Friday, November 22, 2013

Remembering JFK on 50th Anniversary of Assassination in Dallas, Tx

I was a little child growing up in Karachi when the news of JFK's assassination was received with great shock and extreme sorrow in Pakistan. That was 50 years ago today. Just a couple years earlier in 1961, Pakistan's President Mohammad Ayub Khan had  made a successful state visit to the United States. He was warmly received at Andrews Air Force Base near Washington DC by US President John F. Kennedy and First Lady Mrs. Jacqueline Kennedy. 
President John F. Kennedy and Jackie Kennedy receiving President Ayub Khan
I saw the pictures of President Ayub Khan meeting with the US President John F. Kennedy as did other Pakistanis. There were also many photographs of young JFK and his beautiful family splashed across the front pages of major Pakistani newspapers during and after the visit. The sudden loss of the young American president in 1963 was deeply felt as Pakistanis viewed images of his beautiful young widow and two little children mourning for their loved one at his funeral.

US-Pakistan ties were extremely close in 1960s. President Ayub was extended the rare honor of being welcomed by the US President and the First Lady at the airport when the PIA airplane carrying him landed in the United States. He was also given the privilege of addressing a special Joint Session of the US Congress where he received standing ovation. Later, he rode an open top car in a ticker-tape parade in New York City with tens of thousands of Americans lining the parade route and cheering him.

US followed up the visit with a massive assistance program which helped bring about the Green Revolution in Pakistan. The world's largest continuous irrigation system was built along with huge dams with US aid in 1960s. In addition, there was a major industrialization program started under state-owned Pakistan Industrial Development Corporation (PIDC) with US help.

Here's how Pakistani economist Dr. Ishrat Husain recalls Pakistan of 1960s:

"The manufacturing sector expanded by 9 percent annually and various new industries were set up. Agriculture grew at a respectable rate of 4 percent with the introduction of Green Revolution technology. Governance improved with a major expansion in the government’s capacity for policy analysis, design and implementation, as well as the far-reaching process of institution building. The Pakistani polity evolved from what political scientists called a “soft state” to a “developmental” one that had acquired the semblance of political legitimacy. By 1969, Pakistan’s manufactured exports were higher than the exports of Thailand, Malaysia and Indonesia combined. Though speculative, it is possible that, had the economic policies and programs of the Ayub regime continued over the next two decades, Pakistan would have emerged as another miracle economy."




The decade of 1960s is called by economists as Pakistan's Golden Sixties. It was the result of good governance and significant help from the United States at the height of Cold War.

Both US and Pakistan still have close ties but these are marked by significant mutual distrust. People of goodwill on both sides can help reduce some of this mistrust to improve relations. President Kennedy said  in his 1961 inaugural address: "Ask not what your country can do for you; ask what you can do for your country". It is still as applicable to both US and Pakistan today as it was when he said it.

Here's a video of President Ayub Khan's 1961 visit to the United States:


Related Links:

Haq's Musings 

US-Pakistan Ties and New Silk Route

Can Pakistan Say No to US Aid?

Obama's Pakistan Connections

Seeing Bin Laden's Death in Wider Perspective

China's Investment and Trade in South Asia

China Signs Power Plant Deals with Pakistan

Soaring Imports from China Worry India

China's Checkbook Diplomacy

Yuan to Replace Dollar in World Trade?

China Sees Opportunities Where Others See Risk

Chinese Do Good and Do Well in Developing World

Can Chimerica Rescue the World Economy?






Wednesday, November 20, 2013

US Finds India's IT Software and Services Exports Wildly Exaggerated

A 2005 study by US General Accounting Office (GAO) found that Indian government's figures for software and technology exports to the United States were 20 times higher than the US figures for import of the same from India.

U.S. General Accounting Office looked at the 2003 data showing the United States reported $420 million in unaffiliated imports of BPT (business, professional, and technical) services from India, while India reported approximately $8.7 billion in exports of affiliated and unaffiliated BPT services to the United States.

US-India IT Trade Discrepancy Source: GAO 
The GAO found at least five definitional and methodological factors that contribute to the difference between U.S. and Indian data on BPT services. First, India and the United States follow different practices in accounting for the earnings of temporary Indian workers residing in the United States. Second, India defines certain services, such as software embedded on computer hardware, differently than the United States. Third, India and the United States follow different practices for counting sales by India to U.S.-owned firms located outside of the United States. The United States follows International Monetary Fund standards for each of these factors. Fourth, BEA (Bureau of Economic Analysis) does not report country-specific data for particular types of services due to concerns about the quality of responses it receives from firms when they allocate their affiliated imports to detailed types of services. As a result, U.S. data on BPT services include only unaffiliated imports from India, while Indian data include both affiliated and unaffiliated exports. Fifth, other differences, such as identifying all services importers, may also contribute to the data gap.

