Saturday, December 26, 2009

Pakistan's Decade of 1999-2009 in Review

This December 31, 2009, is not just the end of the year; it brings a momentous decade of achievements in Pakistan to a chaotic and bloody end. After a relatively peaceful but economically stagnant decade of the 1990s, the year 1999 brought a bloodless coup led by General Pervez Musharraf, ushering in an era of accelerated economic growth that led to more than doubling of the national GDP, and dramatic expansion in Pakistan's urban middle class.

The decade also cast a huge shadow of the US "war on terror" on Pakistan, eventually turning the nation into a frontline state in the increasingly deadly conflict that shows no signs of abating. Along with the blood and gore and chaos on the streets, there are hopeful signs that rule of law and accountability is beginning to prevail in the country with the restoration of representative democracy and independent judiciary, largely in response to an increasingly assertive urban middle class, vibrant mass media and growing civil society. Let's look at some of the highlights, low lights and then discuss the shape of things to come.


1. Pakistan's tax base and government revenue collection more than doubled from about Rs. 500b to over Rs. 1.2 trillion.

2. Pakistan's GDP more than doubled to $170 billion (nominal) since 1999. It has reached $440 billion in terms of purchasing power parity (PPP).

3. Pakistan attracted over $5 billion in foreign direct investment in the 2006-07 fiscal year, ten times the figure of 2000-01.

4. The country has experienced a mass media revolution. There are now multiple, competing television channels catering to almost every niche, whim and taste---from news, sports, comedy and talk shows to channels dedicated to cooking, fashion, fitness, music, business, religion, local languages and cultures etc. It seems that this media revolution has had a profound influence on how many young people talk, dress and behave, emulating the outspoken media personalities, actors, preachers, singers, sportsmen, celebrities and fashion models. In addition to a smorgasbord of TV channels born out of a surge in advertising spending, there are many newspapers and tabloids, and serious and glossy magazines, and many FM radio stations providing local news, sports, weather and traffic.

5. The strong consumer demand in Pakistan drove large investments in real estate, construction, communications, automobile manufacturing, banking and various consumer goods. Millions of new jobs were created. By all accounts, the ranks of the middle class swelled in Pakistan.

6. Pakistan's KSE-100 stock index surged 55% in 2009, a year that also saw the South Asian nation wracked by increased violence and its state institutions described by various media talking heads as being on the verge of collapse. Even more surprising is the whopping 825% increase in KSE-100 from 1999 to 2009, which makes it a significantly better performer than the BRIC nations. BRIC darling China has actually underperformed its peers, rising only 150 percent compared with energy-rich Brazil (520 percent) and Russia (326 percent) or well-regulated India (274 percent), which some investors see as a safer and more diverse bet compared with the Chinese equity market, which is dominated by bank stocks. According to Tariq Iqbal Khan, Chairman of Pakistan National Investment Trust(NIT), KSE-100 equities provided investors with average annual return of 21 percent during the decade 1999-2009 while the average inflation during this period was 7.2 percent.

7. The Wall Street Journal did a story in September 2007 on Pakistan's start-up boom that said, "Scores of new businesses once unseen in Pakistan, from fitness studios to chic coffee shops to hair-transplant centers, are springing up in the wake of a dramatic economic expansion. As a result, new wealth and unprecedented consumer choice have become part of Pakistan's volatile social mix."

8. The PPP leadership under former Prime Minister Benazir Bhutto returned to Pakistan in 2007 following a US-sponsored amnesty signed by former President Musharraf. Unfortunately, Ms. Bhutto was assassinated before the elections in December 2007. However, the results of the free and fair elections held in 2008 were respected by former President Musharraf that allowed the PPP, led by Benazir Bhutto's widower Asif Ali Zardari, to assume control of the government. Later, Mr. Zardari forced President Musharraf out and succeeded him into the office of the president.

9. Persistent and powerful mass movement led by Pakistani lawyers forced the PPP government to restore Chief Justice Iftikhar Chaudhry and several other senior judges earlier this year. The NRO amnesty that facilitated the PPP leaders' return has since been annulled by the Supreme Court of Pakistan, and all of the corruption and criminal cases against Mr. Zardari and many of his ministers have been re-opened. The chief justice appears determined to pursue accountability and rule of law against all odds.

10. Pakistan's information technology(IT) sector revenue grew from almost nothing to about $2.8 billion in 2008, with about half of it from exports.

11. Higher education reform initiated by Dr. Ata-ur Rehman Khan under President Musharraf resulted in over fivefold increase in public funding for universities, with a special emphasis on science, technology and engineering. The reform supported initiatives such as a free national digital library and high-speed Internet access for universities as well as new scholarships enabling more than 2,000 students to study abroad for PhDs — with incentives to return to Pakistan afterward. The years of reform have coincided with increases in the number of Pakistani authors publishing in research journals, especially in mathematics and engineering, as well as boosting the impact of their research outside Pakistan.

12. The telecom boom increased mobile phone penetration from near zero in 1999 to over 50% now, along with the expansion of Internet access to double digits.

13. Pakistan joined the ranks of the top destinations for business process and technology outsourcing. According to oDesk, Pakistan experienced 328% growth in its outsourcing business in 2007-8, second only to the Philippines (789%) on a list of seven top locations that include US (260%), Canada (121%), India (113%), the Ukraine (77%) and Russia (43%).

14. Over two dozen Pakistani scientists are doing research on large hadron collider at CERN in Switzerland. More scientists are engaged in research at Pakistan's Jinnah research station in Antarctica.

15. Urbanization is not just a side effect of economic growth; it is an integral part of the process, according to the World Bank. With the robust economic growth averaging 7 percent and availability of millions of new jobs created between 2000 and 2008, there has been increased rural to urban migration in Pakistan to fill the jobs in growing manufacturing and service sectors. The level of urbanization in Pakistan is now the highest in South Asia, and its urban population is likely to equal its rural population by 2030, according to a report titled ‘Life in the City: Pakistan in Focus’, released by the United Nations Population Fund. Pakistan ranks 163 and India at 174 on a list of over 200 countries compiled by Nationmaster. The urban population now contributes about three quarters of Pakistan's gross domestic product and almost all of the government revenue. The industrial sector contributes over 27% of the GDP, higher than the 19% contributed by agriculture, with services accounting for the rest of the GDP.

16. Along with increasing internal rural to urban migration, there has also been a wave overseas migration from urban areas in Pakistan to urban centers overseas, especially the Middle East. The Middle East, with its vast oil wealth, has provided many opportunities for overseas workers to work and earn a living building and maintaining infrastructure in various Arab states, especially in the Persian Gulf. In recent years, overseas Pakistanis have been contributing to Pakistan's economy with remittances exceeding $8 billion a year.

17. A new class of entrepreneurs has emerged in Pakistan during this decade who, in small but significant ways, have challenged the religious orthodoxy. They present a sharp contrast to the rising wave of Islamic radicalism that the U.S. and others in the West view as an existential threat to Pakistan. And with many well-traveled Pakistanis importing ideas from abroad, they are contributing to Pakistan's 21st-century search for itself.

18. Pakistan's arms industry came a long way from making small arms as a cottage industry in the last few decades. The US and Western arms embargoes imposed on Pakistan at critical moments in its history have proved to be a blessing in disguise. In particular, the problems Pakistan faced in the aftermath of Pressler Amendment in 1992 became an opportunity for the country to rely on indigenous development and production of defense equipment. Not only did the country become a significant arms exporter, the defense production went high tech this decade, with the growing private defense production sector.

19. The current PPP government hailed Pakistan's progress under President Musharraf in its 2008 MOU with the IMF as follows:

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


1. There appears to be a serious lack of leadership in the face of daily carnage unfolding in Pakistan's cities and towns. In the 51 weeks so far in 2009, Pakistan has suffered at least 44 attacks. The death toll from this steady stream of violence stands at more than 650. And if the past few days are any guide, that horrifying annual tally is not yet complete.

The past three months have been particularly bloody. More than half of Pakistan's terrorists attacks this year have occurred since the beginning of October, a few weeks after the Pakistan military launched an operation to drive the Pakistan Taliban out of its stronghold in South Waziristan.

The country has suffered at least 25 terrorist attacks in that brutal ten-week phase. The latest one was in Peshawar, killing at least 4.

2. In spite of the IMF bailout of Pakistan, the economy is practically in recession, barely keeping pace with the population growth. According to Economic Survey 2008-09, presented by Finance Minister Shaukat Tarin, Pakistan's economy grew by a mere 2.0 percent, barely keeping pace with population growth. The growth fell significantly short of the 4.5 percent target for the year, which was already very modest compared with an average of 7% economic growth witnessed from 2001-2008.

3. Long, recurring and daily power outages are severely impacting all business, economic and social activities in Pakistan. Adding further to the public pain are the multiple crises of sugar shortage, food price rises, and water scarcity, and deteriorating security situation making life extremely difficult for ordinary people.

4. In spite of the fact that Pakistan's Human Development Index (HDI) has risen by 1.30 percent per year from 0.402 to 0.572 during 1980-2007 period, and it has accelerated to 1.9% increase since 2000 when it was reported to be 0.499, its progress is not yet sufficient to improve the nation's ranking relative to other countries in regions like East Asia, which have been moving considerably faster. Pakistan's index grew by 1.75% in the 1980s but slipped to less than 1.3% during the lost decade of the 1990s.

5. Low levels of literacy continue to threaten Pakistan's future. Although literacy in Pakistan has grown by about 13% this decade to about 56%, it remains woefully low when compared to other South Asian nations. Ranked at 141 on a list of 177 countries, Pakistan's human development ranking remains very low. Particularly alarming is the low primary school enrollment for girls which stands at about 30% in rural areas, where the majority of Pakistanis live.

6. Lack of opportunity in rural areas is pushing more and more young people to cities and towns which is further straining the already overburdened infrastructure and municipal services in major cities. In a recent interview with Wall Street Journal, Pakistan's former finance minister Salman Shah explained that "Pakistan has to be part of globalization or you end up with Talibanization". "Until we put these young people into industrialization and services, and off-farm work, they will drift into this negative extremism; there is nothing worse than not having a job," Shah elaborated. But increasing urbanization in South Asia represents both a challenge and an opportunity for India, Pakistan and Bangladesh. It is a challenge because it imposes a rapidly growing burden on the already overcrowded megacities such as Mumbai, Delhi, Dhaka and Karachi. Such a massive challenge will require a tremendous focus on providing housing, transportation, schooling, healthcare, water, power, sanitation and other services at an accelerated pace.

7. There has been rising intolerance and violence against minorities in Pakistan. This year has been particularly traumatic for Pakistani christian community. In August, an angry and armed mob of radical Muslims attacked a Christian village in Gojra, Punjab, firing indiscriminately, throwing Molotov cocktails and looting houses. About 70 houses were burnt to the ground and at least seven Christians died in the flames. Sectarian violence has also increased against Shia and Ahmedi minority communities.

8. Violence against women and wide gender gap continue to hold Pakistan back. The status of women in Pakistan continues to vary considerably across different classes, regions, and the rural/urban divide due to uneven socioeconomic development and the impact of tribal, feudal, and urban social customs on women's lives. While some women are soaring in the skies as pilots of passenger jets and supersonic fighter planes, others are being buried alive for defying tribal traditions.

