Sunday, May 28, 2017

Ramzan; Pakistan Economic Survey; Indian IT Job Losses; Tump's Foreign Tour

What is Ramadan all about? Is it only about abstaining from food and drink in the daylight hours? What is the key message for this Ramzan? Isn't respecting Huqooq-ul-Ibad (human rights of others) as important as observing Huqooq-ul-Allah (Duties to Allah such as prayer and fasting) for each Muslim? What must Muslims do this Ramzan to fulfill all of their obligations to Allah and His creation?

What does the Economic Survey of Pakistan say about Pakistan's GDP, per capita income, infrastructure development, education and other important indicators? What must Pakistani leaders do to ensure greater focus on and investment in education and not just in infrastructure? What is the size of and the key priorities in Pakistan's budget for 2017-18? Should some of the $20 billion (out of the $50 billion budget) for infrastructure be allocated to education to boost Pakistan's stagnant literacy and school enrollment rates?

Why is India losing IT jobs at a rate of 200,000 jobs a year, according to McKinsey? Is it all because of Trump's H1B visa tightening? Or does it have more to do with the need for new skills to deal with new technologies such as cloud computing and digital services?

What was the objective of Trump's tour of the Middle East and Europe? Has he achieved any of the objectives? Was Nawaz Sharif's low-key presence at the Riyadh summit appropriate? Are Nawaz Sharif's critics right? Should he have had a more prominent role at the US-Arab-Islamic summit? How would that impact Iran-Pakistan ties?


Viewpoint From Overseas host Misbah Azam discusses these questions with Riaz Haq (www.riazhaq.com)

https://youtu.be/ojEvEICkimA




Related Links:

Haq's Musings

Riaz Haq's Ramadan Sermon

Pakistan's Lagging Literacy and School Enrollment Rates

Impact of Trump's H1B Visa Crackdown

Impact of Trump's Appointments on US Policy

Iran-Saudi Conflict

Talk4Pak Youtube Channel



Tuesday, May 23, 2017

Afiniti and Careem: Tech Unicorns Made in Pakistan

Afiniti and Careem are two technology unicorns engineered in Pakistan by Pakistanis. AI (artificial intelligence) startup Afiniti software has largely been engineered in Lahore while taxi hailing service Careem's technology has mostly been developed in Karachi. Here's more about these unicorns:

Careem:

Careem is a taxi hailing app that is giving its American competitor Uber a run for its money in a region stretching from Pakistan to the Middle East and North Africa. The company cofounded by Mudassir Sheika, a Pakistani national, is headquartered in Dubai in the United Arab Emirates.

Careem's last round  was valued at over a billion dollars when it raised $350 million from Japanese e-commerce firm Rakuten and Saudi Telecom Company (STC) at the end of 2016, according to Tech Crunch.

Careem's software has been developed by its technology partner VentureDive based in Karachi, Pakistan.  VentureDive was started by serial Pakistani entrepreneur Atif Azim who sold his earlier startup Perfigo to network equipment giant Cisco for $74 million in 2004, according to a report in Tech in Asia.

Atif launched VentureDive in 2011 and  took a small equity stake in Careem in exchange for building its entire tech stack – including the app, the website, and other digital platforms. That small stake has now grown to $50 million.

In 2016, Careem acquired VentureDive's engineering team working on its technology to give the engineers more ownership of the product – now they are getting equity stake in Careem and larger bonuses.

Afiniti Development Team in Lahore, Pakistan. Source: Afiniti.com


Afiniti:

Washington D.C. based AI technology firm Afiniti, founded by serial Pakistani-American entrepreneur Zia Chishti, has filed for initial public offering (IPO) at $1.6 billion valuation, according to VentureBeat. The company has grown out of the technology used in the Pakistan-based call center business of The Resource Group (TRG) also founded by Zia Chishti.

Bulk of the Afiniti development team is located in Thokar Niaz Baig, Lahore. In addition, the company has development team members in Islamabad and Karachi.

