Sunday, February 27, 2011

Economic Impact of Arab Revolt on South Asia

Much is being written about the potential for the spread of political upheaval that started in Tunisia and recently led to the end of the 30 years rule of the Egyptian dictator Hosni Mubarak. Most of the commentary and punditry has so far been focused on potential political instability forced by possibly massive street protests.

Political fall-out from the events in Tunisia and Egypt has already engulfed the Middle Eastern nations of Bahrain, Libya and Yemen. However, little attention has so far been paid to the more immediate impact of spreading trouble in the oil-rich Middle East on developing nations in South Asia and elsewhere.

Crude oil prices have been rising for some time but the fears of the spread of the political unrest have accelerated the rate of increase. The price of crude has already crossed the crucial $100 a barrel mark with the Libyan crisis in full bloom. South Asian economies are keeping a close eye on the situation in Africa and Middle East but still remain unaffected in receiving their oil supplies through this region. Any further spread of the unrest into GCC countries, particularly Saudi Arabia, could have a huge impact on the health of South Asian economies.

According to the World Bank's Immigration and Remittances Factbook 2011, the top remittance sending countries in 2009 were the United States, Saudi Arabia, Switzerland, Russia and Germany. Worldwide, the top recipient countries in 2010 were India, China, Mexico, Philippines and France, according to Dawn News. In South Asia, the top five remittance receiving nations in 2010 were: India ($55.0 billion), Bangladesh ($11.1 billion), Pakistan ($9.4 billion), Sri Lanka ($3.6 billion), and Nepal ($3.5 billion).

Pakistan's exports to the Middle East add up to several billion dollars a year. The United Arab Emirates alone imported $1.7 billion worth of Pakistani products last year, according to Arabian Business.

Relatively stable energy prices and rising exports and surging remittances have helped South Asian nations in 2009-2010. But this could all unravel with rising oil import bill combined with the fall of inflows from worker remittances and decline in exports to the Middle East region. India and Pakistan are already running significant current account deficits, and experiencing high rates of inflation exacerbated by rising food and energy prices since late 2010. The economic hardship, particularly high food prices and unemployment, could become a catalyst for serious political turmoil in South Asia in 2011 and beyond.

Related Links:

Haq's Musings

Pakistan's Economy 2008-2010

Pakistan's Rising Exports and Remittances

Indian Economy: Hard or Soft Landing in 2011?

China's Trade and Investment in South Asia

India's Twin Deficits

Inflation Hits India

Goldman Sachs India Warning on Twin Deficits

India's Nov 2010 Imports, Exports

Friday, February 25, 2011

American Military Presence Destabilizing "Af-Pak"

“What we figured out is that people in the Pech (Afghanistan) really aren’t anti-U.S. or anti-anything; they just want to be left alone. Our presence is what’s destabilizing this area.”

The above quote is attributed in today's New York Times to US military sources explaining their decision to withdraw from a valley in Afghanistan's Kunar province.

This decision follows the killing of 65 civilians, including 50 women and children, in a recent NATO air strike in the Kumar province, as reported by the BBC. As is normal in such increasingly frequent incidents, the US and NATO disagree with the Afghan government and deny civilian deaths. But Afghans are convinced that NATO routinely bombs and shoots innocent people - and that belief is one of the things that keeps the insurgency alive.

I think the conflicting Afghan and American narratives of such incidents can easily be extended to what is happening in US predator strikes in Pakistan's FATA region. Such strikes from the sky are creating a much more dangerous situation by killing many innocent civilians and fueling the revenge attacks that are destabilizing nuclear-armed Pakistan.

Research by New America Foundation found that civilians made up 32 percent of deaths from drone strikes in Pakistan. This count appears to be low, as its data is taken from major U.S. and English-language Pakistani news outlet reports and accepts their characterizations of "civilians" and "militants."

The Campaign for Innocent Victims in Conflict (CIVIC) conducted an on-the ground investigation of American drone strikes (from 2009 and early 2010), and concluded that the nine attacks they surveyed produced a total of 30 civilian deaths (10/10). The CIVIC report points out that Pakistani media outlets, based on government figures, put the civilian death rate from drones at about 90 percent.

