Monday, December 28, 2015

Cow Dung Sales Boost E-Commerce in India

Cow patties -- cow poop mixed with hay and dried in the sun, made mainly by Indian women in rural area -- are among the hottest selling items by online retailers including Amazon and eBay in India, according to media reports. Some retailers are offering discounts for large orders and offering free gift wrapping.


Cow dung has a special spiritual significance in Hindu religion. The cows in India do not eat non-vegetarian items and only eat grass or grains which makes cow dung holy and acceptable. In a lot of pujas (worship rituals), both dried and fresh cow dung is used.  From Govardhan Puja to havans, cow dung is used during pujas.

In many spiritual "yagnas", the fire is lit using dried cow dung and desi ghee (clarified butter). It is believed that burning cow dung with ghee is one of the best ways to purify the home, according to BoldSky.com.

In addition, cow dung is the most widely used fuel in India for heating and cooking in rural areas. However, the online orders are coming mostly from cities where it would be difficult to buy dung cakes. The cakes are sold in packages that contain two to eight pieces weighing 200 grams (7 ounces) each. Prices range from 100 to 400 rupees ($1.50 to $6) per package.

Hindus do not eat beef but cow urine  and cow dung are considered sacred.  Urine is believed to be beneficial by Hindus as both a beverage and used for purification of buildings. American newspaper USA Today published a story earlier this year about a urine bottling plant in Haridwar, India. A recent Times of India report said cow urine was used by a group of Hindu activists for cleaning some government buildings.

Online sales of cow dung offer a uniquely Indian blend of ancient Hindu culture and modern information technology being embraced in the country.  Rise of Hindu Nationalists to power under Prime Minister Narendra Modi has given renewed impetus to total Hinduization of India.

Related Links:

Haq's Musings

Coffe, Tea or Pee?

Hinduization of India

Brievik's Hindutva Rhetoric

Indian Textbooks

India's RAW's Successes in Pakistan

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Friday, December 25, 2015

Pakistan Ranked 5th in the World For Financial Inclusion

When people in need of money go to unscrupulous and unregulated moneylenders, they usually get trapped in mounting debts at exorbitant interest rates. In developing nations like India and Pakistan, many end up losing their basic freedom and human dignity when they are forced to work as bonded laborers. How can this situation be changed?

The first obvious answer is to enforce laws and rules against the use of bonded labor. The second, often ignored, answer is to enable people to legitimately borrow the money they need from regulated financial institutions like banks.  In addition, they can also save and invest money as bank customers. This is called financial inclusion.

The Economist magazine publishes an annual Economic Intelligence Unit (EIU) assessment and ranking of countries for their policies to promote financial inclusion. In 2015, the EIU has ranked Pakistan 5th in the world among 55 countries surveyed for financial inclusion. Peru (90 points) and Colombia (86) remained the top two countries for financial inclusion. The Philippines was followed by India (71) and Pakistan (64), while Chile and Tanzania (62) tied at sixth and Bolivia and Mexico (60) tied at eighth. Ghana (58) rose in the ranks to clinch the 10th place. Finishing at the bottom of the rankings were Haiti, Congo, and Madagascar.

Pakistan had 41.7 million bank accounts last year for its adult population of about 100 million, according to the State Bank of Pakistan (SBP). More than 31.3 million accounts, or 75% of all bank accounts, belonged to the personal accounts category. The SBP has recently modified the regulatory framework to quicken the bank account-opening process with the help of the national database authority, according to Pakistan's Express Tribune newspaper. “NADRA is the real-time online depository of the biometric impressions of close to 100 million people,” Tameer Microfinance Bank CEO Nadeem Hussain said, adding that utilizing its database had so far resulted in eight million one-minute accounts.

