Monday, May 16, 2022

Pakistan: The Only Country in Asia With Birthright Citizenship

Pakistan is the only country in Asia that recognizes citizenship as a birthright. Only one in four nations in the world grant citizenship to all those born within their borders, according to a review of the nationality laws reviewed by EUI Global Citizenship Observatory.  Instead of birthright citizenship, the majority of countries today have citizenship by blood, in which children inherit citizenship from their parents. 

Citizenship as Birthright. Source: Quartz

Based on a review of the nationality laws of 174 nations, only 39, or about 1 in 4, grant citizenship to people born in the country, barring exceptions to children of diplomat parents, according to an article published in QUARTZ.  

Pakistan stands out as the only nation in Asia that grants citizenship as birthright.  It is the most common practice for the countries in the Americas: Canada, Mexico, Argentina, Brazil, among others, all follow this practice. Birthright citizenship is seen as a key measure of a nation's openness to immigrants.

Birthright citizenship didn’t exist in the US at the time of its founding. It was granted as part of the Civil Rights Act of 1866, followed by the Fourteenth Amendment and the 1898 Supreme Court decision in United States v. Wong Kim Ark, which led to the racial and ethnic diversity in the United States today.

The United Kingdom used to recognize birthright citizenship but the British government removed unconditional citizenship by birth in the British Nationality Act of 1981. Children born in the UK today can get citizenship only if they have at least one parent who’s a citizen or is a resident of the British territories. Germany loosened its policy in 2000, replacing the parent’s citizenship requirement with residency. Children born to a parent who has a German resident permit or has lived in Germany for at least eight years can get German citizenship.

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Sunday, May 15, 2022

Karachi Girl Students Win Top Prize at International Science Competition Held in Atlanta, Georgia

Two Pakistani girl students from Karachi have won the first physical science award of $1,500 each at Regeneron International Science and Engineering Fair (ISEF 2022) held May 7 through 13 in Atlanta, Georgia, United States. Ume Kulsoom and Talia Kusloom, the winners from Pakistan, are 12th grade students at Pak-Turk School in Gulshan-e-Iqbal, Karachi. 

Pakistani Student Participants at ISEF 2022 in Atlanta, Georgia, USA. Source: Maarif Foundation

Ume and Talia Kulsoom topped in the physical science category with their project titled "Vegan Leather Obtained from Cedrus Deodara (deodar tree)", according to an announcement by the Society for Science which organized the event. Regeneron ISEF is the world’s largest international science competition held annually. Each year, nearly 1,800 high school students from more than 63 countries participate to showcase their work.  

The winning project from Pakistan was completed under the supervision of Hira Bashir, a science teacher at the Pakistan-Turkey Maarif International Schools College in Karachi. "Our intelligent students believe in the green world and in the conservation of resources, which encouraged them to come up with this unique idea," the school said.

The ISEF is an annual event organized by the Society for Science and Engineering, a non-profit group headquartered in the US. The organization describes the event as "the world's largest international science competition," bringing together approximately 1,800 high school students from more than 63 countries each year. The Maarif Foundation has 28 schools and colleges across Pakistan that provide quality education to thousands of students in several cities, including Islamabad, Karachi and Lahore. 

Aqsa Ajmal, a graduate of Pakistan's National University of Science and Technology, was among six finalists for Lexus Design Award 2020 for industrial design. She won 3 million Yen (over $25,000) in funding and mentorship in an exclusive program in New York City under the guidance of prominent design leaders from a variety of design fields.

Pursewit Sewing Machine. Source: Lexus


The Mayet Family from Karachi, Pakistan won AI Family Challenge World Championship held in Silicon Valley, California on May 20, 2019.  The family's entry called "Cavity Crusher" uses artificial intelligence algorithm to monitor a child's brush time and determine their oral health habits to notify parents accordingly. It was organized by Iridescent, a global technology education nonprofit organization that empowers underrepresented young people to become self-motivated learners, inventors, and leaders.

In 2018, A team of undergraduate students representing Peshawar won a silver medal in a genetic engineering competition organized by the International Genetically Engineered Machine (iGEM) Foundation in Boston, Massachusetts.

Growing numbers of young Pakistanis are now participating and winning in international science and engineering competitions. Examples include Stanford Design ContestAI Family Challenge World Championship and International Genetically Engineered Machine Competition. These wins offer increasing evidence of Pakistan's expected demographic dividend.



