Ayodhya Verdict Belongs in the Hall of Shame of Indian Judiciary

The long awaited ruling of the Allahabad High Court on the disputed Ayodhya site was announced today.

Here's a brief excerpt of how the BBC has reported the Ayodhya verdict:

In a majority verdict, judges gave control of the main disputed section, where a mosque was torn down in 1992, to Hindus.

Other parts of the site will be controlled by Muslims and a Hindu sect.

Allahabad High Court is trying to create a false appearance of Solomon's wisdom by ordering what is being advertised as "split-the-baby" verdict.

In reality, though, the court has wrongly sided with the violent Hindutva outfits in practice by giving the main site where Babri masjid stood to Hindus. This verdict has set a dangerous precedent, raising alarms about hundreds of other mosques in India which are claimed as ancient temple sites by the violent Sangh Parivar.

L.K. Advani and other major Hindutva leaders, including Gujarat Chief Minister Narendra Modi, have welcomed it and vowed to build "Ram Temple" on two-thirds of the disputed land awarded by an extremely unwise and politically motivated decision of the Allahabad Court.

Here's the Breaking News report:

Breaking News! Veteran BJP Leader LK Advani, who spearheaded the Ram Mandir (Ram Temple) movement in the 1990s, welcomed the Allahabad High Court's verdict on Ayodhya land. Advani hailed the High Court for acknowledging the disputed site as Lord Ram (Ram Lalla)'s birth place.....Meanwhile, Gujarat CM Narendra Modi has welcomed the Ayodhya Verdict and said that decks have been cleared for the construction of a Ram Temple in Ayodhya.

With mass murderers like Modi welcoming the Allahabad court verdict, it brings nothing but shame to India's judiciary and its much-hyped secular democracy.

In his Ayodhya opinion, Justice S.U. Khan, the only Muslim judge in the three-judge panel of the Allahabad High Court, made a reference to the Treaty of Hudaibiya as follows: "When prophet Mohammad entered into a treaty with the rival group at Hudayliyah(sic), it appeared to be abject surrender even to his staunch supporters."

This quote from Justice Khan shows how defeated and marginalized even the very few well-educated and well-placed Indian Muslims feel at this point....something reflected throughout his verdict. He basically threw in the towel and gave in to the likes of Justice DM Sharma, the most unabashed pro-Hindtva judge on the panel who "established that the property in suit is the site of Janm Bhumi of Ram Chandra Ji" in his opinion.

This is the most damning evidence of absolute Hindutva fascist dominance of India's "secular democracy" on the streets and in the courts of India today. It does not augur well for either democracy or secularism in India.

Mapping Muslims killed (official figures probably understated) during BJP leader LK Advani's Rath Yatra in 1990

It's important to understand the environment at Benaras Hindu University archeology department that produced the alumni who provided the so-called "archeological evidence" to support Justice Sharma's unabashed pro-Hindutva opinion.

Archeological Survey of India (ASI) is known to be dominated by extreme right wing Hindus, many of whom are graduates of Benaras Hindu University which has practiced Apartheid against its Muslim students.

Here's an excerpt from an article by MIT scholar Omar Khalidi criticizing the ASU's role in distorting evidence used in the verdict:

Justice DV Sharma's judgment in the Babri masjid case given on Thursday claimed that 'the disputed structure was constructed on the site of the old structure after demolition of the same. And that the Archaeological Survey of India has proved that the structure was a massive Hindu religious structure'.

What Justice Sharma was referring to was the ASI's report of 2003 of dubious value on Ayodhya. What the ASI claimed were the base of pillars which held up the temple, were in fact not pillar bases at all. The Siva shrine at a lower level adds no strength to the claim of a Ram temple. The terracotta from different levels has been so jumbled that it can be linked to no particular stratum and period. Moreover, the presence of animal bones and glazed earthenware found at the site makes it difficult to claim that a Ram temple existed on this site between the 12th and 16th centuries.

The ASI's role in marshaling dubious evidence in support of the existence of a Ram temple at Ayodhya is the right occasion to assess its activities as a handmaiden of Hindutva.

Numerous examples of the ASI's role in transforming medieval heritage can be seen across India.