In theory, India follows what is known as BPM 6 (MSITS) reporting method for software and information-enabled technology services (ITES) which counts sales to all multinationals, earning of overseas offices, salaries of non-immigrant overseas workers as India's exports. In practice, India violates it. BPM 6 allows the salaries of first year of migrant workers to be included in a country's service exports. India continuously and cumulatively adds all the earnings of its migrants to US in its software exports. If 50,000 Indians migrate on H1B visas each year, and they each earn $50,000 a year, that's a $2.5 billion addition to their exports each year. Cumulatively over 10 years, this would be $25 billion in exports year after year and growing.

There has neither been any acknowledgement nor any correction of the Indian government's methodology for reporting software and IT services exports since the GAO report was published in 2005. This raises serious questions about the accuracy of India's claims of $60 billion to $70 billion IT software and service exports being currently reported. If the 20X exaggeration still persists, the Indian IT exports could be as little as $3 billion to $4 billion today based on the US methodology.

Pakistan IT Exports BPM 5 Method Source: State Bank of Pakistan

Unlike the Reserve Bank of India's claimed BPM 6 methodology, the State Bank of Pakistan uses a much more conservative BPM 5 reporting system which does not include sales to multinationals located in Pakistan and earning of overseas offices and salaries of non-immigrant Pakistani overseas workers in Pakistan's exports figures. If the State Bank switched to BPM 6 method, Pakistan's software and IT exports of $294 million for 2012-2013 could easily become at least $5 billion.


Pakistan's Software Prodigy

Biotech and Genomics in Pakistan

India-Pakistan Comparison Update 2011

India and Pakistan Contrasted in 2010

Eating Grass-The Making of Pakistani Bomb

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

Thursday, November 14, 2013

Pakistan Tops South Asia in Value Added Agriculture

Livestock revolution enabled Pakistan to significantly raise agriculture productivity and rural incomes in 1980s. Economic activity in dairy, meat and poultry sectors now accounts for just over 50% of the nation's total agricultural output. The result is that per capita value added to agriculture in Pakistan is almost twice as much as that in Bangladesh and India.

Adding value is the process of changing or transforming a product from its original state to a more valuable state, according to Professor Mike Boland of Kansas State University. The professor explains how it applies to agriculture as follows:

"Many raw commodities have intrinsic value in their original state. For example, field corn grown, harvested and stored on a farm and then fed to livestock on that farm has value. In fact, value usually is added by feeding it to an animal, which transforms the corn into animal protein or meat. The value of a changed product is added value, such as processing wheat into flour. It is important to identify the value-added activities that will support the necessary investment in research, processing and marketing. The application of biotechnology, the engineering of food from raw products to the consumers and the restructuring of the distribution system to and from the producer all provide opportunities for adding value."

Although Pakistan's value added to agriculture is high for its region, it has been essentially flat since mid-1990s. It also lags significantly behind developing countries in other parts of the world. For example, per capita worker productivity in North Africa and the Middle East is more than twice that of Pakistan while in Latin America it is more than three times higher.

Agriculture Value Added Per Capita in Constant 2000 US$--Source: World Bank
There are lots of opportunities for Pakistan to reach the levels of value addition already achieved in Middle East, North Africa and Latin America.These range from building infrastructure to reduce losses to fuller utilization of animals and crops for producing valuable products.  Value addition through infrastructure development includes storage and transportation facilities for crops, dairy and meat to cut spoilage. Other opportunities to add value include better processing of  sugarcane waste, rice bran, animal hides and bones, hot treatment, grading and packaging of fruits, vegetables and fish, etc.

Agriculture Value Added Per Capita in South Asia, North Africa and Latin America--Source: World Bank
Pakistan's growing middle class has increased demand for dairy, meat and various branded and processed food products. Engro, Nestle, Unilever and other food giants are working with family farms and supermarket chains like Makro, Hyperstar and Metro Cash and Carry to respond to it by setting up modern supply chains.

Growth of value added agriculture in Pakistan has helped the nation's rural economy. It has raised incomes and reduced rural poverty by creating more higher wage jobs. It has had a salutary effect on the lives of the rural poor in terms of their ability to afford better healthcare, nutrition and education. Doing more to promote value added agriculture can accelerate such improvements for the majority of Pakistanis who engage in agriculture and textiles and still live in rural areas.

