Saturday, August 24, 2013

Major Loss of Confidence Hits Indian Economy

Plummeting Indian rupee is the most obvious symptom of the world losing confidence in India. The crisis of confidence is so great that Jim O'Neill, former Goldman Sachs executive whose BRIC acronym made India an attractive investor destination in 2001,  has recently said that “if I were to change it, I would just leave the "C"" in BRIC.

India has long run huge twin deficits. India imports a lot more than it exports, and its government spends a lot more than its revenue receipts. India has so far been able to finance its trade and budget deficits with foreign capital inflows. Such flows have been driven mainly by the easy money policies pursued by the US Federal Reserve and other central banks in Europe and Japan in recent years. Over $170 billion of India's $390 billion foreign debt is due for repayment within a year. India's current foreign exchange reserves are $278 billion, and repaying $170 billion debt will dramatically deplete its reserves causing further panic in financial markets.

The US Fed in Washington has been buying $85 billion worth of bonds with a few computer key strokes every month to stimulate the US economy.



Many investors had been borrowing money in US dollars at extremely low rates to invest their borrowings for higher returns in emerging markets like India.  With  US economic recovery beginning to take hold, the US Fed has signaled that it may reduce or end these bond purchases. As a result of this change, foreign investors are retrenching from the emerging markets to take advantage of better returns in US and frontier markets.

In contrast to big declines in emerging markets like India and Indonesia, some frontier markets such as the UAE, Bulgaria and Pakistan have returned over 50 percent this year in dollar terms, according to Reuters. Unlike in the big emerging economies, listed companies in Kenya or Pakistan tend to be true plays on the emerging market consumer. Earnings growth estimates for this year have risen sharply almost everywhere to 10-15 percent (versus the 9.8 percent average in emerging markets)

In addition to the stellar performance of Karachi's KSE-100 this year, Pakistani euro bonds listed on the Luxembourg stock exchange are also doing well, according to Pakistan's Dawn newspaper.  In the last four months, these bonds have surged by more than 10 per cent (excluding coupon payment), which places them among the best performing in emerging and frontier markets. During this period, yields on the bonds have declined by more than 300 basis points.

India and Indonesia have been specially hard hit because both are dependent on significant foreign inflows to fill their current-account gaps. Foreign investors have already sold a net $11.6 billion of Indian debt and equities since late May, sparking fears of continued weakness, according to Reuters. As a result, Indian rupee and major Indian stock indices have both suffered double digit losses this year. Weakness in the Indian currency, which tumbled almost 15 percent this year, could further fuel inflation, and hurt consumers in an election year. Compared to 2011-12, the Indian GDP has declined by more than $200 billion to about $1.65 trillion this year.

The Reserve Bank of India (RBI), the country's central bank,  has said it plans to buy long-dated government debt to  stabilize markets after rising volatility threatened to hurt an economy that is already growing at  the slowest pace in a decade. But the BRI actions appear to be too little too late.

There does not appear to be any quick fix to the falling rupee and declining investor confidence. The longer term solution lies in containing both the budget and the trade deficits. It will require strong political will to cut spending and reduce imports in the immediate future. Such actions will make the situation worse before it gets better. Will India's ruling politicians muster the courage to swallow the bitter pill so close to the upcoming elections in 2014? I doubt it.

Related Links:

Haq's Musings

India's Hyphenation: India-Pakistan or India-China?

India's Share of World's Poor Jumps as World Poverty Declines

Forget Chindia--Chimerica Will Rescue the World

World Bank on Poverty Across India

Superpoor India's Superpower Delusions

Are India and Pakistan Failed States? 

India Home to World's Largest Number of Poor, Hungry and Illiterate

India Leads the World in Open Defecation

India Tops in Illiteracy and Defense Spending

Indians Poorer than sub-Saharan Africans

Saturday, August 17, 2013

With Just 10 Nobel Prizes, Are 1.5 Billion Muslims Really Fratricidal Low Achievers?

Are today's Muslims fratricidal low-achievers? Are Muslims unique in their lack of achievement and propensity for fratricidal violence? Are there other religious and racial groups which share these traits with Muslims?

It has become fashionable among Muslims and non-Muslims alike to bash followers of the Islamic faith for their lack of achievement and propensity for fratricidal violence. Some criticize Muslims for having won only 10 Nobel prizes since the prize was launched in 1901. Others lambaste Muslims for killing each other. Let's examine both of these charges in some detail below:

Muslims as Low Achievers:

Renowned atheist scholar Richard Dawkins has recently disparaged Muslims by pointing out that the entire Muslim world has had fewer Nobels (10) than Cambridge University's Trinity College (32).  He is not alone in attacking Muslims for their lack of achievements; I have heard this from many Muslim critics for many years.

