Friday, May 11, 2018

Nawaz Sharif's Report Card 2013-18

The last five years of Pakistan's outgoing government of the Pakistan Muslim League (Nawaz) have seen the revival of Pakistan's economy and completion of many long delayed infrastructure and energy projects. Mr. Nawaz Sharif deserves full credit for it.  At the same time, the PML government is responsible for slow progress on human development indicators, major decline in exports, growing twin deficits of budget and external accounts, mounting public debt and lack of transparency in financial matters.  It is the lack of transparency that has been brought in sharp focus with the removal of Prime Minister Nawaz Sharif by the nation's Supreme Court in the aftermath of Panama Papers. The leak of these papers revealed his family's ownership of undeclared and unexplained substantial assets abroad.

Terrorism Toll in Pakistan. Source: SATP.org

Highlights:

Pakistan achieved 5.8% growth in gross domestic product (GDP) in fiscal 2017-18, the highest in the last 13 years.  Many long delayed projects ranging from roads, ports, dams and irrigation projects to power plants were finally completed.  Examples of such long delayed projects include M8 and M9 motorways, Lyari Expressway, New Islamabad Airport, Neelum-Jhelum Hydroelectric Project and Kachhi Canal. The PMLN government's performance was boosted by a number of factors including the following:

1. Pakistan Army's anti-terror operations Zarb e Azb and Radd ul Fasad dramatically reduced the level of violence and significantly improved security in the country. It resulted in increased confidence of businesses, investors and consumers in the economy. 

2.  Growth of Chinese investment in China Pakistan Economic Corridor (CPEC) related infrastructure and energy projects. Ongoing execution of CPEC projects is transforming some of the least developed areas of Pakistan and creating hundreds of thousands of new jobs.

3. Major decline in energy prices, particularly prices of liquified natural gas (LNG), helped boost the energy and the power sector which in turn helped increase industrial production and transport sectors.  Pakistan is now among the world's fastest growing LNG markets

Lowlights:

Structural problems in Pakistan's economy remained unaddressed. Current account deficits widened as exports declined and imports jumped, putting pressure on the nation's foreign exchange reserves. Increased deficit spending resulted in bigger budget deficit and heavy borrowing. Public debt and debt service costs climbed. School enrollment and literacy rates remained essentially flat in the last 5 years and Pakistan continued to rank low on human development indices. Here are some of the details:

1.  Pakistan's exports have plummeted from about $25 billion in 2013-14 to about $20 billion in 2016-17 under PMLN government.  Exports in first 9 months of current fiscal year 2017-18 have been recorded at $17 billion.  The trade deficit for the first nine months of fiscal 2017-18 reached $27.3 billion.  This situation has forced the government to borrow more in international debt markets at commercial rates. The country now faces the prospect of going back to the International Monetary Fund (IMF) for yet another bailout.

Pakistan's External Debt. Source: Wall Street Journal
2.  Pakistan's net primary enrollment is stuck at about 57% while the literacy rate is flat at about 60%. This is in spite of fact that the country now spends almost as much on education as on defense.  Pakistan's public spending on education has more than doubled since 2010 to reach $8.6 billion a year in 2017, rivaling defense spending of $8.7 billion. Private spending on education by parents is even higher than the public spending with the total adding up to nearly 6% of GDP. Pakistan has 1.7 million teachers, nearly three times the number of soldiers currently serving in the country's armed forces. Unfortunately, the education outcomes do not yet reflect the big increases in spending. Why is it? Let's examine this in some detail.

Source: Economic Survey of Pakistan 2015-16
Mujhe Kyun Nikala (Why was I ousted?): 

When former Prime Minister Nawaz Sharif repeatedly asks "Mujhe Kyun Nikala" (Why was I ousted),  he appears to be arguing that, because of his government's unquestionably better performance than his predecessor PPP government's,  he deserves to be forgiven without explicitly asking for forgiveness.  What are his sins? His biggest sin is that he and his family have accumulated large amount of unexplained wealth in offshore shell companies during his three terms as Pakistan's prime minister. He and his family did not disclose this wealth until they were forced to acknowledge it after Panama Papers leaks.  They were given ample opportunity by the Pakistan Supreme Court to prove that it was acquired by legitimate means. But they failed to do so.

Mr. Sharif and his family are not unique as owners of unexplained offshore wealth. Washington-based Global Financial Integrity (GFI) estimates that developing countries have lost as much as $13.4 trillion through unrecorded capital flight since 1980. Bloomberg reports that Pakistanis own $150 billion worth of undeclared offshore assets, attributing this estimate to Syed Muhammad Shabbar Zaidi, a partner at Karachi-based A.F. Ferguson and Co. -- an affiliate of PricewaterhouseCoopers LLP.

Iqama (Foreign Residency) vs Panama:

Mr. Sharif says that he was removed for "iqama", not "Panama". What he doesn't acknowledge is that having "iqama" (foreign residency) facilitates "Panama", the hiding of assets in offshore locations.

Assets held by people in offshore tax havens are tracked by their country of residence, not by their citizenship, under OECD sponsored Agreement On Exchange of Information on Tax Matters. Pakistan is a signatory of this international agreement.  When Pakistan seeks information from another country under this agreement,  the nation's FBR gets only the information on asset holders who have declared Pakistan as their country of residence. Information on those Pakistanis who claim residency (iqama) in another country is not shared with Pakistani government. This loophole allows many Pakistani asset holders with iqamas in other countries to hide their assets. Many of Pakistan's top politicians, bureaucrats and businessmen hold residency visas in the Middle East, Europe and North America.

Summary:

The last five years of Pakistan's outgoing government of the Pakistan Muslim League (Nawaz) have seen the revival of Pakistan's economy and completion of many long delayed infrastructure and energy projects. Mr. Nawaz Sharif deserves full credit for it.  At the same time, the PML government is responsible for slow progress on human development indicators, major decline in exports, growing twin deficits of budget and external accounts, mounting public debt and lack of transparency in financial matters.  It is the lack of transparency that has been brought in sharp focus with the removal of Prime Minister Nawaz Sharif by the nation's Supreme Court in the aftermath of Panama Papers. The leak of these papers revealed his family's ownership of undeclared and unexplained substantial assets abroad.

Related Links:

Haq's Musings

South Asia Investor Review

CPEC Transforming Pakistan's Least Developed Regions

Pakistan: The Other 99% of the Pakistan Story

How Pakistan's Corrupt Elite Siphon Off Public Funds

Bumper Crops and Soaring Credit Drive Tractor Sales

Panama Leaks

How West Enables Corruption in Developing Countries

Declining Terror Toll in Pakistan

Riaz Haq's YouTube Channel


Thursday, May 10, 2018

Pakistani-American NED Alum Raises $50 Million For Silicon Valley Startup SiFive

SiFive,  a Silicon Valley intellectual property tech startup, has raised $50.6 million in series C funding. The company is headed by Pakistani-American CEO and fellow NED University alumnus Dr. Naveed Sherwani.  SiFive investors include Intel Capital, Western Digital, Sutter Hill Ventures and Spark Capital.

