Haq's Musings

Educational Attainment in India & Pakistan

noreply@blogger.com (Riaz Haq) — Wed, 30 May 2012 05:18:00 +0000

As of 2010, there are 380 out of every 1000 Pakistanis age 15 and above who have never had any formal schooling. Of the remaining 620 who enrolled in school, 22 dropped out before finishing primary school, and the remaining 598 completed it. There are 401 out of every 1000 Pakistanis who made it to secondary school. 290 completed secondary school while 111 dropped out. Only 55 made it to college out of which 39 graduated with a degree.

The preceding assessment is based on an interpretation offered by Indian blogger Siddarth Vij of Barro-Lee data in response to my earlier blog post titled Pakistan Ahead of India in Graduation at All Levels. Robert Barro and Jong-Wha Lee are Harvard University researchers whose data on educational attainment is used by UNDP and the World Bank. Here's how Vij read Barro-Lee dataset for India:

"327 out of every 1000 Indians above the age of 15 have never had any formal schooling. Of the remaining 673, only 20 dropped out during primary school. Once we got kids into primary school, we managed to make sure that they completed it. In secondary school, however, the situation is markedly different. 465 out of every 1000 Indians made it to secondary school but 394 dropped out without completing. Only 58 made it to college out of which a little more than half graduated with a degree"

Putting the two together, here's how the two South Asian neighbors compare:

As of 2010, there are 380 (vs 327 Indians) out of every 1000 Pakistanis age 15 and above who have never had any formal schooling. Of the remaining 620 (vs 673 Indians) who enrolled in school, 22 (vs 20 Indians) dropped out before finishing primary school, and the remaining 598 (vs 653 Indians) completed it. There are 401 (vs 465 Indians) out of every 1000 Pakistanis who made it to secondary school. 290 (vs 69 Indians) completed secondary school while 111 (vs. 394 Indians) dropped out. Only 55 (vs 58 Indians) made it to college out of which 39 (vs 31 Indians) graduated with a degree.

While Vij's explanation of Barro-Lee data-set sounds quite plausible, I still stand by my conclusion made in the earlier post that the percentage of population that completed secondary and tertiary education in Pakistan is higher than that in India.

Another important point to note in Barro-Lee dataset is that Pakistan has been increasing enrollment of students in schools at a faster rate since 1990 than India. In 1990, there were 66.2% of Pakistanis vs 51.6% of Indians who had no schooling. In 2000, there were 60.2% Pakistanis vs 43% Indians with no schooling. In 2010, Pakistan reduced it to 38% vs India's 32.7%.

Clearly, both India and Pakistan have made significant progress on the education front in the last few decades. However, the Barro-Lee dataset confirms that the two South Asian nations still have a long way to go to catch up with the rapidly developing nations of East Asia as well as the industrialized world.

Related Links:

Haq's Musings

India & Pakistan Comparison Update 2011

India and Pakistan Contrasted in 2010

Educational Attainment Dataset By Robert Barro and Jong-Wha Lee

Quality of Higher Education in India and Pakistan

Developing Pakistan's Intellectual Capital

Intellectual Wealth of Nations

Pakistan's Story After 64 Years of Independence

Pakistan Ahead of India on Key Human Development Indices

American Hypocrisy on Dr. Afridi's Sentence

noreply@blogger.com (Riaz Haq) — Sat, 26 May 2012 06:09:00 +0000

The US Congress and the Obama administration are incensed by the 33-year prison term handed to Dr. Shakil Afridi accused by Pakistan of spying for the CIA. In their usual response, the lawmakers in Washington have voted to cut aid to Pakistan for the umpteenth time and some in Congress are proposing to honor Afridi as a hero for his help in killing Osama bin Laden. Secretary of State Hilary Clinton has also chimed in and demanded Afridi's immediate release.

As Washington rises to defend Dr. Afridi, no mention is being made of the potential damage his actions have inflicted on Pakistan's most vulnerable children. The CIA-inspired fake vaccination scheme in Abbottabad to collect bin Laden family's DNA samples has reinforced the fears and doubts in the minds of the parents of the children who really need to be vaccinated. It has also raised suspicions against charities such as Save the Children Fund with which Dr. Afridi claimed affiliation. This misguided effort by Afridi and the CIA has put at risk the heath and well-being of millions of young lives in Pakistan and other developing nations where polio and other similar diseases still persist. Here's how a piece by Maryn McKenna published in Wired magazine describes the outrage:

"I felt, and still feel, that the maneuver — which was belatedly acknowledged by the CIA — was a cynical attempt to hijack the credibility that public health workers have built up over decades with local populations. I especially felt it endangered the status of the fraught polio-eradication campaign, which over the past decade has been challenged in majority-Muslim areas in Africa and South Asia over beliefs that polio vaccination is actually a covert campaign to harm Muslim children — an accusation that seems fantastic, but begins to make sense when you realize some of those areas have perfectly good reasons to distrust vaccination campaigns."

Even without the outrageous scheme by Afridi conducted in collusion with the CIA, the US demands are still hypocritical if one looks at the prison sentences handed out by US courts to Israeli Mossad agent Jonathan Pollard and Pakistani ISI agent Ghulam Nabi Fai in the United States. Both are US citizens.

Some argue that Pakistan should bear the responsibility for CIA's actions because of the country's failure to find bin Laden. While I agree that Pakistan failed badly in capturing bin Laden, there is no evidence to support the assertion that Pakistani government was deliberately hiding bin Laden.

As to the failure to find a most wanted fugitive, one must not forget that it took the FBI 16 years to find crime boss Whitey Bulger. On December 23, 1994, after being tipped off by his former FBI handler about a pending indictment under the RICO Act, Bulger fled Boston and went into hiding. For sixteen years, he remained at large in the United States. For twelve of those years, Bulger was prominently listed on the FBI Ten Most Wanted Fugitives list. On June 22, 2011, Bulger was arrested outside an apartment in Santa Monica, California.

Shuja Nawaz, a scholar with the Atlantic Council in Washington, put it well when he told Voice of America that Pakistanis "see it as the subversion of a Pakistani citizen and his willing participation in an act that was to support the United States intelligence operations inside Pakistan."

Related Links:

Haq's Musings

US Military Undermining Interests in "AfPak"

Northern Distribution Network

From Pakistan to Afghanistan, U.S. Finds Convoy of Chaos

Is US-Pakistan Military Confrontation Inevitable?

Seeing Bin Laden's Death in Wider Perspective

Who Are the Haqqanis?

Military Mutiny in Pakistan?

Can US Aid Remake Pakistan?

The Obama Surge Strategy

US War Effort in Afghanistan Relies on Pakistan

Minorities Are Majority in America's Silicon Valley

noreply@blogger.com (Riaz Haq) — Fri, 25 May 2012 05:35:00 +0000

The U.S. Census Bureau has recently reported that the United States has reached a historic tipping point -- with Latino, Asian, mixed race and African American births constituting a majority of births for the first time. Minorities made up about 2 million, or 50.4%, of the births in the 12-month period ending July 2011. The latest figure was up from 49.5% reported in the 2010 census.

I have personally witnessed Silicon Valley's racial mix change dramatically over the last several decades. When I arrived here to join Intel in 1981, there were few non-whites in the Valley. In fact, I was the only nonwhite person in a picture of the six-member award winning Intel 80386 CPU design team which was published by the PC Magazine in 1988.

My experience of the demographic changes in this high-tech valley is not just anecdotal. It's supported by data compiled by the local San Jose Mercury newspaper in 2010. The data shows that 49% of Intel employees are now Asian, a full 7% more than whites. In Silicon Valley, the difference is even more pronounced with Asians accounting for 53.9% of the employees versus 37.6% white workers.

With Asians accounting for just 15.5% of the high-tech work force nationally, Silicon Valley's high-tech racial mix is also very different from the rest of the country. Silicon valley's employee pool also differs in terms of under-representation of Blacks, Hispanics and women relative the national averages.

Among Asian-Americans, Pakistani-Americans are the 7th largest community in America, according to a report titled "A Community of Contrasts Asian Americans in the United States: 2011" published by Asian-American Center For Advancing Justice. Pakistani-American population has doubled from 204,309 in 2000 to 409,163 in 2010, the second largest percentage increase after Bangladeshis' 157% increase in the same period.

The total fertility rate in the United States is now at 2.06, just enough to maintain the current level of US population. It's possible mainly due to the history of relatively liberal US immigration policy. If US immigration policy is tightened in response to pressures from various labor organizations and the traditional anti-immigration groups, the US fertility rate is likely to dip and hurt the US economy which needs more workers to pay for the retiree benefits of the growing population of senior citizens. Already, many US multinational corporations have added 1.5 million workers to their payrolls in Asia and the Pacific region from 1999 to 2009, and 477,500 workers in Latin America, according to US Commerce Dept data as reported by the Wall Street Journal. If the businesses can not find workers in the United States, they are more likely to continue to accelerate moving jobs elsewhere, depriving the US government the revenue it needs to balance its budget.

Related Links:

Haq's Musings

Pakistani-American's Game-Changing Vision

US Firms Adding Jobs Overseas

Pakistan's Demographic Dividend

Pakistanis Study Abroad

Pakistan's Youth Bulge

Pakistani Diaspora World's 7th Largest

Pakistani-American NFL Team Owner

Pakistani-American Entrepreneurs Catch the Wave

Pakistani Graduation Rate Higher Than India's

Pak Students Buck Decline in Australia

noreply@blogger.com (Riaz Haq) — Wed, 16 May 2012 21:22:00 +0000

While the overall foreign student population in Australia has declined this year, the number of Pakistanis studying in Australia is continuing double-digit growth, according to recent Australian government data on international education. Pakistan has now become the top growth market for Australia's struggling international education industry, even though revenue from its neighbor India fell almost $1 billion in a single year, according to The Australian newspaper. New Australian Bureau of Statistics figures reveal that Australia's fourth-biggest export industry is turning to new markets to counter a $2.2bn loss of revenue last year.

Australia's earnings from the top 12 foreign markets all fell last year, topped by India, which slumped by 37 per cent, but Pakistan bucked the trend, with revenue rising 15 per cent to $253 million.

Australian international education revenue from Pakistan has been rising, more than tripling over the past five years. Earnings from the boom-bust Indian market are down 50% in two years, collapsing from a 2009 peak of $3.1bn.

Although the growth in the total number Pakistanis studying abroad has slowed since the terrorist attacks of Sept 11, 2001 in the United States, the world's sixth most populous nation continues to be among the leading sources of foreign students in America, Europe, Australia and new emerging higher education destinations in Asia.

As the number of Pakistani students in the United States has declined from a peak of 8,644 students (ranked 13th) in 2001-02 to 5,222 in 2009-10 (ranked 23rd), English-speaking OECD nations of the United Kingdom and Australia have become the biggest beneficiaries getting increasing market share of the Pakistan education market. Both nations have benefited in spite of the fact that the UK and Australian visa rejection rates for Pakistanis are higher than for students from other nations.

With rising urban middle class, there is substantial and growing demand in Pakistan from students, parents and employers for private quality higher education, including vocational training, along with a willingness and capacity to pay relatively high tuition and fees, according to the findings of Austrade, an Australian govt agency promoting trade. Private institutions are seeking affiliations with universities abroad to ensure they offer information and training that is of international standards.

Trans-national education (TNE) is a growing market in Pakistan and recent data shows evidence of over 40 such programs running successfully in affiliation with British universities at undergraduate and graduate level, according to The British Council. Overall, the UK takes about 65 per cent of the TNE market in Pakistan.

A common concern about Pakistani students is that they might not return to serve their country. I think this is a genuine concern but it is often overblown. Pakistanis with advanced training are helping their country of origin in many ways. Those who are living and working overseas send significant amounts of money home to help Pakistan's economy. Others contribute their know-how by returning home as doctors, engineers, professors and other professionals and technocrats on a permanent basis or by frequent working visits.

Examples of foreign-educated Pakistanis who are directly contributing to the nation include a Fulbright computer science scholar who has returned home to help fight terror, a plastic surgeon helping victims of acid attacks, a heart surgeon setting up a hospital in a remote Pakistani village, successful business executives, scientists, university professors and deans, current central bank governor, current finance minister and thousands of others.

It is extremely important for Pakistan's public policy makers and the nation's private sector to fully appreciate the expected demographic dividend as a great opportunity to turn the nation's fortunes for the better. The best way for them to demonstrate it is to push a pro-youth agenda of education, skills development, health and fitness to take full advantage of this tremendous opportunity. Failure to do so would be a missed opportunity that could be extremely costly for Pakistan and the rest of the world.

