Saturday, May 8, 2021

America's New Green Deal: Will Biden Ban Burgers?

President Joseph R. Biden's climate policy has recently triggered rumors in right-wing American media of a potential burger ban in America. Such speculations about beef ban have been categorically denied by Tom Vilsack, the Secretary of the US Department of Agriculture (USDA). However, there are reasons to believe that the Biden focus on renewable energy alone will not be enough to achieve his ambitious targets. The current food production methods, particularly the beef industry, will also have to be fundamentally redesigned to meet Biden's climate goal of 50-52% reduction in carbon emissions by 2030. Other industrial processes that will need fundamental rethink to reduce emissions include production of cement, steel and plastics. Dealing with these challenges will require a lot of innovation and new technologies. It presents an opportunity for technology entrepreneurs to reshape the world yet again.  

Meatless Meat Products


Impact of Meat Production:

Animal agriculture is a major contributor to climate change. Relatively large animals like buffaloes, cows and pigs are raised in huge numbers to cater to meat and dairy demand. These animals emit methane gas which is a powerful pollutant that is much more potent than carbon dioxide. Almost 15% of greenhouse gas emissions come from livestock, with cattle making up about two-thirds of that. Livestock farming also requires a lot of land, a significant cause of deforestation in places like Brazil’s Amazon. 

What is making the situation worse is that the demand for meat and dairy is rising in large developing countries like China, India and Pakistan. It is putting greater pressure on the environment and making it difficult to limit average global temperature rise to 1.5 degrees Celsius from pre-industrial times. 

Alternative Meats:

Several technology companies are working on plant-based and cell-based meats to offer a climate-friendly alternative to beef, chicken and pork. Plant-based meats from companies like Beyond Meat and Impossible Foods are already producing and shipping in significant quantities. 

Other technology companies are working on cell-based meats grown in large vats from real animal cells. These companies include San Francisco-based Eat Just and Berkeley-based Memphis Meats, just to name a few.  In a recently published book entitled "Billion Dollar Burger", author Chase Purdy detailed his findings on lab-grown meats. Here is an except from the book:

"By harvesting animal cells and quite literally growing them into fat and muscle tissue inside industrial bioreactors, humans have figured out how to create the exact same meats we’ve eaten for more than half a million years. In doing so, those scientists hope to enable us to sidestep the need to slaughter billions of animals annually, and theoretically, in time, eliminate the need for an industrial farming system that pumps an alarming amount of greenhouse gases into the Earth’s warming atmosphere each year. Scientists agree that animal agriculture is responsible for about 14 percent of greenhouse greenhouse gas emissions. Fully wrapping our heads around the impact of the animal agriculture system we’ve always known is mind-bogglingly difficult. Lots of scientists attempt to measure the full environmental footprint of animal agriculture, and almost all of them have run into fierce sets of critics who challenge their methodologies and motives. Did the scientist measure the life cycle of a single animal and then multiply those data to represent its specific sector? Did they include data on the energy used to grow, manage, and transport the feed grain for cows, pigs, chickens, and other animals? How about factoring in deforestation to make room for grazing? Or the long impact of water pollution from nitrous oxide in manure?"

Industrial Processes:

The focus of most of the governments' climate policies has so far been on switching from fossil fuels to renewable sources of energy. A quick look at common industrial processes like cement, steel and plastic production shows that these processes are major contributors to global warming.  Cement and steel production each contributes 8% of global greenhouse emissions.  All of these materials are essential for modern construction and manufacturing industries. 

Cement production contributes greenhouse gases both directly through the production of carbon dioxide when calcium carbonate is thermally decomposed, producing lime and carbon dioxide, and also through the use of energy, particularly from the combustion of fossil fuels. Similarly, steel-making requires the use of coal to remove oxygen from iron oxide ore. This process emits large amounts of carbon dioxide. Plastics, extracted from oil, are used to make a huge range of products today. Extraction and transportation of oil and production of plastics all produce large amounts of greenhouse gas emissions. 

Changing the production processes of widely used materials like cement, plastics and steel poses a major technological challenge. Among the methods proposed for reducing carbon emissions from these processes is carbon capture...both point carbon capture and direct air capture. Here's an excerpt of Bill Gates' recent book entitled "How to Avoid a Climate Disaster" on climate-friendly industrial processes for cement, steel and plastics: 