NED Alumnus Dr. Naveed Sherwani
The company was founded by Andrew Waterman, Krste Asanovic and Yunsup Leethe of the University of California at Berkeley. Their team developed open-source instruction set architecture (ISA) for Reduced Instruction Set Computing V (RISC V). RISC V design is freely available under Berkeley Software Distribution (BSD) that was first introduced for Berkeley's open source UNIX operating system and open software tools. BSD license permits development of derivative intellectual property (IP) and products. It offers the advantage of having a large open-source community contribute to its continuous development and innovation.

SiFive sells core IP (intellectual property) based on RISC V ISA. The company's IP Cores are the most widely deployed RISC-V cores in the world.  SiFive Core IP is verified and delivered in Verilog for custom SoC (System on Chip) designs.

Naveed Sherwani is a serial entrepreneur with a bachelor's degree in electrical engineering from Karachi's NED Engineering University in 1983. He has a Ph.D. in computer engineering from University of Nebraska. He has taught at Western Michigan University and authored four books and over 100 papers.

In May 2017, NED University alumnus Khalid Raza and two co-founders of Viptela sold their company to Cisco for $610 million. Viptela was a software-defined-networks (SDN) start-up in Silicon Valley that was co-founded in 2012 by Pakistani-American entrepreneurs Amir Khan, Atif Khan and Khalid Raza.

In November 2017, another NED University alumnus Raghib Husain sold his company Cavium to Marvell Technology in a $6 billion stock deal, according to CNBC News. The value of the deal jumped to $7.5 billion enterprise value at the close of market on November 22, 2017.

Sherwani headed Intel's ASIC division before starting Open Silicon, a fabless semiconductor company that offered turn-key custom ASIC solutions. He was the CEO of Peernova before joining SiFive as its chief executive officer.


Related Links:

Haq's Musings

OPEN Silicon Valley Forum 2017: Pakistani Entrepreneurs Conference

Pakistani-American's Tech Unicorn Files For IPO at $1.6 Billion Valuation

Pakistani-American Cofounders Sell Startup to Cisco for $610 million

Pakistani Brothers Spawned $20 Billion Security Software Industry

Pakistani-American Ashar Aziz's Fireeye Goes Public

Pakistani-American Pioneered 3D Technology in Orthodontics

Pakistani-Americans Enabling 2nd Machine Revolution

Pakistani-American Shahid Khan Richest South Asian in America

Two Pakistani-American Silicon Valley Techs Among Top 5 VC Deals

Pakistani-American's Game-Changing Vision 

Tuesday, May 8, 2018

Chinese ECommerce Giant Alibaba Enters Pakistan Market

Alibaba Group (BABA.N) has bought the entire share capital of ecommerce platform Daraz, Rocket Internet said, according to Reuters. American ecommerce giant Amazon is already in Pakistan via its investment in another ecommerce platform Clicky.pk.

Daraz, founded in Pakistan in 2012, operates online marketplaces in Pakistan, Bangladesh, Myanmar, Sri Lanka and Nepal. The unit will continue to operate under the same brand following the sale to Alibaba, Rocket said.

Online sales in Pakistan's $152 billion retail market are doubling every year,  according to Adam Dawood of Yayvo online portal. He expects them to pass $1 billion in the current fiscal year (2017-18), two years earlier than the previous forecast.

Media reports suggest global e-commerce behemoth Amazon.com could purchase substantial stake in Pakistan's e-commerce site  Clicky.pk.

Amazon's Presence in Pakistan:

Amazon already owns about 33% stake in Clicky.pk through its acquisition in 2017 of Dubai-based online retailer Souq.  Souq acquired this stake in the Pakistani company in late 2016.

Today, Alibaba Group (BABA.N) announced the purchase of the entire share capital of ecommerce platform Daraz, according to Reuters.


E-Commerce Market Growth: 

Online sales in Pakistan's $152 billion retail market are growing much faster than the brick-and-mortar retail sales. Adam Dawood of Yayvo online portal estimates that e-tail sales are doubling every year. He expects them to pass $1 billion in the current fiscal year (2017-18), two years earlier than the previous forecast.

E-commerce in Pakistan is being enabled by increasing broadband penetration and new online payment options. Ant Financial, an Alibaba subsidiary, has just announced the purchase of 45% stake in Pakistan-based Telenor Microfinance Bank.

Payment Options: 

Mobile wallets, also called m-wallets, are smartphone applications linked to bank accounts that allow users to make payments for transactions such as retail purchases. According to recent State Bank statistics on branchless banking (BB) sector, mobile wallets reached a high of 33 million as of September 2017, up 21% over the prior quarter. About 22 percent of these accounts – 7.4 million – are owned by women, up 29% seen in Jul-Sep 2017 over previous quarter. Share of active m-wallets has also seen significant growth from a low of 35% in June 2015 to 45% in September 2017.

Summary: 

Online sales in Pakistan's $152 billion retail market are doubling every year,  according to Adam Dawood of Yayvo online portal.  The country's retail market is the fastest growing in the world, according to Euromonitor.  Expanding middle class, particularly millennials with rising disposable incomes, is demanding branded and packaged consumer goods ranging from personal and baby care items to food and beverage products. Strong demand for fast moving consumer goods is drawing large new investments of hundreds of millions of dollars.  Rapid growth in sales of consumer products and services is driving other sectors, including retail, e-commerce, paper and packaging, advertising, media, sports and entertainment. Potential downsides of soaring consumption include increased amount of  solid waste and decline in domestic savings and investment rates.

Related Links:

Haq's Musings

Pakistan Retail Sales Growth

Advertising Revenue in Pakistan

Pakistan FMCG Market

The Other 99% of Pakistan Story

PSL Cricket League Revenue

E-Commerce in Pakistan

Fintech Revolution in Pakistan

Mobile Broadband Speed in Pakistan

Sunday, May 6, 2018

Rising Afghan Violence; Hazara Killings; Safdar's Anti-Ahmedi Move

Why is the violence in Afghanistan intensifying? Why has US-NATO coalition dropped more bombs in Afghanistan in Jan-March 2018 quarter than in any other 3 month period in the last 15 years? Is it in response to the Taliban annual spring offensive? Or the Daish (ISIS) contributing to more killings? Is the Trump administration too busy with the military option and paying too little attention to any diplomatic initiatives to end the war in Afghanistan? Will the appointment of Michael Pompeo as US secretary of state make a difference?

Terrorism Toll in Pakistan. Source: SATP.org
Why are the Hazara killings continuing in Quetta? What can the Pakistani state and the military do to provide relief to the Hazara community? Beyond the the focus on security, what else can and should be done to reduce ethnic and sectarian hatred in Pakistani society in general? What kind of social and educational initiatives are needed to quell such violence? What role must the politicians play to appeal to the better angels of human nature?