* In 2007, the ASI cooked up history at Chittorgarh, a fort near Udaipur, Rajasthan, by signposting an underground passage as the location of Padmini's jauhar or self-immolation, based on the myth of Emperor Alauddin Khilji's alleged atrocities. Numerous modern temples abound in the medieval fort.

* In 2003, the ASI virtually converted the 15th century Kamal Maula mosque in Dhar, Madhya Pradesh, into a temple by allowing Hindu worship in it.

* Since 1977, the ASI has allowed the construction of three new Hindu temples in the precincts of Sher Shah Suri's mausoleum in Sasaram, Bihar. These bathroom-tiled temples with their calendar-art frescos mar the magnificent mausoleum's vistas.

* In 1970, the ASI allowed a kumkum sprinkled stone on the southeast corner of Charminar in Hyderabad to be converted into a full-fledged Bhagya Laxmi temple. A modern temple is protruding out of a major medieval monument in defiance of the ASI's own rules.

* At the turn of the 21st century, almost all the grand gates in historic Golconda fort and Hyderabad are riddled with Hindu temples, signs and icons flying in the face of the ASI's preservation mission.

* In 1948, the ASI converted the Jama Masjid in the Daulatabad fort near Aurangabad into a Bharata Mata Mandir (Mother India temple). The very name is so candidly, crassly contemporary as to make a mockery of a medieval site.

Here is a video clip of Omar Khalidi on ASI's role in promoting Hindutva claims on various religious sies in India:



Hindu alumni of Benaras Hindu University (BHU) archeology department have played a major role in producing "archeological evidence" that the Allahabad High Court relied upon. Professor Ahmad Hasan Dani who attended BHU and studied archeology, says that he was ostracized and treated as a pariah by Hindu students and faculty at BHU. He was not allowed to sit and eat with his fellow students, he was asked to keep his plates and dishes separate in his room, and required to stand outside the dining hall to be served his meal and then wash the dishes himself. Later, when he graduated at the top of the archeology class, he was offered a faculty position, but the University head and former president of India Radhakrishnan told him that he would be paid a salary but he would not be allowed to teach. Here is a video clip of late Prof Dani talking about it with Farah Husain on Morning with Farah TV show:



Let's hope and pray that this latest verdict does not lead to more innocent blood being shed because of an unwise and unjust court ruling favoring the Hindu provocateurs and perpetrators of the crime of demolishing Babri mosque in 1992 and subsequent massacres of Muslim minority. Let's also hope that the Indian Supreme Court eventually reverses the Allahabad court verdict on appeal.

Related Links:

Haq's Musings

Gujarat in 2002

Full Text of Allahabad High Court's Ayodhya Verdict
21st Century Challenges For Resurgent India

BHU Paper on Temple at Ayodhya

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Rise of Hindu Fascism in India

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Muslims Falsely Accused in Malegaon Blast
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Can India "Do a Lebanon" in Pakistan?

Violence Against Indian Christians
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Gujarat Pogrom of 2002

Deeply Religious People Profoundly Ignorant About Religion?

I have often wondered that if the Taliban, al Qaeda militants and their sympathizers really understood the teachings of Islam, would they commit or endorse some of the most horrific acts of murder and mayhem against innocent civilians, and then justify such acts based on religion? I have also had similar questions in my mind about the hateful words and actions of some of the followers of other faiths as well. It seems to me that answers to my questions are beginning to emerge from a recent Pew survey that concludes that deeply religious people are also deeply ignorant about religion. What is even more surprising about this poll is that atheists are more knowledgeable about religions than the self-professed deeply religious people.

A Pew poll conducted in 2002 showed that the United States stands out as the most religious among the wealthy western nations for the religiosity of its people.

Religion is much more important to Americans than to people living in other wealthy nations. Six-in-ten (59%) people in the U.S. say religion plays a very important role in their lives. This is roughly twice the percentage of self-avowed religious people in Canada (30%), and an even higher proportion when compared with Japan and Western Europe. Americans' views are closer to people in developing nations, such as India and Pakistan, than to the citizens of developed nations. The poll showed that 92% of respondents in India and 91% in Pakistan say religion is important to them.



