Haq's Musings

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

Tuesday, October 29, 2024

Will India Grow Old Before it Gets Rich?

India's population has aged faster than expected while its economic growth has slowed over the last decade. This raises the obvious questions: Will India get old before it gets rich? Is India getting poorer relative to its peers in the emerging markets?

India's Population Aging. Source: Semafor

As India's birth rate declines rapidly, the proportion of people age 60 and over is rising in the general population. This is particularly true of the southern states like Kerala and Tamil Nadu. Meanwhile, the expected demographic dividend from the youth bulge in the country has yet to materialize. High youth unemployment is threatening to cause serious social instability in the world's most populous country. It is also causing a massive brain drain.

India's GDP Per Capita Compared to Emerging Markets Average. Source: IMF

India is losing its best and brightest to the West, particularly to the United States, at an increasingly rapid pace. A 2023 study of the 1,000 top scorers in the 2010 entrance exams to the Indian Institutes of Technology (IIT) — a network of prestigious institutions of higher learning based in 23 Indian cities — revealed the scale of the problem. Around 36% migrated abroad, and of the top 100 scorers, 62% left the country, according to a report in the science journal Nature. Nearly two-thirds of those leaving India are highly educated, having received academic or vocational training. This is the highest for any country, according to the Organization for Economic Co-operation and Development.

Annual Population Growth Rapidly Falling Across India. Source: Semafor

India has the lowest GDP per capita among the 5 BRICS nations. The country's GDP growth rate is much slower than the average for emerging markets. It means that India is becoming poorer relative to the rest of the developing world.

GDP Per Capita Map 2024. Source: IMF

India's GDP Per Capita is Very Low. Source: BBC

The north-side geographic divide in India is growing. The southern five of India’s 28 states (Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana) contain 20% of the population and contribute 31% of the GDP, according to The Economist magazine. Among startups, 46% of tech “unicorns” are southerners, particularly from Bangalore. The five southern states provide 66% of the it-services industry’s exports. The latest craze is for “global capability centers”, where multinationals assemble their global auditors, lawyers, designers, architects and other professionals: 79% of these hubs are in the south.

Indian Parliament Seats Based on Current Population. Source: National Herald

There has always been a north-south divide in India in terms of population and wealth. The south has been wealthier and less populous than the north. But the political power is still concentrated in the poorer and more populous northern states. This situation serves Prime Minister Narendra Modi and his BJP party well. But it also creates significant resentment in southern states.

In his book "The Raisina Model", British Lord Meghand Desai says that India's breakup can not be ruled out. Specifically, he points to three issues that could lead to it:

1. Cow protection squads are killing Muslims and jeopardizing their livelihoods. The current agitation about beef eating and gau raksha is in the Hindi belt just an excuse for attacking Muslims blatantly. As most slaughterhouses in UP are Muslim-owned, owners and employees of these places are prime targets.

2. India has still not fashioned a narrative about its nationhood which can satisfy all. The two rival narratives—secular and Hindu nation—are both centered in the Hindi belt extending to Gujarat and Maharashtra at the most. This area comprises 51% of the total population and around 45% of the Muslims in India.

3. India has avoided equal treatment of unequal units. Representation in the Rajya Sabha (Upper House of Parliament) is proportional to population size. The larger states dominate both Houses of Parliament. It would be difficult for small states to object, much less initiate reform. In future, small states could unite to present their case for better treatment.

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Saturday, October 19, 2024

India: A Rogue State Ruled By Gangsters?

The United States and Canadian governments are alleging that Indian government agents plotted assassinations of Sikh dissidents on their soils. Their investigations paint a shocking picture of how recklessly Prime Minister Narendra Modi’s government operates.

Prime Minister Narendra Modi (L) and Home Minister Amit Shah

The criminal charges announced by Washington and Ottawa are backed by Australia, New Zealand and the United Kingdom, the remaining three countries that make up the 5-nation intelligence sharing alliance known as the Five Eyes. Revelations made by the US Justice Department and the Royal Canadian Mounted Police (RCMP) indicate that the authorization for Sikh assassinations came directly from the top Indian government officials, including Indian Prime Minister Narendra Modi's right-hand man Amit Shah. International criminal gang leader Lawrence Bishnoi is listed among the people tasked with carrying out the murders. These allegations are based on intelligence gathered from multiple communication intercepts among Indian government officials in New Delhi and Indian diplomats posted in Canada.