 What does Captain Safdar, son-in-law of former Prime Minister Nawaz Sharif, hope to achieve by pushing a bill in the Pakistan National Assembly to drop the name of renowned Pakistani Nobel Laureate Dr. Abdus Salam from the National Center of Physics at Quaid-e-Azam University (QAU)) in Islamabad? Is this cynical move timed to coincide with the upcoming election to win votes for his father-in-law's PMLN party? Why do politicians pander to the worst instincts of the people to win votes? Why is this happening in this day and age in many countries including India, European Union and the United States? Is this the ugly underbelly of modern democracy?

Viewpoint From Overseas host Misbah Azam discusses these questions with analysts Ali Hasan Cemendtaur and Riaz Haq (www.riazhaq.com)

https://youtu.be/rhS9QC8UCmU




Related Links:

Haq'sMusings

South Asia Investor Review

Trump's Afghanistan Policy

Security Situation in Pakistan

Mariam Nawaz and Capt Safdar's Support of TLYR  Dharna

Viewpoint From Overseas Youtube Channel

Riaz Haq's Youtube Channel

PakAlumni Worldwide

Tuesday, May 1, 2018

How Pakistan's Corrupt Elite Use Trade Misinvoicing to Launder Money

Pakistan's exports have declined significantly since former Prime Minister Nawaz Sharif's PMLN party assumed power in 2013. They are down from about $25 billion in 2013-14 to about $20 billion in 2016-17.  At the same time, the nation's imports have jumped to $47 billion during this period, widening the trade deficit to a record $27 billion. Overvaluation of the Pakistani currency and CPEC related imports are often cited as a reason for it. The other, probably more important reason, may be increasing misinvoicing of trade facilitated by the people in power. Trade misinvoicing is the largest component of illicit financial outflows from developing countries, according to Washington-based Global Financial Integrity (GFI) which tracks such flows.

Trade Misinvoicing:

Global Financial Integrity (GFI) defines trade misinvoicing as "fraudulently manipulating the price, quantity, or quality of a good or service on an invoice submitted to customs" to quickly move substantial sums of money across international borders.

How does trade miscinvoicing work? Here's an example:

Let's say an exporter in Pakistan exports goods worth $1 million to a foreign country and invoices it at $500,000 through an offshore middleman.  The middleman invoices and collects $1 million from the end customer, sends $500,000 to Pakistan and deposits $500,000 in an offshore account. The result: Pakistan is deprived of the $500,000 in foreign exchange.

Similarly, imports of goods worth $1 million to Pakistan are overinvoiced at $1.5 million through an offshore middleman and the difference is kept in an overseas account. The result: Pakistan loses another $500,000 in foreign exchange. Meanwhile, the Pakistani traders and the officials facilitating misinvoicing together pocket $1 million or 50% on the two trades.  Pakistan's trade and current account deficits grow and the foreign exchange reserves are depleted, forcing Pakistan to go back to the International Monetary Fund (IMF) for yet another bailout with tough conditions.



Terror and Drug Financing:

It is not just greedy politicians, unscrupulous businessmen and corrupt officials in developing countries who rely on fraudulent manipulation of trade invoices; all kinds of drug traders, terrorists and criminals also use what is called TBML (trade-based money laundering).

John A. Cassara, former US intelligence official with expertise in money laundering, submitted written testimony for a US Congressional hearing on “Trading with the Enemy: Trade-Based Money Laundering is the Growth Industry in Terror Finance” to the Task Force to Investigate Terrorism Financing Of the House Financial Services Committee February 3, 2016. Here's an except from it:

"Not long after the September 11 attacks, I had a conversation with a Pakistani entrepreneur. This businessman could charitably be described as being involved in international grey markets and illicit finance. We discussed many of the subjects addressed in this hearing including trade-based money laundering, terror finance, value transfer, hawala, fictitious invoicing, and counter-valuation. At the end of the discussion, he looked at me and said, “Mr. John, don’t you know that your adversaries are transferring money and value right under your noses? But the West doesn’t see it. Your enemies are laughing at you.”"

Foreign Residency(Iqama):

Assets held by people in offshore tax havens are tracked by their country of residence, not by their citizenship, under OECD sponsored Agreement On Exchange of Information on Tax Matters. Pakistan is a signatory of this international agreement.  When Pakistan seeks information from another country under this agreement,  the nation's FBR gets only the information on asset holders who have declared Pakistan as their country of residence. Information on those Pakistanis who claim residency (iqama) in another country is not shared with Pakistani government. This loophole allows many Pakistani asset holders with iqamas in other countries to hide their assets. Many of Pakistan's top politicians, bureaucrats and businessmen hold residency visas in the Middle East, Europe and North America.

Loss of Tax Revenue:

Customs duties in developing countries often make up a huge part of the tax revenue collected by the governments. Trade Misinvoicing not only increases current account deficits but also worsen budget deficits by cutting tax receipts. Raymond Baker, author of Capitalism's Achilles Heel, has written about it as follows:

"The Pakistan government's largest source of revenues is customs duties, and therefore evasion of duties is a national pastime. Isn't there a way to tap into this major income stream, pretending to fight customs corruption and getting rich at he same time? Of course; we can hire a reputable (or disreputable, as the case maybe) inspection company, have the government pay the company about one percent fee to do price checking on imports, and get multi-million dollar bribes paid to us upon award of the contracts. Societe de Generale de Surveillance (SGS), headquartered in Switzerland, and its then subsidiary Cotecna, the biggest group in the inspection business, readily agree to this subterfuge. Letters in 1994 promised "consultancy fees", meaning kickbacks, of 6 percent and 3 percent to British Virgin Island (BVI) companies, Bomer Finance Inc. and Nassam Overseas Inc., controlled by (Benazir) Bhutto and (Asif) Zardari. Payments of $12 million were made to Swiss bank accounts of the BVI companies."

Aid in Reverse:

Some have called London the "Money Laundering Capital of the World" where corrupt leaders from developing nations use wealth looted from their people to buy expensive real estate and other assets. Private individuals and businesses from poor nations also park money in the west and other off-shore tax havens to hide their incomes and assets from the tax authorities in their countries of residence.

The multi-trillion dollar massive net outflow of money from the poor to the rich countries has been documented by the US-based Global Financial Integrity (GFI). This flow of capital has been described as "aid in reverse". It has made big headlines in Pakistan and elsewhere since the release of the Panama Papers and the Paradise Leaks which revealed true owners of offshore assets held by anonymous shell companies. Bloomberg has reported that Pakistanis alone own as much as $150 billion worth of undeclared assets offshore.

Impact on Economic Growth:

There's a direct relationship between investment and GDP. Flight of capital reduces domestic investment and depresses economic growth in poor countries. Lower tax revenues also impact spending on education, health care and infrastructure, resulting in poor socioeconomic indicators.

