Friday, March 27, 2015

Median Incomes and Middle Class Bangladeshis, Indians and Pakistanis

Pakistan's per capita median income is $73.26 per month in terms of 2005 PPP (purchasing poverty parity) US dollars as of 2010. It is higher than India's $60.48 and Bangladesh's $51.67 per capita per month, according to the World Bank.

Source: World Bank


Median income is the amount that divides the income distribution into two equal groups, half having income above that amount, and half having income below that amount. Mean income (average) is the amount obtained by dividing the total aggregate income of a country by the number of people in that country.  A country's median income is a better indicator than the average income to gauge how a population is faring economically.

Median income also helps assess the size of the middle class in India, Pakistan and Bangladesh based on the definition used by Asian Development Bank and World Bank. Both of these institutions define middle class as those earning $2 or more per capita per day in terms of 2005 PPP US$.

Pakistan median income of $73.26 per month translates into $2.44 per day, higher than $2 per day income level used by ADB and WB to define middle class. It means that more than 50% of Pakistanis are in middle class. India's $60.48 per month puts 50% of Indians in middle class while Bangladesh's $51.67 means fewer than 50% of Bangladeshis are in middle class.

Source: Asian Development Bank 2010



A 2010 Asian Development Bank's report titled "Asia's Emerging Middle Class: Past,. Present, And Future" reported Pakistan's middle class size as 40.12%  of the country's population as of 2005.  It also estimated Bangladesh's middle class at 20.25% and India's at 25.05% of their total populations.

Source: Institute of Business Administration Karachi Pakistan


More recently, research conducted by Dr. Jawaid Abdul Ghani of Karachi School of Business and Leadership (KSBL) concluded that Pakistan's middle class rose to 55% of the country's population in 2010.

Even though Pakistan's GDP growth has been relatively low compared to India and Bangladesh in recent years, the country's middle class has continued to grow rapidly. It's explained as follows: It's not the overall GDP growth and average per capita income increases but the median per capita income growth that tells you how the GDP gains are shared among the population.

Data shows that economic gains in Pakistan are shared better than India and Bangladesh because of lower inequality. Income poverty rate (those below $1.25 per capita per day) in India is 33% and Bangladesh 43% versus 13% in Pakistan, according to WB data on povcalNet.  Gini Index for India is 33, Pakistan 29 and Bangladesh 32, indicating that Pakistan has lower inequality.

Related Links:

Haq's Musings

Pakistan's Middle Class Estimated at 55% of Population

Comparing Bangladesh and Pakistan in 2012

India-Pakistan Comparison in 2014

Pakistan's Official GDP Figures Ignore Booming FMCG Sector

Musharraf Accelerated Human and Economic Development in Pakistan

Pakistan's Growing Middle Class

Pakistan's GDP Grossly Under-estimated; Shares Highly Undervalued

Fast Moving Consumer Goods Sector in Pakistan

3G-4G Roll-out in Pakistan



Mobile Money Revolution in Pakistan

Friday, March 20, 2015

Tipping Point: Pakistan Middle Class Rises to 55% of Population

Majority of the households in Pakistan now belong to the middle class, a first in Pakistan's history, according to research by Dr. Jawaid Abdul Ghani of Karachi School of Business and Leadership (KSBL).

It's an important tipping point that puts Pakistan among the top 5 countries with fastest growing middle class population in Asia-Pacific region, according to an Asian Development Bank report titled Asia's Emerging Middle Class: Past, Present, And Future. The ADB report put Pakistan's middle class growth from 1990 to 2008 at 36.5%, much faster than India's 12.5% growth in the same period.

Source: Dr. Abdul Ghani



From 2002 to 2011, the country's middle class, defined as households with daily per capita expenditures of $2-$10 in 2005 purchasing power parity dollars, grew from 32% to 55% of the population, according to a paper presented by Dr. Abdul Ghani at Karachi's Institute Business Administration's International Conference on Marketing. Dr. Ghani has cited Pakistan Standards of Living Measurement (PSLM) Surveys as source of his data.