Chishti founded his first company Align Technology in 1997 in Silicon Valley. It creates clear plastic braces for straightening teeth by using advanced 3-D computer imaging. The technology now trademarked as Invisalign has helped millions of people straighten their teeth for a beautiful smile without enduring the pain and unsightly looks of the traditional steel brackets and wires used in orthodontics. Align Technology is now valued at $10 billion.

Afiniti uses artificial intelligence (AI) algorithms to enable real-time, optimized pairing of individual call center agents with individual customers in large enterprises for best results. When a customer contacts a call center, Afiniti matches his or her phone number with any information related to it from up to 100 databases, according to VentureBeat. These databases carry purchase history, income, credit history, social media profiles and other demographic information. Based on this information, Afiniti routes the call directly to an agent who has been determined, based on their own history, to be most effective in closing deals with customers who have similar characteristics.

Summary:

Pakistan is an emerging center of technology with at least two unicorns, Afiniti and Careem, engineered by Pakistanis in Pakistan.  With growing numbers of young homegrown Pakistani technologists, a highly skilled diaspora and an evolving startup ecosystem with incubators, accelerators and investors, the country is beginning to demonstrate its vast potential as a vibrant technology hub of the future. Provincial governments, particularly those in Punjab and KP, are showing leadership in encouraging this trend. The main ingredients are all coming together to make things happen in Pakistan.

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 



Monday, May 22, 2017

Campaign of Fear, Uncertainty and Doubt (FUD) About CPEC

An unrelenting campaign of fear, uncertainty and doubt (FUD) about China-Pakistan Economic Corridor (CPEC) has been unleashed in the media in recent weeks. This strategy harkens back to the aggressive marketing techniques used by the American computer giant IBM in the 1970s to fight competition.

Fear, Uncertainty and Doubt (FUD):

A definition of FUD that captures its essence is offered by Roger Irwin as follows: "Unable to respond with hard facts, scare-mongering is used via 'gossip channels' to cast a shadow of doubt over the competitors offerings and make people think twice before using it".

A number of articles in western and Indian media have attempted to use FUD against China-Pakistan Economic Corridor. Some Pakistani journalists and commentators, some unwittingly, have also joined in the campaign.   As expected, these detractors ignore volumes of data and evidence that clearly contradict their claims.

Part of the motivation of those engaged in FUD against CPEC appears to be to check China's rise and Pakistan's rise with its friend and neighbor to the north. Their aim is to preserve and protect the current world order created by the Western Powers led by the United States at the end of the second world war.

Growing Infrastructure Gap:

Development of infrastructure is essential for economic and social development of a country such as Pakistan. China-Pakistan Economic Corridor financing needs to be seen in the context of the large and growing infrastructure gap in Asia that threatens social and economic progress.

 Rich countries generally raise funds for infrastructure projects by selling bonds while most developing countries rely on loans from international financial institutions such as the World Bank and the Asian Development Bank to finance infrastructure projects.

The infrastructure financing needs of the developing countries far exceed the capacity of the World Bank and the regional development banks such as ADB to fund such projects. A recent report by the Asian Development Bank warned that there is currently $1.7 trillion infrastructure gap that threatens growth in Asia. The 45 countries surveyed in the ADB report, which covers 2016-2030, are forecast to need investment of $26 trillion over 15 years to maintain growth, cut poverty and deal with climate change.



Chinese CPEC Loans to Pakistan:

About 80% of the $55 billion of the Chinese money for CPEC is private investment while the rest is composed of soft loans to the government, according to Shanghai Business Review.

The Chinese soft loans for CPEC infrastructure projects carry an interest rate of just 1.6%, far lower than similar loans offered by the World Bank at rates of 3.8% or higher.

Chinese companies investing in Pakistan are getting loans from China's ExIm Bank at concessional rates and from China Development Bank at commercial rates. These loans will be repaid by the Chinese companies from their income from these investments, not by Pakistani taxpayers.