In Pakistan, for example, it takes investment of about 4% of GDP to grow the economy by 1%. Lower levels of investments in the country has kept its GDP growth below par relative to the rest of South Asia.  Any reduction in the outflow of capital to offshore tax havens will help boost economic growth in Pakistan to close the gap with its neighbors, particularly Bangladesh and India whose economies are both growing 1-2% faster than Pakistan's.

Summary:

Pakistan's exports have declined significantly since former Prime Minister Nawaz Sharif's PMLN party assumed power in 2013. They are down from about $25 billion in 2013-14 to about $20 billion in 2016-17. Overvaluation of the Pakistani currency is often cited as a reason for it. The other, probably more important reason, may be increasing underinvoicing of exports facilitated by the people in power. Trade misinvoicing is the largest component of illicit financial outflows from developing countries as measured by New York- based Global Financial Integrity (GFI) which tracks such flows.

Related Links:

Haq's Musings

South Asia Investor Review

Did Musharraf Steal Pakistani People's Money?

Pakistan Economy Hobbled By Underinvestment

Raymond Baker on Corruption in Pakistan

Nawaz Sharif Disqualified

Culture of Corruption in Pakistan

US Investigating Microsoft Bribery in Pakistan

Zardari's Corruption Probe in Switzerland

Politics of Patronage in Pakistan

Why is PIA Losing Money Amid Pakistan Aviation Boom?

Sunday, April 29, 2018

Social Media Promote Tribalism in Pakistan

Social media newsfeeds are driven by users' profiles to reinforce their preferences and prejudices.  Newsfeeds are customized for each user. Any posts that don't fit these profiles don't get displayed. The result is increasing tribalism in the world. American and British intelligence agencies claim that Russian intelligence has used social media to promote divisions and manipulate public opinion in the West.  Like the US and the UK, Pakistan also has ethnic, sectarian and regional fault-lines that make it vulnerable to similar social media manipulation.  It is very likely that intelligence agencies of countries hostile to Pakistan are exploiting these divisions for their own ends. Various pronouncements by India's current and former intelligence and security officials reinforce this suspicion.

Tribalism:

All human are born with tribal instincts. People embrace group identities based on birthplace, language, region, sect, religion, nation, school, sports team, etc to define themselves.

Such group affiliations can give people a sense of belonging but they are sometimes also used to exclude others with the purpose of promoting hostility and violence. Social media platforms are being used both ways: To unite and to divide people.

Powerful new media such as Facebook, Twitter, YouTube and WhatsApp lend themselves for use as extensions of covert warfares carried out by intelligence agencies against nations they see as hostile.

Social Media Platforms:

Social media platforms like Facebook and Twitter are powerful magnets for marketers,  extremist groups and intelligence agencies. They spend a lot of time and money on such platforms to reach and manipulate their targets.

Trolls and bots proliferate and societies become more deeply divided along political, ethnic, racial, religious, ideological and regional lines.  It is a problem that all nations in the world have to respond to.

Developed nations in Europe and North America with stronger institutions are generally more capable of dealing with the consequences of such divisions.  But the increasing social media penetration in less capable developing nations with weak institutions cause them to sometimes descend into violent riots. In a recent piece titled "Where Countries Are Tinderboxes and Facebook is a Match",  the New York Times has mentioned recent examples of riots and lynchings caused by social media posts in India, Indonesia, Mexico, Myanmar and Sri Lanka.

Brexit and Trump:

The unexpected result of Brexit, the British vote to leave the European Union, shocked many in the UK and Europe. It was soon followed by an even bigger shock with the unexpected election of Donald J. Trump as the President of the United States. Western intelligence agencies have now concluded that Russian intelligence agency sponsored trolls played a major role in manipulating the public opinion in the United Kingdom and the United States.

In February 2018, the US justice department indicted 13 Russians and three Russian entities in an alleged conspiracy to defraud the United States, including by tampering in the 2016 presidential election on behalf of Donald Trump and against Hillary Clinton, according to media reports.

The US DOJ indictment identified the Internet Research Agency, a St Petersburg-based group to which millions of impostor social media accounts have been traced, as a primary offender. The indictment also charged Russian individuals who funded the alleged election tampering conspiracy or who otherwise participated in it.

Some of the Russian social media posts were used to organize protests and counter protests in the United States on issues relating to race and religion.

US Senator Richard Burr confirmed that two groups converged outside the Islamic Da’wah Center of Houston in 2016, the Texas Tribune reported. One had gathered at the behest of the “Heart of Texas” Facebook group for a “Stop Islamification of Texas” rally, while the other, spurred on by the “United Muslims of America” Facebook page, had organized a counter-protest to “Save Islamic Knowledge.”

A Russian-sponsored Facebook ad appeared in late 2015 or early 2016, sources told CNN, and though it was meant to appear supportive of Black Lives Matter movement, it may also have conveyed the group as threatening to some white residents of those cities.

Indian Trolls:

It can be safely assumed that Russians are not alone in using social media against nations they see as hostile to them. It is also a safe bet that Indian intelligence agencies are most likely deploying their troll farms and bots to divide Pakistanis.

India's ruling BJP party has extensively used social media apps to spread rumors, innuendo,  fake news, outright lies and various forms of disinformation against anyone seen to be even mildly critical of their leader Narendra Modi. Their harshest abuse has been targeted at the Opposition Congress party leaders, various liberal individuals and groups, Muslims and Pakistanis.

Swati Chaturvedi, author of I Am a Troll, has cited many instances of hateful tweets from Modi-loving Hindu trolls, including Singer Abhijeet's lies to generate hatred against Muslims and Pakistan and BJP MP Hukum Singh's false claim of "Hindu exodus" from Kairana in western Uttar Pradesh blaming it on Muslims.

Vikram Sood, a former top spy in India, has elaborated on India's covert warfare options to target Pakistan in the following words: "The media is a favorite instrument, provided it is not left to the bureaucrats because then we will end up with some clumsy and implausible propaganda effort. More than the electronic and print media, it is now the internet and YouTube that can be the next-generation weapons of psychological war. Terrorists use these liberally and so should those required to counter terrorism."

In a 2013 speech at Sastra University, Indian Prime Minister Modi's National Security Advisor Ajit Doval revealed his covert war strategy against Pakistan as follows:  "How do you tackle Pakistan?.....We start working on Pakistan's vulnerabilities-- economic, internal security, political, isolating them internationally, it can be anything..... it can be defeating Pakistan's policies in Afghanistan...... You stop the terrorists by denying them weapons, funds and manpower. Deny them funds by countering with one-and-a-half times more funding. If they have 1200 crores give them 1800 crores and they are on our side...who are the Taliban fighting for? It's because they haven't got jobs or someone has misled them. The Taliban are mercenaries. So go for more of the covert thing (against Pakistan)..."

