Thursday, August 23, 2012

Obama Using Beer Photo Ops in Race With Romney

Beer photo ops are an important part of Obama v. Romney race, a historic presidential contest with no WASP candidate. Neither Obama-Biden nor Romney-Ryan are White Anglo-Saxon Protestants, or WASPS, who have dominated America's top leadership throughout American history. Mitt Romney is Mormon and a teetotaler and Obama is Protestant.

In fact, polls show that President Barack Obama is incorrectly thought to be Muslim by one in six American voters, and only one quarter of voters can correctly identify him as a Protestant. Over 60 percent of Republican voters know that Mitt Romney is Mormon. Less than half of Catholic and Democratic voters know this. Joe Biden and Paul Ryan, the VP candidates, are both Catholic.

What's beer got to do with it? It seems the Obama campaign knows that the American voters have long identified with a candidate in polls as someone with whom they’d prefer to drink a beer. Recently, Obama has been shown drinking beer with voters at the Iowa State Fair. Earlier he did the same at a campaign stop in Ohio. Drinking beer with voters helps Obama differentiate himself from Mitt Romney who, as a practicing Mormon, does not drink beer or any other alcoholic beverage. As a bonus, beer photo ops might also help Obama distance himself from Islam and Muslims to increase his appeal to the "working class white" voters, an important constituency in presidential elections.

As to the absence of a WASP from the top of the tickets, it's symptomatic of  power shift happening at the top. The percentage of Protestants in Congress has dropped to 55% from 74% in 1961, according to Pew Forum. Jews now account for 7% of the US Congress overall and 12% of the US Senate. The corner offices of the top banks, once ruled by Rockefellers and Bakers, now include dozens of Jews, an Indian-American and the grandson of a Greek immigrant, according to Wall Street Journal. There are no WASP judges on the US Supreme Court bench. Three of the top judges are Jews. The remaining 6 are Catholics.

It would be wrong to assume, however,  that the power of America's WASP establishment is nearing an end, just as it was a mistake to expect Obama's election to presidency as the beginning of post-racial America.

Related Links:

Haq's Musings

So What if Obama is Muslim?

Obama, Science and Islam

Obama on Pakistan, Cricket, Daal and Keema 

Obama Shies Away From Muslims

Jewish Power in US Congress

Monday, August 20, 2012

Strong Earnings Propel Pak Shares Index to 4 Years High

A string of strong earnings announcements by Karachi Stock Exchange listed companies and the Central Bank's 1.5% rate cut have helped the KSE-100 index gain 32% year to date. In the week ended on August 16, the benchmark index surged by 238.59 points, or 1.61 percent, to 51-month high of 15,000.08 points. This was the highest close since April 30, 2008.

Strong Earnings:

Last week, KSE-listed Indus Motors announced 57% jump in profits on record sales of Toyota Corolla cars.  It was followed by Lucky Cement Ltd. (LUCK), Pakistan’s largest producer of the building material, announcing 71 percent surge in profits to a record as an increase in domestic sales offset a decline in exports. Pakistan Petroleum Limited (PPL), the country’s second largest oil and gas explorer, said its profits soared 30% to Rs40.9 billion in fiscal 2012. Strong earnings have also been reported by Unilever Foods and Bata shoes in the last few days.

Best Performing Market:

 So far in 2012 Pakistan is the best performing market in Asia surpassing the Philippines which was the top performer until June of this year.  Karachi stocks have also significantly outperformed all emerging stock smarket indexes, including Mumbai and Shanghai, in 2012.

 Rising Consumer Demand: 

 Meteoric rise of Engro Foods symbolizes strong consumer demand in growing package food sector. Its CEO Muhammad Afnan Ahsan has forecast 81% increase in net income in the current year ending December 31, 2012.  With a compound annual growth rate (CAGR) of 65 percent and a planned infrastructure investment in 2012 of eight billion rupees, Engro Foods has become the country's fastest growing local company catering to a wide range of consumers in Pakistan and overseas. 