"One approach is to take recycled carbon dioxide—possibly captured during the process of making cement—and inject it back into the cement before it’s used at the construction site. The company that’s pursuing this idea has several dozen customers already, including Microsoft and McDonald’s; so far it’s only able to reduce emissions by around 10 percent, though it hopes to get to 33 percent eventually. Another, more theoretical approach involves making cement out of seawater and the carbon dioxide captured from power plants. The inventors behind this idea think it could ultimately cut emissions by more than 70 percent. Yet even if these approaches are successful, they won’t give us 100 percent carbon-free cement. For the foreseeable future, we’ll have to count on carbon capture and—if it becomes practical—direct air capture to grab the carbon emitted when we make cement. For pretty much all other materials, the first thing we need is plenty of reliable clean electricity. Electricity already accounts for about a quarter of all the energy used by the manufacturing sector worldwide; to power all these industrial processes, we need to both deploy the clean energy technology we already have and develop breakthroughs that let us generate and store lots of zero-carbon electricity inexpensively. And soon we’ll need even more power, as we pursue another way to reduce emissions: electrification, which is the technique of using electricity instead of fossil fuels for some industrial processes. For example, one very cool approach for steelmaking is to use clean electricity to replace coal. A company I’m following closely has developed a new process called molten oxide electrolysis: Instead of burning iron in a furnace with coke, you pass electricity through a cell that contains a mixture of liquid iron oxide and other ingredients. The electricity causes the iron oxide to break apart, leaving you with the pure iron you need for steel, and pure oxygen as a by-product. No carbon dioxide is produced at all. This technique is promising—it’s similar to a process we’ve been using for more than a century to purify aluminum—but like the other ideas for clean steel it hasn’t yet been proven to work at an industrial scale. Clean electricity would help us solve another problem too: making plastics. If enough pieces come together, plastics could one day become a carbon sink—a way to remove carbon rather than emit it. "   

Summary:

Climate change is a major challenge for humanity. It goes beyond energy production and consumption. Areas that account for bulk of greenhouse emissions include production of food, cement, plastics and steels. Dealing with these challenges will require a lot of innovation and new technologies. It presents an opportunity for technology entreprenrurs to reshape the world yet again.  

Related Links:

Haq's Musings

South Asia Investor Review

Pakistan Electric Vehicle Policy

Nuclear Power in Pakistan

Pakistan Cement Production

Pakistan's Response to Climate Change

Massive Oil and Gas Discovery in Pakistan: Hype vs Reality

Renewable Energy for Pakistan

Digital BRI: China and Pakistan Building Fiber, 5G Networks

LNG Imports in Pakistan

Growing Water Scarcity in Pakistan

China-Pakistan Economic Corridor

Ownership of Appliances and Vehicles in Pakistan

Pakistan Meat Industry

Pakistan Among Top Food Producing Countries

Riaz Haq's YouTube Channel

PakAlumni Social Network

Thursday, April 29, 2021

Pre-COVID Fiction: India Wins US-China War Imagined For 2034

In a recently published fiction imagined for 2034 by former top US Admiral James Stavridis and Elliot Ackerman, China and the United States go to war that ends in India's victory. The authors portray Indians as heroes whose statesmen-ship de-escalates World War III, negotiates peace and helps India emerge as the new global superpower. Patel, the Indian uncle of the Indian-American deputy national security advisor Sandeep Chowdhury tells him, "America’s hubris has finally gotten the better of its greatness." The authors imagine the United Nations headquarters moves from New York to Mumbai after the war. Had this book been written after watching thousands of Indian victims of COVID19 gasping for breath and dying daily on the streets of New Delhi, I think Ackerman and Stavridis would have conceived  and developed a completely different plot line for their novel.  

2034 Book Cover


Elliot Ackerman and James Stavridis, authors of "2034: A Novel of the Next World War", imagine a series of incidents in South China Sea and the Persian Gulf. These incidents trigger cyber warfare, global internet outages and the use of tactical nuclear weapons fired from warplanes and warships. The military conflict results in millions of deaths in the cities of San Diego and Shanghai. India intervenes at this point by attacking and destroying Chinese and American fighter planes and ships to stop the war. 

The end of active fighting is followed by New Delhi Peace Accords arranged by the Indian government. The United Nations headquarters is moved from New York to Mumbai. At one point in the conflict, the authors have Patel lecture his nephew Sandeep Chowdhury, the US deputy national security advisor: 

"America’s hubris has finally gotten the better of its greatness. You’ve squandered your blood and treasure to what end? For freedom of navigation in the South China Sea? For the sovereignty of Taiwan? Isn’t the world large enough for your government and Beijing’s? Perhaps you’ll win this war. But for what? To be like the British after the Second World War, your empire dismantled, your society in retreat? And millions of dead on both sides?"

Rising Positivity Rates of COVID19 Tests in South Asia. Source: Our World in Data

Some reviewers of the book have speculated that China may want to take Taiwan by force for one particular technology company, the Taiwan Semiconductor Manufacturing Company (TSMC) which is currently the world's most advanced semiconductor technology company. Semiconductor components underlie all cutting edge applications from artificial intelligence (AI) and smartphones to self-driving cars and advanced military equipment.