9. Pakistan's water crisis became more acute during this decade. According to the United Nations' World Water Development Report, the total actual renewable water resources in Pakistan decreased from 2,961 cubic meters per capita in 2000 to 1,420 cubic meters in 2005. A more recent study indicates an available supply of water of little more than 1,000 cubic meters per person, which puts Pakistan in the category of a high stress country.

10. Even after significant reduction in poverty, the number of poor people earning less than $1.25 a day remains high. Center for Poverty Reduction (CPRSPD), backed by the United Nations Development Program(UNDP), estimated that Pakistan's poverty at national level declined sharply from 22.3 percent in 2005-06 (versus India's poverty rate of 42%) to 17.2 percent in 2007-08. The poverty has most likely increased in 2008-09 with the disappearance of economic growth.

The Future:

While Pakistanis must accept responsibility for their own unwise actions in the past, there is no doubt that the US presence in the region has had a huge negative impact on Pakistanis. Some of the actions by Americans, starting with the use of the "Mujaheddin" during the Soviet war in Afghanistan, have clearly contributed to the problems Pakistan faces today. These problems have been further exacerbated by the use of heavy-handed US tactics in the region, American policy of targeted assassinations by the CIA, and the use of private contractors like Blackwater who view themselves as "Christian Crusaders tasked with eliminating Muslims and the Islamic faith from the globe". There were few religious militants and no incidents of suicide bombings in Pakistan before the US invasion of Afghanistan in 2001. There was only a small presence of the Taliban or al Qaeda in Pakistan prior to the tragic terrorist attacks of September 11, 2001 in the United States. But in recent years, thousands of Pakistani soldiers have died fighting, killing or capturing the militants who fled into Pakistan from Afghanistan. And the civilian death toll from terrorist attacks in Pakistan is continuing to increase on a daily basis.

Pakistan is in the midst of multiple crises of confidence ranging from lack of basic security and political stability to continuing economic stagnation, many of which are of their own making. More than anything else, what the nation needs now is sincere, strong and wise leadership to deal with both internal and external threats. Pakistan needs leaders who can not only respond to the urgent national security problems now, but those leaders who can also ensure a better future looking beyond the current "war on terror" and US demands on Pakistan to a time when the US will leave the region and Pakistanis will have to live with the consequences of their actions in support of the United States. Pakistanis should use force when necessary against the militants and murderers, but they must not shun other avenues of political dialog and necessary reforms to build a national consensus for peace, stability, social justice, and shared economic benefits.

Pakistan is just too big to fail. In spite of all of the serious problems it faces today, I remain optimistic that country will not only survive but thrive in the coming decades. With a fairly large educated urban middle class, vibrant media, active civil society, assertive judiciary, many philanthropic organizations, and a spirit of entrepreneurship, the nation has the necessary ingredients to overcome its current difficulties to build a democratic government accountable to its people.

Here is a slide show of some of the infrastructure development projects underway in Pakistan:

Here is British Writer William Dalrymple talking about India and Pakistan:

Related Links:

Pakistan Economic Update 2009 by World Bank

FDI in Pakistan

Video: Who Says Pakistan Is a Failed State?

Pakistan's LOI With IMF 2008

Pakistani Entrepreneurs Survive Downturn

Online Political Activism in Pakistan

Foreign Direct Investments in Pakistan 1999-2009

Urban Middle Class Clout in Pakistan

Blackwater Founder Implicated in Murder

Daily Carnage in Pakistan

Musharraf's Economic Legacy

List of Companies in Pakistan

NRO Amnesty Annulled By Pakistan Supreme Court

EDC's Pakistan's Country Overview

Eleven Days in Karachi

Is Pakistan Too Big to Fail?

Urbanization in Pakistan Highest in South Asia

Pakistani Entrepreneurs in Silicon Valley

Pakistan's Defense Production Goes High-Tech

Post-911 Economic Boom in Pakistan

Pakistan Economic Indicators 1999-2009

Karachi Stock Exchange Presentation


Anonymous said...

I frankly don't buy the too big to fail statement for any country or organization I mean the USSR was not too big to fail neither was the British Empire,Mughal Empire,French Empire...

If you don't look out for yourself consistently over the long term you will fail,no two ways about it.

Anonymous said...

Anon: Don't need to go so far back in history. 1971 made nonsense of the too-big-to-fail assertion.

For an outsider, it's hard to reconcile Riaz's upbeat picture with the daily carnage, feudal/military looting and a society that is ripping itself apart. May be a Western/Indian media conspiracy - but there's usually no smoke without a fire.

Riaz Haq said...

Anon: "I frankly don't buy the too big to fail statement for any country or organization I mean the USSR was not too big to fail neither was the British Empire,Mughal Empire,French Empire..."

And what were the consequences of failure for each for the world?

The US and the world on edge when USSR fell, worrying about the nukes. Massive assistance was provided by US and Europe to stabilize Russia and secure the nukes. Russia became the largest recipient of US and European aid in the early 1990s.

The fall of the Roman Empire led to a long period of anarchy in Europe called the Dark Ages that lasted several hundred years.

The Fall of Mughal empire devastated India and it is still reeling from extreme poverty, hunger and deprivation. The pre-British, early 19th century Moghul India, described as caste-ridden, feudalistic and unmodern, was economically ahead of the rest of the world,including Britain and the US, according to S. Gururmurthy, a popular Indian columnist. The Indian economy contributed 19 per cent of the world GDP in 1830, and 18 per cent of global trade, when the share of Britain was 8 per cent in production and 9 per cent in trade, and that of US, 2 per cent in production and 1 per cent in trade. India had hundreds of thousands of village schools and had a functional literacy rate of over 30 per cent. In contrast, when the British left, India’s share of world production and trade declined to less than 1 per cent and its literacy was down to 17 per cent. And yet, in 1947, India had large Sterling reserves, no foreign debt, and Indians still had an effective presence in such trade centers as Singapore, Hong Kong, Penang, Rangoon and Colombo.

So even when the world was not as globalized and interconnected, there were still severe consequences of the fall of big nations.

And we're only talking about empires, not nation-states. Russia not only survived but it's thriving. So is Britain. Pakistan is a nation-state, not an empire.

Were the US banks too big to fail? The analogy of the US failure in saving banks that led to the great depression of the 1930s. That's why the US acted quickly to save banks considered "too big to fail" last year.

Anonymous said...

"S, according to S. Gururmurthy, a popular Indian columnist. T"

Gurumurthy also told that India was always rich. That's why your muslim invaders came to India to loot. Remember the gold, diamond taken by Ghaznavi after plundering Somnath temple.

India lost out after Brits rule because we missed the industrialization period for about 200 yrs and not because Mughals were inherently more India friendly than Brits.
In the 800 yr rule of muslim emperors can you name one university started by them. In contrast Brits gave India modern scientific education.

Is it any surprise that even today muslims are laggards in education all thru the world.

Riaz Haq said...

Anon: "Don't need to go so far back in history. 1971 made nonsense of the too-big-to-fail assertion."

We have come a long way since 1971. There would have been no Bangladesh without the Indian intervention and invasion of East Pakistan. I don't see India, or any other nation, taking the monumental risk of invading a nuclear-armed Pakistan.

While stability does help in economic growth, it also preserves the tyranny of the status quo in third world countries like India with rampant poverty and hunger and growing rich-poor gap. Pakistan is changing rapidly through this turmoil into a nation with a large urban middle class, greater accountability of politicians, much less poverty and hunger than India, more egalitarian wealth distribution distribution, etc.

Center for Poverty Reduction (CPRSPD), backed by the United Nations Development Program(UNDP),has estimated that Pakistan's poverty at national level declined sharply from 22.3 percent in 2005-06 (versus India's poverty rate of 42%) to 17.2 percent in 2007-08.

There is widespread hunger and malnutrition in all parts of India. India ranks 66th on the 2008 Global Hunger Index of 88 countries while Pakistan is slightly better at 61 and Bangladesh slightly worse at 70. The first India State Hunger Index (Ishi) report in 2008 found that Madhya Pradesh had the most severe level of hunger in India, comparable to Chad and Ethiopia. Four states — Punjab, Kerala, Haryana and Assam — fell in the 'serious' category. "Affluent" Gujarat, 13th on the Indian list is below Haiti, ranked 69. The authors said India's poor performance was primarily due to its relatively high levels of child malnutrition and under-nourishment resulting from calorie deficient diets.

According to the new UN-HABITAT report on the State of the World's Cities 2008/9: Harmonious Cities, China has the highest level of consumption inequality based on Gini Coefficient in the Asia region, higher than Pakistan (0.298), Bangladesh (0.318), India (0.325), and Indonesia (0.343), among others." Gini coefficient is defined as a ratio with values between 0 and 1: A low Gini coefficient indicates more equal income or wealth distribution, while a high Gini coefficient indicates more unequal distribution. 0 corresponds to perfect equality (everyone having exactly the same income) and 1 corresponds to perfect inequality (where one person has all the income, while everyone else has zero income).

Riaz Haq said...

anon: "In the 800 yr rule of muslim emperors can you name one university started by them. In contrast Brits gave India modern scientific education."

India was far more literate at about 30% when the Brits (Europe's literacy rate was far lower in 18th century) came than when they left in 1947 with a 17% literacy rate.

As to educational system under the Mughals, here's an excerpt from Encyclopedia Brittanica:

The credit for organizing education on a systematic basis goes to Akbar (lived 1542–1605), a contemporary of Queen Elizabeth I of England and undoubtedly the greatest of Mughal emperors. He treated all his subjects alike and opened a large number of schools and colleges for Muslims as well as for Hindus throughout his empire. He also introduced a few curricular changes, based on students’ individual needs and the practical necessities of life. The scope of the curriculum was so widened as to enable every student to receive education according to his religion and views of life.

sgdev said...

Good post. Much of the solutions to the problems of developing countries that you have noted seems to be about getting the masses educated. In that regard - you make an important point on a policy initiated in Pakistan.

BTW there is no need to go back to British, Mughal, Gupta, Maurya, Harappa etc.

The economic and political problems you have listed are more or less the same for all nations in the neighborhood - time is better spent solving our problems together than hating and pointing out who is the bigger loser. That probably gives more pleasure to anti-socials and people elsewhere who dont have to worry about competition from our nations since we are busy pulling each other down.

Reader from India

Anonymous said...

"KARACHI, Dec 16 - The Pakistani rupee traded at a record low early on
Wednesday because of high demand for dollars for payments for imports,
especially oil, and dealers said they expected the currency to remain
under pressure.

Pak rupee is currently trading at 84 for a dollar, compared to 46 of India. You sure you are proud of Pakistan's so called achievement.

Anonymous said...

since this is about this decade, let us talk about this decade

Today's defeat in the Melbourne test is the tenth straight test
defeat. When it comes to Aus,
Pakistan seem to play like Bangladesh in its first few years. They can't even draw a match.

It seems among all countries, India has the best record against Aus in this decade.

Aus vs Pak for the last 10 yrs:
3-0 in 2000
3-0 in 2002
3-0 in 2004
1-0 in the current series. (insha allah, another 3-0 defeat is very

Anonymous said...

"We have come a long way since 1971. There would have been no Bangladesh without the Indian intervention and invasion of East Pakistan. I don't see India, or any other nation, taking the monumental risk of invading a nuclear-armed Pakistan."

Oh my god. what a delusional grandiose statement. First of all 1971 would not have happened if we west Pakistan knew how to respect the self determination of East Pakistanis. But hey, we are Pakistanis. We tell others (Indians) to accept Kashmiri self determination but does not care to apply.
Also India had no other option but to intervene when 10 million East Pakistanis flooded into India. So I take it that as it happened today India will just feed them without taking the rist of nuclear war.

