Tuesday, October 27, 2009

Social Entrepreneur Solving India's Sanitation Crisis

Guest Post by Dost_Mittar

A simple solution to a disgusting problem
"The toilet is a part of the history of human hygiene which is critical chapter in the growth of civilization."
[Dr. Bindeshwar Pathak]

Anyone who has seen the blockbuster film “Slumdog Millionaire” would remember one scene above all others. I am referring, of course, to the “potty scene” where the young Jamal is shown relieving himself in an open pit. The scene caused a lot of adverse reaction in India as unrepresentative of true India. But according to a joint study conducted by the World Health Organization and UNICEF, 665 million Indians, or nearly two-thirds of them defecate in the open. I am not sure if these 665 included people using indoor toilets without plumbing; if it did not, then the number of Indians defecating in an unhygienic manner is even greater.

I love traveling by train when I am in India and have many enchanting childhood memories of such travel. But one of the less enchanting memory is of seeing people relieving themselves in the open whenever the train passed some open areas in the mornings. Some of these people would stand up holding their pajamas or dhotis to protect their dignity at the sight of the approaching train; most would carry on without paying any attention to those seeing them perform one of their most private functions. I never thought of this as anything abnormal and it took a foreigner for me to realize how demeaning this scene was. That was when I read V.S. Naipaul’s “An Area of Darkness”. Naipaul, a Trinidadian of Indian origin, was aghast at seeing such scenes when traveling through India for the first time. I realized then that what I had taken as something natural was somewhat unique to India and Indians. Whereas people in other undeveloped countries may be forced into defecating in the open, they won’t accept it as something normal as we do.

Another thing unique about India is the way we treat those who take care of our excrement. During my childhood in Lyalpur as well as the first decade of my stay in Delhi, our house and, indeed, the street on which we lived did not have indoor plumbing. A woman came to manually scrape our excrement with a pick-up and transfer it to a larger basket -tassla- which she carried outside on her head. Like everyone else, I also avoided her touch as if touching her would somehow make me touch the feces that she just cleaned and carried. She was not allowed to touch our water taps, we would pour water in a bucket reserved for this purpose while she stepped a couple of steps away from us. It never occurred to me that there was something wrong in my behaviour: But it did so to a Brahmin kid growing up in a village in Bihar. Bindeshwar Pathak, a six year old boy, wondered what would happen if he touched such a person. When he did, his mother was hugely upset with the sacrilege he had committed and made him swallow cow dung and urine and bathe in the water of the holy Ganga to purify him from his “polluting” activity. He realized that "If they (scavengers) continue to clean human excreta, they will not be accepted into society."

People who clean and carry human human waste, which we euphemistically call night soil, have been known by various names. We used to call them bhangi or bhangan. In military cantonments, they began to be called jemadar or jemadarni for some obscure reason. Gandhi called them harijan or children of god. But it was the British who coined a term for them for their census purposes which has become a standard expression in Indian English. That term is Scavenger. The dictionary meaning of scavenger is “an animal or other organism that feeds on dead organic matter” or “a person who searches through and collects items from discarded material”. In India, however, the word generally means the person who manually cleans toilets.

Mahatma Gandhi was perhaps the first Indian who recognized the indignity of the job of a scavenger. As anyone who has seen the film “Gandhi” would know, he started the practice of cleaning after himself when he was in South Africa; not only that, the male chauvinist in him forced his wife to do the same, bringing tears to her eyes. Later on, when he started his Sabarmati Ashram, he made it a rule that all inmates of the Ashram would clean their own toilet.

Dr. Bindeshwar Pathak is a Gandhian. Gandhi lived among the “harijans” so that he could experience first hand the humiliating conditions under which they lived. Pathak did the same. He lived among scavengers for three years to be able to feel their pain. He realized that the only way to get rid of the unhygienic state of toilets and to improve the lot of the scavengers was to develop a low cost sanitary toilet which was affordable by ordinary households and, at the same time, eliminated the need for scavengers to carry human waste. He then founded a movement called “Sulabh International” and developed a simple, low-cost toilet which cost approximately Rs. 700 and could be installed anywhere, including villages without any plumbing. This toilet uses only 1.5 litre of water for flushing as against 10 litres by a conventional toilet. The toilet “system” consists of two pits: when the first one fills up, it is closed and the other one is used. The closed toilet dries up in two years when it is ready to be used as fertilizer and for conversion into biogas for heating, cooking, and generating electricity.

Sulabh international has succeeded in raising the percentage of rural population with access to a toilet from 27% to 59%. The movement has also installed 5500 public toilets in the cities and places of tourist attraction throughout the country. Anyone who has used public toilets in India knows how filthy and nauseating they are. Public toilets built and maintained by Sulabh charge a nominal amount for their use but they are much cleaner than other public toilets and a boon to visitors with a need to go. The system has since been exported to many developing countries of Asia and Africa. It has been recommended by the United Nations HABITAT and Centre for Human Settlements, as well as by the United Nations Development Program (UNDP). Sulabh International Social Service Organization has launched operations in Bhutan and Afghanistan. It has, together with UN-HABITAT, trained engineers, architects and others from 14 countries in Africa. It is planning to work in Ethiopia, Cambodia, Laos, Angola, Madagascar, Dominican Republic, and Tajikistan.

The Sulabh system removes the need for scavenger; therefore, Pathak’s organization started training schools to prepare them for alternative jobs. These included a training school for women in Rajasthan to train them in tailoring, embroidery, food-processing and beauty treatments. Some of these women went to New York City to participate in a fashion show held at the U.N. headquarters to celebrate the International Year of Sanitation.

In recognition of his services for efficient water management, Dr. Pathak was awarded the 2009 Stockholm Water Prize. The award was created in 1990 to recognize achievements in water science, water management, water action or awareness building and carries a cash prize of $150,000. If India could produce another 100 Pathaks, it could really begin to shine.

Although the practice of manual scavenging became illegal in India in 1993, there are still 115,000 scavengers working in the country today.

Dost_Mittar, the author, is a Canadian of Indian origin. He is a retired policy analyst with the Canadian government living in Ottawa. He does consulting work, mostly with governments, if and when "I get an assignment without looking for it. My hobby is to get away from Canadian winters as much as possible".

Related Links:

WHO-UNICEF Sanitation Study in India

Sulabh Toilet Museum

Food, Clothing and Shelter in India and Pakistan

Do South Asian Slums Offer Hope?

Can Slumdog Success Help Poor Children?

Mumbai's Slumdog Millionaire

Pakistan's Total Sanitation Campaign

Caste System: India's Apartheid

No Toilet, No Bride

Poverty Tours in India, Brazil and South Africa

South Asia's War on Hunger Takes Back Seat

Bollywood and Hollywood Mix Up Combos

Grinding Poverty in Resurgent India

Pakistani Children's Plight

Poverty in Pakistan

Sunday, October 25, 2009

Ending Corruption Not a Priority in South Asia

Under the US Foreign Corrupt Practices Act (FCPA), all American companies are required to provide details of illegal payments made in foreign countries.

Paxar Corporation, a New York listed company recently acquired by Avery, acknowledged paying $30,000 to bribe Pakistani customs officials in 2008 through its local customs broker. Avery, a California-based company, manufactures and markets various office products in several dozen countries around the world.

In a settlement with the SEC, Avery has agreed to pay over $300,000 in fines, and accepted SEC's cease-and-desist order to stop its corrupt practices.

Here is a list of FCPA violations involving Indian entities reported to the Indian Prime Minister by India's US Ambassador Meera Shanker in Washington:

* On January 9, 2009, Mario Covino of Control Companies allegedly pleaded guilty to making illegal payments of over $ 1 million to employees of state-owned entities, including the Maharashtra State Electricity Board.