Summary: 

Social media newsfeeds are driven by users' profiles to reinforce their preferences and prejudices.  Newsfeeds are customized for each user. Any posts that don't fit these profiles don't get displayed. The result is increasing tribalism in the world. American and British intelligence agencies claim that Russian intelligence has used social media to manipulate public opinion in the West.  Like the US and the UK, Pakistan also has ethnic, sectarian and regional fault-lines that make it vulnerable to similar social media manipulation.  It is very likely that intelligence agencies of countries hostile to Pakistan are exploiting these divisions for their own ends. Various pronouncements by India's current and former intelligence and security officials reinforce this suspicion.

Here's a discussion on the subject in Urdu:

https://youtu.be/zuPMy65O6-s




Related Links:

Haq's Musings

South Asia Investor Review

Social Media: Blessing or Curse For Pakistan?

Planted Stories in Media

Indian BJP Troll Farm

Kulbhushan Jadhav Caught in Balochistan

The Story of Pakistan's M8 Motorway

Pakistan-China-Russia vs India-Japan-US

Riaz Haq's Youtube Channel

Wednesday, April 25, 2018

London-based Exotix Capital: "Coalition led by PTI has become more likely"

Exotix Capital, a UK investment firm specializing in emerging markets, hosted Pakistan Tehreek-e-Insaf (PTI) Chief Imran Khan at its London headquarter this week.  After the event, a tweet from the firm said the PTI Chief  addressed "senior representatives of some of the world’s biggest institutional investors" at this meeting.

Source: Exotix



During discussion that followed his presentation, Imran Khan showed "Reluctant acceptance that IMF assistance may be necessary" and expressed "pragmatism on the need for constructive US relations" and "regret over the lack of transparency of pricing in Chinese-led infrastructure projects", according to a report.

Based on the events in Pakistan since July, 2017 beginning with the disqualification of Mr. Nawaz Sharif from holding elected office, analysts at Exotix have concluded that a "coalition led by PTI has become more likely". The analysts say this is "positive long term, warning short term"

Related Links:

Haq's Musings

South Asia Investor Review

Imran Khan Inspired by Allama Iqbal

Changing Face of Political Rallies in Pakistan

FUD Against CPEC

Panama Leaks

Disqualification of Nawaz Sharif

West Enables Corruption in Developing World

Tuesday, April 24, 2018

Rape: A Political Weapon in Modi's India

An 8-year-old Muslim girl Asifa Bano was locked in a Hindu temple, drugged, gang-raped for several days and then bludgeoned to death in Indian occupied Kashmir, according to a report in a leading American newspaper.

Gang Rape Victim: 8-Year-Old Asifa Bano
Support of Rapists: 

The horror of a Muslim child's rape and murder was made even worse when the ruling BJP-affiliated right-wing Hindu lawyers marched in defense of her attackers. Prime Minister Narendra Modi reluctantly condemned the crime after waiting for several days. His belated acknowledgment came in response to international outrage.

Is this just another rape in India? Did the child's Muslim faith make her a target? Has Islamophobia gone mainstream in India?  To answer these questions, let us put some context to what is happening in Modi's India.

India saw about 39,000 rape cases reported in 2016, a 12% jump over the prior year, according to Indian crime statistics.  Children were reported as victims in 42% of the cases.

It is hard to say how many of the rape victims were Muslim.  What is known, however, is the exhortation by iconic Hindutva leaders to rape of Muslim women.  Vinayak Damodar Savarkar, one of the founders of right-wing RSS who Prime Minister Modi describes as "worthy of worship", is among them. After getting elected to the highest office in India, Modi paid tribute to Savarkar by laying flowers at his portrait that hangs in India's Parliament.

Hindu Nationalist Leader VD Savarkar

VD Savarkar, in one of his books titled Six Glorious Epochs of Indian History, elaborates on why raping of Muslim women is not only justified but encouraged.

Savarkar has used revisionist Hindutva history to exhort his followers to rape Muslim women as payback for historic wrongs he believes were committed by Muslim conquerers of India. “Once they are haunted with this dreadful apprehension that the Muslim women too, stand in the same predicament in case the Hindus win, the future Muslim conquerors will never dare to think of such molestation of Hindu women,” he writes.

Hindutva Revisionist History: 

American history professor Audrey Truschke, in her recently published book "Aurangzeb: The Life and Legacy of India's Most Controversial King" has argued that colonial-era British historians deliberately distorted the history of Indian Muslim rule to vilify Muslim rulers as part of the British policy to divide and conquer India.  These misrepresentations of Muslim rule made during the British Raj appear to have been accepted as fact not just by Islamophobic Hindu Nationalists but also by at least some of the secular Hindus in India and Muslim intellectuals in present day Pakistan, says the author.  Aurangzeb was neither a saint nor a villain; he was a man of his time who should be judged by the norms of his times and compared with his contemporaries, the author adds.

Truschke says the original history of the Mughal rule was written in Persian. However, it is the English translation of the original work that are often used to distort it. Here's what she says about it in her book:

"The bulk of Mughal histories are written in Persian, the official administrative language of the Mughal empire but a foreign tongue in India today. Out of necessity and ease, many historians disregard the original Persian text and rely instead on English translations. This approach narrows the the library of materials drastically, and many translations of the Mughal texts are of questionable quality, brimming with mistranslations and abridgments. Some of these changes conveniently served the agendas of the translators, especially colonial-era translations that tend to show Indo--Muslim kings at their worst so that the British would seem virtuous by comparison (foremost here is Elliot and Dowson's History of India as Told by Its Own Historians). Such materials are great for learning about British colonialism, but they present an inaccurate picture of Mughal India."

Modi's Record: 

In 2002 when Narendra Modi was chief minister of the Indian state of Gujarat, hundreds of young Muslim girls were sexually assaulted, tortured and killed.  These rapes were condoned by the ruling BJP, whose refusal to intervene lead to the rape and killing of thousands and displacement of 200,000 Muslims.

Since his election to India's top elected office, Modi has elevated fellow right-wing Hindu extremists to positions of power in India. Yogi Adiyanath, known for his highly inflammatory anti-Muslim rhetoric, was hand-picked in 2016 by Modi to head India's most populous state of Uttar Pradesh.

Adiyanath's supporters brag about digging up Muslim women from their graves and raping them. In a video uploaded in 2014,  he said, “If [Muslims] take one Hindu girl, we’ll take 100 Muslim girls. If they kill one Hindu, we’ll kill 100 Muslims.”

Yogi wants to "install statues of Goddess Gauri, Ganesh and Nandi in every mosque”.  Before his election, he said, “If one Hindu is killed, we won’t go to the police, we’ll kill 10 Muslims”.  He endorsed the beef lynching of Indian Muslim Mohammad Akhlaque and demanded that the victim's family be charged with cow slaughter.