A new poll conducted by Pew now reveals that Americans are by all measures a deeply religious people, but they are also deeply ignorant about religion.

Researchers from the independent Pew Forum on Religion and Public Life phoned more than 3,400 Americans and asked them 32 questions about the Bible, Christianity and other world religions, famous religious figures and the constitutional principles governing religion in public life.

On average, people who took the survey answered half the questions incorrectly, and many flubbed even questions about their own faith.



Those who scored the highest were atheists and agnostics, as well as two religious minorities: Jews and Mormons. The results were the same even after the researchers controlled for factors like age and racial differences.

“Even after all these other factors, including education, are taken into account, atheists and agnostics, Jews and Mormons still outperform all the other religious groups in our survey,” said Greg Smith, a senior researcher at Pew.

Among the topics covered in the survey were: Where was Jesus born? What is Ramadan? Whose writings inspired the Protestant Reformation? Which Biblical figure led the exodus from Egypt? What religion is the Dalai Lama? Joseph Smith? Mother Teresa? In most cases, the format was multiple choice.

Gallup Poll of Americans: Bible Literal? Or Fables? 

The researchers said that the questionnaire was designed to represent a breadth of knowledge about religion, but was not intended to be regarded as a list of the most essential facts about the subject. Most of the questions were easy, but a few were difficult enough to discern which respondents were highly knowledgeable.

Innovation Vs Religiosity Source: Economist

On questions about the Bible and Christianity, the groups that answered the most right were Mormons and white evangelical Protestants.

On questions about world religions, like Islam, Buddhism, Hinduism and Judaism, the groups that did the best were atheists, agnostics and Jews.

One finding that may grab the attention of policy makers is that most Americans wrongly believe that anything having to do with religion is prohibited in public schools.

An overwhelming 89 percent of respondents, asked whether public school teachers are permitted to lead a class in prayer, correctly answered no.

But fewer than one of four knew that a public school teacher is permitted “to read from the Bible as an example of literature.” And only about one third knew that a public school teacher is permitted to offer a class comparing the world’s religions.

The survey’s authors concluded that there was “widespread confusion” about “the line between teaching and preaching.”

Mr. Smith said the survey appeared to be the first comprehensive effort at assessing the basic religious knowledge of Americans, so it is impossible to tell whether they are more or less informed than in the past.

The phone interviews were conducted in English and Spanish in May and June. There were not enough Muslim, Buddhist or Hindu respondents to say how those groups ranked.

Clergy members who are concerned that their congregants know little about the essentials of their own faith will no doubt be appalled by some of these findings:

* Fifty-three percent of Protestants could not identify Martin Luther as the man who started the Protestant Reformation.

* Forty-five percent of Catholics did not know that their church teaches that the consecrated bread and wine in holy communion are not merely symbols, but actually become the body and blood of Christ.

* Forty-three percent of Jews did not know that Maimonides, one of the foremost rabbinical authorities and philosophers, was Jewish.

The question about Maimonides was the one that the fewest people answered correctly. But 51 percent knew that Joseph Smith was Mormon, and 82 percent knew that Mother Teresa was Roman Catholic.

I am not aware of a similar survey ever done in Pakistan to gauge Pakistanis' knowledge of Islam in particular, and other religions in general. I think such a survey would be a worthwhile exercise.

Related Links:

Haq's Musings

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Explaining Low IQs in Africa and South Asia

Daily Carnage Amidst Intelligence Failures in Pakistan

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The Muslim West Facts Project

South Asians Income Levels in America

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A Brief History of Pakistani Economy 1947-2010

Pakistani economy grew at a fairly impressive rate of 6 percent per year through the first four decades of the nation's existence. In spite of rapid population growth during this period, per capita incomes doubled, inflation remained low and poverty declined from 46% down to 18% by late 1980s, according to eminent Pakistani economist Dr. Ishrat Husain. This healthy economic performance was maintained through several wars and successive civilian and military governments in 1950s, 60s, 70s and 80s until the decade of 1990s, now appropriately remembered as the lost decade.

