Friday, January 1, 2016

Pakistan Year 2015 in Review

A Happy, Peaceful and Prosperous New Year to all my readers.

The year 2015 turned out to be a good year for Pakistan with the return of general optimism among businessmen, investors and consumers. Economic recovery continued as Pakistan Army's efforts, including its Operation Zarb e Arb and Karachi Operation by Rangers, started to bear fruit with significant decline in terrorism. There were new signs of a thaw in India-Pakistan ties with Indian Prime Minister Modi's surprise year-end visit to Lahore. Efforts to bring peace in Afghanistan took a new positive turn with the hopeful entry of the Taliban into a quadrilateral process involving Afghanistan, Pakistan, China and the United States. Threat of ISIS (Daish) presence rose in South Asia with reports of stepped up ISIS recruitment in Afghanistan and Pakistan.


1. Pakistan economy neared the historic one trillion dollar mark in PPP terms in 2015.  The nation's PPP GDP increased from $884 billion to $930 billion, an increase of $46 billion. Pakistan per capita PPP GDP is $4,902 for 2015, up from $4,749 in 2014, according to the IMF. Nominal GDP based on current exchange rates is reported at $270 billion in 2015, up from $246 billion in 2014, an increase of $24 Billion.  Pakistan's per capita nominal GDP for 2015 is $1,427.085, up from $1,325.790 in 2014.

2. Pakistan's actual GDP is higher than what the official figures show, according to the State Bank of Pakistan. The SBP annual report for 2014 released in 2015 said: "In terms of LSM growth, a number of sectors that are showing strong performance; (for example, fast moving consumer goods (FMCG) sector; plastic products; buses and trucks; and even textiles), are either under reported, or not even covered. The omission of such important sectors from official data coverage, probably explains the apparent disconnect between overall economic activity in the country and the hard numbers in LSM."

3. Terrorism declined to the lowest level since 2006 as civilian deaths in terrorist incident nearly halved from 1781 in 2014 to 911 in 2015, according to South Asia Terrorism Portal.

Source: South Asia Terrorism Portal

4. China announced plans of massive $46 billion investment in the country as part of the China-Pakistan Economic Corridor (CPEC).  Once completed, the this corridor with a sound industrial base and competitive infrastructure combined with low labor costs is expected to draw growing FDI from manufacturers in many other countries looking for a low-cost location to build products for exports to rich OECD nations.

Pakistan FDI Estimates Source: FT fDI Markets

CPEC Projects Map

5. Hopes for resolving Pakistan's energy crisis rose as liquified natural gas (LNG) prices hit historic new lows and hydrocarbon prices continued to plummet. An LNG terminal started operations at Port Qasim in Karachi and started receiving LNG cargoes.

6. Over 20  million users signed up for 3G and 4G mobile broadband services after initial rollout in late 2014. Double digit growth was recorded in cement consumption and automobile sales, all pointing to accelerating economic growth.

7. Enrollment in grades 13 through 16 exceeded 3 million mark in Pakistan's 1,086 degree colleges and 161 universities. The 3 million enrollment is 15% of the 20 million Pakistanis in the eligible age group of 18-24 years.  In addition, there are over 255,000 Pakistanis enrolled in vocational training schools, according to Technical Education and Vocational Training Authority (TEVTA).

8. Prime Minister Nawaz Sharif launched a national health insurance plan in the closing days of 2015, further expanding a basic social safety net that started with Benazir Income Support program for the poor during the PPP years in power.


1. Out-of-school children declined by just 1% as Pakistan continued to lag behind neighbors, particularly Bangladesh, India and Sri Lanka, on human development indices.

Source: UNDP

2. The latest human development report for 2015 from UNDP shows human development progress over several decades and confirms it's been the slowest in this decade. Pakistan's HDI grew 13% in 1980s, 11.2% in 1990s, 17.6% in 2000s, and just 3% since 2010. It grew the fastest when President Musharraf was in office from 2000 to 2008.

3. Several reports and arrests of ISIS sympathizes and fundraisers indicated rising threat in South Asia from the Iraq-Syria based terror group.

4. Many politicians, particularly in Sindh province, continued to hinder the Pakistan Army Rangers' efforts to bring peace to Karachi.

5. The implementation of National Action Plan to fight terror has received little more than lip service from the civilian leadership in the country, raising fears of the return of terrorism in the future.


Decline of terrorism has enabled Pakistan's economy to begin to recover in 2015. It needs to be sustained for the long term. A basic requirement for sustainable development is investment in and focus on human resources of the country. Education and health care must receive top priority to build a peaceful and prosperous Pakistan.

Related Links:

Haq's Musings

Pakistan's Trillion Dollar Economy

China-Pakistan Industrial Corridor (CPEC)

How Can Pakistan Benefit From Low LNG Prices?

Who's Better For Human Development? Politicians or Musharraf?

Pakistan's Economic Recovery in 2015

SBP: Pakistan's GDP is Underestimated


Riaz Haq said...

#China #Pakistan Economic Corridor: 27 sites identified for Special Economic Zones (SEZs)| Business Recorder. #CPEC …
The federal government has identified as many as 27 sites in provinces, Islamabad Capital Territory (ICT) and Gilgit-Baltistan for setting up of Special Economic Zones (SEZs) under the China Pakistan Economic Corridor (CPEC), it is learnt. Sources in the Finance Division and the Planning Commission told Business Recorder that provincial governments have also been requested to allocate land for sites of SEZs.

The federal government has identified seven sites in Balochistan for the establishment of SEZs. The sites identified in Balochistan for industrial estates are as follows: (i) Gwadar with 3,000 acres for mines, minerals, food processing, agriculture and livestock, (ii) industrial estate at Lasbela (1,290 acres, iron steel, hardware, paper industry, pharmaceuticals), (iii) industrial and trading estate at Turbat (1,000 acres, manufacturing), (iv) Dera Murad Jamali with 50 acres, (v) Winder Industrial and Trading Estate, (vi) mini industrial estate Khuzdar (50 acres) and (vii) Bolan Industrial Estate (1,000 acres). The government has identified three sites in Sindh to set up Special Economic Zones, which include Chinese industrial zone near Karachi (2,000 acres, Exclusive Chinese Industrial Estate), Textile City at Port Qasim, Karachi with (1,250 acres) and Marble City at Karachi with (300 acres).