Related Links:

Haq's Musings

Pakistan's Expected Demographic Dividend

Pakistani Graduation Rate Higher Than India's

India and Pakistan Contrasted in 2011

Educational Attainment Dataset By Robert Barro and Jong-Wha Lee

Quality of Higher Education in India and Pakistan

Developing Pakistan's Intellectual Capital

Intellectual Wealth of Nations

Pakistan's Story After 64 Years of Independence

Pakistan Ahead of India on Key Human Development Indices

Scholarships at Foreign Universities

Institute of International Education--Open Doors

UK's Higher Education Statistics Agency Report

Austrade on Education in Pakistan

Pakistanis Rank Above Neighbors on Gallup Wellbeing Index 2012

noreply@blogger.com (Riaz Haq) — Thu, 10 May 2012 04:15:00 +0000

Gallup 2012 Wellbeing survey reports that 20% of Pakistanis say they are "thriving", down from 32% last year. However, the report shows that more of them are still better off than their neighbors in Bangladesh (16% thriving) and India (11% thriving). The number of those "thriving" increased in Bangladesh by 3% and declined in India by 6%.

The fact that the number of Pakistanis who consider themselves thriving is down from 1 in 3 last year to 1 in 5 now is understandable because of many serious and worsening crises Pakistan is facing today. The real question is who are these 20%? And why do they say they are thriving?

Here are some of the possible reasons:

1. Rising consumption of durables (cars, motorcycles, tractors, Appliances) and non-durables (FMCGs or fast-moving consumer goods) as well as increasing cement sales are indicative of the underlying strength of the economy.

2. Pakistan's undocumented economy is continuing to thrive as seen in packed shopping malls and restaurants.

3. There are double digit increases in cash remittances flowing in to Pakistan from the world's seventh largest diaspora, rising 21.45 percent to $9.73 billion in the first nine months of the 2011/12 fiscal year.

4. Karachi stock index is booming, hitting new 4-year highs. Share prices are driven by healthy profits and foreign buying, making KSE-100 the third fastest growing index in the world.

5. Even the preliminary official estimates are indicating that Pakistan's nominal per capita income has increased by 9% to $1,372 in 2011-12 from $1,258 in 2010-11.

6. Preliminary estimates are showing that poverty rate in Pakistan has declined from 17.2 per cent in 2008 to slightly over 12 per cent in 2011.

The Gallup survey confirms that only 28% of Pakistanis have confidence in their national government. In my view, it stems from the obvious failure of the state in delivering basic services such as rule-of-law, security and electricity to the people . The best way to improve the wellbeing of the people is to improve governance, reduce corruption and persuade people to pay taxes to give the state more resources.

Related Links:

Haq's Musings

Economic Survey of Pakistan 2011-12

US Technical Analyst Bullish on Pakistan

Pakistan on Goldman Sachs' Growth Map

Pakistan's 64 Years of Independence

Goldman Sachs & Franklin-Templeton Bullish on Pakistan

Emerging Market Expert Investing in Pakistan

Pakistan's Demographic Dividend

Genomics & Biotech Advances in Pakistan

The Growth Map by Jim O'Neill

Pakistan Rolls Out 50Mbps Broadband Service

More Pakistan Students Studying Abroad

Inquiry Based Learning in Pakistan

Mobile Internet in South Asia

Online Courses at Top International Universities

US Technical Analyst Bullish on Pakistan

noreply@blogger.com (Riaz Haq) — Thu, 03 May 2012 04:25:00 +0000

Elliot Wave theorist Mark Galasiewski is forecasting continuation of multi-year bull market in Pakistan. This forecasts marks an unusual agreement of a technical analyst with fundamental research done by Jim O'Neill of Goldman Sachs who recently reiterated Pakistan's place on its growth map.

The Elliott Wave Theory, formulated in 1939 by Ralph Nelson Elliot, is the basis of technical analysis that some traders use to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology, highs and lows in prices, and other collective factors.

Here are some excepts of a recent interview of Elliot Theorist Mark Galasiewski on what he calls the "Indian Ocean Renaissance":

".... there are various ways to make long-term investment decisions. For example, Warren Buffett has shown that picking individual stocks can provide good returns over time. But it's a very labor-intensive and time-consuming process, to research companies thoroughly enough to have the kind of conviction that he does. And his “buy and hold” strategy means that he suffers significant drawdowns in his portfolio at times -- like during the 2007-2009 crash.

Elliott wave analysis gives you the opportunity to make long-term bets with a similar conviction -- but with a fraction of the elbow grease. Instead of pouring over hundreds of quarterly reports and legal documents, you look for Elliott wave patterns in the charts of market indexes. Those patterns reflect investors' collective bias, bullish or bearish. (I won't go into details of why this is so; our Club EWI has tons of free reports explaining the mechanics of the Elliott Wave Principle.)

So, knowing what part of the Elliott wave pattern your market is in, you know how the pattern should progress from there, ideally. And that gives you a probabilistic forecast for the trend. It doesn't work 100% of the time (what does), but our subscribers remember more than one successful forecast we've made using Elliott waves.

For example, on March 23, 2009 -- at the time when almost no one felt bullish -- we issued a special report to our subscribers forecasting a multi-year bull market in Indian stocks. Two weeks later, we identified three more markets in the region -- Pakistan, Sri Lanka, and Indonesia -- that we believed were also likely to enjoy an "Indian Ocean Renaissance."

India, Pakistan, Sri Lanka, Indonesia have all since generated some of the best returns among global stock markets. Without knowledge of the Elliott Wave Principle, it would have been difficult to forecast the boom -- especially given the dismal news events at the time. Do you remember the headlines in early 2009?

The world was engulfed by the global financial crisis, and most people believed the worst was still ahead. The currencies of India, Pakistan, Sri Lanka, and Indonesia had collapsed. Pakistan and India were on the brink of conflict over the Mumbai terrorist attacks of late 2008. A civil war was still raging in Sri Lanka. Who would turn bullish on stock under those "fundamental" conditions? We did, and only because Elliott wave patterns in the price charts of those four markets told us to "buy."

And by the way, the terrible conditions in India, Pakistan and Sri Lanka mostly reversed along with the market rally over the next year."

"The Wave Principle is how the market works. Financial markets are non-rational and counter-intuitive. Investing according to conventional assumptions eventually leads to financial ruin, since the market too often does the opposite of what most people expect.

Even thinking contrarily is insufficient, because sometimes it’s necessary to run with the herd. But Elliott wave analysis helps you to determine which psychological stance is most appropriate at any given time. Often, the news at the time would be suggesting you do the opposite".

These latest analyses remind me of what Reuters' Mark Bendeich wrote on June 10, 2008:

"A little more than six years ago, immediately after the Sept. 11 attacks on U.S. cities, few sane investment advisers would have recommended Pakistani stocks. They should have. Their clients could have made a fortune. Since 2001, the nuclear-armed South Asian country, blamed for spawning generations of Islamic militants and threatening global security, has been making millionaires like newly minted coins. As Western governments have fretted about Pakistan's nuclear weapons falling into the hands of militants, the Karachi Stock Exchange's main share index has risen more than 10-fold."

Related Links:

Haq's Musings

Pakistan on Goldman Sachs' Growth Map

Pakistan's 64 Years of Independence

Goldman Sachs & Franklin-Templeton Bullish on Pakistan

Emerging Market Expert Investing in Pakistan

Pakistan's Demographic Dividend

Genomics & Biotech Advances in Pakistan

The Growth Map by Jim O'Neill

Pakistan Rolls Out 50Mbps Broadband Service

More Pakistan Students Studying Abroad

Inquiry Based Learning in Pakistan

Mobile Internet in South Asia

Online Courses at Top International Universities

Pak Virtual U Wins Top OCW Award

noreply@blogger.com (Riaz Haq) — Tue, 01 May 2012 04:08:00 +0000

Pakistan's Virtual University (VU) has won the Outstanding New Site Award 2012 for an Open CourseWare website which was created last year, according to media reports.

The Awards for OpenCourseWare Excellence provide annual recognition to outstanding courseware and OpenCourseWare sites created in the OCW Consortium community. They also recognize individual leadership in moving the ideals of OpenCourseWare and Open Educational Resources forward. The awards are announced each year at the global OpenCourseWare Consortium's annual conference.

In 2001, the Massachusetts Institute of Technology launched the world's first open courseware program, which inspired many other universities, including Pakistan's Virtual University, to join the Open CourseWare (OCW) movement.

Founded in 2002, Virtual University of Pakistan has so far contributed 138 courses on a wide range of subjects since joining the OpenCouseWare consortium. These courses include free and open digital publications of high quality educational materials for colleges and universities.

Enabling virtual education is the high-speed broadband expansion led by PTCL which has propelled Pakistan to become the fourth fastest growing broadband market in the world and the second fastest in Asia, according to a recent industry report. Serbia leads all countries surveyed with a 68% annual growth rate from Q1 2010 to Q1 2011. Thailand (67%), Belarus (50%), Pakistan (46%), and Jordan (44%) follow Serbia. India is in 14th place worldwide with a 35% annual growth rate.

The quickest and the most cost-effective way to broaden access to education at all levels is through online schools, colleges and universities. Sitting at home in Pakistan, self-motivated learners can watch classroom lectures at world's top universities including UC Berkeley, MIT and Stanford. More Pakistanis can pursue advanced degrees by enrolling and attending the country's Virtual University that offers instructions to thousands of enrolled students via its website, video streaming and Youtube and television channels.

The concept of virtual instruction is finding its way to K-12 education as well. Increasing number of Pakistanis are drawn to the Khan Academy channel on YouTube making Pakistanis among its top users. Virtual Education for All is a local Pakistani initiative extending the concept to primary level.

All of these technological developments and open courseware initiatives are good news for making education available and accessible to satisfy the growing needs in Pakistan and other emerging countries around the world seeking to develop knowledge-based economies of the 21st century. Virtual University deserves credit for leading this education revolution in Pakistan.

Related Links:

Haq's Musings

ICT4E in South Asia

Khan Academy Draws Pakistani Students

Pakistan Rolls Out 50Mbps Broadband Service

More Pakistan Students Studying Abroad

Inquiry Based Learning in Pakistan

Mobile Internet in South Asia

Allama Iqbal Open University

Online Courses at Top International Universities

Pakistan Virtual University

Pasi Sahlberg on why Finland leads the world in education

Intellectual Wealth of Nations

Pakistan Primary Education Crisis

Indian Students' Poor Performance on PISA and TIMSS

Pakistan's Demographic Dividend

India Shining, Bharat Drowning

PISA's Scores 2011

Teaching Facts versus Reasoning

Poor Quality of Education in South Asia

Infections Cause Low IQs in South Asia, Africa?

CNN's Fixing Education in America-Fareed Zakaria

Peepli Live Destroys Western Myths About India

PISA 2009Plus Results Report

Affordable Fuel Shortage Hurts Power Sector in South Asia

noreply@blogger.com (Riaz Haq) — Sat, 21 Apr 2012 16:58:00 +0000

Lack of affordable fuel has forced many power producers in Pakistan to operate at a fraction of their installed capacity since 2008. It has led to widespread load-shedding in the country, seriously hurting its economy. Similar situation now appears to be developing in India as well, although it's not quite as serious as Pakistan's current crisis yet. Current costs of various fuel options vary from $4 per mmBTU for coal to $20 per mmBTU for oil. Recently, the US prices of natural gas have dropped dramatically from $12 per mmBTU a few years ago to less than $2 per mmBTU, about half the price of coal, with the shale gas revolution currently sweeping the United States.

India burns coal to produce 55 percent of its electricity needs. Domestic coal production has increased just 1 percent last year while 11 percent additional power generation capacity has been installed. Some power producers have been importing coal, but that option has become more untenable recently because India’s biggest supplier, Indonesia, has doubled coal prices, according to a report in New York Times.

The gap between demand and supply in India has increased to 10.2 percent last month, from 7.7 percent a year earlier. In some states like Andhra Pradesh and Tamil Nadu, power cuts have become so common that many factories report getting more electricity from diesel generators than they do from the power grid, at much higher cost. Retail rates for electricity are lower than the cost of producing and delivering it and the difference is made up by Indian state government subsidies running into hundreds of billions of rupees annually.

Unlike India which uses coal, Pakistan relies heavily on natural gas for the bulk of electricity production and other energy needs. Demand for natural gas now exceeds 4.5 billion cubic feet per day or 1.6 trillion cubic feet per year, with a shortfall of nearly 300 million cubic feet per day. According to BMI, gas accounted for 47.5% of Pakistan's primary energy demand (PED) in 2007, followed by oil at 30.7%, hydro-electric energy at 12.9% and coal with a 7.9% share.

The main option Pakistan is pursuing now is Iran-Pakistan pipeline to import gas and reduce the growing gap between supply and demand. However, this option faces serious obstacles with tightening US and international sanctions aimed at isolating Iran because of concerns about Iran's nuclear ambitions. At the same time, Pakistan is also negotiating for LNG imports from Algeria. The wholesale prices of these options are 3 to 4 times more expensive than the the retail rate of $3 to $5 per mmBTU for domestic gas being produced in Pakistan.

