Wednesday, October 29, 2014

Multi-dimensional Poverty Index Captures Depth of Deprivation in India

"India is home to over 340 million destitute people and is the second poorest country in South Asia after war-torn Afghanistan...In South Asia, Afghanistan has the highest level of destitution at 38%. This is followed by India at 28.5%. Bangladesh (17.2%) and Pakistan (20.7%) have much lower levels"  Colin Hunter, Center for Research on Globalization 
Increases in per capita income and human development index are often used as indicators to represent improvements in the lives of ordinary people in developing nations in Asia, Africa and Latin America. Both of these have significant limitations which are addressed by Oxford Poverty and Human Development Initiative (OPHI)'s MPI, multi-dimensional poverty index.

The MPI brings together 10 indicators, with equal weighting for education, health and living standards (see table). If you tick a third or more of the boxes, you are counted as poor.

Source: Oxford Poverty and Human Development Initiative


Eradicating poverty in South Asia requires every person having access to safe drinking water, sanitation, housing, nutrition, health and education.

According to the MPI, out of its 1.2 billion-plus population, India alone is home to over 340 million destitute people and is the second poorest country in South Asia after war-torn Afghanistan, according to Colin Hunter of Canada-based Global Research.

Some 640 million poor people live in India (40% of the world’s poor), mostly in rural areas, meaning an individual is deprived in one-third or more of the ten indicators mentioned above (malnutrition, child deaths, defecating in the open).

 In South Asia, Afghanistan has the highest level of destitution at 38%. This is followed by India at 28.5%. Bangladesh and Pakistan have much lower levels. The study placed Afghanistan as the poorest country in South Asia, followed by India, Bangladesh, Pakistan and Nepal, according to Hunter.

Afghanistan is the poorest country in South Asia in terms of multi-dimensional poverty with 66% of its people being poor, followed by India with 54%, Bangladesh with 51%, Pakistan and Nepal at 44%, Bhutan at 27%, and Sri Lanka and the Maldives at 5%, according to Oxford researchers. Among 104 countries ranked by OPHI,  Nepal ranks 82, India 74, Bangladesh 73,  Pakistan 70, Sri Lanka 32 in MPI poverty.

Why has India lagged  behind its neighbors in spite of rapid economic growth in recent years? Here's how Hunter explains it: "The ratio between the top and bottom 10% of wage distribution has doubled since the early 1990s, when India opened up it economy. According to the 2011 Organization for Cooperation and Economic Development report ‘Divided we stand’, this has made India one of the worst performers in the category of emerging economies. The poverty alleviation rate is no higher than it was 25 years ago. Up to 300,000 farmers have committed suicide since 1997 due to economic distress and many more have quit farming."

What Colin Hunter hasn't clearly articulated is the fact that India remains home to the world's largest population of poor, hungry and illiterates who lack even basic sanitation 67 years after the nation's independence from British colonial rule.

As the new Hindu Nationalist government under Narendra Modi begins its anti-Muslim and anti-Pakistan campaigns so soon after inauguration, an Indian journalist  Pankaj Mishra reminds Indians  in a recent New York Times Op Ed that that "India’s reputation as a “golden bird” flourished during the long centuries when it was allegedly enslaved by Muslims. A range of esteemed scholars — from Sheldon Pollock to Jonardon Ganeri — have demonstrated beyond doubt that this period before British rule witnessed some of the greatest achievements in Indian philosophy, literature, music, painting and architecture".

It's time for Mr. Modi to shun his bellicose rhetoric (boli nahee goli--India's guns will do the talking) against Pakistan and focus on much more important issues of deep deprivation of his people.

Here's a video on Grinding Poverty in Resurgent India:

Haq's Musings Grinding Poverty in Resurgent India by faizanmaqsood1010
http://youtu.be/84-Qz4vFVHs



Related Links:

Haq's Musings

India Home to World's Largest Population of Poor, Hungry and Illiterates

Grinding Poverty in Resurgent India

An Indian Farmer Commits Suicide Every 30 Minutes

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

India Teaching Young Students Akhand Bharat 

Pakistan Army at the Gates of Delhi

India's War Myths

India-Pakistan Military Balance

Pakistan Army Capabilities

Modi's Pakistan Policy

India's Israel Envy

Can India Do a Lebanon in Pakistan?

Tuesday, October 28, 2014

Will Pakistan Rejoin Emerging Markets Index?

Pakistan lost its place in MSCI  Emerging Markets Index in December 2008. It was included in MSCI Frontiers Market Index in May 2009.  Some analysts believe that Pakistan could re-gain the Emerging Market classification (which includes BRIC countries) in a couple of years.



Since the beginning of 2012 MSCI’s index of Pakistani shares has jumped 60% in dollar terms—outpacing global indices as well as MSCI Emerging Market Index and Pakistan’s peers among frontier markets.  Pakistan's KSE-100 index was among the top 5 performers in the world in 2013. In recent months foreigners, who kept piling in even as jittery local investors began selling, have bought a net $36m-worth of shares in August, when the PTI and PAT protests were at their height, and a further $53m-worth in September, according to The Economist.

Over the next 6 months $2-2.5 billion of new float is expected to come on stream from Pakistan through government's privatization of assets which should take its MSCI frontier market weightage higher to 9-9.5% with its subsequent effects on passive flows, according to a report in Baron's.

Market classifications of securities from various countries into developed, emerging and frontier indices are made by Morgan Stanley based on a minimum market capitalization and size of free float.