As per official documents, eight sites in Khyber Pakhtunkhawa province have also been identified for special economic zones. They include, marble and granite based industrial estate at Mansehra (80 acres, mining), industrial estate Nowshera (1000 acres, manufacturing), expansion of Industrial Estate Hatter (424 acres, manufacturing), industrial estate at Chitral (80 acres, food processing) as well as Industrial Estate Ghazi (90 acres, manufacturing) and industrial estate Dera Ismail Khan (188 acres, manufacturing).

Industrial estate at border of Kohat and Karak and industrial and economic zone at Bannu (400 acre) in KP have also been identified as sites for SEZ under CPEC. The government has identified seven sites for special industrial zones in Punjab. These included Multan Industrial Estate phase-II (80 acres), Rahim Yar Khan Industrial Estate (450 acres), Bhalwal Industrial Estate (400 acres), DG Khan Industrial Estate (3815 acres), Mianwali Industrial Estate (600 acres), Rawalpindi Industrial Estate (200 acres) and Pind Dadan Khan Industrial City (10000 acres) for agri, textile, food processing, livestock, manufacturing & energy).

Additionally, the existing under-development sites would also be included in SEZs for the CPEC. One site for special economic zones in Gilgit-Baltistan Moqpondass (2,000 kanal, mining & food processing) and one for Islamabad Capital Territory has also been identified under the CPEC.

Riaz Haq said...

It (2015) has been far from a stellar year for the KSE-100 index as it managed to post a 685-point (2.1%) gain in 2015 (this compares favorably with India's BSE losing 5% in 2015) . The index had posted gains of 42% and 22% in 2013 and 2014, respectively. The KSE-100 was well on track to achieve further heights, rising above 36,000 points in August 2015, but remained in a constant state of flux from thereon primarily due to volatile crude oil prices.

However, it was a positive end to the year as the market opened positively following the long weekend as the government announced that it would defer the long-awaited gas price hike till June 2016. The KSE-100 rose 311 points in the opening two days before ending the week strongly with a 412-point gain on Friday to mark the start of the New Year in style.

The primary driver of growth came in the form of government decisions and macroeconomic data. During the week, the government deferred the gas price hike, reduced the industrial electricity tariff by Rs3 per unit and reduced the price of industrial diesel, all of which was welcomed by the business community.

On the macroeconomic front, inflation figures for the month of December 2015 were recorded at 3.19%, which was below market consensus. The State Bank also revealed that the country’s foreign exchange reserves had crossed $21 billion during the week, providing further positivity at the bourse.

With crude oil prices remaining stable during the international holiday season, the Oil and Gas sector sprang to life after the government announced a 50% increase in the price of gas from the Sui gas field, which is operated by Pakistan Petroleum Limited. As a result, a minor rally was witnessed in the sector.

The cement sector, which had a sluggish couple of months, also performed strongly during the week as strong dispatch figures coupled with steady progress on the China-Pakistan Economic Corridor created interest in the sector. The sector was the primary reason behind the strong performance of the index on Friday.

Average daily volumes rose 24.5% and stood at 113.7 million shares traded per day while average daily values remained flat and were recorded at Rs6.6 billion per day. The Karachi Stock Exchange’s market capitalisation stood at Rs7.03 trillion ($66.2 billion) at the end of the week.

Indian shares ended 5% lower in 2015, the first decline in four years, as poor corporate earnings, a slowdown in foreign investments and faltering progress in policy changes hurt sentiment, despite improving macroeconomic conditions.

The S&P BSE Sensex closed at 26,117.54 Thursday, up 0.6% from Wednesday. The index hit an all-time high of 30,024.74 on March 4. It jumped 30% in 2014.

The National Stock Exchange’s Nifty 50 index rose 0.6% Thursday to 7,946.35.

“The year 2015 turned out to be a complicated year for investors,” said Krishna Kumar Karwa, managing director of Emkay Global Financial Services Ltd.

Investors poured billions of dollars into Indian stocks at the start of the year on hopes that Prime Minister Narendra Modi would overhaul the economy. India’s central bank in January also surprised the market by cutting its key lending rate for the first time in nearly two years. But the momentum started to fade after domestic politics forced the Modi government to scrap legislation that would have made it easier for the state to acquire land for infrastructure and industry.


In the currency market, the rupee declined about 4.8% this year against the U.S. dollar as the interest rate increase by Federal Reserve and the depreciation in the Chinese yuan hit emerging market currencies. The rupee was last trading at 66.19 against the dollar.

Riaz Haq said...

Dec 31 Emerging currencies mostly retreated against the dollar on Thursday, led by a 1 percent fall in the Russian rouble on the last trading day of 2015, a year that is closing with double-digit losses for many emerging assets.

MSCI's emerging equity index inched 0.2 percent higher thanks to gains on some Asian bourses but it is down 17 percent in 2015, its fifth straight year of underperformance versus developed indexes as developing countries bore the brunt of a growth slowdown, a commodity price slump and the rising dollar.

Across most asset classes, emerging markets fared worse than their developed counterparts:

"Over the past year, outright long USD would have been the best exposure from a top-down perspective," RBC told clients. "EM currencies and U.S. (junk bonds) were the main side-effects of a strong dollar and lower commodities ... We will also be watching contagion from high yield spread widening into high grade and EM dollar sovereign as well as EM corporate bonds."

Chinese mainland stocks were among the few to buck the trend, overcoming a mid-year collapse to end 2015 almost 10 percent higher, beating Wall Street . The yuan weakened on Thursday and wound up the year with a record yearly loss of 4.7 percent to the dollar.

