Friday, March 20, 2015

Major Tipping Point: Pakistan's Middle Class Grows to 55% of Population

Majority of the households in Pakistan now belong to the middle class, a first in Pakistan's history, according to research by Dr. Jawaid Abdul Ghani of Karachi School of Business and Leadership (KSBL).

It's an important tipping point that puts Pakistan among the top 5 countries with fastest growing middle class population in Asia-Pacific region, according to an Asian Development Bank report titled Asia's Emerging Middle Class: Past, Present, And Future. The ADB report put Pakistan's middle class growth from 1990 to 2008 at 36.5%, much faster than India's 12.5% growth in the same period.

Source: Dr. Abdul Ghani

From 2002 to 2011, the country's middle class, defined as households with daily per capita expenditures of $2-$10 in 2005 purchasing power parity dollars, grew from 32% to 55% of the population, according to a paper presented by Dr. Abdul Ghani at Karachi's Institute Business Administration's International Conference on Marketing. Dr. Ghani has cited Pakistan Standards of Living Measurement (PSLM) Surveys as source of his data.

Growing middle class is a major driver of economic growth, as the income elasticity for durable goods and services for middle class consumers is greater than one, according to a Brookings Institution study titled The Emerging Middle Class in Developing Countries.

Among some of the manifestations of the rising middle class, Dr. Abdul Ghani reports dramatic increase in the ownership of television sets, refrigerators and motorcycles in households in all income deciles in Pakistan.  At the same the total household assets have nearly doubled from $387 billion in 2001-02 to $772.6 billion in 2010-11 in terms of 2005 purchasing power parity dollars.

Consumer spending in Pakistan has increased at a 26 percent average pace the past three years, compared with 7.7 percent for Asia, according to data compiled by Euromonitor International, a consumer research firm. Pakistan's rising middle class consumers  in major cities like Karachi, Lahore and Islamabad are driving sales of international brand name products and services.  Real estate developers and retailers are responding to it by opening new mega shopping malls such as Dolmen in Karachi and Centaurus in Islamabad.

Pakistan's transition to middle-class middle-income country over the last decade mainly during Musharraf years represents a major tipping point for the country's economy. It is likely to accelerate economic growth driven by consumption and draw greater investments in production of products and services demanded by middle class consumers. Some of it is already in evidence in booming sales of durable goods (TV sets, refrigerators, motorcycles) AND non-durables (cosmetics, shampoo, toothpaste, processed foods, etc) in Pakistan's booming FMCG sector.

Related Links:

Haq's Musings

Pakistan's Official GDP Figures Ignore Booming FMCG Sector

Musharraf Accelerated Human and Economic Development in Pakistan

Pakistan's Growing Middle Class

Pakistan's GDP Grossly Under-estimated; Shares Highly Undervalued

Fast Moving Consumer Goods Sector in Pakistan

3G-4G Roll-out in Pakistan

Mobile Money Revolution in Pakistan


Majumdar said...

Prof sb,

Pakiland offers greater mobility to its citizens than India and yet India's pci is higher, HDI is higher, per capita power and energy consumption is higher and is less food insecure and has lower hunger than Pakiland. Quite strange, isn't it?


Riaz Haq said...

Majumdar: "Quite strange, isn't it? "

NO, it's not.

The fact is that India has much bigger problems in terms of multi-dimensional poverty which includes income poverty, inequality, disease burdens and basic hygiene. India also has a huge problem of inequality relative to Pakistan. All these affect quality of life more than just average composite indicators you quote.

One data point to note here is that median per capita income in India ($60 per month) is significantly lower than that in Pakistan ($73 per month) in 2005 PPP $. Income poverty rate (those below $1.25 per capita per day) in India is 33% vs 13% in Pakistan

Another point to note is that agriculture value added per capita in Pakistan is about twice that in India. Agriculture employs the largest number of people in India and Pakistan.

India leads the world in open defecation. Disease burdens in India are much higher than in Pakistan.

Majumdar said...

No one is disputing that India has a lot of poverty. Question is if Pakiland's middle class is bigger how come it consumes less electricty/energy per capita than India. Surely middle class folks dont live without power in Pakiland? Regards

Riaz Haq said...

