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

Wednesday, January 28, 2026

EU-India Trade Deal: "Uncapped" Mass Migration of Indians?

The European Union (EU) and India have recently agreed to a trade deal which includes an MOU to allow “an uncapped mobility for Indian students”, according to officials, allowing Indians greater ease to travel, study and work across EU states. India's largest and most valuable export to the world is its people who last year sent $135 billion in remittances to their home country. Going by the numbers, the Indian economy is a tiny fraction of the European Union economy. Indians make up 17.8% of the world population but contribute only 3.3% of the global GDP. The European Union, on the other hand, has just 5.6% of the global population and produces 17.8% of the world's economic output.

Indian Economy Dwarfed by EU. Source: DW

If finally signed and implemented, this "uncapped mobility" for Indians will probably become the most significant part of the deal. “More than 800,000 Indians are living and actively contributing to the countries of the European Union", according to Indian Prime Minister Narendra Modi. The two sides welcomed the conclusion of the India‑EU Comprehensive Framework of Cooperation on Mobility, in line with the national competences of EU Member States and India and domestic legislation of both parties. They applauded the launch of the first pilot European Legal Gateway Office, as a one‑stop hub to provide information and support the movement of workers, starting with the ICT sector.

Indians are currently the seventh-largest migrant group in Germany. Just the talk of "uncapped mobility" from India will trigger a backlash across Europe where far-right parties opposed to all immigration are gaining popularity. There have been high-profile hate incidents against Indians in several European countries recently. While the rise of the AfD (Alternative for Germany) has increased hatred against Indian migrants, the arrival of the far-right in the mainstream political system in Germany has also started a conversation on racism that otherwise would have been swept under the rug.

EU-India Migration Agreement Tweeted by Modi

Undaunted by the anti-immigrant sentiments, the Indian government has quietly signed labor mobility agreements with at least 20 countries over the past half-dozen years — in Europe and Asia, including the Persian Gulf — all with developed economies and most without much history of hiring Indian workers, according to the New York Times. Arnab Bhattacharya, the chief executive of the "Global Access to Talent From India Foundation" think tank, estimates that India could double its current export of 700,000 workers a year to 1.5 million by 2030. His country, he told the NY Times, “has a workforce that should be servicing the world and not just India.” Their real aim is to deal with the ongoing unemployment crisis in India.

EU-India Migration Agreement Tweeted by Modi

Indian economy is not generating enough jobs for the nation's growing working age population. Corporate profits of Indian firms are growing at a much slower pace than the 8.2% GDP growth in its most recent quarter. Net income for Nifty 50 Index firms likely rose 1.1% in the three months through Dec. 31 from a year earlier, according to analyst estimates compiled by Bloomberg. That would be the slowest pace in five quarters, weighed down by deteriorating margins for banks. Falling profits and declining currency are causing foreign capital to flee Indian markets. Foreign Portfolio Investors (FPIs) pulled out over $20 billion from Indian equities in 2025, marking a severe, sustained withdrawal that has continued into 2026. Net Foreign Direct Investment (FDI) has seen consecutive monthly outflows, including $1.67 billion in October and $446 million in November 2025. Investment banker Ruchir Sharma wrote about it in a Financial Times op ed titled "India needs to import more capital and export fewer workers". Ruchir wrote: "Most strikingly, corporate revenue normally grows (or shrinks) with the economy — in any country. But last year corporate revenue growth for listed companies in India decelerated to barely half the GDP growth rate"

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Riaz Haq's Youtube Channel

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Sunday, January 25, 2026

Independent Economists Expose Modi's Fake GDP

Ruling politicians in New Delhi continue to hype their country's economic growth even as the Indian currency hits new lows against the US dollar, corporate profits fall, electrical power demand slows, domestic savings and investment rates decline and foreign capital flees Indian markets. The International Monetary Fund (IMF) has questioned India's GDP and independent economists Professors Arun Kumar and Ashoka Modi and investment banker Ruchir Sharma have detailed why the Indian official data can not be trusted. It seems that the BJP-led government of Prime Minister Narendra Modi is fast losing credibility by politicizing the civilian bureaucracy and the military brass to project their economic and military failures as successes.

IMF Gives C Grade to India's GDP Data

Beyond the disputed claim of being the "fourth largest economy", the Modi government's failure on the national health and wellness front is also getting more attention. “Air is unbreathable. Water is undrinkable. Food is adulterated. What’s the point of becoming the 4th largest economy?” asked India-American technology entrepreneur Sabeer Bhatia in an X message recently. Gita Gopnath, Harvard professor of economics, said at the World Economic Forum in Davos this week that the economic impact of pollution on India is more severe than the effects of tariffs imposed on the country. “About 1.7 million lives are lost every year in India because of pollution. That’s 18% of the total deaths in India,” Gopinath said, quoting a World Bank study. “Even from an international investor’s perspective … the pollution holds you back.”