* On Feb 14, 2008, Westinghouse Air Brake Technologies Corporation’s Indian subsidiary, Pioneer Friction Ltd, settled civil charges in connection with improper payments to employees of Indian Railways. The $137,400-payment was made between 2001 and 2005.

* Subsidiaries of York International Corporation allegedly made improper payments of over $ 7.5 million to secure orders in various countries, including India. Payments were made from 2001 to 2006.

* C Srinivasan, a former president of A T Kearney India Ltd, allegedly made improper payments of $720,000 to senior employees of two partially state owned enterprises in India between 2001 and 2003.

* Textron’s subsidiaries allegedly made improper payments to secure contracts in various countries including India in the 2001-2005 period.

* Dow Chemicals subsidiary, DE-Nocil Crop Protection Ltd, allegedly made improper payments to various officials, including to an official in Central Insecticides Board. Pride International too, may have made third-party payments.

In spite of the well-publicized actions of the US government under FCPA, there appears to have been no government investigations ordered or actions taken against the corrupt officials on the receiving end of the reported bribes from the US companies in India and Pakistan.

It is because of the total impunity for the corrupt politicians and officials in Pakistan that corruption has surged by whopping 400 percent in the last three years, according to the National Corruption Perception Survey 2009 carried out by Transparency International. The return of democracy under a US-sponsored amnesty for the current leadership has not helped in holding the corrupt accountable. On Transparency International survey for 2008, Pakistan fares badly, ranking at 134 on a list of 180 nations surveyed. By comparison, India ranks higher at 85 while Bangladesh ranks lower at 147.

The National Corruption Perception Survey 2009 (NCPS 2009) indicates that the overall Corruption in 2002 has increased from Rs.45 Billion to Rs.195 Billion in 2009. Police and Power maintained their ranking as the top two most corrupt sectors.

There has been remarkable improvement in Judiciary. As compared to 2006 when it was ranked 3rd most corrupt sector, in 2009 Judiciary is ranked 7th, The News reports.

Postscript: According of Professor Mike Koehler of Butler University School of Law, the FCPA does not contain any affirmative disclosure obligation, as the opening paragraph of this post suggests. However, I do believe that there are certain practical benefits of self-disclosure, such as no prosecution for past violations or lighter or suspended sentences etc.

An example is the case involving a Dutch software company, Paradigm, that caters to the oil and gas industry. After the company relocated its principal place of business from Israel to Texas in 2005, it discovered it had either made or promised numerous bribes to officials in five nations. The company pre-emptively confessed to Justice Department prosecutors, instituted remedial compliance measures, and ultimately ended up with an 18-month non-prosecution agreement.

Related Links:

Haq's Musings

FCPA Blog

Avery Acknowledges Bribing Pakistani Officials

FCPA Violations Involving Indian Entities

The Story of Graft

Anti-Corruption Day, Blagojevich and Zardari

Bhutto Convicted in Switzerland

Corruption in Pakistan

Transparency International Survey 2007

Is Siemens Guilty?

Zardari Corruption Probe

Friday, October 23, 2009

In Defense of Pakistan's Higher Education Reform

Professor Pervez Hoodbhoy is a vocal critic of Pakistan's Higher Education Reform initiated by Dr. Ata ur Rahman, adviser to President Musharraf, in 2002. This reform resulted in over fivefold increase in public funding for universities, with a special emphasis on science, technology and engineering. The reform supported initiatives such as a free national digital library and high-speed Internet access for universities as well as new scholarships enabling more than 2,000 students to study abroad for PhDs — with incentives to return to Pakistan afterward. The years of reform have coincided with increases in the number of Pakistani authors publishing in research journals, especially in mathematics and engineering, as well as boosting the impact of their research outside Pakistan.

Reacting to the recent publication of a report on reform by Dr. Athar Osama, Prof. Adil Najam, Dr. Shams Kassim-Lakha and Dr. Christopher King published in Nature Magazine, Dr. Hoodbhoy wrote a letter to the editors of the magazine that was highly critical of the HEC under Dr. Rahman. Here is Dr. Rahman's response to Dr. Hoodbhoy's latest criticism:

There are four aspects of the comments of Dr. Pervez Hoodbhoy that need to be considered:

1. Firstly, Dr. Hoodbhoy himself admits that there has been a huge increase in international publications at QAU after HEC came into existence when he mentions the number of international publications in the two time periods. Strangely, he picks a six year period, 1998-2003, and then compares it with the subsequent 4.5 years (?) , 2004 to mid 2008, (the correspondence occurred in August 2008, so he could not possibly have had access to the figures for the entire year) I can only assume that he has mentioned 2003 by mistake in the second “5 year” period as there is no reason to include the publications of the year 2003 in both time periods, which he has done. It is clearly unfair to take two time periods of different durations and compare them.

2. In the first 6 year period (1998-2003), Dr. Hoodbhoy admits that there were only 631 research publications from QAU, but in the second 4.5 year period these had risen to 1482 research publications, a tripling of publications on average per year, even by his own estimates.
3. As the HEC programs began in 2003 and their real impact occurred 2-3 years later, a year-wise comparison is far more relevant than an average over a 5 year period as the dramatic change that has occurred gets partly masked when a 5 or 6 year average is taken, though it is still very visible. Dr. Hoodbhoy ignores the figures that Dr. S.T.K. Naim had worked out that in the year 2004, there were only 84 research publications from QAU (an average of only 7 publications per month), but by 2008 they had increased many fold.
4. The citations argument used by Dr. Hoodbhoy is invalid as citations increase with the passage of time. Dr. Hoodbhoy, therefore, wrongly compares the citations of papers of an earlier period with those of a later period. To clarify this issue further, if two papers of equal quality and in a similar field are published, say in 1998 and 2007, and the citations of both are counted in 2008, then the paper which was published in 1998 will have accumulated more citations by 2008 because of the much longer 10 year time period, than the paper published in 2007, as that would have had only one year for the citations to accumulate. Dr. Hoodbhoy is therefore comparing apples with oranges when he tries to compare citations of papers published in an earlier period with a later time period. In order to fairly compare citations, the same duration of time period must be taken. Thus if one takes 1998 publications and counts the citations till 2008, then one will need to take the 2008 publications and count their citations till the year 2018, before one can compare the figures for the citations of the two sets fairly.

The undeniable fact is that the total number of research publications from universities in Pakistan was only about 600 per year till 2001 but then started rising rapidly, and by the year 2008 it had increased to over 4,300! Brazil achieved such an increase over a 35 year period between 1960 to 1995, which Pakistan achieved in only 6 years. After my appointment in March 2000 as the Federal Minister for Science and Technology in Pakistan, I convinced the government to enhance the budget for science and technology in Pakistan by 6000% between July 2000 to October 2002. After my appointment as Chairman, Higher Education Commission (Federal Minister) the budget for higher education was similarly increased by 2400% during 2003 to 2008. Major achievements during these periods were:

1. Establishing 51 new Universities and awarding institutions during 2002-2008,
2. Tripling university enrollment (which had reached only 135,000 from 1947 to 2003) to about 400,000 in 2008,
3. Establishing a powerful Digital Library which provides free nation-wide access to every student in every public sector university to 45,000 textbooks/research monographs from 220 international publishers as well as to 25,000 international research journals,
4. Establishing video-conferencing facilities in most public sector universities that allow lectures to be delivered live and interactively to students in Pakistan from technologically advanced countries
5. Enhancing salaries of academics so that salaries of University Professors were increased to a level about five times the salaries of Federal Ministers, with a corresponding reduction in tax from 35% to only 5%, in order to attract the brightest young men and women into academia,
6. Promoting research through a massive research grant program which resulted in a 600% increase in ISI abstracted publications from about 600 per year in 2001 to 4300 research publications in 2008, accompanied by about 1000% increase in international citations in the same period,
7. Placing a satellite in space (Paksat-1) which is now used for distance learning by the Virtual University,
8. Establishing video-conferencing facilities in most public sector universities and initiating a lectureship program, allowing live interactive lectures to be delivered from technologically advanced countries,
9. Providing free access to scientists/engineers anywhere in the country to sophisticated instruments installed in any institute in Pakistan.

