Haq's Musings

Riaz Haq writes this data-driven blog to provide information, express his opinions and make comments on many topics. Subjects include personal activities, education, South Asia, South Asian community, regional and international affairs and US politics to financial markets. For investors interested in South Asia, Riaz has another blog called South Asia Investor at http://www.southasiainvestor.com and a YouTube video channel https://www.youtube.com/channel/UCkrIDyFbC9N9evXYb9cA_gQ

Friday, January 26, 2024

Indian Muslims: The Poorest Group in Modi's Hindu Rashtra

Muslims are the poorest group in India. They will most likely face further marginalization after the recent inauguration of the Ram Temple built on the ruins of the historic Babri Masjid in Ayodhya. The medieval mosque was demolished by right-wing Hindu groups in 1992. While consolidating the power of the upper caste Hindus in India, the newly built Ram Temple, inaugurated by Indian Prime Minister Narendra Modi, will also not benefit the vast majority of Hindus either. It will, however, help Mr. Modi's BJP party win the upcoming election by a wide margin.

Average Monthly Per Capita Consumption Expenditure in India. Source: Hindustan Times

Analysis of 2021-22 data from AIDIS (All India Debt and Investment Survey) and PLFS (Periodic Labor Force Survey) shows that Indian Muslims have the lowest asset and consumption levels among major religious groups in the country. Even upper caste Muslims (Ashrafs) are poorer than Hindu OBCs (Other Backward Castes).

Average MPCE (Monthly Per Capita Consumption Expenditure) for Muslims is only Rs. 2,170, lower than Rs. 2,470 for Hindus, Rs. 3,194 for Christians and Rs. 3,620 for Sikhs. Average MPCE for upper caste Hindus is Rs. 3,321, the highest of all groups.

Average Monthly Per Capita Consumption Expenditure by Caste in India. Source: Hindustan Times

The economic inequality is the lowest among Muslims, far lower than among various Hindu castes. Average MPCE for lower caste Muslims is Rs. 2,164 while it is Rs. 2,180 for upper caste Muslims (Ashrafs). Inequality among Hindu castes is the highest. Lower caste Hindus average MPCE is only Rs. 2,095, far lower than Rs. 3,321 for upper caste Hindus.

India is almost totally dominated by the upper caste Hindus. It is not just the 220 million Dalits (untouchables), or the 190 million Muslims, or the 110 million from “scheduled tribes” (Adivasis) who are under-represented in positions of power and privilege, but also the 40-50% of Hindus who come from the widest tier of the pyramid, the shudras or laboring castes, known as Other Backwards Classes (OBCs), according to a report in The Economist Magazine. Here's an excerpt from The Economist:

"Out of the 89 highest-ranked civil servants in the central government, according to a recent survey, just four are not upper-caste Hindus, and not one is an obc. Two-thirds of the Supreme Court’s 31 judges and more than half of all state governors are high-caste Hindus. When the home ministry recently formed a panel to revise the criminal code, its five experts were all men, all from north India and all from upper castes. The trend is just as stark outside of government. A study published last year of the mainstream Hindi and English press revealed that out of 121 people in senior jobs, such as editors, all but 15 were upper caste. Not a single one was a Dalit."

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PS: Since I published this post in January this year, there has been a barrage of comments (all rejected) claiming without evidence that the Indian Muslims are richer than Pakistani Muslims. The fact is that the average monthly per capita expenditure (MPCE) in Pakistan was PKR 5,959 in 2019-20, the year closest to the 2021-22 for which the Indian MPCE data is available. Using the 2019 average exchange rate of 2.136 PKR to INR, this works out to MPCE of INR 2,789 in Pakistan, higher than for Indian Hindus (INR 2,470) and Muslims (INR 2,170). As to the cost of living in the two countries, Pakistan is 15.8% cheaper than India without rent and 20.1% cheaper with rent, according to Numbeo.

Friday, January 19, 2024

Iran Chooses to Quickly De-escalate After Pakistan Hits Back Hard

Pakistan swiftly retaliated with "killer drones, rockets, loitering munitions and stand-off weapons" to an Iranian military provocation in Balochistan province this week, according to multiple media reports. Pakistanis felt it was necessary to hit back hard to send a loud and clear message to the Iranians to respect Pakistan's national sovereignty. Within hours of the strong Pakistani military response, the foreign ministers of the two neighbors agreed to de-escalate tensions in a phone call. The Pakistani foreign ministry sent out the following tweet after this phone conversation: "Foreign Minister @JalilJilani spoke with the Foreign Minister of Iran, @Amirabdolahian today. Foreign Minister Jilani expressed Pakistan’s readiness to work with Iran on all issues based on the spirit of mutual trust and cooperation. He underscored the need for closer cooperation on security issues".