Secondly, nukes were there in 1999 but that did not prevent Pakistan from losing the Kargil war.

Last why would India be interested in taking over Pakistan. As they must have been from USA's terrible experience in IRaq and Afghan, it makes no sense to add more problems. India has already enough headache.

Had this post of your came from a paid shill of army, I would have undertstood. Like Zaid Hamid.
But et tu?

Anonymous said...

'The pre-British, early 19th century Moghul India, described as caste-ridden, feudalistic and unmodern, was economically ahead of the rest of the world,including Britain and the US,'

In the pre industrial world per capita incomes were roughly the same +/- 20% so India with its massive population had a GDP ahead of the UK. big deal.

The fact is that in per capita terms India was around 60% of Western europe towards the end of Aurangzeb's rule.

What is more India's once world famous university network was all but ruined by islamic invaders look up Nalanda university and how it ended(sacked incidentally the exact same year oxford university was founded),there were atleast 25 others.
The islamic rulers of India never invested in higher education specifically in science and tech which is why the country which in the 5th century AD produced Aryabhatta who stated the sun is a star and the earth orbits the sun among many other things had no equivalent of the west's Newton and Galileo in the middle ages.

Basic literacy is one thing which was always relatively high in India given the accretion effect of millenia of civilization but under the islamic rulers in terms of human thought and intellect a nation that created the decimal number system,cotton textiles,Ayurveda,Chess,Wootz steel etc etc went from being a world leader to a non contender.

Though I am eager to know of any scientific or technological breakthroughs or discoveries on muslim Indian territory (if any)?

Riaz Haq said...


I hope you know the difference between a skirmish like Kargil (where Pakistan maintained its denials of direct participation, and the Indian casualties were much higher than the intruders) and a full-scale invasion like the one in East Pakistan by Indian Army.

There may still be a small battles and border skirmishes but the strong likelihood of escalation into a nuclear war will have a sobering effect on both sides.

Riaz Haq said...

anon: "Though I am eager to know of any scientific or technological breakthroughs or discoveries on muslim Indian territory (if any)?"

Nor were there any Indian "Hindu" scientific discoveries for centuries, except CV Raman.

And I guess you haven't heard of Prof Salaam of Pakistan, who considered himself a Muslim, praying five times a day and reading the Quran daily.

The bottom line is that India was in much better shape under Mughals than it is today, with high levels of hunger, poverty and illiteracy, and contributing only about 2% of the world GDP with 17% of the world population.

Last year, Indian Planning Commission member Syeda Hameed acknowledged that India is worse than Bangladesh and Pakistan when it comes to nourishment and is showing little improvement.

Speaking at a conference on "Malnutrition an emergency: what it costs the nation", she said even Prime Minister Manmohan Singh during interactions with the Planning Commission has described malnourishment as the "blackest mark".

"I should not compare. But countries like Bangladesh, Pakistan and Sri Lanka are better," she said. The conference was organized last year by the Confederation of Indian Industry and the Ministry of Development of Northeastern Region.

Western colonization has been a disaster for all of the colonized peoples, including Muslims and non-Muslims. Those who sing the praises of the colonizers are misguided.

Anonymous said...

"I hope you know the difference between a skirmish like Kargil (where Pakistan maintained its denials of direct participation, and the Indian casualties were much higher than the intruders) and a full-scale invasion like the one in East Pakistan by Indian Army.
ha. when it is convenient downgrade Kargil to a minor skirmish. Fact is, Kargil was a defeat when it comes to objective. Pak army (whether in uniform or not) had only objective. To capture points and redefine LOC. They failed in it. Period.

India had only objective. To get back to old LOC which they got it. They won.

As for casulaties, the sources I check show that Pak lost 4600 as opposed to 600 India lost. Out of 4600 per Nawaz Sharif 2700 were Pak army alone.

You might want to talk to your personal friend Dr. Hoodbhoy about Kargil fiasco.

Anyhow why does India need to get into a war with Pakistan. I am sure with Pakistanis more than willing to commit suicide, India will save the trouble.

Anonymous said...

"The bottom line is that India was in much better shape under Mughals than it is today, "

and india was in even better shape before muslim invaders came to India. But then why let facts spoil your anti india party. Enjoy the party.

Isn't the hindu vs muslim brain debate now more or less settled with India far ahead of Pak in Science and technology.

Riaz Haq said...

anon: "Isn't the hindu vs muslim brain debate now more or less settled with India far ahead of Pak in Science and technology. "

And what do you base that on? Do you have any concrete data to settle it?

My data tells me that Pakistan is equal to, if not ahead of India in science and tech. Whether it is in defense technology or civilian science, Pakistanis are quite competitive, contrary to all of the boasting and self-delusion among Indians.

Though smaller in numbers based on populations of the two nations, I see Pakistanis working in all of the advanced technologies in US and Europe, whether it is CERN or Antarctica, or NIH, or GE,or Boeing, or Microsoft, or Intel or Cisco, or Oracle etc etc.

Anonymous said...

Here is a Pakistani DR. ISHRAT HUSAIN
The author is the Director, Poverty and Social Policy Department, World Bank.

writing about India vs Pakistan

"Third, the areas where India has surpassed Pakistan. There is little doubt that the scientific and technological manpower and research and development institutions in India are far superior and can match those of the western institutions. The real breakthrough in the Indian export of software after the opening up of the economy in 1991 attests to the validity of the proposition that human capital formation accompanied by market-friendly economic policies can lift the developing countries out of low-level equilibrium trap.

Indian scientists working in India excel in the areas of defense technology, space research, electronics and avionics, genetics, telecommunications, etc. The number of Ph.Ds produced by India in science and engineering every year -- about 5,000 -- is higher than the entire stock of Ph.Ds in Pakistan. The premier research institutions in Pakistan started about the same time as India have become hotbed of internal bickerings and rivalries rather than generator of ideas, processes and products.

Related to this superior performance in the field of scientific research and technological development is the better record of investment in education by India. The adult literacy rate, female literacy rate, gross enrollment ratios at all levels, and education index of India have moved way ahead of Pakistan. Rapid decline in total fertility rates in India has reduced population growth rate to 1.8 percent compared to 3.0 percent for Pakistan.

Health access to the population and infant mortality rates are also better in India and thus the overall picture of social indicators, although not very impressive by international standards, emerges more favorable. The two most important determinants of Pakistan’s dismal performance in social development are its inability to control population growth and the lack of willingness to educate girls in the rural areas."

Riaz Haq said...

Anon: Ishrat Husain's article is at least a decade old, if not more. And it shows overall economic performance of Pakistan about 2X better than India's in terms of per cap income gdp.

As to defense tech, the results of DRDO's work are nothing to be proud of. Pakistanis have done far better with developing tanks, ballistic missiles and jet fighters this decade than Indians, as acknowledged by some of the senior Indian military officers.

Anonymous said...

Dr Babar Hasan is a famous doc in Boston. He wrote this in dawn

"THE letter written by Zainab Shafi (Dec 28) was heart-breaking. It is sad to see such young intelligent people getting a setback so early in their career.

Our country is in dire need of scientists, doctors, inventors and professors who will not only take Pakistan on the path of prosperity but will bring political, economical and religious stability to the country.

Every fourth or fifth person I have seen at MIT or Harvard is an Indian.

The pride of being a citizen of a rapidly developing nation is palpable among them.

Every third or fourth taxi driver in New York is a Pakistani. There are many expatriate Pakistanis who are interested in supporting such students.

Zainab, please feel free to contact me to work out details about getting admission to a good university where you can pursue your dreams.

Boston, USA"

Mr Haq, not every Pakistani deludes like you that today Pakistan is still comparable to India.

Riaz Haq said...

Anon: " Every third or fourth taxi driver in New York is a Pakistani. There are many expatriate Pakistanis who are interested in supporting such students."

Unlike hyperpatriotic and self-boosting Indians, most Pakistanis are self-critical like this guy Babar, often without the correct knowledge of what is happening in the broader community. They assume the worst, without checking the facts.

The fact is that, according to US Census, about 55% of Pakistanis in the US have college degrees, much higher than the 24% overall population in America.

You can read more of Pakistani-American demographics at

Riaz Haq said...

anon: "Pak rupee is currently trading at 84 for a dollar, compared to 46 of India. You sure you are proud of Pakistan's so called achievement."

There is no question that Pakistan is going through a rough period right now, and the Pak rupee is under pressure. But average Pakistanis are still better off than average Indians.

Here's how the objective foreign visitors see the two nations:

Alistair Scrutton of Reuters wrote as follows about Pakistan's infrastructure, particularly its 367 Km long M2 motorway that connects Lahore with Islamabad:

"Indeed, for sheer spotlessness, efficiency and emptiness there is nothing like the M2 in the rest of South Asia.

It puts paid to what's on offer in Pakistan's traditional foe and emerging economic giant India, where village culture stubbornly refuses to cede to even the most modern motorways, making them battlegrounds of rickshaws, lorries and cows.

There are many things in Pakistan that don't get into the news. Daily life, for one. Pakistani hospitality to strangers, foreigners like myself included, is another. The M2 is another sign that all is not what it appears in Pakistan, that much lies hidden behind the bad news.

Here's British writer William Dalrymple who visited and compared India and Pakistan on their 60th anniversary described Pakistan as follows:

"On the ground, of course, the reality is different and first-time visitors to Pakistan are almost always surprised by the country's visible prosperity. There is far less poverty on show in Pakistan than in India, fewer beggars, and much less desperation. In many ways the infrastructure of Pakistan is much more advanced: there are better roads and airports, and more reliable electricity. Middle-class Pakistani houses are often bigger and better appointed than their equivalents in India. Moreover, the Pakistani economy is undergoing a construction and consumer boom similar to India's, with growth rates of 7%, and what is currently the fastest-rising stock market in Asia. You can see the effects everywhere: in new shopping centers and restaurant complexes, in the hoardings for the latest laptops and iPods, in the cranes and building sites, in the endless stores selling mobile phones: in 2003 the country had fewer than three million cellphone users; today there are almost 50 million."

Here are another western tourist's impressions of M2 from

A strange relief to get to drive 3 lane asphalt in such serene quietness! It was unreal, we had to pinch our arm if this was really happening. Is this Pakistan? We decided to spend the night at the 3rd big service area with restaurant, gas station, police and clean toilets. It was strange to see there was no trace of locals selling stuff on the curbs – something which is really normal in Pakistan. Probably these place are off limits to the small business men.

Going to India – something we have long looked out for. We’ve heard a lot about India from other travellers – good and bad experiences. One thing’s for sure – India must have a LOT of people, each and every traveller from India has mentioned this explicitly. With Pakistan and Nepal (1998) as context we’re curious and somewhat anxious how we will experience India. We’re not crowd maniacs and both appreciate a ‘bit of air’ between people. Anyhow India happened quicker than we expected – we left Islamabad on the 25th, the next day we already sat in the garden of Ms Bandari’s Guesthouse. The superb M2 motorway with overnight parking and the road to the Indian border was uneventful. We drove the canal bank road through Lahore a long drive on a straight road. But look carefully to find this road separated by a canal – it’s sign posted rather miniscule by “Wagah border”.

Riaz Haq said...

anon: "Today's defeat in the Melbourne test is the tenth straight test defeat."