Unsafe Drinking Water in India Claimed as 4th Largest Economy. Source: DownToEarth

An international badminton tournament in India has brought global spotlight on the lack of basic hygiene in India. Foreign players complained about dusty floors, dirty courts, bird droppings and unhygienic conditions at the India Open in New Delhi. “I think the floors are dirty. There is a lot of dirt on the courts. There’s bird excrement. There are birds flying around in the arena,” said 28 year-old Denmark women’s singles player Mia Blichfeldt. Andres Antonson, world number three badminton player, withdrew from the India Open Super 750 in New Delhi for the third consecutive year, choosing to pay a $5,000 fine. He cited "extreme" hazardous air pollution in Delhi as the reason for skipping the mandatory tournament, arguing it is not a safe place to hold the event.

The IMF has recently expressed doubts about Prime Minister Narendra Modi's BJP government's GDP data. It has particularly questioned the government's statistical methodologies, inflation measurement, and the estimates of the informal economy used in reporting the country's gross domestic product. Professor Arun Kumar of Jawaharlal Nehru University believes the IMF's concerns are valid. He thinks the real size of India's economy is only half of what is officially claimed. “The economy is almost 50% wrong – when the government says it’s $3.8 trillion, my estimate is it is probably still $2.5 trillion because we are overestimating the unorganized sector, which is actually declining. This is building up over a period of time,” Kumar told Indian journalist Karan Thapar.

In its recent assessment, the International Monetary Fund (IMF) has given a "C" grade to India's national accounts. In particular, the IMF has raised the issue of the government using 2011-12 as the base year as being outdated, the discrepancy between production and consumption data and the use of Wholesale Price Index, and not a Producer Price Index, to deflate many economic activities to derive real GDP from nominal GDP.

Indian Firms Falling Corporate Profits. Source: Bloomberg

Corporate profits of Indian firms are growing at a much slower pace than the 8.2% GDP growth in its most recent quarter. Net income for Nifty 50 Index firms likely rose 1.1% in the three months through Dec. 31 from a year earlier, according to analyst estimates compiled by Bloomberg. That would be the slowest pace in five quarters, weighed down by deteriorating margins for banks. Falling profits and declining currency are causing foreign capital to flee Indian markets. Foreign Portfolio Investors (FPIs) pulled out over $20 billion from Indian equities in 2025, marking a severe, sustained withdrawal that has continued into 2026. Net Foreign Direct Investment (FDI) has seen consecutive monthly outflows, including $1.67 billion in October and $446 million in November 2025. Investment banker Ruchir Sharma wrote about it in a Financial Times op ed titled "India needs to import more capital and export fewer workers". Ruchir wrote: "Most strikingly, corporate revenue normally grows (or shrinks) with the economy — in any country. But last year corporate revenue growth for listed companies in India decelerated to barely half the GDP growth rate"

Falling Indian Rupee. Source: Reuters

The source of the biggest error is the way India estimates the informal economy which, including agriculture, accounts for almost 45% of GDP. To do so, India uses the formal sector as a proxy to estimate the performance of the informal sector. But if the two sectors are moving in opposite directions, as has happened after demonetization, GST imposition and the pandemic, you could end up overestimating the unorganized sector.

Indian-American economist Ashoka Mody, author of "India is Broken", has argued that the current unemployment crisis in India is a direct result of the destruction of the informal sector, particularly the mom and pop stores that employed a large number of Indians.

Questions about the veracity of India's official GDP figures are not new. These have been raised by many top economists. For example, French economist Thomas Piketty argues in his best seller "Capital in the Twenty-First Century that the GDP growth rates of India and China are exaggerated. Picketty writes as follows:

"Note, too, that the very high official growth figures for developing countries (especially India and China) over the past few decades are based almost exclusively on production statistics. If one tries to measure income growth by using household survey data, it is often quite difficult to identify the reported rates of macroeconomic growth: Indian and Chinese incomes are certainly increasing rapidly, but not as rapidly as one would infer from official growth statistics. This paradox-sometimes referred to as the "black hole" of growth-is obviously problematic. It may be due to the overestimation of the growth of output (there are many bureaucratic incentives for doing so), or perhaps the underestimation of income growth (households have their own flaws)), or most likely both. In particular, the missing income may be explained by the possibility that a disproportionate share of the growth in output has gone to the most highly remunerated individuals, whose incomes are not always captured in the tax data." "In the case of India, it is possible to estimate (using tax return data) that the increase in the upper centile's share of national income explains between one-quarter and one-third of the "black hole" of growth between 1990 and 2000. "

Saturday, January 17, 2026

US Immigrant Visa Freeze For 75 Countries: Why Pakistan But Not India?

