Wednesday, August 31, 2011

Nexus of Crime and Politics Hurting Pakistan Economy

Former Sindh Home Minister Zulfiqar Mirza's dramatic August 28 press conference with a copy of the Holy Quran in his hand has become the center of news media attention in recent days.



Following this highly emotion-charged press conference which was carried live by almost all of the mainstream TV channels, Mirza has been hailed as a hero by some of the most popular TV talking heads for railing against MQM's top leadership, and for singling out Pakistan Peoples Party leader and Federal Home Minister Rehman Malik for his harshest accusations.

To assess the extent of Mirza's credibility, it is important to understand the following:

1. What triggered the latest of Mirza's outbursts? Was it Malik's decision to send the Rangers in to the Lyari neighborhood of Karachi?

2. When Mirza used a copy of the Holy Quran in the month of Ramadan to convey his sincerity, did he really tell the whole truth? or did he leave out the ugly truths about the horrific crimes committed by Karachi's armed gangs controlled by him and his ANP political allies?

The answer to both of the above questions can be found in the fact that Mirza's press conference occurred soon after he learned about the Pakistan Rangers' operation to clean out gang-infested Lyari. This operation was authorized by Rehman Malik over the objections of Mirza and without Mirza's prior knowledge to prevent him tipping off his gangster allies in Lyari.

During the Lyari operation, the Rangers discovered the horror chambers that were used to torture and kill people in recent weeks. The badly mutilated bodies of these torture victims were stuffed in bags and dumped in various parts of the city to create widespread fear. The perpetrators were none other than Mirza's allies who falsely labeled their gangs as "People's Amn (Peace) Committee" or PAC.

The Rangers also arrested 133 suspects and seized automatic weapons and ammunition that were concealed in a ditch inside a house. They also found rockets, grenades, nine sub-machine guns and hundreds of bullet rounds once they dug out the makeshift arsenal, according to the Express Tribune newspaper report.

The torture cells were found in the Nayyabad area of Lyari. One was underground while the other was on the first floor. Both were outfitted with chains, chairs, tape for gagging victims, ropes, and power tools to dismember bodies. Jackets, sacks and documents were strewn on the floor along with the uniform an indicating the identity of the victims as members of the MQM's Khimat-e-Khalq Foundation.

The TV news-anchors, talk-show hosts, and the print media reporters must not give Zulfikar Mirza a free pass when he tells the truth only selectively to hide his own misdeeds and the crimes of his political allies in patronizing criminal gangs. Nor should other politicians be spared the tough questions about their culpability in destroying Karachi's peace, and for seriously undermining Pakistan's economy. Pakistan's media must play their crucial role in exposing the growing nexus between crime and politics in Karachi, and the rest of Pakistan.

We must not forget that sunlight is the best disinfectant.

Related Links:

Haq's Musings

MQM Worried By Karachi's Demographic Changes

Karachi Tops World's Largest Cities

Karachi Tops Mumbai in Stock Performace

Eleven Days in Karachi

Pakistan Most Urbanized in South Asia

Karachi: The Urban Frontier

Do Asia's Urban Slums Offer Hope?

Orangi is Not Dharavi

Climate Change Could Flood Karachi Coastline

Karachi Fourth Cheapest For Expats

Karachi City Government

Karachi Dreams Big

Pakistan Census 2011

Jinnah's Vision of Pakistan

High Cost of Failure to Aid Flood Victims

World Memon Organization

Urbanization in Pakistan Highest in South Asia

Labels: , , , , ,

Tuesday, August 23, 2011

More Pakistanis Complete Education Than Indians

Pakistanis spend more time in schools and colleges and graduate at a higher rate than their Indian counterparts in 15+ age group, according to a report on educational achievement by Harvard University researchers Robert Barro and Jong-Wha Lee.

In a recent Op Ed titled "Preparing the Population for a Modern Economy" published by Pakistan's Express Tribune, Pakistani economist Shahid Burki wrote as follows:

"Pakistan does well in one critical area — the drop-out rate in tertiary education. Those who complete tertiary education in Pakistan account for a larger proportion of persons who enter school at this level. The proportion is much higher for girls, another surprising finding for Pakistan."

Source: Global Education Digest


Upon closer examination of Barro-Lee data on "Educational Attainment for Total Population, 1950-2010", it is clear that Pakistani students stay in schools and colleges longer to graduate at higher rates than Indian students at all levels--primary, secondary and tertiary. While India's completion rate at all levels is a dismal 22.9%, the comparable completion rate in Pakistan is 45.7%.