In addition to gas imports, Pakistan has other options to meet its energy needs. Some of these are as follows:

1. Developing its shale gas reserves estimated 51 trillion cubic feet near Karachi in southern Sindh province. The US experience has shown that investment in shale gas can increase production quite rapidly and prices brought down from about $12 per mmBTU in 2008 to under $2 per mmBTU recently. Pursuing this option requires US technical expertise and significant foreign investment on an accelerated schedule.

2. Increasing production of gas from nearly 30 trillion cubic feet of remaining conventional gas reserves. This, too, requires significant investment on an accelerated schedule.

3. Converting some of the idle power generation capacity from oil and gas to imported coal to make electricity more available and affordable.

4. Utilizing Pakistan's vast coal reserves in Sindh's Thar desert. The problem here is that the World Bank, Asian Development Bank and other international financial institutions (IFIs) are not lending for coal development because of environmental concerns.And the Chinese who were showing interest in the project have since pulled out.

5. Hydroelectric and other renewables including wind and solar. Several of these projects are funded and underway but it'll take a while to bring them online to make a difference.

In my view, Pakistan should pursue all of the above options with options 1, 2 and 3 as a priority for now. Pakistan's best interest is not in defying Saudis and Americans to buy expensive Iranian gas and end up with crippling sanctions which could be much worse than its current energy crisis. Its best interests will be served by developing its own cheap domestic shale gas on an accelerated schedule with Saudi investment and US tech know-how. If the Americans and the Saudis refuse to help, then Pakistan will have a stronger case to go with the Iran gas option.

Related Links:

Haq's Musings

Pakistan Needs Shale Gas Revolution

US Census Bureau's International Stats

Pakistan's Vast Shale Gas Reserves

US AID Overview of Pakistan's Power Sector

US Can Help Pakistan Overcome Energy Crisis

Abundant and Cheap Coal Electricity

US Dept of Energy Report on Shale Gas

Pakistan's Twin Energy Crises

Pakistan's Electricity Crisis

Pakistan's Gas Pipeline and Distribution Network

Pakistan's Energy Statistics

US Department of Energy Data

Electrification Rates By Country

CO2 Emissions, Birth, Death Rates By Country

China Signs Power Plant Deals in Pakistan

Pakistan Pursues Hydroelectric Projects

Pakistan Energy Industry Overview

Water Scarcity in Pakistan

Energy from Thorium

Comparing US and Pakistani Tax Evasion

Zardari Corruption Probe

Pakistan's Oil and Gas Report 2010

Circular Electricity Debt Problem

International CNG Vehicles Association

Rare Earths at Reko Diq?

Lessons From IPP Experience in Pakistan

Correlation Between Human Development and Energy Consumption

BMI Energy Forecast Pakistan

Pakistan's Shale Gas With US & KSA Help?

noreply@blogger.com (Riaz Haq) — Tue, 17 Apr 2012 20:46:00 +0000

There are strong rumors that Kingdom of Saudi Arabia has joined the United States to oppose Iran-Pakistan gas pipeline project for which Pakistan is trying to arrange financing in the face of tightening US sanction on Iran.

The Chinese have already pulled out of the project after the US imposed sanctions on banks and other entities dealing with projects and transactions involving Iran. Russia's Gazprom is reportedly interested in financing and constructing the Pakistan section of the pipeline, but only on the condition that the project be awarded to it without any competitive bidding.

The question now is how should Pakistan deal with the situation? Can Pakistan satisfy its growing energy needs without alienating the Saudis and avoiding crippling US sanctions which could be more damaging than its current energy crisis?

To answer these questions, let's first examine the following facts:

1. Pakistan has at least 50 trillion cubic feet of recoverable domestic shale gas reserves, according to US Energy Information Administration.

2. US oil and gas companies are pioneers and leaders in shale gas development. In fact, these firms have been so successful that there is now a gas glut in the United States and gas prices have plummeted to less than $2 per mmBTU (approx 1000 cubic feet).

3. Iran-Pakistan deal requires Pakistan to pay $11-12 per mmBTU for its gas, six times the current price in the United States. Since the pricing formula for Iranian gas is based on the price of oil, it's almost certain that Pakistan will end up paying more than $12 per mmBTU with rising oil prices in the future.

4. Pakistan needs investment and technical know-how to develop its shale gas reserves to assure cheap and abundant energy supply.

Considering the above-mentioned facts, I think the best option for Pakistan is to go with its own domestic shale gas at a fraction of the price Iran is demanding.

Pakistan's best interest is not in defying Saudis and Americans to buy expensive Iranian gas and end up with crippling sanctions which could be much worse than its current energy crisis. Its best interests will be served by developing its own cheap domestic shale gas on an accelerated schedule with Saudi investment and US tech know-how. If the Americans and the Saudis refuse to help, then Pakistan will have a stronger case to go with the Iran gas option.

Related Links:

Haq's Musings

Pakistan Needs Shale Gas Revolution

Pakistan's Vast Shale Gas Reserves

US Can Help Pakistan Overcome Energy Crisis

Abundant and Cheap Coal Electricity

US Dept of Energy Report on Shale Gas

Pakistan's Twin Energy Crises

Pakistan's Electricity Crisis

Pakistan's Gas Pipeline and Distribution Network

Pakistan's Energy Statistics

US Department of Energy Data

Electrification Rates By Country

CO2 Emissions, Birth, Death Rates By Country

China Signs Power Plant Deals in Pakistan

Pakistan Pursues Hydroelectric Projects

Pakistan Energy Industry Overview

Water Scarcity in Pakistan

Energy from Thorium

Comparing US and Pakistani Tax Evasion

Zardari Corruption Probe

Pakistan's Oil and Gas Report 2010

Circular Electricity Debt Problem

International CNG Vehicles Association

Rare Earths at Reko Diq?

Lessons From IPP Experience in Pakistan

Correlation Between Human Development and Energy Consumption

BMI Energy Forecast Pakistan

Pakistan's Energy Security Via Shale Gas Revolution

noreply@blogger.com (Riaz Haq) — Thu, 12 Apr 2012 23:11:00 +0000

US natural gas prices have fallen below $2 per million BTU (approx 1000 cubic feet), about one-sixth of the price Pakistan has agreed to pay for Iranian gas. With over 50 trillion cubic feet of known shale gas reserves in Sindh alone, Pakistanis can also enjoy the benefits of cheap and abundant source of energy for decades via the shale gas revolution already sweeping America.

Increased production of gas from shale rock in the US has created a huge new supply, pushing down gas prices from $13/BTU (million British thermal units) four years ago to just $2/BTU today, even as the price of oil has more than doubled. By contrast, the Iran pipeline gas formula links the gas price to oil prices. It means that Pakistan will have to pay $12.30/BTU at oil price of $100/barrel, and a whopping $20/BTU for gas if oil returns to its 2008 peak of $150/barrel.

To encourage investment in developing domestic shale gas, Pakistan has approved a new exploration policy with improved incentives as compared with its 2009 policy, a petroleum ministry official said recently. Pakistan Petroleum is now inviting fresh bids to auction licenses to explore and develop several blocks in Dera Ismail Khan (KPK), Badin (Sind), Naushero Firoz (Sind) and Jungshahi (Sind), according to Oil Voice.

In addition to the fact that the Iran gas is extremely expensive, the entire Iran-Pakistan gas pipeline project raises other serious issues as well.

Iran-Pakistan Pipeline Issues:

1. Chinese investors and contractors have pulled out of the project for fear of being hit by US sanctions on their banks and other companies.

2. Russia's Gazrom is reportedly interested but only if it gets the deal at whatever price it decides to charge without any competitive bidding.

3. Pakistani companies and financial institutions are also under threat of US sanctions if they participate in the project.

4. If the pipeline does eventually get built, it will still be several years before gas starts to flow to Pakistan.

5. If Iran is still under US sanctions when the Iranian gas imports finally begin, Pakistan will have difficulty paying for the gas using international banking system. Iran has already been suspended by SWIFT, the Society for Worldwide Interbank Financial Telecommunication, which is the main mechanism used for international bank transactions.

6. The largest chunk of Pakistan's trade deficit is accounted for by energy imports. Iranian gas bill will only worsen this deficit, contributing to yet another balance of payments crisis sending Pakistan back to IMF.

Advantages of Domestic Shale Gas Development:

1. Cheap domestic gas can start flowing from Pakistani shale in a couple of years if Pakistan can make a deal with US (and American pioneers of shale gas like George Mitchel's Devon Energy) to invest and execute on an accelerated schedule in exchange for dropping Iran pipeline.

2. Pakistan will dramatically reduce its dependence on foreign sources and save a lot of foreign exchange spent on hydrocarbon imports.

3. Gas burns a lot cleaner than coal which is also a option given vast amounts of it in Thar desert. World Bank and other International financial institutions are more amenable to financing shale gas development than coal.

4. Abundant and cheap domestic gas supplies can help reduce electricity load-shedding which is caused mainly by under-utilization of installed generating capacity for lack of affordable fuel.

Shale gas revolution began a few years ago when an American named George P. Mitchell defied the skeptics and fought his opponents to extract natural gas from shale rock. The method he and his team used to release the trapped gas, called fracking, has paid off dramatically. In 2000, shale gas represented just 1 percent of American natural gas supplies. Today, it is over 30 percent and rising.

Among the potential downsides of shale gas development is the possibility of groundwater contamination reported in some places in the United States. Such risks can be minimized by following accepted practices to protect the aquifers which are found at levels well above the deep shale rock fractured for extracting natural gas.

Cheap and abundant energy is a pre-requisite for rapid economic growth in any country. Pakistan is no exception. The sooner Pakistanis recognize and resolve this crisis, the better it will be for the south Asian nation.

Related Links:

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Pakistan's Vast Shale Gas Reserves

US Can Help Pakistan Overcome Energy Crisis

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US Dept of Energy Report on Shale Gas

Pakistan's Twin Energy Crises

Pakistan's Electricity Crisis

Pakistan's Gas Pipeline and Distribution Network

Pakistan's Energy Statistics

US Department of Energy Data

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CO2 Emissions, Birth, Death Rates By Country

China Signs Power Plant Deals in Pakistan

Pakistan Pursues Hydroelectric Projects

Pakistan Energy Industry Overview

Water Scarcity in Pakistan

Energy from Thorium

Comparing US and Pakistani Tax Evasion

Zardari Corruption Probe

Pakistan's Oil and Gas Report 2010

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Correlation Between Human Development and Energy Consumption

BMI Energy Forecast Pakistan

Pak Consumer Boom Fuels Underground Economy

noreply@blogger.com (Riaz Haq) — Sat, 07 Apr 2012 04:22:00 +0000

Car sales increased 14 percent in February from a year earlier. Cement sales are rising with growing housing demand for increasing population. Lucky Cement, Pakistan’s biggest publicly traded construction materials company, is expected to post record earnings this year. Rising farm prices of bumper crops are pumping hundreds of billions of rupees each year into Pakistan's rural economy.

Contrary to government statistics of a stagnant economy, packed shopping malls and waiting lines at restaurants tell a different story-- the story of growing discretionary incomes of Pakistani consumers today.

So where is the disconnect between these two opposite views of Pakistan's economy? Naween Mangi of Businessweek answers it in her piece "The Secret Strength of Pakistan's Economy". She attributes it to the fast growing informal sector of the nation's economy that evades government's radar, illustrating it with the story of a tire repair shop owner Muhammad Nasir. Nasir steals water and electricity from utility companies, receives cash from his customers in return for his services and issues no receipts, pays cash for his cable TV connection, and pays off corrupt police and utility officials and local politicians instead of paying utility bills and taxes.

Here's an excerpt from Mangi's Businessweek story:

"The rhythms of life in the underground economy remain largely undisturbed. After work, Nasir and his friends sometimes hire a rickshaw to head to the beach or to a religious festival. The driver, part of the flourishing local transport business, doesn’t turn on the meter because he doesn’t have one. On his way home, Nasir stops to buy cooking oil, wheat flour, and sugar at a small grocery store that isn’t officially there. Out of about 1 million shops, up to 400,000 are grocery stores, and most of them are not registered and don’t pay taxes, according to Rafiq Jadoon, president of the City Alliance of Markets Association. In the evening, Nasir unwinds in front of the television. He watches an Indian movie transmitted by a local cable operator to whom he pays a monthly fee—in cash."

The estimates of the size of Pakistan's underground economy vary from 30% to 50% of the official GDP of just over Rs. 18 trillion (US$200 billion). Businessweek's Mangi claims that the government is losing as much as Rs. 800 billion (US$9 billion) in taxes from the informal sector...nearly enough to wipe out Pakistan's current fiscal deficit.

In my view, there are two major problems that arise from the underground economy described by Mangi. First, the massive tax evasion fosters Pakistan's dependence on foreign aid which comes with strings attached and infringes of national sovereignty. Second, the widespread theft of electricity is largely responsible for the huge circular debt and the ongoing power shortages that affect all aspects of life and scare away investors. The sooner the government and the people realize the severe downsides of the underground economy, the better it will be for Pakistan.