The US State Department has suspended processing of immigrant visas from 75 countries, including Pakistan but not India. This action followed President Donald Trump's social media post that listed, without context, the percentage of immigrant households from these countries that rely on the US government financial assistance. While Mr. Trump’s post singled out immigrants, the fact is that the term “financial assistance” as used by him includes social security and Medicare payments which are entitlements received by all senior citizens, both naturalized and US-born. It listed immigrant households from Bhutan (81.4%), Yemen Arab Republic (75.2%) and Somalia (71.9%) as the top three "Welfare Recipients". It also included Afghanistan (68.1%), Burma (59.2%), Bangladesh (54.8%), Pakistan (40.2%) and China (32.9%). India was not shown on this list. A US State Department statement explained the decision to suspend immigrant visa processing as follows: "President Trump has made clear that immigrants must be financially self-sufficient and not be a financial burden to Americans. The Department of State is undergoing a full review of all policies, regulations, and guidance to ensure that immigrants from these high-risk countries do not utilize welfare in the United States or become a public charge". A look at the detailed data shows that non-citizen immigrants consumed 54% less welfare than native-born Americans.

President Trump's Social Media Post on Welfare Receiving Immigrant Households. Source: X

It is important to understand that the data President Trump shared is for households, not individuals. It includes the entire household as recipients of government assistance even if a single individual in that household receives such assistance. Second, the definition of "welfare recipient" in Trump's data includes all government programs, including the entitlement programs like social security and medicare which all senior US citizens receive. Third, the households on non-immigrant visas which are ineligible for government assistance but are counted in the total number households surveyed for this data. For example, millions of H1B visa holders and foreign students on F-1 visa from India are not eligible for such assistance, resulting in a significantly lower percentage of Indian households receiving government assistance.

The median annual income of Pakistani-American households was $108,100 in 2023, higher than $105,600 for Asian-American households overall. The median annual income of Indian-American households was $151,200 in 2023, the highest among all ethnic groups in America. GCBE1, a visa consultancy, explains why certain groups, such as Indians, do not appear in Trump's list in the following excerpt:

"While the welfare chart provides a snapshot, it does not explain why certain groups appear or how participation is measured. Critics argue that without clear definitions of “welfare” or adjustments for income and immigration status, the data can be easily misinterpreted. Groups with high numbers of legal permanent residents and U.S. citizens in mixed-status households might show welfare usage even if non-citizen members are ineligible. Others point out that immigrant households may include U.S.-born children receiving benefits; yet these metrics are not broken down in the shared data".

Per Capita Welfare Consumption by Native Born vs Immigrants in US. Source: Cato

President Trump's post is part of his larger anti-immigration theme to please his MAGA base. But a Cato Institute study found that all immigrants consumed 21% less welfare and entitlement benefits than native-born Americans on a per capita basis in 2022, based on data from the Survey of Income and Program Participation (SIPP). Immigrants were 14.3% of the US population and consumed just 11.9% of all means-tested welfare and entitlement benefits that year. Here's an excerpt of the Cato study:

"The biggest myth in the debate over immigrant welfare use is that noncitizens — which includes illegal immigrants and those lawfully present on various temporary visas and green cards — disproportionately consume welfare. That is not the case. Noncitizen immigrants consumed 54 percent less welfare than native-born Americans. Non-citizens were 7.3 percent of the population and consumed just 3.5 percent of all welfare and entitlement benefits. In total, noncitizens consumed $109.4 billion in benefits in 2022".

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Wednesday, January 14, 2026

Indian NSA Doval Urges Young Hindus to Take Revenge on Muslims

In a recent speech to young Hindus in New Delhi, the Indian National Security Advisor Ajit Doval urged his audience to "avenge history". He talked about the looting and destruction of Hindu temples and many centuries humiliation suffered by Indians. Though he did not specifically say it, there was no doubt in the minds of his audience that he was talking about invaders like Mahmud of Ghazni, an Afghan Muslim ruler, who is said to have destroyed a Hindu temple in Somnath.

Indian Prime Minister Modi (Left) with NSA Ajit Doval

Anti-Muslim rhetoric like Doval’s has made Indian Muslims fear for their lives. It has also put India among top countries with greatest likelihood of mass atrocities, and raised security concerns among India’s neighbors. In its latest warning, the US Holocaust Museum has put three countries scoring higher than India. Myanmar holds the top spot, followed by Chad and Sudan. However, many high-ranking nations including Myanmar and Sudan are already dealing with ongoing mass killings, making India’s position particularly noteworthy as a potential new flashpoint.

For those interested in real history, it is important to understand that eminent Hindu Indian historian Romila Thapar has rejected the Hindu-Muslim framing of the destruction of Somnath. In her book "Somatha", she challenges the simplified story of purely Hindu victims and Muslim invaders, focusing on local Indian sources such as inscriptions, merchant biographies and court epics to reconstruct events. Other sources indicate that several Hindus, including Hindu generals, were part of Ghaznavi's army. Some sources also cite that Arab Muslim traders who had settled in Gujarat during the 8th and 9th century died to protect the Somnath temple against Ghaznavi's Army.

Mughal Emperor Aurangzeb, demonized by Hindu Nationalists, employed several high-ranking Hindu generals, most notably Raja Jai Singh I (of Amber) and Maharaja Jaswant Singh (of Marwar), who served as powerful mansabdars (military commanders) and held significant administrative posts, commanding large forces and participating in key campaigns against rivals like Shivaji Maharaj and Dara Shikoh.

