Pakistan Tops Gallup Well-being Rankings in South Asia

Gallup 2012 Wellbeing survey reports that 20% of Pakistanis say they are "thriving", down from 32% last year. However, the report shows that more of them are still better off than their neighbors in Bangladesh (16% thriving) and India (11% thriving). The number of those "thriving" increased in Bangladesh by 3% and declined in India by 6%.

 The fact that the number of Pakistanis who consider themselves thriving is down from 1 in 3 last year to 1 in 5 now is understandable because of  many serious and worsening crises Pakistan  is facing today. The real question is who are these 20%? And why do they say they are thriving?

Here are some of the possible reasons:

1. Rising consumption of durables (cars, motorcycles, tractors, Appliances) and non-durables (FMCGs or fast-moving consumer goods) as well as increasing cement sales are indicative of the underlying strength of the economy.

2. Pakistan's undocumented economy is continuing to thrive as seen in packed shopping malls and restaurants.

3. There are double digit increases in cash remittances flowing in to Pakistan from the world's seventh largest diaspora, rising 21.45 percent to $9.73 billion in the first nine months of the 2011/12 fiscal year.

4. Karachi stock index is booming, hitting new 4-year highs. Share prices are driven by healthy profits and foreign buying, making KSE-100 the third fastest growing index in the world.  

5. Even the preliminary official estimates are indicating that Pakistan's nominal per capita income has increased by 9% to $1,372 in 2011-12 from $1,258 in 2010-11.

6. Preliminary estimates are showing that poverty rate in Pakistan has declined from 17.2 per cent in 2008 to slightly over 12 per cent in 2011.

The Gallup survey confirms that only 28% of Pakistanis have confidence in their national government. In my view, it stems from the obvious failure of the state in delivering basic services such as rule-of-law, security and electricity to the people .  The best way to improve the wellbeing of the people is to improve governance, reduce corruption and persuade people to pay taxes to give the state more resources.

 Related Links:

Haq's Musings

Economic Survey of Pakistan 2011-12

US Technical Analyst Bullish on Pakistan

Pakistan on Goldman Sachs' Growth Map

Pakistan's 64 Years of Independence

Goldman Sachs & Franklin-Templeton Bullish on Pakistan

Emerging Market Expert Investing in Pakistan

Pakistan's Demographic Dividend

Genomics & Biotech Advances in Pakistan

The Growth Map by Jim O'Neill

Pakistan Rolls Out 50Mbps Broadband Service

More Pakistan Students Studying Abroad

Inquiry Based Learning in Pakistan

Mobile Internet in South Asia

Online Courses at Top International Universities

Comments

Riaz Haq said…
Here's the latest per capita income data from Economic Surveys of India & Pakistan:

India's per capita income for 2011-12 Rs 60,972, according to Economic Survey of India 2011-12. It translates into US $1143.09, using INR 53.25 to a US dollar.

The preliminary official estimates are indicating that Pakistan's nominal per capita income has increased by 9% to $1,372 in 2011-12 from $1,258 in 2010-11.

http://indiabudget.nic.in/survey.asp

http://www.thenews.com.pk/Todays-News-3-107322-Size-of-economy-rises-to-Rs206trn-after-GDP-growth-revision
Riaz Haq said…
Here's a BBC report on power cut and sanitation problems at the Indian parliament:

A foul smell emanating from sewage in a toilet in India's upper house of parliament, the Rajya Sabha, forced it to adjourn twice on Thursday.

Congress party lawmaker Rama Chandra Khuntia first complained of the smell when a minister was replying to a question in the House.

The first adjournment lasted for 15 minutes. But the continuing stink forced lawmakers to exit again.

Mr Khuntia told the BBC the smell was due to "poor maintenance".

"Everyone in the Rajya Sabha, panicked. Initially, we thought it was a gas leak. But then we realised the stench emanated from the toilet."

"We were told the smell from a toilet adjacent to a canteen found its way inside the House through air-conditioning ducts," Mr Khuntia said.

The incident comes three days after brief power cuts interrupted parliament proceedings.

