Monday, January 30, 2012

India's Debt Up, Forex Reserves Down

India’s total external public debt has risen to $326 billion while foreign exchange reserves have dropped to $293 billion, according to the RBI data reported by the Indian Express newspaper.

The Reserve Bank of India is concerned over the increasing shift from equity to debt to fill India's widening current account gap. The latest available data indicates that foreign debt inflows in January so far have amounted to $3.21 billion versus $1.7 billion through equity inflows.

Recent $1.1 billion bail-out of Reliance Communications by state-owned Chinese banks is the clearest indication yet that the situation is also becoming dire in India's private sector with its mounting foreign debt.

This is not the first instance of Chinese banks coming to the aid of an Indian company. Last November, Sasan Power, the project company for the Sasan ultra mega power plant and a subsidiary of RComm affiliate Reliance Power, completed a $2.2 billion refinancing, including a $1.114 billion 13-year tranche. Bank of China, CDB and Chexim took $1.06 billion of that tranche, for which Chinese export credit agency Sinosure provided insurance.

Reliance Com is not alone in facing cash crunch in their ability to service debt. More than two dozen Indian companies included in the BSE-500 index face redemptions on foreign currency convertible bonds worth a combined Rs330 billion ($6.5 billion) by March 2013, according to brokerage Edelweiss. These include RComm’s US$925m outstanding CB, which the loan will repay.

Unless other Indian borrowers can somehow find lenders, they will be facing deteriorating debt market conditions that have led to shrinking liquidity in the loan markets and a rise in pricing.

“Top-tier Indian firms will have to pay between 250 basis points (2.5%) and 300 basis points (3.0%) over LIBOR (London Inter-bank Borrowing Rate) to borrow five-year money offshore. Even at that kind of pricing, there isn’t a lot of liquidity available,” said a Hong Kong-based lender quoted by International Financing Review. Over $20 billion worth of Indian debt is set to mature in 2012 and, of that, about $6 billion each of convertible bonds and rupee loans are up for redemption, with the balance in offshore loans.



India continues to run huge twin deficits of current account and budget. It depends heavily on foreign inflows. 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.



Noting India's significant dependence on foreign capital inflows, Jim O'Neill recently raised 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.

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 Disappoints Goldman Sachs

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

Saturday, January 28, 2012

High Environmental Pollution in India and Pakistan

With a score of just 3.73 out of 100, India ranks as the worst country for the ill effects of toxic air pollution on human health among 132 nations, according to a report presented at the World Economic Forum 2012. India's neighbors also score poorly for toxic air pollution, but still significantly better than India. For example China scores 19.7, followed by Pakistan (18.76), Nepal (18.01) and Bangladesh (13.66).



In the overall rankings based on 22 policy indicators, India finds itself ranked at 125 among the bottom ten environmental laggards such as Yemen, South Africa, Turkmenistan, Uzbekistan and Iraq while Pakistan ranks slightly better at 120. The indicators used for this ranking are in ten major policy categories including air and water pollution, climate change, boidiversity, and forest management.

These rankings are part of a joint Yale-Columbia study to index the nations of the world in terms of their overall environmental performance. The Yale Center for Environmental Law and Policy and Columbia's Center for International Earth Science Information Network have brought out the Environment Performance Index rankings every two years since 2006.

The Yale-Columbia study confirms that environmental problems in South Asia are growing rapidly. The increasing consumption by rapidly growing population is depleting natural resources, and straining the environment and the infrastructure like never before. Soil erosion, deforestation, rapid industrialization, urbanization, and land and water degradation are all contributing to it.

It's important to remember that Bhopal still remains the worst recorded industrial accident in the history of mankind. As India, Pakistan and other developing nations vie for foreign direct investments by multi-national companies seeking to set up industries to lower their production costs and increase their profits, the lessons of Bhopal must not be forgotten.