What Dawkins and other critics, including well-meaning self-critical Muslims,  fail to mention, according to Christian Science Monitor, is the fact that other large (billion-plus) religious, gender and ethnic groups have won even fewer Nobels than ten won by Muslims: Hindus (four),  Chinese (eight) and Africans (nine).  Or the fact that women have only won 44 Nobel Prizes, compared with 791 for mostly white men.


It is important to note that today's Muslims and other ethnic-religious groups with very few Nobel prizes have grown up under the shadow of colonial and neo-colonial rule which followed the Industrial Revolution and preceded the launch of Nobel prizes in 1901. Going back in history, it was the Industrial Revolution that created technology which led to the ascendance of the West and the colonization of the East. It marked the beginning of a major shift in economic, military and political power from East to West.


Dan Murphy of the Christian Science Monitor explains it as follows:

"Dawkins, as an educated man, should be well aware of the legacy of colonialism and of simple poverty…. When the Nobel Prize was founded in 1901, the vast majority of the world's Muslims lived in countries ruled by foreign powers, and for much of the 20th century Muslims did not have much access to great centres of learning like Cambridge. The ranks of Nobel Prize winners have traditionally been dominated by white, Western men - a reflection of both the economic might of the West in the past century, preferential access to education for that class of people as well as a wonderful intellectual tradition ."

Dawkins' tweet did acknowledge that "they (Muslims) did great things in the middle ages". Clearly,  the history of humanity is not just 100 years old. It did not begin with the launch of Nobels in 1901. It stretches much further back. The defining work of Muslims in earlier centuries (8th to 13th century)  built the foundation on which modern science and today's Nobel Laureates stand. It included development of decimal number system (still called Arabic numerals), Algebra (Al-Khwarizmi), the concepts of scientific method (Al Biruni)  and algorithms (Al Khwarizmi), first camera (Al Haitham), Medicine (Avicenna),  first human flight (Ibn Firnas), astrolabe (Al Frazari) etc.

In "Lost Discoveries" by Dick Teresi, the author says, "Clearly, the Arabs served as a conduit, but the math laid on the doorstep of Renaissance Europe cannot be attributed solely to ancient Greece. It incorporates the accomplishments of Sumer, Babylonia, Egypt, India, China and the far reaches of the Medieval Islamic world." Teresi by his description of the work done by Copernicus. Nasir al-Din al-Tusi, a Persian Muslim astronomer and mathematician, developed at least one of Copernicus's theorems, now called The Tusi Couple, three hundred years before Copernicus. Copernicus used the theorem without offering any proof or giving credit to al-Tusi. This was pointed out by Kepler, who looked at Copernicus's work before he developed his own elliptical orbits idea. A second theorem found in Copernican system, called Urdi lemma, was developed by another Muslim scientist Mu'ayyad al-Din al-Urdi, in 1250. Again, Copernicus neither offered proof nor gave credit to al-Urdi. Columbia University's George Saliba believes Copernicus didn't credit him because Muslims were not popular in 16th century Europe, not unlike the situation today."

Fratricidal Tendencies Among Muslims:

Muslims are killing Muslims, say the critics. This begs the question: Is this something unique among Muslims? Who kills 30,000 Americans each year? Is it not Americans? Who is responsible for the 40,000 reported homicides in India (actuals are likely much higher) every year? Is it not fellow Indians? Mostly Hindus?

Who killed Gandhi? Was it not Nathuram Godse, a fellow Hindu? Who killed Yitzhak Rabin? Was it not  Yigal Amir, a fellow Jew? Who killed Abraham Lincoln? Was it not John Wilkes Booth, a fellow American?

The fact is that almost every nation-state has had periods of excessive violence such as civil wars.  Fratricidal deaths have accounted for the great bulk of deaths in almost every nation since the beginning of time. Such deaths have occurred in great numbers in almost every society since Adam and Eve's son Cain is alleged to have killed his brother Abel. Every period of great change in human history has been almost always been accompanied by massive violence that Muslims are experiencing now.

Anti-Muslim Bigotry:

Dawkins' comments appear to be motivated by growing anti-Muslim bigotry in the West, especially because he prefaced them by saying "Who the hell do these Muslims think they are?"  But the fact that he singled out Muslims for criticism and ignored other groups who have achieved even less seems to indicate that he holds Muslims to a higher standard than others, including Blacks, Chinese and Indians who are almost as numerous. I'd prefer that Muslims see as a challenge rather than be offended by it. At the very least, it signals that Muslims are not being subjected to what George W. Bush once described as "soft bigotry of low expectation".

The Challenge for Muslims:

Are Muslims taking the challenge thrown by Dawkins seriously? The answer is a qualified yes. They are beginning to do it.

