Haq's Musings

Riaz Haq writes this data-driven blog to provide information, express his opinions and make comments on many topics. Subjects include personal activities, education, South Asia, South Asian community, regional and international affairs and US politics to financial markets. For investors interested in South Asia, Riaz has another blog called South Asia Investor at http://www.southasiainvestor.com and a YouTube video channel https://www.youtube.com/channel/UCkrIDyFbC9N9evXYb9cA_gQ

Monday, April 28, 2025

Pahalgam Attack: Why is the Indian Media Not Asking Hard Questions?

A recent terrorist attack on April 22 in Kashmir has killed 26 Indian tourists. Prime Minister Narendra Modi's Hindu Nationalist government took no time to blame Pakistan for the attack and vowed to "punish" the neighbor for it. Indian media, also derisively known as "Godi media", immediately went into overdrive to demand action against Pakistan. New Delhi followed up with suspending the Indus Basin Water treaty from the 1960s which guarantees 80% of the water from the three western rivers (Chenab, Jhelum and Indus rivers) to Pakistan, while India gets the exclusive use of the water from three eastern rivers (Beas, Ravi and Sutlej rivers). India also ordered Pakistani visitors to leave the country and reduced Pakistani diplomatic staff posted in India. Pakistan responded by suspending Simla Agreement and banning overflights of Indian civilian and military aircraft through its airspace. Pakistan warned India that any attempt to block its share of water from the three western rivers will be an "act of war", adding that it was prepared to respond, “with full force across the complete spectrum of national power”. Pakistan is a nuclear-armed country, as is India. Pakistan's nuclear doctrine calls for the use of nuclear weapons if its national existence is threatened by any country.

Shankaracharya Swami Avimukteshwaranand Saraswati

The Indian mainstream media has amplified the Modi government's propaganda and abandoned its role of asking the hard questions to get at the truth. Among the few who have raised serious doubts about Delhi's narrative is a Hindu religious leader named Shankaracharya Swami Avimukteshwaranand Saraswati. In a viral video, the holy man has asked the following questions:

1. Shouldn't our "chowkidar" (Modi has called himself chowkidar in the past) be held accountable for any attacks on our home?

2. How did the attackers manage to come in, carry out the attack without any resistance and safely escape?

3. How did you so quickly determine that the attackers came from Pakistan? And if you are so good at reaching this conclusion so quickly, why were you unable to stop the attack in the first place.

4. Can India really cut off water flow instantly to Pakistan to "punish" it? Experts say it will take at least 20 years if India allocated unlimited funds to make it happen as fast as possible. It will require building dams, water reservoirs and canals to divert the water from Pakistan.

Pakistani journalist Najam Sethi sees the hand of "Indian deep state" at work in Pahalgam, carried out while the US Vice President JD Vance in India. Sethi recalls what former American Secretary of State Madeleine Albright wrote in her memoirs titled "Mighty Almighty" about the killing of 35 Sikh villagers in Kashmir that India blamed on Pakistan during US President Bill Clinton's India visit in March, 2000. She said Clinton suspected the hand of Hindu extremists in the Chittisinghpura incident. She quoted him saying that if he hadn’t made the trip, the victims would have still been alive.

Among the Indian journalists, only Bharat Bhushan has raised some questions about his country's government narrative. He thinks India violated the back-channel agreement between Modi's NSA Ajit Doval and Pakistan's then NSA Moeed Yusuf reached after 2019 to spare the civilians on both sides in any proxy attacks. Bhushan points out a warning from Lt General Ahmad Sharif that “the (Jaafar Express) train attack (in Balochistan) has changed the rule of the game”.