It is the responsibility of the governments of the developing countries to legislate carefully and enforce strict environmental and safety standards to protect their people by reversing the rapidly unfolding environmental degradation. Public interest groups, NGOs and environmental and labor activists must press the politicians and the bureaucrats for policies to protect the people against the growing environmental hazards stemming from growing consumption and increasing global footprint of large industrial conglomerates.

Related Links:

Haq's Musings

Pak Entrepreneur Recycles Trash into Energy and Fertilizer

Bhopal Disaster

Environmental Pollution in India

Rising Population, Depleting Resources

India Leads the World in Open Defecation

Heavy Disease Burdens in South Asia

Tuesday, January 17, 2012

Arfa Karim's Inspirational Legacy as Youngest Software Pro

Arfa Karim Randhawa passed away at the tender age of just 16. Inna Lillah Wa Inna Elaih Rajeon!

Born in 1995, she achieved celebrity status after becoming the world's youngest computer expert at the age of 9, passing a tough series of Microsoft tests designed for software professionals. Her success brought her an invitation to Microsoft headquarters in Seattle, where she met its chairman, Bill Gates, and discussed her idea for a self-navigating car in 2005.



She spent the last month of her short life in a Lahore hospital after reportedly suffering an epileptic seizure and cardiac arrest. Two weeks ago her prognosis appeared to improve. In recent weeks, Microsoft stepped in to help provide expert medical care.

Todd Bishop, a Seattle-based newspaper reporter covering her Redmond visit, wrote about her as follows: "She made an impression through a combination of charm, flattery and boldness uncommon for someone her age. For example, during Arfa’s meeting with Gates, she presented him with a poem she wrote that celebrated his life story. But she also questioned him about what she perceived to be the relatively small proportion of women on the campus."

When a younger 9-year-old Indian girl M. Lavinashree broke her record a few years ago by becoming the youngest Microsoft Software professional, Bishop told Arfa about it and got the following response from her:

“This is the first time I’ve seen this story. But I must say that I’m really happy to have read it. This is exactly what I had been wishing for ever since I got to bring laurels for my country. I am very glad to see that people are following what I did and have succeeded in beating me. I don’t know whether you’ve heard or not but a boy, named Bilal, from Gujranwala in Pakistan also became a Microsoft Certified Professional at the age of nine. I would say that the other youngsters should follow suit, thereby convincing the people to take us kids seriously. Our generation is very talented and so should be promoted.”

Arfa's untimely death at such a young age is a tragic loss for her family and for Pakistan. Her legacy, however, will live on. I hope and expect that many more Lavinashrees and Bilals will be inspired by her memory to accomplish whatever they set their mind to, including but not limited to achieving celebrity as Microsoft professionals.

Here's a video clip of Arfa Karim's Interview:



Related Links:

Haq's Musings

Pakistan's Demographic Dividend

Pakistani Software Expert Helps Fight Terror

Pakistan IT Industry

Pakistan Leads Asia in Biometric IT Services

Pakistanis Studying Abroad

Pakistan Working Women

Quality of Higher Education in India and Pakistan

Developing Pakistan's Intellectual Capital

Intellectual Wealth of Nations

Thursday, January 12, 2012

Pakistan Leads the World in Low Cost Texting

Pakistan's 152 billion text messages and Rs. 40 billion in texting revenue in 2009-10 put it among the top-ranking nations for sms traffic, says a report produced by Pakistan Telecommunications Authority (PTA).



The main driver for growth of texting in Pakistan has been its low cost compared with voice calls, a key reason for many users, including illiterate phone users, to be attracted to using text messages to communicate, according to a study done by Alex Gilchrist and Jim Linton Williams of the UK-based Popular Policy Engagement Lab. They start by asking literate relatives and friends to read text messages to them, and sometimes ask them to type messages for them as well. Gradually, they also learn to read and type text messages themselves.



