or burger joints although pakoras – vegetable or chicken fritters - remain the most popular way to break the Ramadan fast, according to a recent survey by Gallup Pakistan.
Here's an interesting ET report on animal welfare efforts in Karachi:
If your cat swallows a ball of fur or your dog eats chocolate, don’t panic. All you have to do is call the Pakistan Animal Welfare Society (PAWS) and they will help your distressed pet.
The society, which was founded in 2004 by Mahera Omer and Maheen Zia, is currently trying to establish a shelter and medical facility exclusively for animal emergencies. It will be equipped with X-ray and ultrasound machines as well as operation theatres. The facility will also have a 24-hour ambulance service. Treatment will be provided not only to cats and dogs, but other animals such as donkeys, horses and mules as well.
But Omer acknowledges that this will be a challenging task, given that the society has limited resources at its disposal. PAWS does not have an office, shelter or clinic of its own and relies entirely on volunteers to help pick up injured animals from the streets and coordinate with private veterinary clinics for treatment. The founders hope to launch the 24-hour ambulance service first, which they feel is achievable with a little help from animal lovers.
Most of the rescued animals are currently given shelter at Karachi Animal Hospital, which is a private clinic in DHA, or PetVet Emergency Veterinary Clinic. But since the facilities have limited space, the co-founders sometimes have to take abandoned cats to their houses.
PAWS also provides advice on animal care and helps find foster homes for animals. Dr Ayaz Ali, one of the vets who treat animals for PAWS, said that the organisation gets between four to 12 calls per week for rescuing stray animals.
“If the animal is badly injured, I take it to a shelter in a taxi or a rickshaw,” he said. “If there is no shelter available, I take it to my house.”
Omer lamented the lack of infrastructure for animal welfare in Karachi.
Though the government has established the Richmond Crawford Hospital, the quality of its services has been waning. She said that most people usually don’t care about ailing animals. “They need to realise that if we help a donkey or a goat, then we might be indirectly helping those people who need them to earn a living,” she said.
Omer said that people weren’t always apathetic to the suffering of animals. Until the early 90s, the Society for Preventing Cruelty to Animals, which comprised of civil society members as well as government officials, was very active.
Back then, they had the authority to punish people for being cruel to animals, which the NGOs cannot do today.
She pointed out that the even if PAWS establishes a shelter and vaccinates animals, very few people would be willing to adopt them. She feels that people like to own only pedigreed animals. “This mentality needs to be changed. People need to open their hearts for all animals.”
Demand for Food Science graduates rising in Pakistan, reports Express Tribune:
As the food processing sector in Pakistan expands, the job opportunities – and starting salaries – for graduates in food science, nutrition and dietetics are increasing substantially.
The University of Agriculture Faisalabad reports that its graduates are finding jobs faster, with higher starting salaries and rapid career progression for many of its graduates. According to Tahir Zahoor, a professor in the food science department, the top graduates of the university’s food science programmes command salaries of Rs45,000 or higher, and get employed by such brand name employers as Nestle Pakistan, Engro Foods and Unilever Pakistan.
These starting salaries are comparable to those earned by graduates of the country’s leading business schools when they join the largest banks on Karachi’s McLeod Road. And it is not just the starting salaries that are high. Many graduates report earning more than Rs100,000 per month within five years of graduation, though admittedly these are some of the best performing students.
Not all graduates get these packages, of course. But according to the university’s professors, no graduate has gotten a job offer with a starting salary of less than Rs25,000 per month, with Rs30,000 per month being the median salary package. The middle-tier of students typically go to some of the smaller names in food production, such as Dawn Foods (a leading bread manufacturer), Shan Foods (a spice manufacturer), etc.
Revenues and profits at food production firms have been soaring. Between 2005 and 2010 (the latest year for which figures are available), revenues at food companies listed on the Karachi Stock Exchange have grown by an average of more than 18.2% per year. Profits have expanded even faster, by more than 21.2% per year.
This blowout growth has caused many to invest heavily into expanding production capacity. Both Engro Foods and Nestle Pakistan invest upwards of Rs8 billion every year in increasing their production facilities. Engro Foods – started only in 2006 – has been particularly aggressive in broadening its product line-up.