India, an investor favourite, nevertheless posted its first yearly equity decline (of 5% in rupee terms) since 2011 .

Oil prices hovering around $36 a barrel continued to inflict pain on energy exporters, notably the Gulf states and Russia.

The rouble tumbled one percent to a new one-year low, standing only 7 percent off last December's record low while the recent losses pushed Moscow stocks, one of this year's stronger performers, into the red in dollar terms.

In the Gulf, Saudi Arabia has unveiled big spending cuts and tax increases in response to oil's tumble, a move that may give investors more confidence in the kingdom's ability to ride out the tough times. The Saudi bourse was flat on Thursday, bucking the lossmaking trend in Dubai and Qatar .

But Riyadh has lost 17 percent this year, failing to live up to expectations generated by a partial opening to foreigners.

Energy importers are benefiting, with Turkey's trade deficit narrowing 49 percent year-on-year in November and South Africa's trade balance swinging into surplus. But the lira eased 0.3 percent for an annual loss of 20 percent.

The South African rand retreated 0.3 percent to two-week lows versus the dollar while benchmark bond yields rose around 10 bps

On sovereign dollar bonds, the EMBI Global index showed average yield spreads widening one basis point to 443 bps over Treasuries, standing around 40 bps wider than end-2014 for a 1 percent return.

Ukraine has been the top performing bond market this year, thanks to a generous debt restructuring. Other unexpected winners were Russia, Argentina and Venezuela while Brazil was bottom with 13 percent losses (

Ukraine's bonds will be in focus in early-2016 following the expiry on Wednesday of a 10-day grace period on a $3 billion debt owed to Russia. Ukraine has called a moratorium on the bond while Russia has threatened to sue in British courts.

Central Europe is ending the year on a mixed note; its currencies have performed better than emerging peers, while the Budapest equity index has returned over 30 percent in dollar terms .

Anonymous said...

As a overseas Pakistani based in the gulf I have been worried with things playing out in the middle east lately between Iran and Saudi. Pakistan might be forced to take sides with Saudi and it might ignite sectarian violence in major cities throughout Pakistan especially Karachi. Do we have a choice to stay neutral and lose diplomatic and economic support we might receive from the Saudis?

Riaz Haq said...

Anon: "Do we have a choice to stay neutral and lose diplomatic and economic support we might receive from the Saudis? "

Unfortunately, the Iran-Saudi proxy war will continue in Pakistan and elsewhere in the region. Pakistan govt needs to do the best it can to minimize its impact on Pakistanis.

Khurshid said...

1. Pakistan economy neared the historic one trillion dollar mark in PPP terms in 2015. The nation's PPP GDP increased from $884 billion to $930 billion, an increase of $46 billion. Pakistan per capita PPP GDP is $4,902 for 2015, @Riaz

In the early 80's, Pakistan economy was 20% or 1/5th of India. Today we are 12.5% or 1/8th. Why has this happened?

Riaz Haq said...

Khurshid: "In the early 80's, Pakistan economy was 20% or 1/5th of India. Today we are 12.5% or 1/8th. Why has this happened?"

Pakistan had the lost decade of 1990s and the slowdown since 2008, a period in which India's economic growth accelerated.

Read more at:

Riaz Haq said...

#Pakistan working on leads from #India to investigate #PathankotAttack via @WSJ

Pakistan’s Foreign Ministry said the government was working on leads provided by India relating to an assault by militants on an Indian air force base near the countries’ shared border, and that it hoped planned reconciliation talks with New Delhi could move forward.

“Living in the same region and with a common history, the two countries should remain committed to a sustained dialogue process,” the ministry said Monday, adding that it “categorically condemned” the attack.

Four heavily armed attackers were killed on Saturday in a gunbattle that began before dawn, at an airfield in the town of Pathankot, which is near India’s border with Pakistan, authorities said. At least one other militant, who took cover in a two-story building where Indian personnel lived, was killed afterward as security personnel combed the large base, home to MiG-21 jet fighters and Mi-35 helicopter gunships. No one has claimed responsibility for the assault, which killed seven Indian security personnel.

Maj. Gen. Dushyant Singh of the National Security Guard, an Indian commando unit, said operations were continuing for a third day to find any others involved.


A recent thaw in relations received a boost when Prime Minister Narendra Modi traveled to Pakistan to meet with his counterpart, Nawaz Sharif, in a surprise Dec. 25 visit, becoming the first Indian prime minister to do so in more than a decade.

Indian officials have long said attacks in their country by militant groups based in Pakistan are aimed at derailing efforts for peace between the two nations.

Mr. Modi’s efforts to improve ties with Pakistan have come under pressure since the attack.

“The government should come clean about the involvement of Pakistan in the attack,” Ajay Maken, a leader of the opposition Congress party, said Monday. “Whether Pakistan is involved directly or indirectly or whatever, the government should make it clear.”

Meanwhile, on Monday, Afghan President Ashraf Ghani called Mr. Modi to brief the Indian prime minister on an attack on the Indian consulate in the Afghan city of Mazar-e-Sharif, which was being battled by that country’s security forces.

Mahendra said...

kHURSHID :(In the early 80's, Pakistan economy was 20% or 1/5th of India. Today we are 12.5% or 1/8th. Why has this happened?)

Pakistan was blessed with the so called Bangladesh dividend. After the break off of the then very poor section in 1971 the statistics of West Pakistan or Pakistan now, in 1985, Pakistan ($1230) in per capita terms was richest in South Asia - 40% higher than India ($839) and nearly double than Bangladesh ($664)

Today Pakistan ($5160) has not only lost the edge but has fallen substantially behind India ($6630) and Bangladesh ($3500) is closing the gap. The data is from The Economist EIU.

Khurshid said...

Mr Riazbhai, have you researched why HDI rank has not kept up for the country compared to others. A trillion dollar economy is a good number but not reflected by HDI rank.

Riaz Haq said...

