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

Tuesday, May 14, 2024

Global Baby Bust: Pakistan is A Rare Bright Spot Among Most Populous Nations in Asia

There is an alarming rapid decline in fertility rates in both developed and developing nations, according to the United Nations. Here is how the Wall Street Journal describes it: "The world is at a startling demographic milestone. Sometime soon, the global fertility rate will drop below the point needed to keep the population constant. It may have already happened".

Total Fertility Rates in 12 Most Populous Nations. Source: Wall Street Journal

Birth rates are low and fertility is rapidly dropping for women across all levels of income, education and labor-force participation around the world. Fertility is falling among Pakistani women too but more slowly than elsewhere in Asia. In fact, Pakistani women have the third highest fertility rate (3.47) among the 12 most populous nations of the world.

Pakistan Fertility Rate. Source: Data Commons

Birth rates have economic, social and geopolitical consequences. "The falling birthrates come with huge implications for the way people live, how economies grow and the standings of the world’s superpowers", says the Wall Street Journal report titled "Suddenly There Aren’t Enough Babies. The Whole World Is Alarmed".

No challenge is greater than the irreversible decline in female fertility rates that China, Japan, South Korea and the West are now experiencing. It's an existential threat. Nations and civilizations with sub-replacement fertility rates will eventually cease to exist. Automation can not replace young curious minds responsible for new ideas, innovation and social and economic vitality. Nor can automation replace consumers needed to buy and pay for products and services produced by robots.

GDP Ranking Changes Till 2075. Source: Goldman Sachs Investment Research

Back in 2022, Goldman Sachs analysts Kevin Daly and Tadas Gedminas projected Pakistan's economy to grow to become the world's sixth largest by 2075. In a research paper titled "The Path to 2075", the authors predicted Pakistan's GDP to rise to $12.7 trillion with per capita income of $27,100. India’s GDP in 2075 is projected at $52.5 trillion and per capita GDP at $31,300. Bangladesh is projected to be a $6.3 trillion economy with per capita income of $31,000. By 2075, China will be the top global economy, followed by India 2nd, US 3rd, Indonesia 4th, Nigeria 5th and Pakistan 6th. The forecast is based primarily on changes in the size of working age populations over the next 50 years.

Economic Growth Rate Till 2075. Source: Goldman Sachs Investment Research

Economic Impact of Slower Population Growth:

Daly and Gedminas argue that slowing population growth in the developed world is causing their economic growth to decelerate. At the same time, the economies of the developing countries are driven by their rising populations. Here are four key points made in the report:

1) Slower global potential growth, led by weaker population growth.

2) EM convergence remains intact, led by Asia’s powerhouses. Although real GDP growth has slowed in both developed and emerging economies, in relative terms EM growth continues to outstrip DM growth.

3) A decade of US exceptionalism that is unlikely to be repeated.

4) Less global inequality, more local inequality.

Goldman Sachs' Revised GDP Projections. Source: The Path to 2075

Demographic Dividend:

With rapidly aging populations and declining number of working age people in North America, Europe and East Asia, the demand for workers will increasingly be met by major labor exporting nations like Bangladesh, China, India, Mexico, Pakistan, Russia and Vietnam. Among these nations, Pakistan is the only major labor exporting country where the working age population is still rising faster than the birth rate.

Pakistan Population Youngest Among Major Asian Nations. Source: Nikkei Asia

World Population 2022. Source: Visual Capitalist

World Population 2050. Source: Visual Capitalist

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. Nearly 700,000 Pakistanis have already migrated in this calendar year as of October, 2022. The average yearly outflow of Pakistani workers to OECD countries (mainly UK and US) and the Middle East was over half a million in the last decade.

Consumer Markets in 2030. Source: WEF

World's 7th Largest Consumer Market:

Pakistan's share of the working age population (15-64 years) is growing as the country's birth rate declines, a phenomenon called demographic dividend. With its rising population of this working age group, Pakistan is projected by the World Economic Forum to become the world's 7th largest consumer market by 2030. Nearly 60 million Pakistanis will join the consumer class (consumers spending more than $11 per day) to raise the country's consumer market rank from 15 to 7 by 2030. WEF forecasts the world's top 10 consumer markets of 2030 to be as follows: China, India, the United States, Indonesia, Russia, Brazil, Pakistan, Japan, Egypt and Mexico. Global investors chasing bigger returns will almost certainly shift more of their attention and money to the biggest movers among the top 10 consumer markets, including Pakistan. Already, the year 2021 has been a banner year for investments in Pakistani technology startups.

