The West's Technological Edge in Geopolitical Competition

The US and its allies enjoy a significant technological advantage over China and Russia.  The Chinese are working hard to catch up but the West is not standing still. It is making huge investments in research and development to maintain this edge as it becomes increasingly clear that the outcome of the ongoing international geopolitical competition will largely be determined by technology. 

East-West Comparison of GDP, R&D. Source: IMF (GDP), OECD (R&D) via WSJ

In 2019, the United States and its allies invested $1.5 trillion in research and development, far outpacing the combined Chinese and Russian R&D investment of half a trillion USD.  This gap will likely narrow if the East's GDP continues to grow faster than the West's, allowing for higher investment in technology. 

After the Russian invasion of Ukraine, the US, EU, Japan, South Korea and Taiwan have made it clear that the Western allies can and will use technology sanctions to control the behavior of China and Russia. 

Taiwan Semiconductor Manufacturing Company (TSMC) will no longer fabricate computer chips for Russia, according to media reports. The ban will particularly affect Russia's Elbrus and Baikal processors, unless China agrees to step in to manufacture these chips, and risk additional US sanctions itself. Both Russian processors use mature 28 nm technology. The world's most advanced TSMC fabrication technology today is 5 nanometers. The best US-based Intel can do today is 7nm technology. China's SMIC (Semiconductor Manufacturing International Corporation) has the capability to produce chips using 14 nm technology.  Semiconductor chips form the core of all modern systems from automobiles to airplanes to smartphones, computers, home appliances, toys, telecommunications and advanced weapons systems.  

While China is the  biggest volume producer of semiconductor components in the world,  the Chinese design centers and fabs rely on tools and equipment supplied by the West to deliver products. Western companies dominate all the key steps in this critical and highly complex industry, from chip design (led by U.S.-based Nvidia, Intel, Qualcomm and AMD and Britain’s ARM) to the fabrication of advanced chips (led by Intel, Taiwan’s TSMC and South Korea’s Samsung ) and the sophisticated machines that etch chip designs onto wafers (produced by Applied Materials and Lam Research in the U.S., the Netherlands’ ASML Holding and Japan’s Tokyo Electron ), according to the Wall Street Journal. 

There is no question that the current western technology sanctions can seriously squeeze Russia. However, overusing such sanctions could backfire in the long run if the US rivals, particularly China and Russia, decide to invest billions of dollars to build their own capacity. This would seriously erode western technology domination and result in major market share losses for the US tech companies, particularly those in Silicon Valley. 

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Pakistan Cut Public Debt in Half On Musharraf's Watch in 1999-2008

In 1999, President Pervez Musharraf inherited a massive debt of over 100% of GDP run up by the Pakistan Peoples Party and the Pakistan Muslim League (Nawaz) governments in 1990s. Musharraf's policies not only revived the bankrupt economy but also brought down debt to 52% of GDP by 2007. 

Pakistan Debt to GDP 1995-2021. Source: IMF

PPP Government's 2008 Letter to IMF:

In a letter to the International Monetary Fund in 2008, the PPP government hailed Musharraf's economic record without mentioning his name in the following words:

"Pakistan's economy witnessed a major economic transformation in the last decade (2000-2008). The country's real GDP increased from $60 billion to $170 billion, with per capita income rising from under $500 to over $1000 during 2000-07.....the volume of international trade increased from $20 billion to nearly $60 billion. The improved macroeconomic performance enabled Pakistan to re-enter the international capital markets in the mid-2000s. Large capital inflows financed the current account deficit and contributed to an increase in gross official reserves to $14.3 billion at end-June 2007. Buoyant output growth, low inflation, and the government's social policies contributed to a reduction in poverty and improvement in many social indicators". (see MEFP, November 20, 2008, Para 1).

Savings and Investments:

Domestic savings rate reached 18% of the GDP and foreign direct investment (FDI) hit a record level of $5.4 billion in 2007-8. This combination of domestic and foreign investments nearly tripled the size of the economy from $60 billion in 1999 to $170 billion in 2007, according to IMF. Exports nearly tripled from about $7 billion in 1999-2000 to $22 billion in 2007-2008, adding millions of more jobs. Pakistan was lifted from a poor, low-income country with per capita income of just $500 in 1999 to a middle-income country with per capita income exceeding $1000 in 2007.