Majumdar: "No one is disputing that India has a lot of poverty. Question is if Pakiland's middle class is bigger how come it consumes less electricty/energy per capita than India. Surely middle class folks dont live without power in Pakiland? Regards"

Per Capita energy consumption in Pakistan is about the same as in India. The difference is that it's more evenly distributed than in India. A detailed World Bank report identified India as the most deprived country in terms of access to energy: as many as 306.2 million of its people are still without this basic utility. The remaining 19 nations lacking access to energy, with the number of deprived people is as follows: Nigeria (82.4 million), Bangladesh (66.4 million), Ethiopia (63.9 million), Congo (55.9 million), Tanzania (38.2 million), Kenya (31.2 million), Sudan (30.9 million), Uganda (28.5 million), Myanmar (24.6 million), Mozambique (19.9 million), Afghanistan (18.5 million), North Korea (18 million), Madagascar (17.8 million), the Philippines (15.6 million), Pakistan (15 million), Burkina Faso (14.3 million), Niger (14.1 million), Indonesia (14 million) and Malawi 13.6 million).

Riaz Haq said...

There are some readers from both India and Pakistan who complain that I always compare Pakistan with India.

The fact is that I have also compared Pakistan with other countries like Bangladesh, China and the United States.


Riaz Haq said...

Pakistan is a rapidly growing country despite a lot of political and economic challenges. However, its growth rate since 1947 has been better than the global average.
A wide range of economic reforms has resulted in a strong economic outlook.
There has been a great improvement in foreign exchange and currency reserves.
New businesses are opening up across Pakistan which is reshaping its landscape.
The GDP growth accelerated to 4.14 percent in 2013-14 and the momentum of growth is broad based, as all sectors namely agriculture, industry and services are supporting economic growth.
The per capita income in dollar terms has reached to $1,386 in 2013-14.
The agriculture sector accounts for 21.0 percent of GDP and 43.7 percent of employment. It has strong backward and forward linkages. It has four sub-sectors including: crops, livestock, fisheries and forestry.
The industrial sector contributes 20.8 percent in GDP; it is also a major source of tax
revenues for the government and also contributes significantly in the provision of job opportunities to the labor force.
The government has planned and implemented comprehensive policy measures on fast track to revive the economy.
As a result, Pakistan’s industrial sector recorded remarkable growth at 5.8 percent as compared to 1.4 percent in the previous year.
The services sector contains six sub-sectors including: transport, storage and communication; wholesale and retail trade; finance and insurance; housing services (ownership of dwellings); general government Services (public administration and defense); and other private services (social services).
The services sector has witnessed a growth rate of 4.3 percent.
The growth performance in the services sector is broad based, all components contributed positively in growth, Finance and insurance at 5.2 percent, general government services at 2.2 percent, housing services at 4.0 percent, other private services at 5.8 percent, transport, storage and communication at 3.0 percent and wholesale and retail Trade at 5.2 percent.
The three main drivers of economic growth are consumption, investment and export.
Pakistan has a consumption-oriented society, like other developing countries.
The private consumption expenditure in nominal terms reached to 80.49 percent of the GDP, whereas public consumption expenditures are 12.00 percent of GDP.
The government has launched a number of initiatives to create enabling environment in the country including steps to improve the energy situation, law and order, auction of 3G and 4G licenses, and other investment incentives for the investors.
Moody’s recent ratings in favor of Pakistan coupled with jacking up from negative to positive rating of five of its banks — Habib Bank Limited (HBL), Muslim Commercial Bank (MCB), Allied Bank Limited (ABL), United Bank Limited (UBL) and National Bank of Pakistan (NBP) — would definitely boost investor confidence.
The current government has launched a comprehensive plan to create an investment-friendly environment and to attract foreign investors to the country. As is evident, the capital market has reached new heights and emitting positive signals for restoring investor confidence.
The European Union (EU) granted Generalized System of Preferences (GSP) Plus status to Pakistan with an impressive count of 406 votes, granting Pakistani products a duty free access to the European market.
The GSP Plus status will allow almost 20 percent of Pakistani exports to enter the EU market at zero tariff and 70 percent at preferential rates. Award of GSP Plus status depicts the confidence of international markets in the excellent quality of Pakistani products.
Pakistan emerged as one of the best performers in the wake of the global financial crisis, even with a backdrop of a country which waged a costly war against militants.

Majumdar said...

Prof sb,

Congratulations to you and all Pakis on Pakistan Day and 75th anniversary of the noble Lahore Resolution. May Pakiland become what our beloved qaid had envisioned it to be.

On a sad note though, I have to break to you the news of death of one of my heroes (and I suspect yours too) of Hazrat Lee Kuan Yew (RA). May God/Allah give him heaven/jannah.