Shivaji Maharaj, held by the Hindu Nationalists as an icon of Hindu resistance against Muslims, was crowned as the king despite opposition from local Brahmins. He had several Muslim generals in his army. In fact, he employed people of all castes and religions, including Muslims.

Hindu kings often attacked and looted temples built by other Hindu kings for the wealth stored inside the idols. Just three years before Ghaznavi's raid on Somnath in 1022, a general under Rajendra I, Maharaja of the Chola empire (848–1279) marched 1,600 kilometers north from the Cholas’ royal capital of Tanjavur. Chola warriors defeated Mahipala, maharaja of the Pala empire (c.750–1161), who was the dominant power in India’s easternmost region of Bengal. The Chola's celebrated their victory by carrying off a bronze image of the deity Shiva, which they seized from a royal temple that Mahipala had patronized. In the course of this long campaign, the invaders also took from the Kalinga Raja of Orissa images of Bhairava, Bhairavi and Kali. These, together with precious gems looted from the Pala king, were taken down to the Chola capital as war booty. This raises the question: Why is Mahmud Ghaznavi demonized but not Rajendra Chola's plunder of Hindu temples?

The real history contradicts Doval's assertion that Hindus have never invaded others, ignoring the fact that an unprecedented number of people were killed in the Kalinga massacre by emperor Ashoka. He also did not mention how the Buddhist and Jain temples were destroyed and Hindu temples built on their ruins. nor did he acknowledge the long-running and ongoing oppression of Hindus by Hindus in the name of caste.

Ajit Doval does not appear to be a serious man worthy of holding the sensitive office of India's national security advisor. He has no sense of history, nor does he understand how damaging his speech is for a diverse country like India. By parroting the divisive Hindutva narrative, Doval has alienated not only Indian Muslims but also India's neighbors. He is a total failure. India's failed national security policy is hurting India and Indians more than anyone else.

Tuesday, January 6, 2026

Pakistan Household Survey HIES 2024-25 Raises More Questions Than It Answers

Recently released HIES 2024-25 household integrated economic survey by Pakistan Bureau of Statistics (PBS) raises more questions than it answers. For example, it shows that Pakistani households are buying lower amounts of basic food ingredients like wheat, meat and eggs in the last four years, implying that people are eating less to cover other expenses, like electricity and gas. But it doesn't explain why the households have reported significantly lower purchases of these items than production reported recently by the PBS. What is the source of this discrepancy? Is the data flawed? Or, is it missing a new trend toward less home cooking? Is the young urbanized population buying more prepared foods? Are they ordering out more often using ubiquitous food delivery services? Let us try and understand it in more detail.

21% Pakistanis Buy Tandoori Nan. Source: Gallup Pakistan

Data Discrepancy:

There is a significant discrepancy in household data for per capita monthly consumption of basic food ingredients like wheat, meat and eggs. For example, the HIES 2024-25 reports 6.59 Kg of wheat consumption per capita per month, which translates into 79 Kg per person per year. The wheat production data from PBS shows 30 million tons or 120 Kg per capita in 2025. We know that Pakistan did not export wheat last year. So what happened to the 41 Kg per capita difference? It is 30% of the total production reported, too large to be explained away as waste in the system. It was most probably bought by food businesses and eventually consumed by Pakistani households. There are similar discrepancies in meat, eggs and other food data, with reported household consumption being far below production.

Household Food Items Purchase Data. Source: HIES 2024-25

Prepared Foods:

A 2025 Gallup survey revealed that 21% of Pakistanis buy tandoori naan. Pakistan's prepared food market is experiencing robust growth, with the Convenience Food sector valued at $6.91 billion in 2025, projected to grow at 5% annually, driven by Ready-to-Eat (RTE) meals and frozen foods, especially RTE/RTC (Ready-to-Cook) products like frozen snacks. Key trends include rising demand for time-saving, convenient options due to urbanization, growing health consciousness (organic/natural), and dominance by flexible packaging, with online delivery also expanding rapidly.

Urbanization in Pakistan. Source: World Bank

Urbanization:

The World Bank researchers have recently concluded that 88% live in urban areas. Their conclusion is based on satellite imagery and the Degree of Urbanization (DoU) methodology. The official Pakistani figures released by the Pakistan Bureau of Statistics (PBS) put the current level of urbanization at 39%. The source of this massive discrepancy is the government's reliance on administrative boundaries rather than population density and settlement patterns, according to the World Bank working research paper titled "When Does a Village Become a Town?".

Ultra-Processed Foods:

Ultra-processed foods (UPFs) like biscuits, sugary drinks, chips, and packaged snacks, are a growing concern in Pakistan. Such foods are contributing to rising obesity, diabetes, and heart disease. Obesity causes non-communicable diseases (NCD) which are now among the leading causes of death in Pakistan.