Pakistan Growth By Decades. Source: National Trade and Transport Facility

In the 1990s, economic growth plummeted to between 3% and 4%, poverty rose to 33%, inflation was in double digits and the foreign debt mounted to nearly the entire GDP of Pakistan as the governments of Benazir Bhutto (PPP) and Nawaz Sharif (PML) played musical chairs. Before Sharif was ousted in 1999, the two parties had presided over a decade of corruption and mismanagement. In 1999 Pakistan’s total public debt as percentage of GDP was the highest in South Asia – 99.3 percent of its GDP and 629 percent of its revenue receipts, compared to Sri Lanka (91.1% & 528.3% respectively in 1998) and India (47.2% & 384.9% respectively in 1998). Internal Debt of Pakistan in 1999 was 45.6 per cent of GDP and 289.1 per cent of its revenue receipts, as compared to Sri Lanka (45.7% & 264.8% respectively in 1998) and India (44.0% & 358.4% respectively in 1998).



After a relatively peaceful but economically stagnant decade of the 1990s, the year 1999 brought a bloodless coup led by General Pervez Musharraf, ushering in an era of accelerated economic growth that led to more than doubling of the national GDP, and dramatic expansion in Pakistan's urban middle class.

Per Capita PPP GDP



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



The above facts were acknowledged by the current PPP government in a Memorandum of Economic and Financial Policies (MEFP) for 2008/09-2009/10, while signing agreement with the IMF on November 20, 2008. The document clearly (but grudgingly) acknowledged that "Pakistan's economy witnessed a major economic transformation in the last decade. The country's real GDP increased from $60 billion to $170 billion, with per capita income rising from under $500 to over $1000 during 2000-07". It further acknowledged that "the volume of international trade increased from $20 billion to nearly $60 billion. The improved macroeconomic performance enabled Pakistan to re-enter the international capital markets in the mid-2000s. Large capital inflows financed the current account deficit and contributed to an increase in gross official reserves to $14.3 billion at end-June 2007. Buoyant output growth, low inflation, and the government's social policies contributed to a reduction in poverty and improvement in many social indicators". (see MEFP, November 20, 2008, Para 1)

 
The decade also cast a huge shadow of the US "war on terror" on Pakistan, eventually turning the nation into a frontline state in the increasingly deadly conflict that shows no signs of abating. Along with the blood and gore and chaos on the streets, there are hopeful signs that rule of law and accountability is beginning to prevail in the country with the restoration of representative democracy and independent judiciary, largely in response to an increasingly assertive urban middle class, vibrant mass media and growing civil society.

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

Why is it that Pakistani economy has done well under military governments and performed poorly when led by politicians? To put it all in perspective, let's recall how late Dr. Mahbub ul-Haq, the renowned Pakistani economist who is credited with the idea of UNDP's human development index (HDI), explained the corrosive impact of political patronage on economic policy in Pakistan.

In a 10/12/1988 interview with Professor Anatol Lieven of King's College and quoted in a recent book "Pakistan-A Hard Country", here is what Dr. Haq said:

"..every time a new political government comes in they have to distribute huge amounts of state money and jobs as rewards to politicians who have supported them, and short term populist measures to try to convince the people that their election promises meant something, which leaves nothing for long-term development. As far as development is concerned, our system has all the worst features of oligarchy and democracy put together.

That is why only technocratic, non-political governments in Pakistan have ever been able to increase revenues. But they can not stay in power for long because they have no political support...For the same reason we have not been able to deregulate the economy as much as I wanted, despite seven years of trying, because the politicians and officials both like the system Bhutto (Late Prime Minister Zulfikar Ali Bhutto) put in place. It suits them both very well, because it gave them lots of lucrative state-sponsored jobs in industry and banking to take for themselves or distribute to their relatives and supporters."

Here is how Pakistani economist and NUST Professor Ashfaque Husain Khan explains the current situation:

What went wrong? Why one of the fastest growing economies in the Asian region until two years ago has been totally forgotten in the region? Firstly, the speed and dimension of exogenous price shocks (oil and food) were of extraordinary proportions. Secondly, the present government found itself totally ill-prepared and clueless in addressing the challenges arising out of the shocks. While rest of the world was taking corrective measures and adjusting to higher food and fuel prices, Pakistan lurched from one crisis to another.