Bhushan's op ed mentions Modi's muscular policy toward people he sees as "terrorists". Canada, Pakistan and the United States have all accused the Indian government of a campaign of international assassinations. He writes: "Another development has been the targeted killings of terrorists and militants — both Kashmir and Sikhs, that Pakistan alleges have been initiated by Indian intelligence agencies after the Pulwama terrorist strike in 2019 when 40 paramilitary personnel were killed. India was allegedly inspired to undertake extra-judicial killings on foreign soil, from the example of Russia’s KGB, Israel’s Mossad, and the assassination of dissident journalist Jamal Khashoggi by Saudi Arabia".

Bhushan concludes his Op Ed in Deccan Herald as follows: "How will India react now to what it believes to be Pakistan-sponsored terrorism? The bravado about punishing every terrorist act with greater-than-expected force is not going to be easy to put in action. Geopolitical circumstances have changed since 2019. Public sentiment cannot be the sole basis of military strikes. Thankfully, no crucial election is in the offing where assuaging public emotions becomes an issue. India will also have to provide proof to the world that Pakistan was indeed involved. This would require the arrest and questioning of the terrorists involved. That may take time. Only the tacit approval of the US can ensure that a strike against Pakistan does not spin out of control".

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Tuesday, April 22, 2025

Earth Day: Pakistan's Progress Toward Low-Carbon Economy

Pakistan celebrates Earth Day on April 22 every year by organizing various events sponsored by the government and non-government organizations to raise awareness of the issues faced by the earth. Today it is being observed with a range of initiatives, including pledges for zero waste, commitments to sustainable practices, and community-based actions to protect the planet. Pakistan contributes less than 1% of global carbon emissions, but it is among the countries considered most vulnerable to climate change. About a third of the country was devastated by massive floods in 2022. The nation committed continued pursuit of nature-based solutions to the problem at COP26 in Glasgow in 2021. As part of this commitment, the country is planting one of the world's largest mangrove forests in the Indus River Delta, a key component of its Ten Billion Tree Tsunami campaign launched by former Prime Minister Imran Khan. The area where Pakistan is making substantial progress is in moving toward a low-carbon economy.

Earth Day in Pakistan

"Our Power, Our Planet" theme focuses on a low-carbon economy with growth in clean electricity generation and the use of electric vehicles in Pakistan. In 2024, the hydropower contributed 10,681MW to the national grid, accounting for 25.4% of total capacity and generating 29,167GWh, representing 31.7% of total electricity generation. With nuclear power generation capacity of 3,262 megawatts, Pakistan increased the share of electricity generated from nuclear power plants to a record 17.4% in 2023 from 16.2% in 2022. Pakistan’s on-grid, net-metered solar capacity reached about 4,100 MW by December 2024.

Meanwhile, Pakistan is in the midst of a solar power boom. It has joined the ranks of the world’s leading solar markets, importing 17 gigawatts of solar panels last year alone, according to the Global Electricity Review 2025 by Ember, an energy think tank in the UK. “Rooftop solar is fast becoming the preferred energy provider,” says Muhammad Mustafa Amjad, program director at Renewables First in Pakistan. “And the role of the grid has to massively adapt in order to remain relevant in a fast-transitioning energy economy.”

A number of auto companies have announced plans to manufacture electric vehicles. Pakistani automobile joint ventures with Chinese automakers BYD and Changan have recently launched several all-electric and plug-in hybrid models of automobiles in Pakistan. Honda Atlas Cars Pakistan Limited has announced plans to build a hybrid electric vehicles plant in the country. Other major brands like Toyota, Haval, and Hyundai are already offering similar models in the country. It all began with the 2019 electric vehicle policy approved by the government of Prime Minister Imran Khan to incentivize the electrification of the auto industry. Pakistan EV policy goal is to achieve 30% of new cars sales, 50% of new 2-wheeler and 3-wheeler sales and 30% of new truck sales by 2030. By 2040, the target is 90% of all new vehicle sales to be electric. The main incentive is the reduction of sales tax from 17% for internal combustion engine (ICE) vehicles to 1% for all-electric (EV) vehicles.