FDI in Musharraf years came in many sectors, ranging from telecommunications to manufacturing.

Several mobile phone and Internet service operators built networks worth billions of dollars. Without this telecom infrastructure, there would be no tech industry, no freelancers and no fast-growing tech exports today.

New cement plants met growing demand that more than doubled cement consumption, FMCG (fast moving consumer goods) sector took off to meet demand from growing middle class and production of cars and motorcycles jumped. 

Pakistan Per Capita Income 1960-2012. Source: World Bank 

Human Capital Development: 

In addition to the economic revival, Musharraf focused on the social sector as well. Pakistan's Human Development Index (HDI) score grew an average rate of 2.7% per year under President Musharraf from 2000 to 2007, and then its pace slowed to 0.7% per year in 2008 to 2012 under elected politicians, according to the 2013 Human Development Report titled “The Rise of the South: Human Progress in a Diverse World”.

Primary Enrollment Source: Economic Survey of Pakistan

Youth Literacy Rate Source: Economic Survey of Pakistan

Overall, Pakistan's human development score rose by 18.9% during the Musharraf years and increased just 3.4% under elected leadership since 2008. The news on the human development front got even worse in the last three years, with HDI growth slowing down as low as 0.59% — a paltry average annual increase of under 0.20 per cent. Going further back to the  decade of 1990s when the civilian leadership of the country alternated between PML (N) and PPP,  the increase in Pakistan's HDI was 9.3% from 1990 to 2000, less than half of the HDI gain of 18.9% on Musharraf's watch from 2000 to 2007.

R&D Spending Jumped 7-fold as % of GDP 1999-2007 Source: World Bank

Acceleration of HDI growth during Musharraf years was not an accident.  Not only did Musharraf's policies accelerate economic growth, helped create 13 million new jobs, cut poverty in half and halved the country's total debt burden in the period from 2000 to 2007, his government also ensured significant investment and focus on education and health care. The annual budget for higher education increased from only Rs 500 million in 2000 to Rs 28 billion in 2008, to lay the foundations of the development of a strong knowledge economy, according to former education minister Dr. Ata ur Rehman. Student enrollment in universities increased from 270,000 to 900,000 and the number of universities and degree awarding institutions increased from 57 in 2000 to 137 by 2008. Government R&D spending jumped from 0.1% of GDP in 1999 to 0.7% of GDP in 2007. In 2011, a Pakistani government commission on education found that public funding for education has been cut from 2.5% of GDP in 2007 to just 1.5% - less than the annual subsidy given to the various PSUs including Pakistan Steel and PIA, both of which  continue to sustain huge losses due to patronage-based hiring.

Pakistan's High-Tech Exports Tripled as % of Manufactured Exports. Source: World Bank

Pakistan textile exports more than doubled from $5.2 billion to more than $11 billion during the Musharraf years. Exports soared 19.43% in 2001, 20% in 2004, 24.5% in 2005 and 11.23% in 2006, all on President Musharraf's watch, according to "The Rise and Fall of Pakistan's Textile Industry: An Analytical View" published by Javed Memon, Abdul Aziz and Muhammad Qayyum.     

Pakistan Textile Exports Growth. Source: Javed Memon

Pakistan experienced rapid economic and human capital growth in years 2000 to 2008 on President Pervez Musharraf's watch. Savings, investments and exports hit new records and the rate of increase in human development reached new highs not seen before or since this period.  Without this human capital, there would be no tech industry, no freelancers and no fast-growing tech exports today.

Employment Growth in South Asia. Source: World Bank

Pakistan's employment growth was the highest in South Asia region in 2000-2010, followed by Nepal, Bangladesh, India, and Sri Lanka in that order, according to a World Bank report titled "More and Better Jobs in South Asia".

Comparing Per Capita GDP Trajectory in South Asia. Source: The Economist

Until 2010, Bangladesh was a laggard in South Asia region. Its per capita income was about half of Pakistan's. Now Bangladesh's per capita GDP is higher than both India's and Pakistan's. What changed? The biggest change is Bangladeshi leader Shaikh Hasina's decision to stifle the unruly Opposition and the media to bring political and economic stability to the South Asian nation of 160 million people. It has eliminated a constant sense of crisis and assured investors and businesses of continuity of government policies. With development taking precedence over democracy, Shaikh Hasina followed the example of Asian Tigers  by focusing on export-led economic growth of her country. She incentivized the export-oriented garment industry and invested in human development. Bangladesh now outperforms India and Pakistan in a whole range of socioeconomic indicators: exports, economic growth, infant mortality rate, primary school enrollment, fertility rate and life expectancy.    