Rising Confidence in Pakistan:

Pakistani economy is already beginning to reap the benefits of the current and expected investments as seen in the 5.2% GDP growth in the current fiscal year, the highest in 9 years.

The World Bank's Pakistan Development Update of May 2017 says that "Pakistan’s economy continues to grow strongly, emerging as one of the top performers in South Asia".

Rapidly expanding middle class and rising demand for consumer durables like vehicles and home appliances attest to the positive impact of CPEC. Consumer confidence in Pakistan has reached its highest level since 2008, according to Nielsen.

US-based consulting firm Deloitte and Touche estimates that China-Pakistan Economic Corridor (CPEC) projects will create some 700,000 direct jobs during the period 2015–2030 and raise its GDP growth rate to 7.5%,  adding 2.5 percentage points to the country's current GDP growth rate of 5%.

Countering FUD:

Pakistani government should respond to the FUD campaign against CPEC by countering it with facts and data and increasing transparency in how CPEC projects are being financed, contracted and managed. It is particularly important in a low-trust society like Pakistan's where people can be easily persuaded to believe the worst about their leaders and institutions. 

Summary:

An unrelenting campaign of fear, uncertainty and doubt (FUD) about China-Pakistan Economic Corridor (CPEC) has been unleashed in the media in recent weeks. This strategy harkens back to the aggressive marketing techniques used by the American computer giant IBM in the 1970s to fight competition. Part of the motivation of those engaged in FUD against CPEC appears to be to check China's rise and Pakistan's rise with its friend and neighbor to the north. Their aim is to preserve and protect the current world order created by the Western Powers led by the United States at the end of the second world war.   Pakistani government should respond to the FUD campaign against CPEC by countering it with facts and data and increasing transparency in how CPEC projects are being financed, contracted and managed. 

Related Links:










Saturday, May 20, 2017

Pakistan Consumer Boom Driving Media Advertising Revenue

Rising buying power of rapidly expanding middle class in Pakistan drove the nation's media advertising revenue up 14% to a record Rs. 76.2 billion ($727 million) in FY 2015-16. Half of this ad spending (Rs. 38 billion or $362 million) went to television channels while the rest was divided among print, outdoor, radio and digital media.

Media Ad Revenue by platform. Source: Aurora











Digital media spending rose 27% in 2015-16 over prior year, the fastest of all the media platforms. It was followed by 20% increase in radio, 13% in television, 12% in print and 6% in outdoor advertising, according to data published by Aurora media market research

HUM TV channel had the highest revenue at Rs. 3.84 billion, followed by ARY Digital's Rs. 3.802 billion, PTV Sports Rs. 3 billion, Geo Entertainment Rs. 2.93 billion, Geo News Rs. 2.6 billion, Urdu1 2.5 billion, PTV Home Rs. 2.5 billion, Samaa Rs. 1.9 billion, and Dunya News, ARY News and Express News Rs. 1.8 billion each.

The television channels with the highest revenue increases in 2015-16 were: Samaa (88%), Geo News (82%), Geo Entertainment (81%) and ARY News (76%).

The current media boom in Pakistan started in early 2000s when Pakistan had just one television channel, according to the UK's Prospect Magazine. Today it has over 100. Together they have begun to open up a country long shrouded by political, moral and religious censorship—taking on the government, breaking social taboos and, most recently, pushing a new national consensus against the Taliban. The birth of privately owned commercial media has been enabled by the Musharraf-era deregulation, and funded by the tremendous growth in revenue from advertising targeted at the burgeoning urban middle class consumers.

Pakistan has managed to significantly reduce poverty and rapidly grow its middle class since 2001 in spite of major political, security and economic challenges. The foundation for the rise of the middle class and the electronic media boom was laid on President Musharraf's watch by his government's decisions to invest in education and infrastructure projects and deregulate the media that led to the expansion of both human and financial capital. My hope is that the continued improvement in security situation and implementation of China-Pakistan Economic Corridor (CPEC) related projects will bring in higher long-term investments and accelerate Pakistan's progress toward prosperity for all of its citizens.