Riaz Haq said...

Majumdar: " On a sad note though, I have to break to you the news of death of one of my heroes (and I suspect yours too) of Hazrat Lee Kuan Yew"

Yes, Lee Kuan Yew was a great man who did a lot for the uplift of his people. His life should be an inspiration for South Asian leaders. May his soul rest in peace.

BTw, I did a post on Suharto's death that acknowledged Lee's great contribution along with Mahathir's and Suharto's. Lee actually wept at Suharo's bedside.

Majumdar said...

Prof sb,

The per capita consumption of energy in Pakiland and India are not "about the same" as you put it. It is 684 kwh per person in India v/s 449 in Pakiland, over 50% difference (Source: World Bank 2011). If you measure it by all sources of energy in terms of kg oil equivalent it stands at 614 kg for India v/s 482 kg for Pakiland (Source: World Bank 2011 data tables).

That Pakiland has 90% households electrified is as meaningless as enrollment in ghost schools or rural Sindh since electrified households dont seem to have much power at all.


Riaz Haq said...

Majumdar: "The per capita consumption of energy in Pakiland and India are not "about the same" as you put it."

The important parameter to compare is the primary energy consumption which is only slightly higher in India. 614 Kg for India is not that much higher than 487 Kg for Pakistan. fact, both are orders of magnitude lower when compared with industrialized nations.

Distribution is important too. More people having access helps more people be productive. Hence, the value-added agri in Pakistan is 2X that in India which means lower rural poverty in Pakistan than in India. And no farmers' suicides in Pakistan

Majumdar said...

Prof sb,

If rural poverty, sanitation and disease load is so much less in Pakiland than in India maybe you can explain why:

India's infant mortality rate (41) is so much lower than Pakiland (69)?
India fared better on hunger and food insecurity than Pakiland?

Btw, the whole job of the exercise is not to show either you, sir, or Pakiland in a poor light. I suspect the data pointers I have selected points to something very grave and something that Pakiland can ignore only at its own risk. That in the last 5-6 years (after Mushy's exit) Pakiland has severely stagnated.


Riaz Haq said...

Majumdar: " India's infant mortality rate (41) is so much lower than Pakiland (69)?
India fared better on hunger and food insecurity than Pakiland?"

Look at the overall premature fatality rate which is much lower in Pakistan

Majumdar said...

I am not familiar with the concept of premature fatalities, yet life expectancy of both countries is same (66) (Source: World Bank). There is however a point you are missing. you must be aware that health experts talk about the 1000 day concept- i.e. the first 1000 days- 270 day gestation period and two years of infancy- of an infant substantially determines physical and mental development over the entire lifetime.

There is no question that until the 1990s at least pakiland had far better conditions than India which is reflected in the fact that till date Pakiland's health care indicators (including mortality and life expectancy) dont show up worse than India's.

Thing is that these things are changing. The differential IMR and hunger we see today could be leading indicators of future health care indices.


Majumdar said...

Prof sb,

On energy I missed one more parameter. In India, 42% of households use non-solid fuels compared to only 36% in Pakiland, only marginally higher of course.


Riaz Haq said...

Majumdar: "I am not familiar with the concept of premature fatalities"

Premature mortality stats are used by WHO and other health-related agencies.

Please read the following to learn:

Riaz Haq said...

Majumdar: " On energy I missed one more parameter. In India, 42% of households use non-solid fuels compared to only 36% in Pakiland, only marginally higher of course."

110 million Pakistanis and 700 million Indians have access to non-solid fuels. The use of cleaner-burning natural gas is far more widespread in Pakistan than in India.

India is way behind Pakistan in terms of its gas pipeline network, with the neighboring country’s network stretching around 56,400 km against its 10,500 km, connecting only 20 cities compared to Pakistan’s 1,050, industry body Assocham said.

Riaz Haq said...