Growing middle class is a major driver of economic growth, as the income elasticity for durable goods and services for middle class consumers is greater than one, according to a Brookings Institution study titled The Emerging Middle Class in Developing Countries.



Among some of the manifestations of the rising middle class, Dr. Abdul Ghani reports dramatic increase in the ownership of television sets, refrigerators and motorcycles in households in all income deciles in Pakistan.  At the same the total household assets have nearly doubled from $387 billion in 2001-02 to $772.6 billion in 2010-11 in terms of 2005 purchasing power parity dollars.

Consumer spending in Pakistan has increased at a 26 percent average pace the past three years, compared with 7.7 percent for Asia, according to data compiled by Euromonitor International, a consumer research firm. Pakistan's rising middle class consumers  in major cities like Karachi, Lahore and Islamabad are driving sales of international brand name products and services.  Real estate developers and retailers are responding to it by opening new mega shopping malls such as Dolmen in Karachi and Centaurus in Islamabad.

Pakistan's transition to middle-class middle-income country over the last decade mainly during Musharraf years represents a major tipping point for the country's economy. It is likely to accelerate economic growth driven by consumption and draw greater investments in production of products and services demanded by middle class consumers. Some of it is already in evidence in booming sales of durable goods (TV sets, refrigerators, motorcycles) AND non-durables (cosmetics, shampoo, toothpaste, processed foods, etc) in Pakistan's booming FMCG sector.

Related Links:

Haq's Musings

Pakistan's Official GDP Figures Ignore Booming FMCG Sector

Musharraf Accelerated Human and Economic Development in Pakistan

Pakistan's Growing Middle Class

Pakistan's GDP Grossly Under-estimated; Shares Highly Undervalued

Fast Moving Consumer Goods Sector in Pakistan

3G-4G Roll-out in Pakistan




Friday, March 13, 2015

Pakistan Burraq Drone to Help Fight Terror

Pakistan has successfully flight-tested Burraq, its first armed drone. The new unmanned combat aerial vehicle (UCAV) fired and precisely hit both still and moving targets with Barq, a laser-guided missile it carried under its wings.

Pakistan UCAV Burraq Source: ISPR

Based on Chinese CH-3 specification,the indigenously developed Burraq can carry 100-kilogram payload.  It is a medium altitude long endurance (MALE) drone which can stay up for 12 hours. The payload can be laser-guided missile Barq, similar to Chinese  AR-1 missiles, or a pair of precision guided small-diameter bombs like the Chinese FT series PGM.

With its successful Burraq test, Pakistan joins eight other countries — the United States, South Africa, France, Nigeria, Britain, Iran, Israel and China — which have already put weapons onto unmanned aircraft, according to the New America Foundation. Of these, only the US, Britain and Israel have successfully deployed armed drones during military operations, the foundation said.

Pakistani military's interest in armed drone technology is based on its direct knowledge of how effective American Predator drones have been in targeting and eliminating Taliban terrorists in Pakistan's FATA (Federally Administered Tribal Areas).

The objections to US drone strikes in Pakistan have mainly been due to the political sensitivity with violation of sovereignty, not due to lack of precision and effectiveness. Top TTP terrorist leaders Nek Mohammad, Baitullah Mehsud and Hakimullah Mehsud have all been killed in US drone strikes.

In a rare public statement on the effectiveness of the US drone campaign in FATA, General Officer Commanding 7-Division Maj-Gen Ghayur Mehmood serving in Waziristan in 2011 confirmed the effectiveness of US Predators when he said: "Yes there are a few civilian casualties in such precision strikes, but a majority of those eliminated are terrorists, including foreign terrorist elements.”

Pakistan is hoping to emulate the success of American drones in FATA by deploying Burraq in its ongoing anti-terror campaign in Waziristan and other tribal agencies.  Burraq has the ability to linger over targets for long periods of time, gather intelligence and fire deadly missiles precisely at much lower cost than fighter planes like F-16 and JF-17.