Here is a summary of Barro-Lee's 2010 data in percentage of 15+ age group students who have enrolled in and-or completed primary, secondary and tertiary education:

Education Level.......India........Pakistan

Primary (Total)........20.9..........21.8

Primary (Completed)....18.9..........19.3

Secondary(Total).......40.7..........34.6

Secondary(Completed)...0.9...........22.5

College(Total).........5.8...........5.5

College(Completed).....3.1...........3.9



It shows the following:

1. India's overall schooling rate of 67.4% exceeds Pakistan's 61.9% in 15 and over age group.

2. Pakistan's primary schooling rate of 21.8% is slightly higher than India's 20.9% of 15+ age group

3. India has a big edge with its secondary enrollment of 40.7% over Pakistan's 34.6%, but India's completion rate at this level is a dismal 0.9% versus Pakistan's 22.5% of the population of 15+ age group.

4. India's tertiary education enrollment rate of 5.8% is higher than Pakistan's 5.5%, but Pakistan's college and university graduation rate of 3.9% is higher than India's 3.1% of 15+ age group.

5. Pakistan's combined graduation rate at all three levels is 45.7% versus India's 22.9% among the population age group of 15 years or older.



Barro-Lee data also shows that the percentage of 15+ age group with no schooling has gone down in both nations in the last decade, particularly in Pakistan where it dropped dramatically by a whopping 22% from 60.2% in 2000 to 38% in 2010. In India, this percentage with no schooling dropped from 43% to 32.7% of 15+ age group.



The Aug 23 & 30, 2010 issue of Newsweek had a cover story titled "The Best Country in he World is...". It ranked top 100 nations of he world based on education, health, quality of life, economy and politics. On education, Newsweek ranked Pakistan 86 and India 88 among 100 nations it included.

Clearly, both India and Pakistan have made significant progress on the education front in the last few decades. However, the Barro-Lee dataset confirms that the two South Asian nations still have a long way to go to catch up with the nations of East Asia and the industrialized world.

Related Links:

Haq's Musings
India and Pakistan Contrasted in 2010

Educational Attainment Dataset By Robert Barro and Jong-Wha Lee

Quality of Higher Education in India and Pakistan

Developing Pakistan's Intellectual Capital

Intellectual Wealth of Nations

Pakistan's Story After 64 Years of Independence
Pakistan Ahead of India on Key Human Development Indices

Labels: , , , ,

Thursday, August 18, 2011

India and Pakistan 2010-11 Incomes Roughly Equal at $3,100 Per Capita

Nominal per capita incomes in both India and Pakistan stand at just over $1200 a year, according to figures released in May and June of 2011 by the two governments. This translates to about $3100 per capita in terms of PPP (purchasing power parity). Using a more generous PPP correction factor of 2.9 for India as claimed by Economic Survey of India 2011 rather than the 2.5 estimated by IMF for both neighbors, the PPP GDP per capita for Indian and Pakistan work out to $3532 and $3135 respectively.

Nominal per capita income of Indians grew by 17.9 per cent to Rs 54,835, or $1218, in 2010-11 from Rs 46,492 in the year-ago period, according to the revised data released by the government in May, 2011 as reported by Indian media.

In June 2011, Economic Survey of Pakistan reported that the nominal per capita income of Pakistanis rose 16.9 percent to $1,254 in 2010-11, up from $1,073 in 2009-2010.



Neither of these figures are adjusted for inflation which has been running in high single digits in India (about 9%) and double digits in Pakistan (about 14%).

Economic Survey of Pakistan 2010-11 puts the nation's population at 177 million and nominal gdp at $222 billion. In terms of purchase power parity with the PPP correction factor of 2.5, it works out to $555 billion PPP GDP.

Looking at the increase in nominal GDP alone can be quite misleading in judging the health of any economy. Other indicators, such as real GDP growth and investments, show that the state of Pakistan's economy is very poor. The nation's GDP grew only 2.4% in real terms in 2010-2011. Domestic investment dropped to a 40-year low of 13.4% of GDP, and foreign direct investment (FDI) declined by 29 percent to $1.232 billion during July-April 2010-11 from $1.725 million in the same period a year earlier.

