Thursday, December 29, 2011

India Ranks Near Bottom on Education

Indian students rank near the bottom on PISA, a global test of learning standards conducted in 74 nations this year. TIMSS, another standardized international test, produced similar results earlier in 2003.



This is the first time that Indian students participated in PISA. Students from Himachal Pradesh and Tamil Nadu took the Program for International Student Assessment (PISA) test, coordinated by the Paris-based Organization for Economic Co-operation and Development (OECD). Prior to this participation, students from Indian states of Orissa and Rajasthan took a similar test called Trends in International Mathematics and Science Study (TIMSS) in 2003.

Tamil Nadu and Himachal Pradesh rank high on human development indicators among Indian states. The India Human Development Report 2011, prepared by the Institute of Applied Manpower Research (IAMR), categorized them as “median” states, putting them significantly ahead of the national average. IAMR is an autonomous arm of India's Planning Commission.

Himachal Pradesh ranked 4 and Tamil Nadu 11 in literacy rates on India's National Family Health Survey released in 2007. However, in the PISA study, Tamil Nadu ranked 72 and Himachal Pradesh 73, just ahead of the bottom-ranked Kyrgyzstan in mathematics and overall reading skills. Shanghai, China's biggest city, topped the PISA rankings in all three categories—overall reading skills, mathematical and scientific literacy. The new entrants included Costa Rica, Georgia, India (Himachal Pradesh & Tamil Nadu), Malaysia, Malta, Mauritius, Venezuela (Miranda), Moldova, United Arab Emirates. PISA 2009+ involved testing just over 46 000 students across these ten economies, representing a total of about 1,377,000 15-year-olds.



In Tamil Nadu, only 17% of students were estimated to possess proficiency in reading that is at or above the baseline needed to be effective and productive in life. In Himachal Pradesh, this level is 11%. “This compares to 81% of students performing at or above the baseline level in reading in the OECD countries, on an average,” said the study.

The average Indian child taking part in PISA2009+ is 40 to 50 points behind the worst students in the economic superstars. Even the best performers in Tamil Nadu and Himachal Pradesh - the top 5 percent who India will need in science and technology to complete globally - were almost 100 points behind the average child in Singapore and 83 points behind the average Korean - and a staggering 250 points behind the best in the best.

The average child in HP & TN is right at the level of the worst OECD or American students (only 1.5 or 7.5 points ahead). Contrary to President Obama's oft-expressed concerns about American students ability to compete with their Indian counterparts, the average 15-year-old Indian placed in an American school would be among the weakest students in the classroom, says Lant Pritchett of Harvard University. Even the best TN/HP students are 24 points behind the average American 15 year old.

The 2003 TIMSS study ranked India at 46 among 51 countries. Indian students' score was 392 versus average of 467 for the group. These results were contained in a Harvard University report titled "India Shining and Bharat Drowning".

These results are not only a wake-up call for the "India Shining" brigade, but also raise serious questions about the credibility of India's western cheerleaders like Indian-American journalist Fareed Zakaria and New York Times' columnist Tom Friedman.

Related Links:

Haq's Musings

India Shining, Bharat Drowning

Learning Levels and Gaps in Pakistan by Jishnu Das and Priyanka Pandey

Pasi Sahlberg on why Finland leads the world in education

CNN's Fixing Education in America-Fareed Zakaria

PISA's Scores 2011

Poor Quality of Education in South Asia

Infections Cause Low IQs in South Asia, Africa?

Peepli Live Destroys Western Myths About India

PISA 2009Plus Results Report

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Sunday, December 25, 2011

IBA Study Ignores Grassroots Entrepreneurship in Pakistan

A recent report by the Center for Entrepreneurial Development (CED) of the Institute of Business Administration (IBA) finds that Pakistanis are less entrepreneurial than their counterparts in the majority of 59 member nations of Global Entrepreneurship Monitor (GEM), according to Express Tribune newspaper. The report says that the new business ownership rate, which is the percentage of owner-managers of a business that is three to 42 months old, is 2.7% in Pakistan, "considerably less" than the average rate for factor-driven economies (11.8%).