Here's a video of Burraq Test:

http://dai.ly/x2jf47j



Pakistan successfully tests 'Burraq' first... by dawn-news

Related Links:

Haq's Musings

Drones Outrage and Inspire Pakistanis

US Drone Strikes and Bloody Blowback in Pakistan

Pakistan Shaheen 3 Can Serve as SLV and Hit Deep Inside India & Israel

IDEAS 2014: Pakistan's Biggest Ever Arms Bazar

Revolution in Military Affairs in South Asia

Pakistan Defense Production Goes High-Tech

Drones Outrage and Inspire Pakistanis

RMA Status in Pakistan

Cyber Wars in South Asia

Genomics and Biotech Advances in Pakistan

India's Israel Envy: What if Modi Attacks Pakistan

Eating Grass: Pakistan's Nuclear Program

Thursday, March 12, 2015

Success of Shaheen 3 to Boost Pakistan's Space Program

Pakistan has successfully tested Shaheen III ballistic missile with 1700 mile range. The intermediate range missile can hit deep inside India and Israel. Its multi-stage solid-fuel technology can also be used to launch satellites into space. It has been jointly developed by the National Engineering and Scientific Commission (NESCOM) and the Space and Upper Atmosphere Research Commission (SUPARCO). It's the latest example of dual-use technology.

Pakistan Shaheen 3 Missile Range Source: Washington Post
The missile was successfully test-fired into the Arabian Sea on Monday, March 9, 2015, according to the Strategic Plans Division (SPD) which oversees Pakistan’s nuclear program. Announcing the result, General Zubair Mahmood Hayat, the head of SPD, congratulated NESCOM (National Engineering and Scientific Commission) scientists and engineers for “achieving yet another milestone of historic significance.”


Shaheen-III is the latest in the series of the indigenously produced Shaheen-I and Shaheen-II, which had shorter ranges. “The test launch was aimed at validating various design and technical parameters of the weapon system at maximum range,” the Pakistani military said in a statement. Pakistani military leaders are trying to maintain a “credible deterrence” as arch-rival India continues to invest heavily in military hardware.

Since the technology used in satellite launch vehicles (SLV) is virtually identical to that used in a ballistic missile, Shaheen 3, the latest enhancement to Shaheen series of missiles, is expected to boost Pakistan's space program as well.  Several nations, including India and Israel recently, have used same rocket motors for  both ballistic missiles and satellite launch vehicles (SLVs).  Israel's Shavit SLV and India's SLV-3 are examples of it.

The success of Shaheen 3 multi-stage solid-fueled ballistic missile is a confirmation of Pakistan's determination to ensure its security AND to pursue its space ambitions at the same time. I congratulate Pakistani engineers and scientists at NESCOM and SUPARCO on their hard work, continuing deep commitment and the latest achievement.

Related Links:

Haq's Musings

India's Israel Envy

Pakistan Space Program

Revolution in Military Affairs

Pakistan Defense Production Goes High-Tech

Drones Outrage and Inspire Pakistanis

RMA Status in Pakistan

Cyber Wars in South Asia

Pakistan's Biggest Ever Arms Bazar

Genomics and Biotech Advances in Pakistan

India's Israel Envy: What if Modi Attacks Pakistan

Eating Grass: Pakistan's Nuclear Program

Thursday, February 26, 2015

Pakistan Deploys Big Data to Fight Terror

Pakistan has started verifying identities of over 135 million cell phone users through fingerprints. The massive exercise is being described by Washington Post as the "world’s largest — and fastest — efforts to collect biometric information". The deadline for completion is March 14, 2015.


Several countries, including South Africa and India, have recently implemented broad systems for collecting and storing their citizens biometric information. But analysts and communications experts say they can’t recall a country trying to gather biometrics as rapidly as Pakistan is doing, according to the Washington-based American newspaper.


In addition to setting up biometric verification systems at tens of thousands of retail points run by carriers, the cellphone companies have launched massive advertising campaigns and sent mobile vans around the country to accelerate the process. About half of all SIMs have so far been verified.