Sikh Leaders Targeted in Assassinations Campaign by Modi Government

RCMP Commissioner Michael Duheme has warned of widespread violence, homicides and a public security threat linked to agents of the Indian government. Duheme said the RCMP has charged “a significant number” of people with direct involvement in homicides, extortions and other criminal acts of violence over the past few years and is aware of more than a dozen threats to members of the south Asian community and the pro-Khalistan movement, according to the Canadian news media.

Meanwhile, the United States Justice Department (US DOJ) has charged a former Indian intelligence agent Vikash Yadav for allegedly orchestrating a foiled plot to assassinate Gurpatwant Singh Pannun, an American citizen living in New York City. Last year, the DOJ first announced charges in the case, indicting an Indian national and alleged drug and weapons trafficker, Nikhil Gupta. That indictment also referred to an unnamed Indian government official whom prosecutors said directed the scheme.

New Delhi is responding very differently to almost identical allegations made by the US and Canadian governments. While the Canadians are treated with total disdain, the Americans are being taken very seriously. The behavior of the Modi officials toward Canada is just as hostile as it has been toward Pakistan which has also documented a campaign of assassinations of Sikhs and Kashmiris orchestrated by Indian agents on its soil.

Reacting to the report of Canadian allegations against the Indian government, Pakistan Foreign Secretary Syrus Qazi said: “We are aware of the nature of our eastern neighbor, we know what they are capable of … so it is not a surprise for us. “We caught [one of their] serving naval intelligence officers on our soil. He (Kulbhushan Jadhav) is in our custody and admitted that he came here to create instability and spread evil,” he added.

Last year, Pakistan foreign office spokesperson Mumtaz Zahra Baloch said her country remained a “target of a series of targeted killings and espionage by (Indian Intelligence Agency) RAW". “In December last year, Pakistan released a comprehensive dossier providing concrete and irrefutable evidence of India’s involvement in the Lahore attack of June 2021. The attack was planned and executed by Indian intelligence,” she said, adding that in 2016, a high-ranking Indian military officer Kulbhushan Jadhav confessed to his involvement in directing, financing and executing terror and sabotage in Pakistan.

The US government has openly bracketed Mr. Modi with several murderous dictators. Speaking about the US decision to grant immunity to Saudi Crown Prince Mohammad Bin Salman in 2022, State Department spokesperson Vedant Patel said that it was “not the first time” that the US government has designated immunity to foreign leaders and listed four cases. “Some examples: President Aristide in Haiti in 1993; President Mugabe in Zimbabwe in 2001; Prime Minister Modi in India in 2014; and President Kabila in the DRC in 2018. This is a consistent practice that we have afforded to heads of state, heads of government, and foreign ministers,” he said.

Modi has a long history of murdering minorities in his country. After the Gujarat anti-Muslim pogrom of 2002, Narendra Modi made the cover of India Today magazine with the caption "Hero of Hatred". Modi was denied a visa to visit the United States. The US visa ban on Modi was lifted in 2014 after he became prime minister. Since then, Narendra Modi's image has been rehabilitated by the West as the US and Western Europe seek allies in Asia to counter the rise of China. However, Modi's actions on the ground in India confirm that he remains "Hero of Hatred" and "Divider In Chief" at his core. A two-part BBC documentary explains this reality in significant detail. The first part focuses on the 2002 events in Gujarat when Modi as the state chief minister ordered the police to not stop the Hindu mobs murdering Muslims and burning their homes and businesses. The second part looks at Modi government's anti-Muslim policies, including the revocation of Kashmir's autonomy (article 370) and a new citizenship law (CAA 2019) that discriminates against Muslims. It shows the violent response by security forces to peaceful protests against the new laws, and interviews the family members of people who were killed in the 2020 Delhi riots orchestrated by Modi's allies.

Here's Indian National Security Advisor on how to use Taliban to attack Pakistan:

https://youtu.be/eYRuk8H5M9E?si=ZB1c7Dd8ntQdKeFi

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PakAlumni Social Network

Thursday, October 10, 2024

Renewable Energy: Clean Electrification of Pakistan's Economy

Access to abundant and cheap electricity is essential for running a modern competitive economy. The rapidly growing power demand for generative AI data centers makes it even more important. The best way to ensure it is in switching to renewable energy sources. That is why Pakistan is in the midst of a renewable power boom. It is ramping up generation of clean energy with solar, hydro, wind and nuclear power. 13 gigawatts of solar panels have been imported in the first half of this year alone. Another 10 gigawatts of hydroelectric power projects are under construction for completion by 2030, bringing the total hydropower capacity to 20 gigawatts. Pakistan's total nuclear energy production capacity rose to 3,620 MW, when the country's sixth nuclear power plant opened two years ago. Pakistan and China have recently signed a $4.8 billion deal to build another 1,200 MW nuclear power plant. There are 36 private wind projects producing approximately 1,845 MW in the country. Pakistan is phasing out old fossil fuel power plants. It has negotiated the termination of power purchase contracts with five independent fossil fuel power producers (IPPs), including Hubco, the largest IPP currently operating in the country. More negotiations are underway to terminate additional IPP contracts. Payments to these IPPs are a huge burden on the nation’s economy and ordinary consumers alike. There have been violent protests against high electricity rates across the country.