Education:

A recent Brookings Institution paper titled A New Face of Education: Bringing Technology into the Classroom in the Developing World compared the effective use of cell phone text messaging in Pakistani schools with the failure of One-Laptop-Per Child (OLPC) scheme in Peruvian schools. It highlights Mobilink-UNESCO program to using text messaging increase literacy skills among rural girls in Pakistan. Each girl in the program uses her mobile phone to send an SMS message in Urdu to her teacher. After sending, she receives messages from her teacher in response, which she copies by hand in her notebook to practice her writing skills. Here's how Brookings paper describes the results:

"Initial outcomes look positive; after four months, the percentage of girls who achieved an A level on literacy examinations increased from 27 percent to 54 percent. Likewise, the percentage of girls who achieved a C level on examinations decreased from 52 percent to 15 percent. The power of mobile phone technology, which is fairly widespread in Pakistan, appears in this case to help hurdle several education barriers by finding new ways to support learning for rural girls in insecure areas—girls who usually have limited opportunities to attend school and who frequently do not receive individual attention when they do. Often they live in households with very few books or other materials to help them retain over summer vacation what they learned during the school year."

The Brookings report compares the use of low-cost, simple and ubiquitous cell phone technology for education in Pakistan with the deployment of relatively more expensive, more complicated and much less ubiquitous laptops to educate children as part of One-Laptop-Per-Child program in Peru. Here's how Brookings paper describes it:

"In Peru, a number of colorful laptops sit in a corner of a classroom covered with dust. Given to the school through a One Laptop Per Child program arranged by the Ministry of Education, the laptops were intended to improve students’ information communication technology (ICT) skills, as well as their content-related skills. Without the proper support for teacher training in how the laptops are used, with no follow-up or repair and maintenance contingencies, and with outdated and bug-infested software, the laptops are seen as unusable and serve little purpose. In this case, technology has not helped improve the educational experience of learners."

Health Care:

Mobile communications service provider Mobilink has recently partnered up with the United Nations Population Fund (UNFPA), Pakistan's Ministry of Health (MoH) and GSMA Development Fund in an innovative pilot project which offers low cost mobile handsets and shared access to voice (PCOs) to Lady Health Workers delivering community-based health care in remote parts of the country. Mobilink hopes to bridge the communication gap between the LHW and their ability to access emergency health care and to help the worker earn extra income through the Mobilink PCO (Public Call Office).

Civil Society:

A recent study of the use of cell phones found that mobile phones are enabling low cost access to community members across class, linguistic and geographical boundaries to build and strengthen a strong civil society across the nation. They are an effective tool for educators, community organizers, NGOs, health care providers, social and political activists and businessmen to communicate with a large cross section of people in Pakistan, as well as to learn from them, and even collaborate with them. Here are some interesting highlights of the Gilchrist-Williams study which focuses on it:

1. 37 percent of the poorest 60 percent of Pakistan’s adults owned a mobile phone; that the majority had regular access to a mobile phone despite not owning one; and that 47 percent of phone-owners used SMS.

2. Just as many women as men have access to a mobile phone through one means or another – but that whereas men tend to own a phone, or to use the phone of a friend or of a Public Call Office, women tend to use a phone owned by an adult male family member.

3. Viral text messaging is widespread in Pakistan. The remarkably low cost of text messages in Pakistan allows this one-to-one viral transmission to achieve quite considerable scale. Jokes, proverbs, quotations, news and religious injunctions are all frequently forwarded, and are often adapted by users with unpredictable effect.

Summary:

Deployment of simple, cheap and ubiquitous mobile phone technology and related services are helping Pakistan develop in ways that could not have been imagined just a few years ago. While there are some reported instances of the abuse of mobile phones by criminals and terrorists to harm people, I believe the net result has been that it is empowering individuals and society to become better educated, healthier, more informed and more productive to build a better Pakistan.

