Thursday, March 27, 2014

US and Europe Must Accept Pakistan as a Legitimate Nuclear State

"The Pakistani establishment, as we saw in 1998 with the nuclear test, does not view assistance -- even sizable assistance to their own entities -- as a trade-off for national security vis-a-vis India". US Ambassador Anne Patterson, September 23, 2009
Pakistan has the world's fastest growing nuclear arsenal today in the midst of a fierce insurgency waged against the Pakistani state by Al Qaeda and the Taliban. How should the world respond? Should the response be to further isolate and sanction Pakistan as argued by some Indian and western scholars? Or, should the US and its Western allies engage with Pakistan by accepting it as a legitimate nuclear state and admitting it as a full member of the Nuclear Suppliers Group?

The first response, as advocated by the likes of TV Paul, a scholar of Indian origin at McGill University, has clearly not worked nor likely to work as explained well by former US Ambassador to Pakistan Anne W. Patterson. The alternative, as advocated in a new book "Overcoming Pakistan's Nuclear Dangers" by former US diplomat Mark Fitzpatrick, is to recognize Pakistan's legitimacy as a nuclear-armed state and work with it to limit the risks of nuclear proliferation in future.

Ambassador Fitzpatrick began by exploring why the West  has been so obsessed with stopping Iran's nuclear program and not Pakistan's. In the end, he came to the conclusion that  Pakistan must be provided "a path to normalizing its nuclear program" in the same way that India was with the US-India nuclear deal. Here's how he describes it on the website of London-based Institute of International Strategic Studies (IISS):

The book was inspired by fellow Londoner Gideon Rachman of the Financial Times, who asked in a June 2012 column why the West was so obsessed with stopping Iran getting nuclear weapons when, ‘by any sensible measure, Pakistani nukes are much more worrying’. I suppose I was one of those who seemed obsessed with Iran, so Rachman’s words hit home. Let’s take a look at Pakistan, I decided.

Successive chapters of my book examine in detail the dangers Rachman ticked off, plus a few more. I concluded that some of the concerns about Pakistan are exaggerated. While the prospect for nuclear terrorism cannot be dismissed, the government’s efforts to ensure the security of its nuclear programme garner too little attention, and compare favourably with India’s nuclear security management. In the ten years since the leakage of the nation’s nuclear secrets masterminded by A.Q. Khan, lessons have been learnt and reforms adopted.

Other concerns get too little attention. As a nuclear wonk, I cannot help but fixate on Pakistan’s veto over negotiations to ban fissile material production and the nation’s move away from signing the Comprehensive Test Ban Treaty. The most worrisome danger, though, is the prospect for nuclear war in the subcontinent.

One cannot write about Pakistan’s nuclear programme without examining the ways that it is motivated by India’s actions, and perceptions thereof. Therefore, the manuscript is about more than Pakistan. One key chapter assesses the South Asian arms race. Although it pales in comparison with the nuclear excesses of the Cold War, the strategic competition in South Asia is potentially destabilising.

In the conclusions, I offer a policy suggestion for the West that will be controversial. Pakistan, I argue, should be offered a path to normalising its nuclear programme. This recommendation did not sit well with one of the statesmen who, before reading it, had agreed to write a back-cover blurb commending my book. Having vehemently opposed making an exception for India, allowing it to benefit from nuclear cooperation while outside the confines of the Nuclear Non-Proliferation Treaty, he had to back out because he objected to the idea of creating a second such hole in the NPT for Pakistan.

His is a respectable opinion. It had also been my view when I started the book project. If there is one tenet I have taken to heart at the IISS, however, it is that analysis should guide one’s research direction. I reached my conclusion with more surprise than enthusiasm.

I am looking forward to explaining more about my analysis in upcoming book launches in Washington, London, Geneva, Vienna and Islamabad.

In spite of the West's nuclear sanctions, Pakistan has managed to develop and build nuclear weapons using both uranium and plutonium since the 1990s. The country also has built solid-fueled and liquid-fueled missiles of various ranges from tactical to strategic. It has built multiple reactors at Khushab to produce large amounts of plutonium for its growing nuclear arsenal.