In addition to improved security environment, Pakistan has an urgent need for serious economic reform, greater social justice and better governance. Unless the PPP government acts to improve this situation, no amount of foreign aid, external loans and other help will suffice. The first step in the process is for the ruling elite to lead by example by paying their fair share of taxes and adopting less extravagant personal lifestyles to get Pakistan's fiscal house in order.

Related Links:

Haq's Musings

Economic Survey of Pakistan 2010-11

Pakistan's Per Capita Income Exceeds $3,100 in 2010-2011

Pakistan's Story After 64 Years of Independence

India and Pakistan Contrasted in 2010

Oligarchs of India and Pakistan

Labels: , , ,

Sunday, August 14, 2011

How is 64-Year-Old Pakistan Doing?

“You tend to hear the worst 5% of the Pakistan story 95% of the time.”


The above is a quote attributed to Pakistani Entrepreneur Monis Rahman in Aug 8, 2011 Forbes Magazine story titled “Want to Start a Company in the World's Sixth-Most Populous Country? Time to Move to Pakistan”.

On Pakistan's 64th birthday today, there is a lot of coverage by the traditional media focused on "the worst 5% of the Pakistan story". To help my readers piece together the full story of Pakistan this August 14, 2011, I am writing today to present some of the key parts of the rest of the 95% of the Pakistan story that gets little or no coverage.

Let's start with some of the key indicators of progress Pakistan has made since independence in 1947.

1. Health & Wealth:

The health and wealth of a nation depend on availability of good nutrition and access to health care and education, which in turn rely on economic growth to support needed public and private social spending.

The most basic indicators of progress, such as the life expectancy and per capita incomes of many nations, have been compiled and brought to life in animations developed by Professor Hans Rosling and posted on gapminder.org.



The Gapminder animations show that life expectancy in Pakistan has jumped from 32 years in 1947 to 67 years in 2009, and per Capita inflation-adjusted PPP income has risen from $766 in 1948 to $2603 in 2009.

2. Literacy:

Literacy is also a very important indicator of progress. Though the literacy in Pakistan has increased from about 10% in 1947 to about 60% today, it remains dismally low relative to many other nations.

However, a closer examination of literacy data by age groups shows that the literacy rates are rising by every generation:

Over 55 years 30% literate
45-55 40%
35-45 50%
25-35 60%
15-25 70% (Male 80%, Female 60%, UNICEF)

Rural and Female illiteracy are the biggest challenges.

3. Poverty, Hunger and Inequality:

The World Bank ranks Pakistan among lower-middle-income nations with per capita income exceeding $1000 a year.

Pakistan is still a country with significant population of poor people. However, its recent levels of poverty are among the lowest in South Asia.

The 2011 World Bank data shows that Pakistan's poverty rate of 17.2%, based on India's current poverty line of $1.03 per person per day, is more than 10 percentage points lower than India's 27.5%. Assam (urban), Punjab and Himachal Pradesh are the only three Indian states with equal or slightly lower poverty rates than Pakistan's.

Based on hunger data collected from 2003 to 2008, The International Food Policy Research (IFPRI) has reported that Pakistan's hunger index score improved over the last three consecutive years reported since 2008 from 21.7 (2008) to 21.0 (2009) to 19.1 (2010) and its ranking rose from 61 to 58 to 52. During the same period, India's index score worsened from 23.7 to 23.9 to 24.1 and its ranking moved from 66 to 65 to 67 on a list of 84 nations.

Pakistan is also more egalitarian than its neighbors. The CIA World Factbook reports Pakistan’s Gini Index has decreased from 41 in 1998-99 to 30.6 in 2007-8, lower than India's 36.8 and Bangladesh's 33.2.

4. Pakistan's Economy:

Pakistan state was broke in 1947 because India refused to give Pakistan its share of Sterling reserves. The situation was so bad that Pakistani govt couldn’t pay employees. In this first existential crisis, the Habibs bailed out Pakistani state by lending Rs. 80 million, more than half of Rs. 150 million budget.

Today, Pakistan's economy is the 27th largest in the world. As Part of "the Next 11" group of nations, it is one of the top 15 emerging economies (BRICs+Next11) picked by Goldman Sachs. Goldman forecasts Pakistan to be among the top 20 biggest economies in the world by 2025.