Here's how Morgan Stanley explains it:

In order to be included in a Market Investable Equity Universe, a company must have the required minimum full market capitalization. This minimum full market capitalization is referred to as the Equity Universe Minimum Size Requirement. The Equity Universe Minimum Size Requirement applies to companies in all markets, Developed and Emerging, and is derived as follows:

1. First, the companies in the DM Equity Universe are sorted in descending order of full market capitalization and the cumulative coverage of the free float‐adjusted market capitalization of the DM Equity Universe is calculated at each company. Each company’s free float‐adjusted market capitalization is represented by the aggregation of the free float‐adjusted market capitalization of the securities of that company in the Equity Universe.

2. Second, when the cumulative free float‐adjusted market capitalization coverage of 99% of the sorted Equity Universe is achieved, the full market capitalization of the company at that point defines the Equity Universe Minimum Size Requirement.

3. The rank of this company by descending order of full market capitalization within the DM Equity Universe is noted, and will be used in determining the Equity Universe Minimum Size Requirement at the next rebalance.

As of April 19, 2011, the Equity Universe Minimum Size Requirement is USD 140 million. Companies with full market capitalizations below this level are not included in any Market Investable Equity Universe. The Equity Universe Minimum Size Requirement is reviewed and, if necessary revised, at Semi‐Annual Index Reviews.

In a recent interview with Forbes, Mohammad Sohail of Topline Securities in Pakistan has expressed confidence in the country’s capital markets moving forward:

"Things that were held up due to the protests – IPOs, privatizations, reforms, the $800 million share sell of our largest oil and gas company OGDC – have now resumed. When the OGDC deal is executed, I think that will give a very clear signal to the international business community that the protests may still be going on, but investment and business already are operating as usual. Pakistan is an unexplored market by most outside investors that is not marketed properly. Compared to peers, the market is very cheap. Pakistan’s markets trades at a price/earning multiple of 7.5 times; a 30% to 40% discount to Sri Lanka, Bangladesh, Nigeria and Vietnam. For me, from an investor’s point of view, the next 24 months look very positive for the equity markets."

Increase in Pakistani shares weight in Frontiers Index and expected re-entry in Emerging Markets  Index are both welcome developments for Pakistan's economy.  As a result of these developments, Pakistan should expect new capital inflows which would strengthen Pakistan's balance of payments position and spur the nation's overall economic growth.

Related Links:

Haq's Musings

Pakistan's KSE-100 Among Top Performers in 2013

Foreign Investment Up, Load-shedding Down in Nawaz Sharif's First 100 Days

Pakistan to Beg and Borrow Billions More in 2013-14

Power Companies Profits Soar at Taxpayer's Expense

Does Nawaz Sharif Have a Counter-terrorism Strategy?

Pakistan's Tax Evasion Fosters Aid Dependence

Pakistan's Vast Shale Oil and Gas Reserves

Pak IPPs Make Record Profits Amid Worst Ever Load Shedding 

Global Power Shift Since Industrial Revolution

Massive Growth in Electrical Connections in Pakistan

Finance Minister Ishaq Dar's Budget 2013-14 Speech

Saturday, October 25, 2014

Babies Born in USA Swaddled in Pakistan-Made Blankets

Anxious wait turned to pure joy as my daughter Amber gave birth to a beautiful, healthy baby boy in San Francisco after a prolonged labor last weekend.  The arrival of my first grandchild was a very exciting moment for all of us and our son-in-law Glenn's brothers and parents.



Soon after normal delivery, Yasmeen, Michelle and I rushed to the hospital room to hold the baby and smiled and cooed at him with excitement.  He was comfortably swaddled in a soft, warm flannel blanket patterned with pink and blue baby footprints.  A quick look at the tag revealed that the blanket was made in Pakistan.



As we decided to share the unique happy moment through pictures with our global family and friends, the obvious choice to reach most of them was via Facebook. The news spread fast and the congratulatory messages poured in.

A friend of mine who is an experienced grandfather offered the following interesting advice: "It's for the parents to raise their children and the grandparents to have the privilege and joy of spoiling their grandchildren".

My good friend Rizwan Kadir from University of Chicago offered his best wishes and shared a link to a 2011 NPR story on baby blankets titled "Born In The USA? This Blanket Might Look Familiar".

The NPR report said that most of the baby blankets used in US hospitals are made in Pakistan and supplied by the medical supply company Medline, based in Mundelein, Ill. Jim Robertson, president of Medline's Medcrest textile division, told NPR in 2011 that the company has produced close to 25 million of the blankets since 1980 alone. Another story in Quartz said the (Medline baby) blankets are sold all over the world, and made in Karachi, Pakistan. Since its creation more than 60 years ago, Medline's Kuddle-Up blankets, which are manufactured in Pakistan, are sold globally.

Yasmeen and I are fortunate to have a great extended family and many sincere friends who have shared in our joy. We take this opportunity to thank them all for their congratulatory messages and sincere best wishes for us, our children and the newborn grandchild.

Related Links:

Haq's Musings

Eleven Days in Karachi

July Vacations in Dubai

Family Vacation in Beijing

Karachi: World's Fastest Growing Megacity

Silicon Valley Eid Celebration 

Sunday, October 19, 2014

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

Newly-elected Prime Minister Narendra Modi government's rhetoric about "jaw-breaking" (munh tod) policy toward Pakistan is the latest manifestation of a disease described by Indian diplomat Sashi Tharoor as "India's Israel envy".


India's Israel Envy:

India's Israel envy is reinforced by the Hindu Nationalists over-estimating their country's strength while under-estimating Pakistan's. It's aided by India's western allies' belief that Pakistan can not fight a conventional war with india and its only option to defend itself would be to quickly escalate the conflict into a full scale nuclear war.