The results of this IBA CED study, as reported by the media, run counter to the findings of a recent World Bank report titled "More and Better Jobs in South Asia" which shows that 63% of Pakistan's workforce is self-employed, including 13% high-end self-employed. Salaried and daily wage earners make up only 37% of the workforce.

Even if one chooses to consider just the 13% who are high-end self-employed as entrepreneurs, it's still much higher than the 2.7% figure reported by CED, and higher than the 11.8% average reported for factor-driven economies covered by GEM.



It seems to me that this discrepancy stems from a very narrow and limited definition of entrepreneurship used in the IBA study which ignores the following realities:

1. The rapid urbanization from massive ongoing rural-to-urban migration in Pakistan is spawning a whole generation of small entrepreneurs who end up working for themselves as small vendors selling their wares on the streets and independent service providers who do basic chores like cooking and cleaning for dozens of clients. Each of these individuals is an entrepreneur by definition. Some of them have also found their way to other nations in Europe and the Middle East where they are earning a good living as street vendors. I saw a recent example of a Pakistani street vendor in Italy who earned enough to send his children to universities....a luxury he didn't have himself.

2. There are many small groups of men and women who are starting businesses at home in both urban and rural areas of the country to sell groceries, sew clothes, raise animals for milk, grow and sell fruits and vegetables, cater cooked food, etc. These small entrepreneurs are managing to put food on their families' tables and put children through good schools. Some of them are being funded and trained by microfinance institutions like Kashf Foundation and others.

People at academic institutions like the IBA who talk about entrepreneurship must research examples like Kraft Foods and Carl's Junior, both of which had humble beginnings on the streets of the United States.

James L. Kraft started Kraft foods by selling milk and cheese from a horse-drawn cart in Chicago in 1903; its first year of operations was "dismal", losing US$3,000 and a horse. Today, Kraft Foods is a multi-billion dollar multinational corporation selling a variety of food products around the globe, including Pakistan.

Carl's Jr, a multi-national fast food giant which operates Hardy's restaurants in Pakistan, began life as a hot dog stand in southern California 1941 with $311 in capital. One cart grew to four, and within five years, Carl's Drive-In Barbecue opened with hamburgers on the menu.

I believe that most Pakistanis are not risk-averse. What is lacking is a supportive environment to help nurture millions of small entrepreneurs to enable them to realize their dreams. The efforts of microfinance sector need to be supported by both the public and private sector through skills training, mentoring and greater funding. Each of us who can afford to help can do so by joining microfinance networks like Kiva.org to lend to such entrepreneurs in Pakistan.

Related Links:

Haq's Musings

Pakistani Entrepreneurs Survive Downturn

Pakistan Leads in Entrepreneurship Indicators

Microfinance to Fight Poverty in Pakistan

Pakistani Entrepreneurs Summit in Silicon Valley

Social Entrepreneurs Target India, Pakistan

Urbanization in Pakistan Highest in South Asia

Start-ups Drive a Boom in Pakistan

P.I.D.E. on Entrepreneurship in Pakistan

Light a Candle, Do Not Curse Darkness

Pakistan Tops Job Growth in Pakistan

Do South Asian Slums Offer Hope?

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Saturday, December 17, 2011

Economic Comparison Between Bangladesh & Pakistan

Economic gap between East and West Pakistan in 1960s is often cited as a key reason for the secessionist movement led by Shaikh Mujib's Awami League and the creation of Bangladesh in 1971. This disparity has grown over the last 40 years, and the per capita income in Pakistan now stands at 1.7 times Bangladesh's in 2011, slightly higher than 1.6 as it was in 1971.