Related Links:

Haq's Musings

Cell Phones for Mass Literacy in Pakistan

Pakistan's Lady Health Workers Best in the World

Pakistan Tops Text Messaging Growth

Media and Telecom Boom in Pakistan

Pakistan 100 Mbps FTTH Launch

Monday, January 9, 2012

Pakistan Ranks High on Philanthropy

"Righteousness is not that ye turn your faces towards the east or the west, but righteousness is, one who believes in God, and the last day, and the angels, and the Book, and the prophets, and who gives wealth for His love to kindred, and orphans, and the poor, and the son of the road, beggars, and those in captivity; and who is steadfast in prayers, and gives alms." Quran 2:177

More Pakistanis gave to charities and the country saw the "largest jump in the rankings globally of 108 places, moving from 142nd to 34th in 2011", according to World Giving Index 2011. The report compiled by Charities Aid Foundation points out that "the floods did not lead to Pakistan's twenty-six percentage point rise in its World Giving Index score" because the survey was conducted before the 2010 floods.

World Giving Index Rankings in South Asia



The United States is ranked as the most generous in the world for charitable giving. Sri Lanka, ranking 8th in the world, leads philanthropy South Asia region. It is followed by Pakistan (ranked 34th globally) in second place, Bangladesh (ranked 78 globally) in third place, Nepal (ranked 84 globally) in fourth place, and India (ranked 91 globally) in last place.

It appears that the country scores in the World Giving Index reflect the breadth of participation rather than the amount of money given as percentage of income or gdp. Here's how the report explains it:

In order to reflect a culturally diverse planet, the report looks at three aspects of giving behavior. The questions that feed the report are:

1. Donated money to a charity?
2. Volunteered your time to an organization?
3. Helped a stranger, or someone you didn't know who needed help?


Pakistan does well in South Asia in terms of the percentage of gdp given as charity as well. Given the lack of full documentation, the estimates of giving in Pakistan range from a low of 1% to a high of 5% of GDP. The upper end of 5% is more than twice the 2.2% of gdp annually contributed by Americans who lead in the world in giving.

The low end of the estimate is by PCP that says Pakistanis contributed Rs.140 billion (US$1.7 billion), nearly 1% of the nation's gross domestic product of $170 billion in 2009.

The upper end of the estimate of 5% of GDP comes from Professor Anatol Lieven in his book Pakistan-A Hard Country. Lieven argues that the "levels of trust in Pakistani state institutions are extremely low, and for good reason. Partly in consequence, Pakistan has one of the lowest levels of tax collection outside Africa. On the other hand, charitable donations, at almost 5% of GDP, is one of the highest rates in the world".

The donations help organizations like Khana Ghar that feeds the hungry, Edhi Foundation which operates non-profit ambulance service, The Citizens Foundation which runs 700 schools serving 100,000 poor students, and Human Development Foundation which builds and operates schools and clinics for the poor.

Lieven lauds the work of TCF and several other charitable organizations, but he singles out Edhi Foundation for his most effusive praise of Pakistan's strong civil society filling the gaps left by the corrupt and incompetent government:

"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".

Related Links:

Haq's Musings

Philanthropy in Pakistan

Pakistan-A Hard Country

World Giving Index Report 2011

How Can Overseas Pakistanis Help Flood Victims?

Light a Candle, Don't Curse Darkness

Pakistan Center for Philanthropy

An Overview of Indian Philanthropy

Aaker Patel on Philathropy

Orangi Pilot Project

Three Cups of Tea

Volunteerism in America

Dr. Akhtar Hamid Khan's Vision

Saturday, January 7, 2012

IBL to Raise Quality of Education in Pakistan

Tell me and I forget, show me and I remember, involve me and I understand.

Improving quality of education is just as important as broadening access to it for Pakistan to reap full demographic dividend of its young population. Inquiry-based learning is an important pillar of the efforts undertaken by Pakistan Science Foundation (PSF) and The Citizens Foundation (TCF) to improve quality of education.



Inquiry-based learning is a method developed during the discovery learning movement of the 1960s. It came in response to a perceived failure of more traditional rote learning. Inquiry-based learning is a form of active learning, where progress is assessed by how well students develop experimental, analytical and critical thinking skills rather than how many facts they have memorized.