Undeterred by the gloom and doom reports in the media, Pakistani consumers are continuing to spend and private consumption has now reached 75 percent of GDP. It rose 11.6% in real terms in 2011-12 compared with just 3.7% growth a year earlier , according to Economic Survey of Pakistan. In fact, many analysts believe that Pakistan's official GDP of  $220 billion is understated by as much as 50%, buttressing a recent claim by the head of Karachi Stock Exchange that Pakistan's real GDP is closer to $300 billion.

I believe that even a modest effort to increase tax collection can significantly improve Pakistan's state finances to support higher public sector investments in energy, education, health care and infrastructure.
 
 Related Links:

Haq's Musings

Pakistan's Underground Economy

 Pakistan Cement Sector Research Report

Tax Evasion Fosters Aid Dependence

Poll Finds Pakistanis Happier Than Neighbors

Pakistan's Rural Economy Booming

Pakistan Car Sales Up 61%

Resilient Pakistan Defies Doomsayers

Land For Landless Women in Pakistan

Sunday, August 19, 2012

Faith in Hard Work: Pakistanis Lead the World

A recent Pew Survey of 21 countries reported that 81% of Pakistanis believe in hard work to achieve material success. Americans are the second most optimistic with 77% sharing this belief followed by Tunisians (73%), Brazilians (69%), Indians (67%) and Mexicans (65%).

 The survey found that "faith in the work ethic is particularly weak in Lebanon, where only 32% of the public anticipates rewards from hard work, and in Russia (35%), Japan (40%), Italy (43%) and Greece (43%), all countries that have suffered greatly from the recent economic downturn. There is also little confidence in hard work in China (45%), despite the fact that it has economically outperformed every country in this Global Attitudes survey".

Reacting to the survey results, former corporate leader Asad Umar who recently left Engro Corporation to join Imran Khan's PTI, said, “Fundamentally, the survey reveals that Pakistanis haven’t lost faith in the country. The Pakistani youth believes that current problems are short-term and can be resolved.”

Fifty-one percent of Pakistani respondents in the survey described their personal economic situation as "good", down from 70% in 2008.  Only 9% of Pakistani participants assessed the national economic situation as "good", down from 41% in 2008.



Another survey titled "Pervasive Gloom About the World Economy" reveals that the vast majority of Pakistanis recognize that their country is facing economic difficulties and most hold the government responsible for it. Only 12% of Pakistanis are satisfied with the current direction of the country. However, 23% believe that Pakistan's economy will get better in the next 12 months. 26% expect it to remain the same and 43% think it will get worse.

Defying the prophets of doom and gloom, Pakistanis remain much more optimistic than the people of any of the 21 countries surveyed, including BRIC countries, that their hard work can bring them material success.It's this perpetual optimism and willingness to work hard that helps Pakistanis maintain their upward social and economic mobility.

Related Links:

Haq's Musings

Upwardly Mobile Pakistan

Educational Attainment in Pakistan

Foreign Visitors to Pakistan Pleasantly Surprised

Pakistan's Infrastructure and M2 Motorway

India Pakistan Comparison 2011

Resilient Pakistan Defies Doomsayers


FMCG Consumption Boom in Rural Pakistan

Pakistan Visits Open  Indian Eyes




Friday, August 17, 2012

British Pakistani Wins "Reinvent the Toilet Challenge"

A team headed by Professor Sohail Khan, a British Pakistani researcher at Loughborough University, won $60,000 second place prize for developing a toilet that converts human waste into biological charcoal, which can be burned, and clean water. The prize was announced on August 14, Pakistan's Independence Day, at Gates Foundation's "Reinvent the Toilet Fair" in Seattle, Washington, which showcased dozens of similar projects aimed at creating an inexpensive and eco-friendly alternative to the flush toilet.