On the civilian nuclear side, Pakistan has acquired four 300 MW nuclear plants at Chashma. Two of these are currently operating and two are under construction. Three 1200 MW newer plants are being supplied by China for installation at Karachi as it ramps up its nuclear power plant manufacturing business. The West has essentially given away this civil nuclear business to China on a silver platter.

The West's decades-long nuclear sanctions on Pakistan have clearly not worked to stop the country. It's time to try a different approach along the lines of what Fitzpatrick advocates If the West follows Fitzpatrick's advice and admits Pakistan to the exclusive international nuclear club called "Nuclear Suppliers Group" (NSG), the US and Europe will have a better chance of persuading Pakistan to agree to signing Fissile Materials Cutoff Treaty (FMCT) and Comprehensive Test Ban Treaty (CTBT) when India also agrees to these international treaties. These two treaties are the cornerstone of the West's efforts to limit development, proliferation and growth of nuclear weapons stockpiles. In return, Pakistan will have access to the West's advanced civil nuclear technology and materials which it needs to deal with the nation's deepening energy crisis. It will be a win-win deal for both sides.

Related Links:

Haq's Musings

Is Pakistan a Warrior State? 

Nuclear Power Plants in Pakistan

"Eating Grass" Book Launch in Silicon Valley

India's "Indigenous" Nukes and Missiles

US-India Nuclear Deal

China Signs Power Plant Deal with Pakistan

Pakistan's Defense Industry

Energy Crisis in Pakistan

Saturday, March 22, 2014

Pakistan: Warrior State? Conspicuous Failure?

The Warrior State: Pakistan in the Contemporary World by Canada's McGill University Professor Thazha Varkey Paul, a graduate of India's Jawaharlal Nehru University, describes Pakistan as a "warrior state" and a "conspicuous failure". It is among a slew of recently published anti-Pakistan books by mainly Indian and western authors which paint Pakistan as a rogue state which deserves to be condemned, isolated and sanctioned by the international community.

As Pakistanis celebrate 74th anniversary of the 1940 Lahore Resolution calling for the partition of India, it is important to examine TV Paul's narrative about Pakistan and fact-check the assertions underlying his narrative.

Here's a point-by-point response to Paul's narrative:

1. Paul argues: Seemingly from its birth, Pakistan has teetered on the brink of becoming a failed state.

In 1947 at the time of independence, Pakistan was described as a "Nissen hut or a tent" by British Viceroy of India Lord Mountbatten in a conversation with Jawarhar Lal Nehru. However, Pakistan defied this expectation that it would not survive as an independent nation and the partition of India would be quickly reversed. Pakistan not only survived but thrived with its economic growth rate easily exceeding the "Hindu growth rate" in India for most of its history.

Agriculture Value Added Per Capita in 2000 US $. Source: World Bank


Even now when the economic growth rate has considerably slowed, Pakistan has lower levels of poverty and hunger than its neighbor India, according UNDP and IFPRI. The key reason for lower poverty in Pakistan is its per capita value added in agriculture which is twice that of India. Agriculture employs 40% of Pakistanis and 60% of Indians. The poor state of rural India can be gauged by the fact that an Indian farmer commits suicide every 30 minutes.



2. Paul: Its economy is as dysfunctional as its political system is corrupt; both rely heavily on international aid for their existence.



The fact is that foreign to aid to Pakistan has been declining as a percentage of its GDP since 1960s when it reached a peak of 11% of GDP in 1963. Today, foreign aid makes up less than 2% of its GDP of $240 billion.

Foreign Aid as Percentage of Pakistan GDP. Source: World Bank


3. Paul: Taliban forces occupy 30 percent of the country.

 The Taliban "occupy" a small part of FATA called North Waziristan which is about 4,700 sq kilometers, about 0.5% of its 796,000 sq kilometers area. Talking about insurgents "occupying" territory, about 40% of Indian territory is held by Maoist insurgents in the "red corridor" in Central India, according to Indian security analyst Bharat Verma.

4. Paul: It possesses over a hundred nuclear weapons that could easily fall into terrorists' hands.

A recent assessment by Nuclear Threat Initiative ranked Pakistan above India on "Nuclear Materials Security Index".