Despite peaceful election and a smooth transition to a new government, political instability persisted. For a protracted period there were no finance, commerce, petroleum and natural resources and health ministers in the country. The government lost six precious months in finding its feet. It gave the impression of having little sense of direction and purpose. A crisis of confidence intensified as investors and development partners started to walk away. The stock market nosedived, capital flight set in, foreign exchange reserves plummeted and the Pakistani rupee lost one-third of its value. In short, Pakistan's macroeconomic vulnerability had grown unbearable. It had no option but to return to the IMF for a bailout package. There were no Plan A, B and C. There was only one plan, that is, to return to the IMF.

While the country was moving rapidly towards the IMF, the ministry of finance had prepared the plan to bring $4 billion by June 30, 2008 through four transactions. A kick-off meeting was scheduled on April 23, 2008 at the ministry to give a final touch to the various roadshows. These transactions were canceled on April 20, 2008. Who ordered the cancellation of $4 billion transaction? This cancellation prompted balance of payment crisis and the rest became history.

The economy continues to remain in intensive care unit and is barely breathing thanks to the injection of funds from the IMF, World Bank and Asian Development Bank. The economy is not on the radar screen of the government and as such the economic managers have no relevance in the current political set up. The exit of Shaukat Tarin is a classic example. At least he tried his best to inject financial discipline but paid the price of teaching prudent financial management.

Since Tarin's departure, Abdul Hafeez Shaikh has assumed the position of finance minister. It is still early to judge him, as the economy has suffered yet another major jolt from the widespread devastation caused by recent floods. This has added to the already extreme challenge Pakistan's leadership faces in bringing political and economic stability to the nation.

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



Related Links:

Haq's Musings
Ishrat Husain: Structural Reforms in Pakistan's Economy
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Pakistan's Economic Performance 2008-2010

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Pakistan's Circular Debt and Load Shedding
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Shaukat Aziz's Economic Legacy

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Pakistan's Multi-Billion Dollar IT Industry

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Food, Clothing and Shelter in India and Pakistan

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IMF-Pakistan Memorandum of Economic and Financial Policies

South Asia's Progress Lags in Meeting UN Millennium Development Goals

In year 2000, leaders of rich and poor nations pledged to build a better world by 2015. Among their key goals now called Millennium Development Goals: halving extreme poverty and hunger from 1990 levels, reducing by two-thirds the child-mortality rate and slashing maternal mortality by three-quarters and achieving universal primary education.

The good news is that the share of people living on less than $1.25 a day seems on track to meet the goal of halving the extreme poverty rate. However, the bulk of those gains have occurred in China and other East Asian countries. In fact, East Asia, Southeast Asia and North Africa are all on track to achieve almost all of the MDGs by 2015, but South Asia and the rest of the developing world have made insufficient progress so far, according to the current assessment by UN agencies.



The three-day summit to press world leaders to meet U.N. MDGs by significantly reducing poverty by 2015 concluded Wednesday with new financial pledges from countries but no guarantee that there will be enough money and political will to meet the targets. With many countries under financial stress from the effects of the global economic crisis as well as rising food and energy prices, Secretary-General Ban Ki-moon has asked member nations not to abandon the 1 billion people living on less than $1.25 a day. While the MDG goals encompass a variety of areas including education, health and gender parity, the first and the most important of these goals is to reduce poverty

With South Asia as the region with the largest share of the one billion global poor, the world will not meet its targets unless there is much greater focus and strong commitment to meet MDG goals in India, Pakistan and Bangladesh. In fact, even South Asia has a better chance of meeting the poverty and hunger reduction goals excluding India. Let's discuss the status of South Asian nations to assess where they are and what needs to be done.



India alone has the world's largest population of poor, hungry and illiterate people living within its borders. A new multi-dimensional measure of poverty confirms that there is grinding poverty in resurgent India. It highlights the fact that just eight Indian states account for more poor people than the 26 poorest African countries combined, according to media reports. The Indian states, including Bihar, Uttar Pradesh and West Bengal, have 421 million "poor" people, compared to 410 million poor in the poorest African countries.