The Bottom Line: In the final analysis, it is not what I or Dr. Hoodbhoy think about the developments, but what is the opinion of neutral international experts who have carried out detailed year-long reviews of the developments during the period that I was heading the Higher Education Commission. A few extracts are given below:

1. Prof. Fred Hayward (independent international educational consultant from USA) carried out a detailed analysis of the developments and published an article entitled “Higher Education Transformation in Pakistan: Political & Economic Instability,” Date: Number 54, winter 2009 Source: International Higher Education Quarterly. I quote: “The news about Pakistan over the last few years has been dominated by reports of political turmoil, terrorism, religious fundamentalism, economic decline, and the Afghan War. What has been missed is the phenomenal transformation in higher education over the last six years, which represents a critical development for Pakistan and a potential engine for growth and national recovery.”
2. Report of US-AID about HEC states that “We are very impressed with the breadth, scope, and depth of the reforms implemented by the HEC since 2002. No other developing country we know has made such spectacular progress.”
3. World Bank Report is very complimentary of many excellent programs introduced.
4. British Council: The report states: “I have worked in many countries in South America, the Middle East, North Africa, and in Russia and India, over the last six years. None in my view, with the exception of India, has the potential of Pakistan for the UK university sector, largely because of the dynamic, strategic leadership of the Chairman of HEC”.
5. Nature: Several articles and editorials have appeared in the world’s leading science journal “Nature” (the most recent in the issue published on 3rd September 2009) in which the very significant progress made by Pakistan in the higher education sector has been applauded and the need for the new government to built on the solid foundation laid has been stressed.
6. Science Watch (Thomson Reuters) has ranked Pakistan as a rising star in five disciplines, more than in any other country of the world.


Riaz Haq's Note: For the first time in the nation's history, President Musharraf's education adviser Dr. Ata ur Rahman succeeded in getting tremendous focus and major funding increases for higher education in Pakistan. According to Sciencewatch, which tracks trends and performance in basic research, citations of Pakistani publications are rising sharply in multiple fields, including computer science, engineering, mathematics, material science and plant and animal sciences. The number of papers published by Pakistani scientists reached 4300 in 2007 (For comparison purposes, India-based authors published 27000 papers in 2007, according to Science Watch). Over two dozen Pakistani scientists are actively working on the Large Hadron Collider; the grandest experiment in the history of Physics. Pakistan now ranks among the top outsourcing destinations, based on its growing talent pool of college graduates. According to Pakistan Software Export Board, Pakistani IT industry has grown at 40% CAGR during the 2001-2007, and it is estimated at $2.8 billion as of last year, with about half of it coming from exports. As evident from the overall results, there has been a significant increase in the numbers of universities and highly-educated faculty and university graduates in Pakistan. There have also been some instances of abuse of incentives, opportunities and resources provided to the academics in good faith. The quality of some of the institutions of higher learning can also be enhanced significantly, with some revisions in the incentive systems.

Admission meritocracy, faculty competence and inspirational leadership in education are important, but there is no real substitute for higher spending on higher education to achieve better results. In fact, it should be seen as an investment in the future of the people rather than just another expense.

Of the top ten universities in the world published by Times of London, six are in the United States. The US continues to lead the world in scientific and technological research and development. Looking at the industries of the future such as nanotechnology, biotechnology, green technologies, the US continues to enjoy a huge lead over Europe and Asia. The reason for US supremacy in higher education is partly explained by how much it spends on it. A 2006 report from the London-based Center for European Reform, "The Future of European Universities" points out that the United States invests 2.6 percent of its GDP in higher education, compared with 1.2 percent in Europe and 1.1 percent in Japan.

In spite of the new education policy promising to more than double education spending from about 3% to 7% of GDP, uncertainty remains about the budgetary situation. Continuing political instability and the deteriorating security situation have created a loss of confidence in government and new questions about the future of higher education. These factors threaten to reverse the phenomenal gains of the last few years, and undermine the prospects for national development toward a knowledge economy. In addition, there is growing uncertainty about the future of the Higher Education Commission, including its administrative and financial autonomy. Thus, one of the few hopeful signs of progress in Pakistan appears to be in jeopardy. While there are many claimants on the national budget in this period of economic difficulty, the failure of higher education transformation would be a devastating reversal for Pakistan and make economic growth, social recovery, and political stability even more difficult than at the present time.

Let us hope that the recent appointment of Dr. Javaid R. Laghari as new Chairman of the HEC will help clarify the situation and restore confidence in the future of higher education in Pakistan.

Related Links:

Higher Education Transformation in Pakistan

Pakistan's $2.8 Billion IT Industry

President Musharraf's Legacy

Education in Pakistan

Reforms? What Reforms? by Pervez Hoodbhoy

India's New Millennium in Science

Higher Education Transformation in Pakistan

Nature's Coverage of Higher Education Reform

Asia Gains in World's Top Universities

Poor Quality of Higher Education in South Asia

Dr. Pervez Hoodbhoy's Letter to Nature

Thursday, October 22, 2009

Pakistan's Multi-Billion Dollar IT Industry

Pakistan's information technology industry is quite young. It is in very early stages of development compared to the much older and bigger Indian IT industry, which had a significant headstart of at least a decade over Pakistan. During the lost decade of the 1990s under Bhutto and Sharif governments, Pakistani economy stagnated and its IT industry did not make any headway. However, the industry has grown at 40% CAGR during the 2001-2007, and it is estimated at $2.8 billion as of last year, with about half of it coming from exports. This pales in comparison to over $5 billion revenue a year reported by India's Tata Consulting alone.

Here's some data on Pakistan's IT industry:

"The State Bank of Pakistan for 2007-08 reports the export figures of software and Information Technology-enabled services to be US$169 million which shows a consistent annual growth. State Bank of Pakistan adopted BPM 5 reporting system to report the IT exports revenue, which restricted the export figures to US$169 million only in 2007-08. In India, the Reserve Bank of India follows the BPM 6 (also called MSITS) Reporting System, which raises its exports to billions of US dollars. BPM 6 includes sales to multinationals, earning of overseas offices & salaries of non-immigrant overseas workers to export revenue. Using the MSITS Reporting System, Pakistan IT Industry exports are estimated at US$ 1.4 billion while the industry size is estimated at US$ 2.8 billion. It is significant to note that Pakistan IT exports growth in each of the last few years has been more than 40%."

According to a report by the Pakistan Software Export Board (PSEB), the top five companies that have contributed the most to the IT sector are Netsol Technologies(NASDAQ: NTWK), Ovex Technologies, TRG Private Ltd, Systems Private Ltd, and Elixir Technologies.

The revenue per employee for the top Indian IT firms of Wipro, Infosys and TCS ranges between $40,000 and $50,000 per employee per year...about $20 t0 $25 per hour per employee, according to Gartner. The Indian revenue per employee is quite competitive relative to the US firms IBM Global Services, EDS, ans Accenture whose revenue per employee exceeds $150,000 per year, about $75 per hour. In comparison, the average figure of $28000 per employee per year (or $14 an hour) is extremely competitive for Pakistan's IT industry average. Probably the higher-end firms make more while others make less.

Pakistani colleges and universities produce almost 1.2 million skilled graduates annually. The Musharraf government announced a $1 billion spending plan over the next decade to build 6 additional state-of-the-art science and engineering universities. If the current government follows through on it, then the scheme would be overseen by the Higher Education Commission for completion in a few years time.

In terms of enrollment, the 2005 Pakistan Education Census reported 43,801 students enrolled in 4-yr engineering institutions, another 37,635 students in 3-year colleges offering Information Technology degrees, and 69,719 studying in three-year polytechnic institutes. 53% of the students out of the total 1.16 million enrolled in colleges are girls, according to the 2005 Census.