Since 2008, Pakistan's economy has been suffering from a serious stagflation, a very bad combination of slow growth and high inflation. But the history tells us that this current situation is not normal for Pakistan. After all, it's Pakistan's robust economic growth that has enabled significant progress based on the health and wealth indicators outlined earlier.

Beginning in 1947, Pakistani economy grew at a fairly impressive rate of 6 percent per year through the first four decades of the nation's existence. In spite of rapid population growth during this period, per capita incomes doubled, inflation remained low and poverty declined from 46% down to 18% by late 1980s, according to eminent Pakistani economist Dr. Ishrat Husain. This healthy economic performance was maintained through several wars and successive civilian and military governments in 1950s, 60s, 70s and 80s until the decade of 1990s, now appropriately remembered as the lost decade.

In the period from 2000-2007, here's what the IMF agreed to in 2008 as part of the nation's bailout:

Pakistan became one of the four fastest growing economies in the Asian region during 2000-07 with its growth averaging 7.0 per cent per year for most of this period. As a result of strong economic growth, Pakistan succeeded in reducing poverty by one-half, creating almost 13 million jobs, halving the country's debt burden, raising foreign exchange reserves to a comfortable position and propping the country's exchange rate, restoring investors' confidence and most importantly, taking Pakistan out of the IMF Program.

5. Science and Technology:

Here are some of the facts about Pakistan's progress in science and technology that never make the headlines in the mainstream media anywhere, including Pakistan:

-Pakistan has been ScienceWatch’s Rising Star for scientific papers published in various international journals.

-Pakistan is among a handful of nations with dozens of scientists working on CERN’s high-profile SuperCollider Project. Several SuperCollider components were built in Pakistan.

-Jinnah Antarctic Station puts Pakistan among a dozen nations doing research in Antarctica.

-Pakistan’s IT Industry is worth $2.8 billion and growing



-Pakistan leads the world in biometric IT services with the world’s biggest biometric database.

-Top-selling Blackberry application was developed by a Pakistani company Pepper.pk

6. Arts, Literature & Culture:

There has been an explosion of the uniquely Pakistani arts and literature:

-Sachal Orchestra, a Lahore Jazz Group, is topping western music charts

-Regular book fairs, music concerts, fashion shows & theater group performances

-UK’s Granta Magazine Special Issue Highlights Successful Pakistani Authors’ Books Published in Europe and America. Examples: Mohsin Hamid (The Reluctant Fundamentalist), Daniyal Mueenuddin (In Other Rooms, Other Wonders), Kamila Shamsie (Burnt Shadows), Mohammad Hanif (A Case of Exploding Mangoes) and Nadeem Aslam (The Wasted Vigil) who have been making waves in literary circles and winning prizes in London and New York.

7. Heavy Manufacturing:

Pakistan has a significant heavy industry today. For example:

-Autos, Motorcycles, Tractors, Buses, Trucks (Auto Sales Up 61% in July, 2011)

-Steel

-Nuclear Reactors (Khushab)

-Aircrafts

-Ships

-Unmanned Drones (UAVs)

-Army Tanks

-Ballistic and Cruise Missiles

8. Natural Resources:

Pakistan is rich in energy and mineral resources.

-US Dept of Energy estimates 51 trillion cubic feet of shale gas mostly in Sindh. And there's good potential for shale oil in the country.

-Vast coal reserves at Thar for cheap electricity

-Huge deposits of copper, gold, iron and rare earths at Reko Diq, Dilband and Saindak in Balochistan

-High sustained wind speeds of 13 to 16 mph along the Arabian Sea coastline

-Lots of sunshine everywhere all year round

-Significant hyrdo energy potential

9. Strong Society:

The Habibs bailed out Pakistani state in 1947.

Now, let's see how Edhi doing it in 2011. Here's quote from Anatol Leiven's "Pakistan: A Hard Country":

"There is no sight in Pakistan more moving than to visit some dusty, impoverished small town in arid wasteland, apparently abandoned by God and all sensible men and certainly abandoned by the Pakistani state and its own elected representatives- to see the flag of the Edhi Foundation flying over a concrete shack with a telephone, and the only ambulance in town standing in front. Here, if anywhere in Pakistan, lies the truth of human religion and human morality".

Lieven says Pakistanis donate 5% of the GDP for charitable cause, making Pakistanis the most generous people in the world. As a benchmark, philanthropy accounts for 2.2% of gdp in the United States, 1.3% in the UK, 1.2% in Canada and 0.6% in India.