OPHI 2010 country briefings on India and Pakistan contain the following comparisons of multi-dimensional (MPI) and income poverty figures:

India
MPI= 55%,Under$1.25=42%,Under$2=76%,India_BPL=29%

Pakistan
MPI=51%,Under$1.25=23%,Under$2=60%,Pakistan_BPL=33%

Lesotho MPI=48%,Under$1.25=43%,Under$2=62%,Lesotho_BPL=68%

China
MPI=12%,Under$1.25=16%,Under$2=36%,China_BPL=3%

Among other South Asian nations, MPI index measures poverty in Bangladesh at 58 per cent and 65 per cent in Nepal.

On poverty in Pakistan, World Bank economist Sanket Mohapatra has said in a recent post that remittances by overseas Pakistanis have played a significant role in Pakistan's economic improvement. Not only have such remittances contributed to significant poverty reduction in Pakistan "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)", but "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”, according to a World Bank report released on July 30, 2010.

There are now fears, however, that some of the gains made in poverty reduction have reversed due to widespread devastation in massive floods and Pakistan's economic woes since 2008 for which the poverty rate of 17% was reported by the World Bank. Thousands of schools and clinics have been destroyed in the recent deluge, setting back Pakistan's efforts toward meeting health and education related millennium development goals by 2015.

In addition to lagging in poverty reduction, South Asians are also doing poorly in terms of hunger and health indicators.

According to a recently-released FAO report's highlights as published in The Guardian, there are 847.5 million undernourished people in the world. India tops the list with 237.7 million, followed by China with 130.4 million, Pakistan 43.4 million, Democratic Republic of Congo 41.9 million, Bangladesh 41.7 million, Ethiopia 31.6 million and Indonesia 29.9 million.

A recent report by World Health Organization (WHO) claims that India accounts for most maternal deaths in the world, with at least 63,000 such deaths taking place in 2008 alone. In fact, India fared worse than even Nigeria (50,000 maternal deaths in 2008), Congo (19,000), Afghanistan (18,000), Ethiopia (14,000), Pakistan (14,000), Tanzania (14,000), Bangladesh (12,000), Indonesia (10,000), Sudan (9,700) and Kenya (7,900). An estimated 65% of maternal deaths globally occurred in these 11 countries in 2008, with India contributing the most.

As South Asians lurch toward the 2015 deadline for meeting the MDG goals, it is important to recognize their governments' role and the need for help from rich donor nations to significantly increase spending on human development for poverty reduction. However, the South Asian governments alone can not do it. The private sector organizations, NGOs and civil society have to come forward to make their contribution toward meeting the important MDG goals to reduce poverty and hunger and improve health and literacy.

In Pakistan's case in particular, the overseas Pakistanis and Pakistan's middle class need to step forward to do their part in rebuilding the shattered lives of millions of their poor fellow citizens affected by the recent floods.

Related Links:

Haq's Musings

MDGs in Pakistani Village

Explore the World--Gapminder.org

UN Millennium Development Goals Report 2010

India Poorer Than Africa

India is Home to the World's Largest Population of Poor, Hungry and Illiterate People

Can Global Pakistanis Invest $10 billion in Reconstruction?

Pakistan Needs Exports and Investments to Drive Economy

Gross domestic product (GDP) is calculated by adding up public and private consumption, investments and net exports (exports-imports). Some of the major world economies, most notably Germany and China, are led by exports, while others, such as United States, United Kingdom, India and Pakistan, are primarily domestic consumption driven.

With almost 80% of its GDP from consumption, Pakistan has particularly heavy reliance on domestic public and private spending for its economic health. This is much higher than the US consumption accounting for over 70% of its economy, and India's 60%.

As Pakistan's GDP has more than doubled over the last decade, its FDI has increased dramatically and its exports have grown at 16% CAGR till 2007, the consumption component has continued to be stubbornly high at about 80%, with about 20% of it coming from investments and exports. By contrast, India's consumption component has declined from 80% to 60% with its investment and export components rising to more than 30% during the same period.

While the rest of the developed economies stagnate, the German formula seems to be working well, with exports driving the nation’s strong recovery. The German economy grew 2.2 percent in the second quarter from the first, yielding an annualized growth rate of about 9 percent that puts it on a footing with emerging markets like China and India.