About 10,000 of the current 1.2 million graduates are engineers with 4-year degrees. In addition, Pakistan also produces at least 25,000 polytechnic inst graduates with three year diplomas (according to recent news in the Nation newspaper) who have less than 4 years of college.

A number of reports inflate the number of engineering graduates in India, as these numbers includes both 4 years and 2-3 years degrees. While it is claimed that India graduates over 200, 000 engineers a year, a Duke study concluded that half of these are 2 or 3-year degrees.

So, for apples to apples comparison, the number of India's engineering graduates is closer to the US's 70,000 engineering grads. And of course, the quality of US graduates is much much higher because they graduate from some of the best schools in the world. Other than about 5000 grads from IITs , the rest of Indian grads are from second and third tier schools that bear no comparison to engineering schools in the developed world in terms of quality. The cost advantage that India offers will still favor a continuing growth based on outsourcing of business and engineering services from the developed world.

Currently, Pakistan is struggling with a powerful insurgency and a stagnant economy that is taking a heavy toll on the nation. If, however, the political and military leadership succeed in creating a semblance of peace and stability in the nation of 170 million, then there can be an expectation of a bright future ahead for the IT industry in particular, and an innovation-based knowledge economy in general.

Related Links:

ICT: Hope or Hype

Haq's Musings

Truth About India's IT Revolution

Education in Pakistan

Musharraf's Legacy

Quality of Higher Education in India, Pakistan

Pakistan's IT Industry Takes Off

Pakistan Launches UAV Production Line

Pakistan's Defense Industry Going High-Tech

Pakistan's Software Successes

Pakistan's Industrial Sector

Pakistan's Financial Services Sector

Auto Sector in India and Pakistan

Pakistan Textile Industry Woes

Pakistan Software Houses Association

Monday, October 19, 2009

Insider Trading Scandal Rattles Silicon Valley and South Asia

Two prominent Indian-Americans, along with a Sri Lanka born billionaire, have been charged in what U.S. prosecutors say is the biggest insider-trading case in a generation. The scandal is now reverberating in South Asia, particularly the island nation of Sri Lanka.

It is estimated that billionaire Raj Rajaratnam, the founder of hedge fund Galleon Group under arrest in New York on charges of insider trading, has invested more than $150 million in Sri Lankan shares. Even rumors of his trades can send the market up or down. Born in Sri Lanka, he was educated at the prestigious Wharton business school in Pennsylvania and went to set up a hedge fund for boutique investment bank Needham. The hedge fund was spun off with Mr Rajaratnam at its head in 1997. Galleon was well known for its extensive research reports, according to the New York Times, and for having many senior technology executives as its investors.

In 2007, there was a minor scandal involving accusations of insider trading against Pakistani-American Atiq Raza, but it was settled out of court with the SEC when Mr. Raza agreed to pay $3 million fine. Under the terms of the agreement, Mr. Raza was also barred from serving as an officer or director of a public company for five years, and he was permanently enjoined from future violations of the federal securities laws.

The Wall Street Journal reports that fears about the future of Rajaratnam's and Galleon's investments in Sri Lanka caused a major selloff Monday. After losing about 3% during early trading, the Colombo Stock Exchange benchmark All-Share Price Index ended the day at 3082.91, down 1.6%. Shares in which Mr. Rajaratnam or Galleon hold major stakes were among the biggest losers.

Mr Rajaratnam is estimated to be worth about $1.3bn by Forbes magazine. Galleon, the hedge fund he founded, had managed up to $7bn in assets. He was investigated by the Federal Bureau of Investigation in 2007 for allegedly funding the Tamil Tiger rebel movement in Sri Lanka, the Central Bank of Sri Lanka said on Monday.

He was among several wealthy Sri Lankans who donated to the US-based charity, the Tamil Rehabilitation Organization, which may have been funneled to the Tamil Tigers.

In addition to Sri Lankan Raj Rajaratnam, 52, the accused include two Indian-Americans, Rajiv Goel, 51, of Los Altos, of Intel's treasury department, and Anil Kumar, 51, of Santa Clara, an executive at the global consulting group McKinsey & Co. Both were rising stars in the high-tech constellation of Silicon Valley. Locally established and internationally connected, the two men's work and reputations stretched to India and back, as they moved in the rarified air of global big business, according to a report in San Jose Mercury News. Kumar and Goel are both charter members of TIE, the Indus Entrepreneur, an organization of mostly Indian-Americans in Silicon Valley.

Goel and Kumar supplied information about their portfolio firms or clients to co-conspirators, according to the complaint, who in turn made profitable trades. Kumar was arrested in New York, then later released on a $5 million bond, while Goel appeared briefly before a federal judge in San Francisco Friday before reportedly posting a $300,000 cash bail and a $100,000 bond. Both of them have been put on leave by their respective firms. The investigation is likely to lead to insiders at several other firms beyond Intel, IBM and McKinsey.

In India, where Kumar had been heavily involved in the Indian School of Business, embarrased officials announced he had voluntarily taken an indefinite leave of absence from the board because of the scandal.

And like Kumar, Goel's Indian roots were deep. Before joining Intel, he worked in finance for one of India's largest business house, the Aditya Birla Group. With an MBA from the Wharton School, he also served as a corporate banker with Bank of America in San Francisco and managed a large portfolio of securities for Metropolitan Life out of New York, according to Mercury News.

The lead prosecutor Preetinder S. Bharara, the US Attorney for the Southern District of New York, also of Indian descent, said “This is not a garden-variety insider trading case." He alleged that the scheme made more than $20 million in illegal profits since 2006. According to the NY Times, Bharara, 40, was born in Ferozepur, India, and he was an infant when his parents immigrated to the United States in 1970. He grew up in Monmouth County, N.J., and graduated from Harvard in 1990 and Columbia Law School in 1993. A rising star in the Democratic Party, Bharara supervises over 200 lawyers who prosecute high-profile cases in New York City.

There have been other recent white collar crime cases against Indian-Americans. Earlier this month, an Indian-American lawyer in Los Angeles, Sandeep Baweja, 39, agreed to plead guilty to two felony charges relating to a scheme where he took more than $2 million awarded in a class action suit and lost it all on the stock market.

Last year, Vijay Taneja, an Indian-American investor and producer of Bollywood movies, was convicted of mortgage fraud in the United States.

This is, indeed, a sad day for many people of South Asian descent in the United States, particularly in Silicon Valley. Let's hope the accused receive a fair trial amidst the wave of negative publicity surrounding the case.


Related Links:

Haq's Musings

Atiq Raza Pays Fine, Settles Insider Trading Charges

US Mortgage Fraud Funds Bollywood

Insider Scandal Hurts Sri Lanka Stocks

Murder-Suicide in Silicon Valley

Bigotry Bedevils Silicon Valley Eatery

Pakistani-American: Mr. Thirty Percent of Silicon Valley

Tuesday, October 13, 2009

Comparing US and Pakistani Tax Cheats

In addition to borrowing heavily, the US collects over 28% of the nation's GDP to support various government expenditures. As the government spending continues to grow to stimulate demand, the US national debt is ballooning, forcing Uncle Sam to pursue offshore tax cheats.

Thursday is the deadline for Americans to come clean about the money they have hidden offshore, in places like Swiss bank accounts. No one can say with certainty how much money is out there — the accounts are secret — but the hoard may be tens of billions of dollars, The New York Times’s Lynnley Browning reports.

Several thousand wealthy Americans have come forward, hoping to avoid large fines or possibly even prison. But many others are still weighing their options. The choice is clear: They can confess and pay the penalties, or gamble that they will not get caught. With the deadline only days away, tax lawyers say they are being inundated by anxious clients, according to the New York Times.