10. Weak State:

Unfortunately, Pakistani state, run by politicians and their hand-picked civilian administrators, is weak, incompetent and ineffective.

The Pakistani military and the civil society bails out the state each time it is found lacking. Examples include the earthquake in 2005 , Swat takeover by Taliban insurgents in 2009, and massive floods in 2010. In each of these cases, the politicians and the civilian administrators abandoned the people and the world media declared Pakistan a failed state on the verge of total collapse. But they were proved wrong.

The military launched the rescue and relief efforts by deploying all of its resources, and then the NGOs like Edhi Foundation stepped in to help the people stand on their feet again.

Summary:

While the worst 5% of the Pakistan story gets all the headlines, the reality of Pakistan today as vibrant society and a strong nation gets ignored by the mainstream media. The real story of Pakistan is the resilience of its 180 million citizens who continue to strive to make it better and stronger.

The Taliban who get all the coverage do not pose an existential threat to Pakistan. Generations of military families have periodically fought FATA insurgencies. For example, Shuja Nawaz, the author of Crossed Swords says that his grandfather, his uncle and his cousin have all been deployed in Waziristan by the British and later Pakistani governments in the last century and a half. American withdrawal from the region will eventually calm the situation in Waziristan, and the rest of the country.

Climate change and the growing water scarcity are the main long-term existential threats to Pakistan and the region. Water per capita is already down below 1000 cubic meters and declining
What Pakistan needs are major 1960s style investments for a second Green Revolution to avoid the specter of mass starvation and political upheaval it will bring.

Note: Click here to get a pdf version of my presentation at P.A.C.C. in San Jose, CA.

Here's a video of Riaz Haq's interview on Aug 14, 2011:


Wide Angle Zoom: Formation and Future of Pakistan by wbt-tv

Related Links:

Haq's Musings

Ishrat Husain: Structural Reforms in Pakistan's Economy

Pakistan's Economic Performance 2008-2010

Incompetence Worse Than Corruption in Pakistan

Pakistan's Circular Debt and Load Shedding

US Fears Aid Will Feed Graft in Pakistan

Pakistan Swallows IMF's Bitter Medicine

Shaukat Aziz's Economic Legacy

Pakistan's Energy Crisis

Karachi Tops Mumbai in Stock Performance

India Pakistan Contrasted 2010

Pakistan's Foreign Visitors Pleasantly Surprised

After Partition: India, Pakistan and Bangladesh

The "Poor" Neighbor by William Dalrymple

Pakistan's Modern Infrastructure

Video: Who Says Pakistan Is a Failed State?

India Worse Than Pakistan, Bangladesh on Nutrition

UNDP Reports Pakistan Poverty Declined to 17 Percent

Pakistan's Choice: Talibanization or Globalization

Pakistan's Financial Services Sector

Resilient Pakistan Defies Doomsayers

Pakistan's Decade 1999-2009

Pakistan's Other Story

South Asia Slipping in Human Development

Asia Gains in Top Asian Universities

BSE-Key Statistics

Pakistan's Multi-Billion Dollar IT Industry

India-Pakistan Military Comparison

Food, Clothing and Shelter in India and Pakistan

Pakistan Energy Crisis

IMF-Pakistan Memorandum of Economic and Financial Policies

Labels: , , , ,

Saturday, August 13, 2011

Pakistan Auto Industry Posts Huge Sales Gains

Auto sales in Pakistan jumped 61% in July, 2011 to 17,563 units from 10,942 units in the same month of last year. Pak Suzuki Motor Company led the auto sales up with 116 percent rise to 11,997 units from 4,503 seen in the same period last year. This is in sharp contrast to a Reuters report of 16% decline in auto sales in July across the border in India.



Earlier, Economic Survey of Pakistan 2010-2011 reported that the first 9 months of fiscal 2010-2011 saw production of television sets jump 28.6% and automobile production increase by 14.6%. From July 2010 to March 2011, production of cars, light commercial vehicles and two and three wheelers grew by 16.4%, 20.5% and 12.6% respectively. These figures confirm the return of Pakistanis' appetite for consumer durables after a significant drop from 2007-2008 to 2008-2009.

In a separate news story carried by Bloomberg, Swiss food giant Nestle's Pakistan subsidiary said its sales of consumer packaged goods rose 25% year-over-year. Engro Foods, a local Pakistani competitor of Nestle, reported its sales climbed 46 percent to 7 billion rupees in the last quarter.