Just recently, Pakistan won a test against NZ and leveled the series.

Pakistan's first test win in three years coincided with India achieving the top ICC rank for test cricket. Before their 2-0 victory over Sri Lanka in the recently concluded home series, India were ranked third with 119 points after Sri Lanka and chart-toppers South Africa (122). The two consecutive innings victories in Kanpur and Mumbai earned India five points, taking them two clear of South Africa, while Sri Lanka slipped below Australia to fourth place. England and Pakistan occupy the fifth and sixth places respectively. Pakistan also ranks 6th in ICC ODI rankings while Australia and India occupy number 1 and two spots.

In recent international tournaments, India have been sent home early during 2009---T20 in England and ICC Trophy in South Africa.

While Pakistan won the T20 title in England, Indians couldn't even make the semis. In ICC trophy, India were eliminated early while Pakistan defeated India and made it to the semi-final.

In terms of the history of India- Pakistan cricket encounters in all three formats, Pakistanis continue to have an edge over their Indian rivals:

Tests ODI Twenty20

Matches played 59 118 3
Won by Pakistan 12 69 1
Won by India 9 45 1
Draw/Tie/No result 38 4 1

And just this month, Pakistan beat India 6-3 in a Champions Challenge hockey tournament semifinal at Salta, Argentina. These wins are very welcome at a time when Pakistanis need their spirits lifted to deal with the extremely difficult situation at home.

Anonymous said...

regarding Pakistan cricket, the only reason why we still look good overall is because of our past record. This decade we did very bad. 7 yrs ago Akram said that there is no new talent in Pakistan and he was dead right.
Today Mohd Yusuf has claimed that 20-20 will finish all other forms of cricket in Pakistan as batsman can not even last 50 overs, let alone a test match.

Anyhow youngster today are more impressed by Zaid Hamid than cricketers.

Riaz Haq said...

drcruncher: The recent record of Pakistani cricket team has been mixed. Pakistanis are the 20-20 world champs, but they have trouble in test matches. Their record against India in recent encounters has been stellar.

However, the inconsistency has always been the hallmark of Pak cricket, your hero Akram included. They have displayed flashes of brilliance followed by dull performances.

Pakistan has a lot of cricketing talent, and continues to discover more everyday, particularly in bowling.

People like Umar Akmal and Mohammad Aamir are great examples of the young new talent inducted recently in Pak team.

Anonymous said...


It seems you are following some other cricket.

In this decade Pak vs India head to head

Test: India won 4 Pak 3

ODI : Pak 22 India 18
(last 5 years Pak won 11,
India 12)

This is not stellar by any means.
The real stellar was in 80s and 90s when we use to win 9 out 10 matches against India.

There is a reason why we are struggling in the 5th,6th or 7th position.

Anonymous said...

hilarious analysis.

Riaz Haq said...

Here is a interesting report in the News on polls conducted in India and Pakistan on relations between the two nations:

By Mohammad Malick

ISLAMABAD: The two nations have repeatedly gone to war in the past. Their governments continue sabre rattling and spewing bellicose rhetoric. But identical nationwide opinion surveys conducted by the Jang Group and the Times of India Group in India and Pakistan show that a majority of the billion and a half people of the sub-continent want to live as peaceful and friendly neighbours and share the same humane goals like any other civilised polity; economic prosperity for all, education for the youth, health for the needy, absence of violence and elimination of existential threats.

In Pakistan, 72 per cent of the respondents desired “peaceful and friendly relations with India” whereas 60 per cent Indians were hopeful of such an eventuality. This relative lesser percentage may be owing to the fact that presently 88 per cent of Indians consider Pakistan as a high/moderate threat to India’s well being. In contrast, 72 per cent Pakistanis perceive India as a high/moderate threat. The 88 per cent threat perception notwithstanding, it is heartening to note, however, that over 59 per cent of Indians think that a peaceful relationship would be established with Pakistan within their lifetime, an optimism shared by 64 percent Pakistanis.

While vested interests on both sides may have led the people to believe that every Pakistani wakes up paranoid with India and that every Indian goes to bed fretting over the next deadly Pakistani move, statistics show otherwise. Half the people polled in India thought about Pakistan “sometimes”, while only 16 per cent thought about us in a more focused manner. As for Pakistanis, 32 per cent appeared to be seriously concerned over the state of our bilateral relations. Hardly the figures for two peoples supposedly obsessed with each other’s ultimate annihilation, would not you agree?

Zen, Munich, Germany said...


"In contrast Brits gave India modern scientific education.

Is it any surprise that even today muslims are laggards in education all thru the world."

These kind of statements which are easily disseminated in some media are dubious at best and propagandist at worst. If we assume that "modern scientific knowledge" is post insutrial scientific knowledge, it is understandable that it was introduced by Britain and not by Muslims. And their intention was not mass upliftment of Indians, rather creation of a clerical middle class which would pursue the interests of British empire. In Kerala there were plenty of them among some Hindu upper castes, but even some rare Muslims were benefeciaries. Some of these modern educated Muslims by the way were rewarded with some authority over Waqf properties and rewarded with titles such as "Khan Bahadur".
A literacy level of 12% at the time of independence explains this well.

As for Muslims being laggards than Hindus - it is another myth. If you use the number of Fortune 500 CEOs as a yardstick, you may be right that Hindus are advanced than Muslims, but if you take basic literacy, you get a different picture. 1.3 bill. Muslims are widely dispersed throughout the world than 900 mill. Hindus which are mainly concentrated in India. Many Muslim countries in SubSaharan Africa lag behind India, but otherwise most Muslim countries have a higher literacy rate than India(eg: Indonesia which is most populous Muslim country has a literacy of 91%). See
If half of Hindus cannot even read and write, it is very difficult to call themself educationally advanced. As a legacy of old British system, now India has some of the best univs. in Asia which churns out elite managers and scientists for Western corporations. Not that there is anything wrong in this, as this atleast benefit India in some ways.

As for situation within India, a good reference is Rangnath Mishra commission report - difference between Hindus and Muslims are only a few percentage points at best in literacy. However Hindus have much higher graduation levels - 7% versus 3% for Muslims.

Zen, Munich, Germany said...


"Basic literacy is one thing which was always relatively high in India given the accretion effect of millenia of civilization but under the islamic rulers in terms of human thought and intellect a nation that created the decimal number system,cotton textiles,Ayurveda,Chess,Wootz steel etc etc went from being a world leader to a non contender."

Where did you get this from? Decimal system etc was developed by individuals - this doesnt say anything about basic literacy of the soceity. In fact, lower castes were systematically excluded from learning anything. Knowledge was monopolized by Brahmins who were a minority. Even Brahmin learning was severely limited in scope as it primarily consisted only of memorizing Vedas and that too passed through orally. Muslim invaders may have discriminated against Hindus, but given the brutal discrimination and low standards that existed within Hindu soceity, they could have played only a positive role.

Riaz Haq said...

Zen: "Muslim invaders may have discriminated against Hindus, but given the brutal discrimination and low standards that existed within Hindu soceity, they could have played only a positive role."

Here's a brief excerpt from the BBC website about the Mughal rule in India:

The Mughal (or Mogul) Empire ruled most of India and Pakistan in the 16th and 17th centuries.

It consolidated Islam in South Asia, and spread Muslim (and particularly Persian) arts and culture as well as the faith.

The Mughals were Muslims who ruled a country with a large Hindu majority. However for much of their empire they allowed Hindus to reach senior government or military positions.

The Mughals brought many changes to India:

* Centralised government that brought together many smaller kingdoms
* Delegated government with respect for human rights
* Persian art and culture
* Persian language mixed with Arabic and Hindi to create Urdu
* Periods of great religious tolerance
* A style of architecture (e.g. the Taj Mahal)
* A system of education that took account of pupils' needs and culture

Under Babur Hinduism was tolerated and new Hindu temples were built with his permission.

Trade with the rest of the Islamic world, especially Persia and through Persia to Europe, was encouraged.

The importance of slavery in the Empire diminished and peace was made with the Hindu kingdoms of Southern India.

Babur brought a broad-minded, confident Islam from central Asia. His first act after conquering Delhi was to forbid the killing of cows because that was offensive to Hindus.

Babur may have been descended from brutal conquerors, but he was not a barbarian bent on loot and plunder. Instead he had great ideas about civilisation, architecture and administration.

Akbar believed that all religions should be tolerated, and that a ruler's duty was to treat all believers equally, whatever their belief.

He established a form of delegated government in which the provincial governors were personally responsible to him for the quality of government in their territory.

Akbar's government machine included many Hindus in positions of responsibility - the governed were allowed to take a major part in the governing.

Akbar also ended a tax (jizya) that had been imposed on non-Muslims. This discriminatory tax had been much resented, and ending it was a popular move.

An innovation was the amount of autonomy he allowed to the provinces. For example, non-Muslims were not forced to obey Islamic law (as was the case in many Islamic lands), and Hindus were allowed to regulate themselves through their own law and institutions.

Riaz Haq said...

Pakistan Telecom Report by

Over the 2002-2009 period, the number of mobile subscribers rocketed from less than 2 million to more than 94 million (58% penetration). The 2006-2007 period in particular had been remarkable for the country’s mobile operators as the total subscriber base moved from 22 million at the beginning of 2006 to 77 million at end-2007. By early 2008, the 50% penetration milestone had been reached, probably much faster than most people expected. Despite a tightening national economy, coming into 2009 the mobile market continued to expand at an annual rate in excess of 10%.

By 2009, however, Internet penetration remained low and broadband growth had also been negligible. There was some good news on this front when the year 2008 saw an upsurge in broadband subscriptions; importantly, this looked to be continuing in 2009, boosted by the spread of competition throughout the market. DSL subscriptions were dominating the broadband market, quite overshadowing the cable modem broadband services provided using HFC infrastructure.

In the meantime, early signs of wireless-based broadband Internet technologies had begun to appear and by 2008 there were a number of WiMAX networks being rolled out in the larger urban centres. For the time being, however, the number of wireless broadband subscribers remains relatively small.

The big challenge in the short term for Pakistan’s telecom market will be to manage the impact of a pronounced downturn in the national economy. The 2008/09 fiscal year saw a huge dip in FDI as foreign investment in the country suffered a significant overall reduction. In the longer term the ongoing task of regulatory reform will be the major challenge.

Key highlights
• Despite a faltering economy and speculation that the mobile market was saturating, Pakistan still managed to grow its mobile subscriber numbers in 2009, reaching 94 million subscribers (almost 60% penetration) by June 2009.
• Growth in mobile subscribers was continuing at an annual rate of about 12% in 2009, modest compared with previous years, yet still representing healthy growth in the circumstances.
• Pakistan’s mobile sector has been boosted by increased competition, with newcomers Warid Telecom and Telenor (both launched in 2005) having quickly claimed big stakes in the market. By mid-2009, their combined market share had reached just over 41%.
• Broadband Internet penetration remains low in Pakistan (around 0.2% in early 2009) but 2008/09 had witnessed a strong surge in demand for broadband services that looked set to continue.
• Growth in the country’s fixed-line market remained sluggish; fixed teledensity stood at less than 4% by end-2008 with the numbers expected to only edge up slightly in the short term.
• One positive factor in the emerging fixed market has been the success of WLL technology which was supporting around 35% of all fixed subscribers by early 2009.