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Resilient Pakistan Defies Doomsayers

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Pakistan's Circular Debt and Load-shedding

US Can Help Pakistan Develop Shale Gas

noreply@blogger.com (Riaz Haq) — Wed, 04 Apr 2012 22:52:00 +0000

Pakistan has over 50 trillion cubic feet of shale gas reserves, according to the US Energy Information Administration (EIA) estimates. It's enough to energize Pakistani homes, businesses, power plants, CNG vehicles, fertilizer plants and factories for 25 years at a rate of 2 trillion cubic feet of consumption per year at half the currently agreed price of imported gas from Iran, an agreement the US strongly opposes. It will also save Pakistanis hundreds of billions of dollars in foreign exchange.

The relevant question here is whether America is willing to offer through its oil and gas companies the necessary investment and the advanced technology to quickly and profitably develop shale gas fields in Pakistan in exchange for abandoning the Iran-Pakistan gas pipeline?

Shale gas revolution began a few years ago when an American named George P. Mitchell defied the skeptics and fought his opponents to extract natural gas from shale rock. The method he and his team used to release the trapped gas, called fracking, has paid off dramatically. In 2000, shale gas represented just 1 percent of American natural gas supplies. Today, it is over 30 percent and rising.

Up until 2009, the US was the largest importer of Qatari LNG. However, the discovery of development of shale gas has caused a glut in the US. The Qatari LNG imports are no longer needed and the gas prices have plummeted in the United States. Qatari oil minister was quoted by Bloomberg as saying that 60 percent of Qatari LNG exports “moved to the east” in 2009.

Increased production of gas from shale in the US has created a huge new supply, pushing down gas prices from $13/BTU (million British thermal units) four years ago to just $2/BTU today, even as the price of oil has more than doubled. By contrast, the Iran pipeline gas formula links the gas price to oil prices. It means that Pakistan will have to pay $12.30/BTU at oil price of $100/barrel, and a whopping $20/BTU for gas if oil returns to its 2008 peak of $150/barrel.

To encourage investment in developing domestic shale gas, Pakistan has approved a new exploration policy with improved incentives as compared with its 2009 policy, a petroleum ministry official said recently. Pakistan Petroleum is now inviting fresh bids to auction licenses to explore and develop several blocks in Dera Ismail Khan (KPK), Badin (Sind), Naushero Firoz (Sind) and Jungshahi (Sind), according to Oil Voice.

Under the new policy, exploration companies will be offered 40-50% higher prices for the extracted gas compared with the $4.26/Btu price announced in Exploration and Production Policy 2009. Companies which succeed in recovering gas from tight fields within two years will get 50% hike over the 2009 price and if it takes more time they will get only a 40% hike on the 2009 price. As an added incentive, the leases for the fields will now be for 40 years instead of 30 in the 2009 policy, the official said.

Even with the higher prices for the tight gas offered to the exploration companies, it is estimated that Pakistan will have to pay a maximum of $6.50/Btu for the gas compared with $12.30/Btu for gas imports, according to a report by Platts.

Pakistan should ask the Obama administration to help fund and develop shale gas in exchange for abandoning the Iran-Pakistan gas pipeline. It will be a historic win-win for both nations, as historic as the US aid to Pakistan for Green Revolution in 1960s. Pakistanis will get relief from the severe energy crisis which affects almost everyone in the country. The US energy companies will create thousands of American jobs and make a huge profit in the process with the potential bonus of largely neutralizing the strong anti-American sentiments in the country.

Related Links:

Haq's Musings

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US Dept of Energy Report on Shale Gas

Pakistan's Twin Energy Crises

Pakistan's Electricity Crisis

Pakistan's Gas Pipeline and Distribution Network

Pakistan's Energy Statistics

US Department of Energy Data

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CO2 Emissions, Birth, Death Rates By Country

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Pakistan Energy Industry Overview

Water Scarcity in Pakistan

Energy from Thorium

Comparing US and Pakistani Tax Evasion

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Pakistan's Oil and Gas Report 2010

Circular Electricity Debt Problem

International CNG Vehicles Association

Rare Earths at Reko Diq?

Lessons From IPP Experience in Pakistan

Correlation Between Human Development and Energy Consumption

BMI Energy Forecast Pakistan

Pakistan on Goldman's BRIC+ N11 Growth Map

noreply@blogger.com (Riaz Haq) — Thu, 22 Mar 2012 23:34:00 +0000

In his recently published book "The Growth Map", Goldman Sachs' Jim O'Neill of BRIC fame has reiterated Pakistan's long term growth prospects as part of the Next 11 (N-11) group of nations which includes Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea, and Vietnam.

Goldman Sachs has recently launched an N-11 equity fund (GSYAX) to enable investors to take advantage of growth in the Next-11 group of nations.

Answering a reporter's question about the growth prospects of GCC (oil-rich nations of Gulf Cooperation Council) at a recent investment conference in Dubai, he said: "Some GCC countries are well placed to be hubs for the BRIC and N-11-influenced world. I often think of Dubai as a kind of N-11 center, even the capital of the N-11 world, given its business adjacency to Egypt, Pakistan, Iran, Turkey, and, of course, India and Russia."

While the primary criterion used by Goldman Sachs for membership of a developing nation in BRIC and N-11 is the size of its population, the firm also considers what it calls Growth Environment Score (GES) of each nation. The 13 variables which make up growth environment score are inflation, fiscal deficit, external debt, investment rate, openness of the economy, penetration of phones, penetration of personal computers, penetration of internet, average years of secondary education, life expectancy, political stability, rule of law and corruption.

Goldman Sachs has given Pakistan a low GES score which puts the country among the bottom third of Next-11 nations. However, this score is rising, and Goldman forecasts that Pakistan will be among the top 20 world economies by 2025.

It seems to me that Goldman Sachs' assessment of Pakistan's growth prospects are too heavily influenced by the current crises the country faces. It is too conservative and does not fully reflect its future potential based on the nation's economic history over the last 64 years. For example, Goldman assumes a future growth rate that is less than the average of over 5% a year which Pakistan has seen over the last 64 years.

My view is that Goldman Sachs' forecast should fully reflect the fact that Pakistan's per capita GDP increased by 60% to $3,000 in the last decade. Even if it is assumed that there is no demographic dividend and the country's gdp growth rate will not accelerate, its per-capita income should still rise to nearly $20,000 by 2050, well above the Goldman Sachs' forecast of $15,066.00.

It is unrealistic to assume that Pakistan's economy will not benefit from its very young population. With half of its population below 20 years and 60 per cent below 30 years, Pakistan is well-positioned to reap huge demographic dividend, with its workforce growing at a faster rate than total population. This trend is estimated to accelerate over several decades. The average Pakistanis are now taking education more seriously than ever. Youth literacy is about 70% and growing, and young people are spending more time in schools and colleges to graduate at higher rates than their Indian counterparts in 15+ age group, according to a report on educational achievement by Harvard University researchers Robert Barro and Jong-Wha Lee. Vocational training is also getting increased focus since 2006 under National Vocational Training Commission (NAVTEC) with help from Germany, Japan, South Korea and the Netherlands.

The fact is that equity markets in Pakistan have already produced much higher returns than BRICs' markets have over the last decade.

Pakistan's main stock market ended 2010 with a 28 percent annual gain, driven by foreign buying mainly in the energy sector, despite concerns about the country's macroeconomic indicators after summer floods, according to Reuters. Although it was less than half of the 63% gain recorded in 2009, it is still an impressive rise in KSE-100 index when compared with the performance of Mumbai(+17%) and Shanghai(-14.3%) key indexes. Among other BRICs, Brazil is up just 1% for the year, and the dollar-traded Russian RTS index rose 22% in the year, reaching a 16-month closing high of 1,769.57 on Tuesday, while the ruble-based MICEX is also up 22%.

Pakistan's key share index KSE-100 dropped about 5% in 2011, significantly less than most the emerging markets around the world. Mumbai's Sensex, by contrast, lost about 25% of its value, putting it among the worst performing markets in the world.

Given the historical economic data I have shared in this post, I remain optimistic that Pakistan can and will easily beat Jim O'Neill's current forecast in the coming decades.

Related Links:

Haq's Musings

Pakistan's 64 Years of Independence

Goldman Sachs & Franlin-Templeton Bullish on Pakistan

Emerging Market Expert Investing in Pakistan

Pakistan's Demographic Dividend

Genomics & Biotech Advances in Pakistan

The Growth Map by Jim O'Neill

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More Pakistan Students Studying Abroad

Inquiry Based Learning in Pakistan

Mobile Internet in South Asia

Online Courses at Top International Universities

Branchless Mobile Banking Takes Off in Pakistan

noreply@blogger.com (Riaz Haq) — Sat, 17 Mar 2012 01:33:00 +0000

Spurred by a favorable regulatory and technology environment, Pakistan is witnessing dramatic growth in branchless banking, according to a March 14, 2012 report by the State Bank of Pakistan.

Here are some of the key indicators contained in the State Bank report:

1. Number of branchless banking accounts jumped 40 percent to 929,184 in October-December 2011 (Second quarter of FY2011-12) from the preceding three month period.

2. Total amount of branchless banking deposits surged 169 percent to Rs 503 million in Oct-Dec 2011 from July-September 2011.

3. Number of branchless banking transactions during the second quarter rose 30 percent to 20.6 million while the value of transactions showed a growth of 35 percent to reach Rs. 79,410 million.

4. Branchless banking agents network in Pakistan grew by 16 percent in the second quarter (October- December 2011) of current fiscal year 2011-12 to reach 22,512 agents covering the entire length and breadth of the country.

5. The average size of branchless banking transaction was Rs 3,855 while the average number of daily transactions was 228,855.

6. Bills payment and mobile phone SIM card top-ups remained the dominating activity in the quarter under review with 53 percent share in total number of transactions, followed by fund transfers and deposits with share of 39 percent and 8 percent respectively.

7. While P2P payments remained the most popular mechanism with 74pc share in the total funds transfer, mobile branchless banking is penetrating all areas of payments such as utility bills, Government-to-Person (G2P) and Person-to-Person (P2P) payments while scaling up other services relating to deposits and loans.

A 2011 report by World Bank's Consultative Group to Assist the Poor (CGAP) describes Pakistan's mobile banking as "a unique laboratory for innovation". Here's an excerpt from it:

"Branchless banking regulation was first introduced in Pakistan in April 2008. From the beginning, the State Bank of Pakistan (SBP) has taken a constructive regulatory approach by providing clear guidance and being willing to listen to businesses and adjust regulation where necessary. A variety of business models is emerging that involves a wide range of players, including mobile network operators (MNOs), technology companies, and even a courier business. (Notably, a bank remains ultimately liable to SBP in all the models.) The government is further encouraging innovation by piloting the use of branchless banking to distribute government payments. Taken together, these factors make Pakistan a unique laboratory for innovation."

In a country where only 22% of the population owns bank accounts and more than 62% owns mobile phones, mobile banking is proving to be the fastest way to promote financial inclusion considered by experts to be essential to lift people out of poverty. Benefits include easy access for rural customers to banking services through agents in villages without bank branches, better documentation of the economy, enlarging of the tax-base and efficiency of economic transactions.

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Khan Academy Draws Pakistani Visitors

noreply@blogger.com (Riaz Haq) — Thu, 15 Mar 2012 00:02:00 +0000

The revolutionary Khan Academy is a brainchild of Bangladeshi-American Salman Khan. It is growing in popularity among Pakistanis wishing to take advantage of "Free World Class Education" offered online via short 10-15 minute videos. The subjects range from math, physics, chemistry and biology to astronomy, history, economics, finance, engineering and medicine. Khan counts Microsoft founder Bill Gates among his fans and students. Gates has described Sal Khan as his favorite teacher, and Gates Foundation has provided funding to enable Khan Academy to grow.

Former hedge fund analyst known as Sal Khan in Silicon Valley, the Academy founder has an MBA from Harvard Business School and three Bachelors degrees in Math, Electrical Engineering, and Computer Science from MIT. Here's how Khan explains on his website why he decided to become a teacher to the world: “A lot of my own educational experience was spent frustrated with how information was conveyed in textbooks and lectures. I felt like fascinating and intuitive concepts were almost intentionally being butchered into pages and pages of sleep-inducing text and monotonic, scripted lectures.”

The number of unique visitors to Khan Academy has grown fourfold from about a million a month in 2010 to 4 million in December, 2011. Bulk of the hits to the educational website still come from the United States, but the latest Alexa traffic data shows that Pakistan is among a handful of countries (shown in green on the map) which are bringing a growing number of learners to it.

Khan's ties to Pakistan go beyond Pakistani visitors to his online academy; his wife is from Karachi, and the man in charge of translating Khan's videos to Urdu and other foreign languages is former Pakistani president's son Bilal Musharraf who lives in Silicon Valley.

Pakistan is ranked fourth in the world for expansion in broadband Internet access which is fueling growth in traffic to video sites like Khan Academy. Planned Urdu translations of video tutorials will only add to the already increasing traffic.