In contrast to the US, Pakistan collects only about 11% of the country's GDP in tax revenue. Farm income, mostly earned by the nation's feudal ruling elite, accounting for about 20% of the GDP is entirely exempt from any income tax under the law. Only 2.5 million of 172 million Pakistanis pay income tax. Of them, 1.8 million are salaried and paid Rs.27.37 billion in taxes during ended fiscal 2008-09, according to a report to the Senate by Minister of State for Finance and Economic Affairs Hina Rabbani Khar. The government runs large current account deficits, forcing it to beg and borrow to meet the budget needs. The budget deficit for 2008-09 was 4.3% of GDP and it is likely to grow with lower revenue amidst slowing economy in 2009-10. The tax evasion in Pakistan is estimated at Rs500 – 600 billion a year, almost half of the total tax collection of about Rs1200 billion during 2008-08. The untapped amount is almost equivalent to the country’s annual budget deficit.

In a country where majority of the transactions, including purchase of big ticket items, occur in cash, there is widespread tax evasion and a sizable informal economy. The estimates for Pakistan's underground economy vary from 25% to 50% of the formal economy. A recent World Bank (WB) report concluded that every Pakistani citizen evaded tax amounting to Rs 4800 in the year 2007-08, while the total tax evaded in the period stood at Rs 796 billion.

During the height of corruption under Bhutto-Zardari-Sharif governments in the 1990s, the size of the underground economy rose to almost 55% in 1999, by one estimate. As the military regime of President Musharraf cracked down on tax cheats, the nation's revenue collection doubled from Rs. 500 million in 2000 to to Rs. 1.04 trillion in 2007-08.

While the income, assets and taxes of the president and top government officials are publicly disclosed and heavily scrutinized by all in the US, no such transparency exists in Pakistan. In fact, tax cheating in Pakistan starts at the top. The richest and the most powerful politicians in the ruling elite pay little or no taxes, setting a horrible example for the rest of the nation.

For example, Benazir Bhutto, Asif Zardari and Nusrat Bhutto declared assets totaling $1.2 million in 1996 and never told Pakistani authorities of any foreign bank accounts or properties, as required by law in Pakistan. Zardari declared no net assets at all in 1990, the year Bhutto's first term ended, and only $402,000 in 1996, according to a report in the New York Times.

Bhutto's family's income tax declarations were similarly modest. The highest income Bhutto declared was $42,200 in 1996, with $5,110 in tax. In two of her years as prime minister, 1993 and 1994, she paid no income tax at all. Zardari's highest declared income was $13,100, also in 1996, when interest on bank deposits he controlled in Switzerland exceeded that much every week. In June 2008, a senior PPP leader and president of Pakistan's Supreme Court Bar Association, Mr. Aitzaz Ahsan, who was interior minister in Benazir Bhutto's first government, told James Traub of the New York Times that most of the corruption and criminal cases against PPP Co-Chairman Asif Ali Zardari which were dropped recently in Pakistan were justified, and that the PPP was a feudal political party led by a figure (Zardari) accused of corruption and violence. After a moment's reflection, Ahsan further added, “The type of expenses that she had and he has are not from sources of income that can be lawfully explained and accounted for.”

It was only in 2007 that President Asif Ali Zardari returned to Pakistan under an amnesty, euphemistically called National Reconciliation Ordinance (NRO), sponsored by the Americans. However, the Americans know that the corruption charges against Zardari were credible and he, along with his late wife, was convicted in at least one case by a Swiss judge. The conviction was under appeal in Switzerland when Pakistan government withdrew all charges pursuant to the NRO signed by then President Musharraf under pressure from the Americans.

There have been widespread complaints in Islamabad, including by Finance Minister Shaukat Tarin, that the government had solutions to improve the power output but was refusing to implement them in order to benefit a handful of power plant operators, such as those supplying rental power at exorbitant rates, while the IPPs are not being paid for supplying power from currently underutilized installed capacity. Requests for information by Transparency International Pakistan regarding rental power contracts have been ignored by the Ministry of Water and Power. There are widespread corruption allegations against Mr. Zardari personally who has influenced the award of the 783 MW rental power contracts to a former governor of Oklahoma and his Pakistani partner.

There are reports that Mr. Zardari is continuing to extort businesses to enrich himself and his cronies. As Tariq Ali put it in a recent article for Counterpunch, "Zardari has carried on from where he left off as minister of investment in his late wife’s second government. Within weeks of occupying President’s House, his minions were ringing the country’s top businessmen, demanding a share of their profits."

Ali continues, "Take the case of Mr X, who owns one of the country’s largest banks. He got a call. Apparently the president wanted to know why his bank had sacked a PPP member soon after Benazir Bhutto’s fall in the late 1990s. X said he would find out and let them know. It emerged that the sacked clerk had been caught with his fingers literally in the till. President’s House was informed. The explanation was rejected. The banker was told that the clerk had been victimized for political reasons. The man had to be reinstated and his salary over the last 18 years paid in full together with the interest due. The PPP had also to be compensated and would expect a cheque (the sum was specified) soon. Where the president leads, his retainers follow. Many members of the cabinet and their progeny are busy milking businessmen and foreign companies."

The PPP leadership is not alone in evading taxes. The PML leadership appears to be just as guilty. The entire Sharif family paid a nominal income tax of Rs 250,000, wealth tax of Rs 550,000 and agriculture tax of Rs 130,000, considering their vast assets and properties of at least 23 sugar and textile mills and huge agricultural land, according to the News. The tax evasion by the the Sharif family was the reason that the donor agencies giving aid to Pakistan in late 1990s insisted on publishing tax records of all lawmakers and senior bureaucrats, The News said, adding that for this reason, the donor agencies insisted on broadening the tax net to prop up government revenues.

As Pakistan faces a severe economic crisis and the current leaders appear ready to mortgage the nation's future, the chances of the ruling elite setting a good example by paying their taxes in full appear rather remote. In fact, the feudal politicians are fighting the current IMF condition for even a modest tax on farm income. The only hope for a fairer tax system and improved collection from the rich and powerful to fund education and health care lies in serious and sustained pressure on Pakistan's ruling elite from the donors and lenders, backed by the United States.

Related Links:

Zardari Corruption Probe in Switzerland

Obama-Biden Financial Disclosures

"Ahmad Rashid's War" by Tariq Ali

Revenue Collection as Percent of GDP

Pakistan's Underground Economy

Sunday, October 11, 2009

Looking Beyond Food, Clothing and Shelter in South Asia

There is nothing more basic in terms of human necessities than the adequate availability of roti, kapra aur makaan. Going beyond these bare essentials of food, clothing and housing, one can add sanitation, health care and education. Let's examine how the two biggest nations in South Asia are coping with such fundamental necessities of their population:

1. Food:

Food is the most basic necessity of all. In terms of being better fed, Pakistanis consume significantly more dairy products, sugar, wheat, meat, eggs and poultry on a per capita basis than Indians, according to FAO data. Average Pakistani gets about 50% of daily calories from non-food-grain sources versus 33% for average Indians.

There is widespread hunger and malnutrition in all parts of India. India ranks 66th on the 2008 Global Hunger Index of 88 countries while Pakistan is slightly better at 61 and Bangladesh slightly worse at 70. The first India State Hunger Index (Ishi) report in 2008 found that Madhya Pradesh had the most severe level of hunger in India, comparable to Chad and Ethiopia. Four states — Punjab, Kerala, Haryana and Assam — fell in the 'serious' category. "Affluent" Gujarat, 13th on the Indian list is below Haiti, ranked 69. The authors said India's poor performance was primarily due to its relatively high levels of child malnutrition and under-nourishment resulting from calorie deficient diets.

Last year, Indian Planning Commission member Syeda Hameed acknowledged that India is worse than Bangladesh and Pakistan when it comes to nourishment and is showing little improvement.

Speaking at a conference on "Malnutrition an emergency: what it costs the nation", she said even Prime Minister Manmohan Singh during interactions with the Planning Commission has described malnourishment as the "blackest mark".