Record Remittances From Overseas Pakistanis:

Pakistan is already seeing high levels of labor export and record remittances of over $30 billion pouring into the country. Saudi Arabia and the United Arab Emirates(UAE) are the top two sources of remittances but the biggest increase (58%) in remittances is seen this year from Pakistanis in the next two sources: the United Kingdom and the United States.

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.

Worker Remittances as Percentage of Pakistan GDP. Source: World Bank

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

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.

Over a Million Pakistani University Students Enrolled in STEM Fields

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PakAlumni: Pakistani Social Network

Friday, May 3, 2024

India's Modi Brags About Ordering Transnational Assassinations

In a campaign speech on May 1, Indian Prime Minister Narendra Modi bragged about his campaign of transnational assassinations of individuals he has labeled "terrorists". “Today, India doesn't send dossiers to the masters of terrorism, but gives them a dose and kills them on their home turf", he is reported to have said, according to a tweet posted by his BJP party. Last month, Indian Defense Minister Rajnath Singh made a similar admission. “If any terrorist from a neighboring country tries to disturb India or carry out terrorist activities here, he will be given a fitting reply. If he escapes to Pakistan we will go to Pakistan and kill him there,” Singh said in an interview to Indian TV news network News18.

Indian Prime Minister Narendra Modi at a BJP Campaign Rally. Source: BJP

Earlier, Pakistan government accused India of carrying out assassinations of Sikh and Kashmiri separatists on Pakistani soil. “We have documentary, financial and forensic evidence of the involvement of the two Indian agents who masterminded these assassinations,” Pakistan's Foreign Secretary Sajjad Qazi said at a news conference in Islamabad.

Pakistan is not alone in accusing India of assassinating dissidents overseas. Canada and the United States are also investigating murders allegedly carried out by Indian agents on their soil. Indian spies have also been kicked out of Australia after being caught monitoring Indian diaspora in the country. "They monitored their country's diaspora community, according to the Australian Security Intelligence Organization (ASIO) Director-General Mike Burgess as reported by the Australian Broadcasting Corp (ABC). "They asked a public servant to provide information on security protocols at a major airport."

Derek Grossman on India's Spy Agency RAW. Source: X

Commenting on the news fromAustralia, a US analyst Derek Grossman posted on X: "Indian RAW gets exposed again, this time in Australia. Maybe, just maybe, they aren’t very good at the spy game".

Gerry Shih of the Washington Post appears to concur with Derek Grossman's assessment of the incompetence of the Indian spy agencies. Referring to RAW's assassination plot against Sikh activist Gurpatwant Singh Pannun, a US citizen, Shih reported as follows:

"After the plot against Pannun failed, the decision to entrust (Vikram) Yadav with the high-risk mission sparked recriminations within the agency, former officials said. Rather than joining RAW as a junior officer, Yadav had been brought in midcareer from India’s less prestigious Central Reserve Police Force, said one former official. As a result, the official said, Yadav lacked training and skills needed for an operation that meant going up against sophisticated U.S. counterintelligence capabilities".

Back in 2018, India's former RAW officers, including one ex chief, have blamed Indian spy Kulbhushan Jadhav, arrested by Pakistan in 2016, for getting caught in Pakistan as a "result of unprofessionalism", according to a report in India's "The Quint" owned and operated by a joint venture of Bloomberg News and Quintillion Media. The report that appeared briefly on The Quint website was later removed, apparently under pressure from the Indian government.

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PakAlumni Social Network

Friday, April 26, 2024

Pakistanis' Insatiable Appetite For Smartphones

Samsung is seeing strong demand for its locally assembled Galaxy S24 smartphones and tablets in Pakistan, according to Bloomberg. The company said it is struggling to meet demand. Pakistan’s mobile phone industry produced 21 million handsets while its smartphone imports surged over 100% in the last fiscal year, according to media reports. The world's 5th most populous country has 192 million mobile phone users and 135 million broadband subscribers, according to the Pakistan Telecommunications Authority (PTA). It is the world's 7th largest mobile phone market.