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Saturday, May 14, 2022

Bridge Collapse Amid Heat Wave in Pakistan Raises Fears of Massive Glacier Melt Flooding

Record-high temperatures in Pakistan caused Shisper glacier to melt rapidly, triggering the collapse of the Hassanabad Bridge along the Karakoram Highway last week.  With 7,253 known glaciers, Pakistan is home to more glacial ice than any other country on earth outside the polar regions. If these start melting in increasingly severe heat waves, there could be massive flooding in the country. Pakistan is among the most vulnerable to climate change. 

Hasanabad Bridge Collapse in Pakistan


India and Pakistan have been hit by a severe heat wave very early this summer.  Jacobabad, a city in Sindh province, hit 122ºF (50ºC) in April, one of the highest April temperatures recorded in the world. Dadu, another city in Sindh, recorded 117ºF (47ºC). "This is the first time in decades that Pakistan is experiencing what many call a 'spring-less year," Pakistan's Minister of Climate Change, Sherry Rehman said in a statement. The consequences of rising temperatures in South Asia could be very severe, ranging from crop losses, food shortages and floods. 

Record High Temperature in Jacobabad, Pakistan


Pakistan's contribution to global carbon emissions is less than 1% but it is still ranked among countries most vulnerable to climate change. The energy-hungry nation needs help to finance climate-friendly  development of clean energy sources and climate-resilient infrastructure. Last year at COP26 conference in Glasgow, Pakistan provided its NDCs 2021 (national determined contribution 2021) to the United Nations ahead. Some of Pakistan's NDC targets are voluntary while others are contingent upon the receipt of financial assistance from the rich nations most responsible for the climate crisis. Some of Pakistan's solution are nature-based such as its Billion Tree Afforestation Project (BTAP) while others require significant increase in low-carbon energy from wind, solar, hydro and nuclear.  

Pakistan NDCs (Nationally Determined Contributions) For Climate Goals. Source: UN



 Malik Amin Aslam, former Prime Minister Imran Khan's special assistant on climate change, said in an interview with CNN that his country is seeking to change its energy mix to favor green.  He said Pakistan's 60% renewable energy target would be based on solar, wind and hydro power projects, and 40% would come from hydrocarbon and nuclear which is also low-carbon. “Nuclear power has to be part of the country’s energy mix for future as a zero energy emission source for clean and green future,” he concluded. Here are the key points Aslam made to Becky Anderson of CNN:

1. Pakistan wants to be a part of the solution even though it accounts for less than 1% of global carbon emissions. . Extreme weather events are costing Pakistan significant losses of lives and property.

2. Pakistan is among the countries most vulnerable to the effects of climate change. 

3. Pakistan is moving towards renewable energy by converting 60% of its energy mix to renewable by 2030. Electric vehicle (EV) transition is also beginning in his country. 

4. Aslam said:  “We are one of the world leaders on nature based solutions. However, the World Bank (WB) in its Report yesterday came up with really good numbers in a comparison done of countries who are shifting their mainstream development towards environment friendly policies and Pakistan came atop among them,” the SAPM explained. 

Pakistan Power Generation Fuel Mix. Source: Third Pole

Here's a video of Malik Amin Aslam's interview with CNN's Becky Anderson:

https://youtu.be/Q_s4kQXChuM


Wednesday, May 11, 2022

WHO: India's 4.7 Million Excess Deaths Account For Nearly One-Third of the Global COVID Death Toll

The World Health Organization estimates that India had 4.730 million COVID19-related  deaths in 2020-21, nearly a third of 15 million global excess deaths attributed to the pandemic. India is followed by Russia with 1.073 million deaths and Indonesia with 1.03 million deaths. The United States with 933,795 deaths and Brazil with 681,219 deaths round out the top 5 countries that suffered the heaviest losses of life believed to be related to the pandemic. Mexico (625,923 deaths), Peru (289,654 deaths), Turkey (264,279 deaths) Egypt (251,635 deaths) and South Africa (238,893 deaths) are ranked number 6 through 10 in the world for excess deaths in 2020-21 period. Although Pakistan too had 8 times the official figure, it still does not figure in WHO's top 10 list for total number of COVID deaths. 

Total Excess Deaths Recorded During the COVID-19 Pandemic in 2020-21. Source: WHO

Excess deaths measure how many more people died than expected compared with previous years. Although it is difficult to say with certainty how many of these deaths were due to Covid, they can be considered a measure of the scale and toll of the pandemic, according to the BBC. 

Although the government of Prime Minister Narendra Modi disputes the WHO estimates, the scenes of desperation and death all over India, including the streets of major cities during the pandemic, offer significant anecdotal evidence to support the WHO claim. Although Pakistan too had 8 times the official figure, it still does not figure in WHO's top 10 list for total number of COVID deaths. 