The possibility of war between China and the United States can not be dismissed. However, the book's portrayal of India's emergence as a global superpower is pure fantasy.  Had this book been written after watching thousands of Indian victims of COVID19 gasping for breath and dying daily on the streets of New Delhi, Ackerman and Stavridis would have conceived  and developed a completely different plot line for their novel.  

Related Links:

Haq's Musings

South Asia Investor Review

India Tops World Hunger Charts

Is India Superpoor or Superpower?

Rape as a Political Weapon Used By Hindutva

Hindu Nationalism Inspired By Nazism, Fascism

Rise of Islamophobia After Sept 11, 2001 Terrorist Attacks

700,000 Indian Soldiers Versus 7 Million Kashmiris

Modi's Kashmir Blunder and India-Pakistan Nuclear Conflict

Is India a Paper Elephant? 

Howdy Modi Rally Exposes Indian-Americans to Charges of Hypocrisy

Modi's Extended Lockdown in Indian Occupied Kashmir

Hinduization of India

Brievik's Hindutva Rhetoric

Indian Textbooks

India's RAW's Successes in Pakistan

Riaz Haq Youtube Channel

VPOS Youtube Channel

Tuesday, April 27, 2021

First Generation Pakistani-Americans Divorce Rate is the Third Lowest in the United States

Divorce rate among foreign-born Pakistani-Americans with children is the third lowest of all immigrants in the United States, according to research recently published by the US-based Institute of Family Studies. Foreign-born Indian-Americans' marriages tend to be the most stable, followed by those of Bangladeshis and Pakistanis living in America.  On the other end of the spectrum, the divorce rates among immigrants from Latin-America are the highest of all ethnic groups. 

 

Immigrants Marriage Stability. Source: IFS


Immigrants from Taiwan, Korea, China, and Japan, also have greater family stability than native-born Americans, as do immigrants from the Middle East and South America, according to the IFS report. Here’s the list of top 20 immigrant groups in the US leading in marriage stability: 


1. India - 94% 
2. Bangladesh - 90% 
3. Pakistan - 87% 
4. Taiwan - 86% 
5. Korea - 85% 
6. China - 84% 
7. Japan - 83% 
8. Poland - 80% 
9. Iran - 78% 
10. Canada - 78% 
11. Ukraine - 77% 
12. Vietnam - 77% 
13. Philippines - 76% 
14. United Kingdom - 74% 
15. Brazil - 73% 
16. Germany - 72% 
17. Venezuela - 72% 
18. Nigeria - 71% 
19. Russia - 68% 
20. Mexico - 68%

There are 326,709 foreign-born Pakistani immigrants of working age (18-64) in the United States, according to figures cited by the Institute of Family Studies. Of these, 87% have been married only once and are still married while 10% are on their second marriage, 2.4% are divorced while 0.6% never married. 

The Institute of Family Studies (IFS) is an advocacy group. The IFS mission is to "strengthen marriage and family life, and advance the well-being of children through research and public education".

Related Links:

Haq's Musings

South Asia Investor Review

Ex US Treasury Sec Praises Pakistan's COVID Response

Pakistani-American Health Expert Featured in Netflix Documentary "Pandemic"

Pakistan is the 3rd Largest Source of Foreign Doctors in America

Van Jones on "Geniuses from Pakistan"

Obama Honors Pakistani-American Doctor With Top Technology Medal

Hindus and Muslim Well-educated in America But Least Educated Worldwide

What's Driving Islamophobia in America?

Pakistani-Americans Largest Foreign-Born Muslim Group in Silicon Valley

The Trump Phenomenon

Islamophobia in America

Silicon Valley Pakistani-Americans

Pakistani-American Leads Silicon Valley's Top Incubator

Silicon Valley Pakistanis Enabling 2nd Machine Revolution

Karachi-born Triple Oscar Winning Graphics Artist

Pakistani-American Ashar Aziz's Fire-eye Goes Public

Two Pakistani-American Silicon Valley Techs Among Top 5 VC Deals

Pakistani-American's Game-Changing Vision 


Saturday, April 24, 2021

Pakistan's Tech Exports Exceed $1.5 Billion in First 9 Months of Fiscal Year 2020-21

Pakistan's technology exports are continuing their growth trajectory, soaring 44% in the first 9 months (July-March) of the current fiscal year 2020-21 to reach $1.512 billion. March 2021 saw record exports of $3.2 billion with goods worth $2.612 billion and services worth $564 million exported during the month.  

Pakistan Exports July20-Mar21. Source: State Bank of Pakistan


Tech exports accelerated 55% in the month of March 2021 to reach monthly record $213 million ,according to data released by the State Bank of Pakistan.
Pakistan's Monthly IT Exports. Source: Pakistonomy

Information technology development depends mostly on available talent. Pakistan has seen significant increase in technology manpower since the massive expansion of higher education initiated by Dr. Ata-ur-Rehman and backed by huge increase in funding provided by President Pervez Musharraf's government. 