5. Paul: Why, in an era when countries across the developing world are experiencing impressive economic growth and building democratic institutions, has Pakistan been such a conspicuous failure?

Pakistan's nominal GDP has quadrupled from $60 billion in 2000 to $240 billion now. Along with total GDP, Pakistan's GDP per capita has also grown significantly over the years, from about $500 in Year 2000 to $1000 per person in 2007 on President Musharraf's watch, elevating it from a low-income to a middle-income country in the last decade.I wouldn't call that a failure.


Pakistan Per Capita GDP 1960-2012. Source: World Bank 


Goldman Sachs' Jim O'Neill, the economist who coined BRIC, has put Pakistan among the Next 11 group in terms of growth in the next several decades.

6. Paul argues that the "geostrategic curse"--akin to the "resource curse" that plagues oil-rich autocracies--is at the root of Pakistan's unique inability to progress. Since its founding in 1947, Pakistan has been at the center of major geopolitical struggles: the US-Soviet rivalry, the conflict with India, and most recently the post 9/11 wars.

Pakistan is no more a warrior state that many others in the world. It spends no more than 3% of its GDP on defense, lower than most of the nations of the world.

7. Paul says: No matter how ineffective the regime is, massive foreign aid keeps pouring in from major powers and their allies with a stake in the region.The reliability of such aid defuses any pressure on political elites to launch the far-reaching domestic reforms necessary to promote sustained growth, higher standards of living, and more stable democratic institutions.

"Massive foreign aid" adds up to less than 1% of Pakistan's GDP. Pakistan's diaspora sends it over 5% of Pakistan's GDP in remittances.

8. Paul: Excessive war-making efforts have drained Pakistan's limited economic resources without making the country safer or more stable. Indeed, despite the regime's emphasis on security, the country continues to be beset by widespread violence and terrorism.

Pakistan Defense Spending as % of GDP Source: World Indicators


 In spite of spending just 3.5% of its GDP which is average for its size, Pakistan has achieved strategic parity with India by developing nuclear weapons. It has since prevented India from invading Pakistan as it did in 1971 to break up the country. Pakistani military has shown in Swat in 2009 that it is quite capable of dealing with insurgents when ordered to do so by the civilian govt.

Growth in Asia's Middle Class. Source: Asian Development Bank


While it is true that Pakistan has not lived up to its potential when compared with other US Cold War allies in East and Southeast Asia, it is wrong to describe it as "conspicuous failure". A possible explanation for it could be the fact that Pakistan did not have the US security guarantees that South Korea, Japan and Taiwan enjoyed. Pakistan should be compared with other countries in South Asia region, not East Asia or Southeast Asia. Comparison with its South Asian neighbors India and Bangladesh shows that an average Pakistani is less poor, less hungry and more upwardly mobile, according to credible data from multiple independent sources.

Pakistan is neither a "warrior state" nor a "conspicuous failure" as argued by Professor TV Paul. To the contrary, it has been the victim of the invading Indian Army in 1971 which cut off  its eastern wing. Pakistan has built a minimum nuclear deterrent in response to India's development of a nuclear arsenal. Pakistan has responded to the 1971 trauma by ensuring that such a tragedy does not happen again, particularly through a foreign invasion.

Today, Pakistan faces some of the toughest challenges of its existence. It has to deal with the Taliban insurgency and a weak economy. It has to solve its deepening energy crisis. It has to address growing water scarcity. While I believe Pakistanis are a very resilient and determined people, the difficult challenges they face will test them, particularly their leaders who have been falling short of their expectations in recent years.

Related Links:

Haq's Musings

Looking Back at 1940 Lahore Resolution

Pakistan's Economic History

History of Literacy in Pakistan

Upwardly Mobile Pakistan

Asian Tigers Brought Prosperity

Value Added Agriculture in Pakistan

Are India and Pakistan Failed States?