According to a new CGAP (Consultative Group to Assist the Poor), accumulated research confirms that financial inclusion, defined as access to and use of formal financial services, benefits the poor people. Some 20 randomized control trials (RCTs) indicate that formal financial services, such as microcredit, savings, insurance and mobile payments, can have a positive impact on a variety of microeconomic indicators, including self-employment business activities, household consumption, and well-being. “But benefits are not limited to the microeconomic level,” notes co-author Robert Cull, Lead Economist, Finance and Private Sector Development Research Group at the World Bank. “In addition to benefits to individuals, non-experimental evidence indicates that broader financial inclusion also coincides with greater local economic activity and decreased economic inequality at the macroeconomic level.”

Inability to have a bank account in modern economy causes financial exclusion of such individuals who happen to be poor. Improving their financial inclusion is essential to make them participants in the nation's economy. The State Bank's efforts to promote financial inclusion are part of Pakistan's war on poverty that needs to continue until all citizens have full access to financial services in the country. The high and growing penetration rate of mobile phones offers the fastest way to do this by offering branchless mobile banking to everyone with a cell phone.

Related Links:

Haq's Musings

Pakistan Economy Near Trillion Dollar Mark

Pakistan 2.0: Technology Driving Productivity

Branchless Mobile Banking Takes Off in Pakistan

Financial Services Sector in Pakistan

Pakistan Ranks High in Microfinance

Pakistan Deploying Mobile Apps to Improve Governance

Pakistan Mobile Broadband Faster Than India's



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Wednesday, December 16, 2015

Pakistan Economy Nears Trillion Dollar PPP GDP Mark in 2015

Pakistan's PPP GDP is nearing trillion US$ mark in 2015, according to the latest figures available from the International Monetary Fund.

Nominal GDP based on current exchange rates is reported at $270 billion in 2015, up from $246 billion in 2014, an increase of $24 Billion.  Pakistan's per capita nominal GDP for 2015 is $1,427.085, up from $1,325.790 in 2014.

The nation's PPP GDP increased from $884 billion to $930 billion, an increase of $46 billion. Pakistan per capita PPP GDP is $4,902 for 2015, up from $4,749 in 2014, according to the IMF.

A dramatic decline in terrorist violence in Pakistan since the launch of Pakistan Army's Operation Zarb-e-Azb and a big drop in international oil prices have helped drive the country's economic recovery in recent months.

Among the clearest signs of recovery are increasing auto sales, growing smartphone purchases and cement consumption.

Pakistan auto industry is booming. Toyota, Suzuki and Honda factories are working around the clock in the southern port city of Karachi and eastern city of Lahore -- yet customers can still wait for up to four months for new vehicles to be delivered, according to media reports. At the same time, increased construction activity is visible everywhere in the country. First 5 months of the current fiscal year have seen sales of 93,570 cars, an increase of 66% over the same period last year.

Over 2 million 3G subscriptions and a corresponding number of smartphones are being bought every month in the country. More than half the people in Pakistan are expected to own a smartphone within the next few years.

Domestic cement sales have jumped by a phenomenal 16.89% to 4.29 million tons during July and August 2015 from 3.67 million tons shipped in the same period last year.

After its September meeting, the State Bank of Pakistan (SBP) said the rise in fixed investment financing in the energy generation and distribution, chemicals and services sectors signal possible increase in their productive activity in coming months. “The implementation of infrastructure development and energy projects under the China-Pakistan Economic Corridor (CPEC) will further enhance the improving investment environment. Therefore, there is anticipation of higher economic activity in 2015-16, which is expected to boost credit uptake,” it said.

Even as its economy recovers, it is unfortunate that Pakistan continues to lag behind its South Asian neighbors in human development.  The latest 2015 human development report from the United Nations Development Program (UNDP) shows that the country's leadership is continuing fail its people, particularly the youth, by its lack of focus and underinvestment in education and health care sectors. There can be no sustainable economic growth without investing in human development. It requires immediate attention.