Higher education in Pakistan has come a long way since its independence in 1947 when there was only one university, the University of Punjab. By 1997, the number of universities had risen to 35, of which 3 were federally administered and 22 were under the provincial governments, with a combined enrollment of 71,819 students. A big spending boost by President Pervez Musharraf helped establish 51 new universities and degree awarding institutions during 2002-2008. This helped triple university enrollment from 135,000 in 2003 to about 400,000 in 2008, according to Dr. Ata ur Rehman who led the charge for expanding higher education during Musharraf years. There are 161 universities with 1.5 million students enrolled in Pakistan as of 2014. Pakistan now boasts 220 universities with 40,000 faculty members and 1.5 million students, according to Dr. Javaid Laghari, former chairman of Higher Education Commission of Pakistan. 

Pakistan is now producing over 25,000 information technology graduates annually, according to the Punjab IT minister Mian Aslam Iqbal. He says Pakistan has more than 2,000 IT companies and call centers, and 300,000 English speaking IT professionals. Pakistan Software Export Board (PSEB) says there are 2,826 IT companies have registered with the Securities and Exchange Commission of Pakistan (SECP) during this financial year alone. Dr. Umar Saif, ex chairman of the Punjab IT Board,  has told the media that the Indian IT exports stood at $100 billion, which is 30 times Pakistan's which he believes are actually closer to $3.5 billion, near double the figure reported by the State Bank of Pakistan. “This is because the Indian IT industry employs over 4.5 million people as compared to Pakistan which has only 125,000 persons in this sector.”  

Pakistan's digital gig economy has surged 69% during the COVID19 pandemic, putting the country among the world's top 4 hottest online freelancer markets, reports  Payoneer, a global payments platform company based in Silicon Valley, in its latest report. Payoneer attributes it to government programs such as Punjab government's e Rozgaar program that has been offering free online courses in digital freelancing. The sudden rush to learn skills online boosted the demand for instructors. The Pakistan government filled this demand by hiring alumni of programs like e Rozgaar who were successfully participating in the gig economy.

Punjab government's e-rozgaar program logo

After a brief dip in January 2020, the demand for freelancers took off in February and increased by double digits each month starting in March until June when it surged 47% at the time the data was compiled by Payoneer for its report.“ Likewise, this response is reflected in the revenue figures where freelancing continued to grow year-on-year but temporarily slowing from 21 per cent growth in March to 16 per cent growth in May,” the report noted. e-Rozgaar’s latest group of graduates earned the highest ever income for a new class of the program--earning over Rs. 25 million in three months during the Covid-19 lockdown. PITB Chairman Azfar Manzoor told Profit magazine that e-Rozgaar was playing a pivotal role in curbing youth unemployment. 

Online Freelance Revenue Surge in Pakistan. Source: Payoneer

“One factor that goes a long way to explain this is that in April, local government authorities took the initiative to rapidly shut down educational institutes as a way to contain the spread of the virus,” the report said, adding that this led to the development of a new online education system and as part of this initiative, government training programs, such as e-Rozgaar, expanded its services throughout the country, offering people a new way to enhance their professional capabilities. “The mission was to help expedite freelancing skills for thousands and enable them to earn a living in the most in-demand fields and ultimately lead to a higher employment rate,” the report highlighted.

A global survey conducted by Payoneer, shows that Pakistani women freelancers are earning $22 an hour, 10% more than the $20 an hour earned by men. While Pakistani male freelancers earnings are at par with global average, Pakistani female earnings are higher than the global average for freelancers. Digital gig economy is not only helping women earn more than men but it is also reducing barriers to women's labor force participation in the country. The survey also concludes that having a university degree does not help you earn more in the growing gig economy. The survey was conducted in 2015.

Freelancers Hourly Rate by Gender. Source: Payoneer


An average Pakistani freelancer working 34 hours a week at $20 an hour earns $34,000 a year, or Rs. 5.7 million a year, a small fortune for a young Pakistani. This is one of the upsides of the online global labor market for skilled young men and women in developing nations like Pakistan. Sometimes freelancing experience leads to tech startups in Pakistan.

Another interesting survey finding is that freelancers with a university degree earn about 10% less on average than those with just the high-school diploma. This indicates that the freelancers skills matter more than the level of formal education.

Average Hourly Rate by Education. Source: Payoneer


Payoneer surveyed 23,000 freelancers worldwide, including emerging markets such as Pakistan, the Philippines and the Ukraine. Survey respondents comprise a random sample of Payoneer’s cross-border payment platform users, providing unique insights into how these globally-enabled freelancers operate, what makes them successful and what rates they command.