To deal with the obeseity crisis, several Pakistani pharmaceutical companies have started domestic production of generic versions of GLP-1 (Glucagon-Like Peptide-1) drugs Ozempic/Wegovy (Semaglutide) and Mounjaro/Zeptide (Tirzepatide).

Food Delivery Services:

Pakistan's food delivery market is experiencing rapid growth, projected to hit $2.35 billion in 2025, driven by high smartphone penetration, a young urban population, and increased convenience-seeking, with Foodpanda dominating but facing a growing trend of direct restaurant ordering and a demand for diverse, tech-enabled options despite past economic challenges.

Street Food Growth:

With rising urbanization, the street food sector in Pakistan is vibrant and growing. It is crucial for livelihoods and affordable food. Deeply embedded in culture, choices range from savory samosas and chaat to bun kebabs, pakoras, pani puri, and biryani, popular for convenience and taste.

Fast Food Boom:

Pakistan’s fast food industry is experiencing rapid growth, making it the 8th largest fast food market globally. With a large consumer base, the demand for fast food continues to grow, contributing to the economy in significantly. The industry’s annual growth rate stands at 20%, highlighting its rapid expansion and increasing consumer preference for quick-serve meals.

Summary:

The HIES 2024-25 report recently issued by Pakistan Bureau of Statistics implies that Pakistani households are eating less to save money to pay for rising energy bills. I think this is misleading for two reasons: 1. It does not explain why reported household consumption figures are significantly lower than per capita production of these food items and 2. It completely ignores the impact of rapid urbanization that is causing Pakistanis to change their eating habits, such as consuming increasing amounts of prepared foods.

Tuesday, December 30, 2025

Happy New Year 2026: Pakistan's Year 2025 in Review

As we enter the year 2026, it is time to review the year 2025 and wish you all Happy New Year 2026! May it bring peace, prosperity and happiness to all!!

The year 2025 saw Pakistan defeat a brazen Indian attack on its soil, while reviving its economy and fighting increasing terror. Pakistan's successful response to multiple serious challenges in 2025 helped significantly raise its geopolitical profile with improved ties with the United States and stronger relations with its friends in China, Russia and the Middle East. Pakistan’s GDP crossed the $400 billion mark in 2025. The year ended with Pakistani currency stable and the KSE-100, the key Pakistani stock market index, achieving new record highs with over 50% annual return in US dollar terms for investors. Privatization efforts gained steam with the sale of the PIA, the debt-ridden money-losing state-owned national airline, to private Pakistani investors. The political issues between the rulers and the opposition remained unresolved while PTI chief Imran Khan and his wife were sentenced to long jail terms. Taliban and Baloch terrorist groups stepped up their attacks on both civilian and military targets in the country. Pakistan has accused the Afghan Taliban of harboring these terrorist groups with India's backing.

Indian Aggression in May 2025:

On May 7, 2025, the Indian military launched an unprovoked attack on civilian targets in Pakistan after alleging without evidence that the terrorist attack in Pahalgam in the Indian Occupied Kashmir was carried out by groups based in Pakistan. The Indian attack was met with a robust Pakistani response in which multiple Indian fighter jets, including recently acquired Rafales, were shot down, leading to the grounding of the entire Indian Air Force for 48 hours. The fighting was halted within 4 days after mediation by the US President Donald J. Trump.

India's diplomatic efforts to isolate Pakistan by attempting to persuade the international community that Pakistan bore responsibility for Pahalgam failed miserably as the world demanded evidence which New Delhi could not produce. Azerbaijan, China and Turkey stood firmly with Pakistan, while India stood alone. Neither the US nor Russia came to India’s support.

High Optimism in Pakistan for 2026. Source: Gallup International

Pakistan's Geopolitical Gains:

Pakistan's success in what India dubbed Operation Sindoor was widely recognized by independent analysts and international media. President Trump talked about India's losses and a US government report referred to Pakistan's military successes against India.

Pakistan’s arm sales soared as the world learnt how the Pakistani military successfully used its indigenous defense gear, including drones and rockets, in the May conflict with India.

The Chinese celebrated the combat performance of their J-10C fighter jets and PL-15 air-to-air missiles used by the Pakistan Air Force against Indian military jets. Saudi Arabia signed a mutual defense pact with Pakistan after the Israeli Air Force struck in Doha, Qatar and the US government did nothing to help the country that hosts the largest US military base in the region.

Pakistan GDP FY 2008 to FY 2025. Source: PBS and AKD

Pakistan's Economic Revival:

Pakistan's economy stabilized with its currency stability and investor confidence. Pakistan’s gross domestic product (GDP ) reached $411 billion in June, 2025, rising 6.2% in April-June quarter. It slowed to 3.7% as floods hit parts of the country in the July-September quarter. The key stock index KSE-100 closed at record highs with 52% annual gain in US dollar terms. Large scale manufacturing grew with 8.3% in Oct 2025, driven by automobiles, construction, textiles, and petroleum. About 36,000 new retail trading accounts were opened in the September quarter, compared to 23,600 new registrations just three months ago, according to Topline Securities, a brokerage house in Pakistan. Broad and deep participation in capital markets is essential for economic growth and wealth distribution in any country.