Indian MP Mani Shankar Aiyar has summed up India's war rhetoric against Pakistan in a recent Op Ed as follows:

(Indian Defense Minister) Arun Jaitley thumps his chest and proclaims that we have given the Pakis a "jaw-breaking reply" (munh tod jawab). Oh yeah? The Pakistanis are still there - with their jaw quite intact and a nuclear arsenal nestling in their pockets. (Indian Home Minister) Rajnath Singh adds that the Pakis had best understand that "a new era has dawned". How? Is retaliatory fire a BJP innovation? Or is it that we have we ceased being peace-loving and become a war-mongering nation? And (Indian Prime Minister Narendra) Modi thunders that his guns will do the talking (boli nahin, goli). Yes - and for how long?

India's Delusions:

Indians, particularly Hindu Nationalists, have become victims of their own hype as illustrated by Times of India's US correspondent who checked into the veracity of claimed achievements of Indians in America and found such claims to be highly exaggerated: "On Monday, the Indian government itself consecrated the oft-circulated fiction as fact in Parliament, possibly laying itself open to a breach of privilege. By relaying to Rajya Sabha members (as reported in The Times of India) a host of unsubstantiated and inflated figures about Indian professionals in US, the government also made a laughing stock of itself." The Times of India's Chidanand Rajghatta ended up debunking all of the inflated claims about the number of Indian physicians, NASA scientists and Microsoft engineers in America.

Similarly, a US GAO investigation found that India's IT exports to the United States are exaggerated by as much as 20 times. The biggest source of discrepancy that GAO found had to do with India including temporary workers' salaries in the United States. India continuously and cumulatively adds all the earnings of its migrants to US in its software exports. If 50,000 Indians migrate on H1B visas each year, and they each earn $50,000 a year, that's a $2.5 billion addition to their exports each year. Cumulatively over 10 years, this would be $25 billion in exports year after year and growing.

Since the end of the Cold War, the West has been hyping  India's  economic growth to persuade the developing world that democracy and capitalism offer a superior alternative to rapid development through state guided capitalism under an authoritarian regime---a system that has worked well in Asia for countries like the Asian Tigers and China.  This has further fooled Hindu Nationalists into accepting such hype as real. It ignores the basic fact that India is home to the world's largest population of poor, hungry and illiterates. It also discounts the reality that  Indian kids rank near the bottom on international assessment tests like PISA and TIMSS due to the poor quality of education they receive.  The hype has emboldened many Indians, including the BJP leadership, to push neighbors around.

Defense Spending as Percentage of GDP Source: World Indicators


Pakistan's Response:

Pakistan has so far not responded to the Indian rhetoric in kind. It might create an impression that Pakistan is weak and unable to respond to such threats with its conventional force. So let's examine the reality.

Ground War:

In the event of a ground war, Pakistan will most likely follow its "offensive defense" doctrine with its two strike corps pushing deep inside Indian territory. Though Indian military has significant numerical advantage, Pakistan's armor is as strong, if not stronger, than the Indian armor.

Before embarking on further offensive, gains shall be consolidated.  Pakistan is also as strong, if not stronger, in terms of ballistic and cruise missiles inventory and capability, putting all of India within its range.  These missiles are capable of carrying conventional and nuclear warheads.

India-Pakistan Firepower Comparison Source: GlobalFirepower.com


In 1990 the Central Corps of Reserves was created to fight in the desert sectors, where enemy land offensives are expected. These dual capable formations trained for offensive and holding actions are fully mechanized. The Pakistan Army has ten Corps including the newly formed Strategic Corps. The Army has twenty-six divisions (eight less than India). Two more divisions were raised as Corps reserves for V and XXXI Corps. The Army has two armored divisions, and ten independent armored brigades. Presently one hundred thousand troops are stationed on the Pak-Afghan border to fight terror.

The Special Service Group – SSG - comprises two airborne Brigades, i.e. six battalions. Pakistan Army has 360 helicopters, over two thousand heavy guns, and 3000 APC’s. Its main anti-tank weapons are Tow, Tow Mk II, Bakter Shiken and FGM 148 ATGM. The Army Air Defense Command has S.A- 7 Grail, General Dynamics FIM-92 Stinger, GD FIM Red Eye, and ANZA Mk-I, Mk-II, Mk-III and HQ 2 B surface to air missiles. Radar controlled Oerlikon is the standard Ack Ack weapon system.

The ballistic missile inventory of the Army is substantial. It comprises intermediate range Ghauri III and Shaheen III; medium range Ghauri I and II and Shaheen II, and short range tactical Hatf I- B, Abdali, Ghaznavi, Nasr, Shaheen I and M -11 missiles. All the ballistic missiles can carry nuclear warheads....some can carry multiple warheads. Nuclear and conventional weapon capable Babur Cruise missile is the new addition to Pakistan’s strategic weapon inventory.  It has stealth features to evade radar to penetrate India's air air-space to hit targets. The number of ballistic missiles and warheads are almost the same as those of India. So there is a parity in nuclear weapons, which is a deterrent.

Tactical missile which can be tipped with miniaturized nuclear warhead is the latest addition to Pakistan's arsenal. It's a battlefield weapon designed to destroy enemy troop concentrations poised against Pakistan.

Air War:

Pakistan has about 900 aircraft compared to India's 1800, giving India 2:1 numerical advantage over Pakistan. India's biggest advantage is in transport aircraft (700 vs 230) while Pakistan has some numerical advantage in two areas: Airborne radars (9 vs 3) and attack helicopters (48 vs 20).