Freelancers Average Work Week. Source: Payoneer 

Pakistani freelancers worked about 34 hours a week, a little less than the 36 hours global average. Indian freelancers log 37.4 hours a week and Bangladeshis 35.9 hours weekly. Freelancers from Kenya average the highest amount of hours per week (42.6) with Egypt coming in second (38.5). Professionals working in Morocco and Tunisia work the fewest hours per week, potentially as a high percentage of them are also working at companies as well

Pakistan's digital gig economy growth is the fastest in Asia and fourth fastest in the world, according to digital payments platform Payoneer.

Gig Economy Growth in Q2/2019. Source: Payoneer
United States led gig economy growth of 78% followed by the United Kingdom 59%, Brazil 48%, Pakistan 47% and Ukraine 36%. Asia growth was led by Pakistan followed by Philippines (35%) , India  (29%) and Bangladesh (27%).

The rapid gig economy expansion of 47% in Pakistan  was fueled by several factors including the country's very young population 70% of which is under 30 years of age coupled with improvements in science and technical education and expansion of high-speed broadband access.  Pakistani freelancers under the age of 35 generated 77% of the revenue in second quarter of 2019.

Growth in Freelance Work. Source: Payoneer

Mohsin Muzaffar, head of business development at Payoneer in Pakistan, has said as follows: "Government investment in enhancing digital skills has helped create a skilled freelancer workforce while blanket 4G coverage across Pakistan has given freelancers unprecedented access to
international jobs".

Global Freelance Revenue By Age. Source: Payoneer. 


In Q2/2019, Asia cemented its status as a freelancer hub.  Pakistan, Bangladesh and India, Philippines made it to the  top 10 list, collectively recording 238% increase from Q2/2018.


Online Labor Index. Source: Oxford Internet Institute

Pakistan technology exports are on a rapid growth trajectory, thanks to the investment made in education during Musharraf years. Pakistan is now producing over 20,000 information technology graduates annually, according to the Punjab IT minister Mian Aslam Iqbal. He says Pakistan has more than 2,000 IT companies and call centers, and 300,000 English speaking IT professionals. 

Silicon Valley based global payments platform Payoneer has reported that Pakistan's digital gig economy has surged 69% during the COVID19 pandemic, putting the country among the world's top 4 hottest online freelancer markets. A global survey results on freelancing show that Pakistani women freelancers are earning $22 an hour, 10% more than the $20 an hour earned by men. While Pakistani male freelancers earnings are at par with global average, Pakistani female earnings are higher than the global average for freelancers.   The survey also concludes that having a university degree does not help you earn more in growing gig economy. The survey was conducted in 2015. As of 2017, Pakistan freelancers ranked fourth in the world and accounted for 8.5% of the global online workforce, according to Online Labor Index compiled by Oxford Internet Institute. India led with 24% share followed by Bangladesh 16%, US 12%, Pakistan 8.5% and Philippines 6.5%.

Related Links:

Haq's Musings

South Asia Investor Review

Friday, April 23, 2021

Is Biden Demanding Use of Pakistani Military Bases After Pullout From Afghanistan?

When President Joseph R. Biden announced his decision to withdraw all US troops from Afghanistan, he said: "We will ask other countries in the region to support Afghanistan, especially Pakistan, as well as Russia, China, India and Turkey." Biden has also talked about the US reorganizing its counterterrorism capabilities in the region to be able to hit the target from “over the horizon.”  These discussions have triggered speculations about the Biden administration seeking access to military bases in Pakistan to target the Taliban after total US pullout from Afghanistan. Such speculations are strengthened by what Biden said in a Democratic Primary debate on September 12, 2019: "We can prevent the United States from being the victim of terror coming out of Afghanistan by providing airbases and insisting the Pakistanis provide bases for us”. There's even talk of possibly escalating US military operations in Afghanistan from bases in Pakistan.  

Afghanistan-Pakistan-US Relations


Responding to a question on the subject of "drone strikes and air strikes" asked in an interview by Voice of America's Ayesha Tanzeem, President Arif Alvi said: "I’m not aware, and I don’t think Pakistan will be in a position to offer that". 

Alvi's response has not diminished the ongoing speculation about Pakistan helping US military's counterinsurgency ops in Afghanistan. Nick Reynolds, an analyst at the London-based think tank Royal United Services Institute (RUSI), has written a piece on it which brings in the United Kingdom helping the United States persuade Pakistan to allow the use of its territory to launch air strikes in Afghanistan. Here's an excerpt of Reynolds' article:

"Ultimately, counterterrorism operations will have to continue in the region, and the US, UK and NATO will be further entangled in Pakistani diplomatic affairs as a result. There is a risk that the UK and NATO, if they wish to support the US, will only be able to do so by striking into Afghanistan from basing in neighboring countries, effectively a continuation of one of the current lines of effort that the Biden administration is attempting to terminate, except with the bases moved across the Pakistani border. The US, UK and NATO may even end up seriously escalating combat operations in Afghanistan in some form in future, either to prevent the Afghan government from falling or to address Taliban support for terrorist networks if they are allowed to take power. The Biden administration seeks to end the ‘forever war’ by withdrawing. However, given the ongoing situation with Islamist terrorism globally, the forever war looks instead as if it is transitioning into a new and dangerous phase in which the UK and NATO will be forced to play a continuing role".