Related Links:

Haq's Musings

Most Indians and Pakistanis Employed in Agriculture and Textiles

Pakistan Among Top Meat and Dairy Consuming Nations

Upwardly Mobile Pakistan

Comparing Pakistan and Bangladesh

FMCG Boom in Pakistan

Agricultural Growth in India, Pakistan and Bangladesh

Pakistan's Rural Economic Survey

Pakistan's KSE Outperforms BRIC Exchanges in 2010

High Cost of Failure to Aid Flood Victims

Karachi Tops Mumbai in Stock Performance

India and Pakistan Contrasted in 2010

Pakistan's Decade 1999-2009

Musharraf's Economic Legacy

World Bank Report on Rural Poverty in Pakistan

USAID Report on Pakistan Food & Agriculture

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

China's Trade and Investment in South Asia

India's Twin Deficits

Pakistan's Economy 2008-2010

Friday, November 8, 2013

Multi-Billion Dollar Gain For Twitter Investor Suhail Rizvi

Suhail Rizvi's 15.6% stake in Twitter was worth $3.8 billion at the end of trading on Thursday when the social media company went public on the New York Stock Exchange.

Suhail Rizvi Photo Courtesy: Valley Wag
Suhail Rizvi was born in India and graduated from the University of Pennsylvania's Wharton Business School. He started and sold a telecom company soon after, and with the proceeds financed the buy-out of an electronic manufacturing business of a Puerto Rico phone company whose annual revenue he boosted from $10 million to $450 million by focusing on higher end products, according to Times of India.

Suhail Rizvi moved with his parents to the United States in 1971 when he was only five. His father Raza Rizvi taught psychology at Ellsworth Community College in Iowa Falls, Iowa, where Suhail and his brother Ashraf, who is a hedge fund manager, went to school.

In addition to Rizvi Traverse Capital's  $3.82 billion, other big winners of Twitter IPO include Evan Williams $2.55 billion,  JP Morgan $2.19 billion,  Spark Capital  $1.46 billion,   Benchmark Capital $1.42 billion, USV $1.25 billion,  DST Global $1.07 billion,  Jack Dorsey $1.05 billion,   Dick Costolo $344 million, and Adam Bain $80 million.

Rizvi Traverse's other major investments include a controlling interest in Playboy and music rights organization Sesac, as well as stakes in news app Flipboard and Jack Dorsey's digital payments company, Square. Sources told CNBC that Rizvi invested $100 million in Facebook before its IPO and sold its shares earlier this year. It also has sold its equity stake in talent agency ICM, and in "Twilight" producer Summit Entertainment, which sold to Lionsgate.

Rizvi's biggest individual client is Prince Waleed Bin Talal of Saudi Arabia who invested $300 million pre-IPO in Twitter through Rizvi Traverse. Rizvi also invested JP Morgan Chase's $400 million pre-IPO in Twitter. Rizvi is reported to have used personal connections in Silicon Valley to purchase these stakes from Twitter employees.

Related Links:

Haq's Musings

Pakistani-American Tech Founder Files For IPO

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Pakistani-American Shahid Khan Richest South Asian in America

Two Pakistani-American Silicon Valley Techs Among Top 5 VC Deals

Pakistani-American's Game-Changing Vision 

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US Promoting Venture Capital & Private Equity in Pakistan

Pakistani-American Population Growth Second Fastest Among Asian-Americans

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Wednesday, November 6, 2013

Pakistani-American Female Superhero Debuts in 2014

The new Ms. Marvel’s real name is Kamala Khan, a 16-year-old Muslim Pakistani-American girl from Jersey City, New Jersey. “Kamala has all of her opportunities in front her and she is loaded with potential, but her parents’ high expectations come with tons of pressure,” says Marvel's press release. “When Kamala suddenly gets powers that give her the opportunity to be just like her idol, Captain Marvel, it challenges the very core of her conservative values.”

Source: Marvel Entertainment
Kamala Khan as Ms. Marvel is the first comic book character from Marvel Entertainment who is both female and Muslim. It is part of the American comic giant's efforts to reflect a growing diversity among its readers.

The new Ms. Marvel series is mainly the work of two women: G. Willow Wilson, a convert to Islam who created the character, and Sana Amanat who edits it.

Here's how Wilson describes the main character of the comic: "Islam is both an essential part of her identity and something she struggles mightily with. She's not a poster girl for the religion, or some kind of token minority. She does not cover her hair –most American Muslim women don't—and she's going through a rebellious phase. She wants to go to parties and stay out past 9 PM and feel “normal.” Yet at the same time, she feels the need to defend her family and their beliefs".