Khurshid: "have you researched why HDI rank has not kept up for the country compared to others. A trillion dollar economy is a good number but not reflected by HDI rank. "

You need to read and understand the post before asking questions.

Read the following in particular and follow the link:

The latest human development report for 2015 from UNDP shows human development progress over several decades and confirms it's been the slowest in this decade. Pakistan's HDI grew 13% in 1980s, 11.2% in 1990s, 17.6% in 2000s, and just 3% since 2010. It grew the fastest when President Musharraf was in office from 2000 to 2008.

Acceleration of HDI growth during Musharraf years was not an accident. Not only did Musharraf's policies accelerate economic growth, helped create 13 million new jobs, cut poverty in half and halved the country's total debt burden in the period from 2000 to 2007, his government also ensured significant investment and focus on education and health care. The annual budget for higher education increased from only Rs 500 million in 2000 to Rs 28 billion in 2008, to lay the foundations of the development of a strong knowledge economy, according to former education minister Dr. Ata ur Rehman. Student enrollment in universities increased from 270,000 to 900,000 and the number of universities and degree awarding institutions increased from 57 in 2000 to 137 by 2008. In 2011, a Pakistani government commission on education found that public funding for education has been cut from 2.5% of GDP in 2007 to just 1.5% - less than the annual subsidy given to the various PSUs including Pakistan Steel and PIA, both of which continue to sustain huge losses due to patronage-based hiring.

Also read the summary:

Decline of terrorism has enabled Pakistan's economy to begin to recover in 2015. It needs to be sustained for the long term. A basic requirement for sustainable development is investment in and focus on human resources of the country. Education and health care must receive top priority to build a peaceful and prosperous Pakistan.

Majumdar said...

Prof sb,

Please stop spinning facts for Mushy. The period 2000-07 was very good for growth globally and Mushy benefited out of that. Since 2008, growth has slowed down and Pakiland has suffered, like everyone else. On the contrary, Mushy left behind two disastrous legacies for the civvies who followed. First, it was under his watch that jihadis had a free run of the place. Second, his administration completely neglected the energy sector which is now slowing down growth.


Riaz Haq said...

Majumdar: "The period 2000-07 was very good for growth globally and Mushy benefited out of that."

So, according to your logic, Mush gets no credit for the good things like economic and human development growth that happened on his watch but he does get the blame for the bad things, like the 911 and the subsequent US invasion of Afghanistan and its aftermath, that occurred in that period? What kind of irrational logic is that?

Riaz Haq said...

Big International Asset Managers Leaving #India - #Goldman #Fidelity #MorganStanley via @FT

International asset managers in India are disappearing at an alarming rate.
Goldman Sachs Asset Management, the $1.19tn fund arm of the US bank, became the fourth global investment manager to quit the country last year. It announced plans in October to sell its mutual fund business to Reliance Capital, India’s third-largest asset manager.

Just weeks earlier Belgium’s KBC Asset Management said it would terminate its push into India with the sale of its stake in Union KBC Asset Management to Union Bank of India.
Fidelity Worldwide Investments, PineBridge Investments and the asset management arms of Morgan Stanley and Deutsche Bank have all sold their mutual fund businesses in the country over the past three years.
The fund houses are reluctant to discuss the reasons behind their exit, but analysts say India has not been the cash cow many asset managers expected.
Sze Yoon Ng, an Asia-based director at Cerulli Associates, the research company, says: “Most [foreign asset managers] are not making money.”
Intense competition, regulatory uncertainty and problems getting fund ranges in front of end investors has meant is not unusual for a foreign asset manager in India to make a loss even after 10 years in the country. “It is hard to stay optimistic when your three-year break-even plan stretches to 10 years and counting,” says Ms Ng.
Fund companies were initially tempted by India’s growth story — its emerging middle class and strong economic expansion. Banking on a population of ready-to-invest consumers, asset managers kept coming to the country, say experts.
“Foreign asset managers saw potential in India: it is a huge country, with great demographics,” says Daniel Celeghin, a partner at Casey Quirk, the consultancy. He has worked with asset managers hat have operations in India. “But you have to be willing to put a lot of time and effort in.”
Franklin Templeton Investments is one of the few global asset managers to have cracked the Indian market. It set up shop 20 years ago and is now the only fully foreign-owned asset manager among India’s top 10 fund houses.
Harshendu Bindal, president of Franklin’s operations in India, says many foreign asset managers came to the market too late and failed to understand the nuances of the country’s “hyper competitive” mutual fund industry.
The market is dominated by just a handful of asset managers. The 10 largest fund houses account for more than 77 per cent of the $200bn of assets under management in India. Lakshmi Iyer, head of investments and product development at Kotak Mahindra Asset Management, the ninth-largest investment manager in India, says the concentration of assets among the top providers “increases the time taken to break even” for entrants.

Rather than go it alone, several international asset managers have tried to gain a foothold in India by partnering with local banks and other financial institutions to create mutual fund businesses.
India’s biggest asset manager, HDFC Asset Management, is a joint venture between Standard Life Investments, the UK fund house, and HDFC, a bank. Prudential, the UK-listed insurer, and local provider ICICI Bank operate ICICI Prudential Asset Management, India’s second-largest asset manager. BlackRock and Amundi Asset Management also have joint ventures in the country.

Riaz Haq said...

Big International Asset Managers Leaving #India - #Goldman #Fidelity #MorganStanley via @FT

But international fund houses frequently find joint ventures difficult to navigate. “You have to realise you will be junior partner to a local firm,” says Mr Celeghin, adding that this is something global asset managers are uncomfortable with.
Foreign asset managers face several other challenges, including being unable to sell international products, such as mutual funds regulated in Europe. Instead, they need to set up local funds. These are typically focused on Indian stocks and shares, partly because of restrictions on what can be sold to retail investors. “If you want to do business in India, you need to have an investment team in the country to create and run a fund, and that is costly,” says Mr Celeghin.