List of Countries with excess deaths during COVID19 pandemic. Source: WHO

Prime Minister Modi's mishandling of the COVID19 pandemic has left a lasting effect on India's economy. Akhil Bharatiya Pratinidhi Sabha (ABPS), the top decision-making body of India's Hindu right-wing RSS (Rashtriya Swayamsevak Sangh), says that “the young generation is suffering from unemployment and the pandemic has made things even grim... We cannot turn a blind eye to unemployment. It is a crisis and it needs to be addressed.” The RSS was apparently reacting to the falling labor participation rate in India relative to Pakistan and the global averages. The RSS leadership wants the government of Prime Minister Narendra Modi to focus on helping small and medium sized enterprises (SMEs) to create jobs.  RSS likes Modi government's ‘Make in India’ initiative “but it needs to be sharpened even more and get more investment.” The resolution is titled, ‘The need to promote work opportunities to make Bharat self-reliant’. The solution offered by ABPS resolution: Take agro-based local initiatives to promote rural areas and create jobs, according to Ram Madhav, a member of the RSS executive committee. 

Falling Employment in India. Source: CMIE


India's labor participation rate (LPR) fell to 39.5% in March 2022, as reported by the Center for Monitoring Indian Economy (CMIE). It dropped below the 39.9% participation rate recorded in February. It is also lower than during the second wave of Covid-19 in April-June 2021. The lowest the labor participation rate had fallen to in the second wave was in June 2021 when it fell to 39.6%. The average LPR during April-June 2021 was 40%. March 2022, with no Covid-19 wave and with much lesser restrictions on mobility, has reported a worse LPR of 39.5%.

Labor Participation Rates in India and Pakistan. Source: ILO/World Bank

In spite of the headline GDP growth figures highlighted by the Indian and world media, the fact is that it has been jobless growth. The labor participation rate (LPR) in India has been falling for more than a decade. The LPR in India has been below Pakistan's for several years, according to the International Labor Organization (ILO). 

Indian Employment Trends By Sector. Source: CMIE Via Business Standard

Construction and manufacturing sectors in India have been shedding jobs while the number of people working in agriculture has been rising, according to CMIE. Job losses have caused a hunger crisis in India which now ranks 94th among 107 nations ranked by World Hunger Index in 2020. Other South Asians have fared better: Pakistan (88), Nepal (73), Bangladesh (75), Sri Lanka (64) and Myanmar (78) – and only Afghanistan has fared worse at 99th place. The COVID19 pandemic has worsened India's hunger and malnutrition. Tens of thousands of Indian children were forced to go to sleep on an empty stomach as the daily wage workers lost their livelihood and Prime Minister Narendra Modi imposed one of the strictest lockdowns in the South Asian nationPakistan's former Prime Minister Imran Khan opted for "smart lockdown" that reduced the impact on daily wage earners. China, the place where COVID19 virus first emerged, is among 17 countries with the lowest level of hunger. 


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Saturday, May 7, 2022

Olive Revolution: Pakistan Joins International Olive Council

Pakistan's Ten Billion Tree Tsunami project launched in 2014 by the PTI government has sparked a silent olive revolution in the country.  Pakistan, now the 19th member of the International Olive Council, is producing about 1,500 tons of olive oil per year and 830 tons of table olives,  according to Juan Vilar Strategic Consultants. It is also helping tackle some of the effects of climate change such as soil erosion and desertification and bringing new opportunities to farmers. Olive cultivation was started as a pilot project in Potohar region by Punjab Chief Minister Shahbaz Sharif's government in 2014. The PTI government promoted it nationwide as a part of Prime Minister Imran Khan's Ten Billion Tree Tsunami initiative to bring about the olive revolution in the country.  

Olive Valley, Pakistan

Pakistan is the world's third largest importer of cooking oil. In 2020, Pakistan imported $2.1 billion worth of palm oil, behind only India's $5.1 billion and China's $4.1 billion in palm oil imports. Increasing olive oil production will help the country reduce its dependence on palm oil imports. Substituting imported palm oil with domestic olive oil may also help improve the heath of Pakistani consumers. 

The International Olive Council (IOC) has 18 members, mostly European and Middle Eastern nations located in the Mediterranean region. Pakistan has joined as its 19th member. The IOC members account for more than 98% of global olive production. The IOC has been headquartered in the Spanish capital Madrid since it was founded in 1959.  The organization specifies acceptable quality control testing methods and assures consumer transparency information, for example: hygiene standards along the supply chain, suitable packing materials and filling tolerances product labelling standards, identification of any food additives or allowable contaminants, recommendations for environmental protection in the use and disposal of olive products.  