The increasing deaths of innocent civilians from American CIA drones are not helping enhance the security of the Americans or Pakistanis. On the contrary, such illegal and immoral tactics are fueling more revenge attacks by suicide bombers in Pakistan. It's become a macabre war of the drones pitting American Predators and Reapers on one side against the suicide bombing human drones on the other side, with devastating carnage of mostly innocent civilian Pakistanis. There has been at least one case of Times Square bomber Faisal Shahzad who cited drone deaths in Pakistan as his reason for wanting to harm innocent American civilians.

It is time for the US to recognize that its continued military presence and CIA's covert war "is what’s destabilizing” not just a small valley in Kunar province but the entire region. The people in the region are not inherently "anti-U.S. or anti-anything; they just want to be left alone". And the sooner America recognizes this reality, the better it will be for the peace and security of the Americans and the people of the entire "Af-Pak" region.

Related Links:

Haq's Musings

Can US Afghan War Remake Pakistan?

Blackwater Bribing in Pakistan?

Jihadis Growing in Tenth Year of Afghan War

Valuing Life in Afghanistan and Pakistan

US Fighting to Stalemate in Afghanistan?

$50 Million Per Dead Taliban

Obama's High-Tech Warfare

Newsweek Defends Drone Hits

Campaign For Innocent Victims in Conflict

Wednesday, February 23, 2011

Philanthropy Lagging in India and Pakistan

Indian billionaire Azim Premji and Pakistani billionaire Malik Riaz Husain have recently made news by their generous pledges to help their disadvantaged fellow South Asians.

While Premji, the third richest among India's 50-odd billionaires, has announced $2 billion donation to improve public education, billionaire Malik Riaz has pledged 75% of his wealth to help Pakistan's flood victims rebuild.

Prior to Premji's $2 billion pledge, the biggest philanthropist in India was Bill Gates, an American, whose foundation is contributing $1.6 billion to help India's poor.

Beyond these high-profile pledges, the state of philanthropy in South Asia, especially in India, is not particularly healthy. Charity contributions in India make up only 0.6% of GDP, significantly lagging behind 2.2% in the United States, 1.3% in the UK, 1.2% in Canada, and 1% of GDP in Pakistan, according to data reported by Bain & Company, and Pakistan Center for Philanthropy.

Pakistanis contributed Rs.140 billion (US$1.7 billion), nearly 1% of the nation's gross domestic product of $170 billion in 2009, according to PCP. Their donations help organizations like Khana Ghar that feeds the hungry, Edhi Foundation which operates non-profit ambulance service and Human Development Foundation which builds and operates schools and clinics for the poor.

Indians gave $7.5 billion to charities, about 0.6% of India's GDP. The donations supported Indian organization like Akshaya Patra which feeds the hungry, and Premji's Foundation that is helping improve primary education to shift away from rote learning to creative thinking.

One of the measures of the goodness of a nation, particularly its middle class, is its level of civic engagement.

By this measure, advanced western nations lead the pack with the United States in #1 position, followed by Ireland, Australia, New Zealand, Britain, Holland, Canada, and lo and behold! Sri Lanka.

In South Asia, Pakistan is a distant second to Sri Lanka's 51% participation rate. Pakistan's participation rate of 42% ranks it at 27, the same as Israel.

India lags far behind with the participation rate of only 28% ranking it at 48 among 130 nations, according to a recent Gallup poll on civic engagement that included 130 nations.

While 53% of Sri Lankans gave money to charity and 53% volunteered time, 51% of Pakistanis contributed money and 27% volunteered time. In India, 28% donated money and 18% volunteered time. Comparable figures for the top-ranking United States are 65% and 43%.

Although South Asians are more generous than the Brazilians (0.3% of GDP) and the Chinese (0.1% of GDP), charity continues to lag in South Asia (Pakistan 1%, India 0.6%) in spite of the rising number of high net worth individuals and families. Bain research shows that nearly 40 percent of India's wealth is controlled by the top 5 percent of India's households. And the top 1% of Indians control about 16% of India's wealth.