Distribution can also be an obstacle. Banks tend to favour the products of their own asset management arms, according to Cerulli. Meanwhile, the regulatory landscape for financial advisers, which control around 30 per cent of the mutual fund market, has been in flux.
In 2009, the Indian regulator introduced rules for mandatory disclosure of rebates — money paid from asset managers to financial advisers to entice them to sell their products. This was later overturned. The Securities and Exchange Board of India has also mooted phasing out commissions entirely, but this looks unlikely at the moment.
“The business environment is one where the rules are changing frequently. It is hard to get clear guidance on what twist or turn can be expected in the future,” says Mr Celeghin.
Ajit Dayal, chairman of Quantum Asset Management Company, which sells funds directly to investors, says: “While [the regulator] is trying to force the industry to adopt a more transparent practice, the distribution industry is dominated by large banks and brokerages and it is not in their interest to necessarily have a more competitive market.”
As a result, foreign asset managers have struggled to mop up assets. Goldman Sachs’s Indian fund business had just $1.1bn in assets under management when it announced plans to sell its mutual fund business.
But Franklin’s Mr Bindal says fund houses that depart are missing a big opportunity. Despite the challenges in the country, India’s fund industry is growing rapidly. Since March 2012, the market for Indian mutual funds has almost doubled in size, according to data from the Association of Mutual Funds in India, the local trade association.
He believes investment companies just need to work harder. “India is truly an attractive market for asset managers,” he says.

While one international asset manager after another has fallen away in India, Franklin Templeton Investments appears to have found the recipe for success.
It was one of the first international fund companies to enter the country, setting up after the government announced plans to allow non-banks to manufacture mutual funds in the early 1990s.
Harshendu Bindal, president of Franklin Templeton in India, says its early foray played an important role in helping it become the country’s seventh-largest asset manager.
“We are one of the oldest fund houses in the country, with a 20-year record, which gave us a long head start [on other foreign asset managers],” he says.
The fund house, which manages $10bn in assets in India, set up a range of local funds, introduced trail-based commissions to incentivise distributors to sell its products and launched various savings products, such as its Family Solutions range, in order to win business.
Patience is vital to success in India, says Mr Bindal. “A fund house may need anywhere between five and seven years, or at times even a decade, before it turns profitable.”

Majumdar said...

Prof sb,

What kind of irrational logic is that?

Same as yours, sir. You are giving credit to Mushy for his good deeds without pointing out his bad deeds.


Majumdar said...

The real good job is being by MNS now, he is the vikas purush of Pakiland. Pakiland's growth is reviving in a difficult environment, attention is being paid to the power sector and CPEC will add to the infrastructure of Pakiland.


Riaz Haq said...

Majumdar: "The real good job is being by MNS now, he is the vikas purush of Pakiland. '

You are now praising the Modi version of "vikas" about which famed French economist Thomas Piketty said it is self-serving and only increases the gap between the rich and the poor. In his opinion, governments should find the means to invest more in social welfare, like primary education and health care.

Musharraf understood this when he poured money in education and health care that accelerated Pakistan's human development to the fastest rate in Pakistan's history.

In addition, Musharraf spent more on PSDP (public sector development plans) than any government before or after him. There was a real construction boom on his watch. One measure of it is that Pakistan's cement consumption more than doubled from 10 million tons in 2000 to 24 million tons in 2008.

Gwadar port was first conceived in late 1950s when Pakistan purchased the region from Oman. CPEC has been talked about since early 1990s. But nothing was done to develop until Musharraf allocated time, money and focus to build Gwadar port, Coastal Highway and Mirani Dam in Balochistan on his watch.

Riaz Haq said...

Is #PathankotAttack inspired by #Khalistan #Sikh movement in #India? … #punjab via @oneindia

The bigger problems that need to be addressed: First and foremost, India cannot continue to take the Punjab issue lightly anymore. Terrorists have hit Punjab twice in six months and this clearly signals the urge by Pakistan to set up shop in the state once again. There has been talks of the revival of the Khalistan movement. In the investigations being conducted into the Pathankot attack one of the angles of focus is whether Khalistan militant groups provided support to the Jaish-e-Mohammad. While Pakistan based militant groups have their eyes set on Kashmir, they will continue to look for other states to attack in a bid to embarrass the Indian establishment. The fact that Punjab has been hit twice in six months calls for tighter vigil along the border. Following the attack, the Home Ministry was quick to understand this and called for a report from the Border Security Force on how the infiltration took place. The BSF in its report stated that there was no breach in the fence, but some of the equipment along the International Border were not functioning. This led to a breakdown of some of the electronic surveillance as a result of which the terrorists could have infiltrated. Fence every pocket: The vigil and the protection at Punjab must be as good as Jammu and Kashmir. The fact that the terrorists managed to enter despite additional security personnel of 1,000 being deployed along the Punjab border after the Gurdaspur attack points towards a technical glitch. The BSF in its report to the Home Ministry has said that there are several pockets which are unfenced. Moreover there is growth of elephant grass in these areas which can provide cover for a group of people attempting to infiltrate. Moreover, on the day that the terrorists infiltrated some of the hand held thermal imagers and the Battle Field Surveillance Radars, placed at the places where fencing is not erected, did not pick up any signal due to a technical glitch. During the high level meetings that were held following the Pathankot attack, the relevance of border security especially at Punjab came up for discussion. It was decided that security along the Punjab border needs to be reviewed and a system as strong as the one we get to see in Jammu and Kashmir will be set up in due course of time.

Read more at:

Sugandha said...

Pakistan's main and top most priority is India. Therefore, the Military takes the next spot in terms of priorities. Third priority is to propagate the ideology of Pakistan.

Fourth is the economy. Perhaps.

Majumdar said...

Prof sb,

You are now praising the Modi version of "vikas" about which famed French economist Thomas Piketty said it is self-serving and only increases the gap between the rich and the poor.