Pakistan-Bangladesh GDP Comparison (Source: World Bank)


Forty years after the Fall of Dhaka and the creation of Bangladesh on Dec 16, 1971, there's still much talk about it. The Daily Star, a Bangladeshi newspaper, has published a piece on the subject by Akbar Ali Khan marking the 40th anniversary of Bangladeshi independence. In his Op ED, Mr. Khan argues that "political independence provided much more conducive environment for growth in Bangladesh than united Pakistan. Though economic growth in East Pakistan was revived during Ayub Khan's so-called decade of reforms, growth rate in erstwhile East Pakistan was much lower than that of West Pakistan".

Agriculture Value Added Per Worker in Constant 2000 US$ (Source: World Bank)


In his zeal to rationalize independence based on the economic argument, Mr. Khan has clearly ignored the following facts:

1. In 1969-70, the ratio of per capita incomes between West and East Pakistan was 1.6, as detailed by Mr. Khan. In 2011, however, this ratio has increased to 1.7, according to the IMF data.

2. Bangladesh is still categorized by the World Bank among low income and least developed countries of the world, while Pakistan is a middle income country and classified well above the list of least developed countries of the world.



3. Bangladesh is ranked as 11th poorest country in the world by the World Bank in terms of the percentage of population living on $1.25 or less a day. Neighboring India is the 14th poorest on this list, while Pakistan does not show up on it. The rest of the nations on this list are all in sub-Saharan Africa.

3. In 1947, East Pakistan started with a lower economic base than West Pakistan, and the loss of its Hindu Bengali business elite in 1947 left it worse off. It also didn't have the benefit of the large number of Muslim businessmen who migrated to West Pakistan, particularly Karachi, after partition of India in 1947.

4. Pakistani economist Dr. Ishrat Husain explains it well when he says that "although East Pakistan benefited from Ayub’s economic reforms in 1960s, the fact that these benefits were perceived as a dispensation from a quasi-colonial military regime to its colony—East Pakistan—proved to be lethal."

It must, however, be acknowledged that Bangladeshi economy has been outperforming Pakistan's in the last few years, particularly since President Musharraf's departure in 2008. Bangladesh has also made significant strides on various social indicators and it now ranks just one notch below Pakistan on human development index 2011. Bangladesh's family planning efforts have been remarkably successful in lowering the fertility rate of Bangladeshi women, an area where Pakistan significantly lags behind the rest of South Asia.

Related Links:

Haq's Musings

Comparing India and Pakistan in 2011

Is This a 1971 Moment in Pakistan's History?

Pakistan Ahead of India in Graduation Rates

Pakistan Tops Job Growth in South Asia

Pakistan Needs More Gujaratis?

President Musharraf's Legacy

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Thursday, December 15, 2011

Pakistani-American Makes History as First Non-white NFL Owner

NFL owners are the oldest and whitest of old white guy clubs. Drew Magary

Pakistani-American Shahid Khan made history this week by becoming the first minority owner of a National Football League team. All 31 other owners of NFL teams are white. The deal to purchase Jacksonville Jaguar is for an estimated $760 million and the ownership transfer will be complete Jan. 4, 2012, according to Associated Press. Earlier, Khan agreed in February 2010 to buy a controlling interest in the St. Louis Rams before billionaire Stan Kroenke exercised an option to purchase the 60 percent of the club he didn’t own.

NFL has highly lucrative business because of the extraordinary popularity of football in the United States. Over nine years, starting in 2014, CBS, Fox and NBC will together will pay an average of about $3 billion a year, more than 50 percent higher than their current deals, according to a report in New York Times. Altogether, the four networks, in addition to DirecTV, which pays $1 billion a year for its Sunday Ticket satellite package, will pay the N.F.L. more annually in TV rights than any sports league has ever been paid.



Shahid Khan, a mechanical engineering graduate of University of Illinois, Urbana-Champaign, made his fortune in the auto business. Almost two-thirds of all North American-built pick- up trucks and sports utility vehicles have bumper systems based on Khan’s designs, according to figures released by the Jaguars. Khan bought Flex-N-Gate in 1980 and the company now has more than 10,000 employees at 48 manufacturing plants with annual sales exceeding $3 billion.