Pakistan Shares Index Performance in 2025. Source: PSX

Pakistani Rupee Performed Better Than Indian/Sri Lankan Currencies in 2025

Pakistan's arms exports soared with multi-billion dollar orders for its fighter jets, trainer aircraft and drones. Azerbaijan, Sudan, Libya and Turkey purchased Pakistan-made defense equipment.

The discovery of rare earth metals, particularly large deposits of antimony, a critical mineral, boosted Pakistan's potential in world trade of critical metals. Antimony's main uses are in flame retardants (as antimony trioxide in plastics, textiles), strengthening alloys (especially with lead for batteries, ammunition, bearings, cable sheathing, pewter), and in semiconductors (diodes, infrared detectors). It's crucial for military tech (night vision, explosives), improves battery performance, and is used in glass (clarifying agent) and ceramics, highlighting its role in critical defense and energy technologies. . The price of antimony trioxide has shot up to around $40,000 per ton — off its peak of more than $60,000 as some users seek alternatives but still substantially higher than $26,000 in September 2024 — as fears about China’s control of the supply chains for metals including antimony have sparked a global race to secure supplies.

Pakistan received commitments of billions of dollars in investments in its large copper and gold deposits. Copper's importance has dramatically increased with growth in electric vehicles, data centers and global power demand.

Pakistan Space Program:

In October 2025, China launched HS-1 satellite for Pakistan, its first hyper-spectral satellite which is equipped with advanced hyper-spectral imaging sensors capable of capturing data across hundreds of narrow spectral bands. The satellite lifted off from China’s Jiuquan Satellite Launch Center on a Kinetica-1 rocket. It is expected to boost Pakistan's national capacities in areas such as precision agriculture, environmental monitoring, urban planning, and disaster management. Its high-resolution data will support improved resource management and strengthen Pakistan’s resilience to climate-related challenges.

In addition to the HS-1 satellite, Pakistan has signed a $406 million deal with China’s PIESAT for a constellation of over 20 imaging and communication satellites, a move that signals a profound shift in its strategic posture, according to defense site Quwa. The deal includes a full transfer-of-technology (ToT) for in-country satellite manufacturing. It is poised to provide the Pakistani military with a sovereign, persistent imaging intelligence (IMINT) capability.

Pakistan's First AI Data Center:

Data Vault and Telenor Pakistan launched the nation's first dedicated AI data center in Karachi. It is designed to support startups, researchers, and government agencies with high-performance computing and GPU-as-a-service offerings. It is equipped with more than 3,000 Nvidia's highest performance H100 and H200 GPUs for which the Trump Administration issued export licenses. These GPUs cost from $40,000 to $60,000 each, making the Nvidia chips the biggest chunk of the investment made in this AI data center. Other data centers in Pakistan also support AI workloads but this new data center in Karachi is specially designed for AI. It puts the country on a short list of only a handful of nations with locally hosted AI data centers. Pakistanis rank among the world's top five users of Artificial Intelligence (AI) tools, securing the fourth spot among 21 nations surveyed by the Schwartz Reisman Institute.

Pakistan's Challenges in 2026:

Sustained economic recovery is the key challenge for Pakistan in 2026 and beyond. It is a difficult challenge amid unsettled issues with India and unresolved domestic political problems at home. Opposition leader Imran Khan and his wife have been sentenced to long jail terms by Pakistani courts. This situation, if left unresolved, is likely to continue to be a source of instability and poor economic performance. The other challenge is rising incidents of terror in the country with a 70% increase in terror attacks in 2025. Brute force alone will not resolve these issues. There's a need for talks to reach a political settlement with the Afghan Taliban who are harboring groups like the TTP and BLA that launch cross-border attacks in Pakistan.

Thursday, December 25, 2025

PIA Privatization: Can it Bring Back Pakistan National Airline's Glory Days?

After decades of failed attempts, the Government of Pakistan has finally privatized the Pakistan International Airline (PIA) under intense pressure from the International Monetary Fund (IMF). Nonetheless, it is a deal that will give the national airline not only a chance to survive but to thrive in the long run. As part of structuring the sale for Rs. 135 billion, the government has assumed Rs. 654 billion in debt and pension obligations. The government gets only Rs. 10 billion in cash but it gives the new owners a clean balance sheet in return for a commitment to invest Rs. 125 billion of the Rs. 135 billion sale price in the carrier.

PIA Privatization Deal Structure. Source: Standard Capital Securities Pvt Ltd.

Pakistani politicians have used state-owned enterprises like the PIA as a vehicle for doling out political patronage. They have given jobs, including top jobs, to political cronies who have neither the experience nor the inclination to run these PSUs like businesses. Their focus has been on extracting as much financial gains as possible, and sharing some of these gains with their political patrons.