Renewable Energy. Source: Easy-Peasy.AI

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

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

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

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Pakistan at 75

Growing Presence of Pakistani Women in Science and Technology

Riaz Haq's Youtube Channel

PakAlumni Social Network

Sunday, October 6, 2024

Is Pakistan Getting Ready For AI Revolution?

Generative artificial intelligence (GenAI) has taken the world by a storm. It has drawn the attention of academia, businesses and governments around the world. This technology is expected to transform almost every sector from business and commerce to government, industries and defense. Are Pakistanis aware of its potential? Is Pakistan getting ready for what is being described as the "AI Revolution"? Let's examine the answers to these questions.

AI awareness is rising among Pakistan’s general public. The country ranks third with 76% of people being aware of ChatGPT, according to Stanford University’s AI Index Report 2024 covering a survey of 31 countries, including the United States, Europe and East Asia. India (82%), Kenya (81%), Indonesia (76%), and Pakistan (76%) have the highest awareness rates in the world. Brazil and Canada have 64% awareness, UK and Japan 61%, China, Germany and France 60% and the US 55%. Poland reported the lowest awareness, at 43%. Globally, 17% of users utilize it daily, 36% weekly, and 16% monthly. India (36%), Pakistan (28%), and Kenya(27%) report the highest levels of daily usage.

Pakistan is among the top 4 countries for enrollment in Coursera online GenAI courses, according to Jeff Maggioncalda, CEO of Coursera. India, Egypt, Pakistan, and Brazil, make up more than half (52%) of GenAI enrollments on Coursera. It offers more than 4,600 courses and 55 Professional Certificates in up to 21 popular languages, including Arabic, Hindi, and Spanish. Coursera, a global online education platform, was launched in 2012 by two Stanford Computer Science professors, Andrew Ng and Daphne Koller.

Pakistan's HEC (Higher Education Commission) has established a partnership with Coursera to give access to online quality education in Pakistan. As a result, more than 200 universities have gained access to Coursera’s library of courses. Over 267,000 courses have been completed with students logging over 1.4 million learning hours. More than 45,000 learners have achieved deep-skills specialized certifications from internationally recognized institutions, the most popular specializations being Communication, Data Analysis, and Leadership and Management, according to Coursera.

Ashar Aziz Foundation, created and funded by Pakistani-American technology entrepreneur Ashar Aziz, has sponsored Advanced AI Bootcamps at the National University of Science and Technology (NUST) in Islamabad. The bootcamp series not only provides theoretical knowledge but also emphasizes practical, project-based learning, according to NUST.

The first AI bootcamp, which focused on Deep Neural Networks (DNNs), was successfully completed at NUST in November 2023. The second bootcamp provided participants with in-depth knowledge and hands-on experience in the development and application of LLMs (Large Language Models). Ghulam Ishaq Khan Institute of Engineering Sciences & Technology (GIKI) also joined this initiative in 2024, conducting its own DNN-focused bootcamp. Participants have the opportunity to work with advanced technologies, including access to a 10xH100 NVIDIA GPU AI supercomputer, ensuring they are well-prepared to tackle real-world challenges in AI. As part of its ongoing efforts, NUST plans to partner with additional universities across Pakistan to further scale this initiative, ensuring that more students have access to high-quality AI training, according to NUST.

Smaller towns in Pakistan are also setting up AI programs with the help of Pakistani-Americans. For example, Stanford educated AI expert Shoaib Lari and Silicon Valley based technology executive Jalil Shaikh have helped Islamia University Bahawalpur start an AI program. Jalil Shaikh is now working with US-based companies to place the first group of graduates from this program.

STEM education underlies Artificial Intelligence. Pakistan stands 4th in the world with 642,562 students enrolled in STEM courses– behind Nigeria (675,371), the US (4,639,771) and India (6,000,967), according to Coursera's Global Skills Report 2023. My own estimate based on HEC data is that STEM enrollment in Pakistan exceeds one million.