In response to the announcement, Professor M. Sohail Khan, Loughborough’s project lead, said, “It was the opportunity of a lifetime to present our research to Mr Gates and we are extremely honored to receive this prestigious award.”

Michael Hoffmann of the California Institute of Technology in Pasadena and his colleagues won the top prize of $100,000. Caltech design uses solar power to run an electrochemical reactor that breaks down human waste to produce hydrogen gas. The gas can be stored and used to run the reactor at night or on cloudy days. according to Science Magazine.

 Third place prize worth $40,000 went to Yu-Ling Cheng of the University of Toronto in Canada and her colleagues whose design dehydrates and smolders solid waste, sanitizing it within 24 hours.


The current flush toilet design is not suitable in places where water supply and sewage pipe infrastructure is not widely available. This describes much of the developing world where open defecation is still common. A 2011 UNICEF report  said Indians make up 58% of the world population which still practices open defection.  India (638m) is followed by Indonesia (58m), China (50m), Ethiopia (49m), Pakistan (48m), Nigeria (33m) and Sudan (17m). In terms of percentage of each country's population resorting to the unhygienic practice, Ethiopia tops the list with 60%, followed by India 54%, Nepal 50%, Pakistan 28%, Indonesia 26%, and China 4%.



 Here's how Bill Gates describes his foundation's "Reinvent the Toilet Challenge" on his thegatesnotes.com website:

When you think about it, the flush toilet is actually a pretty outdated sanitation solution. It was certainly an important breakthrough when it was created in 1775 by a Scottish mathematician and watchmaker named Alexander Cummings. Over the decades, it led to a sanitary revolution that helped keep deadly diseases like cholera at bay, saving hundreds of millions of lives. 

But the fact that four of every 10 people still don’t have access to flush toilets proves that—even today—it is a solution too expensive for much of the world. And in an era where water is becoming increasingly precious, flush toilets that require 10 times more water than our daily drinking water requirement are no longer a smart or sustainable solution. 

A big part of the challenge is technological. In addition to building new toilets that are affordable and sustainable, we have to develop solutions to empty these new latrines and treat the human waste. We also have to work closely with governments, businesses, and communities to stimulate demand for better sanitation, encourage investment, and create supportive public policies that will allow these innovative solutions to succeed.

Inventing new toilets is one of the most important things we can do to reduce child deaths and disease and improve people’s lives. It is also something that can help wealthier countries conserve fresh water for other important purposes besides flushing. 

We don’t have all the answers yet, but I’m optimistic that we can and will solve this problem. I’m hopeful that this unusual summer fair will be a positive step toward that important goal.

Here are two video clips about "Reivent The Toilet" challenge:







Related Links:

Haq's Musings

World Water Day: Water Scarce Pakistan 

India and Pakistan: Off-Track, Off-Target on Toilets

Fixing Sanitation Crisis in India

Food, Clothing and Shelter in India and Pakistan

Heavy Disease Burdens in South Asia

Peepli Live Destroys Indian Myths

India After 63 Years of Independence

Poverty Across India 2011

India Leads the World in Open Defecation

Monday, August 13, 2012

Upwardly Mobile Pakistan on 66th Independence Day

Pakistan has continued to offer much greater upward economic and social mobility to its citizens than neighboring India over the last two decades. Since 1990, Pakistan's middle class had expanded by 36.5% and India's by only 12.8%, according to an ADB report titled "Asia's Emerging Middle Class: Past, Present And Future.

New York Times' Sabrina Tavernise described the rise of Pakistan's middle class in a story from Pakistani town of Muzaffargarh in the following words:

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.”




GeoTV is illustrating  this welcome phenomenon of upward social mobility in Pakistan with a series of motivational "Zara  Sochiey" videos on young men and women who have risen from humble origins to achieve significant successes in recent years. Each individual portrayed in the series has overcome adversity and  focused on acquiring education as a ticket to improve his or her economic and social situation.