"I should not compare. But countries like Bangladesh, Pakistan and Sri Lanka are better," she said. The conference was organized last year by the Confederation of Indian Industry and the Ministry of Development of Northeastern Region.

According to India's Family Health Survey, almost 46 percent of children under the age of three are undernourished - an improvement of just one percent in the last seven years. This is only a shade better than Sub-Saharan Africa where about 35 percent of children are malnourished.

India has recently been described as a "nutritional weakling" by a British report.

2. Clothing:

According to Werner International, Pakistan's per capita consumption of textile fibers is about 4 Kg versus 2.8 Kg for India. Global average is 6.8 Kg and the industrialized countries' average consumption is 17 Kg per person per per year.

3. Shelter:

There is widespread homelessness in India, with a population 7 times larger than Pakistan's, with the urgent need for 72 million housing units. Pakistan, too, has a housing crisis and needs about 7 million additional housing units, according to the data presented at the World Bank Regional Conference on Housing last year.

4. Sanitation:

India might be an emerging economic power, but it is way behind Pakistan, Bangladesh and even Afghanistan in providing basic sanitation facilities, a key reason behind the death of 2.1 million children under five in the country.

Lizette Burgers, chief of water and environment sanitation of the Unicef, recently said India is making progress in providing sanitation but it lags behind most of the other countries in South Asia. A former Indian minister Mr Raghuvansh Prasad Singh told the BBC that more than 65% of India's rural population defecated in the open, along roadsides, railway tracks and fields, generating huge amounts of excrement every day.

As an example, let's compare India's largest slum Dharavi with Pakistan's Orangi Town. The fact is that Orangi is nothing like Dharavi in terms of the quality of its housing or the services available to its residents. While Dharavi has only one toilet per 1440 residents and most of its residents use Mahim Creek, a local river, for urination and defecation, Orangi has an elaborate sanitation system built by its citizens. Under Orangi Pilot Project's guidance, between 1981 and 1993 Orangi residents installed sewers serving 72,070 of 94,122 houses. To achieve this, community members spent more than US$2 million of their own money, and OPP invested about US$150,000 in research and extension of new technologies. Orangi pilot project has been admired widely for its work with urban poor.

5. Healthcare:

A basic indicator of healthcare is access to physicians. There are 80 doctors per 100,000 population in Pakistan versus 60 in India, according to the World Health Organization. For comparison with the developed world, the US and Europe have over 250 physicians per 100,000 people. UNDP recently reported that life expectancy at birth in Pakistan is 66.2 years versus India's 63.4 years.

6. Education:

India's literacy rate of 61% is well ahead of Pakistan's 50% rate. In higher education, six Indian universities have made the list of the top 400 universities published by Times Higher Education Supplement this year. Only one Pakistani university was considered worthy of such honor.

Pakistan has consistently scored lower on the HDI sub-index on education than its overall HDI index. It is obvious from the UNDP report and other sources that Pakistan's dismal record in enrolling and educating its young people, particularly girls, stands in the way of any significant positive development in the nation. The recent announcement of a new education policy that calls for more than doubling the education spending from about 3% to 7% of GDP is a step in the right direction. However, money alone will not solve the deep-seated problems of poor access to education, rampant corruption and the ghost schools that only exist on paper, that have simply lined the pockets of corrupt politicians and officials. Any additional money allocated must be part of a broader push for transparent and effective delivery of useful education to save the people from the curses of poverty, ignorance and extremism which are seriously hurting the nation.

In spite of deficiency in education, how is it that Pakistanis can maintain better standards of living in terms of food, clothing, shelter, sanitation and healthcare than their neighbor India? The first answer is that, according to the 2009 UN Human and Income Poverty Report, the people living under $1.2 a day in India is 41.6 percent, about twice as much as Pakistan's 22.6 percent. The second answer can be found in the fact that Pakistanis' real per capita incomes are actually higher than reported by various agencies. The most recent real per capita income data was calculated and reported by Asian Development Bank based on a detailed study of a list of around 800 household and nonhousehold products in 2005 and early 2006 to compare real purchasing power for ADB's trans-national income comparison program (ICP). The ICP concluded that Pakistan had the highest per capita income at HK$ 13,528 among the largest nations in South Asia. It reported India’s per capita as HK $12,090.


Conclusion:

Clearly, the status of an average Indian is not only worse than an average Pakistani's, the abject deprivation in India is comparable to the nations in sub-Saharan Africa. However, Pakistanis do need to worry about their woefully inadequate state of education and literacy. They must find a way to develop the skills, grow the economy and create opportunities for their growing young population. As Pakistan's former finance minister Salman Shah recently told the wall Street Journal, "Pakistan has to be part of globalization or you end up with Talibanization. Until we put these (Pakistan's) young people into industrialization and services, and off-farm work, they will drift into this negative extremism; there is nothing worse than not having a job." Unless Pakistanis heed Shah's advice, there is real danger that Pakistan will slip into total chaos and violence, endangering the entire nation in the foreseeable future.

To summarize, this post has discussed six different indicators of life in any nation: Availability of food, clothing, shelter, sanitation, health care and education. The published data that I have shared with you shows that PAKISTAN IS AHEAD OF INDIA IN FIVE OF THE SIX INDICATORS. In education, however, Pakistan is marginally behind India, which itself suffers from low levels of literacy and wide gender gap resulting in very poor showing on the UNDP HDI this year, and in prior years. In fact, India dropped six places on the world rankings from a low of 128 to an even lower 134. Unfortunately, Pakistan has also slipped three ranks on the list, down from 138 to 141, mainly due to its deficit in literacy and gender discrimination.

Poverty:

Population living under $1.25 a day - India: 41.6% Pakistan: 22.6% Source: UNDP

Underweight Children Under Five (in percent) Pakistan 38% India 46% Source: UNICEF

Life expectancy at birth (years), 2007 India: 63.4 Pakistan: 66.2 Source: HDR2009

Education:

Youth (15–24 years) literacy rate, 2000 to 2007, male Pakistan: 80% India 87% Source: UNICEF

Youth (15–24 years) literacy rate, 2000 to 2007, female Pakistan 60% India 77% Source: UNICEF

Economics:

GDP per capita (US$), 2008 Pak:$1000-1022 India $1017-1100

Child Protection:

Child marriage under 15-years ; 1998–2007*, total Pakistan - 32% India - 47% Source: UNICEF

Under-5 mortality rate per 1000 live births (2007), Value Pakistan - 90 India 72 Source: UNICEF

Related Links:

Syeda Hamida of Indian Planning Commission Says India Worse Than Pakistan and Bangladesh

Global Hunger Index Report 2009

Grinding Poverty in Resurgent India

Food, Clothing and Shelter For All

India's Family Health Survey

Hunger and Undernutrition Blog

Pakistan's Total Sanitation Campaign

Is India a Nutritional Weakling?

Asian Gains in World's Top Universities

South Asia Slipping in Human Development

What Does Democracy Deliver in Pakistan

Do South Asian Slums Offer Hope?

Friday, October 9, 2009

US, UK Dominate as Asia Gains in World's Top University Rankings

The latest edition of the world's top universities from The Times Higher Education Supplement (THES) has few surprises in 2009. The top 10 Universities are: Harvard (US), Cambridge (UK), Yale(US), UCL, London (UK), Imperial College, London and Oxford (both UK, joint 5), Chicago (US), Princeton (US), MIT, Massachusetts (US) and California Institute of Technology (US). As always, the top of the list is dominated by American and British Universities this year, together making up about 40% of the entire list of 200. The US universities account for more than a quarter, while the UK institutions make up about 15% of the top 200 universities. Outside of the US and the UK, there is fair representation of Australian, Canadian and European institutions and a smattering of Asian universities from China, Japan, South Korea, India, Singapore and Malaysia.