These two companies, however, are not alone. K&N Foods has become the nation’s largest supplier of processed chicken, tempting other food companies to enter into the fray. Dawn Foods, long a manufacturer of just bread and baked products, is now entering meat products. Quetta Textile Mills is setting up a processed chicken facility. And Shan Foods is trying to expand its presence overseas by acquiring a brand in the United Kingdom.
This expansion in the food sector is pushed by a change in the underlying consumer behaviour when it comes to buying food. Consumer spending on processed food appears to be expanding. The average Pakistani household spent almost Rs500 per month on processed food in 2011, over two and half times more than a decade ago, according to the Pakistan Bureau of Statistics, representing a rate of increase faster than inflation....
Here's a Dawn newspaper Op Ed by S. Akbar Zaidi, a Pakistani political economist, about economic myths in Pakistan:
...absence of scholarly engagement results in numerous myths about Pakistan’s economy which become part of the general conversation, and then of conventional wisdom. One can list any number of such misperceptions, but perhaps a handful will emphasise the point.
It is not the fast-moving consumer goods, the Engros and the Habib Banks, or Pepsi or Unilever or ICI, which drive Pakistan’s industry, as so many of the elite who work for them falsely believe. Instead, Pakistan’s industrial force and its economy are based on the dynamic and creative small-scale or informal sector.
Research at LUMS has shown that this sector constitutes as much as 90 per cent of economic establishments, 30 per cent of GDP and 25 per cent of export earnings, and employs 78 per cent of the non-agricultural labour force of Pakistan.
These 3.3 million small- and medium-sized establishments are highly labour-intensive in comparison with the large-scale manufacturing sector, and around 95 per cent employ less than five workers. The backbone of Pakistan’s economy is its informal, small-scale sector, for which policy is seldom designed.
A second myth repeated ad nauseam is that Pakistan is predominantly rural and is an ‘agricultural country’. Research by Reza Ali showed as long ago as 1998 when the last census was held, that Pakistan was almost half urban and half rural, using more productive and useful definitions of ‘urban’, and not the moribund definitions proposed by the Census Organisation.
Fifteen years later, although research awaits the next census, it is not possible to call Pakistan a ‘rural’ country by any stretch of the imagination. If anything, probably 60 or 70 per cent of the people in Pakistan reside in areas one should call urban.
Furthermore, with integrated communication services and linkages, the idea of a ‘rural’ and ‘urban’ divide is increasingly redundant, and one ought to consider settlements and habitation on a continuum.
Since Pakistan is primarily urban, it is also no longer agricultural in terms of the contribution to the economy to which agriculture contributes only one-fifth. However, agriculture is still the main form of employment for Pakistani labour — around 45 per cent of the workforce.
Nevertheless, in areas which are designated by the government as ‘rural’, the non-agricultural sector generates nearly 60 per cent of the total income. Hence, even in ‘rural’ areas, economic activity other than agriculture provides a greater share of income than does agricultural activity.
One might just add in passing that Pakistan — its economy, its agriculture and its relations of production — is not feudal, no matter how often one repeats the claim that it is. At least on this one count, many social scientists are grudgingly coming around, although since many Western journalists only meet such ‘feudals’, they still write mainly about ‘feudal’ Pakistan.
Many liberal members of the Pakistani elite argue for a reduction in the military budget, believing that this will lead to a resultant rise in social-sector spending. One look at the data will show that both have fallen over the last decade.
Yet another particularly pervasive and persistent myth amongst Pakistan’s elite is that US aid to Pakistan is ‘good for the country’, when academic research has shown consistently that nothing could be farther from the truth.
There are numerous other such false hopes which Pakistan’s elite invests in, some of which are translated into government policy. Nevertheless, perception matters perhaps more than reality. If people believe something, they act on the basis of that false knowledge and understanding. Many explanations as to why Pakistan is in such dire straits rest at the doorstep of
Pakistan’s literate, though highly uneducated, elite.
Here's an ET story on Naya Mazimabad, a new gated community in Karachi:
After many years in Karachi, a housing society was launched on Friday for people who may want to escape the commercialisation of their neighbourhoods but cannot afford to buy pricier property in say DHA, PECHS or Mohammad Ali Housing Society.