Musharraf Accelerated Growth of Pakistan's Financial and Human Capital

Pakistan's Nuclear Program

Pakistan on Goldman Sachs' BRIC+N11 Growth Map

Wednesday, March 19, 2014

History of Literacy in Pakistan 1947-2014

The parts that now constitute Pakistan were among the least developed regions of India and the rest of the world prior to 1947, and the last to be conquered by the British, according to an eminent Pakistani economist Dr. Kaiser Bengali. The British rule in Sind, Baluchistan and NWFP lasted about 100 years and these regions were considered the periphery of the British Raj in India. At the time of  the first census in 1950, the overall literacy rate was 20% in India and 14% in Pakistan, according to UNESCO. As of 2012, India has achieved 75% literacy rate while Pakistan is at 58%.  Pakistan Youth (15-24 years) literacy rate is 79.1% for males and 61.5% for females. Each new generation of Pakistanis is more literate than its predecessors:

Over 55 years 30% literate

45-55 years   40%

 35-45 years 50%

25-35 years  60%

15-25 years  70%


Literacy Rates in 1950. Source: UNESCO


Pakistan has come a long way in terms of literacy but it still lags its neighbors, particularly Iran, which had lower literacy rate than Pakistan in 1950s, now has well over 90% of its adult population literate. Education was a key focus of the Shah Reza Shah Pehlavi, the Shah of Iran from 1941 to 1979. The Shah invested a significant chunk of his country's oil revenues to improve education, health care and infrastructure. Iran's education spending increased 1800% during the Shah's rule.

Although literacy in Pakistan has grown by about 13% during President Mushsarraf's rule to about 56%, it still remains woefully low when compared to its neighbors. 

However, Pakistanis now spend more time in schools and colleges and graduate at a higher rate than their Indian counterparts in 15+ age group, according to a report on educational achievement by Harvard University researchers Robert Barro and Jong-Wha Lee.

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


Barro-Lee data shows the following:

1. India's overall schooling rate of 67.4% exceeds Pakistan's 61.9% in 15 and over age group.

2. Pakistan's primary schooling rate of 21.8% is slightly higher than India's 20.9% of 15+ age group

3. India has a big edge with its secondary enrollment of 40.7% over Pakistan's 34.6%, but India's completion rate at this level is a dismal 0.9% versus Pakistan's 22.5% of the population of 15+ age group.

4. India's tertiary education enrollment rate of 5.8% is higher than Pakistan's 5.5%, but Pakistan's college and university graduation rate of 3.9% is higher than India's 3.1% of 15+ age group.

5. Pakistan's combined graduation rate at all three levels is 45.7% versus India's 22.9% among the population age group of 15 years or older.

6. UNESCO's Global Education Digest shows that, as of 2009, nearly 16% of Pakistan's adult population (25-34 years age bracket) has completed higher education as of 2003, higher than the figures of 12% for India and 8% for Indonesia among emerging markets. 


College Graduation Data. Source: Global Education Digest


Barro-Lee data also shows that the percentage of 15+ age group with no schooling has gone down in both nations in the last decade, particularly in Pakistan where it dropped dramatically by a whopping 22% from 60.2% in 2000 to 38% in 2010. In India, this percentage with no schooling dropped from 43% to 32.7% of 15+ age group.


Here's some data on out-of-school children in Pakistan:

1. The actual number of out of school children of primary age in Pakistan is 5.1 million.

2. The out-of-school figures of 50% in Punjab, 61% in Sindh, 65% in KP and 78% in Balochistan are for pre-primary children ages 3 to 5 years, not for ages 6-16 years.

3. In 6-16 years age group, 7% of urban and 23% of rural children are out of school.



4. The number of out-of-school children has declined from in 8.4 million in 2001 to 5.1 million in 2010.

5. According to Pakistan Standards of Living Measurements PSLM 2011-12, the country's literacy rate is 58%.

Source: 2012 Global Monitoring Report
6. Data from Harvard researchers Rober Barro and Jhong-Wa Lee shows that Pakistan has been increasing enrollment of students in schools at a faster rate since 1990 than India. In 1990, there were 66.2% of Pakistanis vs 51.6% of Indians who 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%. 