Shahid Khan joins the illustrious list of Pakistani-Americans that includes Shering-Plough CEO Fred Hassan, Edible Arrangements Founder & CEO Tariq Farid, former CEO of Healthnet Dr. Malik Hasan, global hedge fund manager Mansoor Ijaz, Founder and Former CEO of AST Research Safi Qureshi, Mayor Haroon Saleem of of Granite Falls, Washington, Hilary Clinton aide Huma Abedin Weiner, novelists Bapsi Sidhwa and Daniyal Mueenuddin, Emmy nominee singer-songwriter Nadia Ali, and many other prominent Pakistani-American business executives, entrepreneurs, public servants, politicians and performers who have made their name in their adopted country.



Although Pakistani-Americans are still a miniscule fraction of the overall US population, their numbers have more than doubled in the last decade due to increased immigration, according to US Census 2010 data. With 100% increase since 2000, Pakistanis are the second fastest growing Asian immigrant group in the United States.



Here are some of the highlights of Pakistani-American data from US Census 2010 as gleaned from a report titled "A Community of Contrasts Asian Americans in the United States: 2011" published by Asian-American Center For Advancing Justice:

1. There are 409,163 Pakistani-Americans in 2010, the 7th largest Asian-American community in America.

2. Pakistani-American population doubled from 2000 (204,309) to 2010 (409,163), the second largest percentage increase after Bangladeshis' 157% increase in the same period.

3. 6% of Pakistani-American population is mixed race.

4. 65% of Pakistanis in America are foreign-born. 57% of foreign-born Pakistani-American population is made up of naturalized citizens.

5. There are 120,000 Pakistani legal permanent residents of which 42% are eligible to naturalize.

6. There were 69,202 immigrant visas issued to Pakistanis from 2001 to 2010, the 5th highest among Asian nations.

7. 28% of Pakistanis have limited English proficiency.

8. Average per capita income of Pakistani-Americans is $24,663.00

9. 15% of Pakistanis are classified as poor; only 1% of them are on public assistance.

10. 8% of Pakistanis are unemployed, a figure lower than the general population of Americans.

11. 55% of Pakistanis own their own homes.

12. 55% of Pakistanis have a bachelor's degree or higher.

13. Median age of Pakistanis in America is only 29 years, lower than most of the Asian groups and the national median age of 36.8 years.

Pakistani-American community is still relatively young when compared with other immigrant groups. More of the Pakistanis in America are college educated than the general population of whites and various immigrant groups. The youthful energy and higher education levels of Pakistani-Americans are opening doors for them to rise and shine in America, in spite of the current economic difficulties in their adopted land of opportunities.

Related Links:

Haq's Musings

Pakistani-American in $500 Million Deal to Buy St. Louis Rams

Edible Arrangements- A Pakistani-American's Success Story

Pakistani Diaspora World's 7th Largest

Pakistani-American's Game-Changing Vision

OPEN Forum 2010

Is Pakistan Too Big to Fail?
Pakistani-American Elected Mayor

Huma Abedin Calm Amid Twittergate

Silicon Valley Summit of Pakistani Entrepreneurs

Pakistan's Multi-Billion Dollar IT Industry

Media and Telecom Sectors Growing in Pakistan

Pakistan's Middle Class Growth in 1999-2009

Social Entrepreneurs Target India, Pakistan

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Monday, December 12, 2011

Hospital Fire Casts Shadow on India Medical Tourism

A deadly hospital fire claiming 91 patients' lives in India last week is raising serious concerns about the safety of foreigners being wooed by the nation's growing medical tourism industry.

The fire swept through AMRI, a 180-bed, state-of-the-art facility regarded as one of the best hospitals in India. There were no exit doors or evacuation plan, the windows were sealed, and the local fire department took more than 90 minutes to arrive. Trapped, many of the patients died from smoke inhalation, according to a report in Christian Science Monitor. Most died in their beds, unable to escape the inferno that raged for hours. Residents living in the neighborhood accused the hospital guards of not taking any measures to control the fire and of even preventing others from rushing to the rescue of the victims who were abandoned by the hospital staff. The hospital is known to attract many foreign patients. However, it's too early to tell if any foreigners died in the blaze because most of the charred remains have yet to be identified.