Television news channel NDTV quoted the main opposition party BJP's Ravi Shankar Prasad as saying: "We talk of nuclear safety, we should at least ensure safety of smell in the House."


http://www.bbc.co.uk/news/world-asia-india-18024831
Riaz Haq said…
Here's a Business Line story on India's bills coming due:

A rapidly depreciating rupee, dipping foreign exchange reserves and strong financial links with the Euro Zone are pushing India against the wall. The over 20 per cent depreciation of the rupee against the dollar in the last one year has hugely increased the repayment burden of Indian companies.

According to the Bank for International Settlements' (BIS) preliminary data for December 2011, international claims on India, payable within the next one year, are $137 billion.. This is 60 per cent of the total claims of overseas banks on India in non-rupee currencies. This can eat up one half of the $293-billion foreign exchange reserves that India now has. European banks account for over 40 per cent of India's total foreign dues. At $132 billion, this is twice India's liabilities towards the US.

But leaving out the UK, India's Euro Zone exposure is about $60 billion. That is close to 3.4 per cent of India's GDP. Any full-blown crisis in Greece could spill over to the other European nations, posing a risk of capital flight from India.

The immediate impact of capital flight and the depreciating rupee would be more pressure on domestic liquidity, says Ms Sonal Varma, Executive Director and India Economist at Nomura. That also means a higher risk of interest rates moving upwards.

International claims, other than rupee-denominated ones, include trade credit and other borrowings. The data on international claims from the BIS, roughly tally with the RBI's data on non-rupee external debt.


http://www.thehindubusinessline.com/industry-and-economy/article3429540.ece
Riaz Haq said…
Here's a Reuters' report raining the specter of Greek style debt crisis in India:

India's mounting economic and political woes are prompting market players to raise the specter of a Greek-style crisis in Asia's third largest economy.

This is not simply idle speculation. Last Friday, the rupee crashed to an all-time low against the dollar of 54.9 and it was stuck most of Tuesday at the psychologically significant Rs55/USD level, where the currency is seen as having no obvious technical support. And the implications of a rupee collapse would be immense.

"It could go to stratospheric levels against the dollar and it looks to me as if the Indian government is aiming at a de facto devaluation in an effort to prop up flagging economic growth. And you then have to worry about all the unpleasant boxes such an action would inevitably tick, such as straining further the country's already strained balance of payments as well as bringing on an almighty wave of inflationary pressure," said a credit analyst at a ratings agency in Singapore.

He added that a spike in the rupee would strain the cashflow of corporates and banks as they struggled to service dollar-denominated debt and that the odds of a widespread Indian debt restructuring would be low.

In his opinion the market will determine the rupee's level, with a formal devaluation seen as unlikely given the consequent need for interest rates to be pushed significantly higher to contain capital flight and counter toxic inflation levels.

This scenario was seen in the UK in 1992 when the country exited the ERM and the government pushed short term interest rates up to 15% from 10%, spending billions of pounds of reserves to defend the currency in the process.

Should something similar occur to India, it would almost certainly lose its coveted investment-grade rating, with a one-notch demotion required for that to occur. S&P has India on negative watch for its Baa3 foreign currency rating while Moody's and Fitch retain a stable outlook on the country.

As the country's government faces political impasse amid infighting, principally between prime minister Manmohan Singh and finance minister Pranab Mukherjee on the subject of tax reform, and India limps from one corruption scandal to the next, the sense of decay is palpable.

Surprisingly, India's deteriorating economic fundamentals and toxic politics have not yet impacted the relative value of its issuers offshore debt. In fact, on Tuesday India's dollar offshore curve recovered the 10bp it had widened on Monday. But that situation is unlikely to hold much longer.

"As market players start to fret about the possibility of a full-blown rupee devaluation, you will see this start to impact spreads on the country's offshore curve. If the currency goes in a big way, you will have a unilateral replaying in India of the Asian financial crisis, which involved default on short-dated offshore debt and a mass round of debt restructuring. India is hanging in the balance right now, and the worst case scenario seems increasingly likely to play out," said a Hong Kong-based syndicate head.