Moody’s Raises #Pakistan Outlook as Economy Improves Under #PMLN #NawazSharif via Kyrgyzstan Business Information​
Pakistan’s credit rating outlook was raised to positive from stable by Moody’s Investors Service, signaling an upgrade is possible for the first time since 2006 as the economy steadily improves.
The new outlook “is based on a strengthening external liquidity position, continued efforts toward fiscal consolidation, and the government’s steady progress in achieving structural reforms under the IMF program,” Moody’s analyst Anushka Shah said in a statement on Thursday.
The company maintained its non-investment-grade Caa1 foreign currency rating and said implementation of more reforms, successful completion of the International Monetary Fund program or better finances could trigger an upgrade.
Prime Minister Nawaz Sharif is using lower oil prices, higher remittances and more consumer spending to push growth toward a seven-year high. Even so, a large budget deficit, high debt costs and dependence on external funding leaves Pakistan vulnerable to political and economic risks, Moody’s said.
When Sharif took power in May 2013, he won a $6.6 billion loan from the IMF to avert a balance-of-payments crisis. Since then, the country has cleared six program reviews and has also regained eligibility to borrow from the International Bank for Reconstruction and Development.
“Fundamentals of the country are improving,” Hedi Ben Mlouka, chief executive officer at hedge fund Duet Mena Ltd., said in a March 18 phone interview from Dubai. Even a “marginal improvement will make a very big difference and make it an attractive investor destination.”
The benchmark KSE100 stock index has rallied 56 percent since Sharif took office, and the rupee has outperformed every major global currency over the past six months.
Foreign exchange reserves have doubled in the past year to $16 billion and the IMF forecasts Pakistan’s economy to expand 4.3 percent this year, compared with the five-year average of 3.6 percent.
The nation’s central bank last week cut its benchmark interest rate to the lowest in almost 13 years as lower oil prices slowed inflation.

Majumdar said...

Prof sb,

India's rating btw is Baa3 which is full 7 notches above Pakiland's.


Majumdar said...

Prof sb,

110 million Pakistanis and 700 million Indians have access to non-solid fuels.

Please read the report carefully, sir. It is the other way round- that is the number of people who suffer from access deficit to non solid fuel. India's population is 7 times Pakilands, it means that % of people in India lacking access to non-solid fuel is marginally lower than Pakiland's.

The piped natural gas network in Pakiland has been much bigger than India's because it was for long a major NG producer (Sui et al). But that gas is now getting exhausted. In India LPG takes the place of NG.


Anonymous said...

Overall per capita GDP growth has been mediocre for Pakistan for quite some time. However, the middle class has grown substantially and yet I haven't come across this economic puzzle or read about this in The Economist, The WSJ etc.


Riaz Haq said...

Anon: "I haven't come across this economic puzzle or read about this in The Economist, The WSJ etc."

There's no puzzle here that basic understanding of income distribution can not solve. Headline stories of Economist and WSJ won't help you here.

It's not the overall GDP growth and average per capita income increases but the median per capita income growth that tells you how the GDP gains are shared among the population.

So to assess the size of the middle class, it's important to look at the median per capita income, an income level that divides the top 50% from the bottom 50% of income earners.

Median income in India ($60 per month) is significantly lower than that in Pakistan ($73 per month) in 2005 PPP $ based on 2009-10 surveys.

$60 per month per capita or $2 per day per capita in India means half the population in India does not meet the ADB and WB definition of middle class in India.

On the other hand, media income of $73 per month per capita in Pakistan means more than half of Pakistanis meet the ADB and WB definition of middle class.

Income poverty rate (those below $1.25 per capita per day) in India is 33% vs 13% in Pakistan, according to WB data on povcalNet.

Also Gini Index for India is 33 and for Pakistan 29, indicating that Pakistan has lower inequality.

Riaz Haq said...

A New #Language for #Pakistan’s Deaf. Pakistan Sign Language adds to #Urdu national and 300 regional languages

A common Indo-Pakistan sign language was in use across the subcontinent long before the 1980s, but many words and concepts in Urdu and other regional languages had no place in it. Pakistan Sign Language grew out of this need, but by the late 1990s the books and guides developed by Absa were deemed outdated and went out of print. So the family education foundation worked with deaf instructors in Punjab and Sindh, and with Rubina Tayyab, the head teacher at the Absa School, to develop a new online lexicon that now contains 5,000 words and phrases. On its website, a new video each day shows men, women, girls and boys signing a phrase with its meaning repeated in English and Urdu. Aaron Awasen, the foundation officer in daily charge of the P.S.L. project, describes this lexicon not as a definitive dictionary, but as “a portal through which Pakistan Sign Language can continue to develop.”

Making technology central is typical of the Deaf Reach system. The online tools are accompanied by a book, a CD and a phone app. Computers and televisions are prominent in classrooms, and teachers are encouraged to explore the Internet for supplementary materials.