“Large numbers of hospitals are coming up in a big way across India. What we need to look into when issuing the licenses for running the hospitals is that building construction has complied to safety building codes and a safety plan is in place in case of fire,” said Dr. Muzzafer Ahmed, a member of the country's National Disaster Management Authority, speaking to the media.

Though Indians remain among the most under-served in the world in terms of health care, growing for-profit Indian hospital industry has been promoting itself as an inexpensive alternative to high-cost surgery in the United States and Europe. There are a large number of foreign-trained highly-skilled physicians and surgeons in India. And the heart bypass surgery that costs $6,000 in India costs more than $20,000 in the US, according to Yaleglobal. There are similar deep discounts available for joint replacement, in vitro fertilization (IVF), and surrogate mothers' womb rental services.

Many Indians are expecting exponential growth in foreign demand to take advantage of the opportunity to combine medical treatment with vacations at significantly lower costs. "With health care costs going north," says Dr Alok Roy of Fortis Hospital, one of the leading service providers in the medical tourism sector, "patients are compelled to look at cost-effective destinations for medical treatments. And what could be better if they can combine that with sightseeing at scenic locations?"

The safety concerns about India go beyond the fear of being burned in a fire. Other major concerns include:

1. Fake pharmaceuticals are a big worry. In fact, 75 percent of counterfeit drugs supplied world over have origins in India, according to a report released by the Organization for Economic Co-operation and Development (OECD).

2. Lack of proper hygiene contributes to a large number of infections in hospital settings. A recent investigation into the death of 13 women in a Rajasthan hospital found that the poor hygiene standard in the hospital were flagrantly overlooked, according to Times of India.

Will the latest incident at AMRI in Kolkatta, combined with general concerns about unhygienic practices and widespread use of fake pharmaceuticals, hurt India's efforts at growing its medical tourism industry? The short answer is yes. However, the growth prospects could improve in the future when the Indian government and the hospital industry begin to improve the safety situation to regain the trust of prospective foreign customers.

Related Links:

Haq's Musings

Indians Carry Heavy Disease Burdens

India Leads the World in Open Defecation

WHO Says India Leads the World in TB Cases

Infectious Diseases Kill Millions in South Asia

Infectious Diseases Cause Low IQ

Malnutrition Challenge in India and Pakistan

Hunger: India's Growth Story

Google Baby Boom in India

WHO Report on Medical Tourism in India

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Sunday, December 11, 2011

India "Time of Reckoning" as its Economy "Explodes"

For at least two years in a row, BRIC has, in the words of SGS's Albert Edwards, stood for Bloody Ridiculous Investment Concept, not an acronym for populous emerging markets of Brazil, Russia, India and China as Goldman Sachs' Jim O'Neill saw it ten years ago.

In fact, O'Neill has himself expressed disappointment in India, one of the BRICs, a designation that has boosted foreign investment in India and helped accelerate its economic growth since 2001.

"All four countries have become bigger (economies) than I said they were going to be, even Russia. However there are important structural issues about all four and as we go into the 10-year anniversary, in some ways India is the most disappointing," said O'Neill as quoted by Reuters.

Noting India's significant dependence on foreign capital inflows, Jim O'Neill went further and raised a concern about the potential for current account crisis. "India has the risk of ... if they're not careful, a balance of payments crisis. They shouldn't raise people's hopes of FDI and then in a week say, 'we're only joking'". "India's inability to raise its share of global FDI is very disappointing," he said.



United Nations data shows that India received less than $20 billion in FDI in the first six months of 2011, compared to more than $60 billion in China while Brazil and Russia took in $23 billion and $33 billion respectively. Stocks in all four countries have underperformed relative to the broader emerging markets equity index, as well as the markets in the developed nations. Pakistan's KSE-100 has significantly outperformed all BRIC stock markets over the ten years since BRIC was coined.