Pakistan – Key telecom parameters – 2008 - 2009
Category 2008 2009 (e)
Fixed-line services:
• Total subscribers (million) 6.2 6.5
• Annual growth -7% 5%
• Fixed-line penetration (population) 3.8% 4.0%
• Fixed-line penetration (household) 23% 23%
• Total subscribers (million) 3.7 4.0
• Annual growth 6% 8%
• Internet subscriber penetration (population) 2% 2%
Mobile services:
• Total subscribers (million) 90.0 99.0
• Annual growth 17% 10%
• Mobile penetration (population) 56% 60%
(Source: BuddeComm)

Riaz Haq said...

Dr. Ishrat Husain, a former World Bank senior official and an ex governor of the State Bank of Pakistan, wrote an article captioned "India, Pakistan: a comparison" at the end of the first five decades of two nations' existence as independent states. To my knowledge, Dr. Hussain has not done an update of his article since it was first published. Although about three years too late, I have just published a new post titled "India and Pakistan Contrasted in 2010" to attempt to present a comparison of the two South Asian nations after sixty years of independence.

Riaz Haq said...

Here's a Dawn story about the duplicity of Pakistan's "democratic leaders" published Jan 16, 2009:

ISLAMABAD: While publicly it criticizes former President Musharraf for the present economic mess, the government in its official documents has appreciated the economic policies of the previous regime that became a strong base for seeking loans from multilateral donors and friends of Pakistan.

The PPP-led coalition partners have been blaming Musharraf regime in public speeches for fudging economic figures to paint a rosy picture, while its overall policies pushed the country into economic crisis.

The letter of intent (LoI), on the basis of which, Pakistan sought the much-needed $7.6 billion bailout package from the International Monitory Fund (IMF), has bit by bit appreciated the Musharraf policies since 2000.

During the past one decade (1999-2007), the LoI says Pakistan’s economy witnessed a major economic transformation from substantial increase in the volume of gross domestic product (GDP) to greater international trade.

Talking to Dawn on Thursday former Finance Minister Ishaq Dar said whatever he said about the health of economy was based on the balance sheet existed on March 31, 2008. He said the balance sheet was dully approved by the then cabinet headed by Prime Minister Syed Yousuf Raza Gilani.

He said no body denied the contents of the balance sheet. The focus of the previous economic policy was on promotion of consumerism without supporting the industrial base.

Apparently not willing to agree with the LoI contents, he said though he has a different view of the past economic growth but quickly added the same was destroyed in the last 15 months of the military led dictator.

An official source requesting not to be named said the economic wizards in the finance ministry are not politicians to make only speeches but they have to look into ground realities. ‘We reported to IMF whatever is factual and based on evidence,’ the official added.

The LoI said the country’s real GDP increased from $60 billion in 2000-01 to $170 billion in 2007-08 with per capital income rising from under $500 to over $1000. During the same period, the volume of international trade increased to nearly $60 billion from $20 billion.

For most of this period, real GDP grew at more than 7 per cent a year with relative price stability. The improved macroeconomic performance enabled Pakistan to re-enter the international capital markets in the mid-2000s. Buoyant output growth, low inflation, and the government’s social policies contributed to a reduction in poverty and an improvement in many social indicators.

Former Finance Minister Dr Salman Shah told this scribe the government has made the 170 million people fool while telling them pack of lies in the past nine months about the economic policies of the Mushrraf regime.

He said that as the present government acknowledged in black and white, the impressive past growth made their way easier to make access to the new facility of the IMF for emerging markets hit by the crisis to support the balance of payment problems.

Had growth not been achieved, Pakistan would have to apply for other long term IMF financing facilities like poverty reduction, structural adjustments etc, Shah said adding government should tell truth to the nation if they have confidence.

‘The recruitment made so far for running the finances of this country is very depressing. This shows this government has neither commitment nor capabilities to take the country out of the current crisis,’ Dr Salman said.

Riaz Haq said...

Daily Times is quoting an APP report that Pakistan is on the path of economic recovery, according to the IMF:

Pakistan’s economic growth has started to recover despite security and energy challenges and the country met almost all targets under the International Monetary Fund program, the global financial institution said on Tuesday.

“Pakistan’s program is progressing well,” the Fund said in a statement following ‘constructive discussions’ with Pakistani officials focusing on Pakistan’s recent economic performance, the outlook for the rest of the fiscal year.

Adnan Mazarei, who met with the Pakistani officials in Dubai over the past week to initiate discussions on the fourth review under Pakistan’s Stand-By Arrangement (SBA), noted that Islamabad observed all quantitative performance criteria, except for the budget deficit target, which exceeded by a small margin.

Listing positive trends Pakistan registered in recent months, the Fund said the exchange rate has remained stable at Rs 84–85 per US dollar, and the international reserves position has strengthened (the banking system’s gross foreign exchange reserves, including the State Bank and commercial banks, reached $14.3 billion in mid-February, of this total, the State Bank held $10.5 billion).

The early signs of recovery in some sectors and the improved external position are encouraging, although there are risks and challenges to Pakistan’s economic program.

“Economic growth in Pakistan is starting to recover; large-scale manufacturing output has started to increase, the improvement in the global economy has helped manufacturing exports, and private sector credit growth has picked up to some extent as businesses rebuild their working capital.

The IMF’s package for Pakistan - approved in November 2008- has been extended to $11.3 billion. Looking ahead, the IMF statement said, a resumption of higher growth is needed to raise living standards and will require improvements in the business climate to stimulate higher investment by local and foreign investors.

Emphasizing the need for stepped up donors support for the key anti-terror partner of the international community, the Fund said, early disbursement of donor financing remains crucial to support Pakistan’s stabilisation and reform efforts as well as laying the basis for a sustainable growth.

The IMF mission staff will prepare a report on the fourth review under Pakistan’s SBA, which is scheduled for consideration by the IMF Executive Board in late March. APP

Riaz Haq said...

Here's a report from Business Recorder about increasing foreign portfolio investments in KSE:

KARACHI (February 18 2010): A massive single day inflow of $6.1 million of foreign investors' portfolio investment (FIPI) at the local equity market was witnessed on February 17, 2010. "The positive developments on political front encouraged the offshore investors to take fresh positions at the local equity market", analysts said.

According to National Clearing Company of Pakistan Limited (NCCPL) date, the foreign investors bought shares worth Rs 637.86 million while they sold shares worth Rs 119.91 million on Wednesday. The cumulative inflow of this mode of investment has increased to $15.340 million during the first 17 days of the current month as compared to a net inflow of $4.1 million witnessed in the month of January 2010.

Riaz Haq said...

Dr. Ashfaque H. Khan, Dean of NUST Business School, has written a guest post on this blog. Here are some excerpts from it:

" Pakistan positioned itself as one of the four fastest growing economies in the Asian region during 2000-07 with its growth averaging 7.0 per cent per year for most of this period. As a result of strong economic growth, Pakistan succeeded in reducing poverty by one-half, creating almost 13 million jobs, halving the country's debt burden, raising foreign exchange reserves to a comfortable position and propping the country's exchange rate, restoring investors' confidence and most importantly, taking Pakistan out of the IMF Program.

The present government inherited a relatively sound economy on March 31, 2008. It inherited foreign exchange reserves of $13.3 billion, exchange rate at Rs62.76 per US dollar, the KSE index at 15,125 with market capitalization at $74 billion, inflation at 20.6 per cent and the country's debt burden on a declining path. The government itself acknowledged in the same document that "the macroeconomic situation deteriorated significantly in 2007/08 and the first four months of 2008/09 owing to adverse security developments, large exogenous price shocks (oil and food), global financial turmoil, and policy inaction during the political transition to the new government". (Para 3 of the MEFP, November 20, 2008)"

Riaz Haq said...

Here is a recent Dawn report on Karachi stocks performance:

Foreign investment in the staggering sum of $57 million in two weeks, an unusual phenomenon, is acknowledged by brokers and analysts as the engine that has driven the market to the height.

Broker-turned-industrialist Arif Habib said that foreign funds had recognised Pakistan as a lucrative destination because of improved corporate profitability; a respite in internal political feuds, attractive valuations and high yields.

“The Pakistani stocks give out a yield of 5.5 per cent and the shares of profitable companies are trading on price-to-earnings multiple (PE ratio) of seven times the forward earnings. That compares well with the yield of two per cent and p/e ratio of 17 times in the regional markets including India,” Mr Habib said.

Riaz Haq said...

Here's a billion dollar LNG contract scandal uncovered by a complaint of the Fauji Foundation CEO, as reported by The News:

The NA members were told that the petroleum ministry bosses had never recommended to the Economic Coordination Committee (ECC) to give the multi-billion dollar contract to French firm (GDF-SUEZ), whom surprisingly they all were religiously defending now.

It was disclosed that the petroleum ministry had actually recommended the award of the contract to Shell-Qatar, whose bid was higher than the French bid by $1.5 billion. But Shaukat Tarin had thrown this recommendation of the ministry in a dustbin after he learnt that he was being asked to award the contract to a party (Shell), whose bid was higher by $1.5 billion compared to the lowest bidder.

At the end of the hour-long presentation followed by a question-answer session, Chairman MNA Sheikh Waqas Akram, praised the journalist for his comprehensive presentation. Later, MD Fauji Foundation Lt Gen Rab Nawaz was said to have reiterated his old stance that his firm’s bid was the lowest if compared with the GDF-Suez, which was awarded the deal.

The committee met with Chairman Sheikh Waqas in the chair and was attended by MNAs Barjees Tahir, Nawab Yousuf Talpur, Wasan, Khurum Wattoo and others. Petroleum Minister Naveed Qamar, Secretary Kamran Lashari, Special Secretary G A Sabri and MD FF General Rab Nawaz attended the meeting.

Klasra told the committee that his story was based on the minutes of the ECC presided over by then Finance Minister Shaukat Tarin. The minutes had revealed that Tarin had got a telephone call from MD Fauji Foundation that the lowest bid given jointly by FF/Vitol had been rejected and the highest bidder GDF-Suez was given the lucrative contract. Tarin had informed MD FF that he was not aware of any such bidding because the petroleum ministry never shared such information in its official summary tabled before the ECC on Feb 9.

Consequently, Tarin had alarm bells ringing and had ordered a serious probe into the whole issue as to why the bid offered by FF/Vitol was not mentioned in the summary. But the petroleum ministry never replied to the queries of Tarin till he departed from his office at the end of February, much to the satisfaction of the petroleum ministry officials who thought that the issue had been buried but the publication of the scandal by The News shook them.

Petroleum ministry officials had even written a letter to Tarin, informing him that Minister Naveed Qamar had desired that they should not respond to him as he would “personally deal” with this issue. According to Klasra, he had contacted Shaukat Tarin to get his version about these startling developments and the ex-FM had confirmed on record that he was kept in the dark about the joint bid of FF/Vitol, which was claimed to be the lowest.

Tarin confirmed that he got no reply from the Ministry of Petroleum till he left the office. He also claimed that according to his calculation and information, there was a difference of one billion dollars in the bid price of the French company and FF/Vitol, so the country had suffered a loss of a billion dollar.

Minister Naveed Qamar is a close friend and ally of Zardari.

Riaz Haq said...

Seeking Alpha webite is reporting that a Pakistan ETF is in the works.

Global X, the developer of several sector-specific China funds, has filed for several new country-specific funds, continuing its push to develop a line of innovative international funds. Among the most interesting of the batch are funds targeting Norway, Pakistan and the United Arab Emirates. While most details are still not available for these proposed funds, a look at the outline provided in the prospectus of the economies on which they will reportedly focus provides some insights into the risk and return profiles (it should be noted that not all funds for which a prospectus is filed are eventually launched, so it’s entirely possible these ETFs never make it to market).