Privatization will save Pakistan’s taxpayers tens of billions of rupees each year, and raise the prospect of the PIA becoming a contributor rather than a continuous drain on the national treasury. Prior experience with privatizations of state-owned units like banks and the telecom company has shown that this is a realistic expectation. Taxpayer money saved can be used to fund education, healthcare and critical infrastructure.

The PIA has a huge potential to succeed as an airline business. It has lucrative routes and landing rights which it is currently unable to fully utilize. It has a small aging fleet of 32 aircraft. Half of the fleet is out of service at any given time due to maintenance issues.

Arif Habib, the head of the buying consortium which was advised by New York-based Seabury Aviation Partners, has committed to hiring a professional management team to run the PIA as a business to serve its customers and shareholders. He has announced plans to grow the PIA fleet from around 15-18 operational aircraft to 38 in the first phase, then potentially reaching 64-65 aircraft within a few years, essential for reclaiming international routes and improving service by adding more planes and restoring operational strength.

Pakistan has the world's 6th largest diaspora. In addition, millions of Pakistanis travel for Hajj and Umrah pilgrimage to Saudi Arabia each year. Majority of the overseas Pakistanis and pilgrims would choose to travel by PIA if it offered convenient schedules and better service with direct flights to Pakistan.

A successful national airline can make a significant contribution to the nation's economy by improving connectivity for tourism, trade and investment in the country. Business people, in particular, value their time. Operating direct, non-stop flights to destinations in Pakistan from major international airports are essential for serving this customer base.

PakAlumni Social Network

Friday, December 19, 2025

Pakistan Pharma Begins Domestic Production of GLP-1 Weight Loss Drugs

Several Pakistani pharmaceutical companies have started domestic production of generic versions of GLP-1 (Glucagon-Like Peptide-1) drugs Ozempic/Wegovy (Semaglutide) and Mounjaro/Zeptide (Tirzepatide). Priced significantly lower than the branded imports, these domestically manufactured generic drugs will increase Pakistanis' access and affordability to address the obesity crisis in the country, resulting in lower disease burdens and improved life quality and longer life expectancy. Obesity causes diabetes, hypertension, heart disease and other non-communicable diseases (NCD) which are now among the leading causes of death in Pakistan.

Pakistan Pharmaceutical Companies

BF Biosciences, Ferozsons, Getz Pharma and GD Searle Co are among the leading pharma producers of both injectable and pill versions of the GLP-1 and GIP drugs in Pakistan. Over the last few years, these drugs have revolutionized treatment of diabetes and obesity. Now, Pakistani pharmaceutical companies have begun manufacturing biosimilar versions of these therapies locally, marking a major milestone in access and affordability. Biosimilars are biologic medicines developed to match the safety, efficacy, and quality of their international counterparts, approved only after rigorous regulatory evaluation, according to Pakistani media reports.

Obesity Risk Among Men. Source: World Obesity Atlas

The obesity crisis has become a global health emergency with over a billion people living with obesity in the world, creating global opportunities for weight-loss drugmakers. Rapidly rising rates of obesity in adults and children are being blamed on factors like processed foods, sedentary lifestyles, and stress, leading to serious conditions like diabetes, heart disease, certain cancers, and huge healthcare costs, requiring multifaceted solutions including policy changes, better nutrition, and integrated healthcare.

Obesity Risk Among Women. Source: World Obesity Atlas

Pakistani drugmakers are planning to export these weight-loss and diabetes drugs in the near future. Over a dozen pharma companies are upgrading factories with a total investment of more than $500 million to ensure their medications and factories are compliant with overseas regulations, said Javed Ghulam Mohammad, chief executive officer at Martin Dow Group. His company is a member of the Pakistan Pharmaceutical Manufacturers Association, which is backing the effort. The sector’s push comes as the nation looks to increase overall exports to lift the economy.

The country's drug exports have increased the most in two decades in the fiscal year ending in June, 2025, growing 34% to $457 million, according to the association. Pharmaceutical shipments have the potential to reach $5 billion in eight years if the overseas push is successful, Mohammad said. That would make pharmaceuticals among Pakistan’s largest product exports, according to Bloomberg.

Monday, December 15, 2025

WIR 2026: Income and Wealth Inequality in India, Pakistan and the World

The top 1% of Indians own 40.1% of the nation's wealth, higher than the 37% global average. This makes India one of the world's most unequal countries, according to the World Inequality Report. By contrast, the top 1% own 24% of the country's wealth in Pakistan, and 23.9% in Bangladesh. Tiny groups of wealthy elites (top 1%) are using their money to buy mass media to manipulate public opinion for their own benefit. They are paying politicians for highly favorable laws and policies to further consolidate their power. It is a phenomenon known as "elite capture".

Wealth Inequality. Source: World Inequality Report 2026

"Extreme wealth inequality is persistent and increasing" in all parts of the world, says the report published by World Inequality Lab of the Paris School of Economics. This has serious economic, political and social implications. It is undermining democracies and empowering billionaires at the expense of the common people, including the middle class (middle 40%) and the poor (bottom 50%).