The growing disparities created by the heavily skewed benefits of economic growth accruing to a few creates the potential for serious social unrest, unless the newly rich begin to share their wealth to address the widespread hunger, poverty and deprivation in South Asia. I think it is time for the rich in India and Pakistan to begin to emulate the fine example of generosity being set by Premji and Malik Riaz.

Here's a video clip of Malik Riaz's interview with CNN:

Related Links:

Haq's Musings

How Can Overseas Pakistanis Help Flood Victims?

Light a Candle, Don't Curse Darkness

Pakistan Center for Philanthropy

An Overview of Indian Philanthropy

Aaker Patel on Philathropy

Orangi Pilot Project

Three Cups of Tea

Volunteerism in America

Dr. Akhtar Hamid Khan's Vision

Saturday, February 19, 2011

Pakistan Launches Wind Power Projects

As part of its effort to tap renewable energy sources to solve its painful black-outs and brown-outs, Pakistan has recently launched several wind-farm projects expected to produce over 250 MW of power within the next two years.

The Asian Development Bank has agreed to a loan to help fund the first privately owned and financed wind farm in Pakistan. The output from the plant will provide much-needed additional power for Pakistan, improve the country’s energy security, and lower reliance on fossil fuels. Zorlu Enerji Electrik Uretim, will use the $36.8 million loan to install wind turbines to increase the output of its wind farm – located in the southern Sindh province, 100 kilometers northeast of Pakistan’s commercial hub of Karachi – from the current 6 megawatts to a total of 56.4 megawatts. The existing 6 megawatt wind farm project is currently selling power to the Hyderabad Electric Supply Company. Once the second construction phase is complete – expected in 2012 – the 56.4 megawatt wind farm will supply power to the national grid through a 20-year take-or-pay power purchase agreement with the National Transmission and Dispatch Company. The approved tariff will ensure that the electricity is priced competitively, with the rate dropping over time as project debt is paid down.

Wind Farm at Jhimpir, Sindh, Pakistan

Pakistan has entered into another agreement to build a $375 million wind farm to produce 150 megawatts of electricity near Karachi, its largest industrial city, according to a report in the Express Tribune. It is scheduled to be completed in two years by AES Corporation, a US company, with assistance from US Agency for International Development. The project would be set up at three sites in the Gharo Corridor in Thatta district of Sindh.

FFC Energy, a subsidiary of Pakistan's Fauji Fertilizer Company, is also building a 50 MW wind farm in Jhimpir near Karachi, at a cost of $130 million, according to Reuters. Nordex AG announced that it has signed a contract with FFC Energy Limited, Rawalpindi, for the delivery of a 50 megawatts (MW) wind farm. Known as Jhimpir, the wind farm is to be built in the province of Sindh, where Pakistan is planning to establish new capacity of around 4,600 megawatts. The average wind speed at the site of the planned project is 7.8 meters per second. FFC has therefore opted for the Nordex S77/1500 series, which is specially designed for medium-strong wind conditions. Nordex AG will be supplying hot climate versions of the turbines, which are to be produced at its facilities in China. The 33 turbines are to be delivered soon after tariff approval from NEPRA (National Electric Power Regulatory Authority) and signing of the energy purchase agreement. Nordex has obtained a Letter of Intent for another 100 MW of wind farms from the government.

Pakistan is fortunate to have something many other countries do not, which are high wind speeds near major population centers, according to data published by Miriam Katz of Environmental Peace Review.

Near Islamabad, the wind speed is anywhere from 6.2 to 7.4 meters per second (between 13.8 and 16.5 miles per hour). Near Karachi, the range is between 6.2 and 6.9 (between 13.8 and 15.4 miles per hour).

In Balochistan and Sindh provinces, sufficient wind exists to power every coastal village in the country. There also exists a corridor between Gharo and Keti Bandar that alone could produce between 40,000 and 50,000 megawatts of electricity, says Ms. Katz who has studied and written about alternative energy potential in South Asia. Given this surplus potential, Pakistan has much to offer Asia with regards to wind energy. In recent years, the government has completed several projects to demonstrate that wind energy is viable in the country. In Mirpur Sakro, 85 micro turbines have been installed to power 356 homes. In Kund Malir, 40 turbines have been installed, which power 111 homes. The Alternative Energy Development Board (AEDB) has also acquired 18,000 acres for building wind farms.