Riaz Haq said...

Here's an interesting except from analysis of Pakistan, calling it the Next BRIC, by

...much like Russia, Pakistan also has been one of the top-performing stock markets over the past decade. Had you been able to invest in the Karachi Stock Exchange at the turn of the millennium, you'd be sitting on a much bigger pile of profits than, say, if you had invested in the “China miracle.” Pakistan offers yet another lesson in how gleaming skyscrapers offer little guidance in predicting future stock market performance.

Investing in Pakistan: Surprisingly Big

Teeming with 169 million souls, Pakistan is the world's sixth-largest country by population. That makes it smaller than Brazil , but larger that Russia, as well as the “Next BRIC” candidates, Turkey, Mexico, South Korea and Egypt. Bordered by Afghanistan and Iran in the West, India in the East and China in the far Northeast, Pakistan is just about the size of France and the United Kingdom combined.

Pakistan's real per capita GDP of about $1,250 makes your average Pakistani slightly poorer than his counterpart in India -- and far behind the average in booming China. One third of Pakistan's population lives in poverty, and only half of the population is literate. Yet, Standard Chartered bank estimates that Pakistan has a middle class of 30 million that now earns an average of about $10,000 per year. And adjusted for purchasing power parity (PPP), Pakistan's per capita GDP approaches $3,000 per head. But take away that bit of economic affirmative action, and Pakistan's economy drops from the size of New Jersey's down to that of Alabama.

Investing in Pakistan: Edgy Relations with Uncle Sam

In the bad old days of the Soviet Union, Pakistan was a major U.S. ally. That relationship soured after the United States imposed sanctions on Pakistan after it refused to abandon its nuclear program. The “War on Terror” changed all that. After Pakistan ended its support of the Taliban regime in Kabul, American economic and military aid to Pakistan soared to more than $4 billion within three years of the 9/11 attacks. Indeed, American aid has played no small part in helping Pakistan's economy flourish over the past decade or so.

But as with most forms of handouts, gratitude is the least heartfelt of emotions. Anti-Americanism in Pakistan’s free media is just about as virulent as neighboring Iran. The Wall Street Journal’s Pakistan correspondent was ejected from the country after being charged with spying for the United States and Israel. The U.S. State Department advises U.S. citizens not to visit the country and has forbidden the families of its diplomats in Pakistan to visit since 2002.

Investing in Pakistan: A Solid Start to the Millennium

Economically, the first decade of the 21st century has been good to Pakistan. Thanks to economic reforms introduced in 2000 by the former Musharraf government, Pakistan has privatized $5-billion worth of assets, simplified its tax system and attracted large amounts of foreign direct investment (FDI) compared to its GDP. By mid-2005, the Pakistani economy was growing by 8.6%, and the World Bank named Pakistan as the top reformer in its region and among the top 10 reformers globally.

That changed abruptly with the onset of the “Great Recession.” Pakistan's ensuing balance-of-payments crisis and runaway inflation forced the IMF to step in, and offer a $7.6-billion emergency financing package in late 2008. To its credit, the Pakistani government kept its side of the bargain, maintaining its foreign exchange reserves above target and its fiscal deficit below. The Pakistani economic crisis has eased substantially, and in 2010, the economy is expected to grow at least 4%.

... The stock market index in Karachi has risen by more than 1,000% since 1999. And in 2002, Pakistan was the top-performing stock market in the world.

Riaz Haq said...

Here's a recent excerpt from a piece by Dawn columnist Irfan Husain about Pakistan's middle class influencing nation's politics:

While external debt increased from $39bn in 1999 to $50bn in 2009, poverty levels have fallen by over 10 per cent since 2001. Indeed, there are now around 30 million Pakistanis who are considered to be in the middle class with an average income of $10,000 annually, while some 17 million are now bracketed with the upper and upper-middle classes.

Even though this does not approach China’s and India’s spectacular progress in this period, it does represent a solid advance. If one factors in the political turmoil the country has gone through, together with its ongoing insurgencies in the tribal areas and Balochistan, Pakistan’s progress has been impressive by any standard.

How do these numbers translate into day-to-day life in Pakistan? To examine the social transformation the country is undergoing, Jason Burke uses the Suzuki Mehran as a yardstick to measure change. In his ‘Letter from Karachi’ published in the current issue of Prospect, the Guardian reporter writes:

“In Pakistan, the hierarchy on the roads reflects that of society. If you are poor, you use the overcrowded buses or a bicycle. Small shopkeepers, rural teachers and better-off farmers are likely to have a $1,500 Chinese or Japanese motorbike…. Then come the Mehran drivers. A rank above them, in air-conditioned Toyota Corolla saloons, are the small businessmen, smaller landlords, more senior army officers and bureaucrats. Finally, there are the luxury four-wheel drives of ‘feudal’ landlords, big businessmen, expats, drug dealers, generals, ministers and elite bureaucrats. The latter may be superior in status, power and wealth, but it is the Mehrans which, by dint of numbers, dominate the roads.”

This growing affluence has already caused a major power shift, with the urban population now having a bigger say after years of being ruled by feudal landowners. As urbanisation gathers pace, Pakistan’s traditional power elite will increasingly come from the cities, and not from the rural hinterland. This will have a profound impact not just on politics, but on society as a whole. As Burke observes in his Prospect article:

“Politically, the Bhutto dynasty’s Pakistan People’s Party, mostly based in rural constituencies and led by feudal landowners, will lose out to the Pakistan Muslim League of Nawaz Sharif with its industrial, commercial, urban constituency. Culturally, the traditional, folksy, tolerant practices in rural areas will decline in favour of more modernised, politicised Islamic strands and identities. And as power and influence shifts away from rural elites once co-opted by colonialism, the few elements of British influence to have survived will fade faster.”

Often, perceptive foreigners spot social trends that escape us because we are too close to them to see the changes going on around us. For instance, Burke identifies the shift away from English, and sees ‘Mehran man’ as urban, middle class and educated outside the elite English-medium system. He sees Muslims being under attack from the West, and genuinely believes that the 9/11 attacks were a part of a CIA/Zionist plot. Actually, my experience is that many highly educated and sophisticated people share this theory.

Burke continues his dissection of the rising Pakistani middle class: “Mehran man is deeply proud of his country. A new identification with the ummah, or the global community of Muslims, paradoxically reinforces rather than degrades his nationalism. For him, Pakistan was founded as an Islamic state, not a state for South Asian Muslims. Mehran man is an ‘Islamo-nationalist’. His country possesses a nuclear bomb….”

Riaz Haq said...

Here's a case for "Developmental Realism" by Anatol Lieven and John Hulsman:

..... The North African ones are clearly Europe's responsibility. The remainder include Jordan, a Syria which demonstrates some commitment to reform and international responsibility, Bangladesh, a few of the Muslim states of West Africa and the Sahel, and Pakistan. Pakistan is in fact a perfect case for ethical and developmental realism. As repeated democratic failures have shown, this country's dreadful problems are not amenable to solution by the shallow, short-term, and inexpensive nostrums of Democratism; they require profound, and very expensive, long-term commitments on the part of the U.S..1

However, as recent growth figures (in 2005 Pakistan had the second-highest growth rates in all Asia) and infrastructural developments have shown, the Pakistani state, though deeply flawed, is nonetheless reasonably effective - at least as effective, for example, as was South Korea in the 1950s. Despite considerable barriers to Pakistani exports to the U.S., these have grown over the past three years by between 10 and 15 per cent a year. As to Pakistan's own protectionist measures, the U.S. government in early 2006 criticized these, but also praised Pakistan for having "progressively and substantially reduced tariffs and liberalized imports" since 1998. As a result, U.S. exports to Pakistan have also increased steeply. In other words, this is a troubled country with a corrupt bureaucracy, but by no means a basket case.1

So far, however, U.S. assistance to this vital ally has once again been frankly inadequate. By the end of 2006, Pakistan will have received about $3.4 billion in U.S. aid since 9/11. This sounds like a lot but is, in fact, very small in comparison to Pakistan's needs and the size of its population. Moreover, almost half of this aid is not for economic development, but is security-related.1

The biggest single focus of new U.S. aid should be the improvement of Pakistan's water infrastructure, especially in the area of conservation and reducing the appalling degree of waste. As documented by the International Water Management Institute in August 2006, water shortages present the greatest future threat to the viability of Pakistan and other key Muslim countries as states and societies.1

The second focus of U.S. aid to Pakistan should be helping to provide jobs. Improving Pakistan's educational system, especially for women, is important, but if this only produces unemployed and embittered graduates, the effect will be only to increase Islamist radicalism. Because the ultimate motivation for U.S. aid to Pakistan is not charitable but political, it must bring visible benefits to ordinary Pakistanis.

Riaz Haq said...

Here's a report estimating Pakistan's ICT industry at $12 billion in Pakistan:

KARACHI (APP) - The overall size of Information and Communication Technology (ICT) industry in Pakistan has crossed more than $ 12 billion, of which $ 1 billion is foreign direct investment (FDI).
This was stated by the Advisor to PM on Information Technology Sardar Latif Khan Khosa while speaking at the inauguration of 5th Information & Communications Technology Exhibition and Conference - CONNECT 2010 at Karachi Expo Centre here Saturday.
He said Pakistan has one of the fastest growing the tele-density in the world, accelerating at a rate of 63.5 percent, while the neighbouring India is just 37 percent.
Khosa said there are more than 95 million mobile connections in the country and are still growing in numbers. This is exponential growth as mobile telephone market has seen a 14-fold increase since the year 2000, he added.
He said this signifies the importance of ICT sector and the further potential it holds for country’s economy.
He said CONNECT brings to Pakistan a focused event in the dynamic fields of IT and telecom and provides a unique platform to the companies to showcase their products and services.
The Advisor called upon IT professional to reach out entire Pakistan and spread IT in every nook and corner so that the people can take benefit of this dynamic technology.
He also supported the idea for a greater cooperation and interaction between the government, industry and academia to get maximum benefits of information technology. The Advisor pointed out PPP provides a platform for the promotion of IT in the country under its manifesto which envisages support for right of information to the people. This is the vision of Shaheed Mohtarma Benazir Bhutto for IT and other sectors, he added. Later, taking to media, Sardar Khosa said the government has again invited foreign IT companies to restart their business in Khyber-Pukhtunkhawa and Balochistan.
I have asked these companies to identify the quantum of damage to their infrastructure in Khyber-Pukhtunkhawa area due to on-going war on terror. They are also seeking a price differential for broad band expansion, but we have asked them to first start rehabilitation of their infrastructure and we have assured them to look into their demands.

Riaz Haq said...

Other than financial services, other key service sectors with explosive growth in last decade (1999-2009) in Pakistan include media and telecom.

With an increase of 38% over 2008, the television advertising revenue for 2009 in Pakistan was Rs 16.4 billion ((US $200m), accounting for about half of the total ad market during the year. The TV ad revenue is continuing to rise as a percentage of total ad revenue, mostly at the expense of the print media ads. The biggest spenders in 2009 were the telecom companies with Rs 8 billion, followed closely by fast moving consumer goods (FMCG) sector with Rs. 7 billion, as reported by Pakistan's GeoTV channel. FMCG products, as opposed to consumer durables such as home appliances, are generally low cost and replaced or fully used up over a short period of days, weeks, or months, and within one year. Other important sectors contributing to ad revenue are financial services and real estate, but these sectors have experienced significant slowdown with the current economic slump.