Bilal Musharraf told Pakistan's Dawn newspaper that the goal is to have 1000 videos ready in 10 different languages in a year or two. And the project is mostly volunteer-driven. Khan academy offers best practices of “how-to-dub or re-do Sal’s existing videos, and volunteers take it from there. At present, someone in Japan is working on an Indonesian playlist and engineering students in Saudi Arabia are working on an Arabic playlist. In a matter of months, hundreds of videos have already been translated. You can now learn the Khan way in Spanish, Portuguese, Russian, Arabic, Bengali, Cantonese, French, German, Hindi, Indonesian, Japanese, Korean, Mandarin, Polish, Sinhalese, Tamil, Thai and Urdu.

Sal Khan's efforts are reinventing education and making quality teaching accessible to global population of students everywhere, including developing nations like Pakistan. One example of innovation inspired by Khan can be seen at Los Altos schools in Silicon Valley, CA, as shown by a recent CBS 60 Minutes segment.

"There are no textbooks and no teacher lecturing at the blackboard. Instead, students watch Khan videos at home the night before to learn a concept, then they come to class the next day and do problem sets called "modules," to make sure they understand. If they get stuck they can get one-on-one help from the teacher. Less lecturing, more interaction. What you think of as homework you do at school, and school work you do at home. It's called "flipping the classroom"..."

While anyone can benefit by watching Khan Academy video tutorials online any time and anywhere, it's also important to integrate Khan's video lessons as part of the classrooms learning in a way that is currently being piloted by Los Altos schools.

Here's a video clip from Khan Academy in Urdu:

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Pakistani Entrepreneurs Thrive Against All Odds

noreply@blogger.com (Riaz Haq) — Mon, 12 Mar 2012 00:47:00 +0000

Growing at more than 55% a year and collectively employing 41,000, the winners of Pakistan Fast Growth 100 contest were announced by Harvard-based Allworld Network last week. Of these 100 entrepreneurial companies, 70 also qualified for the Arabia500, putting Pakistan in second position after Turkey with 117 winners.

AllWorld was co-founded by Harvard Business School Professor Michael E. Porter, Deirdre M. Coyle, Jr., and Anne S. Habiby with the aim to bring visibility to growing companies in emerging markets to increase their odds of success. Any private, non-listed, company with rapid sales growth and an ability to demonstrate results with audited financial statements was invited to compete for a spot on the inaugural Arabia500 which includes Pakistan and Turkey in addition to the emerging economies of the Middle East and North Africa.

Each Pakistan entrepreneur ranked in the top 100 has grown an average of 40 percent annually between 2008 and 2010, created an average of 200 jobs per company, and is succeeding in industries from web technology to transportation, food to textiles, and construction to consulting, according to an AllWorld press release. With an average age of 42, nearly all of them plan to establish another entrepreneurial venture within the next two years.

Dr Abdul Hafeez Shaikh, Pakistan’s Minister for Finance, is quoted as saying that “the strong performance of Pakistani companies in Arabia500 illustrates that in spite of the challenges there continues to be strong business and investment opportunity in Pakistan. Pakistani companies in Arabia500 are surfacing new horizons for growth and quickening the pace of economic development and regional integration.”

The fastest growing company from Pakistan, E2E Supply Chain Management, grew at nearly 2000 percent between 2008 and 2010, with 2010 revenues above $50 million and 297 employees. Of the Arabia500 winners from 15 countries, E2E was the third fastest growing. Taking the second spot for Pakistan was Exceed Private Limited with a growth rate of 1,320 percent and 90 employees, and in sixth position overall on the Arabia500.

Pakistan also had the highest number of women entrepreneurs on the Arabia500, and Luscious Cosmetics of Pakistan topped the list of the fastest growing Arabia500 women entrepreneurs with growth of 392 percent and 82 employees.

Complimenting the Pakistan100 winners at the Awards Ceremony held in Lahore, AllWorld co-founders Deirdre Coyle and Anne Habiby urged the Pakistan100 to go further “When no one expected much, the Pakistan100 broke records for growth, transparency and competitiveness. They are the personification of what every country dreams of having. Now raise the bar higher and build Pakistan as a leading entrepreneurial nation.”

A recent World Bank report titled "More and Better Jobs in South Asia" said that 63% of Pakistan's workforce is self-employed, including 13% high-end self-employed. Salaried and daily wage earners make up only 37% of the workforce.

Even if one chooses to consider just the 13% who are high-end self-employed as entrepreneurs by choice, it puts Pakistanis among the most entrepreneurial people in the world.

The winners of Pakistan100 entrepreneurs are truly inspirational. They epitomize the Pakistani nation's extraordinary resilience and reaffirm that Pakistan's best days are ahead.

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Pakistan in Supercomputing Top 200

noreply@blogger.com (Riaz Haq) — Sat, 10 Mar 2012 01:43:00 +0000

NUST's new 132 Teraflop supercomputer has catapulted the Pakistani university's supercomputing center to the elite Top 200 list of supercomputing sites in the world, a list dominated by a handful of industrialized nations. National University of Science & Technology's supercomputer is named ScREC after its supercomputing research and education center. The cluster consists of 66 nodes equipped with a total of 30,992 cores. The NUST site breaks down the components as follows: 32 dual-socket quad-core nodes, 32 NVIDIA GPUs, a QDR InfiniBand interconnect, and 26.1 TB of storage.

ScREC will be be deployed for research in the areas of computational biology, fluid dynamics, image processing, cryptography, medical imaging, geosciences, finance, and climate modeling. Specifically, RCMS is currently developing a direct simulation Monte Carlo (DSMC) method for subsonic nanoscale gas flows. Other projects include external flow analysis of heavy vehicles to reduce fuel consumption, and numerical investigation on performance and stability of axial compressors used in aircraft engines and gas turbines.

In his recent book Turing's Cathedral, computer historian George Dyson explores how the digital universe has exploded in the aftermath of World War II. The proliferation of both codes and machines has paralleled two historic developments: the decoding of self-replicating sequences in biology and the development of the hydrogen bomb, with the most destructive and the most constructive of human endeavors occurring at the same time.

In the decades after World War II, computers have become an absolutely essential tool for research in a variety of fields ranging from weapons to weather and life sciences.

In particular, the distinction between computing and biology has begun to blur in a way that will have enormous benefits for human health, productivity and longevity. Pakistan is among a handful of nations where there is significant research underway in genomics and biotechnology which requires substantial computing power.

Researchers at the Panjwani Center for Molecular Medicine and Drug Research (PCMD) in Karachi collaborated with Beijing Genomics Institute (BGI) to complete gene mapping of Dr. Ata-ur-Rahman, according to SciDev. Dr. Rehman, President of Pakistan Academy of Sciences, volunteered himself for the project.

Pakistan has significant research efforts in seed and livestock development at various agriculture universities, institutes and departments. Pakistani researchers and scientists are currently collaborating in life sciences with their counterparts in the US and China. A number of crops like cotton, rice, wheat, corn, potato, ground nut are being developed locally or with the collaboration of Chinese and US seed companies.

Currently, there are over two hundred life sciences departments which are engaged in genomics and biotechnology research at various Pakistani universities, and they all can benefit from access to modern high-speed supercomputing.

Pakistan has been a Science Watch rising star for several years for research papers in multiple fields, particularly in biological sciences. Publications by Pakistani research teams have increased four-folds in the last decade, and the majority of publications from major universities are in life sciences.

Let's hope that there will be many more high-speed supercomputing sites established at various universities and research institutes to meet the growing demand for computing power by Pakistani researchers.

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Should Pakistan Ignore "Washington Consensus" on Free Trade?

noreply@blogger.com (Riaz Haq) — Wed, 07 Mar 2012 01:08:00 +0000

East Asian experience has some important lessons for Pakistan as the country embraces the western prescriptions of democracy and free trade. It's particularly important to recall these lessons now in view Pakistan's decision to open unrestricted trade with India whose major industrialists like Tata and Birla have greatly benefited from protectionist policies to scale up and gain experience.

The East Asian nation of South Korea has become a great model of economic success for the developing world. Back in 1960s, its annual per capita income was around $80, less than half of Ghana's at the time. Today, it stands at $30,000, comparable to that of some wealthy European nations. For most of this period, the people of South Korea have ignored the Washington consensus, the western prescription on economy and politics, to achieve this miraculous progress.

In 1960s and 1970s, Korea was led by military ruler General Park Chung-Hee who put in place the policies which helped Koreans realize their great potential. President Park made huge investment in infrastructure, health and education. In addition, South Korean analyst Ha-Joon Chang says that the Korean government "practiced many policies that are now supposed to be bad for economic development: extensive use of selective industrial policy, combining protectionism with export subsidies; tough regulations on foreign direct investment; active, if not particularly extensive, use of state-owned enterprises; lax protection of patents and other intellectual property rights; heavy regulation of both domestic and international finance."

Pakistan, too, was ruled by a military dictator General Ayub Khan in a period labeled by Pakistani economist Dr. Ishrat Husain as "the Golden Sixties". General Ayub Khan pushed central planning with a state-driven national industrial policy. In fact, South Korea sought to emulate Pakistan's development strategy and copied Pakistan's second "Five-Year Plan".

Here's how Dr. Husain recalls Pakistan of 1960s:

"The manufacturing sector expanded by 9 percent annually and various new industries were set up. Agriculture grew at a respectable rate of 4 percent with the introduction of Green Revolution technology. Governance improved with a major expansion in the government’s capacity for policy analysis, design and implementation, as well as the far-reaching process of institution building. The Pakistani polity evolved from what political scientists called a “soft state” to a “developmental” one that had acquired the semblance of political legitimacy. By 1969, Pakistan’s manufactured exports were higher than the exports of Thailand, Malaysia and Indonesia combined. Though speculative, it is possible that, had the economic policies and programs of the Ayub regime continued over the next two decades, Pakistan would have emerged as another miracle economy."

South Korea's Chang has exposed the hypocrisy of the West by explaining that the "G7 was always remarkably reluctant to recommend these (South Korea's) "heterodox" policies and insisted that the "Washington consensus" package of opening up, deregulation and privatization was the right recipe for everyone. When confronted with the Korean case, Washington consensus supporters tried to brush it off as an exception. However, the history of take-offs in most of the G7 countries – especially Britain, the US, Germany, France and Japan – is far closer to the Korean model than is commonly thought. The "unorthodox" policies used by Korea and almost all of today's rich countries need to be seriously considered in any discussion on development options."

Since the great success achieved by South Korea and other Asian Tigers in the latter part of the 20th century, China has become the latest example to have followed the East Asian development model with great results for what is now being dubbed the Asian century. Each of these nations has done it by ignoring the Washington Consensus about democracy, free markets and free trade.

As Pakistan embarks on a new course in trade, it's important for its leadership to recognize the wide gap between the theory and practice of the "Washington Consensus" to effectively safeguard its economy, domestic industries and jobs for Pakistanis to develop and prosper in the 21st century.

Related Links:

Haq's Musings

Ishrat Husain: Structural Reforms in Pakistan's Economy

Pakistan's Bilateral Trade Agreements

Role of Politics in Pakistan Economy

History of Pakistan Economy 1947-2010

Pakistan's Economic Performance 2008-2010

Incompetence Worse Than Corruption in Pakistan

Pakistan's Circular Debt and Load Shedding

US Fears Aid Will Feed Graft in Pakistan

Pakistan Swallows IMF's Bitter Medicine

Shaukat Aziz's Economic Legacy

Pakistan's Energy Crisis

Karachi Tops Mumbai in Stock Performance

India Pakistan Contrasted 2010

Pakistan's Foreign Visitors Pleasantly Surprised

After Partition: India, Pakistan and Bangladesh

The "Poor" Neighbor by William Dalrymple

Pakistan's Modern Infrastructure

Video: Who Says Pakistan Is a Failed State?

India Worse Than Pakistan, Bangladesh on Nutrition

UNDP Reports Pakistan Poverty Declined to 17 Percent

Pakistan's Choice: Talibanization or Globalization

Pakistan's Financial Services Sector

Pakistan's Decade 1999-2009

South Asia Slipping in Human Development

Asia Gains in Top Asian Universities

BSE-Key Statistics

Pakistan's Multi-Billion Dollar IT Industry

India-Pakistan Military Comparison

Food, Clothing and Shelter in India and Pakistan

Pakistan Energy Crisis

IMF-Pakistan Memorandum of Economic and Financial Policies

Genomics & Biotech Advances in Pakistan

noreply@blogger.com (Riaz Haq) — Thu, 01 Mar 2012 15:47:00 +0000

Complete gene mapping of a Pakistani citizen by Human Genome Project in Karachi has put the country on a very short list of nations which have accomplished this scientific feat. To assess the state of genomics and biotechnology in Pakistan, let's take a look at what is happening in the country in this field:

1. Researchers at the Panjwani Center for Molecular Medicine and Drug Research (PCMD) in Karachi collaborated with Beijing Genomics Institute (BGI) to complete gene mapping of Dr. Ata-ur-Rahman, according to SciDev. Dr. Rehman, President of Pakistan Academy of Sciences, volunteered himself for the project.

