Save Pakistan's Education, Airline & Railways

"...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

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

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?

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

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

Can Superpoor India Become a Superpower?

"India is superpoor, not superpower"
Sashi Tharoor

“It is still 80 percent nation and 50 percent democracy”
Ramachandra Guha

Source: Where Are the Poor and Where Are the Poorest?

Last year, Indian writer, diplomat and politician Sashi Tharoor said "India is superpoor, not superpower". This week, Indian historian Ramachandra Guha went a step further and suggested that "India can not and must not become a superpower". Guha added that “India should not try to be a dominant and powerful country, but a less discontented nation.”



How poor is India? An Oxford study found last year that India has more poor than the poor population of all of sub-Saharan Africa. The latest World Bank data shows that India's poverty rate of 27.5%, based on India's current poverty line of $1.03 per person per day, is more than 10 percentage points higher than Pakistan's 17.2%. Assam (urban), Punjab and Himachal Pradesh are the only three Indian states with similar or lower poverty rates than Pakistan's.



“A superpower is a political, economic and military giant that has global reach,” Tharoor said. “The US still holds that position. It can fight a war in East Asia or any other part of the world. But I can’t imagine China or India doing that.”



Given the many ethnic, regional, religious and caste fault lines running through the length and breadth of India, there have long been questions raised about India's identity as a nation. Speaking about it, the US South Asia expert Stephen Cohen of Brookings Institution said, " But there is no all-Indian Hindu identity—India is riven by caste and linguistic differences, and Aishwarya Rai and Sachin Tendulkar are more relevant rallying points for more Indians than any Hindu caste or sect, let alone the Sanskritized Hindi that is officially promulgated".

Acknowledging the reality of deep fault lines in Indian polity, Guha says: "Because of its size and diversity, because of the continuing poverty of many of its citizens, because it is (in historical terms) still a relatively young nation state, and because it remains the most recklessly ambitious experiment in history, the Republic of India was never going to have anything but a rocky ride.

Pakistan share of the world poor about the same as its share of the world population

"National unity and democratic consolidation were always going to be more difficult to achieve than in smaller, richer, more homogeneous and older countries."

Mr Guha argues that democracy and nationhood in India face the following major challenges:

1. India is home to some of the world's fiercest insurgencies which Indian military is attempting to put down in northeast, northwest and central India.

2. Religious fanaticism is "receding but by no means vanquished." A "sullen peace rather than an even-tempered tranquility" prevails in the country

3. There is increasing corrosion of public institutions. Political parties are becoming family businesses; the police and bureaucracy are heavily politicized; corruption is rampant and patronage trumps competence

4. Natural resources are rapidly degrading and depleting as population grows, causing severe problems for the rural poor.

5. There is growing economic disparity. One example: India's richest man, Mukesh Ambani, is worth more than $20bn, and his new home is a 27-storey high, 400,000 sq ft building in Mumbai, where 60% of the people live in subhuman conditions in overcrowded slums.



I think both Tharoor and Guha make a lot of sense. The sad reality is that India is home to the world's largest population of poor, hungry and illiterates, a country where nearly two-thirds of the people still practice open defecation. India really needs to focus on solving these basic domestic problems rather than trying to become a superpower through a massive arms buildup.

Here's a video of Ramachandra Guha on the subject:



Related Links:

Haq's Musings

Are India and Pakistan Failed States?

India Home to World's Largest Number of Poor, Hungry and Illiterate

India Leads the World in Open Defecation

India Tops in Illiteracy & Defense Spending

Indians Poorer than sub-Saharan Africans

Pakistan Stun Top-ranked England to Complete 3-0 Whitewash

Pakistan defeated England in the final match of the cricket test series in UAE to complete a historic 3-0 whitewash.

Pakistani bowlers emasculated English batting throughout the series and won the third test by 71 runs in Dubai.