Francophone economists shud all be packed off to Pakiland- one such "economist" Jean Dreze (a Belgian) f***ed up India's economy in 2004-14 and reduced the mighty INC to 44 seats in Parliament. Sure you can focus on education and healthcare- what will they do when they grow up. Kerala which follows the Picketty model is a good example. Problem of course, is that the Gulf can provide employment to only so many people. Not a billion and a half desis. We need more Modis and Nawazoos. The economy they will create will provide the money for education and healthcare.


Riaz Haq said...

It's time #India stops blaming #Pakistan for every terror attack on its soil. #PathankotAttack via @qzindia

Since 2009, 31 (Pakistani) military installations, including airbases and intelligence headquarters, have been attacked by the militants affiliated with the Al Qaeda, the Pakistani Taliban, and its affiliate and the sectarian killer group, Lashkar-e-Jhangvi (LeJ). The attacks on Pakistan’s naval and air bases have led to the destruction of expensive equipment and loss of military personnel. If terrorism is sponsored singularly by Pakistan’s intelligence networks, then it would be irrational to believe that the military attacks its own installations.


The reality is that the militias since the Afghan jihad have fragmented, made further worse by the Al Qaeda’s operations for more than a decade. Pakistan is fighting this menace—mostly a result of continued regional conflict and its past security policies—and trying to eliminate these networks. Official statements from Pakistani prime minister Nawaz Sharif and the military leadership, led by Army chief General Raheel Sharif, have indicated that the erstwhile distinction between good and bad Taliban no longer stands. Skepticism has been aired about these pronouncements since much more needs to be done to undo the militant infrastructure. But Pakistan is moving in that direction. In recent months, the state has eliminated the LeJ leadership, and several groups that comprise the Pakistani Taliban.
On top of that, Sharif would not have fixed an informal meeting with Modi without taking the military into confidence. He has avoided direct confrontation with the military in his third tenure. Reuters, citing security sources, had reported in December that the military paved the way for reviving stalled India-Pakistan dialogue process. The appointment of a retired general as national security advisor (NSA) provides the military a direct stake in the dialogue with India.
The rogue elements within the security apparatus that aided terror groups in the past have not gone unnoticed. Attacks on Pakistan’s military, and even the former president Musharraf, have happened with collusion at lower levels. But it is too early to conclude in that direction. Also, things have changed since 2008 Mumbai attacks. The incentive to escalate conflict with India is perhaps at its lowest—not because there has been a fundamental shift in the way Pakistani state works or imagines its nationalism. The regional dynamics necessitate this change. Pakistan of 2015 is aspiring for economic integration with China’s “One Belt, One Road” programme; and aiming to become a transit hub of energy trade.

Riaz Haq said...

BBC News - #India's response to #Pathankotattack was 'a debacle' …

It took Indian authorities four days to put down a deadly attack on the Pathankot air force base near the Pakistani border which killed seven Indian soldiers and wounded another 22. The inept handling of the security operation can only be described as a debacle, writes defence analyst Rahul Bedi.
According to official accounts, the National Security Adviser Ajit Doval had advance intelligence of the planned attack on 1 January.
But military analysts said India's response to the attack was amateurish - there were inadequate offensive measures and the multiplicity of forces involved and a lack of suitable equipment rendered the entire operation a near fiasco.
When the attack began, Mr Doval chose to airlift some 150 National Security Guard (NSG) personnel from their base at Manesar, on Delhi's outskirts, to fight in an unfamiliar terrain.

The operational command for the mission was handed over to the NSG, the Defence Service Corps (DSC) and the air force's Garud Special Forces.
The DSC comprises retired and unmotivated military personnel, whilst the Garuds continue to struggle for operational relevance amongst the plethora of India's burgeoning Special Forces.
In what appeared to be an obvious desire to control the operation, Mr Doval ignored the presence of some 50,000 army troops in the Pathankot region, possibly the highest such concentration in the country.

Reports said he requested the army chief for just two columns - 50-60 troops - to provide back-up support to the operation.
The army, say security officials, is experienced in battling Kashmiri insurgents.
The NSG, for its part, was unacquainted with the terrain and took avoidable losses that included Lieutenant-Colonel Niranjan Kumar being killed in a grenade explosion from a booby trapped militant's body.`

Four other NSG personnel were injured in this blast that - in all probability - would not have fooled the army, familiar with such militant ploys of activating a grenade and lying on it as a last offensive act.
The NSG is also strapped for equipment - it has no competent night vision devices and other materiel necessary for an operation of the kind in Pathankot - military sources said.
Throughout the four days the operation lasted, the army was accorded a marginal role - although some 200 soldiers were eventually deployed when fighting stretched beyond 48 hours and after senior ministers - including Prime Minister Narendra Modi, Home Minister Rajnath Singh and Defence Minister Manohar Parrikar - had announced that the operation had been completed successfully.
The congratulatory messages followed the gunning down of four terrorists, but thereafter firing began afresh, and confusion prevailed over how many gunmen were hiding in the tall grass surrounding the air base, spread over some 1,200 hectares.

Riaz Haq said...

Majumdar: "Francophone economists shud all be packed off to Pakiland- one such "economist" Jean Dreze (a Belgian) f***ed up India's economy in 2004-14 and reduced the mighty INC to 44 seats in Parliament. Sure you can focus on education and healthcare- what will they do when they grow up. Kerala which follows the Picketty model is a good example. Problem of course, is that the Gulf can provide employment to only so many people. Not a billion and a half desis. We need more Modis and Nawazoos. The economy they will create will provide the money for education and healthcare."

Both Angus Deaton and Amartya Sen (Nobel Laureates, not Francophones) agree with Pketty.

Don't blame Inda's failures on Francophones and Keralites. India lacks the ability to hold on to its best and brightest. Silicon Valley is filled with such Indians.

Riaz Haq said...

#Pakistan economy looking good. Its shares market deserves an upgrade from frontier to emerging market status. #MSCI …

The country (Pakistan) is brimming with untapped potential and a population filled with unfilled dreams. The people are very similar to Indians, and I can say with some certainty that they wish to be an integral part of the capitalist system. They should be given that opportunity, and under the premiership of Nawaz Sharif, I believe they will.