Pakistan Science Foundation (PSF) has initiated “La Main a La Pate” – an Inquiry-Based Learning program in Pakistan with the support of the French government. First launched in France in 1996, the program is aimed at renovating and revitalizing the teaching of science in primary schools. In Pakistan, the PSF has organized three workshops to train teachers since the Pakistan launch of “La Main a La Pate” in 2010. The most recent workshop was in December 2011 that was conducted by two French trainers, Michel Ouliac and Patrick Marcel. It was attended by 30 teachers from Islamabad, Kot Addu, Rawalpindi and Karachi, according to a report in The Express Tribune newspaper.

A similar inquiry-based teaching effort has been undertaken by The Citizens Foundation (TCF), a non-profit organization running 730 schools serving over 100,000 students in different parts of Pakistan. It is described in a recent book "Back to Pakistan: A Fifty-Year Journey" by Leslie Noyes Mass. Mass was in US Peace Corp who served as a young volunteer back in 1960s in Pakistan. The well-written book is about her return to Pakistan and her impressions of the country 50 years later. In 2009, Mass found a very different Pakistan: more education for children, a much larger population, and a place not nearly as friendly to the United States as it was when she first went there in 1960s.

Here's how Mass describes inquiry-based methods used at a summer science camp for TCF children at primary and secondary levels:

"Inquiry is a form of active learning where progress is assessed by how well students develop experimental and analytical skills rather than by how much knowledge they possess. In a science curriculum, this means that students are presented with a problem and the teacher guides them to solve it without making the solution explicit. This requires students to work together, to think critically, and to search for solutions based on the evidence rather than the predefined "correct" answer."

Then she goes on to describe the details of the experiments used to teach primary and secondary students.

Both PSF and TCF deserve kudos for promoting inquiry-based methods to encourage more active learning and critical thinking at an early age. These skills are essential to prepare Pakistani youngsters to be capable of facing the challenges of living in a highly competitive world in which the wealth of nations is defined in terms of human capital.

Related Links:

Haq's Musings

Pasi Sahlberg on why Finland leads the world in education

Intellectual Wealth of Nations

Pakistan Primary Education Crisis

Indian Students' Poor Performance on PISA and TIMSS

Pakistan's Demographic Dividend

India Shining, Bharat Drowning

PISA's Scores 2011

Teaching Facts versus Reasoning

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

Thursday, January 5, 2012

Solar Power in Pakistani Homes, Schools and Factories

“I use the solar light for cooking at night. We save money because we had to buy candles and kerosene before. We also use it to charge our mobile phones.” Marvi, Yousaf Babar Village in Sindh, Pakistan


About 250 schools and 12,000 homes in Pakistani villages have so far been lit by solar lights. The program is funded by the UK's Department for International Development (DfID) to help flood-affected people in rural Sindh and Punjab.

Plan International Pakistan and the Punjab education department have rebuilt 400 schools destroyed by floods, and implemented solar panels in 250 schools that did not have electricity. In addition to the solar panel installation, the DfID funded project also provided water and sanitation, school furniture, school paper, schoolbags and uniforms, sports equipment and health education for 54,000 primary school children.

The solar lights cost about $15 each and give sustainable, free light for up to 10 hours after each charge, and can last for up to five years. The cost is recouped within a couple of months, providing excellent value for money, according to DfID sources.



The solar technology is also used for recharging mobile phones, which provide vital communication lifelines in rural areas, enabling people to keep in touch with family and community. The mobile phones are helping reunite displaced families and communities, and helping people to try to get back to a normal life.

In addition to growing number solar energy users in Pakistani villages, the city dwellers are also increasingly turning to solar to cope with frequent power cuts, and gas shortages. There is growing demand for low cost Chinese solar products such as solar street lights, solar garden lights, solar generators, solar heaters, solar water heaters and solar water collectors for industry, according to a report in Pakistan's Express Tribune newspaper. Many consumers told ET they prefer solar over UPS (un-interruptible power supplies) and diesel or gas generators.