Pakistan is currently experiencing a huge economic drain in terms of fossil fuel imports. In the first two months of the current fiscal year, Pakistan's oil import bill increased by 23% compared to the same period in 2023. Paying for huge amounts of imported coal, gas, and oil in US dollars has become disastrous, particularly after 40% depreciation of Pakistani currency over the last two years. Switching to cheap renewable sources will have a salutary effect on the country's climate and economy. It will help grow the nation's exports by increasing its exporters' competitiveness. It will also make it easier to manage inflation and reduce the need for recurring IMF bailouts.

The GenAI revolution is another factor that will dramatically increase global power demand. Wall Street investment bank Goldman Sachs forecasts that the new high-performance AI data centers alone will grow electricity demand by 160% by 2030. Pakistan needs to prepare for it if it wants to be competitive in this brave new world of generative artificial intelligence (Gen AI).

Saturday, April 19, 2025

International Schools: Pakistan Ranks Among Top 5 Countries in the World

Pakistan ranks among the top 5 nations in terms of international schools offering schooling based on International Baccalaureate (IB) and IGCSE (Cambridge) curricula. China leads with 1,000 international schools, followed by India (900), UAE (784), Pakistan (598) and Brazil (415). The medium of instruction in these schools is English.

Aitchison College, Lahore, Pakistan

The international schools in India and Pakistan date back to the days of the British Raj when these schools were established to serve the children of the British and the British-Indian civil servants. Later, these schools also attracted the children of diplomats and expats as well as Indian and Pakistani elites. Today, the vast majority of students attending these schools are the children of rich Indians and Pakistanis.

Karachi Grammar School, Karachi, Pakistan

The international schools favored by Pakistani elites include Aitchison College, Karachi Grammar School, Lahore Grammar School and the American International Schools located in Islamabad, Karachi and Lahore. The tuition at the most expensive international schools in Pakistan runs from $12,000 to $15,000 a year. Beaconhouse schools in Pakistan cost less than these select schools. The graduates of international schools often attend elite universities in the UK and the United States, in addition to top Pakistani private universities like LUMS (Lahore University of Management Sciences) in Lahore and the Aga Khan University in Karachi.

The Aga Khan University, Karachi, Pakistan

Former finance minister Dr. Miftah Ismail, a member of Karachi's rich business elite, attended Karachi Grammar School and went on to earn a PhD from UPenn's Wharton School of Business. In an article in Dawn newspaper titled "The One Percent Republic", he wrote about elitism in education as follows:

"There are around 400,000 schools in Pakistan. Yet in some years half of our Supreme Court judges and members of the federal cabinet come from just one school: Aitchison College in Lahore. Karachi Grammar School provides an inordinate number of our top professionals and richest businessmen. If we add the three American schools, Cadet College Hasanabdal (alma mater of military top brass) and a few expensive private schools, maybe graduating 10,000 kids in total, we can be sure that these few kids will be at the top of most fields in Pakistan in the future, just as their fathers are at the very top today..... Pakistan’s economy thus only relies on whatever a small elite can achieve. It remains underdeveloped as it ignores the talent of most in the country."

Lahore University of Management Sciences (LUMS)

Pakistan's former Prime Minister Imran Khan attended Aitchison College, an elite school established in Lahore by South Asia's colonial rulers to produce faithful civil servants during the British Raj. He then went on to graduate from Oxford University in England. Here's an excerpt of what he wrote in an article published by the Arab News on January 14, 2002:

"My generation grew up at a time when colonial hang up was at its peak. Our older generation had been slaves and had a huge inferiority complex of the British. The school I went to was similar to all elite schools in Pakistan. Despite gaining independence, they were, and still are, producing replicas of public schoolboys rather than Pakistanis. I read Shakespeare, which was fine, but no Allama Iqbal — the national poet of Pakistan. The class on Islamic studies was not taken seriously, and when I left school I was considered among the elite of the country because I could speak English and wore Western clothes. Despite periodically shouting ‘Pakistan Zindabad’ in school functions, I considered my own culture backward and religion outdated. Among our group if any one talked about religion, prayed or kept a beard he was immediately branded a Mullah. Because of the power of the Western media, our heroes were Western movie stars or pop stars. When I went to Oxford already burdened with this hang up, things didn’t get any easier. At Oxford, not just Islam, but all religions were considered anachronism."