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Pakistan Independence Day 2020: National Resilience Amid Deadly COVID19 Pandemic

On Pakistan's 73rd Independence Anniversary, the people of the South Asian nation have demonstrated their resilience yet again. They have defied all foreign and domestic doomsayers, including media, activists and think tanks of all varieties. Pakistan has successfully fought off the deadly COVID19 virus and begun to bounce back economically. Moody's rating agency has raised Pakistan's economic outlook from "under review for downgrade" to "stable". Pakistan's Planning Minister Asad Umar is talking of a "V-shaped recovery". Large Scale Manufacturing (LSM) is recovering. Monthly cement sales have rebounded to the pre-pandemic level, fertilizers sales are setting records, fuel sales have increased, tax collection is up,  exports are rising and the Karachi stock market is booming again. Prime Minister Imran Khan and Army Chief General Qamar Javed Bajwa have been on the same page in tackling the health and economic crises faced by Pakistan. Contrary to the critics of Pakistan's civil-military ties,  Khan-Bajwa cooperation has been one of the keys to the country's success in dealing with the twin crises.

Coronavirus Pandemic:

Foreign and domestic media, activists and think tanks lived up to their reputation when it comes to the coverage of coronavirus pandemic in Pakistan. They all made dire predictions of imminent collapse of the state and society. That has been the case in the past when Pakistan faced terrorist threats and natural disasters.  As in the past, they all turned out to be wrong. Pakistan successfully tacked the pandemic and brought it under control. This success has drawn praise from the likes of Bill Gates known for his global health activism and philanthropy. Speaking on CNN Global Public Square, Gates said:

"Pakistan had a pretty bad peak in Karachi but those numbers have come down and now they look like Europe. India is still sadly in growth phase as is South America...in Africa South Africa is top...in the rest of Africa we've been funding a lot of testing because it's a bit opaque..what goes on in the lungs..you are more exposed to indoor and outdoor particulates even at younger ages you can get disease compared to let's say a rich country"

CNN Screenshot of Pakistan's COVID19 Progress

Civil-Military Relations:

Attacking Pakistani military and describing Pakistani civilian leadership as "puppets" has been one of the favorite hobby horses of foreign and domestic media, activists and think tanks. It seems that they would like nothing better perpetual conflict between the two power centers. So far, these critics have miserably failed in igniting the civil-military conflict in Pakistan.

Prime Minister Imran Khan and Army Chief General Javed Bajwa have been on the same page in tackling health and economic crises faced by Pakistan. This has been one of the keys to country's success in dealing with the twin crises.

Pakistan Stock Market Best Performing in Asia. Source: Bloomberg

Large Scale Manufacturing:

In spite of COVID19 pandemic, Large Scale Manufacturing (LSM) went up 16.81% in June 2020 from May 2020, but still down 7.74% from June, 2019.  LSM  declined 10.17% in fiscal 2020 from fiscal 2019.

Pakistan Manufacturing Output. Source: Bloomberg

Pakistan Car Sales. Source: Bloomberg

Cement Sales:

Cement is a basic building material. Its sales are seen as a very important economic indicator of development activity. The cement sales jumped 37.75% from 3.512 million tons in July 2019 to 4.838 million tons in July 2020, the first month the new fiscal year 2020-21.

Pakistan Cement Sales. Source: Bloomberg

According to the data released by Pakistan's cement industry group APCMA, the local uptake of cement in July 2020 increased by 32.67% to 3.953 million tons from 2.979 million tons in July 2019 while exports rose 66.14% to 0.885 million tons, up from 0.533 million tons in same month last year.

Fertilizer Sales:

Sales of urea, a barometer of agriculture activity, have surged 83% to 1.18 million tons in June 2020 from a year ago.  The surge came after a decline 7% YoY to 2.6 million tonnes in the first half of CY20, partly due to COVID19 related lockdown in the country.