As India's twin deficits continue to grow and the Indian rupee hits record lows relative to the US dollar, there is pressure on Reserve Bank of India to defend the Indian rupee against currency speculators who may precipitate a financial crisis similar to the Asian crisis of 1997.

In addition to Jim O'Neill, a range of investment bankers are turning bearish on India. UBS sent out an email headlined "India explodes" to its clients. Deutsche Bank published a report on November 24 entitled, "India's time of reckoning."

"Suddenly everything seems to be coming to a head in India," UBS wrote. "Growth is disappearing, the rupee is in disarray, and inflation is stuck at near-record levels. Investor sentiment has gone from cautious to outright scared."

India's current account deficit swelled to $14.1 billion in its fiscal first quarter, nearly triple the previous quarter's tally. The full-year gap is expected to be around $54 billion.

Its fiscal deficit hit $58.7 billion in the April-to-October period. The government in February projected a deficit equal to 4.6 percent of gross domestic product for the fiscal year ending in March 2012, although the finance minister said on Friday that it would be difficult to hit that target.

As explained in a series of earlier posts here on this blog, India has been relying heavily on portfolio inflows -- foreign purchases of shares and bonds -- as a means of covering its rising current account gap. Those flows are called "hot money" and considered highly unreliable.

Indian policy makers face a significant dilemma. If they do nothing to defend the Indian currency, the downward spiral could make domestic inflation a lot worse than it already is, and spark massive civil unrest. If they intervene in the currency market aggressively by buying up Indian rupee, the RBI's dollar reserves could decline rapidly and trigger the balance of payment crisis Goldman Sachs' O'Neill hinted at.

Related Links:

Haq's Musings

India's Twin Deficits

Karachi Tops Mumbai in Stock Performance

India Returning to Hindu Growth Rate

Soft or Hard Landing For Indian Economy?

Karachi Stocks Outperform Mumbai, BRICs

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Friday, December 2, 2011

Lahore Company Recycles Waste Profitably

Asif Farooqui is making millions of dollars by turning thousands of tons of waste in Lahore into liquefied petroleum products and fertilizer for farmlands.

Words like "clean" and "green" are not usually associated with the streets of major South Asian cities, but Farooqui's Waste Busters, a successful waste management business, is slowly changing the image of the Pakistani city of Lahore, according to an Aljazeera report.



The business started modestly a few years ago with just six donkey carts and a few workers to collect the trash and manually process it. Today, it has 200 garbage collection vehicles, several waste management plants and employs over 3000 people. Its plants separate garbage in to organics, plastics and metals to produce LPG products, fertilizer, and recyclables for reprocessing and reuse. And it is being done profitably.

An example of reprocessing and reuse is a Lahore-based company called Green Earth Recycling which turns shopping bags and other plastic scrap into beautiful green "plastic wood" furniture.

Other cities and communities in Pakistan are looking at the Lahore example and working on duplicating it. Waste Buster has already won contracts in communities in Karachi, Quetta, Rawalpindi, Peshawar and other cities.

Like it not, western style consumption patterns are happening in Pakistan, and these require western style professional management of the environment. With the rapid growth of urban middle class and its rising consumption of packaged products bringing fast proliferation of FMCG brands and big box retailers in Pakistan, it is becoming absolutely essential to deal effectively with the increasing amounts of trash being produced in big cities. Waste Busters sets a good example of what needs to be done on a much bigger scale to keep Pakistan's cities clean, environmentally safe and livable.

Related Links:

Haq's Musings

Pakistan's waste gets a second life - Central & South Asia - Al Jazeera English

Burning Garbage to Produce Electricity

Pakistan's Urban Middle Class

Green Earth Recycling

Eleven Days in Karachi

Pakistani Entrepreneurs Survive Downturn

Pakistan's Twin Energy Crises

Creative Financing of Clean Energy Projects

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