Saturday, April 12, 2025

Pakistan Minerals Investment Forum Draws Interest of Global Investors

Pakistan's mineral resources, estimated to be over $6 trillion, attracted global investor interest at the Pakistan Minerals Investors Forum 2025 (PMIF2025) held recently in Islamabad on April 8th and 9th. It was attended by major international companies and government officials from Australia, Canada, China, Saudi Arabia, Turkiye, the US and other nations.

Pakistan is known to have large deposits of critical minerals from copper and gold to lithium. Canadian Mining Journal has described the border region of Afghanistan and Pakistan as "Saudi Arabia of lithium". These deposits are found in various parts of the country, including Balochistan, Gilgit, Khyber Pakhtunkhwa, Sindh, and the Exclusive Economic Zone of Pakistan's coastal waters. The Geological Survey of Pakistan also notes the potential of lithium in LCT-type pegmatites and super arid salt lakes. Pakistan's major lithium-bearing areas are found in the Khyber Pakhtunkhwa and Tribal Areas (FATA), contributing about 85% of the country's lithium production.

Pakistan Minerals Map. Source: ResearchGate

The Trump administration is interested in working with Pakistan to explore the potential for cooperation in meeting the US needs for critical minerals. "Critical minerals are the raw materials necessary for our most advanced technologies," said Eric Meyer, a senior official for the Department of State's Bureau of South and Central Asian Affairs, who attended the PMIF2025 in Islamabad. He said Pakistan's "vast mineral potential" can benefit the United States as he highlighted the White House's strategic priority to secure diverse and reliable sources of critical minerals.

Eric Meyer's participation in the PMIF2025 was preceded by a phone call from US Secretary of State Marco Rubio to Pakistani Foreign Minister Ishaq Dar. After the call, the US State Department readout said, "The Secretary raised prospects for engagement on critical minerals and expressed interest in expanding commercial opportunities for U.S. companies".

In January of this year, Gentry Beach, an American billionaire investor and a close Trump ally, visited Pakistan to look for investment opportunities in the mining sector. Upon his return to the United States, Beach praised Pakistan government’s policies as “favorable for business and investment" and expressed keen interest in investing across various sectors. In a viral TikTok video of his speech at Trump's Florida home at Mar a Lago, Gentry said, " Last week, I had the benefit of visiting Pakistan, an amazing country.....unfortunately, the previous administration (Biden administration), burned every possible bridge they could, they even put sanctions on Pakistan, a close US ally... they (Pakistanis) have sacrificed so much for the American people....Pakistan is a country that we (US) need to build a strong bridge to and partnership with".

Pakistan has one of the world’s largest porphyry copper-gold mineral zones. The Reko Diq mine in southwestern Balochistan province has an estimated 5.9 billion tons of copper ore. At current prices, the value of copper and gold deposits at Reko Diq in Balochistan province is nearly $200 billion. It is expected to generate $70 billion in free cash flow and $90 billion in operating cash flow over 37 years.

Barrick Gold CEO Mark Bristow has said he’s “super excited” about the company’s Reko Diq copper-gold development in Pakistan. Speaking about the Pakistani mining project at a conference in the US State of Colorado, the South Africa-born Bristow said “This is like the early days in Chile, the Escondida discoveries and so on”, according to Mining.com, a leading industry publication. "It has enormous upside potential". He was referring to Pakistan’s untapped discovery potential. Escondida was the first discovery of copper in Chile which is now the world's largest producer and exporter of copper. Last year, the South American country exported nearly $20 billion worth of copper.

