tag:blogger.com,1999:blog-5848640164815342479.post2050931131221420097..comments2024-03-27T15:36:44.737-07:00Comments on Haq's Musings: Looking Back at Military Rule in Indonesia and Pakistan Riaz Haqhttp://www.blogger.com/profile/00522781692886598586noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-5848640164815342479.post-83655194836344414842016-12-25T08:54:03.308-08:002016-12-25T08:54:03.308-08:00Here are a couple of excerpts from "Playing w...Here are a couple of excerpts from "Playing with Fire" by Pamela Constable:<br /><br /><br />"Sugar is critical commodity in a country (Pakistan) where people consume vast amounts of sweet tea, soft drinks, and cakes, using about 4 million metric tons of sugar a year. .....Sugar is also very profitable. Pakistan is among the top five producers of sugar cane in the world, employing more than two million seasonable laborers at harvest time, and sugar refining is the second largest agribusiness after flour milling. According to National Accountability Bureau, a majority of country'd eighty-plus sugar mills are owned by political families, including Sharifs and Bhuttos, as well as members of parliament and several military-controlled enterprises." <br /><br />"In Pakistan, the sugar industry is actually a political industry in which powerful politicians on all sides are involved", said a 2009 statement from the Sugar Mills Workers Federation that described how the big millers cheat mall growers through fake middlemen, then manipulate sugar prices by pressuring the government to stimulate or discourage exports depending on how much cane has been harvested."<br /><br /><br />"Throughout the 1990s, during two periods of rule by Sharifs and two by his archrial Benazir Bhutto, the privatization process became a game of grab and run. Investing of investing in solid projects, many business groups colluded with corrupt officials to make quick profits. They borrowed huge sums (from state-owned banks) without collateral, created and dissolved ghost factories, purchased state assets at token prices, avoided paying taxes, defaulted on shaky loans, or deferred paying them indefinitely....Major defaulters and beneficiaries of loan write-offs, granted by both the Bhuttos and Sharif governments, included some of Pakistan's wealthiest business families-- Manshas, Saigols, Hashwanis, Habibs, Bhuttos and Sharifs......using the National Accountability Bureau (NAB), the (Musharraf) regime (after year 2000) went to prosecute eighteen hundred cases of corruption to recover nearly $3.4 billion in assets." <br /><br />https://books.google.com/books?id=Y-wU1aVyM9IC&pg=PA40&lpg=PA40&dq=pakistan+sugar+mafia+politician&source=bl&ots=W7LPxh8OQW&sig=9zTBvtFcwCSIXjs6Hxz-HdylcXg&hl=en&sa=X&ved=0ahUKEwiLvtLu-4vRAhVpqVQKHXBDCSQQ6AEISjAN#v=onepage&q=loan%20defaulters&f=false <br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-85677484098091045572014-03-03T17:02:18.219-08:002014-03-03T17:02:18.219-08:00Democracy in #Pakistan: GDP grew avg 2.9% rate sin...Democracy in #Pakistan: GDP grew avg 2.9% rate since 2008, less than half of 7% on @P_Mushharaf's watch until 2007. http://www.dailytimes.com.pk/business/27-Feb-2014/pakistan-s-gdp-grow-2-9-in-5-yearsRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-2475283492494637192013-11-24T16:02:15.761-08:002013-11-24T16:02:15.761-08:00Here's a New Op Ed by Sayem Ali:
We are cauti...Here's a <a href="http://magazine.thenews.com.pk/mag/moneymatter_detail.asp?id=6641&magId=10&catId=79" rel="nofollow">New Op Ed</a> by Sayem Ali:<br /><br /><i>We are cautiously optimistic on growth outlook for 2014. Investor confidence has improved due to a smooth political transition in the May 2013 general elections and a new IMF loan to support the balance of payment position. The KSE 100 index has rallied 50 percent in 2013, as inflows from Foreign Portfolio Investors (FPI) increased to $372 million in 2013, compared to $114 million in 2012. While growth is likely to remain subdued at 3.5 percent in FY14 (ending June 2014), a stronger pickup is expected in the second half of 2014 on improved energy supply and higher private sector investment spending. In our view, growth will rise to 4.5 percent in FY15 (starting July 2014).<br /><br />Growth is led by higher manufacturing sector output, which posted a strong 8.4 percent year-on-year growth in the second half of 2013, led by stronger growth in textile and leather exports. Improved energy supplies have led to higher output in the petroleum, fertiliser and food and beverages sectors. Private sector credit growth has also picked up, rising Rs82 billion during the second half of 2013, after declining by Rs20 billion in FY13. Credit growth will pick up in 2014 as government reins in large fiscal deficit under the IMF stabilisation program.<br /><br />Key risks to growth arise from a deteriorating security environment, energy crisis and sharp rise in inflation. Inflation has accelerated in the second half of 2013 on cut back in energy subsidies and a weaker Pakistan rupee. Inflation has increased to 9.1 percent year-on-year in October 2013, a sharp increase after declining to 5.1 percent in May. Sharp rupee depreciation of over 8.5 percent in the second half of 2013 on widening balance of payment deficits has also fuelled inflation. We forecast CPI inflation to average 10 percent in FY14.