A US publication, US News & World Report, also published its ranking of the world's top universities in June, this year. USN&WR rankings are not identical but quite similar to the Times list.

The number of Asian universities in the list of top 100 has increased from 14 to 16. The University of Tokyo, at 22, is the highest ranked Asian university, ahead of the University of Hong Kong that stands at 24.

Leading UK universities said institutions in Japan, South Korea and Hong Kong were "snapping at the heels" of western institutions, arguing they need more funding to compete on the global stage.

However, there has been a significant fall in the number of North American universities in the top 100, from 42 in 2008 to 36 this year.

The rankings are based on an international survey of 9,000 academics who assessed the institutions' research facility, teaching quality and ability to recruit staff and students abroad.

"The broad message of these tables is clear - the leading UK research universities are held in high esteem internationally but countries like China and Korea, which are investing massively in their best institutions, are snapping at our heels" Wendy Piatt, director general of the Russell Group of universities said.

Piatt said the UK was less well-funded than its competitors and if public spending cuts hit budgets they would be under increasing pressure.

The entire Muslim world is represented by just one university from Malaysia on the top 200 list. Other Muslim nations including Indonesia, Malaysia, Iran, Pakistan, Saudi Arabia, Turkey and UAE are represented by one or more institutions among the top 400 universities listed by the Times of London for 2009. Egypt, the largest Arab nation by population, is conspicuous by its absence from this prestigious list of 400 institutions of higher learning.

Here are some of the key highlights:

1. Among the top 20 universities, including one tied ranking, there are 13 American, 5 British, 1 Australian, 1 Canadian and 1 Swiss on the list.

2. Top Canadian university is McGill in Montreal, at number 18, up from 20 last year. Australian National University and ETH Zurich (Swiss Federal Institute of Technology) are ranked at 17 and 20 respectively. Another top Canadian University in top 200, University of Toronto, is ranked 29.

3. Top Asian universities are University of Tokyo at 22 (down from 19 last year), followed by University of Hong Kong at 24 (up from 26), National University of Singapore at 30, and Hong Kong University of Technology at 35 (up from 39).

4. Outside of Hong Kong, the top Chinese university is Tsinghua at 49 (up from 56), followed by Peking University at 52 (down from 50).

5. The top Irish university is Trinity College, Dublin, at 43, up from 49.

6. Two campuses of the Indian Institutes of Technology make the list, down from three in 2006. IIT Bombay is ranked 163, up from 174 last year, and IIT Delhi at 181, down from 154 last year. Beyond the top 200, there are four more Indian institutions in the top 400 list. These include IIT Kanpur at 237, IIT Madras at 284, University of Delhi at 291 and IIT Kharagpur at 335.

7. Except for UC Santa Cruz (at 252) and the relatively new campuses at Merced and Riverside (at 285), the rest of the University of California campuses are on the top 200 best universities list. UCLA is at 32, UC Berkeley 39, UC San Diego 76, UC Santa Barbara 106, UC Davis 108, and UC Irvine at 161. On a personal note, it is nice to see both of my daughters' schools, UCLA and UC Berkeley, show up among the top 50 institutions on the list. It is also a consolation to see Rutgers University, where I taught in late 1970s, ranked at 183.

8. Ranked at 181, Universiti of Malaysia is the only institution from a Muslim nation on the list, down from two in 2006. It is a sad commentary on the quality of higher education at universities in Islamic nations that renders them unable to be considered for such prestigious lists. It is not hopeless however. There are several up and coming universities in Islamic nations, including Malaysia, Indonesia, Saudi Arabia and Pakistan, which can move up the list if there is continued focus on excellence in higher education.

9. Beyond the top 200, there are thirteen more universities on the list of top 400 from Muslim nations. At 201, the University of Indonesia just missed the top 200 list. Saudi Arabia's King Saud University is at 247, Indonesia's Universitas Gadjah Mada at 250, Saudi Arabia's King Fahd University at 266, Malaysia's Universiti Kebangsaan Malaysia at 291, Malaysia's Universiti Sains Malaysia at 314, Universiti Teknologi Malaysia at 320, Universiti Putra Malaysia at 345, Pakistan's National University of Science and Technology (NUST) at 350 (up from 376), Indonesia's BANDUNG Institute of Technology at 351, Turkey's Bilkent University at 360, Iran's University of Teheran at 386 and UAE's United Arab Emirate University at 374.

Table Courtesy of Two Wobbling Minds:



Related Links:

Times Higher Education Rankings

US News and World Report Rankings

Pakistan Thompson Reuters' Rising Star in Science and Technology

World's Top 600 Universities

Quality of Higher Education in South Asia

Haq's Musings

Spiked-Online.com

NEDUET Admissions Prospectus 2009-10

Global Shortage of Quality Labor

Nature Magazine Editorial on Pakistan's Higher Education Reform

India Invites Foreign Colleges to Set Up Indian Campuses

McKinsey Global Institute Report

Pakistan Ranks Among Top Outsourcing Destinations

Pakistan Software Houses Association

World's Top Universities Rankings

Improving Higher Education in Pakistan

Globalization of Engineering Services 2006

Center for European Reform

Reforming Higher Education in Pakistan

Wednesday, October 7, 2009

South Asia Lags in Human Development

In spite of the fact that Pakistan's Human Development Index (HDI) has risen by 1.30 percent per year from 0.402 to 0.572 during 1980-2007 period, and it has accelerated to 1.9% increase since 2000 when it was reported to be 0.499, its progress is not yet sufficient to improve the nation's ranking relative to other countries in regions like East Asia, which have been moving considerably faster. Pakistan's index grew by 1.75% in the 1980s but slipped to less than 1.3% during the lost decade of the 1990s.

South Asia Lagging

In fact, the latest Human Development Report for 2009 shows that all major South Asian nations have slipped further down relative to other regions of the world. Pakistan's HDI ranking dropped 3 places from 138 last year to 141 this year, and India slipped six places from 128 in 2008 to 134 this year. The report includes human development data on 182 countries on the index, which measures achievements in terms of life expectancy, educational attainment and adjusted real income.

Rankings of other South Asian countries in 2009 are as follows: Bangladesh 146 (140 in 2008), Sri Lanka 102 (99 in 2008), Maldives 95 (100 in 2008), Nepal 146 (142 in 2006) and Bhutan 132 (135 in 2008). Norway continues to top the chart, while Australia, Iceland, Canada, Ireland, the Netherlands, Sweden, France, Switzerland and Japan make up the top 10. The US is ranked 13, while Britain and Germany are further down at 21 and 22.

Human Development Defined:

HDI provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy); being educated (measured by adult literacy and gross enrollment in education); and having a decent standard of living (measured by purchasing power parity) income.

Human Poverty Index (HPI-1) focuses on the proportion of people below certain threshold levels in each of the dimensions of the index. By looking beyond income deprivation, HPI-1 represents a multi-dimensional alternative to the $1.25 a day poverty measure. The HPI-1 value is 33.4 percent for Pakistan ranks 101st among 135 counties for which the index has been calculated. This figure of 33.4% poverty differs sharply from 17.2% poverty calculated for 2007-08 by the UNDP analysts in Islamabad.

Pakistan's Gender Development Index value means that the greater the gender disparity in basic human development the lower is the country's GDI relative to its HDI. Pakistan's GDI value, 0.532, should be compared to its HDI value of 0.572. Its GDI value is 93 percent of its HDI value. Out of the 155 countries with both HDI and GDI values, 152 countries have a better ratio than Pakistan. The Gender Empowerment Measure (GEM) shows whether women take an active part in economic and political life and is different to GDI as the GEM exposes inequalities in opportunities in selected areas. GEM says Pakistan ranks 99th out of 109 countries in the GEM index, with a value of 0.386.