Pakistan won in spite of their relatively poor fielding and less than stellar batting which made them look very vulnerable at times. But the bowlers strongly reasserted Pakistan's dominance each time to bring their side back in the game, winning the first match in Dubai on the 3rd day by 10 wickets and the second match in Abu Dhabi by 72 runs on the 4th day by dismissing the entire England side for a paltry 72 runs. In the third test, the Pakistani batting collapsed with the exception of stellar performances by Younus Khan and Azhar Ali. Younus Khan found form and scored the first century (127 runs) of the series, and inspired Azhar Ali to surpass his score with the second century (157 runs) of the series. In a series dominated by bowlers, Younus-Azhar partnership of 216 runs was the best.



Recent wins against Sri Lanka and Bangladesh, and this latest victory against England have all been possible courtesy of Pakistan's formidable bowling attack, particularly the fine spin bowling by Saeed Ajmal and Abdur Rehman who together claimed a record 43 scalps in the series. These Pakistani bowlers have more than compensated for the perennial weakness in the batting side.

The most fitting description I have seen of Pakistan's highly talented cricketers was in a recent Wall Street Journal piece by commentator Richard Lyons in which he called Pakistani cricket team "freakishly talented" and "the most resilient entity in the world". Just imagine what would Pakistan be like if these descriptions were also true of the nation's top civilian leadership as well.

Related Links:

Haq's Musings

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Resilient Pakistan Defies Doomsayers

India-Pakistan Cricket Diplomacy

What Pakistan Did Right

Branchless Banking Responds to Pakistan Floods

Pakistan's Rural Economy Recovering

Pakistan's Growing Middle Class

Pakistan is Too Big to Fail

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Case For Resuming India-Pakistan Peace Talks

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Afridi's Leadership

Pakistan In, India Out of T20 Semis

Pakistan Beat India in South Africa

Kiwis Dash Pakistan's ICC Championship Hopes

Pakistan Crowned World T20 Champs

Pakistan's Aisamul Haq Beats Tennis Great Roger Federer

Pakistani-American's $112 Million Yacht

Shahid Khan, Pakistani-American owner of an NFL team, has put his luxury yacht up for sale. Asking price: $112 million.

The Pakistani-American owner of Jacksonville Jaguars NFL franchise owns the 223-foot Kismet, a German-made yacht built in 2007. The boat has an expansive bedroom suite, a formal dining salon, disco, teak decks, jacuzzi, sauna and gym. High-end woodwork adorns everything from a beer keg to a motorcycle hatch with crane. There's also a 25-foot Chris Craft boat, Yamaha WaveRunners and other surpasses, according to the Florida Times-Union.



The ship is listed for sale by Moran Yacht & Ship, which charters the Kismet. For those who can't afford the $112 million price, the yacht is available for $600,000 a week plus expenses for Caribbean cruises this winter.



Shahid Khan made history last year by becoming the first ever minority owner of a National Football League team. All 31 other owners of NFL teams are white. Khan paid $760 million to purchase Jacksonville Jaguars. Earlier, Khan had agreed in February 2010 to buy a controlling interest in the St. Louis Rams before billionaire Stan Kroenke exercised an option to purchase the 60 percent of the club he didn’t own.



Shahid Khan, a mechanical engineering graduate of University of Illinois, Urbana-Champaign, made his fortune in the auto business. Almost two-thirds of all North American-built pick- up trucks and sports utility vehicles have bumper systems based on Khan’s designs, according to figures released by the Jaguars. Khan bought Flex-N-Gate in 1980 and the company now has more than 10,000 employees at 48 manufacturing plants with annual sales exceeding $3 billion.

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UN Finds India Most Deadly For Little Girls

Superfreakonomics authors Steven D. Levitt and Stephen J. Dubner have argued that if women could choose their birthplace, India might not be a wise choice for any of them to be born. They say that those lucky enough not to be aborted as fetuses face inequality and cruelty at every turn because of the low social status given to Indian women.



The latest UN data proves Levitt and Dubner right. An Indian girl aged 1-5 years is 75% more likely to die than an Indian boy, making India the most deadly place for newborn baby girls, according to data released by the UN Department of Economic and Social Affairs (UN-DESA). The data for 150 countries over 40 years shows that India and China are the only two countries in the world where female infant mortality is higher than male infant mortality.