Related Links:

Haq's Musings

Pakistan Auto Industry

Record Cement Sales Raise Hope Of Pakistan Economic Recovery

Credit Suisse Bullish on Pakistan Cement Industry

China-Pakistan Economic Corridor

Pakistan Army Acts Against Terrorists

Pakistan Middle Class Larger & Richer Than India's

Top Global Investor Bullish on Pakistan

The Role of Cement Industry in Economic Development of Pakistan

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Monday, November 30, 2015

Pakistani Kids Are World Champs at World Education Games 2015

Pakistanis were crowned World Champions and won the Maths World Cup, with Malaysia taking second place and the Literacy World Cup and Australia claiming third place overall and the Science World Cup, according to a report in Australia's The Educator publication.


World Education Cup 2015 saw student competitors from 159 countries earn 169 million UNICEF points, and raise more than $100,000 which will help 33,000 kids go to school.

The event was hosted by 3P Learning, an Australian company internationally renowned for its online education resources including Mathletics. Its CEO, Tim Power, said he had seen a big improvement in the results of STEM education subjects. World Education Games is a free downloadable program for registered schools for students to use.

Pakistan's winning team members included Ali Saud Khan (Grade 9), Abeeha Saud (grade 4) and Emaan Fatimah (Grade 7) from Beaconhouse school in Mandi Bahauddin, Lahore, according to The Express Tribune newspaper. The goal of the annual event is to ensure that students have 21st century skills to be prepared for the jobs of tomorrow.

Pakistani kids are now increasingly visible on the international stage in global competitions. Recently,  an exceptionally bright student of PakTurk International School in Jamshoro brought home a gold medal after competing in Math Challenge V hosted by the Pan-Asia International School in Bangkok.  In 2013, Khadija Niazi,  then a 12-year-old Pakistani girl attending advanced MOOCS (Massively Online Open Courses) was featured at the World Economic Forum in Davos, Switzerland. In 2012, four teams of Pakistani students won five medals, including one silver, in four international science competitions.

After seeing its youngsters win several international competitions, Pakistan has now decided to host the 48th International Chemistry Olympiad (IChO) in Karachi next year at the International Centre for Chemical and Biological Sciences (ICCBS), University of Karachi (KU).

Although access to quality education remains quite limited in Pakistan, it is still encouraging to see some Pakistani youngsters excelling in STEM fields at the international level. I hope these wins will help inspire more young Pakistanis to pursue and excel in math and science education.

Related Links:

Haq's Musings

Girl's Journey From Karachi Slum to Harvard Business School

12-Year-old Pakistani Girl at World Economic Forum

Pakistani Kids Outperform Indian Counterparts in Math and Reading

PakTurk Schools in Pakistan

Upwardly Mobile Pakistan

Human Capital Growth in Pakistan

Pakistan Joins CERN as Associate Member

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Saturday, November 28, 2015

Black Friday Sales in Pakistan

Pakistan saw its first Black Friday sales this year. These retail sales were on at both brick-and-mortar stores and e-tailers like Daraz.pk. There were also media reports indicating similar sales in the UK and other countries as well.  For those unfamiliar with Black Friday, let me explain what it is.

Black Friday, a day of mega sales by retailers, follows Thanksgiving Day in America. Black Friday marks the start of the annual Christmas shopping season that accounts for about half the annual retail revenue and much of the profits earned by US retailers.

Thanksgiving is a quintessential American holiday that commemorates the arrival of European "Pilgrims" fleeing religious persecution across the Atlantic. It is celebrated with a dinner of turkey, cranberries and corn that made up the feast offered by native Americans, also known as American Indians, to welcome the hungry and tired Europeans in this continent of North America. President Barack Obama used the occasion to remind today's Americans of their duty to welcome those who are fleeing persecution in Syria and elsewhere in the Middle East. Here's what the President said:

“Nearly four centuries after the Mayflower set sail, the world is still full of pilgrims – men and women who want nothing more than the chance for a safer, better future for themselves and their families. What makes America America is that we offer that chance. We turn Lady Liberty’s light to the world, and widen our circle of concern to say that all God’s children are worthy of our compassion and care. That’s part of what makes this the greatest country on Earth.”