Just as the tide moves against them, though, Indian corporates are seeing the need for offshore funding increase. According to the credit analyst, many Indian corporates have reached borrowing ceilings with local banks and are sizing up offshore bond issuance as a result. That would be a tall order and an expensive trip, though.

With massive convertible maturities coming up, some in dollars, a local market that is increasingly saturated and has less support from foreign investors and a closed dollar market, it seems inevitable that restructuring will soon become the main activity for Mumbai-based investment-bankers.


http://www.reuters.com/article/2012/05/22/us-india-devaluation-idUSBRE84L0N920120522
Riaz Haq said…
Here's an interesting excerpt from NY Times review of Ed Luce's book “In Spite of the Gods: The Strange Rise of Modern India”:

Despite its robust democracy and honest elections, India faces the future saddled with one of the most corrupt government bureaucracies on earth. Mr. Luce encounters a woman in Sunder Nagri, a New Delhi slum, whose quest for a ration card entitling her to subsidized wheat and other staples involved bribing an official to get an application form. The form was in English, which she could not read, so she had to pay a second official to fill it out. When she turned up to claim her wheat, it was moldy and crawling with insects. The store owner had evidently sold his good government wheat on the black market.

In the northern state of Bihar, Mr. Luce writes, more than 80 percent of subsidized government food is stolen. Most ration cards are obtained through bribery, by Indians who are not poor. It’s the same story in nearly every area of an economy touched by the groping tentacles of a government that “is never absent from your life, except when you actually need it.”

As a former cabinet official tells Mr. Luce, corruption is not simply a nuisance or an added burden on the system. Rather, he says, “in many respects and in many parts of India it is the system.”

Mr. Luce, traveling the country’s rickety rail system, covers an enormous amount of ground. He inquires into the Kashmir dispute while dissecting India’s fraught relationship with Pakistan; marvels over New Delhi’s spanking-new subway system; describes the middle class rage for megaweddings; pays a visit to Bollywood and, in some of his most absorbing chapters, analyzes the changing caste system, the status of India’s Muslims and the alarming rise of Hindu nationalism.

All this and a visit to C2W.com, a Mumbai company that markets brands through the Internet, cellphones and interactive television shows. Its founder, Alok Kejriwal, is still in his 30s, and to Mr. Luce represents the new India.

“I am greedy,” he tells the author. “I have no trouble admitting to that.”

At one point, Mr. Luce ponders India’s constant state of chaos and compares it to a swarm of bees. From inside the swarm, things look random, but from the outside, the bees hold formation and move forward coherently.

Sometime in the 2020s, at current growth rates, India will overtake Japan to become the world’s third-largest economy. Greatness lies within its grasp, Mr. Luce argues, if it can figure out a way to restructure its inefficient agriculture, put millions of desperately poor people in jobs that pay more than a pittance, wake up to a potential H.I.V.-AIDS crisis and root out government corruption.

Mr. Luce takes a cautiously optimistic view. “India is not on an autopilot to greatness,” he writes. “But it would take an incompetent pilot to crash the plane.”


http://www.nytimes.com/2007/01/17/books/17grim.html
Riaz Haq said…
Here's a Dawn story on trendy restaurants Ramadan menu choices in Karachi:

Who would have ever imagined that one day chicken schezwan and prawn on toast would be considered as food items to break the fast with? Not just that, these days there are restaurants in Karachi that serve juicy cheese burgers with fried chips as Iftar deals.

Those who believe only technology has taken giant steps to help the world progress by leaps and bounds, they should know that traditional food has given way to newer cuisines with a great degree of success too.

Traditionally things that one gets to eat at Iftar is a plate of fruit chaat, a bowl of chick pea and potato mix, dates, pakoras and a pitcher of sherbet. This is very much the case even now.

But for those who like to eat out, and Karachi now brims with food lovers who love to step out of their houses to eat, their taste buds for Iftar yearn for something ‘different’. The myriad of restaurants in the city provide them with just that: something different.

Nowadays among the many eateries that (fasting or not fasting) Karachiites turn to minutes before Iftar include a seafood restaurant (of all the places), a burger joint and a pizza parlour.

Seafood, for some odd reason, is making its presence felt. There are people who love to indulge in prawn-chomping at dusk. This has even surprised those who work at the restaurant.