In spite of the fact that about 80% of Pakistan's GDP depends on domestic consumption, the nation has been highly vulnerable to external shocks related to the need for imports, particularly the oil price volatility. Energy accounts for about a third of Pakistan's imports, and as the speculators drove oil prices to over $150 a barrel in 2008, the nation found itself unable to pay for imports, and sought bailout by the International Monetary Fund in 2008.

While the country was moving rapidly towards the IMF, former economic adviser Prof. Ashfaque Hasan Khan recalls that Pakistan's ministry of finance had prepared the plan to bring $4 billion by June 30, 2008 through four transactions. A kick-off meeting was scheduled on April 23, 2008 at the ministry to give a final touch to the various roadshows. These transactions were canceled on April 20, 2008. Who ordered the cancellation of $4 billion transaction? This cancellation prompted the latest balance of payment crisis and the rest became history.

Since the major missteps by the Zardari government in 2008, the economic crisis has worsened as the investors have pulled out and business confidence plummeted amidst serious security concerns raised by the Taliban insurgency in the country. It has also hurt Pakistan's exports. The recent devastating floods have added to the already serious economic woes. The only positive news has been the rising remittances by overseas Pakistanis which increased to nearly $9 billion last year.



Several East Asian and South East Asian nations faced a similar financial crisis in 1997 which required IMF bailout. Since the 1997 crisis, most of these Asian nations have significantly expanded their exports and built up large dollar reserves to deal with external shocks effectively. In addition, the Association of South East Asian Nations (ASEAN) has banded together with China, South Korea, and Japan to form the "ASEAN Plus Three" financial grouping. This arrangement is designed to enable member countries to swap reserves if speculators again target their currencies.

In addition to reviving the national economy from its current slump, the biggest long-term challenge for Pakistan's economic leadership is to improve the nation's ability to deal with external and internal shocks. This will require learning from the experience of India or other Asian economies in building sufficient internal revenue base for public expenditure, attracting greater foreign investment, expanding and diversifying exports and strengthening hard currency reserves. Inability to deal with these challenges will doom Pakistan to perpetual dependence on IMF and consequent loss of sovereignty to it.

Related Links:

Haq's Musings

Incompetence Worse Than Corruption in Pakistan

Pakistan's Circular Debt and Load Shedding

Pakistan Swallows IMF's Bitter Medicine

Shaukat Aziz's Economic Legacy

Structural Reform in Pakistan Economy

Pakistan's Energy Crisis

Soaring Food and Fuel Prices

Karachi Tops Mumbai in Stock Performance

India Pakistan Contrasted 2010

Pakistan's Foreign Visitors Pleasantly Surprised

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

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

BSE-Key Statistics

Pakistan's Multi-Billion Dollar IT Industry

India-Pakistan Military Comparison

Food, Clothing and Shelter in India and Pakistan

Pakistan Energy Crisis

IMF-Pakistan Memorandum of Economic and Financial Policies

Can Global Pakistanis Invest $10 Billion in Post-Floods Reconstruction?

Members of Pakistani diaspora must remember their compatriots in distress as we celebrate Eid today.

While there have been high-profile recent efforts by overseas Pakistanis to raise millions of dollars to fund rescue and relief efforts after the recent devastating floods, it is now time to begin to shift focus on to the much longer term and significantly more expensive reconstruction phase that will requires billions, not millions, of dollars.

World Bank economist Sanket Mohapatra has said in a recent post that remittances by overseas Pakistanis have played a significant role in Pakistan's economic improvement. Not only have such remittances contributed to significant poverty reduction in Pakistan "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)", but "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”, according to a World Bank report released on July 30, 2010.

World Bank's Mohaptra adds that "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 cost and the task of post-flood reconstruction may appear to be monumental, but I feel confident that global Pakistani community is equal to it. Already, non-resident Pakistanis have been sending home nearly ten billion US dollars a year in remittances to their home country. And their invested assets are estimated to be in hundreds of billions of US dollars in different parts of the world. I believe Pakistani diaspora can double their remittances in the next twelve months, thereby boosting Pakistan's overall economy by a $10 billion stimulus for reconstruction.