Pakistan Air Force has  over 100 upgraded F-16s and 200 rebuilt Mirage- 3's (for night air defense) and Mirage-5's for the strike role. They can carry nuclear weapons. They have been upgraded with new weapon systems, radars, and avionics. Additionally, the PAF 150 F-7's including 55 latest F-7 PG’s. Manufacture of 150 JF 17 Thunder fighters (jointly designed) is underway at the Pakistan Aeronautical Complex Kamra. The JF-17 Thunder is a 4th generation fly by wire multi-role fighter aircraft. Eight are already in PAF service. An order has been placed with China for the purchase of 36 JF-10, a Mach 2.3 -5th generation multi-role fighter, comparable in performance to the Su-30 Mk-1 with the Indian Air Force.

In spite of Indian Air Force's numerical superiority since independence in 1947, Pakistan Air Force has performed well against it in several wars. The PAF pilots have always been among the best trained in the world.

Complimenting the Pakistan Air Force pilots, the legendary US Air Force pilot Chuck Yeager who broke the sound barrier, wrote in his biography "The Right Stuff": "This Air Force (the PAF), is second to none". He continued: "The  (1971) air war lasted two weeks and the Pakistanis scored a three-to-one kill ratio, knocking out 102 Russian-made Indian jets and losing thirty-four airplanes of their own. I'm certain about the figures because I went out several times a day in a chopper and counted the wrecks below." "They were really good, aggressive dogfighters and proficient in gunnery and air combat tactics. I was damned impressed. Those guys just lived and breathed flying. "

 In 1965, Roy Meloni of the ABC reported: "Pakistan claims to have destroyed something like 1/3rd the Indian Air Force, and foreign observers, who are in a position to know say that Pakistani pilots have claimed even higher kills than this; but the Pakistani Air Force are being scrupulously honest in evaluating these claims. They are crediting Pakistan Air Force only those killings that can be checked from other sources."


Indian Media Cann't Stop Praising Pakistan Air... by zemtv

Naval War:

Of the three branches of the military, India's advantage over Pakistan is the greatest in naval strength. Pakistan has just 84 sea-going vessels of various kinds versus India's 184.

Pakistan Navy can still inflict substantial damage on the Indian Navy. The Indian Navy has 17 submarines. Pakistan Navy has ten, some are brand new and equipped with AIP. Indian Navy has 28 war ships, Pakistan Navy has eleven.

As seen in the past wars, India will attempt a naval blockade of Pakistan. Here's how MIT's Christopher Clary discusses in his doctoral thesis the Indian Navy's ability to repeat a blockade of Pakistan again:

"Most analyses do not account adequately for how difficult it would be for the (Indian) navy to have a substantial impact in a short period of time. Establishing even a partial blockade takes time, and it takes even more time for that blockade to cause shortages on land that are noticeable. As the British strategist Julian Corbett noted in 1911, "it is almost impossible that a war can be decided by naval action alone. Unaided, naval pressure can only work by a process of exhaustion. Its effects must always be slow…. ". Meanwhile, over the last decade, Pakistan has increased its ability to resist a blockade. In addition to the main commercial port of Karachi, Pakistan has opened up new ports further west in Ormara and Gwadar and built road infrastructure to distribute goods from those ports to Pakistan's heartland. To close off these ports to neutral shipping could prove particularly difficult since Gwadar and the edge of Pakistani waters are very close to the Gulf of Oman, host to the international shipping lanes for vessels exiting the Persian Gulf. A loose blockade far from shore would minimize risks from Pakistan's land-based countermeasures but also increase risks of creating a political incident with neutral vessels."

Summary:

The chances of India prevailing over Pakistan in a conventional war now are very remote at best. Any advantage that India seeks over Pakistan would require it to pay a very heavy price in terms of massive destruction of India's industry, economy and infrastructure that would set India back many decades.

In the event that the India-Pakistan war spirals out of control and escalates into a full-scale nuclear confrontation, the entire region, including China, would suffer irreparable damage. Even a limited nuclear exchange would devastate food production around the world, according to International Physicians for the Prevention of Nuclear War, as reported in the media. It would set off a global famine that could kill two billion people and effectively end human civilization as we know it.

I hope that better sense will prevail in New Delhi and India's BJP government will desists from any military adventurism against Pakistan. The consequences of any miscalculation by Narendra Modi will be horrible, not just for both the countries, but the entire humanity.

Here's a video discussion on this and other current topics:


India-Pakistan Tensions; End of TUQ Dharna; Honors for Malala; Ebola Threat from WBT TV on Vimeo.

Here's an interview of former President Musharraf on an Indian TV channel:

 
Parvez Musharraf blasts Modi in an Indian Talk... by zemtvRelated Links:

Haq's Musings

India Teaching Young Students Akhand Bharat 

Pakistan Army at the Gates of Delhi

India's War Myths

India-Pakistan Military Balance

Pakistan Army Capabilities

Modi's Pakistan Policy

India's Israel Envy

Can India Do a Lebanon in Pakistan?

Thursday, October 16, 2014

Pakistan: A Land of Opportunity?

"All members of the Commission (on Social Entrepreneurship and Innovation) were agreed, Pakistan is a land of opportunity" i-genius Opportunity Pakistan Report April, 2014

i-genius, headquartered in London, calls itself a "World Community of Social Entrepreneurs". It promotes social entrepreneurship to a network in over 200 countries.


Last year in September, it sent fifteen people (Commissioners) from Australia, Italy, Pakistan and the United Kingdom to Pakistan to survey its social entrepreneurship landscape.  At the end of their trip, all 15 members of the team unanimously conclude that "Pakistan is a land of opportunity" for social entrepreneurship and innovation.  They said:

"The population (of Pakistan) is proportionately one of the youngest in the world. The youth predominately feel passionate about their country and are determined for it to succeed. Entrepreneurship and social entrepreneurship seems almost natural to them, perhaps in part due to the lack of large employers. Where their parents forged family businesses in traditional practices often around clothes, food and retail, Pakistani youth are embracing new opportunities that arise from modern technology and creative industries. Likewise, women (young and old) are making an important contribution to the economy and becoming founders of their own businesses. Pakistanis have had to overcome many hardships, but this in turn has made them resourceful, robust and resilient. Such characteristics are ideal in shaping successful social entrepreneurs."