Olive Plantation in Peshawar, Pakistan. Source: Olive  Oil Times

Welcoming Pakistan into the organization, Mr. Abdellatif Ghedira, the IOC’s executive director, told Olive Oil Times: “In Pakistan, olive oil culture is making inroads, and so are the opportunities related to that .....The council is a decisive player in contributing to the sustainable and responsible development of olive growing, and it serves as a world forum for discussing policymaking issues and tackling present and future challenges".  

Olive trees thrive in dry arid regions with rocky soils that are more challenging for traditional crops. Pakistan government officials believe that olive farming is an efficient answer both to reforestation needs and economic development. “A special focus in this phase will be given to underprivileged areas of the country, such as Southern Balochistan, Southern Punjab, the tribal areas of Khyber Pakhtunkhwa (KPK) and some parts of Sindh province,” Muhammad Tariq, national project director at the Ministry of National Food Security and Research, told Olive Oil Times. 

It is expected that traditional farming and modern techniques would make large tracts of barren land productive, creating new jobs and growing the economy. Drip irrigation systems are being deployed over 16,000 hectares and 3.6 million olive trees. The Pakistani public and private sectors currently maintain 26 olive oil extraction plants of different capacities, from 80 kilograms per hour to 600, according to Olive Times.

Pakistan has the potential to be a world leader in olive production. In the last decade,  PTI's Ten Billion Tree Tsunami initiative has spurred rapid olive cultivation in Pakistan with the import of 100,000 olive seedlings from top olive producing countries like Spain, Italy and Turkey. Pakistan’s climate is conducive for olive production, as the olive trees grow fast in regions with moderate winters following long hot summers.

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Thursday, May 5, 2022

SBP Governor Dr. Reza Baqir's 3-Year Term Saw Expansion & Modernization of Financial Services in Pakistan

Pakistan's chief central banker Dr. Reza Baqir's 3-year term saw a broad expansion and modernization of the nation's financial services industry. The impact of Baqir's policies can be seen in multiple sectors including agriculture, housing, manufacturing, exports, financial digitization and record-high investments in technology startups. Supported by Dr. Baqir's accommodative monetary policy during the COVID19 pandemic, Pakistan poverty headcount, as measured at the lower-middle-income class line of US$3.20 PPP 2011 per day, declined from 37% in FY2020 to 34% in FY2021, according to the World Bank's Pakistan Development Update 2022 released this month. The report said Pakistan's real GDP shrank by 1% in FY20, followed by 5.6% growth in FY21.  Pakistan’s economy created 5.5 million jobs during the past three years –on an average 1.84 million jobs a year, which is far higher than yearly average of creation of new jobs during the 2008-18 decade, according to the Labor Force Survey (LFS) published by the Pakistan Bureau of Statistics (PBS). 


SBP Accomplishments on Dr. Reza Baqir's Watch 1. Source: SBP


State Bank of Pakistan's TERF (Temporary Economic Refinance Facility) helped drive double-digit growth in large scale manufacturing (LSM) and its RDA (Roshan Digital Accounts) simplified overseas Pakistanis' investment and boosted the nation's foreign exchange reserves. 

SBP Accomplishments on Dr. Reza Baqir's Watch 2. Source: SBP


Under Dr. Reza Baqir's leadership, the SBP supported the Rozgar Scheme, Loan Extension and Restructuring Package, and RFCC (Refinance Facility to Counter Covid) to deal with the economic impact of the COVID pandemic. To promote digital payments, the SBP waived all charges for customers using online fund transfer services. Further, to ease on-boarding of new customers to use online banking channels, the SBP waived the requirement of biometric verification to activate internet and mobile banking accounts. 

World Bank Pakistan Update 2022:

A World Bank report released in April 2022 credited the PTI government led by former Prime Minister Imran Khan for timely policy measures, particularly the Ehsaas program, for mitigating the adverse socioeconomic impacts of the COVID-19 pandemic. Here's an excerpt of the report titled Pakistan Development Update 2022:  

"The State Bank of Pakistan (SBP) lowered the policy rate and announced supportive measures for the financial sector to help businesses and the Government expanded the national cash transfer program (Ehsaas) on an emergency basis. These measures contributed to economic growth rebounding to 5.6 percent in FY21.  However, long-standing structural weaknesses of the economy, particularly consumption-led growth, low private investment rates, and weak exports have constrained productivity growth and pose risks to a sustained recovery. Aggregate demand pressures have built up, in part due to previously accommodative fiscal and monetary policies, contributing to double-digit inflation and a sharp rise in the import bill with record-high trade deficits in H1 FY22 (Jul–Dec 2021). These have diminished the real purchasing power of households and weighed on the exchange rate and the country’s limited external buffers." 