Export Performance:

As the COVID19 pandemic eased in Pakistan, the country's exports bounced up to $1.998 billion in July 2020 against $1.889 billion in the same month of the last fiscal year 2019, up 5.8% in dollar terms year-over-year. The imports stood at $3.54 billion in July 2020 against $3.696 billion in the same month of 2019, recording a decline of 4.2 percent. The overall trade balance reduced by negative 14.7% as it stood at $1.542 billion in July 2020 compared with $1.8 billion in same month of 2019.

Pakistan is trying to address various impediments to growing exports. “More than half of Pakistani exporters struggle with domestic and foreign regulatory barriers,” said Invisible Barriers to Trade – Pakistan 2020: Business Perspectives. The report was prepared in collaboration with the World Bank Group’s country office in Pakistan. There's significant upside to exports if Pakistani government and exporters can join hands to address these "invisible barriers to trade".

Naya Pakistan Housing:

Inn spite of the pandemic, Pakistani Prime Minister Imran Khan announced a new housing construction incentives package that includes down payment assistance and expansion of home loans portfolios by commercial banks at discounted rates for affordable housing for the poor.

Shariah compliant financing is also included in it. Pakistan’s mortgage finance to GDP ratio is just 0.25%, among the lowest in the world, according to the World Bank. The average for South Asia 3.4%.  New housing drives a large number of sectors of the economy from banking and building materials to construction and manufacturing of furniture and home appliances. These incentives are designed to stimulate the economy, boost employment and deal with the growing shortage of affordable housing in the country.


CPEC Gains Momentum:

The work on China-Pakistan Economic Corridor (CPEC) has gained momentum in spite of the pandemic that has slowed many sectors of the country's economy.

Pakistan has begun construction on major dam projects worth $11 billion. Diamer Bhasha dam will store 6.4 million acre-feet (MAF) of water and generate 4,500 MW of electricity. Azad Pattan hydro-electric project will produce 700 MW of electricity.

Financing for the $6.8 billion ML-1 railway project has been agreed. It will be the first major upgrade of the train track since Pakistan's independence in 1947. This project will upgrade Pakistan’s existing 2,655km railway tracks to allow trains to move up to 165km/h – twice as fast as their current speed.

Nine special economic zones (SEZs), including Rashakai in Khyber-Pakhtunkhwa, Allama Iqbal in Punjab and Dhabeji in Sindh province, have been launched. Some 1,000 acres of land had been procured for Rashakai SEZ, the groundbreaking of Allama Iqbal SEZ in Faisalabad had been done and tenders opened for Dhabeji SEZ, which would be built on 3,000 acres of land.

Pakistan's Human Development: 

One of the biggest areas of concern is Pakistan's laggard performance in human development. This requires closer civil-military cooperation to deliver better education and health care to improve the country's competitiveness in the world.

There's reason for optimism, however. Key indicators show that education and health care in Pakistan are improving but such improvements are slower than in other countries in South Asia region. Pakistan's human development ranking plunged to 150 in 2018, down from 149 in 2017. It is worse than Bangladesh at 136, India at 130 and Nepal at 149. The decade of democracy under Pakistan People's Party and Pakistan Muslim League (Nawaz) has produced the slowest annual human development growth rate in the last 30 years. The fastest growth in Pakistan human development was seen in 2000-2010, a decade dominated by President Musharraf's rule, according to the latest Human Development Report 2018. One of the biggest challenges facing the PTI government led by Prime Minister Imran Khan is to significantly accelerate human development rates in Pakistan.

Summary:

Pakistanis have defied all foreign and domestic doomsayers, including media, activists and think tanks of all varieties. Pakistan has successfully fought off the deadly COVID19 virus and begun to bounce back economically. Moody's rating agency has raised Pakistan's economic outlook from "under review for downgrade" to "stable". Pakistan's Planning Minister Asad Umar is talking of a "V-shaped recovery". Monthly cement sales have rebounded to pre-pandemic level, fuel sales have increased, tax collection is up,  exports are rising and the Karachi stock market is booming again. Prime Minister Imran Khan and Army Chief General Javed Bajwa have been on the same page in tackling the health and economic crises faced by Pakistan. Contrary to the critics of Pakistan's civil-military ties,  Khan-Bajwa cooperation has been one of the keys to the country's success in dealing with the twin crises.