GeoTV videos feature a number of young men and women, including Saima Bilal, Kashif Faiq,  Qaisar Abbas and many others, to inspire and encourage other Pakistanis to pursue their dreams against all odds.

Contrary to the incessant talk of doom and gloom, the fact is that the level of educational attainment has been rising in recent decades.  In fact, Pakistan has been increasing enrollment of students in schools at a faster rate since 1990 than India, according to data compiled and reported by Harvard University researchers Robert Barro and Jhong-Wa Lee . In 1990, there were 66.2% of Pakistanis vs 51.6% of Indians in 15+ age group who had had no schooling. In 2000, there were 60.2% Pakistanis vs 43% Indians with no schooling. In 2010, Pakistan reduced it to 38% vs India's 32.7%.
 

Source: Harvard Business Review


As of 2010, there are 380 (vs 327 Indians) out of every 1000 Pakistanis age 15 and above who have never had any formal schooling. Of the remaining 620 (vs 673 Indians) who enrolled in school, 22 (vs 20 Indians) dropped out before finishing primary school, and the remaining 598 (vs 653 Indians) completed it. There are 401 (vs 465 Indians) out of every 1000 Pakistanis who made it to secondary school. 290 (vs 69 Indians) completed secondary school  while 111 (vs. 394 Indians) dropped out. Only 55 (vs 58 Indians)  made it to college out of which 39 (vs 31 Indians) graduated with a degree.



Education and development efforts  are beginning to bear fruit even in remote areas of Pakistan, including Federally Administered Tribal AreasThe Guardian newspaper recently reported that FATA's Bajaur agency alone has 616 school with over 60,000 boys and girls receiving take-home rations. Two new university campuses have been approved for FATA region and thousands of kilometers of new roads are being constructed. After a recent visit to FATA, Indian journalist Hindol Sengupta wrote in The Hindu newspaper that "even Bajaur has a higher road density than India"

 Prior to significant boost in public spending on education during Musharraf years, the number of private schools in Pakistan grew 10 fold from about 3000 in 1983 to over 30,000 in 2000. Primary school enrollment in 1983 has increased 937%, far greater than the 57% population increase in the last two decades.

Unfortunately, there has been a decline in public spending on education since 2008, even as not-for-profit private sector organizations, mostly NGOs, have stepped up  to try to fill the gap.  Last year, a Pakistani government commission on education found that public funding for education has been cut from 2.5% of GDP in 2007 to just 1.5% - less than the annual subsidy given to the various PSUs including PIA, the national airline that continues to sustain huge losses.


Clearly, this is not the time for Pakistan's political leadership to let up on the push for universal education. The momentum that developed in Musharraf years needs to be maintained, even accelerated to get to the goal of 100% literacy and 100% enrollment of all children in Pakistan. Nothing less will do if Pakistan is to achieve economic competitiveness on the global stage.

Here are some of  GeoTV's Zara Scohiye video clips:

 



 



Related Links:

Haq's Musings

Educational Attainment in Pakistan

Foreign Visitors to Pakistan Pleasantly Surprised

Pakistan's Infrastructure and M2 Motorway

India Pakistan Comparison 2011

Resilient Pakistan Defies Doomsayers


FMCG Consumption Boom in Rural Pakistan

Pakistan Visits Open  Indian Eyes


Friday, August 10, 2012

Toyota Pakistan Auto Profits Up 57% in 2012

Indus Motor Company earned Rs. 4.3 billion in net income on sales of Rs. 75 billion in 2011-12, representing an increase 57% in net income and 25% in total revenue over previous year. The company that is 37.5% owned by Japan’s Toyota Motors sold over 55,000 cars during the financial year that ended on June 30, 2012, its highest ever for a single year. Both revenues and profits were the highest in the company’s history in Pakistan, according to media reports. Pakistan's total car market was about 235,000 units in July 2011-June 2012 period.