So what do many American shoppers do on Black Friday? They mob the shopping malls and the brick-and-mortar stores as they open very early on Friday morning following Thanksgiving holiday to snap up bargains. Overzealous shoppers are known to knock down and trample other shoppers as they race to take advantage of bargain basement prices on items such as new apparel, consumer electronics and toys. With the rise of e-commerce, many American shoppers now prefer to take advantage of Black Friday sales offered by popular e-tailers like Amazon.com. The e-commerce sites usually have such Black Friday sales continue beyond a single day.

This year, Pakistan's Daraz.pk e-tailer offered Black Friday bargains to Pakistani shoppers. Daraz.pk partnered with several companies including PTCL, Ponds, Mediatek, InnJoo and Easypay. EasyPay is the official payment partner, offering an additional 25 per cent discount on products to customers who use Easypay on Black Friday.  There were category discounts as high as 63 per cent on smartphones, 50 per cent on computers and 70 per cent on fashion and accessories on offer at Daraz, according to Express Tribune newspaper.

In addition to e-commerce sites, there was also a report in England's "The Daily Mirror" about "Lahori aunties going mad" on Black Friday at a fabric store in Lahore.

To the dismay of many, American style consumerism is finding broad acceptance among the middle class consumers across the world, including developing countries like Pakistan. Is this wise? Is it sustainable? How would it affect our future? I'll leave these questions for the readers to answer for themselves.


https://vimeo.com/147199858



Amir Khan Under Fire Over "Intolerance" in India; Black Friday in Pakistan; Russia-Turkey Conflict in Syria; PPP's Asim Husain C from WBT Productions on Vimeo.


https://youtu.be/_y07qQCtWXw





Related Links:

Haq's Musings

E-Commerce in Pakistan

High-Tech Investments in Pakistan

Upwardly Mobile Pakistan's Appetite For International Brands

Pakistan Middle Class Grows to 55%

South Asia's Rising Consumption; Depleting Resources

Syrians Flee Persecution


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Tuesday, November 10, 2015

Diwali Brings High Pollution Warning For Indian Capital Delhi

India's capital Delhi has the dubious distinction of being the world's most polluted city and Diwali fireworks are making its air pollution even worse. The smog will be particularly dangerous on Nov. 12 and 13, with the concentration of pollution-related particles — PM2.5 and PM10 — projected to increase by 148% and 170% respectively, according to Indian media reports.


News headlines said US President Obama's 3 day visit to New Delhi last year cut his life expectancy by 6 hours. Why? Because Delhi has the highest level of the airborne particulate matter, PM2.5 considered most harmful to health, with 153 micrograms per cubic meter, 15 times higher than the 10 micrograms per cubic meter considered safe by the World Health Organization (WHO).


World's Dirtiest Cites

Delhi is not alone; Other cities in India claim 13 spots among the top 20 dirties cities in the world. Not far behind  Delhi's 153 micrograms is another Indian city, Patna with 149 micrograms. Other Indian cities among the world's dirtiest are: Agra (88 ug/m3), Allahabad (88 ug/m3), Ahmedabad (100 ug/m3), Amritsar (92 ug/m3), Firozabad (96 ug/m3), Gwalior (144 ug/m3), Khanna (88 ug/m3), Kanpur (93 ug/m3), Lucknow (96 ug/m3), Ludhiana (91 ug/m3) and Raipur (134 ug/m3).  Pakistani cities of Karachi (117 ug/m3), Peshawar (111 ug/m3) and Rawalpindi (107 ug/m3) also count among the world's most polluted.

India's pollution problems are not entirely due to poorly controlled industry and transport. The early winter problems are significantly exacerbated by the burning of the fields by farmers after harvest.

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.