Rising sales of consumer durables like cars and fast moving consumer goods (FMCG) represent a clear sign of the return of the middle class consumers who had pulled back since 2008. This improvement has been been aided by rising incomes in the rural areas stimulated by higher food and commodity prices. Fast moving consumer goods (FMCG) – or Consumer Packaged Goods (CPG) – are products that are sold quickly and at relatively low cost. Examples include non-durable goods such as milk, juices, sodas, toiletries, and packaged grocery items.

Nestle Pakistan's chief Ian Donald summed up the rising demand for his company's products as follows: “It’s a common perception that China and India are much bigger in terms of growth than Pakistan. But for Nestle, the per capita consumption of our products in Pakistan is twice as much as we have in China and India.” It should be noted that Nestle is the world's largest packaged food company.

Over the last two decades, Pakistan has continued to offer much greater upward economic and social mobility to its citizens than neighboring India. Since 1990, Pakistan's middle class had expanded by 36.5% and India's by only 12.8%, according to an ADB report on Asia's rising middle class released in 2010.

The ADB report on Asia's rising middle class confirms that Pakistan's middle class has grown to 40% of the population, significantly larger than the Indian middle class of about 25% of its population, and it has been growing faster than India's middle class.

Coming on the eve of Pakistan's Independence Day this Aug 14, the news of rising sales of cars and other consumer products could lead to more hiring and help revive Pakistan's economy which has been stagnant since 2008.

Related Links:

Haq's Musings

Resilient Pakistan

Pakistan's Rural Economy Showing Strength

Pakistan's Exports and Remittances Rise to New Highs

Incompetence Worse Than Corruption

Sugar Crisis in Pakistan

Agricultural Growth in India, Pakistan and Bangladesh

Pakistan's Rural Economic Survey

Pakistan's KSE Outperforms BRIC Exchanges in 2010

High Cost of Failure to Aid Flood Victims

Karachi Tops Mumbai in Stock Performance

India and Pakistan Contrasted in 2010

Pakistan's Decade 1999-2009

Musharraf's Economic Legacy

World Bank Report on Rural Poverty in Pakistan

Copper, Gold Deposits Worth $500 Billion at Reko Diq, Pakistan

China's Trade and Investment in South Asia

India's Twin Deficits

Pakistan's Economy 2008-2010

Auto Industry in India, Pakistan and China

Media Revolution in Pakistan

Labels: , , ,

Wednesday, August 10, 2011

Pakistani Jazz Music Tops Western Charts

Pakistan's Sachal Studios Orchestra, named after Sindhi Sufi Saint Sachal Sarmast (1739–1829), has topped iTunes jazz charts in America and Britain with its interpretation of Dave Brubeck's Take Five that blends classical violins with sitars, tablas and other South Asian instruments, according to British media reports.



It's the first time Jazz is being played in Pakistan in a big way since Jazz greats like Dave Brubeck, Duke Ellington and other jazz legends performed in the country in the 1950s. Brubeck, 90, told reporters that it is "the most interesting" version of Take Five he's ever heard.

Sachal Orchestra's first album, “Sachal Jazz,” with interpretations of tracks like “The Girl from Ipanema” and “Misty,” and of course “Take Five” is available on iTunes. It's been produced, financed and directed by a wealthy British Pakistani Jazz enthusiast Izzat Majeed.

Inspired by the Abbey Road Studios in London, Majeed and his partner Mushtaq Soofi have worked for the last six years with Christoph Bracher, a scion of a German musicians’ family, to design and set up Sachal Studios in Lahore where their albums have been recorded.

In addition to Sachal's jazz interpretation, there are now other signs of revival of uniquely Pakistani music. An example is Coke Studio. Sponsored by Coca Cola Pakistan, Coke Studio is a one-hour show that features musicians playing a distinct blend of fusion music that mixes traditional and modern styles. Helped by the media boom in Pakistan, the show has had dramatic success since it was launched three years ago. The popular show has crossed the border and inspired an Indian version this year.