Naya Nazimabad City, a project of stockbroker and businessman Arif Habib, is located at a drive of 20 minutes from Water Pump Chowrangi in Federal B. Area. Another big broker, Aqeel Karim Dhedhi, has also put his weight behind the project.
Naya Nazimabad’s sponsors want to outdo Defence Housing Authority (DHA) and Bahria by completing the project in time.
“We are not targeting the people who live in Defence or Bath Island,” said Ovais Sohail, the project manager. “Our clientele will come from Gulshan, New Karachi and Nazimabad.”
The project will be developed in phases with the first one to be finished by 2015. “This entire city will take ten to eleven years to complete.”
Sponsors have hired around 150 personnel of the Frontier Constabulary for security of the project, which is located near the violence-prone Qasba Colony and between Pukhtunabad and Baloch Goth. The number of FC guards will be increased once residents move in, an official said.
Naya Nazimabad, with hills on one side and Manghopir Lake on the other, will house 300,000 people in single-storey units and flats. Since the development of the homes depends on demand, developers were unable to say exactly how many houses will be built.
Hospital, schools and markets are part of the project.
Naya Nazimabad will have its own bylaws. “It’s not like you can buy the plot and construct whatever type of house you feel like,” said Sohail. “The bylaws need to be followed. We will continue to work as the administrator.”
A single-storey house covering 160 square yards is being offered for 3 million rupees, with a 1.2 million-rupee debt component.
The chairman of AKD Securities, Aqeel Dhedhi, said that the project drew on inspiration from the Askari and Navy Housing Scheme projects. “There are no gated societies in Karachi,” he claimed. “Naya Nazimabad will have gates on all three societies that will be properly guarded."
According to him, a well-developed society needs over 1,000 acres of land. “Getting that in Karachi is near-impossible. The city stands divided on ethnic lines. And for all those schemes coming on the Super Highway, security remains a concern.”
Naya Nazimabad is spread over 1,200 acres, most of which belonged to Javedan Cement plant, a company of the Arif Habib Group.
While manager Ovais Sohail was sure that they would be able to provide basic amenities, a lot of questions need to be answered. Karachi’s water utility is under increasing criticism for failing to meet the needs of tens of thousands of people. How would it ensure a supply to Naya Nazimabad? Sohail explained that it helped that they are located right near Hub, the dam from where Karachi gets its water. “Both the main supply conduits pass near the project,” he added. “And I don’t see any reason for us to be denied the supply.”
Here's an ET report on Emaar Alma Townhomes project in Islamabad:
With Spanish and Portuguese architectural designs, imported electrical and sanitary fittings, ironmongery for doors and design-fitted kitchens, Alma Townhomes offer dream homes for those wanting to invest in real estate.
The second phase of the housing project, that was opened for buyers by international real estate developer Emaar on Saturday, saw a large number of potential home owners from twin cities showing up. The two-day event is being held at a sales centre inside Emaar’s 400-acre gated community — Canyon Views.
Situated on the Islamabad Highway near the Grand Trunk Road (DHA Phase-II Extension), the Alma houses target a major segment in the housing market – end users who are looking for an “affordable” house in a safe and sustainable community, according to Emaar Pakistan Head of Development and Projects Shairyar Salim. The company has completed the first phase, which is fully occupied.
The earthquake-resistant housing units, which occupy eight to 12 marlas and have three to four bedrooms, start with a price of Rs14 million, which is slightly high compared to Bahria Town’s Safari Villas and Defence Housing Authority (DHA). A 10-marla house Safari Villas and DHA cost Rs12 million and Rs11.5 million on average respectively, according to a Rawalpindi-based real estate agent Waseem Kiyani.
He said that a ready-made house on 10 marlas in Bahria Enclave can cost around Rs15 million with a one-year payment plan.
Facilities at these housing projects seem comparable, although Salim believes Emaar’s designs are more “advanced”, as they draw on the developer’s experience of making international housing projects.
The Alma Townhomes might also have a superior security apparatus. The integrated community has a three-tier security plan which includes two outer boundary walls and a security patrol on the streets.
“With Emaar, you’re confident that your money will not go down the drain,” said Asif Akhtar, a resident of the Alma Townhomes Phase-I who works for the Army Welfare Trust.