“We have special Iftar deals in boxes. These boxes contain all kinds of food, including seafood. And foodies like that. If you ask about the number of people who visit us, I can tell you that each year the number increases. While we serve food at Iftar, we also deliver our stuff at people’s doorsteps,” said Talha, an order-taker at a seafood restaurant.

This may all sound mouth-watering, but when it comes to the rates at which these deals are sold, not everyone can afford them. A pack of a dozen chicken wonton costs no less than Rs300. But then only those who have enough money generally eat out. And there is no dearth of such people in Karachi.

Add to all of this a new trend. Chinese food is in with a certain section of the fasting public. In this case, they order food for home delivery as not many Chinese restaurants offer dine-in facilities at Iftar. “People order all kinds of dishes. It may be hard to believe, but there are some who call us to home-deliver sushi to them. Chicken manchurian and chicken schezwan are also regular items. Perhaps the one dish that never loses its charm is chicken chowmein,” said Imran who works at a known Chinese takeaway restaurant.

There is a different side to this scenario as well. The mushrooming of restaurants, especially in upscale localities, has dented the business of established eateries. A case in point is a restaurant at Khayaban-i-Tauheed. Anil, who works here, said: “This year we are getting 40 to 50 customers on a daily basis. Last year, and the years before that, the situation was different. We used to have a much bigger crowd. A few reasons could be given for it, for example inflation has skyrocketed. Perhaps the more convincing reason is that each year countless new eating places and coffee shops open up. This affects the business of the ones already in the market. As far as what food people prefer at Iftar, well, it’s the normal stuff (pakoras and dates), but for the main course they like to have all kinds of cuisines ranging from Italian to continental to desi.”

The eating-out trend has its pluses and minuses. If, on the one hand, it refreshes traditional values with a dash of contemporariness, on the other, it also points to a certain kind of commercialism that has crept into every aspect of our lives.


http://dawn.com/2012/08/05/iftar-the-trendy-way/
Riaz Haq said…
Pizza Hut withdraws all-you-can-eat Ramadan deals in Pakistan, reports Telegraph:

Pizza Hut has withdrawn its all-you-can eat Ramadan offer in Pakistan prompting howls of fury from thousands of hungry Muslim families used to breaking their fast with plate after plate of deep pan or thin crust.

Instead the chain said it wants to reduce "gluttony" by limiting customers to a single regular pizza in its Ramadan Fiesta offer.

In previous years Pizza Hut restaurants would be packed for the evening meal of Iftar, as diners starving from a day of fasting would fill their bellies with pizza after pizza for as little as £7 – a figure industry analysts said was unsustainable.

Furious fast food fans have taken to social media to complain at the new, cheaper deal, which is still advertised as an "all-you-can" offer.

"Pathetic and a misleading deal. It's only one regular pizza with bottomless Pepsi, not all you can eat," said one post on Pizza Hut Pakistan's Facebook page.

Imran Khan, a student and regular customer at a branch in Karachi, said: "The place was always packed in the evening. For a lot of people it had become a Ramadan tradition so this change is very sad."



Marya Khan, of Pizza Hut Pakistan, said the offer was more in keeping with the spirit of the holy month of Ramadan.

"The former all-you-can-eat format served as an unrestrained invitation to gluttony and waste, colliding with the very spirit of Ramadan," she said.

"For those who do not consider Iftar deal as a means of just gorging after sunset, then the new Ramadan Fiesta offered by Pizza Hut is a well-balanced and valuable deal to enjoy finest pizza at a value price."

Pizza Hut in Pakistan was one of many fast food restaurants to have benefited from a move away from the traditional Iftar meal of spiced fruit salad, chickpeas and dates.

As an alternative, many people are turning to Chinese buffets or burger joints although pakoras – vegetable or chicken fritters - remain the most popular way to break the Ramadan fast, according to a recent survey by Gallup Pakistan.


http://www.telegraph.co.uk/news/worldnews/asia/pakistan/9458500/Pizza-Hut-in-Pakistan-ditches-all-you-can-eat-Ramadan-offer-to-curb-unrestrained-gluttony.html

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