Pakistan Telecom March 2024 Indicators. Source: PTA

Pakistani mobile phone manufacturers claim that almost all major mobile phone brands except iPhone are being assembled in Pakistan. “All mobile brands except iPhone are being manufactured in Pakistan and mobile phone import has been largely replaced with local manufacturing,” Aamir Allawala, vice chairman of the Pakistan Mobile Phone Manufacturers Association (PMPMA), told Arab News.

Strong demand for mobile phones is driven by rapidly increasing number of digital apps being used across various sectors ranging from agriculture to e-commerce, education, finance, health and retail. This is underpinned by digital infrastructure development with thousands of kilometers of fiber optic cables being laid across the country.

Smartphones are boosting the government's Digital Pakistan initiative. It is backed by growing intellectual capital in the IT arena. Over a million students, about a third of total 3 million students (1.4 million women, 1.6 million men) enrolled in Pakistani universities and degree colleges, are currently studying science, technology, engineering and mathematics (STEM Education), according to data released by the country's Higher Education Commission (HEC). Of these students, 415,008 are studying natural sciences and mathematics, 276,659 are in information and communication technologies (ICT), 178,260 are in health sciences and 166,457 are in engineering. Pakistan produced 157,102 STEM graduates last year, putting it among the world's top dozen or so countries. About 43,000 of these graduates are in information technology (IT).

Over a Million Pakistani University Students Enrolled in STEM Fields

2021: A Banner Year For Tech Startups in Pakistan

Pakistan Projected to Be World's 6th Largest Economy By 2075

Pakistan Among Largest Sources of STEM Workers in America

Growing Share of Working Age Population in Pakistan

Pakistan Scientific Output is World's Fastest Growing

India's Chandrayaan 3 Success: Can Pakistanis Explore Space?

Digital Pakistan 2022

Pakistan's Large and Growing Civil Nuclear Program

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PakAlumni Social Network

Monday, April 1, 2024

Pakistani Student Enrollment in US Universities Hits All Time High

Pakistani student enrollment in America's institutions of higher learning rose 16% last year, outpacing the record 12% growth in the number of international students hosted by the country. This puts Pakistan among eight sources in the top 20 countries with the largest increases in US enrollment. India saw the biggest increase at 35%, followed by Ghana 32%, Bangladesh and Nepal at 28% each, Pakistan 16%, Colombia 13%, Italy 10% and Spain 5%.

Top 8 Source Countries of Foreign Students in US. Source: IIE OpenDoors

"During 2022-2023, there were 10,164 Pakistani students, compared to 8,772 in the previous year, indicating an impressive 16% increase," according to IIE Open Doors Report for 2022-23. There has been an overall 33% increase in enrollment of Pakistani students in US colleges and universities.

Major Destinations of Pakistanis Studying Abroad. Source: UNESCO

The most recent UNESCO data (2021) counts 71,865 Pakistani students abroad in higher education. More recent statistics published by government sources in various receiving countries show that the outbound student mobility from Pakistan was over 103,190 in 2022. There have been large increases in Pakistani students recorded recently in the UK, Australia, US, Canada, and Germany. The UK is now the top destination with over 23,000 Pakistani students, followed by Australia with nearly 16,000 students from Pakistan in 2021/22, according to the ICEF Monitor.

The most recent UNESCO data (2021) puts the total number of Indians studying abroad at 508,174.

Pakistani Students in America. Source: IIE OpenDoors

Pakistan is ranked as the 16th biggest source of foreign students in America. China remains the top-sending country in 2022/23, with 289,526 students studying in the U.S. (-0.2% year-over-year). India, the second largest sending country, reached an all-time high of 268,923 international students in 2022/23, an increase of 35% year-over-year, according to the report.

Top 20 Sending Countries of International Students in America. Source: Statista

The United States is hosting over one million (1,057,188) international students in the 2022/2023 academic year, a 12% increase compared to the previous academic year. It is the fastest growth rate in more than 40 years. It is partly attributable to the end of the COVID19 pandemic which dramatically diminished international student mobility.