Digital Banking:

Digital transactions in Pakistan soared 31.1% to Rs. 88 trillion or $500 Billion in fiscal year 2020-21, according to the nation's top central banker. “If the figure is $500 billion now, you can imagine the pace at which we are digitizing,” said Dr. Baqir Raza, Governor of the State Bank of Pakistan, adding that those transactions showed a year-on-year growth of 30.6% in volume and 31.1% in value. The nation's central bank also reported that the large-value payments segment, known as Real-time Inter-Bank Settlement Mechanism (PRISM),  saw growth of 60% by volume and 12.8% by value to Rs. 444.6 trillion or $2.5 trillion in FY 2020-21. There are several factors driving rapid shift to digital technology, including expanding digital infrastructure, new technologies and the government's efforts to document Pakistan's huge undocumented economy. Grey-listing of Pakistan by the Financial Action Task Force (FATF) has also played a role. 


Internet & Mobile Banking in Pakistan. Source: SBP

Digital Transactions Growth: 

Growth in digital transactions was led by major uptake in mobile banking (29% increase in the number of users and 133.6% and 178.7% hike in volume and value, respectively) and internet banking (32% increase in the number of users and 65.1% and 91.7% up in volume and value, respectively), according to the State Bank of Pakistan. “If the figure is $500 billion now, you can imagine the pace at which we are digitizing,” said Dr. Baqir Raza, the head of Pakistan's central bank.“Therefore, there is a huge potential for enhancing financial inclusion,” he added. 

E-Banking in Pakistan. Source: Dawn

Pakistan's central bankers have taken the plunge into the world of digital payments with their own offering: Raast. It aims to create an instant low-cost payment system that can seamlessly and securely connect government entities, a variety of banks, including microfinance banks (MFBs),  electronic money institutions (EMIs) and State Bank authorized payment service providers (PSPs) like 1Link and NIFT which may choose to take advantage of it.  Currency and coins in circulation account for about 43% of Pakistan's total money supply. The introduction of Raast is part of the government's effort to modernize and document the nation's cash-based informal economy. Undocumented economy poses a serious threat to the country because it creates opportunities for criminal activities and tax evasion. Digital financial services will also promote e-commerce in Pakistan. 

Raast Digital Payment System. Source: State Bank of Pakistan



Raast Digital Payments:

Raast is a system of digital payment infrastructure. It is essentially a pipe that is intended to connect government and financial institutions with consumers and merchants with each other to process payments instantly at very low cost.  

Raast will be boosted by Pakistan government's decision to use it to pay salaries, pensions and pay welfare recipients under Benazir Income Support and Ehsaas Emergency Cash programs. 


It has been developed in-house by the State Bank of Pakistan  in collaboration with Karandaaz, Bill & Melinda Gates Foundation and supported by the World Bank, the British government and the United Nations.

Private Payment Apps:

Several private payment apps, including EasyPaisa and JazzCash, are already operating in Pakistan. These apps lack interoperability with each other. Each operates in its own silo. Neither of these offer links to financial institutions and government entities. 

There are also several EMIs (Electronic Money institutions) in Pakistan. These include NayaPay, SadaPay and Finja.  EMIs are not banks, but can store deposits. These are not tied to any banks or telcos. They could all use back-end plumbing offered by Raast. 

Payment Service Providers (PSPs) :

1Link and NIFT payment and switch networks, supported by different groups of Pakistani financial institutions, currently process the bulk of credit/debit card and ATM transactions as well as e-payments in Pakistan. State Bank's Raast promises to be cheaper and faster than these networks. Raast also offers processing of e-payments by government entities. 

Raast Future Roadmap:

State Bank of Pakistan  intends to demonstrate Raast's usefulness by first processing government payments to individuals, including government employees and Ehsaas welfare beneficiaries, before expanding it for business applications.  SBP’s plan is to start person-to-person (P2P) payments using just the phone numbers in Q3/2021 and then bring merchants on board with QR codes by Q1/2022. 