UNESCO data also shows that a significant percentage of out-of-school children in Pakistan are expected to enter school:
I do not see any justification for the usual expressions of extreme pessimism that follow every alarmist report in the media. I do, however, see an urgent need for higher spending and greater focus on education by Pakistani government to make faster progress, particularly in closing the gender gap in school enrollment. A recent report about significant education successes in Punjab prepared by Sir Micheal Barber gives me hope that the PML (N) will perform better than the last government in responding to the challenge. 

Related Links:

Haq's Musings

Educational Attainment in Pakistan

Upwardly Mobile Pakistan

Biotech and Genomics in Pakistan 

India & Pakistan Comparison Update 2011 

India and Pakistan Contrasted in 2010
  
Eating Grass-The Making of Pakistani Bomb
  
Educational Attainment Dataset By Robert Barro and Jong-Wha Lee 

Quality of Higher Education in India and Pakistan

Developing Pakistan's Intellectual Capital

Intellectual Wealth of Nations

Pakistan's Story After 64 Years of Independence

Pakistan Ahead of India on Key Human Development Indices

Thursday, March 13, 2014

Thar Drought: Precursor of Dust Bowl in Water-Stressed Pakistan?

Deaths of dozens of malnourished and sick children after a 3-year drought in Pakistan's Thar desert have finally got the media attention and forced politicians to take notice of the unfolding tragedy. Emergency aid is now being provided by the Pakistani military and the civil society. And promises are being made by the politicians to do more for the poor, mostly Hindu, residents of the affected region.


Dust Bowl: 

The Thar situation today reminds of what happened during America's Dust Bowl in the 1930s that lasted almost a decade. It forced millions of people in Arkansas, Kansas, Oklahoma, New Mexico, Nevada and Texas to migrate to other parts of the country, particularly California.  Drought caused windblown dust and devastation of agriculture in the region. Some believe with good reason that the Dust Bowl accentuated and extended the Great Depression for several more years than would have been the case otherwise.

Here's what John Steinbeck wrote about the Dust Bowl in his 1939 novel The Grapes of Wrath:

"And then the dispossessed were drawn west- from Kansas, Oklahoma, Texas, New Mexico; from Nevada and Arkansas, families, tribes, dusted out, tractored out. Car-loads, caravans, homeless and hungry; twenty thousand and fifty thousand and a hundred thousand and two hundred thousand. They streamed over the mountains, hungry and restless - restless as ants, scurrying to find work to do - to lift, to push, to pull, to pick, to cut - anything, any burden to bear, for food. The kids are hungry. We got no place to live. Like ants scurrying for work, for food, and most of all for land."

Like the residents of the American plains affected by the Dust Bowl in 1930s,  the people of Thar desert region rely on their crops and livestock for their livelihood. Since there is a very limited irrigation system in the area, they depend almost entirely on rains to grow their crops and raise cattle.

The area currently affected by drought is relatively small but it could expand rapidly and turn into a much bigger tragedy unless the government and the people wake up to it. In addition to providing immediate relief, there is a strong need for a longer term strategy to improve water storage and irrigation in the region.

It's not just Thar region. The problem that needs to be addressed is much bigger. Pakistan has increasingly been suffering from cycles of severe droughts followed by massive floods in the last few years. This recurring pattern of shortage and excess of water gives us a preview of the growing challenge of climate change. This situation calls for a comprehensive water management effort to deal with a potentially existential threat to Pakistan.



Flood-Drought Cycles:

Before the summer floods of 2010, the Indus had turned into a muddy puddle in parts of Sindh. Britain's Financial Times reported at the the time that "angry farmers marched through villages in Sindh demanding access to water. Those who can no longer turn a profit in the fields are increasingly resorting to banditry or migrating to urban shanties".

Earlier, there was a 2009 report by the Woodrow Wilson International Center saying that the melting Himalayan glaciers have exacerbated Pakistan’s shortages. And the World Bank warned that Pakistan could face a “terrifying” 30-40 per cent drop in river flows in 100 year’s time. Now large parts of Sindh are under water for the second year in a row, destroying lives and standing crops.