Back on September 12, 2019, Candidate Biden talked about seeking bases in Pakistan during the third Democratic Primary Presidential debate. Here's what he said then: 

"The whole purpose of going to Afghanistan was to not have a counterinsurgency, meaning that we're going to put that country together. It cannot be put together. Let me say it again. It will not be put together. It's three different countries. Pakistan owns the three counties -- the three provinces in the east. They're not any part of -- the Haqqanis run it. I will go on and on. But here's the point. The point is that it's a counterterrorism strategy. We can prevent the United States from being the victim of terror coming out of Afghanistan by providing for bases -- insist the Pakistanis provide bases for us to air lift from and to move against what we know. We don't need those troops there. I would bring them home".

Should Pakistan yield to western pressure yet again as it did after 911? Pakistan has paid a very heavy price for working with the United States in the last two decades. Tens of thousands of Pakistanis have died in attacks launched by groups opposed to US-Pakistan cooperation. Pakistan's economy has suffered hundreds of billions of dollars  of losses. And yet, Pakistan continues to be accused of double-dealing. Pakistani civilian and military leaders will undoubtedly face very strong internal opposition to the use of Pakistani territory for any US military operations in Afghanistan. 


Back in 2016, General David H. Petraeus thoroughly debunked intense media propaganda campaign of allegations of duplicity against Pakistan Army and ISI. He has also ruled out cutting ties with Pakistan as an option

General David Petraeus Speaking at RUSI in 2016



Here's the video of General Petraeus at RUSI. His remarks on Pakistan are in the last 8 minutes of the video:

Brief 1-minute clip:

https://www.youtube.com/watch?v=01ghm5V3Wn4





Related Links:

Haq's Musings



Monday, April 19, 2021

Income Inequality: Elite Capture in Pakistan

A recent United Nations report on inequality reveals that the richest 1% in Pakistan take 9% of the national income.  A quick comparison with other South Asian nations shows that 9% income share for the top 1% in Pakistan is lower than 15.8% in Bangladesh and 21.4% in India. These inequalities result mainly from a phenomenon known as "elite capture" that allows a privileged few to take away a disproportionately large slice of public resources such as public funds and land for their benefit. 

Share of Income of Richest 1% in South Asia


Elite Capture:

Elite capture, a global phenomenon,  is a form of corruption. It describes how public resources are exploited by a few privileged individuals and groups to the detriment of the larger population. 

A recently published report by the United Nations Development Program (UNDP) has found that the elite capture in Pakistan adds up to an estimated $17.4 billion - roughly 6% of the country's economy. 

Pakistan's most privileged groups include the corporate sectorfeudal landlordspoliticians and the  military. UN Development Program's NHDR for Pakistan, released last week, focused on issues of inequality in the country of 220 million people. 

Ms. Kanni Wignaraja, assistant secretary-general and regional chief of the UNDP, told Aljazeera that Pakistani leaders have taken the findings of the report “right on” and pledged to focus on prescriptive action. “My hope is that there is strong intent to review things like the current tax and subsidy policies, to look at land and capital access", she added. 

Inequality in Pakistan. Source: UNDP

Income Inequality:

The richest 1% of Pakistanis take 9% of the national income, according to the UNDP report titled "The three Ps of inequality: Power, People, and Policy". It was released on April 6, 2021. Comparison of income inequality in South Asia reveals that the richest 1% in Bangladesh and India claim 15.8% and 21.4% of national income respectively.

In addition to income inequality, the UNDP report describes the inequality of opportunity in terms of access to services, work with dignity and accessibility. It is based on exhaustive statistical analysis at national and provincial levels, and includes new inequality indices for child development, youth, labor and gender. Qualitative research, through focus groups with marginalized communities, has also been undertaken, and the NHDR 2020 Inequality Perception Survey conducted. The NHDR 2020 has been guided by a diverse panel of Advisory Council members, including policy makers, development practitioners, academics, and UN representatives.

Savings, Investments and Exports:

It is generally accepted that the rich save a much bigger portion of income than the middle class and the poor. The effect is strongest among those in the top quintile of the lifetime earnings distribution—they have substantially greater wealth relative to their earnings than those in the bottom 80% of the distribution, according to published research

Lower inequality in Pakistan is reflected in its abysmal domestic savings and investment rate of around 10% of GDP. It shows in Pakistan's lower economic growth rate compared to Bangladesh and India. The distribution of national income in a country is a key socioeconomic variable with broad economic and societal implications. Income inequality and wealth inequality are related because the flow of income determines savings and investments, which in turn determine GDP growth and accumulation of wealth. An economic model offered by Galor and Zeira finds that the effect of rising inequality on GDP per capita is negative in relatively rich countries but positive in poor countries like Pakistan.