Ms. Wilson says the series is “about the universal experience of all American teenagers, feeling kind of isolated and finding what they are.” Though here, she told New York Times, that happens “through the lens of being a Muslim-American” with superpowers.

Source: Marvel Entertainment
Elaborating on the superhero character, series editor Sana Amanat said the following in an interview published on Marvel.com website: "As much as Islam is a part of Kamala’s identity, this book isn’t preaching about religion or the Islamic faith in particular. It’s about what happens when you struggle with the labels imposed on you, and how that forms your sense of self. It’s a struggle we’ve all faced in one form or another, and isn’t just particular to Kamala because she’s Muslim. Her religion is just one aspect of the many ways she defines herself".

The Marvel series is set for launch in February, 2014. Earlier this year, Pakistan's GeoTV launched Burka Avenger. Its superhero is a mild mannered school-teacher who fights feudal villains and terrorists getting in the way of girls' education.  Burka Avenger series is inspired by the story of Malala Yousufzai, a Pakistan teenage school-girl who  miraculously survived an assassination attempt by the Taliban in Swat valley last year. Malala has since become an international icon for girls' education worldwide.  The United Nations declared Malala's 16th birthday this year on July 12 as Malala Day to focus on girls' education.

Related Links:

Haq's Musings

Burka Avenger: Pakistani Female Superhero 

Burka Avenger  Videos on Vimeo Channel

UN Malala Day

Pakistan's Cowardly Politicians

Pakistani-American Ashar Aziz's Fireeye Goes Public

Pakistani-American Shahid Khan Richest South Asian in America

Two Pakistani-American Silicon Valley Techs Among Top 5 VC Deals

Pakistani-American's Game-Changing Vision 

Minorities Are Majority in Silicon Valley 

US Promoting Venture Capital & Private Equity in Pakistan

Pakistani-American Population Growth Second Fastest Among Asian-Americans

Edible Arrangements: Pakistani-American's Success Story

Pakistani-American Elected Mayor

Upwardly Mobile Pakistan



Monday, November 4, 2013

Pakistani-American Founder's Silicon Valley Company to Go Public

Book rental companies like Silicon Valley based Chegg, founded by Pakistani-American Osman Rashid and Indian-American Aayush Phumbhra, are helping American college students deal with rising textbook costs. Their business is inspired by Netflix movie rental business. Other major contenders in this space are Bookrenter, Textbooks.com, eCampus, BookByte, Direct Textbooks, Student Book Trades and Textbook Recycling.

Osman Rashid
Osman Rashid is the son of  a Pakistani diplomat. He was born in London and raised in Islamabad. He came to the United States from Pakistan in 1990s to study electrical engineering at University of Minnesota and earned a BSEE there.

Rashid is a serial entrepreneur who has founded four companies so far. He left Chegg in 2010 to start his current gig as CEO at Kno which he also founded along with fellow Pakistani-American Babur Habib. Habib has a BSEE from University of Minnesota, MS from Stanford and Ph.D. from Princeton. He serves as CTO at Kno. The Silicon Valley based company offers electronic textbooks and associated software for K-12 and college courses. It is backed by Intel, Goldman Sachs and Netscape founder Mark Andreeson's VC firm Andreeson Horowitz.

In its filing for initial public offering, Chegg says it plans to raise nearly $200 million by offering its stock for sale at $9.50 to $11.50 a share. At the midpoint of the range, that would value Chegg at nearly a billion dollars.

The name Chegg combines chicken and egg. It rents textbooks for a semester at a time at about 50% off the retail price. It has 180,000 titles in its catalog. It also offers more than 100,000 electronic textbooks and has rolled out offerings like helping high school students find colleges and scholarships, according to New York Times.

Like its competitors, Chegg offers book return guarantees and shipping speed. Chegg is a selling point for your own books as well as textbook rentals at low prices. What differentiates Chegg is that it offers course reviews and grade distributions as well as homework help for selected courses. Along with first hand reviews of a course, you get a detailed schedule of the books you need for it. Chegg claims it now reaches about 30 percent of all college students in the United States and 40 percent of college-bound high school seniors.

Related Links:

Haq's Musings

Pakistani-American Ashar Aziz's Fireeye Goes Public

Pakistani-American Shahid Khan Richest South Asian in America

Two Pakistani-American Silicon Valley Techs Among Top 5 VC Deals

Pakistani-American's Game-Changing Vision 

Minorities Are Majority in Silicon Valley 

US Promoting Venture Capital & Private Equity in Pakistan

Pakistani-American Population Growth Second Fastest Among Asian-Americans

Edible Arrangements: Pakistani-American's Success Story

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Upwardly Mobile Pakistan