According to Daily Times, Chairman Mushtaq Malik of the Pakistan Electronic Media Regulatory Authority (PEMRA) has said that the cable television sector “is the fast growing segment among the electronic media ventures”. In the first 100 days of the current government, he has claimed that new licenses for 16 satellite TV channels, 10 FM radio stations, and 232 cable TV channels have been granted. It is anticipated that this would lead to additional investment worth Rs. 2.5 billion, generating 4000 additional jobs in this sector. The cable television sector alone is employing some 30,000 people in the country.

APP reported that overall size of Information and Communication Technology (ICT) industry in Pakistan has crossed more than $ 12 billion, of which $ 1 billion is foreign direct investment (FDI).
This was stated by the Advisor to PM on Information Technology Sardar Latif Khan Khosa while speaking at the inauguration of 5th Information & Communications Technology Exhibition and Conference - CONNECT 2010 at Karachi Expo Centre here Saturday.
He said Pakistan has one of the fastest growing the tele-density in the world, accelerating at a rate of 63.5 percent, while the neighbouring India is just 37 percent.
Khosa said there are more than 95 million mobile connections in the country and are still growing in numbers. This is exponential growth as mobile telephone market has seen a 14-fold increase since the year 2000, he added.

Riaz Haq said...

Here's an interesting excerpt from a piece about the use of technology in Pakistan written for CNET by a visiting Pakistani tech journalist Zamir Haider at Stanford University:

According to the Ministry of Finance's Economic Survey of Pakistan for fiscal 2005-2006, computer use in urban households is high. In comparison with the literacy rate--53 percent--at least 40 percent of Pakistanis are computer literate or have access to computers.

Mostly, these are Pentium II or Pentium III PCs, since laptops are expensive. PCs are now widely available at good prices, thanks to Chinese computers flooding the markets. Most of these machines are not big brands, but they do say "Intel Inside." As for laptops, they come from various brands like Dell, Toshiba, Compaq, Sony and Apple. Wireless Internet connections, on the other hand, are still rare.

Dialing up through the phone lines
In Pakistan, 99 percent of Internet connections are still over phone lines. Wi-Fi is generally seen only at five-star hotels and now at a few restaurants. People at home usually use Internet cards of various denominations starting from 10 rupees per hour (16 cents) to 100 rupees per 10 hours ($1.60). Connection speeds through Internet cards are generally poor.

Getting permanent Internet connections from an Internet service provider is expensive, but most businesses do get connections from these companies.

Mobile phones are the most common form of personal technology seen in Pakistan. Connecting to the Internet through mobile phones is getting popular now, but it probably will still take another a year or more to be as popular as it is here in California.

People here are excited about the coming of the Apple iPhone. That's what I hear people talking about when I go to any of the mobile phone outlets in San Francisco.

In Pakistan, people aren't that much different when it comes to mobile phones. They're fond of buying expensive cell phones not for technology purposes alone, but also largely to show off.

Riaz Haq said...

By evacuating 250 Pakistani students, and the body one slain Pakistani, in an airlift from Kyrgyzstan, Pakistani government has demonstrated that it cares for its citizens abroad. I see this as a good sign of responsive democratic governance emerging in Pakistan. I hope there will be more signs of it to come, and I expect Pakistani media to continue to play their role in such matters.

Meanwhile, India's foreign ministry has said that 116 Indians - mostly students - were still stranded in southern Kyrgyzstan due to the fighting.

"Everything possible is being done to ensure the safety and well-being of the Indian nationals, within the constraints posed by the difficult ground situation," said the ministry in a statement.

Riaz Haq said...

Here's an interesting opinion by a ferozk at about bad governance being the biggest problem in Pakistan:

In the days ahead, Pakistan's major problem will not be so much as terrorism, or hyper-inflation or a progressively victimized and ignored electorate, but the issues of misgovernance. This issue will compound all the other issues facing and challenging Pakistan and in the process, accelerate the dystopian nature of the Pakistani polity into a complete failure. Pakistan is suffering from an unimaginable crisis of a lack of governance, because there is no government in Pakistan. Period.

It seems that elections of 2008 did not elect a government to power as much as it installed a political party into power. Pakistan Peoples Party is a dysfunctional party, whose loyality is divided between the idolized cult of Benazir Bhutto and the dread of Asif Ali Zardari. Its leadership is centralized within the cabal that supports Asif Ali Zardari and runs the country from the presidency, law ministery and the interior ministery in Islamabad. All the laws and decisons, which affect Pakistan are made in the presidency and the parliament, which is supposed to be the sovereign voice of the people of Pakistan, is ignored.

The government itself is confused. It claims to be a parliamentary government headed by a prime minister but yet appeases a presidential rule. Its ministers are dogged by allegations of corruption made worse by the fact that they are generally incompetent and mostly self-serving individuals. In the last two and a half years that this government has been in power, other than increasing its own sphere of power through the Eighteen Amendment, it never offered a solution to the problems faced by the people. Its battles in the parliament and its policies are designed to prolong its hold on power.

Its silent partner and accomplice in the fraud being perpetuated on the Pakistani people is the Pakistan Muslim Leaque - Nawaz. The PML-N is also confused. Its leader, Nawaz Sharif, seems to be out of his depth, because he only wants to be the prime minister for a third time and does not wish to harm his changes of attaining that position. Nawaz Sharif, like other Pakistani politicans, is a bad leader not because he makes awful decisions, but because he makes no decisions at all! Nawaz Sharif generally follows the politics in Pakistan, hoping to exploit them for his benefit, instead of shaping the politics of Pakistan. In true sense of the word, he is more of a follower than a leader and that too a stunted bonzai leader groomed by his patron the Pakistani military.
Still, this government has to be given the chance to do nothing till 2013, because it will make the people realize the value of their vote and that they should not vote for a political party on the basis of sympathy, but what it will do for them once elected! Since 2008, the people of Pakistan have matured as far as their understanding of what democracy is and for many clowns in power; this is perhaps their last ride on the merry-go-round of power. Granted that there will be slips, but the levels of political expectations in Pakistan are increasing and with that comes a sense of accountibility to hold those in power responsible.

On the whole, things are looking up in Pakistan!

Riaz Haq said...

Here's how Pakistani middle class is helping the flood victims in Pakistan, according to Christian Science Monitor:

Ain-ul-Ghazala, a local Pakistani doctor, says what motivated her to take matters into her own hands came down to what she saw on television. Images of immense misery and destruction brought about by the worst floods in Pakistan in recent memory unfolded before her eyes, and she says she couldn't sit still.

She had noticed hundreds of tents setup on the streets of her hometown, where various groups sought funds and materials. But despite hearing repeated calls for more aid, tales of corruption deterred her from donating to the government or aid organizations, and she didn’t want to give her money to Islamist groups like Jamat-ud-Dawa.

“No one trusts the government anymore, so I wanted to see the situation for myself and do what I could to help,” she explains. As the effects of the disaster wound into a third week, the gynecologist, who works at a private hospital owned by her husband, decided to set off to the flood-afflicted southern Punjab region along with her three adult daughters and one of their friends, also a female medical doctor.

Over the course of two days, they distributed, tents and food, while the two doctors checked in on some 200 patients in Kot Addu, near Muzaffargarh. “There were a lot of people suffering," she says. On top of the health problems, "some didn’t have anything to wear - they were without any clothes,” she says. “We gave iron and calcium supplements to the pregnant women, and ended up seeing a few male patients, too.”
According to Rasul Baksh Raees, head of social sciences at the Lahore University of Management Sciences, the reach and influence of civil society has grown as Pakistan’s middle classes have become more affluent, organized (thanks in no small part to the Internet age), and confident.

In recent years, Pakistan’s civil society has made headlines for its activism. Indeed, students and middle-class professionals joined lawyers in a movement to restore the country’s popular Chief Justice Iftikhar Muhammad Chaudhry, who was removed from office twice in recent years by former military ruler Gen. Pervez Musharraf.

Ms. Ali says she used Facebook to solicit contributions from relatives, friends, and friends of friends both at home and abroad. She raised some $2,300, transmitted either to her mother’s bank account or via Western Union transfers, to spend on "family packs" (food items, flour, cooking oils, sugar, lentils, and candles) for the victims of the flooding in Swat. Mr. Khurram and half-a-dozen friends, meanwhile, organized a couple of truckloads of meals and traveled to Swat to hand over supplies to the Army for distribution.

The group was stranded for three days by landslides but then traveled to the village of Solgarah in Pakistan’s northwest to setup a Tandoor kitchen that would feed 50 families for 10 days.

“Naturally we don’t have enough donations for everyone,” says Khurram. “So we tried to make sure the same families aren’t getting the same stuff again and again.”
The open-source platform was originally created in Kenya and called Ushahidi, Swahili for "testimony." It maps user reports of events sent via text message, e-mail, the Web and Twitter. Explains Mr. Chohan: “We believe the mobile [phone] is the best way to communicate with people in normal conditions as well as disasters. This was tried and tested in Kenya and Haiti. Why not put all this first line of reporting on mobiles in Pakistan?” With more than 90 million mobile phone users, he says, it has the potential to become the largest deployment of Ushahidi anywhere in the world.

Riaz Haq said...

About 60% of India's workforce is engaged in agriculture, contributing about 16% of GDP, according to published data. Textile manufacturing claims the second largest employment and comprises 26% of manufacturing output. It accounts for a fifth of India’s exports, and employs almost 10 percent of India’s workforce, or some 35 million people, and has the potential to add another 12 million new jobs --dwarfing the 1-2 million jobs created by the much-heralded IT and BPO sector, according to a World Bank report. Even the most optimistic estimates by NASSCOM put the total direct and indirect employment in IT and ITES sectors at 10 million jobs.

Agriculture in Pakistan accounts for 19.4% of GDP and 42% of labor force, followed by services providing 53.4% of GDP and 38% employment, with the remainder 27.2% of GDP and 20% workers in manufacturing sector. Over half of Pakistan's manufacturing jobs are in the textile sector, making it the second biggest employer after agriculture.

Here is a quick comparison of different sectors of the economy in India and Pakistan in terms of employment and GDP contribution:

Country....Agri(emp/GDP)..Textiles..Other Mfg..Service(incl IT)

India........60%/16% ...........10%/4%.....7%/25%...........23%/55%


Riaz Haq said...

Here's Pakistani economist Dr. Ashfaque H. Khan writing about "Pakistan: a forgotten economy" in a piece published by The News:

How has that economy been transformed into a forgotten one in just three years? Unfortunately, the economy never featured on the radar screen of the present government. Additionally, the government lacked a credible economic team. In less than three years there have been four finance ministers, four finance secretaries and three governors of the State Bank.

The government wasted time and energy in downplaying the achievements of the previous government, while it lurched from one crisis to another, a rudderless ship with no sense of direction and purpose. The current economic team is weak and lacks the capacity to handle the multidimensional challenges it is confronted with, most of which are self-created.

The country’s economic growth has slowed to an average of three per cent per annum, and unemployment and poverty have risen. Higher double-digit inflation has persisted and items of basic necessity have gone beyond the reach of the common man. The debt burden has reached unsustainable levels and the dependence on donors has grown. Clearly, three years of mis-governance and poor economic management have brought the economy to near-standstill. People have lost confidence in the country’s ability to recover from the ever-deepening economic crisis. The recent unprecedented floods have further aggravated the impact of the economic ills.