“Sales of solar energy panels have increased about 40 per cent compared to winter of last year. Sunshine in Pakistan remains for approximately 10 hours a day, which is enough to produce 1,000 watts per square meter. Producing electricity from the sun is very easy,” the paper quotes Tariq Nurani, a solar products dealer, as saying.

The Express Tribune story also features Khawaja Cotton Industries CEO Muhammad Amjad Khawaja who said he invested Rs 5 million for solar water boilers which helped deal with increasing gas load shedding in the textile manufacturing sector.

The rapid cost declines and increasing availability of solar equipment are enabling energy-starved but resilient Pakistanis to cope with the twin shortages of gas and electricity.

Related Links:

Haq's Musings

Shakti Solar Model For Pakistan

Pakistan's New FIT Policy For Alternative Energy

Media & Telecom Revolution in Pakistan

Pakistan Building 1000 MW Wind Farms

Pakistan Launches Wind Farm Projects

Renewable Energy to Solve Pakistan's Electricity Crisis

Electrification Rates By Country

Wind Turbine Manufacturing in Pakistan

Pakistan Pursues Hydroelectric Power Projects

Solar Energy for Sunny Pakistan

Wind Power Tariffs in Pakistan

Pakistan's Twin Energy Shortages

Tuesday, January 3, 2012

World Class Education at Karachi Business School

Cambridge University's Judge Business School and Karachi Education Initiative are launching Karachi School for Business & Leadership (KSBL) in 2012.

Karachi Education Initiative, which is providing the initial core funding for KSBL, is a non-profit group of leading industrialists and businessmen of Karachi. The group has committed to raising a permanent endowment fund to support the education of deserving students at KSBL, as well as for the provision of resources, facilities and buildings required to create a world-class institution.



The school is headed by Dean Robert Wheeler III who has served at the Pennsylvania State University, University of Texas at Austin and Georgetown University in key positions like assistant dean and director of MBA program. Spread over three acres, the main campus of KSBL is now under construction on Stadium Road in Karachi. The construction phase will be over in July 2012 and the first group of students will be admitted in September. Initially, KSBL will offer a full-time, 21-month MBA program in general management only.

KSBL's MBA curriculum has been designed in collaboration with Judge Business School of Cambridge University in England. In addition to conventional teaching methods involving lectures and case studies, KSBL will use videoconferencing to let its students attend live lectures from American and British universities.

Wheeler told Express Tribune that the core faculty of KSBL would be of Pakistani origin with PhD degrees from foreign universities. “We’ll cut back on the administrative work that faculty is often required to do in Pakistan and encourage them to do applied research that could be used in the industry, government and business.” In many classes, especially those on entrepreneurship, Wheeler said more than one person would co-teach students via videoconferencing to provide them with a combination of academic and professional perspectives.

KSBL will join the ranks of other major business schools such as Karachi's Institute of Business Administration (IBA) and Lahore University of Management Sciences (LUMS) to deliver world class business education for meeting the growing demand for professional management in the industrial and service sectors of Pakistan's economy.

The history of advanced business management education began with the founding of the Institute of Business Administration (IBA) in 1955 in Karachi, Pakistan, in collaboration with the top-ranked Wharton School of Finance & Commerce at University of Pennsylvania. Additional help and support came from University of Southern California and USAID to set up facilities and train faculty.

As the contribution of agriculture dropped from 50% of GDP in 1950s to about 20% of Pakistan's economy in 2000s and Pakistan began to urbanize and industrialize, the demand for business professionals grew significantly, as did the number of schools offering business education. As of 2004, there were 87 business schools recognized by the Higher Education Commission of Pakistan, according to stats compiled by Dr. Jamshed Hasan Khan of LUMS. Of these, 28 were in the public sector and the rest in private sector.

The rapid expansion of business education has raised concerns about the quality of such education. The HEC is responding to such concerns by standardization of business curricula and accreditation requirements. A number of programs have been initiated by the HEC to improve business faculty, including scholarships for advanced training and education in Pakistan and universities in the West.