Particular areas they focused on include energy, water and housing.  Writing for the Guardian newspaper, Nishat Ahmad identified some of the key efforts being made in these two areas.

Clean Water:

Nishat Ahmad highlights Pharmagen Water. Founded in 2007, Pharmagen aims to provide poor communities in Pakistan’s second largest city, Lahore, with affordable clean and purified drinking water. It is supported by the Acumen, which invests in entrepreneurs and creates venture capital which can provide solutions to causes of poverty.


Off-grid Energy:

In energy sector,  SRE Solutions is helping with affordable solar panels for the poor. Established just last year with Acumen’s support it offers to harness solar energy for off-grid customers in districts of Punjab and Khayber Pakhtunkhwa provinces.

Affordable Housing:

Born after the 2005 earthquake, Ghonsla is working to build affordable housing for the poor. In the coming months Ghonsla is looking into increasing production and collaborating with another insulation firm based in Germany while working locally to increase the company’s footprint in Pakistan’s northern district of Chitral, a scenic yet underdeveloped area bordering the Himalayas.

Startup Finance:

In finance, Nishat Ahmed cites SEED, Social Entrepreneurship and Equity Development, a venture which supports startups and grassroots innovations. SEED provided initial funding for Ghonsla. Its incubation center in Pakistan provide opportunities for young entrepreneurs in their early years of startup. It was established by friends Faraz Khan and Khusro Ansari and runs five distinct projects, including StartUp Dosti, a business plan based competition for early stage startups in India and Pakistan. It seeks to build relationships between the next generation of entrepreneurs from the two countries and the wider South Asian diaspora. As part of this it also launched Pakistan’s first television program closely based on the BBC’s Dragons Den format. It is to be aired in India and Pakistan in November.

Other Sectors:

i-genius report on Pakistan also mentions their commissioners' meetings with other important social entrepreneurs such the Citizens Foundation (TCF) in education sector and Zacky Farms in sustainable agriculture.

i-genius report says that Pakistan's social entrepreneurs are actively seeking ways to fill the huge gaps created by successive governments' continuing neglect of the country's social sector and infrastructure needs.

Summary:

Pakistan has many problems in almost all areas including education, health care, food, water, energy, housing and infrastructure. But the country is also home to one of the youngest and most passionate populations which, in the words of i-genius commissioners, is "determined for it to succeed. Entrepreneurship and social entrepreneurship seems almost natural to them, perhaps in part due to the lack of large employers. Where their parents forged family businesses in traditional practices often around clothes, food and retail, Pakistani youth are embracing new opportunities that arise from modern technology and creative industries. Likewise, women (young and old) are making an important contribution to the economy and becoming founders of their own businesses. Pakistanis have had to overcome many hardships, but this in turn has made them resourceful, robust and resilient. Such characteristics are ideal in shaping successful social entrepreneurs".

Related Links:

Haq's Musings

Social Entrepreneurship in America and Developing World

TEDx Karachi

light Candles, Do Not Curse Darkness

Social Entrepreneurs Target India, Pakistan

Pakistani-American Entrepreneurs in Silicon Valley

Fighting Poverty Through Microfinance in Pakistan

Silicon Valley Summit of Pakistani Entrepreneurs 2008

Pakistan's Multi-Billion Dollar IT Industry

Media and Telecom Sectors Growing in Pakistan

Pakistan's Middle Class Growth in 1999-2009

Tuesday, October 14, 2014

Karachi Entrepreneurs Launch Urdubit Bitcoin Exchange in Pakistan


"We plan to create a platform (Urdubit Bitcoin Exchange) where people feel safe with the world of Bitcoin and hopefully substitute it for trading locally as easily as Pakistani rupees, while giving everyone an opportunity to invest in this commodity." Zain Tariq, Urdubit, Pakistan


Zain Tariq and Danyal Manzar have launched Pakistan's first Bitcoin exchange called Urdudit, according to media reports.

It represents an attempt to introduce Pakistanis to the  digital currency and bring them into the wider Bitcoin community.



As a virtual currency, Bitcoin is created and stored electronically on a computer or mobile device.  There are over a hundred digital currencies in use today but Bitcoin is by far the most popular one and accounts for more than two-thirds of the virtual currency market.

Satoshi Nakamoto, a computer programmer, proposed Bitcoin, which was an electronic payment system based on mathematical proof. The idea was to produce a currency independent of any central authority, transferable electronically, more or less instantly, with extremely low transaction fees.

Unlike national currencies, no one controls Bitcoin. Bitcoins aren’t printed, like dollars or euros – they’re produced by lots of people running computers all around the world, using software that solves mathematical problems. It’s a growing category of money known as cryptocurrency.

Urdubit exchange's main focus is on bringing liquidity to the Pakistani Bitcoin market, and educate the people on the use of the cryptocurrency as a commodity. To accelerate these processes, Tariq and Manzar built a Bitcoin community and advocacy group called BitcoinPk. According to Tariq, Pakistan's Bitcoin community is still small, although active, and rather dispersed.

There's a lot of activity around Bitcoin in Silicon Valley. A number of entrepreneurs, including Pakistanis, are pursuing opportunities offered by digital currencies. One such Silicon Valley Pakistani entrepreneur is Haseeb Awan, co-founder of BitAccess, who is developing Bitcoin ATM machines.