Here's a brief video clip of Sachal orchestra performance:



Related Links:

Haq's Musings

Pakistan's Other Story in 2010

Music Drives Coke Sales in Pakistan

History of Pakistani Music

Pakistan's Media Boom

Pakistan's Murree Brewery in KSE-100 Index

Health Risks in Developing Nations Rise With Globalization

Pakistan's Choice: Globalization Versus Talibanization

Life Goes On in Pakistan

Labels: , , , ,

Saturday, August 6, 2011

Evolution and Growth of Oligarchy in India and Pakistan

India is the world's third biggest and the fastest rising oligarchy with 17.2% of its GDP amassed by its 55 billionaires. India's system of governance has some of the worst of features of democracy and oligarchy in which the democratically elected politicians are bought off by the richest Indians, and both groups further enrich themselves at the expense of the vast majority of ordinary Indians. The biggest Indian oligarchs today are mainly industrialists like Ambanis, Adanis, Birlas, Mittals, Premjis and Tatas.



Like India, Pakistan is an oligarchy as well. But it is dominated by the feudal rather than the industrial elite. These oligarchs dominate Pakistan's legislature. Vast majority of them come from rural landowning and tribal backgrounds. Well-known names include the Bhuttos and Khuhros of Larkana, the Chaudhrys of Gujarat, Tiwanas of Sargodha, Daulatanas of Vehari, the Jatois and Qazi Fazlullah family of Sindh, the Gilanis, Qureshis and Gardezis of Multan, the Nawabs of Qasur, the Mamdots of Ferozpur/Lahore, Ghaffar Khan-Wali Khan family of Charsadda and various Baloch tribal chieftains like Bugtis, Jamalis, Legharis, and Mengals. The power of these political families is based on their heredity, ownership of vast tracts of land and a monopoly over violence – the ability to control, resist and inflict violence.

Pakistan, too, has an industrial elite. Its biggest names include Manshas (Nishat Group), Syed Maratib Ali and Babar Ali (Packages) Saigols, Hashwanis, Adamjees, Dawoods, Dadabhoys, Habibs, Monnoos, Lakhanis and others. But their collective power pales in comparison with the power of the big feudal families. The only possible exception to this rule are the Sharif brothers who own the Ittefaq Group of Industries and also lead Pakistan Muslim League (Nawaz Group), one of the two largest political parties. But the Sharifs too rely on political support from several feudal families who are quick to change loyalties.

The origins of the differences between Indian and Pakistan oligarchies can be found in some of the earliest decisions by the founding fathers of the two nations. India's first prime minster dismantled the feudal system almost immediately after independence. But Nehru not only left the industrialists like Birla and Tata alone, his policies protected them from foreign competition by imposing heavy tariff barriers on imports. In Pakistan, there was no serious land reform, nor was any real protection given to domestic industries from foreign competition.

Oligarchy is the antithesis of democracy. However, it's important to understand the differences between feudal and industrial oligarchies, and their effects on nations as observed in South Asia.

Industrial oligarchs of India have accelerated economic growth, created a large number of middle class jobs, increased India's exports significantly and paid higher taxes to the tune of 17% of GDP. This has created a trickle-down effect in terms of increased public spending on education, health care and various social programs to fight poverty. Unfortunately, the tax collection in Pakistan's feudal oligarchy remains dismally low at less than 10% of GDP, and the lack of revenue makes its extremely difficult for Pakistani state to spend more on basic human development and poverty reduction programs.



As to the future, the hope for Pakistan is that the feudal hold on power will eventually weaken as the nation sustains its rapid pace of urbanization. Pakistan has and continues to urbanize at a faster pace than India. From 1975-1995, Pakistan grew 10% from 25% to 35% urbanized, while India grew 6% from 20% to 26%. From 1995-2025, the UN forecast says Pakistan urbanizing from 35% to 60%, while India's forecast is 26% to 45%. For this year, a little over 40% of Pakistan's population lives in the cities. The political power shift from rural to urban areas may eventually produce a more industry-friendly government in the future. Such a government can be expected to help increase the tax base significantly, permitting greater spending on education and health care, and reduced dependence on foreign aid.

Related Links:

Haq's Musings

India: World's Largest Oligarchy

Who Owns Pakistan?

Tax Evasion Fosters Aid Dependence

Urbanization in Pakistan Highest in South Asia

India's 2G Scandal

Bloody Revolution in India?

Is There a Threat of Oligarchy in India?