Income Inequality. Source: World Inequality Report 2026

Income inequality is trending in the same way as wealth inequality. The income of the top 1% of Indians stands at 22.6% of the national income. The income of the top 1% of Pakistanis is 16.2% of the country's income, significantly lower than the 20% global average. The income and wealth distribution in Bangladesh is similar to Pakistan's.

Widening Income Gap in India. Source: WIR2026

Persistent Income Gap in Pakistan. Source: WIR2026

The global average monthly income is 1200 Euros but there are huge differences among various regions of the world. The South and South East Asia region remains among the poorest, but its average monthly income of 600 Euros is twice that of sub-Saharan Africa. North America's monthly income of 3,800 Euros is the highest while sub-Saharan Africa's 300 Euros is the lowest in the world.

Regional Income Disparities. Source: WIR2026

Global Inequality Change From 1980 to 2025. Source: Bloomberg

The report documents how the global financial system reinforces inequality. Wealthy economies continue to benefit from an “exorbitant privilege”: each year, around 1% of global GDP (approximately three times as much as development aid) flows from poorer to richer nations through net foreign income transfers associated with persistent excess yields and lower interest payments on rich-country liabilities. Reversing this dynamic is central to any credible strategy for global equity.

Elite Capture in South Asia

Food in Pakistan 2nd Cheapest in the World

India in Crisis: Unemployment and Hunger Persist After COVID

IMF Questions Modi's GDP Data

Record Number of Indians Seeking Asylum in US

Ambani Wedding, Indian Billionaires and Bollywood

Incomes of Poorest Pakistanis Growing Faster Than Their Richest Counterparts

Pakistanis Consuming More Calories, Fruits & Vegetables Per Capita

How Grim is Pakistan's Social Sector Progress?

Pakistan Fares Marginally Better Than India On Disease Burdens

COVID Lockdown Decimates India's Middle Class

Pakistan Child Health Indicators

Pakistan's Balance of Payments Crisis

How Has India Built Large Forex Reserves Despite Perennial Trade Deficits

Riaz Haq's Youtube Channel

PakAlumni Social Network

Wednesday, December 10, 2025

Pakistan Gets its First AI Data Center

Data Vault and Telenor Pakistan have launched the nation's first dedicated AI data center in Karachi. It is designed to support startups, researchers, and government agencies with high-performance computing and GPU-as-a-service offerings. It is equipped with more than 3,000 Nvidia's highest performance H100 and H200 GPUs for which the Trump Administration issued export licenses. These GPUs cost from $40,000 to $60,000 each, making the Nvidia chips the biggest chunk of the investment made in this AI data center. Other data centers in Pakistan also support AI workloads but this new data center in Karachi is specially designed for AI. It puts the country on a short list of only a handful of nations with locally hosted AI data centers. Pakistanis rank among the world's top five users of Artificial Intelligence (AI) tools, securing the fourth spot among 21 nations surveyed by the Schwartz Reisman Institute.

The local hosting of data in Pakistan ensures data sovereignty to comply with national data protection and security standards. It also achieves faster response times for queries. The data center runs entirely on solar power, making it a green data center solution. Additionally, the government of Pakistan has allocated 2,000 MW of power from the national grid for AI data centers.

One of the objectives of locally hosted AI data centers is to support Urdu language models (LLMs) trained to help Pakistani consumers who wish to use AI chatbots in local languages. A number of Urdu LLMs have already been developed in the country, including Alif and UrduLlama, both based on the open-source Llama-3.1-8B-Instruct architecture. Another model named UrduGPT is described as Pakistan's own large language model, UrduGPT is fine-tuned specifically for Urdu and regional languages of Pakistan using local datasets and cultural semantics to ensure relevance for native speakers.

Currently, Pakistan has 27 data centers located in Karachi, Lahore, and Islamabad, operated by PTCL, Multinet, and Cybernet. More are being built. Zong, a local mobile phone service operator owned by China Mobile, is building AI-driven cloud infrastructure in Pakistan. Indus Cloud and Huawei have a strategic partnership that aims to launch a next-generation cloud data center, incorporating energy-efficient Huawei technology. XDS and Al Nahal IT Park are partnering to build a liquid-cooled data center at the Al Nahal IT Park in Sindh province. Mari Petroleum Company Limited (MPCL), the state-owned oil and gas firm, is diversifying by forming a subsidiary, Mari Technologies, to build Tier III and Tier IV data centers in Islamabad and Karachi, with the 5MW Islamabad facility set for completion by early 2026.

RAAST: Pakistan's Instant Payment System

Pakistan to Develop Urdu Large Language Model (LLM)

Algorithm: Origins of Artificial Intelligence in Islamic Age

Digital Pakistan 2022: Broadband Penetration Soars to 90% of 15+ Population

STEM Enrollment in Pakistan Exceeds One Million

Digital Public Infrastructure in Pakistan

Generative AI Buzz in Pakistan

Is Pakistan Ready for the AI Revolution?

Growing Presence of Pakistani Women in Science and Technology

Riaz Haq's Youtube Channel

PakAlumni Social Network