Madhav S. Golwalkar, considered among the founders of the Hindu Nationalist movement in India, saw Islam and Muslims as enemies. He said: “Ever since that evil day, when Moslems first landed in Hindusthan, right up to the present moment, the Hindu Nation has been gallantly fighting to shake off the despoilers".

In his book We, MS Golwalkar wrote the following in praise of what Nazi leader Adolf Hitler did to Jews as a model for what Hindus should do to Muslims in India: "To keep up the purity of the Race and its culture, Germany shocked the world by her purging the country of the Semitic races -- the Jews. Race pride at its highest has been manifested here. Germany has also shown how well-nigh impossible it is for races and cultures, having differences going to the root, to be assimilated into one united whole, a good lesson for us in Hindusthan to learn and profit by."

Social Hostility Against Minorities in South Asia. Source: Bloomberg

Rise of Hindu Nationalists: 

The situation for India's minorities, particularly Muslims, has become a lot worse in the last two years with Hindu mobs raping and lynching Muslims with impunity. The 2016 election of anti-Muslim radical Hindu priest Yogi Adiyanath as Chief Minister of Uttar Pradesh, India's most populous state, is seen as a clear signal from Mr. Modi that his anti-Muslim policies will continue.

Mohammad Akhlaq is believed to be the first victim of Hindu lynch mobs claiming to be protecting the cow. He was accused of consuming beef. For more than a week Prime Minister Narendra Modi remained silent over the incident and even after he spoke about it, he did not condemn it outright. The ruling BJP officials even tried to explain it as the result of the genuine anger of the Hindus over the slaughtering of a cow.

Pew Research Report:

A Pew Research report from data collected in 2015, about a year after Modi rose to power, found that the level of hostility against religious minorities is "very high". In fact, it said India scores 9 for social hostilities against religious minorities on a scale of 0-10.   Other countries in "very high" category for social hostilities include Nigeria, Iraq and Syria. Pakistan's score on this scale is 7 while Bangladesh is 5.5.

Pew Research Report on Religious Freedom

History of Anti-Muslim Riots in India:

Paul Richard Brass, professor emeritus of political science and international relations at the Henry M. Jackson School of International Studies, University of Washington, has spent many years researching communal riots in India. He has debunked all the action-reaction theories promoted by Hindu Nationalists like Modi. He believes these are not spontaneous but planned and staged as "a grisly form of dramatic production" by well-known perpetrators from the Sangh Parivar of which Prime Minister Modi has been a member since his youth.

Here's an excerpt of Professor Brass's work:

"Events labelled “Hindu-Muslim riots” have been recurring features in India for three-quarters of a century or more. In northern and western India, especially, there are numerous cities and town in which riots have become endemic. In such places, riots have, in effect, become a grisly form of dramatic production in which there are three phases: preparation/rehearsal, activation/enactment, and explanation/interpretation. In these sites of endemic riot production, preparation and rehearsal are continuous activities. Activation or enactment of a large-scale riot takes place under particular circumstances, most notably in a context of intense political mobilization or electoral competition in which riots are precipitated as a device to consolidate the support of ethnic, religious, or other culturally marked groups by emphasizing the need for solidarity in face of the rival communal group. The third phase follows after the violence in a broader struggle to control the explanation or interpretation of the causes of the violence. In this phase, many other elements in society become involved, including journalists, politicians, social scientists, and public opinion generally. At first, multiple narratives vie for primacy in controlling the explanation of violence. On the one hand, the predominant social forces attempt to insert an explanatory narrative into the prevailing discourse of order, while others seek to establish a new consensual hegemony that upsets existing power relations, that is, those which accept the violence as spontaneous, religious, mass-based, unpredictable, and impossible to prevent or control fully. This third phase is also marked by a process of blame displacement in which social scientists themselves become implicated, a process that fails to isolate effectively those most responsible for the production of violence, and instead diffuses blame widely, blurring responsibility, and thereby contributing to the perpetuation of violent productions in future, as well as the order that sustains them."

"In India, all this takes place within a discourse of Hindu-Muslim hostility that denies the deliberate and purposive character of the violence by attributing it to the spontaneous reactions of ordinary Hindus and Muslims, locked in a web of mutual antagonisms said to have a long history. In the meantime, in post-Independence India, what are labelled Hindu-Muslim riots have more often than not been turned into pogroms and massacres of Muslims, in which few Hindus are killed. In fact, in sites of endemic rioting, there exist what I have called “institutionalized riot systems,” in which the organizations of militant Hindu nationalism are deeply implicated. Further, in these sites, persons can be identified, who play specific roles in the preparation, enactment, and explanation of riots after the fact. Especially important are what I call the “fire tenders,” who keep Hindu-Muslim tensions alive through various inflammatory and inciting acts; “conversion specialists,” who lead and address mobs of potential rioters and give a signal to indicate if and when violence should commence; criminals and the poorest elements in society, recruited and rewarded for enacting the violence; and politicians and the vernacular media who, during the violence, and in its aftermath, draw attention away from the perpetrators of the violence by attributing it to the actions."

Summary:

India is seeing a spate of gang rapes and lynchings of Muslims by Hindu mobs who have been emboldened by the rise of anti-Muslim Hindu Nationalist leader Narendra Modi since his 2014 election to the highest office in India.  In their writings, iconic Hindutva leaders like Savarkar have encouraged rape of Muslim women. The elevation of radical Hindu Yogi Adiyanath to the top job in Uttar Pradesh by Mr. Modi has further alarmed India's Muslim minority. University of Washington's Professor Emeritus Paul Brass, who has documented the history of anti-Muslim violence in India,  describes it as "a grisly form of dramatic production" by well-known perpetrators from the Sangh Parivar of which Prime Minister Modi has been a member since his youth. Pew Research report on religious violence confirms India's status as a country with "very high" levels of social hostilities against religious minorities.  There appears to be no relief in sight for them at least in the foreseeable future.

Related Links:

Haq's Musings

Islamophobia Goes Mainstream

700,000 Indian Troops vs 10 Million Kashmiris

Muslim Lynchings in Modi's India

Yogi Adiyanath as UP CM

Hindu Nationalists Admire Hitler

Hinduization of India Under Modi

Muslim Victims of Gujarat 2002

India's Superpower Delusions: Modi's Flawed Policies

What Do Modi and Trump Have in Common?

Pakistani Film Cake Breaks Sindhi Stereotypes

Pakistani movie "Cake" is a Sindhi family drama set in Karachi and rural Sindh.  I had the chance to see it on a Silicon Valley theater screen in California.

Cake is nothing like the usual Bollywood fare featuring an "item song" included in a series of song-and-dance sequences. It tells a story accompanied with a great soundtrack showcasing the classic Sindhi poetry of Shah Abdul Latif Bhitai and Shaikh Ayaz, some of it sung by Allan Fakir in his mournful voice.