The Pakistan government has released its National AI Policy Draft for comments. It focuses on how AI can help the country promote its national competitiveness and improve the lives of its citizens by outlining a wide range of developmental initiatives necessary for awareness and adoption of AI, reimagining the transparent and fair use of personal data using AI, and stimulating innovation through industry-academia collaborations and investments in AI-led initiatives. The Pakistan government has set up a National Center for Artificial Intelligence (NCAI) at the National University of Science and Technology (NUST). NCAI has created a a consortium model consisting of 6 public sector universities with 9 specialized research centers spread across Islamabad, Lahore, Karachi, Peshawar.

Pakistan has also seen several private-sector led initiatives to create greater awareness of AI. For instance, Karachi.AI is recognized as a premier community for Applied AI practitioners. Established in 2017, the community proudly hosts over 10,000 members representing various domains. Its mission revolves around three central pillars: raising awareness, promoting engagement, and driving execution. Karachi. AI hosts regular meetups in Karachi, which are also live streamed on its YouTube channel, along with other educational content about AI.

In addition to skilled human capital, the GenAI apps require a lot of digital public infrastructure, powerful computers and large data centers to securely store and rapidly access vast amounts of data. A number of private investors are jumping in to build data centers in Pakistan. Mari Petroleum Company Limited (MPCL) is planning to develop data centers across the country as part of an expansion into digital infrastructure. Chakwal Spinning Mills Limited, has recently said it was pivoting to develop data centers.

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Growing Presence of Pakistani Women in Science and Technology

Riaz Haq's Youtube Channel

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Thursday, September 26, 2024

Investors Celebrate Pakistan's Continuing Economic Recovery

Pakistan's benchmark KSE-100 index hit an all-time high after the announcement of the $7 billion IMF bailout deal today. Economic indicators such as inflation, exports and remittances are also showing significant improvement as well. Speaking to reporters after the IMF deal, the Fund Managing Director Kristalina Georgieva acknowledged progress made by Pakistan. She said "The economy is on the sound path. Growth is up and inflation is down". The KSE-100 index rose in early trade to a record high of 82,905.73 points, before giving up those gains later in the day to close 0.7% down at 81,657. It still represents an annual gain of nearly 100%.

Pakistani Stock Market Outperforms Asian Peers. Source: Bloomberg

Pakistan rupee has remained essentially stable at around Rs. 277 to a US dollar over the last year. Inflation has come down from 37% last year to less than 10% this year. Exports have climbed 10.54% ($2.921 billion) to $30.645 billion during the fiscal year 2023-24 compared to $27.724 billion in the corresponding period of 2022-23. Overseas workers' remittances have surged 44% to $5.94 billion in the first two months (July-August) of the current fiscal year 2024-25, compared to the same period last year. Current account deficit has declined to $681 million in FY24 from $3.275 billion in FY23. The budget deficit for the 2023–2024 fiscal year has been reduced to 6.8% of GDP from 7.7% in the previous year.

The stock market gains are driven primarily by the increasing profitability of the firms making up the index, in addition to improvement in macroeconomic indicators. The companies listed on Pakistan’s KSE-100 Index have reported their highest-ever earnings of Rs1.7 trillion in FY24, marking a 25% year-on-year increase from Rs1.3 trillion in FY23. In US dollar terms, profits after tax (PAT) rose 10% to $5.8 billion during the same period, according to data compiled by brokerage firm Topline Securities. Dividend payouts soared 30% as banking, fertilizer, and cement sectors led growth, according to media reports.

Pakistan has a long tough road ahead to carry out the reforms promised to the IMF in the latest bailout deal. Renegotiating unsustainable IPP (Independent Power Producers) contracts and carrying out long-delayed privatization of state-owned enterprises to reduce major drain on the taxpayers will not be easy, Boosting tax collection is not easy either. Offering incentives for savings, investments and exports while reducing budget deficits is a difficult feat. It will take a lot of fortitude, finesse and political will to get the results to improve the economy. Pakistani leaders' biggest challenge is to find a way to grow the economy to create enough jobs for the country's growing working age population. Failure to do so could cause major social unrest in the nuclear-armed country of 240 million people.

Pakistan Sets New Record For Rice Exports

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Friday, September 20, 2024

Powerful Hindutva Lobby Flexes its Muscle in California

Last year, California lawmakers voted 31-5 to approve the first state-wide bill (SB 403) explicitly banning caste discrimination. The bill, enjoying broad support among California voters, was sponsored by Senator Aisha Wahab. It was vetoed by Governor Gavin Newsom under pressure from wealthy political donors belonging to the Hindutva lobby.