Political Patronage in Pakistan

India at Davos 2011: Story of Corruption and Governance Deficit

Challenges to Indian Democracy

India After 63 Years of Independence

Labels: , , , ,

Tuesday, August 2, 2011

Consumers Sustaining Pakistan Economy

First 9 months of fiscal 2010-2011 saw production of television sets jump 28.6% and automobile production increase by 14.6%, according to Economic Survey of Pakistan 2010-2011. From July 2010 to March 2011, production of cars, light commercial vehicles and two and three wheelers grew by 16.4%, 20.5% and 12.6% respectively. These figures confirm the return of Pakistanis' appetite for consumer durables after a significant drop from 2007-2008 to 2008-2009.

Automobile:

146,271 vehicles were produced in Pakistan in 8 months from July 2010 to February 2011, representing an increase of 9.2% y-o-y on the 133,918 units produced over the same period of FY09/10, according to figures from the Pakistan Automotive Manufacturers Association (PAMA). This consists of 85,924 units for passenger car production, 1,807 units truck production, 308 units bus production, 580 units jeep production, 12,000 units pick-up production and 45,652 units farm tractor production. Sales largely mirror production in Pakistan's auto market: the first eight months of FY10/11 saw a total of 143,785 new vehicles sold in the country, an increase of 7.1% y-o-y. Extrapolating the eight-month data across 12 months, total vehicle production would amount to 219,407 units, while total vehicle sales would register 215,678 units. This compares to the BMI forecast for the full fiscal year of just over 221,500 and just over 224,000 for production and sales respectively. However, these figures for FY10/11 aggregate sales and production are still considerably below the high watermark reached for both variables in FY07/08.



Although FY10/11 and FY09/10 have seen reasonably strong growth in y-o-y terms for both sales and production volumes, the industry is still recovering from a disastrous year in FY08/09, which was hit by a combination of the global economic downturn and severe internal political instability.

Consumer Electronics:

The media revolution of 24X7 news, entertainment and sports centered around rising number of television channels drove tv set sales up by 28.6% in 2010-2011.



Pakistan's consumer electronics market, including personal computers, mobile handsets and audio-video products, is now estimated at about $1.8 billion. BMI forecasts that this market will grow to $3 billion by 2015.

Computers accounted for about 20% of Pakistan's consumer electronics spending in 2010. BMI forecasts Pakistan's domestic market computer hardware sales (including notebooks and accessories) of $312 million in 2011, up from $292 million in 2010. Computer hardware CAGR for the 2011- 2015 period will be about 8%.

Mobile Handsets Pakistan's market handset sales are expected to grow at a CAGR of 16% to 29.5 million units in 2015, as mobile subscriber penetration reaches 70%. Revenues growth will be slower due to lower average selling prices (ASPs) of mobile handsets, with most handsets sold at less than $40. Another issue is the declining growth rate of mobile subscriber penetration, which is now more than 60%. 3G licenses are still expected to be awarded in 2011, but Pakistan's telecoms regulator has yet to confirm this.

Fast Moving Consumer Goods:

Fast moving consumer goods (GMCG) sector, including food, beverage and tobacco, grew by 9.3%, according to Economic Survey of Pakistan 2010-11. Adverting revenue from this sector has continued to drive proliferation of electronic mass media in Pakistan.

Conclusion:

The continuing growth in consumer spending is a testament to Pakistanis' resilience in the midst of multiple and very serious crises of energy shortages, continuing militancy and political violence and instability. The question is how long can this extraordinary resilience last if the corrupt and incompetent Pakistani politicians continue to persist in their mismanagement of the country and its economy.

Related Links:

Haq's Musings

Resilient Pakistan

Pakistan's Rural Economy Showing Strength

Pakistan's Exports and Remittances Rise to New Highs

Incompetence Worse Than Corruption

Sugar Crisis in Pakistan

Agricultural Growth in India, Pakistan and Bangladesh

Pakistan's Rural Economic Survey

Pakistan's KSE Outperforms BRIC Exchanges in 2010

High Cost of Failure to Aid Flood Victims

Karachi Tops Mumbai in Stock Performance

India and Pakistan Contrasted in 2010

Pakistan's Decade 1999-2009

Musharraf's Economic Legacy

World Bank Report on Rural Poverty in Pakistan

Copper, Gold Deposits Worth $500 Billion at Reko Diq, Pakistan

China's Trade and Investment in South Asia

India's Twin Deficits

Pakistan's Economy 2008-2010

Auto Industry in India, Pakistan and China

Media Revolution in Pakistan

Labels: , , , ,