2. More than two hundred life sciences departments are engaged in genomics and biotechnology research at various Pakistani universities, according to a report in The News.

3. Pakistan has been a Science Watch rising star for several years for research papers in multiple fields, particularly in biological sciences. Publications by Pakistani research teams have increased four-folds in the last decade, and the majority of publications from major universities are in life sciences.

4. Pakistan began producing biotechnology based pharmaceuticals in 2009. The first of these plants was set up by Ferozesons in Lahore to produce interferon for treatment of hepatitis, according to Nature magazine.

5. Pakistan has significant research efforts in seed and livestock development at various agriculture universities, institutes and departments. Pakistani researchers and scientists are currently collaborating in life sciences with their counterparts in the US and China. A number of crops like cotton, rice, wheat, corn, potato, ground nut are being developed locally or with the collaboration of Chinese and US seed companies.

6. Post-doctoral research on biotechnology and related agricultural issues is being funded under a Young Scientists Program, as part of the USDA-funded sustainable endowment to support the Agricultural Linkages Program at the Pakistan Agricultural Research Council (PARC). An MOU for $7.5 million has been signed under the Pakistan-U.S. Science and Technology Program between Pakistan’s Higher Education Commission (HEC) and the Ministry of Science and Technology and the U.S Agricultural Research Service (ARS) for scientific collaboration and capacity building of scientists.

7. National Biosafety Committee has allowed stacked gene (Cry 1A and Cry 2Ab) in cotton developed by Center of Excellence in Molecular Biology (CEMB), Lahore. Several other stacked gene products are in the pipe line and will be put for approval soon.

8. Pakistan is building the capacity of its young scientists in the legislative, regulatory, and policy areas related to agricultural biotechnology, biosafety and nanotechnology. A small project has been funded in Agricultural Nanobiotechnology related to the use of nanoparticles for plant genetic engineering utilizing a Bio-Rad biolistic gene gun at National Institute for Biotechnology and Genetic Engineering (NIBGE), Faisalabad.

While the universities have stepped up their research programs in life sciences as a result of the higher education reforms undertaken in the last decade, it's still a major challenge to translate the academic work into tangible benefits in terms of improved human health and higher crop and livestock yields in the country.

Part of the challenge stems from the need for regulatory framework for introducing biotech products and technology for humans, plants and animals. To make progress on this front, Pakistan has ratified the Cartagena Protocol of Biosafety (CPB) with a framework for handling GMO’s. The proposed regulatory guidelines are built upon on a three-tier system composed of the National Biosafety Committee (NBC); a Technical Advisory Committee (TAC); and Institutional Biosafety Committees (IBC), according to USADA GAIN report on Pakistan.

In the regulatory framework, the Secretary of the Ministry of Environment heads the NBC, and is responsible for oversight of all laboratory work and field trials, as well as authorizing the commercial release of GM products. The three monitoring and implementing bodies administer enforcement of the National Biosafety Guidelines. The IBC may make recommendations to the NBC regarding the awarding of exemptions for laboratory and fieldwork related to products of bioengineering. These recommendations may be accepted, and formal approval granted, if sufficient information and grounds exist to consider the risk as being minimal or non-existent. After permission for deregulation is granted by the NBC, approval can still be withdrawn provided sufficient technical data and other evidence later becomes available that warrants a review. The other important ministry dealing with production and release of GM crop is Ministry of Food and Agriculture (MINFA). The ministry developed several Standard Operating Procedures (SOP’s) for handling of cases of import/approval/release of GM crops; however, all these have yet to be promulgated.

Genomics and biotechnology have great potential to fight diseases and help improve human lives and increase productivity. So far, the benefits of these advances have accrued mostly to the rich countries because they are driven by market incentives. The time has now come for Pakistan to take advantage of such technological advances. Take crop yields as an example. Wheat is the staple of Pakistan and planted on the largest acreage. It contributes about three percent to the GDP. The national average yield is about 2.7 tons per hectare, far below the average in European countries such as France, Germany and the United Kingdom where they are above seven tons per hectare, according to recent Op Ed by Dr. Ata-ur-Rehman.

There is significant opposition to the use of GM seeds in South Asia today. In his book The Rational Optimist, author Matt Ridley recalls that there was similar resistance in 1960s to Nobel Laureate Norman Borlaug's Mexican dwarf wheat. Ridley writes about how Borlaug's efforts helped spark the Green Revolution in India and Pakistan. Ridley argues that it was Borlaug's work with his new seeds and chemical fertilizer that disproved Paul Ehrlich's claim in his book The Population Bomb that India would never feed itself.

Pakistani farmers have already begun planting biotech cotton since 2011. With 2.6 million hectares of Bt cotton planted in 2011, Pakistan ranks 8th in terms of the area for biotech crops in the world, according to International Service for the Acquisition of Agri-Biotech Applications (ISAAA) report. US ranks number 1, Brazil 2, Argentina 3, India 4, Canada 5, China 6, Paraguay 7 and Pakistan 8. South Africa 9 and Uruguay 10 round out the top 10. Pakistan has had a bumper crop of cotton in 2011-2012 mainly because of the planting of Bt seeds.

While extra caution is absolutely warranted before introducing genetically modified organisms in the environment, an irrational fear of the unknown would be unacceptable in a country like Pakistan with its dwindling water resources and a growing young population that needs to be fed, clothed, educated and nurtured. Clearly, the technology can help cure diseases and lead to development of new drought-resistant seed varieties producing high crop yields.

Related Links:

Haq's Musings

Pakistani Students Studying Abroad

Pakistan Manufacturing Tablet PCs

Military's Role in Pakistan's Industrialization

Pakistan's Demographic Dividend

Pakistan's Defense Industry Goes High-Tech

Pakistan Launches UAV Production Line at Kamra

Pakistan Going Mainstream in IT Products

Pakistan Launches 100 Mbps FTTH Access

Pakistan's $2.8 Billion IT Industry

Pakistan's Software Prodigy

Developing Pakistan's Intellectual Capital

Pakistan Graduation Rates Higher Than India's

Pakistan Conducting Research in Antarctica

Pakistani Scientists at CERN

Higher Education Reforms in Pakistan

Groundbreaking DCK Green City in Pakistan

noreply@blogger.com (Riaz Haq) — Thu, 23 Feb 2012 03:54:00 +0000

Work started today to build a 21st Century eco-friendly model city about 50 km north east of downtown Karachi, Pakistan.

Named DHA City Karachi or DCK, the project has been planned by Doxiadis and Osmani Associates along with Professor Spiro Pollalis as its chief planner on an 11,640 acre rural site. Constantine Doxiadis (1914-1975) was a Greek architect and urban planner who planned Pakistan's capital Islamabad and several Karachi communities, including Korangi, Landhi and New Karachi, in 1960s. Pollalis, also of Greek ancestry, is a professor of design, technology and management at the Harvard Design School in Cambridge, Mass.

The DCK masterplan envisions a self-contained sustainable city with 50,000 residential and commercial lots, healthcare and education facilities, theme parks, a convention center, informal and formal sports and recreational facilities and resorts, retail and restaurants, along with all necessary community facilities such as theaters and civic centers.

At the heart of the new city lies the City Gateway and Downtown district that house the Central Business, Culture & Arts, Education, Central Market and Mixed-use Sub Districts. Careful consideration has been given to the distribution of land uses within this area in order to provide a vital economic and cultural heart that will support the city as it grows.

The downtown district will be defined by an automobile-free pedestrian zone with tree-lined walking paths, landscaping, water features, and piazza’s. The idea is to encourage pedestrian movement to improve the quality of life for the downtown employees, visitors and residents. An efficient public transportation system will help support this.

Based on the latest research done under Zofnass Program for Sustainable Infrastructure at Harvard University's Graduate School of Design, sustainable design principles have been implemented across the entire community. A strategy has been used to maintain the ecological integrity of the site through the preservation and incorporation of prominent natural features that are integrated as creeks, green fingers and wind corridors, according to e-architect.com.

There's great emphasis on energy, waste and water management throughout the plan. There will be passive cooling and shades to reduce the need for air-conditioning in summers, extensive use of renewable energy from wind, solar and biomass, and energy-efficient LED lighting. There will be storm water collection through natural drains into lakes, and the community bylaws will require waste recycling as well as the use of grey water to irrigate drought-resistant native plants and shrubs.

DCK is an ambitious but necessary effort to promote eco-friendly and sustainable urban development as Pakistan undergoes rapid urbanization. But the past experience has shown that the actual implementation of such a plan will be quite challenging without the cooperation of its residents.

An even bigger challenge is the uncontrolled expansion of big cities like Karachi which are drawing more and more rural migrants every day without building appropriate new low-cost legal housing and infrastructure for them. The result is the mushroom growth of illegal settlements created by unscrupulous land-grabbing politicians and their cronies who profit from it. In the absence of official urban planning to settle migrant laborers, a burgeoning informal industry has emerged to fill the vacuum to build what are described as "Self-service Levittowns" by an American journalist Steve Inskeep in his 2011 book about Karachi titled "Instant City". With the active connivance of corrupt local police and other government officials and protected by politicians, the so-called "land mafias" grab and sell large swathes of vacant government land, subdivide it into plots, build shoddy roads and pilfered service connections for gas, water and electricity.

Here's how Inskeep describes one such illegal settlement in areas opened up and made accessible by a new expressway called "Northern Bypass":

"My driver steered the car to a section known as Tasier Town, which stood within a couple of miles of the new highway. It was in the farther northeastern reaches of the city, a bit farther than Doxoiadis's "ruined" old suburb in North Karachi. We stopped in a settled area to ask directions, and were pointed down a two-lane road. A market appeared to the right. A wide expanse of land stretched off to the left. Someone had posted a little sign on a little roadside building there, 2007 order from the High Court of Sindh directing that nothing should be built on that property. Behind it, on the vacant land, we saw homes under construction.....The local Home Depot was called a thalla, and Wahab, the boss of it, was thallawala. Like his workers-a so many newcomers to Karachi-he was a Pashtun from Pakistan's war-torn far northwest. On his lot, he sold most of the basic materials to make a simple house. Concrete blocks and roofing materials were cheap. Human beings were even cheaper. Wahab's laborers lived under a thatched roof near the concrete mixer.

Wahab said that there were certain expenses. Police sometimes came by and declared themselves to be shocked-shocked-that illegal construction was underway. The cops could not possibly overlook such an obvious violation unless they were paid.......I said goodbye to Wahab and went back into the illegal development, along narrow and straight dirt lane. Little ridges of dirt marked out the future home lots on either side. I chatted with several men who were laying PVC pipe in a trench, building a sewer line that would dump into the seasonal stream....Who was paying the men to dig the sewers? "A rich man", was all one said."

While Defense Housing Association (DHA) is known for developing upscale communities in major cities, Pakistani military governments have also taken low-cost initiatives to house the poor beginning with the urban planning and development of Landhi, Korangi and New Karachi in 1960s. Unfortunately, there has been little interest on a similar scale by the civilian governments to follow through on their promises of roti, kapra aur makan (food, clothing and shelter) for the poor.

Even though boosting legal housing construction in planned communities offers tremendous potential to stimulate and grow the formal economy, it is not being taken seriously today. It's much more lucrative for the politicians and bureaucrats to continue the current system of illegal settlements.

While critics jump at every opportunity to lambaste the Pakistani military for its various business enterprises, they pay no attention to the fact that Pakistan's economy has also been managed significantly better under military rule. It's not just the venality of the politicians, but also their gross incompetence that gets in the way. One need only look at the differences between Cantonments and civilian communities in South Asia to get a sense of who provides more competent governance.

Prof Anatol Lieven in his book "Pakistan: A Hard Country", describes Pakistan Army as follows:

"For the military, the image of paradise is the cantonment, with its clean, swept, neatly signposted streets dotted with antique, gleaming artillery pieces, and shaded trees....In the poorer parts of Pakistan, the contrast with civilian institutions-including those of government-is that between developed and the barely developed worlds....In the military headquarters, every staff officer has a computer. In the government offices, most ministers do not (and in many cases would not know how to use it if they did). "

British legacy of competence lives on in the Indian military as well. Here's a similar excerpt from a piece by Indian journalist Vir Sanghvi describing Indian military:

".... the (Indian) army sometimes appears to live in a state within a state. Visit a cantonment and you will be struck by the contrast with the civilian part of the town or city where it is located. The roads will be broad and well-maintained, the buildings will be freshly painted, the surroundings will be clean, and an air of good manners and civility will prevail. Visit an army town (Wellington, for instance) and the contrast will be even more striking. The order and cleanliness of the cantonments serves as a contrast to the chaos and filth of modern India."

I welcome the DCK plan with the hope that the green city will serve as a model for the 21st century and inspire private-sector developers to build similar project in the future.