Bitcoin is attracting the attention of law enforcement agencies, tax authorities, and various government regulators, all of whom are trying to understand how the cryptocurrency fits into existing frameworks. US law-enforcement and securities agencies have said at a recent Senate hearing that digital currencies could be legitimate means of exchange, spurring more investments by venture capitalists.

Bitcoin Price Oct 7 2012 to Oct 15 2014 Source: CoinDesk


The legality of your Bitcoin activities will depend on who you are, where you live, and what you are doing with it, according to Coindesk. Bitcoin has proven to be a contentious issue for regulators and law enforcers, both of which have targeted the digital currency in an attempt to control its use. It's still early in the game, and many legal authorities are still struggling to understand the cryptocurrency, let alone legislate around it. It's another case of legislation significantly lagging technology.  In the end, the currency's future will depend on how many consumers and businesses adopt it and eventual recognition of such transactions by various national governments around the world.

Here's a video explaining Bitcoin mining in Urdu:

http://vimeo.com/84558750


CPU MINING Urdu Tutorial from Dablio Raja on Vimeo.

Related Links:

Haq's Musings

Financial Services in Pakistan

Mobile Banking in Pakistan

Pakistan Among Most Popular Outsourcing Destination

Microfinance in Pakistan

Pakistanis in Silicon Valley




Monday, October 13, 2014

Pak NED Alumni Convention in Silicon Valley Focuses on Innovation

Hundreds of my fellow alumni of Pakistan's NED University of Engineering and Technology (NEDUET) gathered in Silicon Valley for tenth annual North America convention for three days starting Friday, October 10 through Sunday, October 12, 2014. They traveled from dozens of US states and Canada. Many, including NED University's vice chancellor Dr. Afzal Haq, came from as far as Pakistan.



The Silicon Valley convention featured keynote speeches by IBA director Dr. Ishrat Husain and Silicon Valley entrepreneur and NED University alumnus Dr. Naveed Sherwani.  In addition, there was an interesting monologue by NED alum Aftab Rizvi which offered a fictionalized account of an NEDian rise from a Karachi slum to a lucrative career. In this post, I will focus on the innovation panel which I found particularly interesting.



Innovation Panel:

The topic for this panel was "How to promote innovation in Pakistan".  Distinguished panelists included Dr. Afzal Haque, Vice Chancellor of NED University, Dr. Ishrat Hussain, Dean of Karachi's Institute of Business Administration,  Dr. Khursheed Qureshi, Chairman of DICE  Initiative to promote innovation, Dr. Abdul Ghafoor, Chairman of Manufacturing Engineering Department at National University of Science and Technology (NUST),  Dr. Mumtaz Hussain, first Vice Chancellor of King Edwards Medical University, Tanveer Malick, NED Endowment - ALEF and  Professor Ali Minai, Panel Moderator.



After listening to the panelists for almost an hour, it became very obvious to me that the panelists were talking about imitation rather than innovation in areas such as automotive engineering and personal computing. Dr. Khurshid Qureshi and Dr. Ghafoor talked about designing and building an automobile engine entirely in Pakistan by assigning major parts of the project to various engineering departments at universities working with the local auto industry.  Then Dr. Khurshid Qureshi brought up working with some Silicon Valley alums to design and build a laptop in its entirety in Pakistan.

It was a relief to finally hear Dr. Ishrat Husain clearly articulate the fact that the panelists were essentially talking about doing what others did decades ago. He said it's not really a bad thing to begin with and cited the example of the imitation and absorption of Green Revolution technologies in Pakistan.

He went on to explain that imitation, absorption and diffusion of existing technologies can greatly benefit Pakistan and set the stage for real innovation in the long term.  Post WW II success stories of the Japanese and the South Koreans and other Asian Tigers have shown how this process has helped them develop and prosper by industrializing rapidly.  Beyond imitation,  real innovation requires a culture that promotes questioning of widely accepted conventional wisdom. Discouraging questions from children kills their natural curiosity and hurts innovation.

Moderator Ali Minai illustrated this important point with the following poetic lines:

yaqeeN kee baat mayN kuchh bhee naheeN thaa/ naye pehloo huay paidaa gumaaN say ( by late Saleem Ahmad)

(Absolute faith offered little/ doubts have helped open up new possibilities)

vo harf sach tha ke ahl-e yaqeeN naheeN samjhay/ dimaagh-e kufr se kyaa kyaa haqeeqatayN nikleeN  (by late Aziz Hamid Madni)

(People of faith did not comprehend the truth/ Agnostics' mind revealed many truths)

Dr. Mumtaz Husain of King Edwards Medical University added that there is nothing in Islam that discourages questions and critical thinking. In fact, the Quran repeatedly exhorts people to think, to ponder, and to go as far as necessary to seek knowledge. He particularly cited repeated Quranic exhortations like "Afala ta'qilun" (Why don't you reason?), "afala tatafakkarun" (Why don't you think?), "afala tubsirun" (Why don't you see?), "afala tadabbarun" (Why don't you find solutions?).

Here's a video clip of Dr. Ishrat Husain's presentation on innovation at the NED Alumni Convention 2014 in Silicon Valley:

http://www.dailymotion.com/video/x27up3a_innovation-panel-at-ned-alumni-convention-2014-in-silicon-valley-ca_news


Innovation Panel at NED Alumni Convention 2014... by riaz-haq


http://youtu.be/-NTy66ey6vc?list=UUkrIDyFbC9N9evXYb9cA_gQ





Promoting Innovation:

Dr. Ishrat Husain succinctly stated some of the key points which I had brought out in a blog post titled "Promoting Innovation Culture in Pakistan".  It's reprduced below for those who didn't get a chance to read it:

Efforts to promote innovation in Pakistan are being spearheaded by several different groups including DICE Foundation and Pakistan Innovation Foundation.  Both DICE and PIF focus almost entirely on higher education institutions.