Growing Water Scarcity:



According to the United Nations' World Water Development Report, the total actual renewable water resources in Pakistan decreased from 2,961 cubic meters per capita in 2000 to 1,420 cubic meters in 2005. A more recent study indicates an available supply of water of little more than 1,000 cubic meters per person, which puts Pakistan in the category of a high stress country. Using data from the Pakistan's federal government's Planning and Development Division, the overall water availability has decreased from 1,299 cubic meters per capita in 1996-97 to 1,101 cubic meters in 2004-05. In view of growing population, urbanization and increased industrialization, the situation is likely to get worse. If the current trends continue, it could go as lows as 550-cubic meters by 2025. Nevertheless, excessive mining of groundwater goes on. Despite a lowering water table, the annual growth rate of electric tubewells has been 6.7% and for diesel tubewells about 7.4%. In addition, increasing pollution and saltwater intrusion threaten the country's water resources. About 36% of the groundwater is classified as highly saline.

So what can Pakistan do to manage these disastrous cycles of floods and droughts?

1. Build Dams and Dykes:



As the flood disasters took their toll , there were reports of USAID and ADB considering funding the $12 billion Bhasha Dam in Pakistan. The project is located on Indus River, about 200 miles upstream of the existing Tarbela Dam, 100 miles downstream from the Northern Area capital Gilgit in Gilgit-Baltistan region. The dam's reservoir would hold so much water that it could have averted last year's devastating floods. It would also provide enough electricity to end  Pakistan's crippling shortages, according to a report in the Guardian newspaper. The massive dam on the Indus river would provide 4,500MW of renewable energy, making up for a shortfall causing up to 12 hours of load shedding on daily basis across Pakistan. The reservoir would be 50 miles long, holding 8.5 MAF (million acre feet) of water.

In addition to large dams, there is also a need to build and maintain dykes and start other flood-control and overground and underground water storage projects and drill deep wells in areas like Thar, Badin and Thatta in Sindh.

2. Conserve Water:

Building Bhasha and several other proposed dams will help in dealing with water scarcity, but the growing population will continue put pressure on the vital resource.



Serious conservation steps need to be taken to improve the efficiency of water use in Pakistani agriculture which claims almost all of the available fresh water resources. A California study recently found that water use efficiency ranged from 60%-85% for surface irrigation to 70%-90% for sprinkler irrigation and 88%-90% for drip irrigation. Potential savings would be even higher if the technology switch were combined with more precise irrigation scheduling and a partial shift from lower-value, water-intensive crops to higher-value, more water-efficient crops. Rather than flood irrigation method currently used in Pakistani agriculture, there is a need to explore the use of drip or spray irrigation to make better use of nation's scarce water resources before it is too late. As a first step toward improving efficiency, Pakistan government launched in 2006 a US $1.3 billion drip irrigation program that could help reduce water waste over the next five years. Early results are encouraging. "We installed a model drip irrigation system here that was used to irrigate cotton and the experiment was highly successful. The cotton yield with drip irrigation ranged 1,520 kg to 1,680 kg per acre compared to 960 kg from the traditional flood irrigation method," according to Wajid Ishaq, a junior scientist at the Nuclear Institute for Agriculture and Biology(NIAB).





Beyond the government-funded experiments, there is a drip irrigation company called Micro Drip which is funded by the Acumen Fund. Micro Drip develops and provides products and services as poverty alleviation solutions to small farmers in Pakistan’s arid regions. It provides a complete drip irrigation system along with agricultural training and after-sales support to enable farmers to extract a higher yield from their land at a much lower cost of input.

So what is holding up Pakistan's progress on water management?

1. Lack of Funds:

Pakistani government revenues continue to be limited by slow economic growth and widespread culture of tax evasion. The biggest culprits are the ruling feudal politicians who oppose any attempt to levy taxes on their farm income. The limited resources the state does have are usually squandered on political patronage doled out to ruling politicians' supporters in the form of capricious grants, huge loans (defaulted with impunity), and plum jobs in bloated government and the money-losing state-owned enterprises. The result of this blatant abuse, waste and fraud is that the budget allocations for vital long-term investments in education, health care and infrastructure development projects are regularly slashed thereby shortchanging the future of the nation.