Directed by Asim Abbasi, the movie has an interesting plot and it tells a good story. What makes its  plot especially relevant to the Pakistani diaspora is that it involves a theme familiar to them: Ailing elderly parents  (Jamalis ably played by Mohammad Ahmed and Beo Raana Zafar) in Pakistan with two of their three children living overseas. It also defies the stereotypical depiction of patriarchal Sindhi men as cruel landlords oppressing their women and peasants.

At the center of the story is Zareen (Aamina Sheikh) who takes care of her aging parents in Karachi and their land in rural Sindh. She is joined by her sister Zara (Sanam Saeed) from London when their elderly parents' health suddenly deteriorates.  Many long unresolved family issues come to the surface as they spend time together.  Some of the issues are triggered by the arrival of Christian nurse Romeo (Adnan Malik) who helps the sisters in providing care to their parents.

Except for a few sentences spoken in Sindhi by Aamina Sheikh, the rest of the movie features Urdu as the primary language spoken by the main characters in the movie. It shows how widely Urdu has been embraced by all ethnic groups as the lingua franca binding Pakistanis together as a nation.

Cake is a well-made and beautiful movie featuring great acting talent that breaks old stereotypes. It is yet another confirmation of the renaissance that the Pakistani cinema has seen in the last decade.

Related Links:

Haq's Musings

South Asia Investment Review

Bollywood Revenue in Sharp Decline

Bollywood Eyes Pakistan Market

Peepli Live Destroys Indian Myths

Bollywood-Hollywood Combos

Indian Bollywood Seeks Cultural Dominance

US Mortgage Fraud Funded Bollywood Movie


Friday, April 20, 2018

Post-Truth Partition Narrative Delegitimizes Pakistan

The partition of India to carve out the Muslim majority state of Pakistan was strongly contested by the Hindu-dominated Indian National Congress. It was also opposed by many within the Indian Muslim community from both the right and the left ends of the political spectrum. In the end, the vast majority of Indian Muslims sided with Quaid-e-Azam Mohammad Ali Jinnah and Pakistan became a reality on August 14, 1947. It was a great accomplishment of the Quaid-e-Azam Mohammad Ali Jinnah. His biographer and American historian Stanley Wolpert, Professor Emeritus at the University of California at Los Angeles (UCLA), has acknowledged it as follows: “Few individuals significantly alter the course of history. Fewer still modify the map of the world. Hardly anyone can be credited with creating a nation-state. Mohammad Ali Jinnah did all three.” Sore losers as they are, Pakistan's and Quaid-e-Azam's detractors continue to promote falsehoods to delegitimize both the founder and the country he created.


Quaid-e-Azam Mohamad Ali Jinnah Time Magazine Cover
Churchill Created Pakistan:

The latest attempt to delegitimize Pakistan is being made by some who now argue that it was late British Prime Minister Sir Winston Churchill who created Pakistan. The film "The Viceroy's House" is a new manifestation of this delegitimization campaign. It is nothing but false history.  Why? Because it ignores several well-documented facts contradicting it, including the following:

1. Churchill was ousted as prime minister of Britain two years before the partition of India when his party lost the 1945 British parliamentary elections. He was replaced by Clement Attlee who introduced the India Independence Act 1947 in the British Parliament. Churchill spoke in opposition to it.

2. Churchill opposed the end of the British Raj. "Churchill was very much on the far right of British politics over India," says Charmley. "Even to most Conservatives, let alone Liberals and Labour, Churchill's views on India between 1929 and 1939 were quite abhorrent." Churchill's stance was very much that of a late Victorian imperialist, says John Charmley, author of Churchill: The End of Glory.. "[Churchill] was terribly alarmed that giving the Indians home rule was going to lead to the downfall of the British Empire and the end of civilization."

3. Quaid-e-Azam Mohammad Ali Jinnah had earlier accepted the Cabinet Mission proposal for full autonomy for Muslim majority provinces and the right to form regional groupings of provinces within India, a proposal that was rejected by Nehru thereby paving the way for the Partition of India.

4. British Viceroy Lord Mountbatten assured Indian leader Jawharlal Nehru in 1947 that Pakistan was only a "nissen hut", a temporary tent.   Here's the exact quote from Mountbatten: "administratively it [wa]s the difference between putting up a permanent building, a nissen hut or a tent. As far as Pakistan is concerned we are putting up a tent. We can do no more." Both expected Pakistan would soon fail, fold up and rejoin India. Pakistan has defied that "hope" by not only surviving but thriving in the face of mounting challenges from the first day it became an independent state.

Two Nation Theory:

The Quaid's quest for Pakistan as an independent state for Muslims was motivated by a desire to give India's disadvantaged minority Muslims better opportunities to grow and prosper. While it's true that Pakistan has not lived up to the Quaid's expectations, it is also true that, in spite of all their problems, Muslims in Pakistan are still much better off  than their counterparts in India.

The growing intolerance in Modi's India and the Indian government commission headed by former Indian Chief Justice Rajendar Sachar confirm that Muslims are the new untouchables in caste-ridden and Islamophobic India. Indian Muslims suffer heavy discrimination in almost every field from  education and housing to jobs and criminal justice.  Their incarceration rates are much higher than those of their Hindu counterparts.

According to Sachar Commission report, Muslims are now worse off than the Dalit caste, or those called untouchables. Some 52% of Muslim men are unemployed, compared with 47% of Dalit men. Among Muslim women, 91% are unemployed, compared with 77% of Dalit women. Almost half of Muslims over the age of 40 can not read or write. While making up 11% of the population, Muslims account for 40% of India’s prison population. Meanwhile, they hold less than 5% of government jobs.

Those who say that the Two-Nation-Theory died with the creation of Bangladesh in 1971 are wrong. They need to be reminded that the Lahore Resolution of March 23, 1940, in fact called for two "independent states",  not a single "state", in Muslim majority areas of India in the north east and the north west. The other fact to remember is that Bangladesh did not choose to merge with India after separation from Pakistan.

Muslim Zion:

There have also been attempts by some to compare Pakistan with Israel to argue that Pakistan is illegitimate as is the Zionist state.

Such arguments fail to highlight this fundamental difference between the two states: Unlike Israel that was founded by people brought in from Europe for the explicit purpose of creating the Jewish state in Palestine, Pakistan was created by indigenous population of Indian Muslims who were led by leaders born and raised in India. Pakistan is the result of Indian Muslim Nationalist movement, not an outpost of European colonialism started by foreign transplants.

Economic Opportunity For Muslims:

Quaid-e-Azam Mohammad Ali Jinnah sought better opportunities for Indian Muslims who felt deeply deprived in India.  In 1947, most of the agricultural land in the largely agrarian provinces of Sindh and Punjab was owned by non-Muslims.  The urban elites of the major cities of Karachi and Lahore were almost entirely non-Muslims. Muslims were in majority in both provinces but they were mostly poor peasants.

In Punjab, two-thirds of the land-holdings and 99% of bank deposits of Rs. 100 crore in Lahore were held by Hindus and Sikhs, according to the British archives researched by Dr. Kirpal Singh, author of "PARTITION of PUNJAB", published in 1972.