Investment as Percentage of GDP Source: State Bank of Pakistan 


While Pakistan's per capita income more than doubled from $500 to $1,000 in the ten years 2000 to 2010, the growth has slowed to less than 30% from 2010 to 2020. Faster GDP growth in the decade of 2000-2010 was partly the result of significant increase in Pakistan's savings and investment rates. Meanwhile, rising worker remittances from overseas Pakistanis have been boosting Pakistan national savings rate and helping reduce current account deficits
 
Savings Rate in Pakistan. Source: Dawn


Pakistan's exports doubled from $10 billion to $20 billion in years 2000-2010. In the last decade 2010-2020, the nation's exports have grown only about 25% to $25 billion. Exports have declined in terms of percentage of the country's GDP from 13% to 10% in the most recent decade. 

Pakistan FDI inflows have significantly lagged behind those of the rest of South Asia.

FDI Inflows in Pakistan. Source: World Bank

Pakistan saw rapid economic growth in the 1960s in spite of low domestic savings rate. This can be explained by foreign development aid of as much as 10% of GDP that Pakistan received in that decade. . 

Foreign Aid to Pakistan as Percent of GDP Source: World Bank

Summary:

The richest 1% of Pakistanis take away 9% of the national income. Inequality in Pakistan has many dimensions beyond income. The rich enjoy greater access to education, healthcare, financial services, employment and business opportunities. Corporations, feudal landowners, politicians and the military are the most privileged groups with the best opportunities to own businesses, financial assets, farmland and real estate. They capture an estimated $17.4 billion - roughly 6% of the country's economy. Ms. Kanni Wignaraja, assistant secretary-general and regional chief of the UNDP, told Aljazeera that Pakistani leaders have taken the findings of the report “right on” and pledged to focus on prescriptive action. “My hope is that there is strong intent to review things like the current tax and subsidy policies, to look at land and capital access", she added. The policymakers in Pakistan should consider the negative economic implications of any such moves, particularly on savings and investments in the country.  




Wednesday, April 14, 2021

2010-2020: Pakistan's Lost Decade

Until 2010, Bangladesh was a laggard in South Asia region. Its per capita income was about half of Pakistan's. Now Bangladesh has surpassed Pakistan as the Pakistani economy has suffered significant slow-down from the previous decade. In fact, the Pakistan economy grew at the slowest rate in South Asia as reflected in per capita incomes. However, the income inequality in Pakistan continues to be the lowest in South Asia. 

Per Capita Income Growth in Pakistan Lags in South Asia. Source: World Bank

Lower income inequality in Pakistan is reflected in its abysmal domestic savings and investment rate of around 10% of GDP. It shows in Pakistan's lower economic growth rate compared to Bangladesh and India. The distribution of national income in a country is a key socioeconomic variable with broad economic and societal implications. Income inequality and wealth inequality are related because the flow of income determines savings and investments, which in turn determine GDP growth and accumulation of wealth. An economic model offered by Galor and Zeira predicts that the effect of rising inequality on GDP per capita is negative in relatively rich countries but positive in poor countries like Pakistan.


Investment as Percentage of GDP Source: State Bank of Pakistan 


While Pakistan's per capita income more than doubled from $500 to $1,000 in the ten years 2000 to 2010, the growth has slowed to less than 30% from 2010 to 2020. Faster GDP growth in the decade of 2000-2010 was partly the result of significant increase in Pakistan's savings and investment rates.  Meanwhile, rising worker remittances from overseas Pakistanis have been boosting Pakistan national savings rate and helping reduce current account deficits

Savings Rate in Pakistan. Source: Dawn

Pakistan also saw rapid economic growth in the 1960s in spite of low domestic savings rate. This can be explained by foreign development aid of as much as 10% of GDP that Pakistan received in that decade.


Foreign Aid to Pakistan as Percent of GDP Source: World Bank


Pakistan's exports doubled from $10 billion to $20 billion in years 2000-2010. In the last decade 2010-2020, the nation's exports have grown only about 25% to $25 billion. Exports have declined in terms of percentage of the country's GDP from 13% to 10% in the most recent decade. . 

Pakistan Exports Since Year 2000. Source: World Bank


Return on money invested in Pakistani stock market has also been cut in half in 2010-2020 when compared with the return in 2000-2010.  Shares of companies making up the Karachi Stock Exchange 100 index have returned 8% in US$ terms in 2010-2020, less than half of the 20% during 2000-2010 period. KSE100 still managed to achieve 14% return over the 20-year period from 2001 to 2021, among the highest in the world. 