Before assessing the situation and making recommendations on promoting innovation in Pakistan, it's important to understand the history of innovation by studying the examples of major innovations since the industrial revolution.

James Watt:

James Watt (1736-1819) is credited with the innovation of the steam engine which is believed to have enabled the Industrial Revolution in Scotland. Watt only had high school education. He never studied at a college or a university. His invention enabled a wide range of manufacturing machinery to be powered.  His steam engines could be sited anywhere that water and coal or wood fuel could be obtained and provided up to 10,000 horsepower to run large factories. It could also be applied to vehicles such as traction engines and the railway locomotives. The stationary steam engine was a key component of the Industrial Revolution, allowing factories to locate where water power was unavailable.

Thomas Edison:

Thomas Alva Edison (1847-1931), the man who invented the light bulb, was probably the most prolific inventor since the Industrial Revolution. He had no formal education. He was a tinkerer who worked with his hands to come up with many devices and was awarded over 1000 patents by the U.S. Patent Office. His innovations were transformational in their impact: electric light and power utilities, sound recording, and motion pictures, all established major new industries world-wide. Edison's inventions contributed to mass communication and, in particular, telecommunications. These included a stock ticker, a mechanical vote recorder, a battery for an electric car, electrical power, recorded music and motion pictures.

Steve Jobs:

Steve Jobs (1955-2011) invented Apple personal computer. Jobs revolutionized several industries from computing and personal electronics to publishing and entertainment. Jobs, a highly prolific innovator, attended college briefly but did not complete college education. Jobs, too, was a tinkerer who worked with his hands to create things.

These examples clearly establish that some of the most prolific innovators have been people who had little or no college education. It is therefore not wise to limit promotion of innovation to just the college level.

In fact, it is much more important to start promoting innovation during early years in primary and secondary schools. It can be done through inquiry-based learning and provision of tools and training at the K-12 school level. Some examples are as follows:

Inquiry-based Learning:

Inquiry-based learning is a method developed during the discovery learning movement of the 1960s. It came in response to a perceived failure of more traditional rote learning. Inquiry-based learning is a form of active learning, where progress is assessed by how well students develop experimental, analytical and critical thinking skills rather than how many facts they have memorized.  Pakistan Science Foundation (PSF) and The Citizens Foundation (TCF) are beginning to promote inquiry-based methods to encourage more active learning and critical thinking at an early age in Pakistan. These skills are essential to prepare Pakistani youngsters to be capable of facing the challenges of living in a highly competitive world in which the wealth of nations is defined in terms of human capital and innovation.

Maker Movement:

The Maker Movement is a technological and creative learning revolution underway around the globe. It has exciting and vast implications for the world of education. New tools and technology, such as 3D printing, robotics, microprocessors, wearable computing, e-textiles, “smart” materials, and programming languages are being invented at an unprecedented pace. The Maker Movement creates affordable or even free versions of these inventions, while sharing tools and ideas online to create a vibrant, collaborative community of global problem-solvers.

Maker movement is helping spawn facilities in many different cities around the world. These places have a wide range of both hardware and software tools and classes available to help people to create and "make" things with their own hands.

The only possible example of "makerspace" that comes close in Pakistan is Robotics Lab that was launched in 2011 in Karachi. It was founded by two friends Afaque Ahmed and Yasin Altaf who had previously worked in Silicon Valley. They bought a 3D printer for the lab as a tool to help children learn science. The founding duo is now looking for ways to expand its audience.“Our goal is to push this science lab to TCF schools, a nationwide school network covering about 150,000 underprivileged students,” says Ahmed. The project, however, is currently pending because of funding constraints. “We have asked them to find some big donor for this purpose. Currently, we train these children only through field trips to our labs.”

Out-of-the-Box Thinking:

The key to innovation is not necessarily advanced education and training in a certain field. It is out-of-the-box thinking. Major innovations have often come from people working in unrelated fields. Recent examples of such innovations from people of South Asian origin include Zia Chisti's Invisalign and Salman Khan's Khan Academy. Both Zia and Salman came from investment banking background before they revolutionized the fields of orthodontics and education.

Summary: 

Encouragement of the culture of innovation should begin during children's formative years in primary and secondary schools. Innovation requires free out-of-the-box thinking. History tells us that some of the biggest innovators were tinkerers with little or no formal education in the fields of their biggest and most transformative innovations. Groups and foundations promoting innovation in Pakistan need to increase their outreach to the school kids. As a start, they can expand inquiry-based learning and build more makerspaces like Karachi's Robotics Lab in partnership with private industries and foundations in major cities.

Here's a video of my friend Ali H. Cemendtaur's visit to Karachi Robotics Lab:

http://vimeo.com/58856985


Visiting Robotics Labs, Private Limited in Karachi, Pakistan from Ali Cemendtaur on Vimeo.


PS: Since I first published this blog, Dr. Khurshid Qureshi, Chairman of DICE, has communicated the following to me:

While I was reading the article, I wondered that may be I failed to fully explain what DICE is all about. My apologies.

I would like to mention few point to clarify our mission.
1. As I mentioned earlier we have been arranging mega events for last 7 years  and that is to bring all innovative ideas from all domains disciplines to one platform in an effort to bring Innovaiton culture in Pakistan. We have seen innovations from increasing iron content of Basmati rice 10 times, fertilizer which works on saline land, design of low cost sugarcane planter to pain measurement device (if we are succesfful in creating such a device - that one innovation can have a potential to take Pakistan out of misery. At DICE we have been bringing 100 humdreds of such innovations on surface for the last several years.
2. When we talked about automotive and laptop, idea was not to say that we should not work on item 1 above, it is just that there are certain strategic areas where we have to fix the baseline first (we are far behind), before we can reasonably come up with some thing really innovative. And from my perspective even Pakistan having its own low cost car (indigenous design) with our own engine is highly innovative.