There will be severe health consequences for all Indians unless the Modi government acts to legislate and regulate various sources of pollution in the country. Pakistan government, too, needs to act to prevent severe harm to public health by rising pollution.

Related Links:

Haq's Musings

India's Air Most Toxic

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

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Sunday, November 1, 2015

Economists Criticize Rising Intolerance in Modi's India

Top economists have now joined the rapidly growing ranks of Indian writers, historians and other intellectuals warning Modi government of the negative consequences of rising intolerance for the entire nation.

Billboard During Modi's Silicon Valley Visit
The Wall Street Journal reported that India's chief central banker Raghuram Rajan "made an unusual appeal for tolerance in a speech Saturday, triggering a debate about whether he was trying to send a message to the country’s leaders". “The first essential is to foster competition in the market place for ideas,” Gov. Rajan told students at his alma mater, the Indian Institute of Technology in New Delhi. “Without this competition for ideas, we have stagnation.”

Arun Shouri, BJP leader who has previously served as a federal minister and worked as World Bank economist, joined the criticism of the Modi government when he said: "there is clearer belief (in the Modi government) that managing the economy means managing the headlines and this is not really going to work.” He said the NDA government was essentially “the Congress plus a cow”, in an apparent reference to the violence against minorities and killings of Muslims accused by the Sangh Parivar activists of consuming beef.

Ratings agency Moody's has also weighed in with its own warnings saying that "in recent times, the government also hasn't helped itself, with controversial comments from various BJP members. While Modi has largely distanced himself from the nationalist jibes, the belligerent provocation of various Indian minorities has raised ethnic tensions.

"Along with a possible increase in violence, the government will face stiffer opposition in the upper house as debate turns away from economic policy. Modi must keep his members in check or risk losing domestic and global credibility," Moody's said.

While the chorus of criticism of Modi's government has been rising in recent weeks, what is different is that the economists' warnings are inspired by practical economic concerns rather than the moral dimensions of the Hindu militancy in Modi's India.

What Mr. Narendra Modi must realize is that it is hard to reverse the real damage to the nation once the forces of bigotry and intolerance are unleashed. The difficulty he faces is the lack of his moral authority with his Hindu Nationalist power base given his own track record as the chief executive of Gujarat for many years that include the 2002 anti-Muslim pogrom on his watch.

Related Links:

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Friday, October 30, 2015

Historic Low LNG Prices Can Help Resolve Pakistan Energy Crisis

LNG spot prices hit a new low of $4 per mmBTU as the supply continues to significantly outstrip demand. It's creating opportunities for Pakistan to get access to large supply of cheap fuel for its power generation.

With softening demand from China and 130 million tons per year (mmpta) of additional LNG supply set to reach market over the next five years, gas research firm Wood Mackenzie sees continuing downward pressure on global LNG spot prices.

LNG Price History Source: WSJ



“The entire industry is worried because it is hard to tell when China’s demand will pick up again,” said an LNG strategist at a Malaysian energy company who attended the Wood Mackenzie conference in Singapore, according to Wall Street Journal. “Rising demand from smaller countries such as Pakistan, Egypt and Bangladesh is not enough to offset the declining demand from north Asia.”

As recently as two years ago, LNG shipped to big North Asian countries like Japan and Korea sold at around $15 to $16 a million British thermal units. This month, the price has already hit $6.65 a million BTUs, down 12% from September, according to research firm Energy Aspects. It expects prices to fall further in Asia next year, to under $6 per million BTUs, as a wave of new gas supply in countries from the U.S. to Angola to Australia comes on line, according to Wall Street Journal.

Petronet LNG Ltd, India’s biggest importer of liquefied natural gas (LNG), is saving so much money buying the commodity from the spot market that it’s willing to risk penalties for breaking long-term contracts with Qatar.