It is not only the economy which is in decline. This is true of things in every walk of life. To name just a few, this has been evident in the game of cricket, the inaugural parade at the Commonwealth Games, the Haj operations, the creation of the sugar crisis, the running of public-sector enterprises like PIA, Pakistan Railways, the Steel Mills, National Insurance Corporation and TCP, the crisis in higher education, the deterioration in law and order and the debacle of the recently concluded Pakistan Development Forum (PDF).

The PDF meeting requires special mention. The PDF, the reincarnation of the Aid to Pakistan Consortium, is jointly chaired by the World Bank and the Government of Pakistan, represented through its finance minister. The purpose of this forum is to provide a platform to the government where it can present its economic and social reforms agenda before visiting delegations. The PDF has never been a platform for pledging assistance. Unfortunately, this forum was transformed into a pledging forum because every minister, even the prime minister, made statements about the financial loss caused by the floods and asked for financial support. The minister of interior even pleaded for a debt write-off.

It is unfortunate that we have turned every international forum, including Friends of Democratic Pakistan (FODP), into an opportunity for begging. No self-respecting nation begs forever. A beggar cannot command respect in the comity of nation. Continuing to do so, Pakistan risks nothing less than global oblivion. How long can we keep on begging like this? Is this the fate to which the people of Pakistan must resign themselves?

Riaz Haq said...

Here are some excerpts from an Op Ed in Newsweek Pakistan by Meekal Ahmed, a former IMF official:

The government hopes to generate Rs. 53 billion during the last quarter of the current financial year, which concludes on June 30. It hopes to achieve this by imposing a 15 percent surcharge on income tax paid by Pakistan’s paltry 1.7 million registered, individual taxpayers. Given the small tax base and modest yield, the surcharge seems unfair and not worth it. In a move that is regressive and potentially inflationary, depending on the market, excise duty on certain import items has been increased from 1 percent to 2.5 percent until end-June. While these measures are better than doing nothing at all—which is what happened during the first three quarters—they are far from ideal, and don’t go far enough to address the big problems with the economy.

But it’s not all bad. The elimination of tax exemptions for agricultural inputs (including tractors, fertilizers, and pesticides) was long overdue. With a strong agro-lobby preventing taxation on their handsome incomes in a sector that contributes 21 percent of GDP, the government might as well tax the inputs. Tax exemptions for export quality textiles sold within Pakistan have also been nixed despite resistance from the fierce textile lobby. The freeze on additional hiring in the public sector, and the 50 percent cut in several spending categories should also be welcomed.

Then there is the profusion of what many Pakistani media outlets call “petrol bombs”—highly unpopular oil price adjustments at the start of each month. The government announces the adjustments, and then rolls them back under popular and political pressure. The fuel price adjustments are unavoidable. Pakistan is a net oil importer and can’t insulate itself from global price shocks. Oil prices have risen steeply in the last three months, and have now crossed the psychologically important 100-dollar mark. Pakistan’s fuel subsidies—at an estimated Rs. 5 billion per month that could have been spent on development—are unaffordable and unsustainable. Oil prices will remain high for a while. Pakistanis must adjust to this reality. .....
Despite the new measures, doubts remain about the revised tax-revenue targets and the state’s capacity to achieve them. The Federal Board of Revenue is notorious for its chronic underperformance. The justification that there is a tax revenue shortfall because the economy is in recession holds no water. An economy expected to grow at around 3 percent is not, technically speaking, in recession, but is growing below its potential. There is no cycle for fiscal revenues in Pakistan: whether the economy grows at 3 percent or 7 percent, whether inflation is 2 percent or 25 percent, tax revenues fail to keep up. If they did not, there would be a constant tax-to-GDP ratio, which is actually falling. This trend points to the existence of deep-rooted structural deficiencies in the tax system, which is regressive, anti-poor and plagued by too many exemptions and concessions. Then there’s also corruption, abuse of the system, and evasion. Even taxes withheld at source are not deposited in the government’s account because of alleged connivance between withholding agents and tax officials.

Riaz Haq said...

UN Human Development Report 2010 shows that Pakistan ranks among the top 10 movers in HDI in the decade of 2000-2010.

See table 3 in Let's Talk Human Development.

Riaz Haq said...

The Times Higher Education Supplement for 2011 ranks 6 Pakistani universities among the top 100 Asia for Life sciences and Bio medicine.

NUST ranks 60, UET-Lahore 65, Karachi University 68, University of Lahore 73, Punjab University 91 and Quaid-e-Azam University Islamabad at 94.

On THES IT and Engg rankings, there are 4 Pakistani universities: NUST is 47, Univ of Karachi 91, University of Lahore 89, UET Lahore 90.

Riaz Haq said...

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

Increased load shedding in Pakistan alone has cost 400,000 jobs in recent years, according to the World Bank. Although the World Bank report does not address it directly, the anecdotal evidence suggests that almost all of Pakistan's job growth for the decade occurred from 2000-2007 when the economy showed robust gdp growth. During 2000-2007, Pakistan's economy became one of the four fastest growing economies in Asia with its growth rate averaging 7.0 per cent per year for most of this period. As a result of strong economic growth, Pakistan succeeded in reducing poverty by one-half, creating almost 13 million jobs, halving the country's debt burden, raising foreign exchange reserves to a comfortable position and propping the country's exchange rate, restoring investors' confidence and most importantly, taking Pakistan out of the IMF Program. Contrary to its public criticism of the Musharraf-era economy, the preceding facts were acknowledged by the current government in a Memorandum of Economic and Financial Policies (MEFP) for 2008/09-2009/10, while signing agreement with the IMF on November 20, 2008.

Riaz Haq said...

Online News: Half of Pakistan’s population may live in cities by 2030

ISLAMABAD: More than half of Pakistan’s population is estimated to be living in cities by the year 2030. Both natural increase and net migration are major contributory factors to urban growth.

These views were expressed by participants of a seminar on “Business and the Middle Class in Pakistan organized by the Planning Commission of Pakistan which was held here on Wednesday.

The seminar included speakers and discussants from some of the largest companies and businesses in Pakistan, coming together to discuss the importance of the evolving middle class in Pakistan.

The participants said that current urban growth rate was approximately 3.5 per cent as compare to 2 per cent nationally. More rural people are migrating to urban centers for higher-paying jobs. Upward social mobility creating and expanding the middle class.

Given the low median age, Pakistan’s middle class is unusually young as compared to developed economies, meaning that younger population will have the most disposable incomes.The expanding middle class consumers will aim for first world aspirations and greater focus will be on branded retail products. The middle class has been growing in number as well as in importance all over the world, which is why businesses strategize targeting this specific class.

The participants said that the middle class is conceptually defined as the class between the rich and the poor; however its boundaries are usually made arbitrarily. It is also important to note the multi-dimensionality of an adequate definition; a person belonging to the middle class needs to be evaluated not only on a monetary basis, other aspects of quality of life and available opportunities need to be encapsulated to arrive at a well rounded definition.

They said that studies show a positive relationship between the higher share of income for the middle class and economic growth as well as political aspects like democracy. Other studies indicate the emergence of entrepreneurs from the middle class. It is the middle class that was the driver of success in India and China.

They said that the biggest opportunity of the rising middle class, at present and future will be for companies selling mass-consumer goods and services. As incomes rise spending patterns will incorporate discretionary and small luxury items while proportionate expenditure on food, clothing and other necessities tend to shrink.

While the basics may decline as a share of consumption, in absolute terms they will continue to grow. Housing, healthcare and educational expenses are expected to register a greater share of the wallet – this spending will be driven by the strong link between education and higher salaries, as well as growing number of options for both higher and vocational education.

Riaz Haq said...

Here are highlights of a presentation on Pakistan's cement manufacturing sector:

Beginning with just 500,000 tons in 1947, Pakistan's cement production almost tripled from 16 million tons in 2000 to 44 millions in 2010.

At 145 Kg per person, Pakistan's cement consumption is up from 75 Kg in 2003, but still about half of the world per capita consumption average of 270 Kg.

Riaz Haq said...

Pakistan ID boss to head UNDP digital transformation committee as World Bank mulls funding | Biometric Updat

World Bank considers $78M project for digital public services
Malik has previously worked on identity projects with both the World Bank and UNDP. ProPakistani reports that the World Bank will consider the US$78 million ‘Pakistan: Digital Economy Enhancement Project’ that seeks a more holistic approach to digital government services for citizens and businesses.

While Pakistan has relatively robust national ID and payment systems (with links to improve service and inclusion), a lack of interoperability frameworks has limited public and private efforts for secure data exchange.

The country lacks certain elements of digital infrastructure and digital government, notes the report, though acknowledges that nearly four million citizens have been a smartphone app called the Pakistan Citizen’s Portal for accessing services or submitting grievances.

A data protection bill is still in draft form and requires more work, finds the World Bank documentation. Together these issues mean a lack of implementation support for digital projects, despite policy instruments at the federal and provincial levels. World Bank analysis therefore finds opportunities are being missed in the country’s digital transformation.

A recent opinion piece in Pakistan Today also covered elements of progress in the digital economy in the country.

Property registrars go biometric in Sindh province
All offices of the Sub-Registrar Property in Sindh province will be equipped with biometric identity verification systems to prevent impersonation in property registration, reports The Express Tribune.

NADRA Technologies Limited (NTL), a subsidiary of NADRA, signed an agreement with the Board of Revenue Sindh in Karachi, the province’s largest city. The system will be linked to the NADRA database and used to check the identity of property buyers and sellers.

The development of such systems was reported on in July 2022, with a similar biometric verification system slated for the Capital Development Authority.

Riaz Haq said...

1,800 TCF schools: Jazz digitally enabling TCF to implement tech-enabled learning - Pakistan - Business Recorder

KARACHI: Jazz, Pakistan’s leading digital operator and a part of VEON Group, is digitally enabling The Citizens Foundation (TCF) to implement tech-enabled learning across 1,800 TCF schools and ensuring an advanced learning experience for over 250,000 students nationwide.

As part of this initiative, 23 computer labs have already been revamped, and a school management app has been introduced in all TCF schools, offering efficiency, transparency, and accuracy of data collection and management for all students, faculty, and non-faculty employees.

The blended learning solution for primary students is an innovative approach that combines online and offline education to provide a more interactive and engaging learning experience, while the computer curriculum under DLP (Digital Literacy Program) for grades 6-8 is specifically designed to equip students with digital-age skills.

The digitization initiative also facilitated the translation of books and learning materials for grades 6 and 7 into Urdu, creating a bilingual curriculum, along with a scripted bilingual lesson plan. In addition, 700 Android phones were delivered to schools across the entire TCF network, which aided in implementation of blended learning program.

Commenting on the initiative, Jazz CEO Aamir Ibrahim said, "We are proud to have collaborated with TCF on this important initiative to digitize schools and provide students with access to the latest technology. Driven by the impetus to digitally empower youth and to assist the Government of Pakistan in realizing its Digital Pakistan vision, Jazz continues to club its resources and expertise in creating long-term, sustainable solutions and partnerships that uplift individuals and the larger community."

Additionally, the female teacher training program is a crucial part of the grant as it will digitally empower women to take on more leadership roles and optimize their performance, which has been a key focus area for Jazz toward building an integrated and equitable society.