“They deliver on their promises, and their quality of construction and services are simply amazing,” he added.
The houses will be made available under a two-year payment plan and the construction is expected to be completed within that time frame, said Emaar Pakistan Head of Sales and Marketing Uzair Adil.
According to Salim, houses in Phase-I were quick to sell out and a similar response is expected from the second phase. The new community will also have access to facilities that were constructed for the first phase, such as a school and markets.
“The advantage of Phase-II is that the infrastructure is already present and the roads are almost complete,” he added.
Salim went on to explain that the houses will be built in groups of 50 to 60 units, with each group having a park, play area and BBQ area. Plans to build a hospital, shopping malls, community club houses and mosques are also underway.
Shaukat Zia, a civil engineer from Rawalpindi, who was present at the launch with his family, seemed quite impressed after being briefed about the project.
However, he was concerned about the investment, saying that a house in the townhomes seemed only feasible for the elite.
Salim said Emaar is looking to sell around 150 units in the first batch, which is approximately one-third of the total units.
Emaar Pakistan has invested over $2.4 billion in the country since 2007, according to information available on its website.
Here's a Financial Times Op Ed on Pakistan:
Pity the people of Pakistan, trapped between self-serving, complacent elites who preside over a crumbling state, and a rich array of violent extremists who seem determined to tear the same state apart....
The military, the country’s most meritocratic and efficient institution, is widely regarded as the only force that can break this grim cycle. Yet there are other, largely hidden forces at work in Pakistan that hold it together and offer it a better future:
adaptability and resilience, entrepreneurship and shared coping.
These forces can be found in the very new – widespread mobile banking services – and the very old – Islam’s traditions of charity, justice and learning. When government and donors work creatively with these forces, amazing things can happen.
Pakistan has one of the best regulatory environments in the world for microfinance and one of the fastest-growing microfinance sectors, with 3m borrowers. It is also one of the most innovative places in the world for mobile banking services, partly due to the State Bank of Pakistan’s moves to encourage the market. About 1.5m customers make about 30m transactions a quarter through their mobiles, using a network of 20,000 agents, mainly local shops, to collect their cash.
A wave of charitable giving by individuals has helped to ensure that the hundreds of thousands of people displaced by floods in 2010 are not still living in tents. A guerrilla army of more than 100,000 Lady Health Workers, funded by government, has helped to reduce markedly the number of women and babies who die in child birth, according to studies by the World Bank.
Too many children are still out of school and many government schools are woeful. Yet Pakistani parents go to enormous lengths to give their children, girls and boys, a chance at an education.
Low-cost private sector schools, charging perhaps $2 a week, are booming in slums and villages. Wherever girls receive a secondary level education, small private schools run in the homes of their owners start popping up, as they put their education to use to improve their standing in society. Even the government’s conservative figures suggest that a third of children in Pakistan and half in Karachi, many of them from poor households, attend such schools.
Indeed, Pakistan has a record in picking up new approaches to learning. The Allama Iqbal university in Islamabad, the first open university outside the UK, is the second largest in the world with 1.8m students. Start-ups such as Tele Taleem, tucked away on a dusty industrial estate on the outskirts of Islamabad, are pioneering ways to take learning to schools in the remoter regions, through satellite links and cheap tablet computers.
Donors are playing a vital role in promoting social innovation. The UK’s Department for International Development has pioneered a new road map for school improvement in Punjab, which Sir Michael Barber, the education reform expert, says is delivering one of the world’s fastest improvements in school performance. In Karachi, tens of thousands of poorer families will next year receive vouchers to send their children to low-cost private schools.
In agriculture, social venture capitalists such as Indus Basin Holdings are leading efforts to link groups of small-scale rice farmers to multinational companies.
Pakistan’s institutions may seem frozen, its elites worried that taking on the extremists will provoke even more violence in the run-up to next year’s elections. Yet, at the grassroots, Pakistan is in perpetual motion, with ceaseless creativity as people find affordable solutions to their basic needs. These largely hidden forces of resilience offer the best hope for the country’s future. In Pakistan, the state may be fragile but society is far stronger than many think.
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.”...