Senator Aisha Wahab with Supporters of California Law to Ban Caste Discrimination

Hindutva Lobby:

The Hindutva lobby's opposition to the California anti-caste discrimination bill was spearheaded by Ramesh Kapur, a wealthy Massachusetts entrepreneur. “If you want to be our next president, veto the bill”, Kapur told the governor in no uncertain terms, according to a recent investigative piece written by British journalist Andrew Cockburn and published in the Harper magazine. Here's an excerpt from the article:

"The ultimatum was decisive. Kapur said that Newsom emailed him three hours before going public: “I’m going to veto it.” Newsom’s move dashed the hopes of all who had fought for the bill, but it seems likely to reap him rich rewards. “Now that he has made that decision, he has become the champion of the Hindu cause,” Kapur told me over the phone from California, where he was busy organizing the first in a series of fundraisers for the governor in Silicon Valley, Chicago, and New Jersey. “Newsom is hot in the Indian-American community!”"

In recent years, Hindu Americans have become the highest-income group in the United States. Most of them support Hindu Nationalist Prime Minister Narendra Modi's BJP party. There are many billionaires among them, and they are willing to use their wealth to influence the US political process. They see AIPAC, the Israel lobby, as their inspiration.

California AB 3027:

California bill (AB 3027) banning transnational repression was introduced in response to the attempted assassination of an American Sikh leader. The US government believes that the assassination was plotted by agents of the Indian government. This bill is strongly opposed by the Hindutva lobby which calls it "Hinduphobic". It is supported by law enforcement agencies in the state. The bill would provide an improved sense of personal security to many Indian Americans who are facing threats for opposing the Modi government in India. It is currently stalled in California Senate committees. Hindutva supporters see Zionists as useful allies in their effort to draw parallels between antisemitism and “Hinduphobia.”

California Hindutva Group Marches with Zionists in Support of Israel's Gaza Genocide

Donor Power:

Gavin Newsom's veto of the bill to ban caste discrimination illustrates the power of the donors crushing popular will, making a mockery of democracy. The power of the Israel lobby (AIPAC) backed by rich Jewish-American donors is the most egregious example of this, as is the power of the gun lobby (NRA).

Polls consistently show that the majority of Americans oppose US shipment of weapons to Israel while it slaughters tens of thousands of innocent Palestinian civilians, mainly children and women. But the Biden administration continues to send arms, ammunition and explosives to the Israeli government. Both Biden and Harris pay lip service to the need for an immediate ceasefire but refuse to stop giving Netanyahu the bombs that he is using to sustain the Gaza genocide.

Similarly, the majority of Americans want laws to restrict gun ownership in the country. Polls after each mass shooting confirm broad support for gun control laws. But the US politicians refuse to pass such laws because of the power of the US gun lobby.

American Muslim Vote:

There are enough Muslim voters in battleground states, particularly Michigan, where their vote can make a difference to the outcome of this year's presidential contest between Vice President Kamala Harris and former President Donald Trump. But there is little difference between their positions on Gaza. Both have expressed strong support for Israel, thanks to the power of AIPAC and its wealthy billionaire donors. Nonetheless, it is interesting to look at the numbers. Here is an excerpt from the Harper piece on this:

"Since October 7—coincidentally the same day that Newsom announced his veto—the ongoing slaughter in Gaza has brought electoral peril for the Democrats. Polls report withering support across important components of the coalition that brought Biden to victory in 2020, especially among the Muslim community, which gave him up to 85 percent of its votes in that election, according to some polls. Although Hindus were less supportive of Biden than Muslims were in 2020 (25 percent went for Donald Trump, according to certain estimates, a slight uptick from 2016), some see their votes as the perfect replacement for the Democrats’ faltering Muslim coalition. “We can make the difference!” Kapur exclaimed, brandishing a state-by-state breakdown of Hindu and Muslim populations to show that his fellow Hindus could deliver votes as well as money. Muslims outnumber Hindus in America, 3.5 million to 2.5 million. But in key swing states, the numbers Kapur presented to me, drawn mostly from 2014 data, almost balance out: Pennsylvania is home to 130,000 Hindus and 150,000 Muslims. In Georgia, the state’s 172,000 Hindus outnumber its 123,000 Muslims, while the 110,000 Hindus in Michigan provide some counterweight, Kapur implied, to the quarter million Muslims, many of whom are outraged by the Biden Administration’s support for Israel. In Nevada, Hindus outnumber Muslims by almost three to one, while in Virginia, Hindus have an edge of 200,000 to just under 170,000. During the 2021 Virginia governor’s race, both the Democratic candidate, Terry McAuliffe, and the Republican, Glenn Youngkin, paid attention to this voter pool and dutifully visited Hindu temples, but Youngkin reportedly made the stronger impression—he “listened deeply” to their concerns, as American Hindu Coalition chairman Shekhar Tiwari put it, especially their complaints about local schools’ efforts to promote diversity by modifying admissions policies at their expense. And Youngkin was not the first Republican to cultivate and enjoy Hindu support. In 2015, the Chicago billionaire industrialist Shalabh Kumar set up the Republican Hindu Coalition, which describes itself as “modeled after the highly successful Republican Jewish Coalition”; Steve Bannon was an honorary co-chair of the group. Kumar and his wife poured money into Trump’s 2016 election campaign, which was making major media buys in swing states. Trump even recorded a message in Hindi".