In addition to high wind speeds near major centers as well as the Gharo and Keti Bandar corridor, Pakistan is also very fortunate to have many rivers and lakes. Wind turbines that are situated in or near water enjoy an uninterrupted flow of wind, which virtually guarantees that power will be available all the time. Within towns and cities, wind speeds can often change quickly due to the presence of buildings and other structures, which can damage wind turbines. In addition, many people do not wish for turbines to be sited near cities because of noise, though these problems are often exaggerated.

Pakistan's Alternative Energy Development Board (AEDB) is trying to boost local private investment in alternative energy by offering incentives and access to wind turbine makers and operators such as Siemens, Nordex SE, Coolwind, SWEG and General Electric, according to Reuters.

Nordex in March agreed to supply Fauji Fertilizer Company (FFC) with turbines for a 50 MW farm in the southern Sindh province.

To attract private investors, AEDB's Arif Alauddin said the government is guaranteeing an annual rate of return of up to 18 percent and will pay power producers if the wind blows below an annual average of 7.3 meters per second.

AEDB has already allocated land for 18 independent power producers for wind power projects of 50 MW each. The U.S. Agency for International Development has plans to help Pakistan develop wind farms to generate 300 MW by the end of 2014.

"You cannot expect changes overnight. It'll take time. But we believe some 10,000 MW would be coming through wind in the next five to 10 years," Alauddin told Reuters.

AEDB is carrying out national wind mapping for possible farms in other locations such as southwestern Baluchistan and northwestern Khyber-Pakhtunkhwa.

While 250 MW of windpower is very modest to fill the current supply-demand power gap of thousands of megawatts, it does represent a good start toward serious use of renewables to generate electricity in Pakistan. Given the uncertainty about cost, availability and environmental impact of hydrocarbons, it is important for Pakistan to rapidly diversify into renewables such as water, wind and sun.

Here's a video of Late Ambassador Holbrooke signing a wind-farm funding agreement with Pakistan in November, 2010:

Here's a video report on Pakistan's first windfarm near Karachi:

Here's a CNBC Pakistan video on KESC's power projects:

Related Links:

Haq's Musings

Renewable Energy to Solve Pakistan's Electricity Crisis

Electrification Rates By Country

Wind Turbine Manufacturing in Pakistan
Pakistan Pursues Hydroelectric Power Projects

Solar Energy for Sunny Pakistan
Wind Power Tariffs in Pakistan

Pakistan's Twin Energy Shortages

Pakistan Council of Renewable Energy Technology

Renewable Energy for Pakistan

Abundant Cheap Electricity From Pakistani Coal

Pakistan Policy on Renewable Technology

Sugarcane Ethanol Project in Pakistan

Community Based Renewable Energy Project in Pakistan

Thursday, February 17, 2011

US Says American Human Life is Worth $ 9.1 Million

The US Department of Homeland Security assesses the value of an American human life lost to terrorism at double that of a death from any other cause.

The value of human life in America is periodically assessed by various US government departments and agencies as part of the effort to justify the cost of safety regulations. For example, the US Department of Transportation (DOT) has used values of around $6 million per death to justify recent decisions to impose regulations that require stronger roofs on cars.

The values range from $7.9 million per victim at the Food and Drug Administration (FDA) to $ 9.1 million at the Environmental Protection Agency (EPA), according to a report in NY Times.

The American government's concern for human life in America is quite laudable. But it raises another question: How do American policies and actions abroad value human lives in places like Afghanistan, Iraq, Pakistan, Palestine and Yemen? Why are they focusing their energies on optimizing the methods and costs of killing people more efficiently in these places and not valuing innocent lives? Why the double standard? And why are the mainstream American media, like Newsweek which justifies these killings, complicit in this ongoing murder of the innocents?

Let's take the case of innocent victims who are dying in "targeted" assassinations by the American CIA Reaper and Predator drones in Pakistan.