Here's bloomberg on fast food craze in Pakistan:
...Local and overseas business groups are queuing up to buy franchise rights in Pakistan for an array of popular food sold from Los Angeles to Kuala Lumpur, driven by rising demand from a booming middle class in South Asia’s second-biggest economy after India. Pakistanis increasingly flock to American food outlets even as ties between the two nations are strained by U.S. drone missile strikes in the northwest of the country.
Johnny Rockets Group Inc., another American fast-food group based in Aliso Viejo, California, that operates or franchises 68 hamburger restaurants in 16 countries, Second Cup Ltd., a coffee shop chain based in Missisauga, Canada, with over 360 cafes and Malaysia’s MammaRoti and PappaRoti are set to open their first stores in Pakistan this year.
Fatburger joins Hardee’s Food Systems Inc., headquartered in St. Louis, Atlanta-based cinnamon roll maker Cinnabon International Inc., The Noodle House of the United Arab Emirates, and five foreign frozen yoghurt chains that opened their first outlets in the world’s sixth-most populous nation since 2011. Consumer spending in Pakistan has increased at a 26 percent average pace the past three years, compared with 7.7 percent for Asia, according to data compiled by Euromonitor International, a consumer research firm.
...Pakistan’s middle class has doubled to 70 million people in the past decade as booms in agriculture and residential property, as well as jobs in telecom and media have helped people prosper, according to Sakib Sherani, chief executive officer at Macroeconomic Insights in Islamabad.
Franchising is also booming as businesses battling Pakistan’s record energy outages seek alternatives to factories that can’t run without adequate power, said Samiullah Mohabbat, chief executive officer of Fatburger Pakistan and the country representative for the World Franchise Association. Mohabbat received over 100 queries this year from entrepreneurs wanting to buy franchise rights for international food chains.
The number of foreign food franchises in Pakistan will “easily double” in the next two years as more coffee houses and casual dining outlets enter the country, Mohabbat said. About two dozen foreign food franchises operate in Pakistan since Louisville, Kentucky-based Yum! Brands Inc.’s Pizza Hut opened two decades ago, followed by the same company’s KFC in 1997 and Oak Brook, Illinois-based McDonald’s Corp., the world’s largest restaurant chain, the following year.
KFC plans to open 40 more stores in Pakistan over the next five years to expand its network of 64 outlets in 18 cities, said Rafiq Rangoonwala, chief executive officer of Cupola, the company with the franchise rights for KFC, the biggest fast-food chain by outlets in Pakistan.
Salt Lake City-based Mrs Field’s Original Cookies Inc., that opened an outlet in Lahore in 2011, plans to start 15 more this year, said Rashed Siddiqui, franchise owner.
Second Cup will open its first outlet in Islamabad within the next six months and Red Mango Inc., a Dallas-based frozen yoghurt retailer, will enter Pakistan this year, Mohabbat said.
Fullerton, California-based Tutti Frutti Frozen Yoghurt, that has 20 outlets in Pakistan since opening in late 2011, plans to start 100 more this year, said Naeem Niazi, director for international business development at Wellspring Industry Inc., owner of Tutti Frutti.
Pakistanis spend 90 billion rupees ($924 million) a year on eating out at the 20,000 restaurants nationwide because of a paucity of other entertainment facilities, said Nauman Mirza, founder and chief executive officer of Food Connection Pakistan, an online restaurant guide.
Here's a report on Marble Slab Creamery opening outlets in Pakistan:
Global Franchise Group LLC inked a franchise agreement with Western Brands PVT Ltd. to open the first Marble Slab Creamery locations in Pakistan.
Financial terms were not disclosed.
The deal calls for the development of 10 Marble Slab Creamery stores in Pakistan over a 10-year period, with the 5,000-square-foot flagship store opening up in Lahore.
“The new locations in Pakistan are an extension of Marble Slab Creamery’s existing presence in the Middle East and the South East Asian sub-continent,” said John Peddar, director of international development, Global Franchise Group. “In a nation of 176 million people, we expect that the brand product will be well-received and positioned for growth in this emerging market.”
Marble Slab Creamery is managed by GFG Management LLC, a subsidiary of Atlanta-based Global Franchise Group.
Marble Slab Creamery operates in Australia, Bahrain, Canada, Guam, Kuwait, Lebanon, Mexico, Oman, Puerto Rico, Scotland, Trinidad and Tobago, United Arab Emirates, and the United States.