Saturday, September 14, 2024

ITU Cybersecurity Index 2024: Pakistan Ranked Among Top Tier Countries

International Telecommunications Union (ITU) has ranked Pakistan (score 96.69/100) among top tier countries for cybersecurity in 2024. Out of a maximum score of 20, Pakistan received 20 for legal measures, 18.21 for technical measures, 20 for organization measures, 20 for capacity development and 18.48 for cooperative measures, according to the Global Cybersecurity Index 2024 report released by the ITU.

Pakistan Cybersecurity Scores 2024. Source: ITU

Pakistan's tier one cybersecurity ranking is a big improvement from its 79th rank (score 64.88 from 100) it got in the cybersecurity ranking by the ITU in 2020. Four years ago, Pakistan scored 15.97 on legal measures, 12.26 on technical measures, 11.01 on organizational measures, 17.25 on capacity development and 8.38 on cooperative measures.

Increasing penetration and rapid growth of the Internet user base in Pakistan has brought in a lot of user complaints of bullying and fraud, necessitating government action, including new legislation and capacity building to fight cyber crimes.

Pakistan Telecom Indicators as of July 2024. Source: PTA

Back in 2018, Pakistan launched its National Center for Cyber Security (NCCS) as a joint project of Higher Education Commission (HEC) and the Federal Planning Commission. The Center includes several Research and Development (R&D) Labs at Pakistani universities. These universities have been given the mandate to establish NCCS affiliated Labs in different specialties of cybersecurity under the Center's secretariat. Earlier this year, Pakistan's economic coordination committee (ECC), a ministerial level body, allocated $36 million for work on cybersecurity measures.

Like many other nations, the cybersecurity threats in Pakistan include hacking, identity theft, cyber-bullying, cyberstalking, spoofing, financial frauds, digital piracy, viruses and worms, malicious software, money laundering, denial of service attacks, electronic terrorism, vandalism, and pornography.

Pakistan has passed a cybercrime bill and established a National Response Center for Cyber Crime (NR3C). NR3C has expertise in Digital Forensics, Technical Investigation, Information System Security Audits, Penetration Testing and Training. Since its inception, it has been involved in capacity building in various departments including Police, Intelligence, Judiciary and Prosecutors. Cyber Scouts is the latest initiative of NR3C, in which, selected students of different private/public schools are trained to deal with computer emergencies and increasing awareness of cyber threats amongst their fellow students, teachers and parents.

RAAST: Pakistan's Instant Payment System

2021: A Banner Year For Tech Startups in Pakistan

Pakistan Projected to Be World's 6th Largest Economy By 2075

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

Pakistan's Digital Public Infrastructure

Pakistanis' Insatiable Appetite For Smartphones

Solar Power Boom in Pakistan

Pakistan at 75

Growing Presence of Pakistani Women in Science and Technology

Riaz Haq's Youtube Channel

PakAlumni Social Network

Friday, September 6, 2024

Shifting Monsoon Pattern: Is Arid Pakistan Turning Wet?

Semi-arid Pakistan, with its farmlands predominantly irrigated by the world's largest contiguous canal system, has experienced an increasing amount of annual rains and floods for several years. Even the desert regions of the country, like the vast Thar desert straddling India-Pakistan border, have recently been turning green. Now a study has found that "the mean rainfall over the semi-arid northwest parts of India and Pakistan has increased by 10%–50% during 1901–2015 and is expected to increase by 50%–200%" by the end of the current century. The authors of this study published by Advanced Earth and Space Science conclude as follows: "While an adaptation strategy to increased hydrological disasters is a must, harnessing the augmented rainfall would lead to a substantial boost in food productivity, bringing transformative changes in the socio-economic condition of people in the region".