The companies are warning subscribers that their SIM (subscriber identity module) cards will not work unless the owners' fingerprints are  entered and verified against the database maintained by the National Database Registration Authority (NADRA). They have to show their computerized national identity cards (CNICs) and fingerprints. If the scanner matches their print with the one in a government database, they can keep their SIM card. If not, or if they don't show up, their cellphone service is cut off.

The current SIM registration drive is part of the government's new counter terrorism campaign. Cellphones have been used in the past to detonate explosive devices as well as to make extortion calls. Identification of SIM cards is expected to discourage such acts of terror and help track down the perpetrators.

The use of Big Data like Pakistan's biometric database is not limited to catching terrorists and criminals. It can also be used to significantly improve governance. Here's how Tariq Malik, the architect of Pakistan's NADRA, describes it in a recent piece for Forbes magazine:

BIG Data can now be leveraged for a variety of public uses, and re-uses. It can strengthen the link between citizens and state to enhance state capacity, and its applications are varied—ranging from disaster management to social service delivery.  

Collecting, storing and processing structured and unstructured information is an endeavor that is both massive and meticulous. But thanks to advancing big data technology, it’s more feasible today than ever before. BIG Data can now be leveraged for a variety of public uses, and re-uses. It can strengthen the link between citizens and state to enhance state capacity, and its applications are varied—ranging from disaster management to social service delivery. 

Consider Pakistan’s National Database And Registration Authority (NADRA) that houses one of the world’s largest multi-biometric citizens database, consisting of ten fingerprints, digital photographs and biographic attributes of each citizen. More than 121 million identities are stored in this database. When floods suddenly hit Pakistan in 2010, over 20 million citizens were displaced. Government wanted to provide monetary subsistence and aid for the rehabilitation and reconstruction effort; however, the problem was that while traditional aid could be dropped via helicopter, cash could not. They were further challenged with verifying claimants; specifically, identifying whether or not they belonged to a calamity hit area. 

 How could Pakistan support those affected by the disaster? The NADRA had a simple task to perform: cross verify citizen thumb prints with information stored in its database, then check their permanent address. The result was nothing short of miraculous. Essentially, big data allowed policymakers to know who the victims were and where they lived at the time of the crisis. Smart cards were quickly loaded with cash to help victims with rehabilitation efforts. More than $1 billion U.S. was disbursed without a single misappropriated penny. The process was swift and transparent, and international auditors were taken aback. 

All of this made international aid donors happy, since it cut down their cost of administration, eliminated doubts of corruption and narrowed the trust deficit. But more importantly, the state enforced its writ and citizens realized for the first time that the state is there for them in times of need. 

At last count, just 800,000 of Pakistan’s 180 million people paid direct taxes. Integrating data across various government databases, then reconciling it with the citizen database along with NADRA big data analytics helped identify 3.5 million tax evaders. It is estimated that if a basic minimum tax rate were applied, Pakistan would have $3.5 billion right away. Although big data analytics is no substitute for radical reform, it at least generates a healthy debate for tax reform. 

It’s been argued that state capacity is essentially “extractive capacity”; the ability to effectively tax its citizens and plough it back for public welfare. Advanced data analytics on big data provides an important linchpin in this ongoing debate. As NADRA’s experience illustrates, many fragile states face an even more basic challenge: the ability to accurately count and register its citizens. To collect and process big data in a way that does not compromise citizen privacy can have powerful development externalities, including the ability to build state capacity through tax collection—and avoid approaching the International Monetary Fund with a begging bowl. 

Big data analytics for government is a rapidly evolving field, offering exciting opportunities that, when explored and applied, can help fragile states uncover powerful and effective methods for optimizing governance.


Related Links:

Haq's Musings

NADRA Case Study

Pakistan Leads in Biometric IT Services

3G-4G Rollout in Pakistan 

Is India's AAdhaar Copied From Pakistan's NADRA?

Mobile Broadband in Pakistan