The P.S.L. tools imprint three languages — Urdu, English and P.S.L. — on the children’s brains at the same time. They also enable relatives and others to learn P.S.L. even if they can’t attend regular training sessions. Meanwhile, a publicity campaign called “Don’t Say It, Sign It” shows Pakistani celebrities like the filmmaker Sharmeen Obaid-Chinoy and the cricket star Shahid Afridi signing simple phrases in short online video clips, in an effort to remove the stigma of “otherness” and incapacity from the common perception of the deaf.

Ten thousand copies of the organization’s dictionary and DVDs have been distributed across Pakistan, and a second edition is in print. Next, the foundation will send “deaf leaders” to 25 cities to meet with their deaf communities and provide materials for smaller villages. By distributing 18,000 P.S.L. books and 7,000 DVD sets, the organization hopes this first phase of its project will affect 150,000 people.

In a country like Pakistan, where so many other languages and communities jostle for space, and a walk down any street reveals a modern-day Tower of Babel, what does it mean to give an entire community its own language? If “a loss of language is a loss of culture,” as Mr. Awasen says, then the gain of a language is a gain in culture. So empowering the deaf can only strengthen Pakistan’s social fabric; the deaf community will be proud to take its rightful position within the constellation of diversity that is one of Pakistan’s greatest assets.

Riaz Haq said...

Pew Survey: Car, bike or motorcycle? Depends on where you live

Only 3% of Pakistani households (vs 6% in India) own a car but 43% (vs 47% of Indians) respondents own motorcycles.

If you’ve ever witnessed traffic in Ho Chi Minh City, it’s clear that motorcycles and scooters dominate transportation there. While less common than cars and bicycles, these relatively inexpensive two-wheelers are especially popular in South and Southeast Asia. More than eight-in-ten in Thailand, Vietnam, Indonesia and Malaysia own a scooter. And the next tier of motorcycle owners are all in Asia: China at 60%, India at 47% and Pakistan at 43%.

Riaz Haq said...

“#Pakistan is all set to become one of the top global markets of #motorcycles" #Yamaha President Hiroyuki Yanagi … Yamaha Motor Pakistan (Pvt) Ltd, a newly formed company with 100% equity from Yamaha Motor Company, Japan, is expected to produce 30,000 units in year 2015.

The factory has been established with an initial investment of Rs5.3 billion and its current production capacity is 40,000 units per year. It has hired 200 employees in the first phase.

In its initial phase, the company has introduced the “YBR125” model, a 125cc engine motorcycle, with a network of 140 dealerships in different parts of the country. Equipped with new technology, industry analysts say the initial price of YBR125 (Rs129,400) is competitive enough for its rival models in the market. Pak Suzuki’s GS150 is available in Rs128,500 while Atlas Honda’s CG125 and CG125 Deluxe is available in Rs102,900 and Rs124,000, respectively.

Japanese Ambassador to Pakistan Hiroshi Inomata said that the presence of the top leadership of Pakistan in the inauguration ceremony signifies the importance of the investment Yamaha has brought into Pakistan.

“We appreciate the efforts of the government of Pakistan in bringing FDI in the country. We believe this is a win-win situation for both Japan and Pakistan,” Inomata added.

Board of Investment Chairman Dr Miftah Ismail said the middle class of Pakistan was growing at a rapid pace. From the current level of 70 million, it will touch 100 million by 2025, making Pakistan one of the top six countries with the largest middle class in the world, he added.

Riaz Haq said...

Excerpt of Wall Street Journal interview with President of Yamaha Motors in Japan:

WSJ: What about in South Asia?
Mr. Yanagi: We want to expand business in Pakistan and Bangladesh as soon as possible. We had a production venture in Pakistan but we dissolved it five years ago. We are now planning to begin local production again, on our own this time.

In Bangladesh, we import motorcycles from our plant in India on a small scale, but we are studying now the best way of running operations because of rising tariff barrier there.

Riaz Haq said...

#Pakistan middle class world's 18th largest: report. #Pakistan 5.7% vs #India 3% of population. #China 1st, #US 2nd …

Pakistan’s middle class consists of over 6.27 million people, according to Credit Suisse, a global financial services company.

In its Global Wealth Report 2015 released on Oct 13, Credit Suisse said Pakistan has the 18th largest middle class worldwide.

The study revealed that 14% of world adults constituted the middle class in 2015 and held 32% of world wealth. The share of middle-class adults in Pakistan’s total adult population of 111 million was 5.7% in 2015 as opposed to India’s 3% and Australia’s 66% in 2015.

Middle-class Pakistani adults constituted 0.9% of the worldwide middle-class population. The highest concentration of middle-class population in 2015 was in China (108.7 million), followed by the United States (91.8 million) and Japan (62 million).