Business schools in Pakistan have produced highly competent men and women executives who have proved themselves by managing significant topline growth and increasing profitability in banking, telecom, FMCG, automobiles and other sectors in very difficult circumstances. I am optimistic that the addition of business schools like the KSBL will further enhance the capacity of future managers to deal with such challenges.

Related Links:

Haq's Musings

Pakistan's Demographic Dividend

FMCG Consumption Boom in Pakistan

Pakistan's Financial Services Sector

Pakistan's Growing Middle Class Consumption

IBA's Entrepreneurship Study Flawed

Pakistan's Media and Telecom Revolution

Pakistanis Study Abroad

Pakistan's Youth Bulge

Pakistani Diaspora World's 7th Largest

Pakistani Graduation Rate Higher Than India's

India and Pakistan Contrasted in 2011

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

Working Women in Pakistan

Pakistan Youth Roundtable

Scholarships at Foreign Universities

Institute of International Education--Open Doors

UK's Higher Education Statistics Agency Report

Austrade on Education in Pakistan

Sunday, January 1, 2012

Resilient Pakistan's Year 2011 in Review

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


Most of the reviews of Pakistan's Year 2011 fit the above description of how Pakistan's story is told by foreign and domestic media engaged in the 24X7 news cycle.

So let me get the worst 5% of the story out of the way before telling you the rest of the 95% of it.

The Worst 5% of Pakistan's Story in 2011:

Pakistan added to the list of multiple serious crises of energy, economy, education, security and the worst ever governance by adding one more--a civilian-military conflict created by the hubris, incompetence and corruption of the ruling Peoples' Party leadership. This ongoing crisis now threatens to discredit and derail democracy yet again with the rapidly declining popularity of the Zardari-Gilani government and growing favorability ratings of the Pakistani military and its leadership.

Now the Rest of the Pakistan Story in 2011:

Politics:

1. The current PPP-led coalition reached a key milestone of becoming the longest-serving elected civilian government in Pakistan's history.

2. Deep dissatisfaction with PPP-PML(N) duopoly gave rise to a credible third option with the emergence of Pakistan Tehrik-e-Insaf (PTI) party, led by the popular cricketer-turned politician Imran Khan. PTI particularly gained considerable momentum with successful political rallies in Lahore and Karachi.

Education:

1. Early childhood education received a significant boost with the launch of Sim Sim Hamara, Pakistani adaptation of the popular Sesame Street TV show for pre-school children.



2. Pakistan continued to be ahead of India in graduation rates at all levels, according to 2011 update published by Harvard researchers Robert Barro and Jong-Wha Lee.

3. Pakistan achieved the distinction of having the world's largest Fulbright Foundation program in 2011, with about 200 scholarships for advanced degrees during the year.

4. Punjab government launched elite Danish School system for high-achieving but poor college-bound students in Southern Punjab region. Public-sector Danish schools are intended as an alternative to the best available private schools which are beyond the reach of the poor rural students. There are currently two schools each in Chistian, Hasilpur and Rahim Yar Khan, and ambitious plans for over 600 such schools in the future.

5. The Citizens Foundation (TCF), a private foundation, continued to expand its network of schools, reaching a total of 730 well-equipped schools as of April, 2011, serving over 100,000 mostly underprivileged students. 71 of these TCF schools have been built are being operated with funds from Pakistani-American donors.

6. The British government announced $1 billion in aid for improving primary education in Pakistan over a four year period. The money will fund education for up to 4 million students, train 9,000 teachers, purchase 6 million new text books and build 8,000 schools by 2015.

Healthcare:

1. Pakistan's lady health workers were described as "the best in the world" by a Boston University researcher and author of a community-based health care delivery study in Pakistan.