Research by New America Foundation found that civilians made up 32 percent of deaths from drone strikes in Pakistan. This count is appears to be low, as its data is taken from major U.S. and English-language Pakistani news outlet reports and accepts their characterizations of "civilians" and "militants."

The Campaign for Innocent Victims in Conflict (CIVIC) conducted an on-the ground investigation of American drone strikes (from 2009 and early 2010), and concluded that the nine attacks they surveyed produced a total of 30 civilian deaths (10/10). The CIVIC report points out that Pakistani media outlets, based on government figures, put the civilian death rate from drones at about 90 percent.

The increasing deaths of innocent civilians from American CIA drones are not helping enhance the security of the Americans or Pakistanis. On the contrary, such illegal and immoral tactics are fueling more revenge attacks by suicide bombers in Pakistan.

It is time for the US to cease such strikes and adequately compensate those innocent individuals and families who have suffered from the brutal attacks from the sky.

Here's a video clip of CIVIC report on innocent civilian victims of US drone hits:

Related Links:

Haq's Musings

Valuing Life in Afghanistan and Pakistan

$50 Million Per Dead Taliban

Obama's High-Tech Warfare

Newsweek Defends Drone Hits

Campaign For Innocent Victims in Conflict

Sunday, February 6, 2011

British Pakistani Housewife on No-Fly List

A British officer has recently been fired for putting his Pakistani wife on a terror watch-list, according to a report in The Daily Mail.

He used his access to security databases to include his wife on a watch list of people banned from boarding flights to Britain because their presence in the country is "not conducive to the public good".

As a result the woman was unable for three years to return from Pakistan after traveling to the county to visit her family.

The act went unnoticed until the immigration officer was selected for promotion and his wife's name was found on the suspects' list during the vetting process.

The British Home Office said that the officer has been fired for gross misconduct.

This is not the first time that questions are being raised about the no-fly list. The process of adding names to the list has been a mystery since it was first launched in September, 2001. It contains names of little children, and of people who have long been dead.

Officially, the process to add or delete people from the list has been a closely guarded secret, with only bits of information made public during US congressional hearings, according to Wired magazine.

Even though the list has grown, but it did not contain the name of airline passenger Umar Farouk Abdulmuttalab, according to ABC news. The Nigerian tried to bomb a Detroit-bound Northwest airlines flight on Christmas Day using explosives packed in his underwear.

Here is how Wired magazine and AP have described the process:

The first step might be a simple tip to law enforcement or an intelligence agent or may come from information gleaned from a wiretapped conversation. The tip is submitted to the National Counterterrorism Center in Virginia, where it’s entered into a classified database known as Terrorist Identities Datamart Enterprise, or TIDE. The database might include a suspect’s name and relatives and associates. About 2 percent of the names in the database belong to Americans.

Here information is data-mined to connect dots and flesh out partial names and identities. If enough information can be connected to a Terrorist Watchlist target, it’s escalated to the Terrorist Screening Center, also in Virginia, for more analysis. About 350 names are sent to the screening center daily.

Depending on what the analysis turns up, a suspect might wind up on the FBI’s terror watchlist, which includes the names of about 418,000 people — including a New Jersey eight-year-old who regularly gets frisked at the airport. Airport security personnel use the list to single out some travelers for extra screening or interrogation, and the watchlist is also used for screening U.S. visa applicants and gun buyers, as well as suspects stopped by local police.

To get on this list, there must be “reasonable suspicion” that the person is involved in terrorism, according to the AP. People whose names are on this list are singled out for questioning at U.S. borders, but they can still fly. A Justice Department inspector general report last year found that the FBI was mishandling the watch list and failing to add legitimate suspects under terrorist investigation to the list; at the same time not properly updating and removing records from the list so some U.S. citizens are subjected to unjustified scrutiny.

In order to get on the no-fly list, authorities must have the suspect’s full name and age and have information indicating that the suspect is a threat to aviation or national security. The final decision for adding a name to the no-fly list rests in the hands of about six people from the TSA, the AP said.