Global Franchise Group’s other brands include Great American Cookies, MaggieMoo’s, Pretzelmaker and Pretzel Time
Here's an ET story on middle class powering FMCG growth in Pakistan:
Procter & Gamble (P&G), one of the world’s largest consumer goods company, has recognised Pakistan as one of the top 10 emerging markets to focus investment in. This sounds like good news for our cash-strapped economy, and it is equally good news for those who have invested in P&G.
It makes sense for any fast moving consumer goods (FMCG) to invest in a country where the world’s biggest consumer goods names – Unilever, P&G, Nestle and Mondel-z (formerly Kraft Foods) – are not only operating, but also growing significantly.
According to the State Bank of Pakistan, the net profits of FMCG companies listed on the Karachi Stock Exchange grew in excess of 20% in fiscal year (FY) 2011-12. P&G, which is not listed on the KSE, has witnessed tremendous growth in revenues during the past three years – including 50% revenue growth in FY2012. Besides the consumer goods sector, its supporting industries like packaging and distribution companies have also seen their toplines grow significantly.
So what are the factors contributing to this growth?
If the fact that these companies are selling essential food items and consumer goods in the world’s sixth-largest market by consumer size is not satisfying enough for you, here’s a more detailed and nuanced explanation.
“Economics and demographics are together at play in Pakistan,” P&G Pakistan Country Manager Faisal Sabzwari told this correspondent in a recent interview. The boom in the rural economy has also been a major contributor to their growth – thanks to a series of bumper crops of agricultural produce and wheat support prices, which were raised by the government in recent years.
Besides this, according to Sabzwari, Pakistan is one of the top countries adding 20-somethings to its workforce; these are the people establishing families, getting new jobs and helping market sizes grow.
“We have millions of consumers entering independent disposable income space in their lives every year,” Sabzwari said, while referring to the growing middle class.
The market size in Pakistan has also grown in terms of volumes, without taking pricing into account. “Increasing urbanisation and the growing middle class are key drivers of the FMCG business,” Sabzwari said.
Pakistan’s is urbanising faster than other developing countries, according to Sabzwari. “The country’s population is growing at under 3%, while the rate of migration to urban centres is even higher,” according to Muzammil Aslam, managing director at Emerging Markets Rsearch.
“A population base of 180 million talented and hard-working people hungry for prosperity ensures that nothing can hold this country back from growing,” P&G Pakistan’s chief said. While looking at the growing middle class, he said, it is important to look at their consumption habits. “We are exposing more consumers to value brands like Pampers and Always,” he explained.
It may be added here that consumer spending in Pakistan has increased by an average of 26% in three years, according to a Bloomberg report published on November 21, 2012 – a strong sign that people are consuming more goods than ever before.
This rise in consumer demand has spurred the growth of supermarkets across major urban centres, which include, but are no longer limited to Karachi, Hyderabad, Multan, Lahore, Faisalabad and Islamabad.
Such superstores are getting larger and asking manufacturers for broader brand portfolios in order to serve their customers better. They have larger shelves, enabling them to have more sophisticated and developed categories in which they can stock more products than ever before....
The Emerging Middle Class in Pakistan: How it Consumes, Earns, and Saves
Dr. Jawaid Abdul Ghani
Professor, Strategy and Marketing Research,
Karachi School of Business and Leadership
During the first decade of the twenty first century, and for the first time in the history of
Pakistan, over half of the households in the country belonged to the middle class (M-class).
During this period (2002-2011) the M-class, defined as households with daily per capita
expenditures of $2-$10 in 2005 purchasing power parity dollars1
, grew from 32 percent to 55
percent of all households in the country, and the number of people in this class doubled from 38
million to 84 million. Real aggregate national consumption increased by about $60 billion, of
which $55 billion was accounted for by the increase in consumption of the M-class. As a result
90 percent of the increase in national consumption during this decade came from the increase in
consumption of the M-class2
. It is not surprising that the Asian Development Bank listed
Pakistan as among the top five countries3
in the Asia Pacific region with the fastest growing Mclass
during 1990-2008 (Chun 2010).