Here's a brief video clip of Bill Gates' remarks on CNN:

https://youtu.be/NWTkfhiwsG4




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Pakistan's Thar Desert Riding CPEC Development Wave

Thar, one of the least developed regions of Pakistan, is seeing unprecedented development activity in energy and infrastructure projects.  New roads, airports and buildings are being built along with coal mines and power plants. There are construction workers and machinery visible everywhere in the desert. Along with renewed hopes for the region and its people, development boom is also raising concerns about the environment and its impact on the residents.

Thar Coal Development. Photo Credit: Amar Guriro 

Thar Development Projects:

The Tharparker District or simply the Thar Desert is located in the southeastern province of Sindh. It is  receiving a lot of attention because the desert sands hide an estimated 175 billion tons of coal underneath.

In December 2015, China agreed to invest $1.2 billion to develop Thar coal and establish a 660 MW coal-fired power plant.

The coal deposits are divided into 12 blocks, each containing approximately 2 billion tons. In the first phase the Sindh provincial government has allocated block II to Pakistan's Sindh Engro Coal Mining Company (SECMC) to excavate 1.57 billion tons of coal and build a 660 megawatt power plant. The plant is expected to provide power to the Pakistani national grid by June 2019. Later expansion to produce 1,320 MW of power is also planned.

Muhammad Makki, a doctoral student at the University of Queensland in Australia, recently visited the region.  Makki saw "signs of a resource boom already animating the dull landscape of the region – roads, airports, site offices, power lines, guest houses and rising real estate price are evident".

Thar Population:

The region has a population of 1.6 million. Most of the residents are cattle herders. Majority of them are Hindus.  The area is home to 7 million cows, goats, sheep and camel. It provides more than half of the milk, meat and leather requirement of the province. Many residents live in poverty. They are vulnerable to recurring droughts.  About a quarter of them live where the coal mines are being developed, according to a report in The Wire.

Hindu Woman Truck Driver in Thar, Pakistan. Source: Reuters

Some of them are now being employed in development projects.  Makki saw an underground coal gasification pilot project near the town of Islamkot where "workers sourced from local communities rested their heads after long-hour shifts".

Hindu Woman Truck Driver in Thar, Pakistan. Source: Reuters 

In the first phase, Sindh Engro Coal Mining Company (SECMC) is relocating 5 villages that are located in block II.  SECMC is paying villagers for their homes and agricultural land.

SECMC’s chief executive officer, Shamsuddin Ahmed Shaikh, says his company "will construct model towns with all basic facilities including schools, healthcare, drinking water and filter plants and also allocate land for livestock grazing,” according to thethirdpole.net He says that the company is paying villagers above market prices for their land – Rs. 185,000 ($ 1,900) per acre.

Impact to Date:

Islamabad-based Pakistani economist Dr. Pervez Tahir recently visited and found that "the impact of the road, augmented by mobile connectivity, is multidimensional" Here's an excerpt of what he wrote in The Express Tribune:

"Walking long distances has given way to motorbikes and overloaded buses have taken the place of kekras, the rickety shuttle truck-bus of the World War II vintage. Children suffering from malnutrition and other ailments are reported directly to the media as well as the hospital in Mithi on mobile phones. The high numbers of the suffering children had always existed; only the media was late in discovering these cases. The media attention did bring politicians and bureaucrats to the region, facilitated of course by the road. The hospital in Mithi is now much better staffed and well-stocked with medicines. It is now a thriving town with a good number of schools and a college. Even an English-medium private school was in evidence. A sub-campus of a university is also coming up. Locals complained about the lack of girls schools, especially at the post-primary level. This is a sign of growing awareness. There was also frustration that the locals are not given the party tickets for the National and Provincial assembly seats. Mobile connectivity and the road have linked the famous craftswomen of Thar with the main markets much more effectively. At a community meeting in Islam Kot, women were quoting prices that broadly corresponded with the prices charged in Karachi’s Zeb un Nisa Street."

Summary:

Thar development boom is part of Pakistan's efforts to solve its energy crisis as part of China-Pakistan Economic Corridor (CPEC) projects. It is stimulating a lot of economic activity in Tharparker region that will impact the local population and the environment. Sindh government and the companies working there claim that they are trying to maximize benefits for the region and the country while mitigating any problems associated with it. It's important that they live up to their claims.

Here's a video report by Amar Guriro:

https://vimeo.com/179874726

Pakistan’s coal expansion brings misery to villagers in Thar desert from thethirdpole on Vimeo.