The domestic auto industry sold 178,753 cars, 23% more than last year. The rest of the demand was met by imports of 55,000 cars in fiscal year 2012, representing an increase of 50% over last year. In addition to durables like automobiles, companies in FMCG (fast moving consumer goods) sector are also expected to report strong sales and earnings this year. Engro Foods has emerged emerged as the supercharged FMCG player with over 400 percent in bottom line in 2011, grabbing fourth position after Nestle, Unilever and Rafhan, and outpacing National Foods. The sector growth has been particularly well supported by strong rural consumption in recent years.

Here are a few key points excerpted from a recent Businessweek story on rise of the rural consumer supported by higher crop prices in Pakistan:

1. Unilever and Colgate-Palmolive Co. are sending salespeople into rural areas of the world’s sixth most-populous nation, where demand for consumer goods such as Sunsilk shampoo, Pond’s moisturizers and Colgate toothpaste has boosted local units’ revenue at least 15 percent.

2. “The rural push is aimed at the boisterous youth in these areas, who have bountiful cash and resources to increase purchases,” Shazia Syed, vice president for customer development at Unilever Pakistan Ltd., said in an interview. “Rural growth is more than double that of national sales.”

3. Consumer-goods companies forecast growth in Pakistan even as an increase in ethnic violence in Karachi has made 2011 the deadliest in 16 years for the country’s biggest city and financial center.

4. Nestle Pakistan Ltd. is spending 300 million Swiss francs ($326 million) to double dairy output in four years, boosted sales 29 percent to 33 billion rupees ($378 million) in the six months through June. “We have been focusing on rural areas very strongly,” Ian Donald, managing director of Nestle’s Pakistan unit, said in an interview in Lahore. “Our observation is that Pakistan’s rural economy is doing better than urban areas.”

5. Haji Mirbar, who grows cotton on a 5-acre farm with his four brothers, said his family’s income grew fivefold in the year through June, allowing him to buy branded products. He uses Unilever’s Lifebuoy for his open-air baths under a hand pump, instead of the handmade soap he used before. “We had a great year because of cotton prices,” said Mirbar, 28, who lives in a village outside south Pakistan’s Matiari town. “As our income has risen, we want to buy nice things and live like kings.”

6. Sales for the Pakistan unit of Unilever rose 15 percent to 24.8 billion rupees in the first half. Colgate-Palmolive Pakistan Ltd.’s sales increased 29 percent in the six months through June to 7.6 billion rupees, according to data compiled by Bloomberg. “In a generally faltering economy, the double-digit growth in revenue for companies servicing the consumer sector has come almost entirely from the rural areas,” said Sakib Sherani, chief executive officer at Macroeconomic Insights Pvt. in Islamabad and a former economic adviser to Pakistan’s finance ministry.

7.6 billion rupees, according to data compiled by Bloomberg. “In a generally faltering economy, the double-digit growth in revenue for companies servicing the consumer sector has come almost entirely from the rural areas,” said Sakib Sherani, chief executive officer at Macroeconomic Insights Pvt. in Islamabad and a former economic adviser to Pakistan’s finance ministry.

7. Unilever is pushing beauty products in the countryside through a program called “Guddi Baji,” an Urdu phrase that literally means “doll sister.” It employs “beauty specialists who understand rural women,” providing them with vans filled with samples and equipment, Syed said. Women in villages are also employed as sales representatives, because “rural is the growth engine” for Unilever in Pakistan, she said in an interview in Karachi. While the bulk of spending for rural families goes to food, about 20 percent “is spent on looking beautiful and buying expensive clothes,” Syed said.

8. Colgate-Palmolive, the world’s largest toothpaste maker, aims to address a “huge gap” in sales outside Pakistan’s cities by more than tripling the number of villages where its products, such as Palmolive soap, are sold, from the current 5,000, said Syed Wasif Ali, rural operations manager at the local unit.