Summary:

 Dr. Reza Baqir's 3 years as Pakistan's top central banker saw a broad expansion and modernization of the nation's financial services industry. The impact of Dr. Baqir's policies can been seen in multiple sectors including agriculture, housing, digitization and record-high investments in technology startups. Digital transactions in Pakistan soared 31% to $500 billion in FY 2020-21. Among the factors driving rapid shift to digital technology are: expanding digital infrastructure, new technologies and the government's efforts to document Pakistan's huge undocumented economy. Grey-listing of Pakistan by the Financial Action Task Force (FATF) has also played a role.  The State Bank of Pakistan's launch of Raast digital payment infrastructure represents a great leap forward for the use of financial technology (FinTech) and financial inclusion in the  country.  It will also promote e-commerce in Pakistan. Undocumented economy poses a serious threat to the country because it creates opportunities for criminal activities and tax evasion.  Raast is part of the government's effort to modernize payment systems and document the nation's cash-based informal economy. 

Speaking with CNN"s Julia Chatterly, the State Bank of Pakistan Governor Reza Baqar said last year that the Pakistani government is currently studying the idea of issuing central bank digital currency (CBDC). China is showing Pakistan the way with its CBDC. There will be an announcement on the country's CBDC in the next several months. Because CBDC is issued by the central bank, it can help the country fight crime and corruption. Pakistan is also promoting digital payments to enhance financial inclusion and document the economy. Eliminating digital payment fees during the covid pandemic has resulted in 100%-200% jump in such transactions. He said fintech companies and digital payment processors like Stripe are welcome to operate in Pakistan. It has the world's 5th largest population with young demographics offering tremendous growth opportunity.


Here's a brief video of Dr. Reza Baqir's CNN interview with Julia Chatterly:

https://youtu.be/BZ8MAi-_Qb4


Sunday, May 1, 2022

European Union: Fastest Growing Source of Remittances to Pakistan

Remittances from the European Union (EU) to Pakistan soared 49.7% in FY 21 and 28.3% in FY22, according to the State Bank of Pakistan. With $2.5 billion remittances in the first 9 months (July-March) of the current fiscal year, the EU ($2.5 billion) has now surpassed North America ($2.2 billion) to become the third largest source of inflows to Pakistan after the Middle East and the United Kingdom. Remittances from the US have grown 21%, second fastest after the EU (28.3%) in the first 9  months of the current fiscal year. 

Country-wise Remittance Inflows in Pakistan. Source: State Bank of Pakistan

Pakistanis in European Union: 

The population of Pakistan-born migrants to European Union countries has been growing in recent years. With over 120,000 Pakistani migrants, Italy is the most popular destination for Pakistanis in the EU. 

Italy is followed by Germany with 75,495 Pakistani migrants. Then comes Spain with 61,953 migrants, France 21,900 (2017), Sweden 11,674, Denmark 10,669, Ireland 7,351 (2016), Belgium 5,927, Portugal 5,310, Norway 5,157, Netherlands 4,723 and Austria 4,112. There are smaller populations of Pakistanis in several other European countries. 

Pakistan-born Migrants in European Union. Source: OECD

With $5.74 billion in the first 9 months of current fiscal year FY22, Saudi Arabia remains the top source of remittances to Pakistan, followed by $4.28 billion from the United Arab Emirates (UAE). However, the Saudi remittances are essentially flat while those from the UAE have declined 5.3% in this period.  Pakistani diaspora is sending home over $30 billion a year, about 10% of the country's GDP. It is badly needed foreign exchange to balance Pakistan's external accounts.  

Pakistan's Worldwide Diaspora:

Over 10 million Pakistanis are currently working/living overseas, according to the Bureau of Emigration. Before the COVID19 pandemic hit in 2020,  more than 600,000 Pakistanis left the country to work overseas in 2019. The average yearly outflow of Pakistani workers to OECD countries (mainly UK and US) and the Middle East has been over half a million in the last decade.  

Pakistan’s economy created 5.5 million domestic jobs during the past three years –on an average 1.84 million jobs a year, which is far higher than yearly average of creation of new jobs during the 2008-18 decade, according to the Labor Force Survey (LFS) published by the Pakistan Bureau of Statistics (PBS). 

Pakistan ranks 6th among the top worker remittance recipient countries in the world.  India and China rank first and second, followed by Mexico 3rd, the Philippines 4th, Egypt 5th and Pakistan 6th.  

Pakistan Demographics
Pakistan's Demographic Dividend: 

About two million Pakistanis are entering the workforce every year. The share of the working age population in Pakistan is increasing while the birth rate is declining. This phenomenon, known as demographic dividend, is coinciding with declines in working age populations in developed countries. It is creating an opportunity for over half a million Pakistani workers to migrate and work overseas, and send home record remittances. These overseas Pakistanis are now sending home over $30 billion a year, about 10% of the country's GDP. It is badly needed foreign exchange to balance Pakistan's external accounts.  

Projected Population Decline in Emerging Economies. Source: Nikkei Asia



Monday, April 25, 2022

Ukraine War: Time For India To Rethink its Military Doctrine Modeled On Russia's?