<br /><br />The biggest short-term challenge for policymakers is to avert a balance of payments crisis. Foreign exchange reserves have declined to dangerously low levels of $3.6 billion on November 13, which is equivalent to only one month of import cover. Large debt payments are looming on the horizon and a significant dollar liquidity injection is required to avert another balance of payment crisis. It will be hard for the economy to recover from another balance of payments crisis, similar to the 2008 crisis that led to the rupee depreciating 28 percent and forced the economy into a downward spiral of stagnant growth and record inflation.<br /><br />Policy<br /><br />The government has outlined an ambitious reform agenda under the IMF programme. The target is to reduce the fiscal deficit to 5.8 percent of GDP in FY14 from 8.8 percent in FY13. Reform agenda includes cutting back on power subsidies, implementing new tax measures and privatising public sector enterprises (PSEs). The government cut energy subsidies by 30percent for households and 50 percent for commercial users in November. A new tax on gas consumption is planned for December. The government has also shortlisted 31 state enterprises for privatisation, which will include IPOs for banks and oil and gas companies in 2014.</i><br /><br />http://magazine.thenews.com.pk/mag/moneymatter_detail.asp?id=6641&magId=10&catId=79Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-54003864038263205622013-10-08T10:43:07.610-07:002013-10-08T10:43:07.610-07:00A 2010 UMich study found that misinformed people e...A 2010 UMich study found that misinformed people exposed to corrected facts rarely changed their minds http://www.boston.com/bostonglobe/ideas/articles/2010/07/11/how_facts_backfire/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-50156643919702580702013-05-20T19:53:13.481-07:002013-05-20T19:53:13.481-07:00Mayraj: "Indonesia benefitted from Chinese bu...Mayraj: "Indonesia benefitted from Chinese business people and being the 'right' neighborhood."<br /><br />I agree that Indonesia benefited from its entrepreneurial ethnic Chinese minority. But it was only possible because Suharto managed to protect them from the tyranny of the majority which killed many Chinese and deterred investment. <br /><br />In addition, Suharto was one of <a href="http://www.riazhaq.com/2008/01/asean-architect-suharto-passes-on.html" rel="nofollow">the architects of AEAN</a> along with Lee Kwan Yu of Singapore and Malaysia's Mahathir Muhammad. Both of them made a visit to his deathbed and wept openly. <br /><br />"Lee, 84, and Mahathir, 82, paid what they knew would be their final respects to a former comrade-in-power, in a moment pregnant with symbolism as the curtain was drawing on a key regional actor. The death of Suharto, the most senior of the three ASEAN octogenarians, marks the beginning of the end of a defining generation of regional leaders", said Yang Razali Kassi of Pacific CSIS. <br /><br />http://www.riazhaq.com/2008/01/asean-architect-suharto-passes-on.html<br /><br />BTW, Pakistan, too, has a very entrepreneurial <a href="http://www.riazhaq.com/2011/03/pakistan-needs-more-gujaratis.html" rel="nofollow">Gujrati minority</a> who were badly hurt when Bhutto hit the so-called "22 families" hard which deterred further private investment in 1970s. <br /><br />http://www.riazhaq.com/2011/03/pakistan-needs-more-gujaratis.htmlRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-75404131331814173252013-05-20T19:40:41.298-07:002013-05-20T19:40:41.298-07:00Indonesia benefitted from Chinese business people ...Indonesia benefitted from Chinese business people and being the 'right' neighborhood.<br />The story is still commodities (note it is no longer a major oil producer like it was before):<br />"Indonesia has indeed successfully overcome several setbacks in the last 15 years. In addition to the Asian financial crisis, the country underwent a political re-structuring, the devastating 2004 Tsunami and periods of domestic unrest and instability. Yet Roubini has identified several key asset markets in which Indonesia is attracting serious foreign investment. These include coal (much of which competes with Australian coal in China), palm oil and timber. The country’s population is also large – at 230 million, the 4th largest in the world – and thus has some of the "large market" allure that favors well-peopled economies when investment and expansion decisions are made.<br />Nouriel Roubini is not alone in his optimism about Indonesia. The IMF and the OECD have both recently issued favorable reports on Indonesia’s economy (albeit pointing out a need for some reforms)."<br />http://thediplomat.com/pacific-money/2012/10/01/the-next-asian-tiger/<br />The Next Asian Tiger<br /><br />http://www.oecd.org/eco/surveys/indonesia2012.htm<br /><br />Thing are looking up for African countries.Mayrajnoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-36541636800553861862013-05-20T19:33:44.484-07:002013-05-20T19:33:44.484-07:00^^RH: "Policies and governance are much more ...