Annual Summer Monsoon Rainfall in Millimeters For 1979-2015. Source: AGU

Already, the satellite images shared by the US National Aeronautics and Space Administration (NASA) show that greenery in Pakistan has been growing at double digit rates over the last few decades. All of this rapid greening of the country is the result of intensive agriculture in Punjab and Sindh provinces.

Greening Trends in Asia. Source: NASA Earth Observatory

Recent economic data from Pakistan lends credence to the findings of the latest study that the region will see "substantial boost in food productivity, bringing transformative changes in the socio-economic condition of people". Pakistan's agriculture sector grew 6.3% in 2023-24, far outpacing the overall economy that grew just 2.38%, according to the Economic Survey of Pakistan 2023-24. Pakistan’s agricultural exports reached a record $8 billion in FY 2023-24. This is good news for about 40% of the country's population working in the agriculture sector. By contrast, India's agriculture growth slowed to 1.2% in recent quarters. Studies have shown that strong growth in agriculture helps reduce poverty in developing nations like India and Pakistan.

Projected Percentage Change in South Asia Rainfall By End of 21st Century. Source: AGU

The study highlights shifting monsoon patterns bringing more rainfall in northwestern India and Pakistan which is explained as follows: "The warming of the western Indian Ocean and Arabian Sea strengthens winds that cross the equator, which increases evaporation and the amount of moisture carried from the ocean to the land. This leads to increased monsoon rainfall." "On the other hand, the oceanic rain belt between the equator and 10°S shows weakening, with a decrease in mean rainfall from the eastern IO (Indian Ocean) extending up to the maritime continent", it adds.

A major downside of the increased rainfall from shifting monsoon patterns is frequent flooding in both rural and urban Pakistan. The country experienced the worst floods in its history in 2022. Over a thousand Pakistanis died. About 33 million people in two southern provinces became homeless. Sindh was inundated with 784% of normal rainfall. Balochistan saw 522% of average rainfall. Both provinces suffered their worst ever heatwave prior to this unprecedented deluge. Nearly a million livestock were lost, over two million acres of farmland went underwater and 90% of the crops in Sindh and Balochistan were damaged. It was a massive humanitarian crisis.

Such extreme weather events like the floods of 2022 are likely to recur and cause widespread devastation unless measures are taken to build back better. Part of the new infrastructure needed to deal with it includes better rainwater harvesting and improved drainage systems. This is what the authors of the study refer to when they say that "harnessing the augmented rainfall would lead to a substantial boost in food productivity, bringing transformative changes in the socio-economic condition of people in the region".

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Friday, August 30, 2024

New Net Metering Policy: Is Pakistan's Solar Boom in Jeopardy?

Recent experience in California has shown that changes in incentives have a huge impact on residential adoption of solar power technology. Since the introduction of NEM 3.0 last year, new rooftop solar business in California has dramatically slowed. New residential solar installation applications have plunged 80%, according to Cal Matters. This has driven many solar installers out of business. The business that remains is mostly focused on adding batteries to existing solar installations.

Impact of California NEM 3.0 on Solar Business. Source: Cal Matters

California Net Energy Metering (NEM 3.0) was launched last year after heavy lobbying by the state's utility companies like PGE and SoCal Edison. It has reduced payments for the excess power exported by the consumer to the grid by 75%. This change means that the consumer is better off with storage batteries to maximize self-consumption of the power generated by the solar panels. Companies such as Tesla Solar with its PowerWall 3 battery are the main beneficiaries of this change.

With rapidly falling solar panel prices, Pakistan is experiencing a solar power boom. The country imported some 13 gigawatts of solar modules in the first six months of the year, making it the third-largest destination for Chinese exporters, according to Bloomberg. In addition, there is approximately 2.2 gigawatts (GW) of net-metered rooftop solar PV capacity connected to the grid by June 2024, according to IEEFA.

What is likely to happen to this solar boom as Islamabad considers changes to its net metering policy? A recent study published by the Institute for Energy Economics and Financial Analysis (IEEFA) attempts to answer this question.

Net Metering vs Net Billing Payback Period in Pakistan. Source: IEEFA

There are several proposals under consideration by the Pakistani government to change its net metering policy. All are designed to significantly reduce payments to the consumer for energy exported to the grid. One of these proposals likely to be adopted is to switch from "Net Metering" to "Net Billing".

Net metering transactions are usually one-to-one, so the credits are often equal to the retail rate of electricity (aka what you pay). Net billing credits are often equal to the wholesale rate of electricity (aka what your utility pays), which is less than the retail rate, according to Energy Sage. Utilities tend to oppose net metering programs, so alternative compensation programs are increasingly being used.