India's Russian-equipped and trained military is watching with great concern Russia's losses in the Ukraine war. Moscow has lost 20,000 soldiers, nearly 500 main battle tanks and a large warship so far, according to media reports. Ukraine's use of Turkish drones, US-made anti-tank guided missiles (ATGMs) Javelins and Ukrainian anti-ship Neptune missiles has taken a heavy toll on the Russian Army and Navy. It is notable that India's Cold Start Doctrine against Pakistan is modeled on the Russian formation known as the “operational maneuver group” (OMG).  

Russian Influence On Indian Military Doctrine. Source: Air University, US Air Force

Russian Influence on Indian Military Doctrine:

It is well known that the Indian Army relies on Russian tanks, artillery, rockets, and ammunition. The Indian Navy uses Russian ships, submarines and missiles and the Russian Su-30 MKI forms the backbone of the Indian Air Force. Like Russia, the Indian military doctrine is based on deploying large platforms (tanks, artillery, ships and fighter-bombers) with massive firepower.  Here's an excerpt of an article by Dr. Vipin Narang, an Indian-American analyst, on the subject: 

"In terms of doctrine and strategy, although it may be difficult to trace direct influence and lineage between Russia and India, there are several pieces in India’s conventional and nuclear strategy that at least mirror Russia’s behavior. On the conventional side, the core formation in the quick-strike concept known as “Cold Start” or “proactive strategy options” was modeled on the Russian formation known as the “operational maneuver group” (OMG). The idea was to have a formation that could be rapidly assembled from tank and armored divisions that could break through reinforced defenses—NATO for Russia, and Pakistan’s I and II Corps in the plains and desert sectors for India.

"On the nuclear side, India is currently seized with the same dilemma as the Soviet Union was during the Cold War: both NATO and Pakistan threaten battlefield nuclear weapons against conventional thrusts (India, at least, presumably would be retaliating following a Pakistan-backed provocation). While both states refined their conventional concept of operations, there may have also been corresponding adjustments to their nuclear strategies. It was long believed that, in response to NATO threats to use nuclear weapons first on the battlefield, the Soviet Union had strong preemptive counterforce elements in its strategy to try to at least disarm the United States of its strategic nuclear weapons for damage limitation. It is increasingly evident that at least some serious Indian officials are interested in developing the same sort of option: preemptive counterforce against Pakistan’s strategic nuclear forces, both for damage limitation and to reopen India’s conventional superiority. It is no surprise perhaps, then, that India chose to go ahead with acquiring Russia’s S-400 missile and air defense system, despite the threat of Countering America's Adversaries Through Sanctions Act (CAATSA) sanctions from the United States: the S-400 is key to India’s damage limitation strategy, capable of potentially intercepting residual ballistic and cruise missiles that a counterforce strike might miss". 

Turkish Drones: 

Turkish Bayraktar TB2 has been highly effective in destroying Russian tanks and armor in Ukraine. It is playing a key role in Ukraine's counter offensives against Russia's invasion. It is proving so effective that "Ukrainian forces are singing its praises, literally", according to a CNN report

Indian Army has nearly 6,000 tanks of Russian origin. These tanks are just as vulnerable to drone and anti-tank missiles as the Russian tanks that perished in Ukraine. 

Pakistan has developed Baktar Shikan, a second-generation man-portable anti-tank guided missile (ATGM) system which uses optical aiming, IR tracking, remotely controlled and wire transmitted guidance signals. It can also be mounted on attack helicopters and Armored Personnel Carriers (APCs). Its long range, penetration power and a powerful anti-jamming capability form a potent defense against armored targets.

Pakistan is also reported to have already acquired Turkish Bayraktar TB2 drones recently. It was displayed in the Pakistan Day Parade on March 23, 2022, along with other military equipment acquired recently by the Pakistani defense forces. 

Anti-Ship Missiles:

Ukraine claims that its Neptune anti-ship missiles hit and sank Moskva in Black Sea.  It was a large 10,000-ton guided missile cruiser of the Russian Navy that was launching cruise missiles on targets in Eastern and Southern Ukraine. It is the largest warship to have been sunk in action since WWII. 

Vast majority of Indian Navy ships, including its aircraft carriers and missile frigates, are designed, built and equipped by Russians.  