2. Corruption and Security Concerns:

The NY Times has reported that "Washington’s fears of Pakistani corruption and incompetence has slowed disbursal of the money". The story reinforces the widely-held view that even after the funding is arranged, the corrupt and incompetent politicians and their hand-picked civilian administrators make any development progress slow and difficult. Such problems are further exacerbated by significant security issues in parts of the country severely plagued by ongoing militancy.

Existential Threat:

It can be argued that the threat from climate change is bigger than the Taliban threat which gets all the coverage in Pakistan. Generations of military families have periodically fought FATA insurgencies. For example, Shuja Nawaz, the author of Crossed Swords says that his grandfather, his uncle and his cousin have all been deployed in Waziristan by the British and later Pakistani governments in the last century and a half. Pakistani military is quite capable of dealing with this threat to defeat the Taliban.

Climate change and the growing water scarcity pose a bigger long-term existential threat to Pakistan and the region. Water per capita is already down below 1000 cubic meters and declining. What Pakistan needs are major 1960s style investments for a second Green Revolution to avoid the specter of mass starvation and political upheaval it will bring.

Conclusion:

As to the current Thar crisis, corruption, incompetence and poor governance have characterized the Pakistan People's Party rule at the federal level and in Sind province for years. What is happening in Tharparkar now is symptomatic of it. The PPP voters in Sind, particularly in Tharparkar, are mostly poor haris many of whom are followers of powerful landowning feudal pirs who represent them in Sind assembly and in the national parliament. The voters never hold their representatives accountable for their total neglect of their areas. Instead, the powerful and ubiquitous media born on Musharraf's watch is doing it, as are the Supreme Court judges. I think it's a good development in Pakistan which will likely help the poor who have so far been helpless.  I hope that the media focus is not just on the current crisis in Thar at the provincial level but also on the larger national issues of water management, storage and irrigation infrastructure the country needs to avert a much bigger disaster in the future.

Related Links:

Haq's Musings

Growing Water Scarcity in Pakistan

Political Patronage in Pakistan

Corrupt and Incompetent Politicians

Pakistan's Energy Crisis

Culture of Tax Evasion and Aid Dependence

Climate Change in South Asia

US Senate Report on Avoiding Water Wars in Central and South Asia

Thursday, March 6, 2014

Fireeye's Ashar Aziz Becomes First Pakistani-American Tech Billionaire

Silicon Valley has minted the first Pakistani-American billionaire with an incredible 377% surge in the price of Fireeye (NASDAQ: FEYE) shares since its IPO last year.

The advanced computer security software company , founded by Ashar Aziz, priced its initial public offering of 15.2 million shares at $20 per share in September, raising about $304 million after increasing its expected price range to $15 to $17 per share.

Aziz owns about 10.91 million shares in the Milipitas, Calif.-based security company; that 9.3% stake on the close of the first day of trading in September was worth more than $392 million.

Here are some of the reasons for the huge spike as described by Business Insider:

1. The company's flagship product solves a really hard computer security problem. It is able to stop hack attacks that were previously almost impossible to stop.

2. FireEye bought another security firm, Mandiant, for $1 billion. Mandiant was famous for uncovering links between Chinese hackers and attacks on U.S. companies.

3. With Mandiant, FireEye launched a cloud computing security service that competes with SourceFire. SourceFire is the company Cisco bought last summer for $2.7 billion.

4. The company beat expectations on its fourth quarter with revenue of $57.3 million, a beat by $1.26 million, and EPS of $-0.35, a beat by $0.03.

5. Some Wall Street analysts have been really gung ho on the company. Wells Fargo started tracking it a month ago, saying it was "a once in a decade opportunity to invest in a truly disruptive technology."

The world has dramatically changed since the 1990s when Wintel ruled the roost. PC is no longer the dominant device. Smartphones and tablets have brought the era of mobile cloud computing where neither Intel nor Microsoft enjoy leadership position. Even developing countries like Pakistan are deploying cloud computing applications. A Google sponsored survey in Pakistan found that mobile computing is expected to overtake desktop computing this year. Several new and more innovative and powerful players have emerged to in this market.

As more and more enterprises embrace cloud-based computing, cloud security is becoming a hot area for many entrepreneurs. This shift means over $2 billion annual market for cloud security vendors like Fireeye and Elastica. Researchers at Gartner forecast the highest growth to occur in cloud-based tokenisation and encryption, security information and event management (SIEM), vulnerability assessment and web application firewalls.