Pakistan Foreign Minister Jalil Abbas Jilani (L), Iranian Foreign Minister Amir-Abdollahian

In the early hours of Tuesday, Iran fired missiles and drones at an armed group Jaish al-Adl in Pakistan’s southwestern border province of Balochistan. Pakistan in turn struck anti-Pakistan Baloch militant targets inside Iran on Thursday. Pakistan also recalled its ambassador from Tehran and blocked the return of Iran’s envoy to Islamabad.

The Iranian attack on Pakistan came without warnings at multiple forums where the two sides were engaging each other. Just prior to the Iranian provocation, the Iranian Foreign Minister met Pakistani Prime Minister Anwarul Haq Kakar at the World Economic Forum in Davos, Switzerland. There were also joint navy drills taking place which were quickly abandoned after the surprise attack.

The only way to explain it is that the IRGC, the Islamic Revolutionary Guard Corps, initiated the attack on Pakistan without consulting with the Iranian government of President Ebrahim Raisi. The IRG also targeted locations in Iraq and Syria. The IRGC works independently of the Government in Tehran. Its commander reports directly to Iran's Supreme Leader Ayatollah Ali Khamenei.

Late IRGC Commander General Qassem Soleimani

IRGC appears have been personified by its former leader General Qassem Soleimani who was assassinated by the US military on former President Donald Trump's orders. He was known for his independence from the Tehran government. There were reports in 2018 of then President Hassan Rouhani lashing out at Soleimani during a meeting with several senior IRGC officers in attendance, accusing him of hiding the truth from the president and even from the supreme leader. Soleimani left the room in anger. Earlier, when the two met during Friday prayers, Soleimani warned the president about the “folly of not increasing the budget allotted to Quds.

Soleimani sat by Imam Khamenei’s side at key meetings, conveying his importance in the eyes of the spiritual leader. He met Syrian leader Bashar Al-Assad in February 2019 together with the supreme leader — but without Iran’s Foreign Minister Mohammad Javad Zarif, triggering resignation threats by Iran's top diplomat at the time.

In February, 2019, Soleimani threatened Pakistan. He boasted of Iran's "independent power and honor". He said: "I warn you not to test Iran and anyone who has tested Iran has received a firm response. We are speaking to Pakistan with a friendly tone and we are telling that country not to allow their borders to become a source of insecurity for the neighboring countries..... Iran enjoys independent power and honor. Some countries have wealth, but no prowess. Trump tells the Al-Saud that if it hadn't been for the US support, Saudi Arabia would not have survived and Saudi Arabia's coalitions in the region have all ended in failure." Soleimani's tone in this message to Pakistan is anything but "friendly".

Saturday, January 13, 2024

Pakistan to Set New Record For Rice Exports in 2023-24

The United States Department of Agriculture is forecasting that Pakistan's rice exports will set a new record of 5 million metric tons in 2023-24. This is nearly 30% more than the 3.9 million tons Pakistan exported last year. It is being attributed to a bumper rice crop in the country and strong global demand after India imposed restrictions on its exports. A large exportable surplus has helped Pakistani exporters to offer competitive prices in the international market, but prices are likely to remain high due to an increase in demand, according to S&P Global Commodity Insights. European Union and Middle East are the main export markets for Pakistani Basmati rice while Africa and the Far East have emerged as the key export destinations for non-Basmati rice from Pakistan.

Top Rice Exporting Countries. Source: Aljazeera

Pakistan is the world's fourth largest exporter of rice after India, Thailand and Vietnam. Last year (2022-23), India exported an estimated 20.5 million tons of rice, almost 2.5 times that of the second largest exporter, Thailand with 8.5 million tons. Thailand was followed by Vietnam (7.9 million tons), Pakistan (3.6 million tons) and the United States (2.1 million tons).

Pakistan Rice Exports. Source: S&P Global

Pakistan is among the world's largest food producing countries. It produces large and growing quantities of cereals, meat, milk, fruits and vegetables. Currently, Pakistan produces about 38 million tons of cereals (mainly wheat, rice and corn), 17 million tons of fruits and vegetables, 70 million tons of sugarcane, 60 million tons of milk and 4.5 million tons of meat. Total value of the nation's agricultural output exceeds $50 billion. Improving agriculture inputs and modernizing value chains can help the farm sector become much more productive to serve both domestic and export markets.

One of the objectives of Pakistan government's Special Investment Facilitation Council (SIFC) is to bring in new investments to modernize farming. Already, Pakistan has signed a memorandum of understanding with Kuwait for $10 billion worth of projects, including some focused on food security. The government is also collaborating with China Machinery Engineering Corp., an engineering and construction heavyweight, and China’s Famsun, an agriculture equipment company, according to a presentation about the initiative in November seen by Bloomberg.