PakAlumni Social Network

Friday, March 29, 2024

Agriculture, Caste, Religion and Happiness in South Asia

Pakistan's agriculture sector GDP grew at a rate of 5.2% in the October-December 2023 quarter, according to the government figures. This is a rare bright spot in the overall national economy that showed just 1% growth during the quarter. Strong performance of the farm sector gives the much needed boost for about 37% of Pakistan's workforce engaged in agriculture. It helps the country's rural economy improve their living standards. In the same period, India's agriculture sector that employs 43% of the workforce slowed to 1.2% growth. This could be one possible contributing factor for Pakistan (rank108) significantly outperforming India (rank 126) on the World Happiness Index once again.

World Happiness Map 2023. Source: Gallup

Pakistan has seen bumper crops of rice, corn, wheat, sugar and cotton this fiscal year after the devastation caused by massive floods in the prior year. During the first six months of the current fiscal year 2023-24, exports of agro and food products from Pakistan have soared by 64% as compared to the same period during 2022-2023. In the month of December alone, there was a growth of 118%, as $882 million of food was exported as compared to $404 million in the same month in 2022-23. Pakistan's gains in the food export market have come at a time when India has had to limit or ban exports of rice, corn, sugar and other commodities due to crop failures.

The World Happiness Report attributes India's poor ranking in the Index to widespread caste discrimination in the country. Older Indians belonging to upper castes, and “never experience[d] discrimination or ill-treatment” were “more satisfied with their lives”, according to the report.

Caste discrimination contributed “significantly to the caste-based discrepancies in life satisfaction”, the research showed. Caste backgrounds determined access to education, social services, health care or financial security in India. Individuals with secondary or higher education, and those of higher social castes reported higher life satisfaction than those without access to formal education and those from Scheduled Castes (SC) and Scheduled Tribes (ST).

Another factor contributing to India's unhappiness is the ruling party's targeting of its minorities, including Christians, Muslims and Sikhs. Here's an excerpts from Rohit Khanna's piece in The Quint describing this issue:

"In recent years, 20 percent of India, our minorities, have been targeted – economically, socially, and physically. We have all seen multiple viral videos calling for the economic boycott of Muslims, of them being mob-lynched on the roads, of their homes being bulldozed, of inter-faith marriages being targeted as ‘love-jihad’ and more. We have seen videos of Christian pastors and congregations being roughed up, and of church buildings being vandalised. We have seen protesting Sikh farmers being vilified on communal lines as ‘Khalistanis’".

Average MPCE (Monthly Per Capita Consumption Expenditure) for Indian Muslims is only Rs. 2,170. Average MPCE for upper caste Hindus is Rs. 3,321, the highest of all groups. Lower caste Hindus fare much worse than upper caste Hindus, according to Indian government data.

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

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.

Some Indians claim 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.

While it is true the Pakistani currency has suffered significant devaluation in the last couple of years, there have been large increases in wages. Pakistan's minimum wage has increased 14 times since 2001, from 14% to 67%. The minimum wage for unskilled workers in 2023 is 32,000 Pakistani rupees per month, up from 25,000 rupees in 2022. The cost of living has been a key factor in determining the new rate.

Income Poverty in Bangladesh, India and Pakistan. Source: Our World in Data

Over 75% of the world's poor deprived of basic living standards (nutrition, cooking fuel, sanitation and housing) live in India compared to 4.6% in Bangladesh and 4.1% in Pakistan, according to a recently released OPHI/UNDP report on multidimensional poverty. Here's what the report says: "More than 45.5 million poor people are deprived in only these four indicators (nutrition, cooking fuel, sanitation and housing). Of those people, 34.4 million live in India, 2.1 million in Bangladesh and 1.9 million in Pakistan—making this a predominantly South Asian profile".

Tuesday, February 27, 2024

Biden's Gaza Ceasefire Veto Defies American Public Opinion

Aaron Bushnell, an active serviceman in the United States Air Force, burned himself to death in front of the Israeli Embassy in protest against the US policy in Gaza. Before setting himself on fire in what he called an "extreme act of protest", he said he would "no longer be complicit in genocide". Polls show that the vast majority (63%) of Americans want an immediate end to the carnage being perpetrated by Israel in Gaza.