3. I always cite example of Shan Masala (one of the greatest innovations), and also ultimately having a Innovation market place such as Jumma Bazar of Innovations where people can market their innovative ideas and projects (does have to come from colleges / Univ).
So as I mentioned earlier, I am fully aligned with what you are saying that Innovation can come from anywhere - doesn't require degrees.
I thought I should try to clarify our position at DICE - we are not there just to imitate (which btw is also an innovation), we are truly after changing the culture of our nation.

Related Links:

Haq's Musings

Pakistanis in Silicon Valley

NEDians in America

Promoting Culture of Innovation in Pakistan 

Asian Tiger Dictators Brought Prosperity; Democracy Followed

Industrial Revolution Power Shift

Steve Jobs' Syrian Father

Inquiry-Based Learning in Pakistan

3D Printing in Pakistan

Zia Chishti's Innovation in Orthodontics

Human Capital Growth in Pakistan

Khan Academy Draws Pakistani Visitors


Friday, October 3, 2014

India-Pakistan Economic Comparison 2014

India and Pakistan are running neck and neck in per capita GDP in both nominal US dollar terms and purchasing power parity terms, according to data available from multiple sources.


Nominal and PPP GDP:

CIA World Factbook reports that the 2013 official exchange rate GDP of India is $1.67 trillion while that of Pakistan is $237 billion. It's a ratio of 7, about the same as the population ratio between the two countries.

World Bank's International Comparison Program (ICP) 2011 did a detailed cross-country purchasing power comparison and estimated $778 billion PPP GDP for 2011. It put India's GDP at $5,757 billion, about 7.4 times Pakistan's.  It makes India's economy the third largest and Pakistan's economy 23rd largest in the world in PPP terms.  The ICP findings conclude that Pakistan's per capita income is US$4,450.00, just slightly below India's US$4,735.00. 


India Pakistan Sri Lanka Per Capita Income Source: World Bank


Poverty Rates:

The number of Pakistanis living below the 2005 $1.25 poverty line (set at $1.44 for 2011) is 4.8 million, less than one-seventh of the 35.1 million reported earlier., according to Center for Global Development (CGD). It is a huge drop from about 20% of the population to 3% of the population living below the international poverty line.
World Bank's Revised Poverty Estimates (Source: CGD)

Poverty rates for many other nations, including India and Bangladesh,  have also seen dramatic downward revisions. As a result, India now has 102 million poor, just slightly above China's 99 million. In fact, the new report has cut the world poverty rate in half from 19.7% to 8.9%. Reduction from 21% to 3% for Pakistan poverty is much sharper than the rest of the world because ICP 2011 found it to be the second cheapest in the world.

Cost of Living Comparison in Asia


The revision became necessary after the World Bank's International Comparison Program (ICP) completed a detailed study of a list of around 800 household and non-household products to compare real purchasing power for trans-national income comparison program (ICP). The CGD explained that the revision in poverty rate was necessitated by the results of latest ICP. It said: "Pakistan’s PPP conversion rate for GDP was 19.1 Rupees to the dollar in 2005 and 24.4 in 2011 — a gentle increase of 28 percent. The Consumer Price Index in Pakistan has gone up 102 percent over that same period. That might reflect changing or inadequate ICP commodity baskets or consumption data in one or both years, or mismeasurement of prices by Pakistan’s statistical agencies. But whatever the reason, it appears to apply to a lot of countries. Very few places saw PPP conversion rates climb close to or more than CPIs between 2005 and 2011, which is why poverty rates based on the 2011 PPP numbers tend to be lower."

Rural Poverty: 

One of the key reasons for lower rural poverty in Pakistan is the relatively high per capita agriculture value added  for its region.


Agriculture Value Added Per Capita in Constant 2000 US$--Source: World Bank
Livestock revolution enabled Pakistan to significantly raise agriculture productivity and rural incomes in 1980s. Economic activity in dairy, meat and poultry sectors now accounts for just over 50% of the nation's total agricultural output. The result is that per capita value added to agriculture in Pakistan is almost twice as much as that in Bangladesh and India.

Manufacturing Percentage of GDP Source: World Bank


GDP Growth Rates:

While per capita GDPs of Pakistan and India are neck-and-neck at the moment, the fact is that economic growth rates in Pakistan are continuing lag growth rates in India and other SAARC economies.

Meager 4.1% GDP growth reported by Pakistan for 2013-14 caps sixth consecutive year of disappointing economic performance under "democratic" governments in the country. This slow growth brings back bitter memories of the last lost decade of 1990s when 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 (PMLN) played musical chairs.


India-Pakistan GDP Growth Rates Since 1990s Source: World Bank 


Unless Pakistani leaders find a way to accelerate growth, Pakistan will be left far behind India in terms of per capita gdp by the end of this decade.

Summary:

While India has suffered an economic slow-down in recent years, growth in Pakistan has dramatically plummeted under "democratic" leadership since 2008. Pakistan is in the midst of another lost decade like the 1990s, putting it at risk of being the worst economy in South Asia region and hurting its people in myriad ways including human development rates. This has to change for the better for Pakistan to keep up with its neighbors. 

Related Links:

Haq's Musings

Underinvestment Hurting Economic Growth in Pakistan

Pakistan's Revised PPP GDP 2011

Pakistan Among Top 25 World Economies

Pakistan's Per Capita Income

Pakistan Fares Better Than Neighbors on World Misery Index

Pakistan's Underground Economy

India Pakistan Comparison 

Pakistan Economic History

Pakistan's Expected Demographic Dividend