The Pakistan capital markets, and in particular the Karachi Stock Market and its benchmark index KSE100, have over the past few years performed well, returning over 150% cumulatively in local currency since January 7, 2012. China has recently shown great interest in Pakistan and has pledged to assist them in building an economic corridor with a $46 billion network of transportation links as part of China’s “one belt, one road” initiative.

When completed, no doubt, this will add substantially to Pakistan’s GDP growth of 4.2%. Recently, Mr. Sharif spoke at a forum in Sri Lanka where he said, “Democracy creates far better opportunities for both economic growth and cultural progress than the authoritarian regimes. My government has placed strong emphasis on bold economic reforms to achieve significant improvement in all sectors of the economy." But he did not elaborate on what the reforms would be.

As far as investment opportunities, it is of interest to me that Global X recently launched a Pakistan focused ETF (
), which since its launch in May 2015 has a return of negative 15%. I expected that, in the light of what most Asian stocks have returned in 2015. However again, I am not going to invest in the ETF, but would rather gain exposure by investing in some GDRs being traded on the London Stock Exchange. With all the infrastructure projects being talked about and the tangential business derived from that, for a retail investor, I believe the financial sector would be a great entry point, and in particular banks.

The largest Pakistani bank, Habib Bank Ltd. (HBL), is only traded on the Karachi Stock Exchange, but retail investors can purchase shares online. However, the banks I would like to target are Pakistan’s fourth largest bank, MCB Bank (MCBS) which is trading at $3.50 a share, and is at a 52-week low but has tremendous upside; and United Bank (UBLS) which is trading around $6.70 a share, close to its 52-week high. In the coming years, these two banks should outperform. Both banks are part of the PAK ETF which also includes some sectors that I do not think will perform well in the near term. They are of course, oil and gas.

So, in my opinion, Pakistan should be characterized in the near future to emerging market status from frontier market. They deserve it. But more importantly, Pakistan’s youth deserve a bright and rewarding future. Oh, and one last item. Have you ever watched the Coca-Cola Ramzan commercial? You should. You knew I had to bring Coke into this article!

Riaz Haq said...

MedCong: Medical corridor between #Pakistan and #China to collaborate in health sciences and serve the poor. #CPEC …

KARACHI: Medcong will serve as a medical corridor with China that will benefit poor patients in the two countries, said former federal minister and former Higher Education Commission chairperson Prof Attaur Rehman on Friday.

He was speaking at the inauguration of the first-ever three-day Pak-China Medical Congress (Medcong). The event, attended by senior medical experts of the two neighbouring countries, was inaugurated by Prof Rehman.

The Medcong, which is jointly being organised by Pakistan Medical Association (PMA) in collaboration with Chinese Medical Association (CMA), aims at paving the way for a medical corridor between Pakistan and China.

Addressing the ceremony, Prof Rehman said that Pakistan and China have strong high-level collaboration with each other. “The relations between both the countries have been improving day by day in various sectors, including education, research, medical, infrastructure building and other fields,” he said.

Prof Rehman said the establishment of a medical corridor with China will benefit the two countries’ poor patients. Tremendous opportunities exist for the medical students and researchers of the two countries, once provided with a chance to work together, he said.

CMA president Prof Yan Fei Liu said in his speech that Pakistan is magnificent, rich in natural resources and cultural heritage. “This ancient and magical land gave birth to a brilliant civilisation,” he said. “The Pakistani people are kind-hearted, hardworking, talented and courageous with the spirit of perseverance and [are] unyielding.”

According to him, CMA and PMA are going to make coherent efforts to build a Pak-China medical corridor to deepen the implementation of the China-Pakistan Economic Corridor and to seek bilateral exchanges and cooperation in medical education, patient caring, academia exchanges, medical information and experience sharing.

Prof Tipu Sultan, senior doctor and chairperson of the organising committee of Medcong said that China and Pakistan have been dear and close friends since long. “The academic and professional cooperation between the PMA and the CMA will bear great results,” he said.

A 44-member delegation representing the medical fraternity from China, including CMA vice-president and secretary-general Dr Keqin Rao, CMA deputy secretary-general Dr Lingo Lu, CMA international relations department deputy director Qing Long Meng and CMA project manager Weili Zhao are participating in the congress. The delegates, comprising medical experts from Sri Lanka, England and United Arab Emirates, are also participating in the congress along with their counterparts from different parts of Pakistan.

A memorandum of understanding (MoU) was also inked by the PMA and its Chinese counterpart, the CMA, during the congress. Both the PMA and CMA were declared sister concerns under the MoU while the decision to rotate the event every two years in the two countries will also be finalised.

Anonymous said...

There is a saying, not putting all your eggs in one basket. Seems like Pakistan has places all her eggs in one basket, China. What if China goes bust? No more Pakistan then? Do you have any other country to show which is willing to take place of China if she goes bust in the short or medium term? India, for example courts with Russia and US equally and in past has used both of them against each other marvelously. Remember 1971 and Russian naval blockade of USS Enterprise? Does Pakistan has any major country to show as a possible tactical ally, especially when China is out of the picture?

CPEC looks like a nightmare in making, it passes too closely to Indian territory. What if India sabotages movement of goods and people there, making CPEC fall in disuse within years of completion? Remember CPEC is not exactly built as a chinese investment but by Pakistani loans from China. Pakistan will still need to pay China at a fairly high interest rate. Will it not push Pakistan into abyss of debt?

I believe you are clutching each straw of "good news". Reality is that Pakistan is highly fragile economically and militarily. Also China is also not having the best of their time. Their economy is showing that their best days are behind them now.

Riaz Haq said...