Analysis by Haneea Isaad, an Energy Finance Specialist at IEEFA, shows that the switch from net metering to net billing would still reduce the payback period for 5kW to 25kW solar systems combined with 50% to 70% self-consumption. She concludes that the payback period will be well under 4 years for a system that has a life of 25 to 30 years. It is better than the 5-year payback period in California under NEM 3.0.

Would consumers without solar be stuck with high electricity bills? It is quite likely because capacity charges paid to independent power producers (IPPs) accounted for 62% of energy expenditure in Pakistan for the 2023-2024 fiscal year. For the 2024-2025 fiscal year, 64% of the total power purchase price is expected to be fixed capacity costs. Lower consumption of grid electricity will result in a disproportionate impact on consumers who rely entirely on grid power.

Higher levels of self-consumption closer to 100% would require larger batteries which are still quite expensive in Pakistan. This is likely to change as traditional lead-acid battery makers switch to lithium ion batteries in the country. Recent launches of electric vehicle assembly plants in Pakistan are expected to boost the lithium-ion battery production and bring down prices in the country in the coming years, according to Mordor Intelligence.

Sunday, August 25, 2024

Following the Money: Insights into Pakistan's Budget 2024-25

A look at Pakistan's current fiscal year 2024-25 budget helps gain insights into how the country is run. It shows the money flows from the key sources of revenue and the nation's spending priorities. Total planned federal spending for the current fiscal year is Rs.18,900 billion (about 69 billion U.S. dollars). This figure does not include the transfer of Rs. 7,438 (US$ 26 billion) from the federal government to the provinces. Under the 18th amendment passed in 2010, the federal government is obligated to share 57.5% of its revenue with the provinces. The federal government is primarily responsible for defense, foreign affairs, debt servicing, foreign trade, ports and shipping, and development programs, while food and agriculture, education, healthcare and housing are devolved to the provinces. There still appears to be some overlap of domestic responsibilities between the federation and the provinces.

Pakistan's Budget 2024-25 at a Glance. Visualization Courtesy of Prof Adil Najam

The federal government's total revenue is expected to be Rs. 17, 815 billion (US$ 65 billion). In addition, Islamabad plans to borrow Rs. 8,470 billion ($31 billion) during the fiscal year. Interest payments of Rs. 9,775 billion ($ 36 billion) will account for more than half of the federal budget this year. Debt servicing costs will also exceed the planned borrowing (of Rs. 8,470 billion) for the year. In other words, all of what the government plans to borrow this fiscal year will be used to service the current debt on the books.

Detailed Budget Visualization By Dr. Adil Najam via Dawn

Federal debt servicing costs (Rs. 9,775 billion or $35 billion, 9.3% of current GDP) have spiked in recent years due to the State Bank's tight monetary policy designed to fight persistent double digit inflation. In fact, interest payments on debt are by far the biggest single federal expenditure line item, far surpassing the Rs. 2, 122 billion ($7.7 billion or 2% of current GDP) defense spending. Higher interest rates have also dramatically slowed down the economy.

Pakistani provinces raise some of their own revenue on top of the transfers from the federal government. For example, Punjab, the largest of the four provinces, plans to spend an estimated Rs. 4,643.4 billion ($17 billion); including the federal transfer of Rs. 3,683.1 billion and about Rs. 960 billion ($3.5 billion) of provincial tax revenue.

Sind, the second largest province, has a Rs. 3,056 ($11 billion) budget that includes Rs. 1,854 billion from the federal government, and Rs. 1,202 billion ($4.35 billion) from its revenue sources. KP, the third largest province, has a Rs1,754 billion ($6.4 billion) budget, including Rs. 1,222 billion from the federal government and Rs. 532 billion ($1.9 billion) provincial revenue. Balochistan's budget is Rs. 956 billion ($3.5 billion) that includes Rs. 667 billion from the federal government and Rs. 290 billion ($1 billion) from its resources.

Altogether, the federal and provincial governments expect to raise about $75 billion in revenue, representing 20% of $375 billion GDP for fiscal year 2023-24. This is not bad for a developing country like Pakistan. The defense allocation of Rs. 2,122, the second largest federal expenditure, is a mere 2% of the current GDP. The biggest expenditure this year will be the interest payments of Rs. 9,775, accounting for over 50% of the federal budget and 9.3% of the current GDP. These debt servicing costs will hopefully come down as the State Bank cuts its interest rates this year and next. Lower interest payments in future years should free up money for other more pressing needs in the areas of education, healthcare, energy and infrastructure.