USAF Engineer Aaron Bushnell

Although Bushnell resorted to this extreme form of protest against the Biden Administration's policy of unqualified support for Israel, he was not alone in opposing it. American public opinion polls confirm that the vast majority of Americans, including Jewish Americans, want an immediate end to the Gaza carnage.

Gaza Ceasefire Poll. Source: ISPU

Overall, 63% of Americans support a ceasefire in Gaza, according to a recent poll conducted by the Institute for Social Policy and Understanding (ISPU). In terms of religions, 71% of Catholics, 61% of Non-Affiliated, 60% of Protestants, 58% of White Evangelicals, 50% of Jews and 75% of Muslims support an immediate ceasefire, according to the poll.

Jewish and Muslim Democrats, like Democrats in the general public, favor an end to the violence in Gaza. The majority of Republicans in the general public also favor a ceasefire.

So why is President Biden defying the will of the American people on Gaza? The simple answer is AIPAC, the American Israel Public Affairs Committee (AIPAC), the most powerful lobby in Washington D.C. This Israel lobby has showered its friendly politicians with money from wealthy Jewish donors. It has also ensured the defeat of those politicians who dared to speak out against Israeli policies in the Middle East. As one former Democratic senator, Ernest Hollings, put it on leaving office, ‘you can’t have an Israeli policy other than what AIPAC gives you around here.’ Or as Ariel Sharon once told an American audience, ‘when people ask me how they can help Israel, I tell them: “Help AIPAC.”’

President Jimmy Carter who helped broker peace between Israel and Egypt knows the Israel lobby well. He told Amy Goodman of "Democracy Now" many years ago: "I think it’s accurate to say that not a single member of Congress with whom I’m familiar would possibly speak out and call for Israel to withdraw to their legal boundaries or to publicize the plight of the Palestinians or even to call publicly and repeatedly for good faith peace talks..... And I would say that if any member of Congress did speak out, as I’ve just described, they would probably not be back in the Congress the next term ".

Friday, February 16, 2024

Pakistan Elections: Imran Khan's Supporters Skillfully Used Tech to Defy Powerful Military

Independent candidates backed by the Pakistan Tehreek e Insaf (PTI) party emerged as the largest single block with 93 seats in the nation's parliament in the general elections held on February 8, 2024. This feat was accomplished in spite of huge obstacles thrown in front of the PTI's top leader Imran Khan and his party leaders and supporters by Pakistan's powerful military to prevent their victory.

Pakistan's Official Election Results 2024. Source: Aljazeera

Imran Khan and his top party leaders were thrown in jail on trumped up charges, his party was denied a unified electoral symbol of cricket bat, his supporters' rallies were banned, the mainstream media were prevented from carrying PTI leaders' speeches and the Internet was repeatedly blocked when the party held online events. So how did they succeed in spite of it? The answer lies in how skillfully the PTI activists used technology to get the party's messages out to the country's young electorate.

Well over 90% of Pakistan's adults have access to the Internet. This allows them to use a variety of apps ranging from TikTok and YouTube to Facebook, Instagram and X. The PTI supporters used AI (Artificial Intelligence) to produce Imran Khan's speeches using his own voice and words and made them go viral. They used X Spaces to engage with the public. Here's how Uzair Younus, a Pakistani-American analyst at The Atlantic Council, a Washington-based Think Tank, describes what occurred:

"The result of PTI’s technological campaign strategy was a more engaged and informed electorate, which translated into significant electoral gains. Khan’s PTI managed to galvanize a significant part of the electorate, and the party’s success demonstrates the potential of digital tools to democratize political participation and challenge entrenched power structures".

When it became clear that the PTI was headed for a massive victory with more than half of the 264 National Assembly seats as live results from the polling started to pour in on the evening of February 8, there was a sudden mysterious delay in real time reporting. Most political analysts in Pakistan believe that this delay was ordered by the Pakistani military to rig the results. This belief is confirmed by the reports that the total votes reported cast for PTI by the polling stations on "Form 45" add up to a lot more votes than those reported cast on "Form 47" for over 55 constituencies of the National Assembly. These 55 seats plus the officially reported 93 seats add up to 148 seats giving PTI more than half of the total 264 directly elected members in the National Assembly.