Here's a video describing the project:

Related Links:

Haq's Musings

Housing Construction & Economy in Pakistan

Emaar Crescent Bay Project in Karachi

Pakistan Military Starts Manufacturing Tablet PCs

Military's Role in Pakistan's Industrialization

Pakistan's Demographic Dividend

Pakistan's Defense Industry Goes High-Tech

Low-income Housing in Pakistan

Pakistan Launches UAV Production Line at Kamra

DHA City Karachi Report

Incompetence Worse Than Corruption

Food, Clothing & Shelter for All

Save Pakistan's Education, Airline & Railways

noreply@blogger.com (Riaz Haq) — Mon, 20 Feb 2012 20:14:00 +0000

"...under 1.5% of GDP [is] going to public schools that are on the front line of Pakistan's education emergency, or less than the subsidy for PIA, Pakistan Steel, and Pepco." Pakistan Education Task Force Report 2011

Pakistan has ordered 5 Boeing 777s and 75 train engines for its state-owned companies in a bid to catch up with rising passenger and cargo service demands, according to media reports.

Boeing, the American aerospace giant, has announced the $1.5 billion deal with Pakistan International Airline (PIA) which includes a firm order of five 777-300ER (extended range) jets as well as the purchase rights for an additional five, according to Fox News.

Separately, The News is reporting that Pakistan Railway is purchasing 75 Chinese-made train engines for $105 million.

Highways have now become the most important segment of transport sector in the country, according to the Economic Survey of Pakistan. At the time of Pakistan's independence in 1947, transportation by roads accounted for only 8% of all traffic. Today, it accounts for 92% of national passenger traffic and 96% of freight.

The last decade has seen major competition coming from first-class private bus services now operated on modern motorways in all parts of Pakistan. The best known of these is Daewoo bus service with its comfortable luxury coaches and stewardesses offering meal services. With the construction and expansion of national highways and motorways, the trucking industry has also grown by leaps and bounds in the last few decades.

In mid-90s, Pakistan Railway had 10.45% share of passenger traffic and 5.17% of freight traffic, which has declined to 9.95% and 4.72% respectively by the year 2006-07, according to Economic Survey of Pakistan.

Pakistan Railway has been weighed down by heavy expenses of payroll and rising corruption and incompetence. As a result, a large number of engines are no longer operational and there have been big cuts in service.

After gaining domestic and international traffic market share for several decades after independence, Pakistan International airline has been losing it in recent decades because of serious problems of corruption and mismanagement by the cronies of the ruling politicians. PIA is now losing hundreds of millions of dollars a year while being hit by lean and mean domestic private airlines and international competition from rising Gulf giants like Emirates, Etihad and Qatar Airways.

Today, PIA's employee to aircraft ratio of 450 is more than twice as much as some of its competitors. "Politically motivated inductions have been the major cause of the significant increase in human resource burden in this organization," the State Bank of Pakistan said recently.

Pakistani taxpayers are heavily subsidizing the national airline at the expense of much more crucial public sectors like education. Last year, 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 PIA, the national airline that continues to sustain huge losses.

The latest example of the use of public funds to buy support for the government is Rs 366 million given in "discretionary development funds" as reward to senators for passing the 20th Constitutional Amendment with more than two-third majority, according to Pakistani media reports.

The crux of the issue for the bloated public sector units like PIA, Pakistan Steel Mills and Pakistan Railways is the reprehensible system of political patronage which puts the wrong people in charge of them. The sooner PIA, PR and other PSUs become privatized, the easier it will be to revive them for better service and improved profitability. It will turn them into a source of much needed revenue for the public treasury, just as the denationalization of banks did in the last decade.

From an after-tax loss of Rs. 9.77 billion in 2001 (when MCB, Habib, UBL and Allied were government owned) the earnings of these privatized banks rose to a profit after-tax of Rs. 73.115 billion in 2007. Higher earnings meant increased tax contribution by these banks to the government from Rs 10.8 billion in 2001 to Rs. 33.8 billion in 2007, according to data provided by former State Bank governor Mr. Shahid Kardar.

Even if privatization of the heavily subsidized public sector units does not yield higher tax revenue from them, it will at least free up public funds for more pressing needs like education, health care, energy, water and public infrastructure development.

Related Links:

Haq's Musings

Pakistan's Infrastructure

British Aid for Pakistani Schools

Pakistan's Twin Energy Shortages

Cycles of Floods & Droughts

Resilient Pakistan Defies Doomsayers

Political Patronage Trumps Public Policy in Pakistan

Pakistan's Tax Evasion Fosters Aid Dependence

Finance Minister Shaukat Tarin Resigns

Musharraf's Legacy

US Fears Aid Will Feed Graft in Pakistan

Pakistan Swallows IMF's Bitter Medicine

Shaukat Aziz's Economic Legacy

Power and Patronage in Pakistan

Pakistan's Energy Crisis

Karachi Tops Mumbai in Stock Performance

Pakistan Ranks High in Microfinance

noreply@blogger.com (Riaz Haq) — Sat, 18 Feb 2012 17:30:00 +0000

Pakistan ranks first in Asia and third in the world in Economist Intelligence Unit's overall microfinance business environment rankings for 2011. Among other Asian nations, only the Philippines at #6 made the top ten list.

On a scale of 0-100, Pakistan scores 62.8, just behind top-ranked Peru's 67.8 and second-ranked Bolivia's 64.7 in overall global rankings of 55 countries. Among nations in South Asia region, India ranks 27 with a score of 43.1 and Bangladesh ranks 43 with a score of 30.9. Sri Lanka is at #48 with a score of 27.4 followed by Nepal at 51 scoring 26.1.

Among various categories, Pakistan ranks #1 in regulatory framework and practices and #5 in supporting institutional framework.

Here's an excerpt on Asia from the EIU report titled "Global microscope on the microfinance business environment":

"Pakistan and the Philippines again top the regional rankings for East and South Asia. These countries both finished in the top ten globally, signifying strong environments for microfinance. Indeed, Pakistan and the Philippines came first and second globally, respectively, in the Regulatory Framework and Practices category, suggesting strong regulatory regimes and good prospects for MFIs to enter the sector and perform effectively. The Philippines, for example, has had a strong enabling environment for microfinance for more than a decade. Cambodia is third best in Asia and makes it into the top 25% globally. India comes next, but fell precipitously after the crisis that struck the sector last year. Mongolia finished fourth in Asia, but was the region’s most-improved performer."

Recently, Pakistan's central bank governor Haris Anwar said that large segments the nation's population have no bank accounts and many do not understand why it puts them at a disadvantage when it comes to their personal financial management. According to Pakistan Access to Finance Survey (A2FS), only 12 percent of the population has access to formal financial services. Of the remaining 88 percent, only 32 percent are informally served and 56 percent are completely excluded, Anwar said, adding that according to the A2FS analysis, about 40 percent of the financially excluded population reported lack of understanding of financial products as the main reason for financial exclusion.

It has long been recognized by poverty alleviation experts that pursuing policies for increasing financial inclusion, such as encouraging microfinance, are absolutely essential to lift tens of millions of people out of poverty in Pakistan, where 50% of the workforce is made up of low-end self-employed. Other efforts toward bringing financial services to the poor and lower middle class in Pakistan include financial literacy initiatives and growth of branchless mobile banking in city slums and rural areas of the country.

Pakistan’s first-ever National Financial Literacy Program was launched earlier this year with the support and collaboration of Asian Development Bank (ADB), Pakistan Banks’ Association (PBA), Pakistan Microfinance Network (PMN), Pakistan Poverty Alleviation Fund (PPAF) and BearingPoint consultants.

The growth of branchless banking in Pakistan is now being held up a success story at international fora. Within a span of just two years, there are now almost 18,000 branchless banking outlets surpassing the 10,000 conventional bank branches, according to Governor Anwar. UBL Omni’s branchless banking service launched in April 2010 by United Bank has won several contracts to disburse payments for nongovernment organizations and government schemes to help those affected by floods. UBL reports that at the end of June it had 5,000 agents disbursing payments to 2 million recipients under these programs. UBL Omni has also started accepting loan repayments for microfinance institutions (MFIs) and providing cash management facilities for businesses.

According to a recent World Bank report titled "More and Better Jobs in South Asia" which shows that 63% of Pakistan's workforce is self-employed, including 13% high-end self-employed. Salaried and daily wage earners make up only 37% of the workforce. Access to money is necessary for many of these entrepreneurs to succeed in realizing their dreams.

The history of microfinance in Pakistan started with the launch of Orangi Pilot Project (OPP) in Kutchi Abadies (shanty towns) of Karachi in early 1980’s, according to a paper published by Abdul Qayyum and Munir Ahmed. In the late 1960s, prior to OPP, a few NGOs in the rural areas of Pakistan began to experiment with microcredit by offering subsidized loans. However, they mostly failed to reach the poor due to abuse and corruption. Now there are dozens of Micro Finance Institutions working in Pakistan. The MFIs in Pakistan can be divided into different groups based on their uniqueness that separates them from other financial institutions and makes them similar in terms of the way they function.

The first group consists of financial institutions with microfinance as a separate product line. The share of microfinance related activities of these institutions is up to 10 percent. This group includes Orix Leasing and the Bank of Khyber –both are profit making organizations and consider microfinance as a separate product line.

The second group refers to the specialized MFI’s, which includes two microfinance banks - The Khushhali Bank and First Microfinance Bank Limited (FMBL) - and two NGOs - KASHF Foundation and Asasah. All these institutions completely focus on provision of financial services and also have commercial focus as well.

Third category MFIs related to activities of the Rural Support Programs which deals with integrated Rural Development Programs with microfinance as one of its activities. These organizations are National Rural Support Programs (NRSP), Punjab Rural Support Programs (PRSP) and Sarhad Rural Support Programs (SRSP). The last group consists of private NGOs. These NGOs are basically integrated development organizations with microfinance as one of their activities. These include Orangi Pilot Project, Sungi Foundation, Taraqee Foundation, Development Action for Mobilization and Emancipation (TRDP), Sindh Agricultural & Forestry Workers Coordinating Organization (SAFWCO) and Development Action for Mobilization and Emancipation (DAMEN), among others.

Khushhali Bank was established in August 2000 as part of the Government of the Islamic Republic of Pakistan's Poverty Reduction Strategy. The Pakistan Microfinance Sector Development Program (MSDP) was developed with the technical assistance and funding of the Asian Development Bank, which provided a US$150 million loan to the government of Pakistan, US$70 million being used for micro-loans provided by KB. Headquartered in Islamabad, KB operates under the central bank's supervision (State Bank of Pakistan) with several commercial banks operating as its primary shareholders.

To broaden access, there are now efforts underway to offer Shariah-compliant microfinance products to those who are reluctant to participate in interest-based banking. Farz Foundation is among the first to do so. It is engaged in Islamic micro-financing for livestock and agriculture among the rural poor.

Pakistan has a long way to go to achieve financial inclusion for the majority of its population. The current efforts on increasing access to money for the poor are a good start on a long journey that may take decades to complete. My readers who are interested in helping the poor in Pakistan by offering small loans of $25 or more have a choice of many websites to do so, including kiva.org which I have been using. The loans to Pakistani recipients are administered through Asasah, a Kiva partner in the country.

Related Link:

Haq's Musings

Pakistan's Financial Services Sector

Fighting Poverty Through Microfinance

IBA on Entrepreneurship in Pakistan

Floods Dampen Enthusiasm on Pakistan Independence Day

Live Large For Less in Delhi, Dhaka, Karachi & Mumbai

noreply@blogger.com (Riaz Haq) — Thu, 16 Feb 2012 00:44:00 +0000

A worldwide cost of living survey of 131 major cities has found that big South Asian cities of Dhaka, Delhi, Karachi and Mumbai are among the ten least expensive in the world. In other words, foreign visitors, expatriate businessmen and overseas investors can live better for less in South Asia, particularly in Karachi which is the cheapest on the list, just one rank below Mumbai, India.

The survey conducted by Economist Intelligence Unit (EIU) compared more than 400 individual prices across 160 products, including food, clothing, transport, rents and private schools.

India and Pakistan’s cheap labor and land costs are making the area “attractive to those bargain-hungry visitors or investors willing to brave some of the security risks that accompany such low prices,” the survey said, as reported by the Wall Street Journal.

The Swiss city of Zurich remained the world’s most expensive, Tokyo was the runner up, with Singapore now listed as the world’s 9th most expensive city. Singapore was listed as the 6th most expensive last year, but remarkably was ranked 97th in 2001.

Here's how EIU describes the world cost of living survey methodology:

"More than 50,000 individual prices are collected in each survey, conducted each March and September and published in June and December. EIU researchers survey a range of stores: supermarkets, midpriced stores and higher priced specialty outlets. Prices reflect costs for more than 160 items in each city. These are not recommended retail prices or manufacturers’ costs; they are what the paying customer is charged. Prices gathered are then converted into a central currency (US dollars) using a prevailing exchange rate and weighted in order to achieve comparative indices. The cost-of-living index uses an identical set of weights that is internationally based and not geared toward the spending pattern of any specific nationality. Items are individually weighted across a range of categories and a comparative index is product using the relative difference by weighted item."