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Pakistan Under Civilian Rule: Neither Democracy Nor Development

“Na Khuda hi mila, na visaal-e-sanam/Na udhar kay rahay, na idhar kay rahe (I found neither faith, nor union with my lover/And now I belong neither there nor here).”

Pakistan's quest for democracy under civilian rule has produced neither democracy nor development in the Islamic country of over 180 million people. Currently, Pakistan is experiencing 6th consecutive year of  stagnant economy and human development under an elected but highly corrupt "democratic" government run by the Sharif family and their cronies for their own benefit.

Is it a Democracy?

Can one call it a rule-of-law or democracy when the Sharifs illegally order the Lahore police to attack the home of Allama Tahir ul Qadri, kill over a dozen unarmed civilians including women, and then refuse to file a report  (FIR) of the incident at the local police station?  Can you call it constitutional rule when the ruling politicians openly defy the Supreme Court orders to hold local government elections under Article 140 (A) of the Pakistan constitution? Is it democracy when all of the most powerful government positions are held a few members of the Sharif family and their close friends?

Is it Development?

Is it development when Pakistan's human development progress is the slowest in decades? Is it development when Pakistan faces another lost decade like the decade of 1990s under PPP and PMLN rule? Is it development when Pakistan continues to drop in world rankings on social indicators included in the UNDP's HDI index?

Pakistan's HDI grew an average rate of 2.7% per year under President Musharraf from 2000 to 2007, and then its pace slowed to 0.7% per year in 2008 to 2012 under elected politicians, according to the 2013 Human Development Report titled “The Rise of the South: Human Progress in a Diverse World”.

Source: Human Development Report 2013-Pakistan

History of Human Development in Pakistan: 

At 0.515, Pakistan's HDI is lower than the average HDI value of 0.558 for South Asia which is the second lowest among the various regions of the world tracked by UNDP. Between 2000 and 2012, the region registered annual growth of 1.43% in HDI value, which is the highest of the regions. Afghanistan achieved the fastest growth (3.9%), followed by Pakistan (1.7%) and India (1.5%), according to the United Nations Development Program.

Overall, Pakistan's human development score rose by 18.9% during Musharraf years and increased just 3.4% under elected leadership since 2008. The news on the human development front got even worse in the last three years, with HDI growth slowing down as low as 0.59% — a paltry average annual increase of under 0.20 per cent.

 Who's to blame for this dramatic slowdown in the nation's human development?  Who gave it a low priority? Zardari? Peoples' Party? Sharif brothers? PML (N)? PML (Q)? Awami National Party? Muttahida Qaumi Movement?  The answer is: All of them. They were all part of the government. In fact, the biggest share of the blame must be assigned to PML (N).

Sharif brothers weren't part of the ruling coalition at the center. So why should the PML (N) share the blame for falling growth in the nation's HDI? They must accept a large part of the blame because education and health, the biggest contributors to human development, are both provincial subjects and PML(N) was responsible for education and health care of more than half of Pakistan's population.

Source: The Rise of the South: Human Progress in a Diverse World

Source: The Rise of the South: Human Progress in a Diverse World

Going further back to the  decade of 1990s when the civilian leadership of the country alternated between PML (N) and PPP,  the increase in Pakistan's HDI was 9.3% from 1990 to 2000, less than half of the HDI gain of 18.9% on Musharraf's watch from 2000 to 2007.



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

Source: Pew Surveys in Pakistan

Looking at examples of nations such as the Asian Tigers which have achieved great success in the last few decades, the basic ingredient in each case has been large social sector investments they have made. It will be extremely difficult for Pakistan to catch up unless similar investments are made by Pakistani leaders.

Summary:

Civilian rule in Pakistan has delivered neither democracy nor development. The country stands at a crucial juncture with highly energized Pakistanis staging a historic massive sit-in in Islamabad since August 14, 2014. They have shaken up the ruling Sharif family and forced them to seek Pakistani military's help to save themselves from the wrath of the people. Any decisions made by Pakistan's military and politicians now will have long term impact on the health of the country. Let's hope these decisions bring about changes which help accelerate socio-economic development while making Pakistan's rulers more accountable and responsive to the people for their actions.

Here's a video discussion on the current political crisis in Pakistan:

http://vimeo.com/104722439

http://youtu.be/r66ep0WghZU


Pakistan PM Invites Army Intervention; Can Army Chief Save Nawaz Sharif Govt? from WBT TV on Vimeo.