Recently, a Silicon Valley cloud security start-up Ealstica was launched by Rehan Jalil, a Pakistani-American alumnus of NED University of Engineering, Karachi, Pakistan. Elastica received $6.3 million funding from Mayfield Ventures, a premier Silicon Valley Venture Capital firm.

Several analysts have recently upgraded Fireeye to buy with the target price above $100.

Related Links:

Haq's Musings

Pakistani-American Ashar Aziz's Fireeye Goes Public

Pakistani-American Shahid Khan Richest South Asian in America

Two Pakistani-American Silicon Valley Techs Among Top 5 VC Deals

Pakistani-American's Game-Changing Vision 

Minorities Are Majority in Silicon Valley 

US Promoting Venture Capital & Private Equity in Pakistan

Pakistani-American Population Growth Second Fastest Among Asian-Americans

Edible Arrangements: Pakistani-American's Success Story

Pakistani-American Elected Mayor

Upwardly Mobile Pakistan

Tuesday, March 4, 2014

World Economic History: Was India Ever Rich?

When the British arrived in Mughal India, the country's share of the world GDP was 25%, about the same as the US share of the world GDP today. By 1947, undivided India's share of world GDP ($4 trillion in in 1990 Geary-Khamis dollars) had shrunk to about 6% (India: $216 billion, Pakistan: $24 billion). Since independence, India's contribution to world GDP has shrunk further to about 4%, according to British Economist Angus Maddison who died in 2010.



The colonization of India and many other nations in Asia and Africa began with the advent of the Industrial Revolution in Europe which resulted in a major power shift from East to West over the time-span of just a few decades. Prior to the Industrial Revolution, the world depended mainly on agriculture based on human and animal muscle power. Countries with large populations and farmlands had large share of the world GDP.  The per capita productivity differences among nations and regions were relatively small. The machine age changed it all. Those who used machines became much more productive and significantly richer than the rest.

In 1000 AD, according to British Economist Angus Maddison, China and India together accounted for more than half of the world GDP (calculated in 1990 dollars in terms of purchasing power parity). By 1600, that share was 51.4%, with China accounting for 29% and India 22.4% of world GDP. A hundred years later, China’s GDP had fallen but India’s went up to 24.4% of world output. By 1820, however, India’s share had fallen to 16.1%. By 1870, it went down to 12.2%. International Monetary Fund (IMF) projections indicate that India’s share of world GDP would be 6.1% in 2015.

While it is a fact that India's total GDP was at one point the highest in the world, does it mean that the average Indian was richer than his or her counterparts elsewhere in the world? To answer this question, let's look at Maddison's figures for per capita GDP in various parts of the world.


In 1 AD, India’s GDP per capita was $450, the same as China’s. But Italy under the Roman Empire had a per capita income of $809. In 1000 AD, India’s per capita income was $450 and China’s $466. But the average of the Islamic Caliphate in Baghdad which ruled West Asia (Turkey, Syria, Iran and Iraq) was much higher at $621. An average citizen of the Abbasid Caliphate was richer than an average Indian or Chinese. In fact, the per capita income in the Abbasid Caliphate was the highest in the world in 1000 AD.

As the European Renaissance began, new centers of prosperity emerged. Italy topped the table in 1500 AD, with per capita income of $1,100, the Netherlands following with a per capita income of $761. The UK was not far behind, with a per capita income of $714. All of these nations were richer than India and China which had per capita incomes of $550 and $600 respectively.

India Health-Wealth Indicators Source: Gapminder.com


While India today has the world's largest population of poor, it is still richer than it has ever been in terms of per capita incomes. Indians are also living longer than ever in the country's history; average life expectancy in India has risen from just 23 years in 1800 to 65.5 years now. However, India continues to significantly lag the rest of the world on both economic and social indicators.

Related Links:

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Power Shift Since Industrial Revolution

Can Superpoor India Become a Superpower?

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

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Brief History of Pakistan Economy

India Ranks Last on PISA, TIMSS