Women at Work:

1. The year 2011 saw a silent social revolution in Pakistan with rising number of women joining the workforce and moving up the corporate ladder. "More of them(women) than ever are finding employment, doing everything from pumping gasoline and serving burgers at McDonald’s to running major corporations", said a 2011 report in Businessweek magazine.

2. Women now make up 4.6% of board members of Pakistani companies, a tad lower than the 4.7% average in emerging Asia, but higher than 1% in South Korea, 4.1% in India and Indonesia, and 4.2% in Malaysia, according to a February 2011 report on women in the boardrooms.

3. In rural Sindh, the government started granting over 212,864 acres of government-owned agriculture land to landless peasants in the province. Over half of the farm land being given is prime nehri (land irrigated by canals) farm land, and the rest being barani or rain-dependent. About 70 percent of the 5,800 beneficiaries of this gift are women. Other provincial governments, especially the Punjab government have also announced land allotment for women, for which initial surveys are underway, according to ActionAid Pakistan.

Economy:

1. Middle class consumers started spending again in 2011. over 10,000 more units of locally assembled cars were sold in July-November 2011 with sales hitting 62,353 units compared with 52,200 units in the same period of 2010. Auto sales in Pakistan hit a two year high, jumping 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.



2. Away from the violence and the troubles of the big cities, the economy of rural Pakistan experienced a boom. Flush with cash from bumper crops at record commodity prices, the farmers spent on tractors, cars, motorcycles, mobile phones, personal grooming items, packaged foods and beverages and other consumer products like never before. Higher crop prices increased farmers’ incomes in Pakistan by Rs. 342 billion in the 12 months through June, according to a government economic survey. That was higher than the gain of Rs. 329 billion in the preceding eight years, according to a report by Bloomberg News. Companies like Millat tractors, Honda Atlas Motorcycles, Pak Suzuki Motors, Engro Foods, Telnor, Nestle, Colgate-Palmolive, and Unilever have been big beneficiaries of the rural consumption boom.

3. Pakistan's key share index KSE-100 dropped about 5% in 2011, significantly less than most the emerging markets around the world. Mumbai's Sensex, by contrast, lost about 25% of its value, putting it among the worst performing markets in the world.



Energy:

1. Significant new investments were announced in the renewable energy sector, particular hydroelectric power plants and wind farms. WAPDA announced 28% completion of the 969 MW Neelum-Jhelum hydroelectric project, and ADB took the lead financier role in the 4500 MW Diamer-Bhasha dam project. Pakistan has about 1000 MW of wind power plants at various stages of planning and construction, and another 498.5 megawatts of wind programs announced, mostly in Jhimpir, Gharo, Keti Bandar and Port Qasim wind corridors along the Arabian Sea coast in Sindh.

2. In addition to billions of tons of coal deposits in Sindh, exploration confirmed the presence of upwards of 60 trillion cubic feet of shale gas in Pakistan, enough for 20 years or more.

Declining Violence:

1. As US-Pakistan relations sank to new lows, there were tentative signs that Pakistan's fight against Tehrik-e-Taliban Pakistan (TTP) is beginning to succeed. There have been no major terrorist attacks in Pakistan since the the Mehran Naval Base siege in Karachi in May, 2011.

2. Death toll from terrorism declined for the third year in row, according to South Asia Terrorism Portal. After hitting a peak of 11,704 in 2009, number of deaths fell to 7,435 in 2010 and 6,048 in 2011.

3. Huge political rallies in 2011 passed off without violence, helping boost confidence in the security situation in major Pakistani cities.

Conclusion:

While deep concerns remain about Pakistanis' ability to overcome the myriad crises they face today, the year 2011 showed that the people continue to be undaunted and resilient. A significant number of them, like Edhi Foundation, The Citizens Foundation, Pakistan Lady Health Workers and others are showing the way by lighting candles rather than cursing darkness.

Related Links:

Haq's Musings

Auto Sales Jump in Pakistan

64 Years of Pakistan

British Aid for Pakistani Schools

Pakistan Plans 1000 MW Wind Farms

Light a Candle, Don't Curse Darkness