Allowing for migration-both within and between countries-has the potential to increase people's freedom and improve the lives of millions around the world, according the Human Development Report. "We live in a highly mobile world, where migration is not only inevitable but also an important dimension of human development. Nearly one billion-or one out of seven-people are migrants.

"Migration can be a force for good, contributing significantly to human development," says United Nations Development Program (UNDP) Administrator Helen Clark. "But to realize its benefits, there needs to be a supportive policy environment as this Report suggests."

Comparing HDI and PHI:

Unlike HDI which adds other dimensions such as literacy, the new index PHI focuses specifically on the most basic parameters of poverty and hunger in developing nations.

On PHI, Pakistan at 45 ranks well ahead of India at 62, and it is included in the medium performing countries. PHI is a new composite indicator – the Poverty and Hunger Index (PHI) – developed to measure countries’ performance towards achieving MDG1 on halving poverty and hunger by 2015. The PHI combines all five official MDG1 indicators, including a) the proportion of population living on less than US$ 1/day, b) poverty gap ratio, c) share of the poorest quintile in national income or consumption, d) prevalence of underweight in children under five years of age, and d) the proportion of population undernourished.

UNDP Criticisms:

Dr. Mahbub ul Haq of Pakistan, the creator of the human development report, intended the HDI for use as a more reliable indicator of human condition than the gross domestic product (GDP) of various nations. It has not quite met the expectations of some in the human development community. There have been many criticisms of HDI, ranging from the use of stale and skewed data to clear disconnect between the HDI ranking and the ground reality as seen by most observers.

In a 2003 letter to the UNDP, the former director of the UNDP-funded Center for Research on Poverty Reduction and Income Distribution (CRRPRID), Dr Mushtaq A. Khan, challenged the basic data on which the UNDP had ranked Pakistan. Dr. Khan argued that using the factual data of life expectancy at 63.56 years, literacy rate at 44 percent, combined gross enrollment rate at 36 per cent and PPP GDP per capita at $1890, the country should have been ranked at 136th position for 2001, rather than 144th, "bringing it in the group of medium human development countries instead of the low human development countries". Rather than responding to the issues raised in Dr. Khan's letter, the UNDP had him fired from his post. More recently, there continues to be a discrepancy between the poverty figures reported by UNDP analysts in Islamabad and the figures used in HDI computation.

Recently, UNDP became part of a controversial report by Mumbai's municipality in claiming that “Dharavi is not Asia’s largest slum, Karachi’s Orangi Township has surpassed Dharavi.” It is clear that UNDP did not bother to check the facts on the ground before allowing itself to be used by Mumbai's BMC. The fact is that Orangi is nothing like Dharavi in terms of the quality of its housing or the services available to its residents. While Dharavi has only one toilet per 1440 residents and most of its residents use Mahim Creek, a local river, for urination and defecation, Orangi has an elaborate sanitation system built by its citizens. Under Orangi Pilot Project's guidance, between 1981 and 1993 Orangi residents installed sewers serving 72,070 of 94,122 houses. To achieve this, community members spent more than US$2 million of their own money, and OPP invested about US$150,000 in research and extension of new technologies. Orangi pilot project has been admired widely for its work with urban poor.

Foreign visitors to Pakistan and India have often reported that Pakistanis generally look better fed, clothed and housed than their counterparts in India. There is much less poverty on show in Pakistan than in India. However, the UNDP HDI reports continue to show India ranking higher than Pakistan. There could be many possible reasons for such a disconnect.

One example of the disconnect between the UNDP reports and ground reality can be found in the purchasing power parity calculations. The most recent real per capita income data was calculated and reported by Asian Development Bank based on a detailed study of a list of around 800 household and nonhousehold products in 2005 and early 2006 to compare real purchasing power for ADB's trans-national income comparison program (ICP). The ICP concluded that Pakistan had the highest per capita income at HK$ 13,528 in South Asia. It reported India’s per capita as HK $12,090.

In terms of being better fed, Pakistanis consume significantly more dairy products, sugar, wheat, meat, eggs and poultry on a per capita basis than Indians. Average Pakistani gets about 50% of daily calories from non-food-grain sources versus 33% for average Indians.

There is widespread hunger and malnutrition in all parts of India. India ranks 66th on the 2008 Global Hunger Index of 88 countries while Pakistan is slightly better at 61 and Bangladesh slightly worse at 70. The first India State Hunger Index (Ishi) report in 2008 found that Madhya Pradesh had the most severe level of hunger in India, comparable to Chad and Ethiopia. Four states — Punjab, Kerala, Haryana and Assam — fell in the 'serious' category. "Affluent" Gujarat, 13th on the Indian list is below Haiti, ranked 69. The authors said India's poor performance was primarily due to its relatively high levels of child malnutrition and under-nourishment resulting from calorie deficient diets.

According to Werner International, Pakistan's per capita consumption of textile fibers is about 4 Kg versus 2.8 Kg for India.

There is widespread homelessness in India with the urgent need for 72 million housing units. Pakistan, too, has a housing crisis and needs about 7 million additional housing units, according to the data presented at the World Bank Regional Conference on Housing last year.

India might be an emerging economic power, but it is way behind Pakistan, Bangladesh and even Afghanistan in providing basic sanitation facilities, a key reason behind the death of 2.1 million children under five in the country.

Lizette Burgers, chief of water and environment sanitation of the Unicef, recently said India is making progress in providing sanitation but it lags behind most of the other countries in South Asia. A former Indian minister Mr Raghuvansh Prasad Singh told the BBC that more than 65% of India's rural population defecated in the open, along roadsides, railway tracks and fields, generating huge amounts of excrement every day.

Conclusion:

In spite of the many valid criticisms and the major flaws in UNDP's methodology and HDI computation and reporting, the HDI rankings are an important ballpark indicator of the state of human development in a nation or region. The report is a very useful document that the governments must take seriously and make the necessary efforts to improve their human resources by providing the required funding and support for proper nutrition, education and health care to ensure a better future for their people.

Pakistan has consistently scored lower on the HDI sub-index on education than its overall HDI index. It is obvious from the UNDP report and other sources that Pakistan's dismal record in enrolling and educating its young people, particularly girls, stands in the way of any significant positive development in the nation. The recent announcement of a new education policy that calls for more than doubling the education spending from about 3% to 7% of GDP is a step in the right direction. However, money alone will not solve the deep-seated problems of poor access to education, rampant corruption and the ghost schools that only exist on paper, that have simply lined the pockets of corrupt politicians and officials. Any additional money allocated must be part of a broader push for transparent and effective delivery of useful education to save the people from the curses of poverty, ignorance and extremism which are seriously hurting the nation.

Here's a video report about Pakistan's decrepit public education:



Poverty:

Population living under $1.25 a day - India: 41.6% Pakistan: 22.6% Source: UNDP

Underweight Children Under Five (in percent) Pakistan 38% India 46% Source: UNICEF

Life expectancy at birth (years), 2007 India: 63.4 Pakistan: 66.2 Source: HDR2009

Education:

Youth (15–24 years) literacy rate, 2000 to 2007, male Pakistan: 80% India 87% Source: UNICEF

Youth (15–24 years) literacy rate, 2000 to 2007, female Pakistan 60% India 77% Source: UNICEF

Economics:

GDP per capita (US$), 2008 Pak:$1000-1022 India $1017-1100

Child Protection:

Child marriage under 15-years ; 1998–2007*, total Pakistan - 32% India - 47% Source: UNICEF

Under-5 mortality rate per 1000 live births (2007), Value Pakistan - 90 India 72 Source: UNICEF

Related Links:

UNDP HDI: A Poor Representation of Human Development

HDI Ranking 2009

Housing in South Asia

Education, Society and Development

Pakistan Questions HDI Ranking

Pakistan's Decrepit Public School System

Globalis-Pakistan Human Development by Decades

Globalis-India Human Development by Decades

Pakistan Poverty Declines to 17.2%

Pakistanis Dietary Habits

UNDP Watch