The cheapest cities on the EIU list are dominated by Asian and Middle Eastern cities. The latter of these is due, in part, to the use of price controls and the pegging of currencies to the US dollar. The former seems to have a more structural basis, with cheap labor and land costs making India and Pakistan incredibly attractive to those bargain hungry visitors or investors.

Currently, there are over 300 foreign multinational companies, including American and European companies, with operations in Pakistan. And more are coming every year in spite of ongoing security concerns and current economic slowdown. Almost all big international brand name American and European companies operate in Pakistan.

Here's an excerpt from a US government website on America's commercial presence in Karachi, Pakistan:

"U.S. firms have a strong presence in Pakistan. More than 70 wholly-owned U.S. subsidiaries are registered with the American Business Council (ABC) and American Business Forum (ABF) in Pakistan. There are also hundreds of local firms representing U.S. firms in the market. Leading U.S. businesses in Pakistan include Citibank, Pepsi-Cola, Coca-Cola, Procter & Gamble, NCR, Teradata, Pfizer, Abbot, Eli Lilly, Wyeth, DuPont, Oracle, Microsoft, Cisco, Intel, Chevron, 3M, IBM, Apple, Monsanto, McDonald’s, KFC, Pizza Hut, Dominoes Pizza, and Caterpillar.

Despite security challenges and common emerging market concerns about intellectual property rights (IPR) protection, contract enforcement, and governance issues, the Pakistan market offers many attractive trade and investment opportunities in a broad range of sectors: among others, energy (power generation); transportation (aerospace and railways); information and communications technology; architecture, construction, and engineering; health; environmental technology; agricultural technology; safety and security; franchising; and services."

Jon Copestake, the editor of the EIU cost survey report, explained that these cheap cities “have been cheap for a long time.” “Even though local inflation is high, it’s coming from a very low base, so it’s only a slight rise in the cost-of-living index,” he said.

Related Links:

Haq's Musings

Karachi 4th Cheapest for Expats

WEF Study Finds India's Air Most Toxic in the World

Karachi's High Development Index

Karachi Tops Mumbai in Stock Performance

Eleven Days in Karachi

Citymayors website

Karachi Demographic Trends Worry MQM

Pakistan Most Urbanized in South Asia

Karachi: The Urban Frontier

Do Asia's Urban Slums Offer Hope?

Orangi is Not Dharavi

Climate Change Could Flood Karachi Coastline

Karachi Fourth Cheapest For Expats

Karachi City Government

Karachi Dreams Big

Pakistan to Build Nuclear Submarines?

noreply@blogger.com (Riaz Haq) — Sun, 12 Feb 2012 19:38:00 +0000

Pakistan has said it will take steps to maintain the credibility of its nuclear deterrence after India's decision to acquire a Russian nuclear attack submarine on a 10-year lease. "We are looking at these developments very closely. Rest assured, there will be no compromise in terms of maintaining the credibility of our deterrence," Pakistan Foreign Office spokesman Abdul Basit was quoted by the media reports as saying at a news briefing in December, 2011.

Now there are strong rumors in the media indicating that Pakistan is preparing to build its own fleet of nuclear-powered and nuclear-armed submarines to complete its nuclear triad for effective deterrence primarily against the regional threat posed by India's massive arms buildup.

A Pakistani defense analyst Mansoor Ahmed recently told Defense News that he has for some time believed Pakistan was working on a nuclear propulsion system for submarine applications and that Pakistan already has a functional submarine launched variant of the Babur cruise missile.

Pakistan's Babur cruise missile is very similar to the U.S. BGM-109 Tomahawk, and it can carry conventional or nuclear warheads, according to Ahmed.

Ahmed says Pakistan is now gearing up to build its own SSN/SSGN flotilla as a way of deterring India and maintaining the strategic balance in South Asia. However, Ahmed argues that Pakistan should build ballistic missile submarines. to fully ensure the credibility of its deterrent.

Here are some of the advantages of nuclear submarines:

1. Atomic weapons abroad nuclear submarines can be more survivable and useful for second strike capability which is considered vital for nuclear deterrence.

2. Nuclear propulsion, being completely independent of air, frees the submarine from the need to surface frequently, as is necessary for conventional submarines; the large amount of power generated by a nuclear reactor allows nuclear submarines to operate at high speed for long durations; and the long interval between refuelings assures a range limited only by supplies such as food. Current generations of nuclear submarines never need to be refueled throughout their 25-year lifespans.

3. Pakistan does have some AIP (air-independent propulsion)equipment on some of its current fleet of conventional submarines, which can stay submerged for longer periods to significantly boost their stealth and combat capabilities, somewhat narrowing the gap with nuclear-powered submarines which of course can operate underwater for much longer periods.

The rumors have not been confirmed or denied by Pakistani military. But if the past history is any guide, it's quite safe to assume that Pakistan will continue to effectively respond to all military threats to its security and preserve credible nuclear deterrence. It has already produced and deployed a significant nuclear arsenal consisting of uranium and plutonium bombs, ground-based nuclear-capable ballistic and cruise missiles, air-launched nuclear missiles, modern fighter-bombers, tactical nuclear weapons, etc.

In their attempts to preserve their nuclear deterrence, Pakistanis are often reminded of a quote from former Pakistani Prime Minister Zulfikar Bhutto's speech in which he said, "If India builds the bomb, we will eat grass and leaves for a thousand years, even go hungry, but we will get one of our own". Well, Pakistanis didn't have to wait for a thousand years. Pakistan tested its nuclear bomb in 1998, about three decades after Mr. Bhutto's "we will eat grass" speech.

Pakistan does have a hunger and malnutrition problem that needs to be seriously addressed as a priority. However, all of the available data from international sources shows that the hunger problem is far worse in India, with hundreds of millions of its citizens going to bed hungry every night as Pakistan's neighbor and traditional rival continues its massive arms build-up.

Here's an excerpt from Times of India on persistent and pervasive hunger in India:

With 21% of its population undernourished, nearly 44% of under-5 children underweight and 7% of them dying before they reach five years, India is firmly established among the world's most hunger-ridden countries. The situation is better than only Congo, Chad, Ethiopia or Burundi, but it is worse than Sudan, North Korea, Pakistan or Nepal.

Today India has 213 million hungry and malnourished people by GHI estimates although the UN agency Food and Agriculture Organization (FAO) puts the figure at around 230 million. The difference is because FAO uses only the standard calorie intake formula for measuring sufficiency of food while the Hunger Index is based on broader criteria.

What is even worse is that many of the hundreds of millions starving Indian children are resorting to eating dirt while India has achieved the dubious distinction of being the world's largest importer of weapons. Here's how BBC describes the situation in the Indian state of Uttar Pradesh:

In Ganne, just off the main road about an hour south of the city of Allahabad, this is a simple fact of life.

It is home to members of a poor tribal community, who live in small huts clustered around a series of shallow quarries.

Inside one of the huts sits a little girl called Poonam. She is three years old, and in the early stages of kidney failure.

Like many children in Ganne she has become used to eating bits of dried mud and silica, which she finds in the quarry. Tiny children chew on the mud simply because they are hungry - but it is making them ill.

When reports first emerged of children eating mud here local officials delivered more food and warned the villagers not to speak to outsiders. But Poonam's father, Bhulli, is close to despair.

I believe that there can be no real national security without economic security. Even as they struggle to maintain credible nuclear deterrence against external threats, it's important for Pakistani leadership to take steps to revive Pakistan's ailing economy with a renewed sense of urgency.

Haq's Musings

India-Pakistan Military Balance

Pakistan's Economic Performance

Hunger Rising in Pakistan

India Tops in Illiteracy and Defense Spending

Pakistan's Defense Industry

US Proliferated Nukes to India

Diet of Mud and Despair in India

India's "Indigenous" Copies of Foreign Nukes and Missiles

India's Nuclear Bomb by George Perkovich

Bulletin of Atomic Scientists

Cyberwars Across India, Pakistan and China

Pakistan Starts Tablet PC & Notebook Production

noreply@blogger.com (Riaz Haq) — Fri, 10 Feb 2012 00:33:00 +0000

Military-run Pakistan Aeronautical Complex (PAC) at Kamra has launched manufacturing of Android tablets, Android eBook readers and Windows/Linux notebook computers.

All three products are being offered by Commercial Products Manufacturing Cell (CPMC), a join venture of Pakistan Aeronautical Complex Kamra (PAC) and Hong Kong-based INNAVTEK. Initial prices range from Rs. 8,000 for PAC eBook reader tablet, to Rs. 15,000 for PAC PAD 1 tablet computer and Rs. 23,500 for PAC nBook notebook.

PAC PAD is the first to be manufactured in Pakistan, but not the first tablet offered for sale in Pakistan. Last year, PTCL also launched an Android based thin 7 inch tablet computer with EVO 3G and WiFi connectivity built-in. 3G EVO Tab is a 7 inch touch screen tablet with built-in EVO service to offer wireless broadband internet on the go in more than 100 cities and towns across Pakistan. Powered by Google Android Froyo 2.2 Operating system, 3G EVO Tab offers support for both 3G and Wi-Fi for an un-interrupted on-the-go connectivity. With a 5 MegaPixel Camera, a variety of built-in applications, 3G EVO Tab lets users browse, snap, share, communicate, navigate, play games and do a lot more on-the go, thereby making it an ideal connectivity solution for users looking for high speed on-the-go 3G connectivity on an Android platform. PTCL 3G EVO Tab offers convenience and speed with three diverse economy packages to suit individual needs and pockets. Its 12-month bundle offer has been very successful with majority sales in this bracket.Customers can get EVO Tab for as low as Rs 7,999 plus 12-month unlimited EVO service, all at Rs 31,999. In addition to the 12-month contract, EVO Tab offers bundled packages based on 3 and 6 month contracts at Rs 27,999 and Rs 29,999, respectively with 3 and 6 month of unlimited EVO service.

PAC's PAD is being built at Kamra complex that has set up advanced electronics manufacturing facilities used for building avionics for Pakistan's JF-17 fighter. A PAC press release issued at the launch of the project said that “for the joint production of JF-17, PAF [Pakistan Air Force] had established sufficient facilities which are appropriate for the production of both defence and commercial products.” CPMC website explains that “Innavtek jointly developed two products with (PAC's) Avionics Production Factory which are successfully flying on fleet of our JF-17 aircraft and three more products are under co development phase.”

History tells us that the Chinese People's Liberation Army (PLA) has played a huge role in China's phenomenal industrial progress and its emergence as the factory of the world in the last few decades. Even in the free-market capitalist system of the United States, great inventions like semiconductor chips, computers the Internet have their origins in the defense establishment. The US military has played a key role in funding research, development and manufacturing industries to support America's military-industrial complex and its space program. In spite of some of the well-deserved criticisms of the the world's biggest military-industrial and space complex in America, no one can deny that a lot of innovation, jobs growth and economic expansion has flowed from it to benefit the American society at large.

The latest PAC-Kamra venture is a good example of how military projects can help spawn commercial industries in Pakistan, essentially replicating the American and the Chinese industrial experience.

With experience and economies of scale, PAC computer products are likely to follow the traditional cost curve of electronics products and become more powerful and affordable for larger numbers of Pakistani customers. Growing domestic market for computers should also attract private investment in the sector and stimulate the national economy by creating more skilled jobs, and help boost human development and productivity.

PAC computer products have the potential to enable huge opportunities for education, communication, business and entertainment. Take distance learning as an example. The quickest and the most cost-effective way to broaden access to education at all levels is through online schools, colleges and universities. Sitting at home in Pakistan, self-motivated learners can watch classroom lectures at world's top universities including UC Berkeley, MIT and Stanford. More Pakistanis can pursue advanced degrees by enrolling and attending the country's Virtual University that offers instructions to thousands of enrolled students via its website, video streaming and Youtube and television channels.

PAC products can be expected to contribute to the ongoing information revolution in Pakistan by making information and education more accessible to a larger cross-section of Pakistani society. Such a revolution is essential for Pakistan to rapidly move into the 21st century, and reap full demographic dividend of its youthful population which is naturally attracted to modern gadgetry of computing and communications.

I applaud Pakistan's military for taking a page from the Chinese PLA playbook. As the only robust and well-functioning institution of Pakistani state, the military should do whatever is necessary to strengthen the nation's industry, economy, human capital and national security, regardless of any critics, including Ayesha Siddiqa Agha and her myriad fans. This is the best way forward to a well-educated, industrialized, prosperous and democratic Pakistan in the future.

Related Links:

Haq's Musings

Military's Role in Pakistan's Industrialization

Pakistan's Demographic Dividend

Pakistan's Defense Industry Goes High-Tech

Pakistan Launches UAV Production Line at Kamra

Pakistan Going Mainstream in IT Products

Pakistan Launches 100 Mbps FTTH Access

Pakistan's $2.8 Billion IT Industry

Pakistan's Software Prodigy