Defining ‘middle class’

Economists use a variety of methods, such as income and standard of living, to define what constitutes the middle class. Credit Suisse uses the measure of ‘personal wealth’ – or a ‘wealth band’ instead of an ‘income range’ – to determine the size and wealth of the middle class around the world.

Taking the United States as the benchmark country, Credit Suisse considers an adult to be part of the middle class if they have wealth between $50,000 and $500,000 valued at mid-2015 prices.

Credit Suisse came up with the minimum and maximum figures for the US middle-class wealth band based on its median earnings and the amount of capital a person close to retirement age needs to purchase an annuity paying the median wage for the remainder of their life.

For the rest of the countries, Credit Suisse uses the IMF series of Purchasing Power Parity (PPP) values to derive equivalent middle-class wealth bounds in local terms.

Being a lower per-capita country, Pakistan has lower prices and consequently a reduced middle-class threshold. To be a member of the middle class in 2015, according to Credit Suisse, a Pakistani adult must have wealth of at least $14,413.

In terms of the local currency that buys one dollar for Rs104 these days, a Pakistani adult should be considered part of the middle class if they have wealth of between Rs1.5 million and Rs15 million.

With $14,413, Pakistan has the third lowest “middle-class lower bound wealth” for 2015, followed by India ($13,662) and Ukraine ($11,258). This suggests Pakistan has lower prices in general, which enables people to join the middle class by crossing a relatively lower threshold of wealth band.

Wealth in Pakistan

According to Credit Suisse, total wealth in Pakistan amounted to $495 billion in 2015. Given that the figure stood at $170 billion in 2000, total wealth in Pakistan has increased at an annualised rate of 7.4% for the last 15 years.

Total wealth of the world increased on average by 5.2% annually over the same 15-year period, the report shows.

A little more than 90% Pakistani adults had wealth less than $10,000 in 2015. The share of Pakistani adults with wealth between $10,000 and $100,000 in 2015 was 9.8% while only 0.1% adults owned wealth in the range of $100,000 and $1 million, the report revealed.

Riaz Haq said...

#Pakistan's Proper #Urbanization, Estimated at 55% Now, Can Yield Big Economic Benefits for its Rapid Urbanization …

Urbanization provides Pakistan with the potential to transform its economy to join the ranks of richer nations, but the country, like others in South Asia, has so far struggled to make the most of that opportunity, says a new World Bank report.

Leveraging Urbanization in South Asia: Managing Spatial Transformation for Prosperity and Livability was presented at the third Pakistan Urban Forum. Difficulty in dealing with the pressures that increased urban populations put on infrastructure, basic services, land, housing and the environment has fostered what the report calls “messy and hidden” urbanization in Pakistan and throughout the region. This, in turn, has helped to constrain Pakistan’s full realization of the prosperity and livability benefits of urbanization.

“Properly managed urbanization can enhance both the prosperity and livability of cities,” says, Peter Ellis, Lead Urban Economist at the World Bank. “This is certainly the case for Pakistan, which is the most urbanized large country in South Asia and derives so much of its economic growth from cities.”

Estimates indicate that cities generate up to 78 percent of Pakistan’s gross domestic product and the government’s Vision 2025 places a premium on urban job growth. Planning ahead for urban growth can help create vibrant and productive cities that fuel the country’s growth, but that will require dealing with the problems posed by the country’s messy and hidden urbanization to date.

Messy urbanization in Pakistan is reflected in the existence of low-density sprawl and the fact that cities are growing outward beyond administrative boundaries, creating challenges for planning, transportation and the provision of public services. It also reflected in the widespread existence of poverty and slums. In Pakistan in 2010, about one in eight urban dwellers lived below the national poverty line and an estimated 46.6 percent of the urban population lived in slums.

Hidden urbanization, the report said, stems from official national statistics understating the share of the population living in areas with urban traits. Officially, 36 percent of Pakistanis lived in urban settlements in 2010 but the World Bank estimates that the actual share of the population living in areas with urban characteristics may be as high as 55 percent. Acknowledging the true extent of urban areas can help to facilitate better planning and metropolitan management.

Failure to address these problems can make cities less livable. Pakistan faced an urban housing shortage of approximately 4.4 million units in 2010. The 2015 livability index of the Economist Intelligence Unit ranked Karachi 135th out of 140 cities; Dhaka was the only major city in South Asia with a lower ranking.