At this point, a suspect can either be added to a “selectee list,” a list of about 18,000 people who are singled out for extra screening at airports or be put on the no-fly list. Not all people on the no-fly list are prevented from flying, however. Sometimes authorities allow them to travel unimpeded, but place a tail on them to monitor their activity, the AP said.

Originally intended to be a serious intelligence document, FBI agent Jack Cloonan told CBS that the No Fly List has become a "cover your rear end" document designed to protect bureaucrats and make the public feel more secure.

"I know in our particular case they basically did a massive data dump and said 'Ok anybody that’s got a nexus to terrorism, let’s make sure they get on the list,'" Cloonan explained. "And once that train left the station, or once that bullet went down range. There was no calling it back. And that is where we are."

Related Links:

Haq's Musings

FBI Entrapping Young Muslims in Phony Terror Plots

Unlikely Terrorists on the Watch List

Early Anthrax Probe of Pakistani-Americans

Inside the Mind of Times Square Bomber

Home-grown Terror Plots Seen as FBI Entrapment

Milgram's Experiments on Obedience to Authority

Tuesday, February 1, 2011

India at Davos: Story of Corruption and Governance Deficit

Brand India has lost its luster at Davos in 2011!

Poor governance and corruption are endemic in India, and have been the talk of the town at Davos this year, tarnishing the meticulously crafted image of "Shining India" at the World Economic Forum since 2006. The immediate effect is that that India's foreign direct investment (FDI) is already down by a whopping 36% in 2010 from 2009, and there is no recovery in sight yet. Meanwhile India's current account deficit is exploding, accounting for about 3.5% of GDP.

In 2006, the "India Everywhere" campaign orchestrated by Indian planning commission officials and the Confederation of Indian Industry (CII) dominated the ambiance of the World Economic Forum at Davos, Switzerland. They spent two years and more than $4 million and put together an elaborate marketing and PR campaign to ensure that the "India story" got prominent play and did not get drowned in the noise at Davos. The success of the initiative was apparent by the dramatic increase in FDI inflow to India which doubled from less than 1% of GDP to nearly 2% of the expanded GDP in 2008.

Here is how Times of India reported the scene from Switzerland in 2006:

For once, India is really everywhere at Davos. With the 35th World Economic Forum (WEF) opening at the Swiss mountain resort, one cannot help but notice India Everywhere.

Right from the moment you step off the aircraft at Zurich airport, big hoardings proclaiming India greet you. Upon reaching Davos, located about 150 km from Zurich, the Indian colours are just about everywhere.

In fact, you see more of India than Switzerland in Davos this year.

The buses wear Indian colours, the bus shelters have Indian advertisements, and key bars, pubs and hotels in the city where the economic meet began Wednesday evening are serving up Indian snacks and Indian wines and beer.

Reports from the World Economic Forum at Davos in 2011 offer a very different narrative.

Coming after the massive multi-billion dollar telecom corruption scandal in 2010 and expression of deep concern by some prominient India businessmen about the nation's governance deficit in 2011, India's presence at the World Economic Forum 2011 was decidedly lower key when compared with the heady days of 2006.

Summing up the sentiment at Davos, an Indian journalist opined as follows: "..such a forthright disregard for the so-called "India story" may understandably offend nationalist sentiments and bring on the "west versus rest" polarization that keeps many public intellectuals in business. But the harsh truth is that India has been sold, resold and re-re-sold in so many samosa and Sula evenings that it has lost novelty."

Here's a video clip on India's massive corruption:

Related Link:

Haq's Musings

Indian Economy: Hard or Soft Landing in 2011?

Pakistani Economist Saadia Zahidi at World Economic Forum

Inaction Against Corruption in South Asia

2G Corruption Scandal in India

Musharraf at Davos 2008

Imran Khan at Davos 2011

Delhi in Davos: How India Built its Brand at the World Economic Forum

FDI India, Pakistan, China and Vietnam 2003-2010

China's Trade and Investment in South Asia

India and Pakistan at Davos 2009

India's Twin Deficits

Pakistan's Economy 2008-2010

Inflation Hits India

Goldman Sachs India Warning on Twin Deficits

India's Nov 2010 Imports, Exports