Only 3 out of 16 colleges in Lahore were run by Muslims. Of the 15 professional colleges, excluding 3 run by the government, all were run by non-Muslims. All 12 hospitals were operated by non-Muslims. Muslims in undivided Punjab had very low standards of living relative to Hindus and Sikhs, they were poor and backward, and there was no Muslim professional or business class in Lahore of 1947.

In Sindh province, about 60% of the agricultural land was owned by Hindus. The rest of the land was owned by big and small Muslim landowners but they were almost always in debt to Hindu moneylenders who exacted over 100% interest on the money they lent, according to The Imperial Gazeteer of India by W.W. Hunter. These massive debt burdens on Sindhi Muslims were removed when most of the Hindu moneylenders fled to India at the time of the partition in 1947.

Education and health care in Sindh were entirely controlled by non-Muslims, mainly Hindu Sindhis, according to The Imperial Gazeteer of India by W.W. Hunter and Nandita Bhavnani, author of "THE MAKING OF EXILE: SINDHI HINDUS AND THE PARTITION OF INDIA", published in 2014.  The educated elite, including the professional and business classes, were mostly Hindus and a few Parsees.

The partition in 1947 has been tremendous boon for both Sindhi and Punjabi Muslims of Pakistan. They have reaped great benefits from: 1) Departure of powerful non-Muslims landowners and moneylenders to India in 1947 2)  Massive investments made by Pakistani government in major irrigation projects to create the world's largest contiguous irrigation system for farming since 1947. 3) Large investments in education, health care and urban development that have helped raise standards of living significantly as seen in various health (life expectancy) and wealth (per capita incomes)  indicators after 1947.

Quaid-e-Azam Mohammad Ali Jinnah's Quote Tweeted By UN Human Rights Coordinator


Quaid-e-Azam's Vision:

Pakistan's founder Quaid-e-Azam Mohammad Ali Jinnah sought Pakistan as a homeland for Indian Muslims where they had better opportunities to grow and prosperity. But the Quaid's vision was a pluralistic vision. It is reflected in the words of what he described as Prophet Muhammad's first constitution called Misaq-e-Madina. It is also found in Quaid-e-Azam's other speeches that are mistakenly seen by some as conflicting with his quote: "Who am I to give you the constitution? The Prophet of Islam had given us a constitution 1300 years ago."

Here is a quote from one of Quaid-e-Azam's August 11, 1947 speech that reaffirm his pluralistic vision of Pakistan:

"You are free; you are free to go to your temples, you are free to go to your mosques or to any other place of worship in this State of Pakistan. You may belong to any religion or caste or creed that has nothing to do with the business of the State"

This vision is a very much Islamic. It is a reflection of the constitution of the world's first Islamic state in Madina. Here's the opening line of Misaq-e-Madina:

"This is a document from Muhammad the Prophet (may Allah bless him and grant him peace), governing relations between the Believers i.e. Muslims of Quraysh and Yathrib and those who followed them and worked hard with them. They form one nation -- Ummah."

It clearly says that all citizens of "Yathrib" (ancient name of Madina), regardless of  their tribe or religion, are part of one nation--"Ummah". So the word "Ummah" here does not exclude non-Muslims.

Further into the "Misaq" document, it says: "No Jew will be wronged for being a Jew. The enemies of the Jews who follow us will not be helped. If anyone attacks anyone who is a party to this Pact the other must come to his help."

The Mesaq assures equal protection to all citizens of Madina, including non-Muslim tribes which agreed to it. The contents of Misaq-e-Madina, Islam's first constitution approved by Prophet Mohammad 1400 years ago, appear to have inspired Quaid-e-Azam Mohammad Ali Jinnah vision of Pakistan where people of all religions and nationalities live in harmony with equal rights and protections under the law.

Pakistani Nationalism: 

Some Indian and western writers and journalists present caricatures of Pakistan that bear no resemblance to reality.  They portray Pakistan as a artificial and deeply divided failed state. What they fail to see is  Pakistan is not one or two dimensional; it's much more complex as explained by Christophe Jaffrelot in his book "The Pakistan Paradox: Instability and Resilience".

Political, military, religious, ethnic, sectarian, secular,  conservative and liberal forces are constantly pushing and pulling to destabilize it but Pakistan remains resilient with its strong nationalism that has evolved after 1971. Pakistan is neither a delusion nor owned by mullahs or military as claimed by some of Pakistan's detractors.

In a 2015 Op Ed for NDTV titled "What Modi Has Not Recognized About Pakistan", Indian politician Mani Shankar Aiyar recognized Pakistani nationalism as follows:

"..unlike numerous other emerging nations, particularly in Africa, the Idea of Pakistan has repeatedly trumped fissiparous tendencies, especially since Pakistan assumed its present form in 1971. And its institutions have withstood repeated buffeting that almost anywhere elsewhere would have resulted in the State crumbling. Despite numerous dire forecasts of imminently proving to be a "failed state", Pakistan has survived, bouncing back every now and then as a recognizable democracy with a popularly elected civilian government, the military in the wings but politics very much centre-stage, linguistic and regional groups pulling and pushing, sectarian factions murdering each other, but the Government of Pakistan remaining in charge, and the military stepping in to rescue the nation from chaos every time Pakistan appeared on the knife's edge. The disintegration of Pakistan has been predicted often enough, most passionately now that internally-generated terrorism and externally sponsored religious extremism are consistently taking on the state to the point that the army is so engaged in full-time and full-scale operations in the north-west of the country bordering Afghanistan that some 40,000 lives have been lost in the battle against fanaticism and insurgency".

Summary:

Pakistan was created in the face of strong opposition from Hindu dominated Congress Party and some Muslim groups from the right and the left. The vast majority of Muslims of India supported the Muslim League and the partition of India to carve out the new state of Pakistan.  It was a great accomplishment of the Quaid-e-Azam Mohammad Ali Jinnah. His biographer and American historian Stanley Wolpert, Professor Emeritus at the University of California at Los Angeles (UCLA), has acknowledged it as follows: “Few individuals significantly alter the course of history. Fewer still modify the map of the world. Hardly anyone can be credited with creating a nation-state. Mohammad Ali Jinnah did all three.” Sore losers as they are, Pakistan's and Quaid-e-Azam's detractors continue to promote falsehoods to delegitimize both the founder and the country he created.

Related Links:

Haq's Musings

South Asia Investor Review

Is Two Nation Theory Dead?

Lahore Resolution of 1940

Quaid-e-Azam Mohammad Ali Jinnah's Vision of Pakistan

Islamophobia in India

Hinduization of India

Pakistanis Send $5 Billion a Year to Relatives in India

Pakistan: A Blessing For Muslims

India-Pakistan Nuclear Arms Race

The Other 99% of the Pakistan Story