The initial focus of the Green Pakistan program is on transforming parts of the Cholistan desert to farms and fruit orchards As much as 4.8 million acres of the desert may be allocated fir this purpose. Many parcels of land available for lease are in arid and underdeveloped regions, supporting irrigation initiatives. Some farmers are already working on their own to implement drip irrigation in Cholistan. Back in 2019, Zofeen Ibrahim of The Third Pole publication met one such farmer named Hasan Abdullah. He uses a measured amount of water mixed with fertilizer via drip irrigation to precisely irrigate his 50 acre citrus farm located on the sand dunes. As much as 60% of the cost of installing drip irrigation system has come from the provincial government.

Monday, January 8, 2024

India's Malign Influence in Bangladesh

Shaikh Hasina has won a 5th term in yet another sham election which saw a mere 40% voter turnout. Bangladesh Nationalist Party (BNP), the main opposition party, boycotted the election. Months leading up to the elections saw protests in the country suffering from economic slowdown, human rights violations and a crackdown on the opposition parties. Her longevity in office is believed to be largely orchestrated by India. Her own Foreign Minister Abdul Momen acknowledged this fact when he made a trip to New Delhi in 2022 and said, "I've requested Modi government to do whatever is necessary to sustain Sheikh Hasina's government".

Bangladesh PM Shaikh Hasina (L) with Indian PM Narendra Modi

Upon her return from India in 2022, Sheikh Hasina told the news media in Dhaka, "They (India) have shown much sincerity and I have not returned empty handed". It has long been an open secret that Indian intelligence agency RAW helped install Shaikh Hasina as Prime Minister of Bangladesh, and her Awami League party relies on New Delhi's support to stay in power. Bangladesh Foreign Minister Abdul Momen has described India-Bangladesh as one between husband and wife. In an interview with Indian newspaper 'Ajkal,' he said, "Relation between the both countries is very cordial. It's much like the relationship between husband and wife. Though some differences often arise, these are resolved quickly." Both Bangladeshi and Indian officials have reportedly said that Sheikh Hasina "has built a house of cards".

British Indian analyst Dr. Avinash Paliwal explains Shaikh Hasina's current dilemma as follows: "Politically reliant on New Delhi, she (Hasina) is finding it increasingly difficult to manage the ramifications of India's turn towards Hindu nationalism that misuses migration from Bangladesh and the Rohingya crisis for domestic electoral gain". Justice Surendra Kumar Sinha, Bangladesh's former Chief Justice, has said India is backing Sheikh Hasina's autocratic government for its own interest. Here's how prominent Indian journalist SNM Abdi explains Indian intelligence agency RAW's influence in Bangladesh: "India wields more influence in Bangladesh than the Security Council’s five permanent members put together. The Research and Analysis Wing (RAW) is the most dreaded outfit in the neighboring country surpassing even the brutally unforgiving RAB (Rapid Action Battalion). Hasina lives in mortal fear of RAW. She knows that she will be toppled if she displeases India. So she has adopted the policy of pleasing India to retain power at any cost".

Bangladesh has received wide acclaim for its remarkable economic success under the authoritarian leadership of Shaikh Hasina over the last decade. She has jailed many of her political opponents and hanged others. She has tamed the country's judiciary and gagged Bangladeshi mainstream media. What has helped her retain power is the fact she has New Delhi's support and she has succeeded in delivering rapid economic growth that has helped improve the lives of ordinary Bangladeshis. However, a combination of current global inflation and the resulting economic crisis is unravelling this formula. Ordinary Bangladeshis are being hit by high food and fuel prices. There is widespread discontent and anger among the people of Bangladesh against the Hasina government and its chief supporter India.

Bangladesh's currency taka has depreciated by over 40% against the US dollar in the last two years, import bill has soared by nearly 44%, forex reserves have declined to $20 billion and the revenue from ready made garments export and remittances is not keeping pace with the fast rising imports. Bangladesh is receiving a $4.7 billion IMF bailout to cope with the situation. In addition, India has agreed to trade with Bangladesh in local currencies to reduce pressure on forex reserves.

Falling Foreign Direct Investment in India. Source: NY Times

Bangladesh is not the only economy in trouble. The European Union, United Kingdom, Japan, Sri Lanka and Pakistan are also experiencing severe economic pain. India's forex reserves are falling and its current account deficit is rising as foreign direct investment declines. High energy prices and the strong US dollar are hurting most of the world economies. Food and energy prices have shot up due to the Russia-Ukraine war. The US currency driven by aggressive US Federal Reserve policy of rate hikes has reached new highs. A stronger dollar for the US means cheaper imports, a tailwind for efforts to contain inflation, and record relative purchasing power for Americans. But the rest of the world is straining under the dollar’s rise, according to the Wall Street Journal.