^^RH: "Policies and governance are much more important than the riches of commodities. If natural resources mattered much then African countries would be among the richest and Japan and South Korea among the poorest"<br />---- <br /><br />True dat. True dat. Well said.Hopewinshttps://www.blogger.com/profile/07885301987622998733noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-85278640997839917862013-05-20T19:32:27.323-07:002013-05-20T19:32:27.323-07:00Mayraj says: "Malaysia best. Indonesia next. ...Mayraj says: "Malaysia best. Indonesia next. Philipines so-so. Pakistan is not up the mark. This is because..feudal..population.. risk..resources..english..blah..blah..blah."<br />-----<br /><br />Here is a simpler explanation of why the growth in Malaysia > Indonesia > Philipines > Pakistan:<br /><br />http://alturl.com/qiykuHopewinshttps://www.blogger.com/profile/07885301987622998733noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-91758605636453485292013-05-20T19:28:08.683-07:002013-05-20T19:28:08.683-07:00Mayraj: "ndonesia is a resource rich country ...Mayraj: "ndonesia is a resource rich country and benefitted from commodities."<br /><br />Policies and governance are much more important than the riches of commodities. If natural resources mattered much then African countries would be among the richest and Japan and South Korea among the poorest. Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-56930620554775248292013-05-20T19:22:33.894-07:002013-05-20T19:22:33.894-07:00Indonesia is a resource rich country and benefitte...Indonesia is a resource rich country and benefitted from commodities. It also has benefitted from business oriented Chinese diaspora. It hasn't done as well as Taiwan or Malaysia because its population is much bigger. It could have done much better if it had a bold risk taking leadership like China;but it didn't/'doean't. In fact Malaysia needs more potent policies to continue growing. It has stagnated.[When I was working on my chapter on Chinese decentralized I did some research on the Asian Tigers.]<br />Had Bhutto not nationalized industry, Pakistan could have been in a different. Yes govt owned factories like those operated by TVEs in China can be successful;but they were incentivized to succeed-not the case in Pakistan. <br />Note: Philippines has a feudal-large landlord problem like Pakistan and yet its economy is picking up. It has finally earned to take advantage of its English seeking population-at home. And see how policy of improving corruption has been a boon. It is being done under Aquino-now why couldn't a Bhutto be like that?<br />http://oecdinsights.org/2012/05/03/getting-globalization-right-the-east-asian-tigers/<br />Getting Globalization Right: The East Asian Tigers<br /><br />http://www.rappler.com/business/13776-philippines-and-indonesia-are-the-new-tigers,-say-analysts<br />Philippines and Indonesia: the new 'tigers'<br />http://www.bloomberg.com/news/2013-05-02/philippines-wins-investment-grade-from-s-p-in-aquino-affirmation.html<br />Philippines Beats Indonesia in Gaining S&P Investment Grade<br /> <br />http://www.policymic.com/articles/39507/philippines-economy-booming-but-poverty-and-unemployment-remain-problematic<br />Philippines Economy: Booming, But Poverty and Unemployment Remain Problematic<br /> <br />“At 6.6 percent, the Filipino economy's current GDP growth rate is the second highest in Asia, behind only China's.”<br />“These economic improvements are in part due to President Benigno Aquino, whose steps to increase transparency and address corruption sparked renewed international confidence in the Filipino economy even during the global slowdown.”<br />“Filipino economist Cielito Habito calculated that the increased wealth of those families was equivalent in value to a staggering 76.5 percent of the country's overall increase in GDP at the time. This income disparity was far and away the highest in Asia”<br />http://www.theatlantic.com/international/archive/2013/05/the-grim-reality-behind-the-philippines-economic-growth/275597/<br />The Grim Reality Behind the Philippines' Economic Growth<br />The country is being heralded as the new Asian success story, but only an elite few reap the rewards. <br /> <br />http://www.channelnewsasia.com/news/asiapacific/high-unemployment-rate-in-philippines-de/659606.html<br />High unemployment rate in Philippines despite strong economic growth<br />Despite strong economic growth, the unemployment rate in the Philippines remains the highest in Southeast Asia. The government hopes to create employment by drawing in more investments.<br /> <br />“Not everything is rosy however. For instance, although workers are increasingly returning home, the economy still has an abnormal number of “remittance” workers abroad, which constituted about 8 percent of GDP last year. What’s more, in the same report mentioned above, the IMF warned that Manila will need to continue improving its institutions and invest more in infrastructure.<br />Despite these challenges, Fitch and now Standard and Poor’s positive outlook for the country has demonstrated that Aquino administration is on the right track with its “good governance is good economics” philosophy.”<br /> <br />http://thediplomat.com/pacific-money/2013/05/03/asias-rising-economic-star-the-philippines/<br />Asia’s Rising Economic Star: The Philippines?Mayrajnoreply@blogger.com