Since the turn of the century, Pakistan has seen a net decline in multi-city agglomerations – defined as continuously lit belts of urbanization containing two or more cities with a population each in excess of 100,000 – as the formation of new agglomerations was outpaced by the merging of existing ones. The Lahore agglomeration, for example, expanded to absorb those of Chiniot, Gujranwala, Gujrat, Lalamusa and Sialkot. In fact, the Lahore agglomeration meets its Delhi equivalent to form one continuously lit belt with an estimated population of 73.4 million, slightly less than the population of Turkey.

Riaz Haq said...

#Pakistan’s tallest building ‘Bahria Town Icon’ inaugurated in #Karachi via @sharethis

Pakistan’s tallest building ‘Bahria Town Icon’ was inaugurated with a splendid display of fireworks here on Monday night.

Built by Bahria Town, the sky-scrapper soars 62 floors up in the sky in the Clifton area of the port city.

‘Karachi Icon’ houses residential apartments, a big shopping mall and hundreds of corporate offices.

A large number of people turned up to witness the fireworks that sparkled the sky just above the brilliantly lit tower.

Riaz Haq said...

Over last two years: #Pakistan’s food, beverage exports to #UAE increase 27% …

Pakistan’s food and beverage exports to the United Arab Emirates (UAE) have increased 27% in the last three years, making it an area worthy of attention after textiles, said the consul general of Pakistan in Dubai.

While rice remains the country’s top export commodity to the Emirates, the food segment remains a potential area as Pakistan continues its fight to increase foreign exchange revenue through exports.

“Pakistan’s food and agro-products exports touched $0.5 billion last year compared to 2012’s number of $362.4 million,” said Commercial Counsellor of Dubai Consulate Saeed Qadir, adding that Pakistan had boosted sale of its traditional agricultural products and expanded reach into areas such as processed meat and poultry products, tea, concentrated milk and cream, certain fruits and vegetables, spices, herbs and confectionaries.

Rice remains Pakistan’s leading food export to the UAE. According to TDAP figures, Pakistan’s rice sales jumped 11 fold to $207.8 million compared to the last two years. Meat and processed frozen food exports crossed the $100 million mark in the last three years.

As for fruits and vegetables, exports increased over 100% in three years. Sales of dried fruits and vegetables to the UAE rose to $9.7 million and $7.8 million, respectively. Exports of potatoes reached $5.9 million last year – an eight-fold increase compared to the 2012 figures, while fresh and frozen meat exports crossed the $50 million mark.

“Moreover, for this sector, there awaits a major export push as more than 90 Pakistani companies are taking part in the Gulfood 2016; the world’s largest annual food and hospitality trade platform, scheduled in Dubai later this month,” said the CG.

“In this exhibition, Pakistani exhibitors will be looking to source new buyers for a wide range of Pakistani food and agro sector products including fresh and frozen foods, rice, fruits and vegetables, sauces, nuts, sweets, confectionery and tea,” said Consulate General of Pakistan, Dubai Consul General Javed Jalil Khattak.

“Buyers can leverage Pakistan’s cost-competitiveness, lower transport costs and delivery time, and the quality, freshness, taste and aroma of our diverse produce”, he added.

The Pakistan pavilion at Gulfood 2016 will feature among 117 national and trade association pavilions. There will also be a first-time group participation from Russia, Costa Rica, Belarus, Mauritius and New Zealand (returning after a six-year break). In all, some 5,000 international companies from 120 countries and more than 85,000 food and beverage, wholesale, retail, distribution and hospitality professionals from five continents will take part in the event.

Data released by global macroeconomic research firm, BMI International, shows that Pakistan remains a buoyant market for consumer sales and food and beverage investment. The firm is forecasting a 9.9% per capita compound annual growth rate (CAGR) in food consumption until 2019, a 3.2% per capita CAGR growth in domestic soft drinks sales and 9.5% per capital CAGR in mass grocery retail sales.

“There are enormous business opportunities emerging in Pakistan for both food and beverage imports and exports, as evident by the recent international investment in manufacturing plants in Karachi, Multan and Islamabad,” explained the Exhibitions and Events Management Dubai World Trade Centre Senior Vice President Trixie Lohmirmand.

Riaz Haq said...

#Japan's Ajinomoto to offer #halal seasonings in #Pakistan in collaboration with Lakson Group- Nikkei Asian Review

TOKYO -- Ajinomoto will set up a company in Pakistan to sell halal-certified seasonings, aiming to tap a market of nearly 200 million people as well as gain a firmer foothold near the Middle East and its heavily Muslim population.