Pakistan has had an impressive 50 per cent increase in the number of research publications during just the last two years, going up from 3939 to 6200. This has been the second highest increase worldwide. SCimago, the world's leading research database, is forecasting that if this research trend from Pakistan continues, then by 2018, Pakistan will move ahead 16 notches in world ranking, from 43 to 27, and for the first time ever, will cross Hong Kong, Singapore and Thailand in Asia, according to a report in The Nation newspaper.  Turkey, Iran, Egypt and Malaysia are other Muslim nations which figure prominently on SCimago rankings.

As to the violence, it is likely to continue for a while longer as vast swaths of the Muslim world sort out their differences on fundamental questions of the role of religion in society and government and settle on a model that delivers what the Muslim world needs most: good clean and responsive governance. Fortunately, there are successful models within the Muslim world in countries like Turkey and Malaysia.

Related Links:

Haq's Musings

Obama, Islam and Science

Educational Attainment in India and Pakistan

Biotech and Genomics Advances in Pakistan

Pakistani Students Studying Abroad

Pakistan Manufacturing Tablet PCs

Military's Role in Pakistan's Industrialization

Pakistan's Demographic Dividend

Pakistan's Defense Industry Goes High-Tech

Pakistan Launches UAV Production Line at Kamra

Pakistan Going Mainstream in IT Products

Pakistan Launches 100 Mbps FTTH Access

Pakistan's $2.8 Billion IT Industry

Pakistan's Software Prodigy

Developing Pakistan's Intellectual Capital

Pakistan Graduation Rates Higher Than India's

Pakistan Conducting Research in Antarctica

Pakistani Scientists at CERN

Higher Education Reforms in Pakistan



Monday, August 5, 2013

Pakistan's Top Televangelist Aamer Liaquat Husain Commercializes Eid and Ramadan

"At Christmas there's Santa Claus to give everyone gifts, it's important for Christians. For us Ramadan is a really special time so it's really important to make people happy and reward them." Aamer Liaquat Husain, Popular Televangelist and Show Host of Pakistan's GeoTV 

Aamer Liaquat Husain's Amaan Ramzan is the highest rated TV show in Pakistan. It attracts sponsor-ships and advertisements from successful companies in Pakistan which are willing to pay top dollars for a slice of its viewers' attention and business. These advertisers see the festive Ramadan and Eid season as crucial to boost their annual profits and sales.


Downplaying the commercial success of his show, Aamer Liaquat insists that "it is not commercialization, it is not showbiz. It is real Islam. I am the religious icon of television" according to an AFP report

Aamer Liaquat's show is no ordinary TV production. The show is set in a massive wedding hall at a Karachi hotel. It is bedecked with advertisements for a variety of products competing for space with pictures of camels and palm trees. Its a variety show featuring Islamic quizzes, Quran recitations, cooking, religious songs, and lots of prizes and Iftar dinner for over 500 guests, including hundreds of women and children. 


GeoTV  Host Aamer Liaquat (L) and  ARY TV Host Junaid Jamshed (R)
Prizes given away at  Geo's Amaan Ramzan show include consumer electronics, motorbikes, microwave ovens, washing machines and refrigerators. But eyebrows were raised around the world last month when Aamer Liaquat gave away an abandoned baby to a grateful childless couple on live TV. It was arranged by an NGO which insists that it followed the law. Critics called it a "publicity stunt" to boost show ratings. 

ARY TV, a competitor of Geo TV, has responded to Ramzan Aman show by its own show which features  Junaid Jamshed, a celebrity rock star who  gave up his singing career and grew a long beard as a sign of religious piety. 


Source: Aurora Magazine


Pakistan's rising middle class has helped spawn a mass media revolution in the country. It is driving consumer spending and advertising. Television ads capture 56% of total advertising revenue in Pakistan. TV ad revenue for 2011-12 added up to Rs. 21.6 billion (US $210 million), up 16% from the prior year, according to Dawn's advertising Aurora magazine. Since 1990, Pakistan's middle class has expanded by 36.5% and India's by only 12.8%, according to an ADB report titled "Asia's Emerging Middle Class: Past, Present And Future". Consumer spending in Pakistan has increased at a 26 percent average pace the past three years, compared with 7.7 percent for Asia, according to Bloomberg.  

Many in Pakistan cringe at the thought of crass commercialization of occasions like Eid and Ramadan both of which have special religious significance for Muslims. To me it is just an indication that the corporate-owned media business in Pakistan is evolving along the same commercial lines as its western counterparts have decades ago. It is, of course, a matter of grave concern to me and others who see the combined power of money and media as an unwelcome influence in shaping public opinion and government policies. 

Related Links:

Haq's Musings

Rights in Ramadan

Is Ramadan a Break from Work?

Media Revolution in Pakistan

Culture of Corruption in Pakistan

Gangster Politicians of Pakistan

Gangs of Karachi

Does Sharif Have an Anti-Terror Policy?

Why is Democracy Failing in Pakistan?

Viewpoint From Overseas-Vimeo 

Viewpoint From Overseas-Youtube