Stock Market Returns. Source: Tundra 


Foreign direct investment (FDI) in Pakistan ramped up in 2000-2010, reaching the peak of $5.6 billion (3.67% of GDP) in 2007. FDI inflow has since suffered a steep decline.

Foreign Direct Investment in Pakistan. Source: World Bank

Pakistan FDI inflows have significantly lagged behind those of the rest of South Asia.

FDI Inflows in Pakistan. Source: World Bank

Pakistan's manufacturing output tripled from $7 billion in 2000 to $21 billion in 2010. Then it rose just 60% to $34 billion in 2019. The nation's industrial output declined as percentage of GDP from 14% to 12% in the last decade, according to the data from UNIDO, the United Nations Industrial Development Organization. 

Pakistan's Manufacturing Output Trend Since 2000. Source: World Bank


Pakistan's literacy rate has been flat at about 59% in the last decade (2010-2019) after substantial rise from 45% to 55% in the decade of 2000-2010. 


Pakistan Literacy Rate. Source: World Bank

The net primary enrollment rate in Pakistan jumped from 55% in 2000 to 65% in 2010. The progress on this metric slowed as it increased just two percentage points to 67% in 2019. 


Net Primary Enrollment Rate in Pakistan. Source: World Bank


Pakistan has seen a major decline in the rate of human development growth in the country over the last decade. Pakistan saw HDI (Human Development Index) average annual growth of 1.4% in 2000-2009 and 0.80% in 2010-2019, according to Human Development Indices and Indicators 2018 Statistical Update.  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.

Pakistan Human Development Index Growth Rate. Source: Human Development Report 2020


Bangladesh surpassing Pakistan in socioeconomic indicators has brought into sharp focus the contrast between Pakistan's decades of 2000-2010 and 2010-2020.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.       

South Asian Countries' Export Growth. Source: Wall Street Journal

Bangladesh's garment exports have helped its economy outshine India's and Pakistan's in the last decade. Impressed by Bangladesh's progress, the United Nations’ Committee for Development Policy has recommended that the country be upgraded from least developed category that it has held the last 50 years. 

The next challenge for Bangladesh is to move toward higher-value add manufacturing and exports, as Vietnam has done. Its export industry is still overwhelmingly focused on garment manufacturing. The country’s economic complexity, ranked by Harvard University’s Growth Lab, is 108 out of the 133 countries measured. That is actually lower than it was in 1995, according to the Wall Street Journal

Pakistan Growth By Decades. Source: National Trade and Transport Facility


Vietnam ruled by autocrats is rapidly becoming an Asian Tiger. With rising manufacturing costs in China and the US-China trade war,  many major manufacturers are relocating to other countries in Asia. This situation has helped Vietnam emerge as a hub of foreign direct investment (FDI). FDI flow into the country has averaged more than 6% of GDP, the highest of any emerging economy. The country’s recent economic data shows a rise of 18% in exports, with a 26% jump in computers/components exports and a 63% jump in machinery/accessories exports.  These figures have earned Vietnam the moniker of the newest "Asian Tiger".

Musharraf Years & History of Pakistan's GDP Growth Rates. Source: PBS 


It was in 2007 that Pakistan caught the "democracy" fever led by the lawless lawyers of Lahore. This led to the return of corrupt dynastic rule of Asif Zardari and then Nawaz Sharif. The year 2007 also marked the beginning of yet another lost decade that saw Pakistan's per capita gdp's continuing lag behind South Asia region and other emerging economies. 


Pakistan was the original "Asian Tiger" back in the 1960s when  other developing Asian economies sought to emulate its development model. It became an export powerhouse in the 1960s when the country's manufactured exports exceeded those of Thailand, Malaysia and Indonesia combined.  The creation of major industrial estates in Karachi under President Ayub Khan's industrial policy incentivized industrial production and exports of value added manufactured products such as textiles. Now the country's industrial output lags its neighbors'. 

History of Pakistan's Manufactured Exports


With Chinese looking to relocate some of their industrial production to low-cost countries, Pakistan has a golden opportunity to grow its industrial output and exports again. Here's Karen Chen explaining why:

“Vietnam is too crowded already and moved into automobiles and electronics. There is no space for investment in Vietnam. Myanmar doesn’t have infrastructure. India is terrible. In Bangladesh you don’t have right conditions for setting up fabric units. So Pakistan is the ideal location for such garment manufacturing because of abundance of cheaper labour. The investment and tax policies for SEZs and new projects are also good. We’ve confidence to be at here.”

Seizing the opportunity to attract export-oriented investors will help Pakistan become the next Asian Asian Tiger economy. It will help the country avoid recurring balance-of-payments crises that have forced the nation to seek IMF bailouts with all their tough conditions. Focusing on "Plug and Play" Special Economic Zones (SEZs) is going to be essential to achieve this objective.