Related Links:

Haq's Musings

Credit Suisse Wealth Report 2016

Pakistan: A Majority Middle Class Country

Pakistan Mass Media Boom

State Bank: Pakistan's Actual GDP Higher Than Officially Reported

College Enrollment in Pakistan

Musharraf Accelerated Development of Pakistan's Human and Financial Capital

China-Pakistan Economic Corridor

Thursday, May 18, 2017

Pakistan to Build Massive Dams for Abundant Water and Power

China and Pakistan have agreed to finance and build two mega dams in Gilgit-Baltistan region of Pakistan. A memorandum of understanding (MoU) for this development was signed by the leaders of the two countries on the sidelines of the Belt and Road Initiative (BRI) summit in Beijing.

Actual vs Potential Hydropower in South Asia. Source: Economist Magazine


The two dams, called Bunji and Diamer-Bhasha projects, will have the capacity to generate 7,100MW and 4,500MW of electricity respectively. China will provide $27 billion to fund the construction of the two dams, according to media reports.

Pakistan's Hydropower Potential: 

Pakistan has the potential to generate 59,000MW of hydropower, according to studies conducted by the nation's Water and Power Development Authority (WAPDA). Currently, it's generating only 6,600MW of hydroelectric power, about 11% of the estimated potential. Media reports indicate that China is prepared to finance and build another 40,000MW capacity as part of the development of the Northern Indus Cascade region which begins in Skardu in Gilgit-Baltistan and runs through to Tarbela, the site of Pakistan’s biggest dam, in Khyber-Pakhtunkhwa province.

Diamer-Bhasha Water Storage:

Diamer-Bhasha project is located on Indus River, about 200 miles upstream from the existing Tarbela Dam, 100 miles downstream from the Northern Area capital Gilgit in Gilgit-Baltistan region.  It will generate 4,500 MW of electricity and its reservoir will hold so much water that it could have averted recent devastating floods that affected large parts of Pakistan. It would also provide enough electricity to end  Pakistan's crippling shortages, according to a report in the Guardian newspaper.  The Diamer-Bhasha reservoir would be 50 miles long, holding 8.5 MAF (million acre feet) of water.

Response to Climate Change:

Pakistan has made only a small contribution to climate change through carbon emissions.  And yet, it counts among the dozen or so nations considered most vulnerable to its damaging effects. These include rising temperatures, recurring cycles of floods and droughts and resulting disruption in food production.

One of the ways Pakistan can help reduce carbon emissions is by realizing its full hydroelectric potential by building more dams. The development of the Northern Indus Cascade region to generate 40,000MW of hydropower is a significant part of this effort.

Prerequisite for Economic Development: 

Availability of abundant and cheap electricity has historically preceded rapid economic development in America, Europe and East Asia. Pakistan has an opportunity to meet this prerequisite by generating large amounts of clean renewable hydropower to meet its hunger for energy required for rapid economic growth in all sectors of the economy ranging from agriculture to manufacturing and services.

Summary:

Pakistan is endowed with significant amount of water and power resources that can be harnessed to enable rapid economic growth in all sectors of its economy. It appears that the Chinese investment, as part of China-Pakistan Economic Corridor, is now putting this goal within reach. Tens of thousands of megawatts of added electricity and millions of acre feet of additional water will hopefully transform Pakistan's economy and bring prosperity to its people.

Here's a video on the subject:

https://youtu.be/y-VkLn2J6fM



Related Links:

Haq's Musings

Recurring Cycles of Drought and Floods in Pakistan

Pakistan's Response to Climate Change

Renewable Energy for Pakistan

LNG Imports in Pakistan

Growing Water Scarcity in Pakistan

China-Pakistan Economic Corridor

Ownership of Appliances and Vehicles in Pakistan