In the decade of 2000s, there were 56 male child deaths for every 100 female child deaths in India, compared with 111 in the developing world. This ratio has got progressively worse since the 1970s in India, even as Pakistan (120) and Sri Lanka (125) have improved.

The BBC recently reported the case of a toddler girl with serious injuries - human bite marks all over her body, broken arms and a partially smashed head - who is on life support at a New Delhi hospital. This latest UN report makes it difficult to dismiss this shocking case as just an isolated incident. It now raises serious questions about persistent and pervasive gender discrimination against girls before and after birth in the country.

The land of former Prime Minister Mrs. Indira Gandhi has been killing its daughters by the millions for decades. Economically resurgent India is witnessing a rapid unfolding of a female genocide across all castes and classes, including the upper caste rich and the educated. Nationwide, the number girls for every 1000 boys has dropped from 975 in 1961 to 910 in 2011. The situation is particularly alarming among upper-caste Hindus in some of the urban areas of Punjab, Rajasthan, Haryana, Himachal Pradesh and Madhya Pradesh, specially in parts of Punjab, where there are only 300 girls for every 1,000 boys, according to Laura Turquet, ActionAid's women's rights policy official.

This latest UN report is a wake-up call for India. Clearly, the problem is much more serious than female abortions. It extends to post natal abuse and neglect leading to high mortality rates for little girls and increasingly skewed male-female ratio. It shows that the Indian government's efforts, like Save the Girl Child, to improve the situation are not working. There is an urgent need for fresh thinking to save the lives of little girls through strong incentives and powerful public-private partnerships.

Here's a video clip about Falak, a baby girl fighting for her life in India:



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Guest Post by Amjad Noorani

Like any young nation, Pakistan has been on a roller coaster ride. Things are looking up now -- and TCF is doing its part.

Here are sample facts about an emerging nation and its modest progress, through sources that underscore Pakistani business, its economy, education, social programs, democratic institutions, an improving infrastructure and quality of life.



TCF is doing its part by addressing the challenges of high illiteracy, access to quality education for the poor, the need for education reform, and providing a replicable model for better education management. Our goal is to make high quality education possible for all children and our commitment was recognized recently by the Clinton Global Initiative.

Good news rarely makes headlines and media stories often depict Pakistan as a problem country subscribing to extremist ideology. Certainly Pakistan has had its ups and downs, reckless spurts and grinding halts. But, against heavy odds, Pakistan is resilient and its people recognize that it must do better to thrive in a competitive world.

From Forbes, there is good news in business. Consumer prices and inflation are checked. Exports in 2011 were up sharply. Despite global recession, its annual GDP growth was 2.8% for 2008-2011 and as high as 7% annually for the period 2004-2007. About 40% of the country's labor force is in services, 40% in agriculture and 20% in industry.

Economists project a 4% GDP growth rate. Sales of consumer electronics is expected to grow 13.3% annually. International icons like Nestle, Pepsi and Unilever are common household names. The pharmaceutical industry is one of the most developed hi-tech sectors. In July 2011, a growing middle class pushed car sales up by 61%.

Democratic processes seem to be taking hold. Tax revenues are going up and there are signs of improving infrastructure in many aspects of daily life. College education is more accessible and overall quality of education is steadily improving. Telecom technology is introducing education to far flung areas, with phenomenal growth in media and communications. Also read about women leading a silent social revolution and a new cadre of excellent journalists and writers on social issues. These are solid indicators of Pakistani progress despite the roller coaster ride of the last 64 years. With 60% of its population under 30 years old, huge challenges remain in critical areas such as education, workforce training, employment, housing, water management, healthcare, etc. Gradually, these are being chipped away with homegrown solutions.

We hope to bring you more good news about TCF and other positive initiatives in Pakistan. Do let us know what you think. Support for TCF is the best route to helping Pakistan. Let's make 2012 a great year for Peace and Progress in Pakistan.

Note: The author is a board member of The Citizens Foundation USA.

Here's a video clip of The Citizens Foundation's brief presentation at a recent Clinton Global Initiative meeting:



Here's a short film about Pakistan:



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