Economist Amartya Sen: "Never been optimistic about #India. But today, I'm more pessimistic" #Modi #BJP via @qzindia

From Davos to New Delhi, prime minister Narendra Modi and his government are trying hard to sell the story of India’s revival. But Nobel Prize-winning economist Amartya Sen has scarcely been more pessimistic about the state of the nation.
At an evening session of the Kolkata Literary Meet on Jan. 23, the 82-year-old Harvard University professor was asked if and when he had felt the most optimistic in the decades of observing India’s policies on education, the agency of women, and healthcare.
“I don’t think I’ve felt optimistic at any time,” Sen replied chortling, as the audience of a few hundreds chuckled briefly.
His early years during India’s colonial occupation, he explained, were no reason for optimism, although there was much hope that Independence would turn the situation around. “Then came Nehru’s speech at midnight, and we were going to do great things in education and healthcare,” Sen said. “That remained the rhetoric, and is still today the rhetoric.”

“You said that schools have expanded…” Sen said, turning to Harvard University historian and Trinamool Congress member of parliament, Sugata Bose, who was in conversation with the economist on stage. “They have expanded but still there are many schools with one teacher, which is very difficult…”
Bose helpfully recalled the “savage cuts” in primary education under the Modi government. Indeed, in the first full budget presented by finance minister Arun Jaitley last year, the government cut back on the country’s education budget by 16%, with a 10% reduction in planned outlay to the school sector. Alongside, the government’s spending on health dropped by 15%.
“What I didn’t recognise,” Sen continued, “I feared it might be worse (but) I didn’t recognise, what Sugata (Bose) referred to just now, how big and savage the cuts in an already very low budget would have been.”
“China spends 3% of its income on healthcare,” he explained. “We spend less than 1% and most of it goes in a peculiar way like RSBY (Rashtriya Swasthya Bima Yojana), which is totally counterproductive. You subsidise private hospitals with it when you have expensive treatment but you don’t do the basic public services in healthcare…”

“So I never was very optimistic, but am I more pessimistic right now? Ya.”
Another round of muffled laughter followed.
This isn’t the first time that Sen has expressed concern on India’s renewed attempts to push for higher economic growth without first improving its education and healthcare systems. In an interview last November at the London School of Economics, Sen had explained:
India is the only country in the world which is trying to become a global economic power with an uneducated and unhealthy labour force. It’s never been done before, and never will be done in the future either…
…India is trying to be different from America, Europe, Japan, Korea, Hong Kong, Singapore, Taiwan, China—all of them. This is not a good way of thinking of economics. So foundationally, the government’s understanding of development underlying their approach is mistaken. Having said that, the previous government was terribly mistaken, too. But one hoped there might be a change, and there has been, but not for the better. All the sins of the past government have been added up.

Riaz Haq said...

#Pakistan PM #NawazSharif inaugurates Gwadar-Hoshab (M-8) portion of #CPEC in #Balochistan

Prime Minister Nawaz Sharif on Wednesday inaugurated the Gwadar-Hoshab (M-8) road and reviewed the work being carried out on the China-Pakistan Economic Corridor (CPEC).

During the inspection of the newly constructed M-8 route, General Raheel Sharif personally drove the prime minister in an open-top vehicle.

The military spokesperson also added that the locals were overjoyed with the progress of the CPEC project.

“The land-locked Central Asian states are interested in trade via the Gwadar port,” said the prime minister.

He said on the occasion that CPEC would open new vistas of development and prosperity in the region in general and benefit the country in particular.

The inauguration ceremony of M8 was attended by Chief Minister Balochistan Nawab Sanaullah Zehri, Chief of Army Staff General Raheel Sharif, Commander Southern Command Lieutenant General Amir Riaz and other high ranking military and civilian officials.

The prime minister on the occasion also praised the services and sacrifices rendered by the Frontier Works Organisation (FWO) in the construction of CPEC.

“Despite security problems, work is in full-swing on construction of roads in Balochistan,” added Nawaz.

The Prime Minister elaborated that after completion of CPEC and other related projects, Balochistan would not be dependent for financial aid on the federal government. "CPEC would ensure economic development of Balochistan", he said, adding that the people of the province would be major beneficiaries of the mega project.

"Projects cannot be completed through mere slogans, rather a strategy was imperative for completion of projects", he said.

The prime minister also reiterated his commitment on the occasion and said efforts were being made to develop Balochistan and bring it at par with other parts of the country.

Read: PM inaugurates western route of CPEC in Zhob

Earlier in January, Prime Minister Nawaz Sharif had inaugurated the western route of the (CPEC) in Balochistan's Zhob and laid the foundation stones of two key projects: upgradation of the Zhob-Mughal Kot section of the Dera Ismail Khan-Qila Saifullah Highway (N-50) and the Qilla Saifullah-Waigam Rud Road section of the Multan-Dera Ghazi Khan-Qilla Saifullah Highway (N-70)

CPEC: Background
The CPEC is a 3,000-kilometer network of roads, railways and pipelines to transport oil and gas from Gwadar Port to Kashgar city, northwestern China's Xinjiang Uygur autonomous region.

Proposed by Chinese Premier Li Keqiang during his visit to Pakistan in May 2013, the CPEC will act as a bridge for the new Maritime Silk Route that envisages linking three billion people in Asia, Africa and Europe.

An official agreement on the corridor was signed between the two countries in May this year during President Xi Jinping's historic visit to Pakistan.

A flagship project of the Belt and Road initiative as well, the CPEC intends to revive the ancient Silk Road with a focus on infrastructure, and constitutes the strategic framework of bilateral cooperation.

The project links China's strategy to develop its western region with Pakistan's focus on boosting its economy, including the infrastructure construction of Gwadar Port, together with some energy cooperation and investment programs.

It also involves road and railway construction including an upgrade of the 1,300-km Karakoram Highway, the highest paved international road in the world which connects China and Pakistan across the Karakoram mountains.

The CPEC will reduce China's routes of oil and gas imports from Africa and the Middle East by thousands of kilometers, making Gwadar a potentially vital link in China's supply chain.