What characterizes the M-class? Bannerjee and Duflo (2008) suggest that holding a relatively
secure job is the single most important characteristic of the M-class. Individuals with higher
levels of “permanent income” are less vulnerable to economic shocks, have lower discount rates
for future rewards and thus invest more in health, education, and other “rent generating”
credentials. Professionals and others in the “service class” with large amounts of human capital
and stable employment relationships are considered the most likely to invest in securing their
own and children‟s future. Indeed, according to Sorenson (2000) it is the level of uncertainty in
“lifetime wealth” and resulting living conditions which result in differences among social
. M-class values are described as optimism and confidence regarding the future, a
preference for moderation and stability, a willingness to pay a little extra for quality, the “ability
to defer gratification”, and income often based on specialized skills. As a result the M-class has
the “base amount of income to invest in productive activities that contribute to economy-wide
welfare” (Chun 2010), and is more likely to accumulate human capital and savings, and more
inclined towards entrepreneurship (Lopez 2012, Meyer 2012).
#Pakistan middle class world's 18th largest: report. #Pakistan 5.7% vs #India 3% of population. #China 1st, #US 2nd http://tribune.com.pk/story/973649/pakistan-has-18th-largest-middle-class-in-the-world-report/ …
Pakistan’s middle class consists of over 6.27 million people, according to Credit Suisse, a global financial services company.
In its Global Wealth Report 2015 released on Oct 13, Credit Suisse said Pakistan has the 18th largest middle class worldwide.
The study revealed that 14% of world adults constituted the middle class in 2015 and held 32% of world wealth. The share of middle-class adults in Pakistan’s total adult population of 111 million was 5.7% in 2015 as opposed to India’s 3% and Australia’s 66% in 2015.
Middle-class Pakistani adults constituted 0.9% of the worldwide middle-class population. The highest concentration of middle-class population in 2015 was in China (108.7 million), followed by the United States (91.8 million) and Japan (62 million).
Defining ‘middle class’
Economists use a variety of methods, such as income and standard of living, to define what constitutes the middle class. Credit Suisse uses the measure of ‘personal wealth’ – or a ‘wealth band’ instead of an ‘income range’ – to determine the size and wealth of the middle class around the world.
Taking the United States as the benchmark country, Credit Suisse considers an adult to be part of the middle class if they have wealth between $50,000 and $500,000 valued at mid-2015 prices.
Credit Suisse came up with the minimum and maximum figures for the US middle-class wealth band based on its median earnings and the amount of capital a person close to retirement age needs to purchase an annuity paying the median wage for the remainder of their life.
For the rest of the countries, Credit Suisse uses the IMF series of Purchasing Power Parity (PPP) values to derive equivalent middle-class wealth bounds in local terms.
Being a lower per-capita country, Pakistan has lower prices and consequently a reduced middle-class threshold. To be a member of the middle class in 2015, according to Credit Suisse, a Pakistani adult must have wealth of at least $14,413.
In terms of the local currency that buys one dollar for Rs104 these days, a Pakistani adult should be considered part of the middle class if they have wealth of between Rs1.5 million and Rs15 million.
With $14,413, Pakistan has the third lowest “middle-class lower bound wealth” for 2015, followed by India ($13,662) and Ukraine ($11,258). This suggests Pakistan has lower prices in general, which enables people to join the middle class by crossing a relatively lower threshold of wealth band.
Wealth in Pakistan
According to Credit Suisse, total wealth in Pakistan amounted to $495 billion in 2015. Given that the figure stood at $170 billion in 2000, total wealth in Pakistan has increased at an annualised rate of 7.4% for the last 15 years.
Total wealth of the world increased on average by 5.2% annually over the same 15-year period, the report shows.
A little more than 90% Pakistani adults had wealth less than $10,000 in 2015. The share of Pakistani adults with wealth between $10,000 and $100,000 in 2015 was 9.8% while only 0.1% adults owned wealth in the range of $100,000 and $1 million, the report revealed.
Hi Mr Haq, I need an update on the Educational Market of Pakistan in terms of investment opportunity for the foreign publishers. I am preparing for the forthcoming Abu Dhabi International Book Fair 2017 as a representative of Karachi International Book Fair. I'll appreciate any assistance in this regard, please.
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