If a significant part of this additional $10 billion in remittances goes into special, professionally managed, investment funds specifically for post-floods reconstruction and rehabilitation, it will be an even greater boost to Pakistan's overall economy. To put it in perspective, the $10 billion in a year would be 5 times the annual foreign aid, and twice the peak FDI Pakistan received in 2007, the last year of healthy economic growth in 2007-2008.

Here's a video clip of Pakistan's billionaire real estate developer Malik Riaz Husain pledging $2 billion of his own wealth to help the flood victims rebuild:



Related Links:

Haq's Musings

Pakistani-Americans Extend Help to Flood Victims

World Bank Report on Pakistan released on July 30, 2010

Pakistan's Economic Performance 2008-2010

Aid, Trade, Investments and Remittances in Pakistan

World Bank Blog on Impact of Remittances in Pakistan

Silicon Valley Rises to Help Pakistan Flood Victims

For every Pakistani hit by floods, there are eight who are still standing and ready to help. That was the theme that guided the recent Silicon Valley Iftar and Fundraiser organized by Organization of Pakistani Entrepreneurs (OPEN Silicon Valley) at the Computer History Museum in Mountain View, California.

About 300 attendees contributed over $500,000 at the event. It was specially gratifying to see that my fellow NED alumni were at the forefront and donated $60,000, with a pledge to give another $40,000 to match any additional contributions made within a week of the event. There was another offer of $70,000 match by an unknown contributor.

In addition to various fundraisers to aid twenty million flood victims, Pakistani-American employees have persuaded their high-tech employers to make significant matching contributions for flood relief. For example, Cisco is matching over a million dollars in employee contributions, and Intel's Pakistani employees expect their employer to contribute about $250,000. Google has announced $250,000 grant for flood victims, and set up a special page for additional fundraising.

While each of these reported amounts at individual events and companies in the valley appear too small to meet the massive challenge ahead, I believe that it will all add to up to a substantial amount of several million dollars for at least the initial phase of rescue and relief effort.

Beyond that, the community and their friends and neighbors will need to be energized to support the much bigger and longer term effort required for the reconstruction and rehabilitation phase for about twenty million victims.

Here is a list of some of the organizations actively raising funds for flood relief:

- Imran Khan Flood Relief Fund

- Edhi Foundation

- IMANA

- HumanityFirst

- Developments in literacy

- HOPE USA

- Human Development Fund

- Naya Jeevan

- APPNA

- The Citizens Foundation

- Hidaya Foundation

- American Red Cross

- HelpingHands

- UNICEF

- Islamic Relief

- Relief International

As Pakistan faces the worst natural disaster of its 63 year history, the failure to aid the victims could perpetuate the misery of the poor victims and play right in to the hands of the extremist forces of intolerance who are actively taking advantage of the human misery amidst social inequities of Pakistan's rural feudal society.

As heart-wrenching and destructive as this deluge has been, I believe it could also be a blessing in disguise for the millions of poor peasants who have been toiling on the feudal lands from time immemorial. If the reconstruction and rehabilitation effort is designed and implemented to help the victims escape the degrading life as slaves of their feudal lords, Pakistan could see a new beginning toward greater human development and a prosperous future that is free of violence and terrorism.

Here is a video clip showing scenes of great devastation and widespread human suffering caused by the unprecedented flooding in Pakistan:



Related Links:

Haq's Musings

Pakistan's Middle Class Responds to Challenge

Taliban Target Landed Elite

Disaster Dampens Spirits on Pakistan's 63rd Independence Day

Feudal Power Dominates Pakistani Democracy

Failure to Aid Pakistan Flood Victims Will Be Costly

HDF Silicon Valley Fundraiser For Pakistan

Aid versus Trade, Investments and Remittances

Microfinancing in Pakistan

HDF Silicon Valley Fundraiser 2008

Aid to Pakistan Bill 2009

Light a Candle, Do Not Curse Darkness

Facebook Group-Zimmedar Shehri

Helping Children Become Responsible Citizens

Orangi Pilot Project

Three Cups of Tea

Volunteerism in America