Any coalition government formed by the PTI opponents is unlikely to be stable or long lasting. This unstable situation will likely prolong the deep economic crisis the country now faces. The best course of action for the Pakistani military is to release Imran Khan from jail and allow his party to form the next government.

Digital Pakistan 2022: Broadband Penetration 90% Among 15+ Age Group

Resilient Pakistan Defies Doomsayers

US and China Compete For Influence in Pakistan

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PakAlumni: Pakistani Social Network

Friday, February 2, 2024

Soaring Illegal Immigration of Indians into the United States

Illegal immigration from India to the United States is soaring. A record 96,917 Indians were detained while attempting to enter the US illegally from October 2022 to September 2023, representing a 50% jump from the corresponding period in the prior year. Vast majority of the arrested Indians came from Prime Minister Modi's state of Gujarat while others came from the state of Punjab. There are about 725,000 undocumented Indian immigrants in the US – the third-largest population of illegal immigrants after Mexicans and El Salvadorans – according to a Pew Research Centre report.

Illegal Immigration to the US From India. Source: Strait Times

The number of Indians attempting to cross into the United States illegally has accelerated in recent years on Prime Minister Modi's watch. These immigrants take the Latin American route to reach the US-Mexico border before making a run for the US. They cross the Darien Gap, a dangerous thick forest region between Colombia and Panama, taking three days to a week while taking huge risks ranging from lack of food and drinking water, wild animals and violent gangs.

There are multiple drivers of mass illegal migration of Indians to other countries. These include increasing violence under Mr. Modi's Hindutva rule and lack of jobs for thee growing working-age population. Human traffickers are exploiting these conditions to profit from vulnerable groups most impacted by political and economic problems in the country.

Christians, low caste Hindus, Muslims and Sikhs are among the main targets of the far-right Hindu mob attacks across India. In 2023, the Modi government’s discriminatory and divisive policies led to growing violence against minorities, creating a pervasive environment of fear and a chilling effect on government critics, Human Rights Watch said in its World Report 2024.

India's labor force participation rate (LPR) has been declining for several years. Centre For Monitoring Indian Economy (CMIE) data shows that the labor participation rate fell to 39.5% in 2022-23, from an already low 40.1% in 2021-22. This indicates that more than half of India’s working age population is not employed. This is especially the case for women 90% of whom are out of the labor force. India’s LPR is among the lowest in the world. The global average LPR is 60%.

Labor Participation Rate in India. Source: CMIE Via Reuters

The rapid GDP growth claimed by India is not creating enough jobs for its massive young population. The much-hyped "Make in India" initiative of the Modi government is just not working well enough to keep pace with the demand for jobs. Manufacturing’s contribution to India’s GDP has declined from 17% two decades ago to just 13% in 2022, according to the World Bank. India has added only 5 million factory jobs since Mr. Modi was first elected, for a total of 65 million such jobs now, according to the Wall Street Journal. Unable to find jobs in cities, a very large number of Indians are going back to subsistence farming to eke out a meager living.

Indian economist Ritesh Kumar recently wrote a piece for Nikkei Asia titled "Few are benefiting from India's rapid GDP growth". His conclusion: What India really needs is a growth trajectory that is inclusive, sustainable and can foster shared prosperity across all segments of the economy rather than benefiting only a privileged few.

Pakistan Floods 2022

Food in Pakistan 2nd Cheapest in the World

India in Crisis: Unemployment and Hunger Persist After COVID

India Rising, Pakistan Collapsing

Record Number of Indians Seeking Asylum in US

The Great Indian Brain Drain

Is Modi's "Make in India" All Hype?

Pakistanis Consuming More Calories, Fruits & Vegetables Per Capita

How Grim is Pakistan's Social Sector Progress?

Pakistan Fares Marginally Better Than India On Disease Burdens

COVID Lockdown Decimates India's Middle Class

Pakistan Child Health Indicators

Pakistan's Balance of Payments Crisis

How Has India Built Large Forex Reserves Despite Perennial Trade Deficits

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PakAlumni Social Network

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.

"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".