The Japanese company will form a joint venture with Pakistani conglomerate Lakson Group in Karachi, Pakistan's largest commercial center. The venture will be capitalized at about 1.2 billion yen ($10.7 million), with Ajinomoto owning 85% and Lakson 15%. It will import such products as fried chicken coating and meat-flavored Masako seasoning from Indonesia and market them across Asia using Lakson's sales network. The two companies are targeting about 1.3 billion yen in sales by fiscal 2022, aiming to eventually turn this into a 10 billion yen business.

Ajinomoto set up an office in Pakistan in July 2014 and has studied trends in the country's food markets and logistics industry. Although it sells its namesake monosodium glutamate flavoring through local stores, it apparently faces an uphill battle against more established Chinese rivals.

Lakson, which works in finance and information technology, also partners with foreign companies to manufacture and sell such items as tea, detergents and soap. Its products are carried by 180,000 retailers across the country. The partnership with Ajinomoto will add high-value-added seasonings such as meat flavorings for lentil soup -- an important part of home cooking -- to Lakson's portfolio.

Ajinomoto expects to report group sales of 1.26 trillion yen for fiscal 2015, with the food segment accounting for about 70%. Domestic food sales are seen totaling 404.5 billion yen and overseas sales 502.7 billion yen. The company has focused on such countries as Brazil, the Philippines and Indonesia as foreign growth drivers. It considers Indonesia key to future growth, positioning it as a base for cultivating the Muslim market.

The company will spend 360 billion rupiah ($27.3 million) to boost Masako production capacity by 30% in Indonesia, where it has had success making and selling halal products. For Pakistan, whose Muslim population is second only to Indonesia's, Ajinomoto will develop products tailored to Muslim dietary habits as well as consider local production.

Riaz Haq said...

Dailytimes | #Motorcycle production in #Pakistan reached nearly 2m per annum in 2015 via @Shareaholic

Lack of adequate transportation infrastructure, higher inflation and poor economy made the low-powered vehicles apex priority of Pakistanis as two-wheeler production increased by 10% to 19, 12,944 units in 2015.

"Lower oil prices and improved business environment has provided a much needed boost to motorcycle industry in the outgoing year as production went up significantly due to rising demand," said Association of Pakistan Motorcycle Assemblers (APMA) Chairman Mohammad Sabir Shaikh.

He said that the government has to end the cartelisation of Japanese car and motorcycle assemblers in order to flourish the local industry otherwise the industry would remain on sluggish trajectory in coming decades as well.

He urged the government to abolish imports regime and duty structure for various motorcycles parts, as the duty on imported parts should be the same at 25 % custom duty instead of existing five different structures.

Shaikh said the industry has enough capability to cater to the rising demand of two-wheelers by producing more than 4 million motorcycles per year. However, he added that the government's apathetic attitude towards this dynamic sector has put the industry on a slow track, which has restricted production to only 2 million per annum.

"About half of the parts of motorcycles are being made in Pakistan and half of them are imported from different countries while the local industry is capable to make full production if the government patronises the sector," Sheikh said, adding that the domestic motorcycle industry now completely dominates the local market and not even a single motorcycle has been imported since 2007-08.

Detailed assessment of Pakistan Bureau of Statistics (PBS) latest data reveals that the motorcycle production including locally made Japanese brand and Chinese made imported motorcycles' brand stood at 1,912,944 units in the 2015, registering 10% growth over the same period of last year to 1,743,039 units. In December 2015, total 156,415 motorcycles were produced in the country, registering 17% growth over the production of 134,230 motorcycles in December 2014.

Recently, Atlas Honda Limited has announced an investment of $100 million in the expansion of its motorcycle operations in Pakistan. The first motorcycle produced from the new line will arrive in the market by the beginning of October 2016. The expansion will lead to the generation of 1,800 direct jobs and 5,000 jobs at associated companies and parts manufacturers.

Shaikh told Daily Times that around 4 million of motorcycles are sold illegally in Pakistan due to which the national kitty is being deprived of huge revenue in terms of taxation. "Due to this lack of concern by law enforcement agencies, the national kitty is continuously missing huge revenue in terms of taxes and duties as many local motorcycles assemblers do not show sale of unregistered motorcycles in tax documents," he added.

The motorcycle production in the country is being run by about 100 motorcycle assemblers, including one dozen cottage manufactures, which produce less than 1,000 units.