Pakistan recently showcased its anti-ship missile Harbah at DIMDEX 2022, a defense expo in Qatar. It  is a medium range ship launched subsonic cruise missile system capable of targeting sea as well as land targets in “all weather operation” at a maximum range of 280 kilometers, according to a report in NavalNews. The missile is fire and forget type. It relies on inertial navigation technologies with GPS and GLONASS systems. According to its manufacturer GIDS, the missile features the following guidance systems: a DSMAC camera, imaging infrared seeker, and radar seeker.

Summary:

The war in Ukraine is forcing a defense strategy rethink in countries such as India which rely on Russian equipment and training. Hindustan Times has quoted an unnamed former Indian Army Chief as saying:  “War videos available show that the Russian Army has tactical issues in Ukraine war. Tell me, which tank formation goes to war in a single file without air or infantry cover when the opponent is equipped with the best anti-tank guided missile like Javelin or Turkish Bayraktar TB2 missile firing drones? There is question on Russian air supremacy with Ukraine Army armed with shoulder fired Stinger surface to air missiles as well as the night fighting capability of the Russian Air Force.”

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Wednesday, April 20, 2022

World Bank: Pakistan Reduced Poverty and Grew Economy During COVID19 Pandemic

Pakistan poverty headcount, as measured at the lower-middle-income class line of US$3.20 PPP 2011 per day, declined from 37% in FY2020 to 34% in FY2021 in spite of the COVID19 pandemic, according to the World Bank's Pakistan Development Update 2022 released this month. The report said Pakistan's real GDP shrank by 1% in FY20, followed by 5.6% growth in FY21.  The report highlights high inflation and low savings rate as key economic issues. 

Pakistan's Macroeconomic Indicators. Source: World Bank


The report credited the PTI government led by former Prime Minister Imran Khan for timely policy measures, particularly the Ehsaas program, for mitigating the adverse socioeconomic impacts of the COVID-19 pandemic. Here's an excerpt of the report titled Pakistan Development Update 2022

"The State Bank of Pakistan (SBP) lowered the policy rate and announced supportive measures for the financial sector to help businesses and the Government expanded the national cash transfer program (Ehsaas) on an emergency basis. These measures contributed to economic growth rebounding to 5.6 percent in FY21.  However, long-standing structural weaknesses of the economy, particularly consumption-led growth, low private investment rates, and weak exports have constrained productivity growth and pose risks to a sustained recovery. Aggregate demand pressures have built up, in part due to previously accommodative fiscal and monetary policies, contributing to double-digit inflation and a sharp rise in the import bill with record-high trade deficits in H1 FY22 (Jul–Dec 2021). These have diminished the real purchasing power of households and weighed on the exchange rate and the country’s limited external buffers." 

The report cites high rates of inflation hurting the people, particularly the poor who spend about half of their income on food. Here's an excerpt: 

"Headline inflation rose to an average of 9.8 percent y-o-y in H1 FY22 from 8.6 percent in H1 FY21, driven by surging global commodity and energy prices and a weaker exchange rate. Similarly, core inflation has been increasing since September 2021. Accordingly, the State Bank of Pakistan (SBP) has been unwinding its expansionary monetary stance since September 2021, raising the policy rate by a cumulative 525 basis points (bps) and banks’ cash reserve requirement by 100 bps" 


Pakistan Savings Rate Comparison. Source: World Bank

The World Bank report highlights the low level of personal savings and investments as a key impediment to economic growth. Here's an excerpt: 

"The savings challenge has only been exacerbated by the low level of financial inclusion in the country, where even those who save are not saving with the financial system, and as such savings are not being fully leveraged to support capital formation. Only 21 percent of the population has access to an account and only 18 percent of the population uses digital payments. There are also large gaps in financial inclusion, with vulnerable segments having limited access at high prices. In terms of access to accounts, 7 percent of adult women have access compared to 35 percent of adult men, and 15 percent of young adults (ages 15–24) have access compared to 25 percent of older adults. It should be highlighted, however, that Pakistan has made notable gains on the financial inclusion agenda in recent years, supported by policy reforms and holistic strategies such as the National Financial Inclusion Strategy. However, despite the progress made, Pakistan underperforms on key metrics of financial inclusion in comparison to its peer comparators. Estimates suggest that less than 50 percent of domestic savings find their way to the financial sector, with the rest used in real estate, being intermediated through informal channels, or are soaked up directly by the government through National Savings. The incentive system is skewed such that savings flow outside of the financial sector. The large quantum of currency in circulation (CiC) in the economy is also indicative of this trend. The CiC/M2 ratio, which averaged 22 percent till June 2015 has increased to over 28 percent as of June 2021. The increase in CiC/M2 ratio translates into excess CiC of PKR1.4 trillion. These are resources that could have been intermediated for productive uses by the financial sector but are currently outside the sector." 

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