“Copper has no substitutes,” Bristow continued. “It is as strategic as gold is precious, and we’re bringing new copper projects online just as the supply squeeze hits.” Comparing Reko Diq to Escondida, he said "walking across, there's more than one porphyry, significantly more than one, it's a real endowment for the people of Balochistan and greater Pakistan". "It (Reko Diq) is world class, a gold mine on its own and a copper mine on its own". He expects a peak of 10,000 jobs during construction and 5,500-6,000 direct jobs to operate the Reko Diq mine afterwards. It will also create a lot of indirect job opportunities in the supply chain. "We are going to demonstrate (in Balochistan) that you can do something transformatory, both socially and economically".

The biggest foreign investor in Pakistan's mining sector is Canadian mining giant Barrick Gold with a projected investment of $5 billion. It is followed by the Saudi Manara Minerals with $540 million. World Bank's investment arm IFC has committed $300 million for Reko Diq. Pakistan's state-owned OGDCL has recently announced it is increasing its investment in Reko Diq to $627 million.

The biggest challenge Pakistan faces is one of security in the remote areas where its mineral resources are located. Pakistani military chief General Asim Munir believes he can deal with it effectively. He made assurances to investors that his forces will ensure security. Another challenge is one of lack of political stability which is a matter of great concern to investors.

Friday, April 4, 2025

Trump's Tariffs Shock the World

President Donald Trump's announcement of "reciprocal tariffs" has shocked the world. Nations and corporations were all expecting the US to increase tariffs but the scope and scale have caused severe tremors in the global economy. There's a base level of 10% tariffs on all trading partners. Imports from China (54%), Vietnam (46%), Bangladesh (37%), Pakistan (29%), India (26%), Japan (24%) and the European Union (20%) are all subject to higher tariffs. Even the poor African nation of Lesotho (GDP: $2.5 billion) has not been spared. It is now subject to a 50% tariff on the jeans it exports to the United States.

Trump's Reciprocal Tariffs. Source: CNBC

The charts showing President Trump's claimed tariffs on US imports by other countries have no resemblance to reality. For example, the US Commerce Department claims Pakistan imposes a 58% tariff on imports from the US. Pakistan's trade weighted average tariffs on the US goods were 7.3% compared to 9.9% that the US charges on imports from Pakistan, according to the Pakistani Ministry of Commerce. Financial writer James Surowiecki has reverse engineered what the Trump team did to come up with the "tariffs charged to the U.S.A." column. Surowiecki found that these figures were worked out by dividing the US trade deficit with each country by the total US imports from that country. For example, the US buys more goods from China than it sells to them - there is a goods trade deficit of $295 billion. The total amount of goods it buys from China is $440 billion. Dividing 295 by 440 gets you to 67%.

Trump's Tariffs. Source: Express Tribune

Higher tariffs on imports will raise the prices paid by the US consumers for imported goods such as electronics and textiles. And higher prices tend to depress demand. So Pakistan's main exports of textiles to the US will mean higher prices and lower demand. However, what is important is the difference in tariffs charged on imports from various countries. The fact that tariffs applied to Pakistani exports are lower than those applied to Bangladeshi, Chinese and Vietnamese textiles could help Pakistan gain market share in the US. In addition, Pakistan could attract Chinese manufacturers' investment who could then export their products from Pakistan to the US market.

The biggest fear expressed by most mainstream economists is that the Trump tariffs could trigger a global economic slowdown. Global investors have already sharply driven down major stock market indices across the globe. China, the world's second biggest economy, has already retaliated with 34% additional tariffs on imports from the US. Wharton economist Professor Jeremy Siegel has compared Trump's tariffs to the Smoot-Hawley tariffs that caused the Great Depression of the 1930s. Trump's tariffs put the effective tariff rate above the level of around 20% set by 1930’s Smoot-Hawley Tariff Act.

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