9. Palmolive's detergents Bonus Tristar and Brite are packed in sachets of 20 grams or less and priced as low as five rupees (6 cents), to boost sales among low-income consumers hurt by the fastest pace of inflation in Asia after Vietnam. Unilever plans to increase the number of villages where its products are sold to almost half of the total 34,000 within three years. Its merchandise, including Dove shampoo, Surf detergent and Brooke Bond Supreme tea, is available in about 11,000 villages now.

10. Telenor Pakistan Pvt. is also expanding in Pakistan’s rural areas, which already contribute 60 percent of sales, said Anjum Nida Rahman, corporate communications director for the local unit of the Nordic region’s largest phone company.




 Undeterred by the gloom and doom reports in the media, Pakistani consumers are continuing to spend and private consumption has now reached 75 percent of GDP. It rose 11.6% in real terms in 2011-12 compared with just 3.7% growth a year earlier , according to Economic Survey of Pakistan. In fact, many analysts believe that Pakistan's official GDP of  $220 billion is understated by as much as 50%, buttressing a recent claim by the head of Karachi Stock Exchange that Pakistan's real GDP is closer to $300 billion.

I believe that even a modest effort to increase tax collection can significantly improve Pakistan's state finances to support higher public sector investments in energy, education, health care and infrastructure.
 
 Related Links:

Haq's Musings

Pakistan's Underground Economy

Tax Evasion Fosters Aid Dependence

Poll Finds Pakistanis Happier Than Neighbors

Pakistan's Rural Economy Booming

Pakistan Car Sales Up 61%

Resilient Pakistan Defies Doomsayers

Land For Landless Women in Pakistan

Thursday, August 2, 2012

Haq's Crystal Ball: A Look at Pak Elections 2013

Political parties and pundits are catching the election fever as the current PPP-led coalition government in Pakistan is nearing the end of its term in February 2013.

Campaign rallies are being organized across the country by major political parties including Pakistan Peoples' Party (PPP), Pakistan Muslim League factions (PML N & Q), Pakistan Tehrik-e-Insaf (PTI), Muttahida Qaumi Movement (MQM), Awami National Party (ANP), Jamiat Ulama Islam (JUI) and Jamaat-e-Islami (JI) and others like Difa-e-Pakistan Council (DPC), etc.



Overseas Pakistanis are getting into the spirit of elections as well. A WBT TV show called Viewpoint From Overseas recently interviewed me on the subject and asked for my analysis and predictions of winners and losers in 2013. Here's a summary of how I see the outcome of the upcoming elections in Pakistan:

1. Pakistan Peoples' Party (PPP) is likely to emerge as the single largest party with 90 or slightly fewer seats of the 272 general seats up for direct elections in 2013.

2. Pakistan Muslim League (N) would be competing with Imran Khan's Pakistan Tehrik-e-Insaf (PTI) for the second spot.

3. PPP is most likely to form the next coalition government with smaller parties like PML (Q), MQM and ANP.

4. PPP will essentially retain its vote bank in rural Sindh and Southern Punjab while MQM and ANP will carry urban Sindh and KP province respectively.

5. PML (N) will have real struggle getting overall majority in Punjab province.

6. There will be little change in Balochistan given the fact that the nationalists and insurgents are not ready to talk peace and participate in elections.

For detailed analysis, please watch this video:




Here's a more recent video on election strategies of PTI, PPP and PML(N) in the battleground province of Punjab:


Related Links:

Haq's Musings
Pakistan Rural Economy Showing Strength

Judicial Coup in Pakistan
Land for Landless Women Peasants

Imran Khan's Social Media Campaign

FMCG Companies Profiting From Pakistan's Rural Consumption Boom

Poll Finds Pakistanis Happier Than Neighbors

Politics of Patronage in Pakistan

Feudal Power Dominates Pakistani Elections