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Thirty Years of Self-Help Rural Development in Pakistan

 "Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime".

Rural Support Network, now a large collection of local NGOs, was founded by Dr. Shoaib Sultan Khan of the Agha Khan Network in December 1982. Over the last 30 years, the RSP movement has spawned nearly 300,000 community self-help organizations touching the lives of 32 million rural Pakistanis across the length and breadth of the country.


While the stats about its reach are impressive, the emphasis on its self-help model is what makes it particularly effective. RSPNs differ fundamentally from the normal aid programs.

An American writer  Joshua Foust recently described RSP's modus operandi in The Atlantic magazine as follows: "They focus on the development of institutions first, and only after that institution is established do they worry about its output or performance. The NGO also heavily invests in the smallest scale of the community, from conceptualization to execution, hiring mostly locals to administer projects. Lastly, they have extraordinarily long project timelines -- sometimes as long as 15 years from start to finish..... RSPN's longer term focus lets it work on more difficult goals, such as creating institutional capacity that can exist without foreign input. It also means RSPN can build out micro-infrastructure projects like micro-hydro power plants that allow communities to finance their own development -- again, without foreign input."

Micro-infrastructure Projects:

 A number of community-based micro hydro projects are being executed with the help of the Agha Khan Foundation in Pakistan's Northern Areas and NWFP. Within this region, out of a total of 137 micro-hydro plants, the AKRSP has established 28 micro-hydros with an installed capacity of 619kW. Initially, in 1986, these plants started as research and demonstration units. These projects were extended to Village Organizations (VOs) and became participatory projects. A Village Organization (VO) is a body of villagers who have organized themselves around a common interest.

After formation, each village organization signs a partnership with AKRSP to abide by all terms and conditions necessary for the village development. The entire responsibility of implementation is passed on to the VOs. AKRSP provides the negotiated cost of the plants and technical input required during the construction period. All the VOs complete the civil work of the plants. They purchase and transport machinery from other parts of Pakistan. The VO members provide subsidized or free unskilled labour and locally produced building material.

Health Care Insurance:

 RSP has helped create a collaborative micro-healthcare insurance system. For very little money -- $3.50 a year in some cases -- poor people can get access to basic medical care (especially maternity care) and assistance if they face hospitalization.

More recently, the Wall Street Journal reported that Asher Hasan, a social entrepreneur, has set up Naya Jeevan—"new life" in Urdu—a nonprofit micro-insurance program for the urban poor.

Human Development Effort: 

Human Development Foundation, an organization funded mostly by overseas Pakistanis, has taken a page from RSP playbook to establish many self-help projects.

HDF has a community physical infrastructure development program which helps communities improve their environment, including link roads, water storage, hand pumps, tube wells, irrigation, sanitation and pest control projects. Such projects are executed with community's sweat equity (Development Organization) and managed by the community (Village Development Organization) upon completion. Over 600 such projects have already been completed, and hundreds are currently underway.

HDF also has an education program which has grown from a few non-formal schools with 20-30 children each, to multi-grade schools with over 100 children each. Many of these schools operate in remote areas, and curriculum is activity-based to retain children's interest and reduce drop-out rates.

HDF has a  microfinancing program as well. It has grown from offering small loans to individuals to joint ventures and community partnerships, and "one village, one product" programs. In addition to capital, these programs also offer skills training to start and run the businesses. These microloan programs are based on the Islamic principle of Murahaba.

Hope for the Future:

 Unfortunately, Pakistani state, run by politicians and their hand-picked civilian administrators, is weak, incompetent and ineffective. But ordinary Pakistanis are among the most philanthropic people in the world. Thirty years of community-based rural support and other similar programs are proof that many of them are giving to help their fellow citizens to get up on their own feet. More and more of them are choosing to light candles instead of cursing the darkness.  This should give us all hope for a brighter future for Pakistan.

Related Links:

Haq's Musings

Philanthropy in Pakistan

Pakistan-A Hard Country

World Giving Index Report 2011

How Can Overseas Pakistanis Help Flood Victims?

Light a Candle, Don't Curse Darkness

Pakistan Center for Philanthropy

An Overview of Indian Philanthropy

Aaker Patel on Philathropy

Orangi Pilot Project

Volunteerism in America

Dr. Akhtar Hamid Khan's Vision