This is a great opportunity for Pakistan to take advantage of historically low LNG prices to alleviate its severe load-shedding of gas and electricity.  Recently, Pakistan has launched its first LNG import terminal in Karachi and started receiving shipments from Qatar.  Pakistan has also signed a $2 billion deal with Russians to build a north-south pipeline from Gwadar to Lahore. But the country needs to rapidly build up capacity to handle imports and distribution of significant volumes of LNG needed to resolve its acute long-running energy crisis.

Here's a related video discussion:
http://dai.ly/x3ccasi



Pakistan Local Elections; Indian Hindu... by ViewpointFromOverseas


https://vimeo.com/144586144



Pakistan Local Elections; Indian Hindu Extremism; LNG Pricing; Imran-Reham Split from WBT TV on Vimeo.


https://youtu.be/LZavD-tkReg





Related Links:

Haq's Musings

Pakistan's Twin Energy Crises of Gas and Electricity

Affordable Fuel For Pakistan's Power Generation

Pakistan Shale Oil and Gas Deposits

China-Pakistan Economic Corridor 

Blackouts and Bailouts in Energy Rich Pakistan

Pakistanis Suffer Load Shedding While IPPs Profits Surge

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Tuesday, October 27, 2015

Uber Ready to Launch in Lahore, Pakistan

Uber, the rapidly growing San Francisco based behemoth known for its taxi app,  appears to be getting ready to launch its service in Lahore, Pakistan, according to media reports.

A report in Tech In Asia points to the career page on Uber website that shows openings for “general manager”, “operations and logistics manager”, and a “marketing manager,” for Lahore,  Pakistan's second-largest city.

In fact, Uber has confirmed its plans to launch in Pakistan soon, according to TechJuice.

“We can confirm we are currently recruiting for a team in Lahore, and are very excited about launching in Pakistan as we see huge potential in the way we can help people move around their city safely and reliably,” Shaden Abdellatif, communications manager for Uber’s Middle East and Africa operations told TechJuice. “We are also excited about the opportunity for economic empowerment we can bring to the drivers we partner with.”



It makes sense given the size of the Pakistan's expanding urban middle class with its fast growing mobile broadband subscriptions combined with rising smartphone sales in the country.

Pakistanis are signing up for 3G and 4G services at a rate of 1 to 2 million new subscriptions a month. In September 2015 alone, Pakistan Telecom Authority reported 2.22 million new 3G and 4G subscriptions in the country. There's corresponding increase in demand for smartphones.



With over 18 million smartphones and mobile broadband subscriptions, Pakistan is ripe for a whole range of new businesses from e-commerce to gaming to various online services like Uber that are accessed through smartphone apps.

Related Links:

Haq's Musings

Mobile Broadband Subscription Growth Accelerates in Pakistan

Pakistan Car Sales Jump 72%; Cement Consumption Up 17%

iPhone 6 and 6S Launched in Pakistan

Pakistan Government Deploys Mobile Apps

E-Commerce Taking Off in Pakistan

Haier Pakistan to Manufacture Smartphones

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Monday, October 26, 2015

Pakistan's 3G 4G New Subscriptions Accelerate in September 2015

Monthly new subscriptions of 3G and 4G in Pakistan doubled to 2.22 million in September 2015, up from 1.1 million new subscribers in August 2015.  This brings the total number of mobile broadband subscribers to 18.04 million and total of all broadband subscriptions to 21.2 million since 3G-4G launch in May 2014, according to the latest data released by Pakistan Telecommunications Authority.
Mobile Broadband Subscriptions in Pakistan Source: PTA


Increasing use of the Internet is now being put to good use to deal with the tragic aftermath of the the earthquake in Pakistan.  Facebook and Google have set up special pages to help people find each other.

Demand for smartphones is also accelerating in Pakistan along with the rise in mobile broadband subscriptions. Forecasters estimate the number of smartphone sales to increase to 40 million by next year.

Overall, 3G and 4G subscriptions in Pakistan jumped 14.43 % during September 2015, the highest sequential monthly increase in the past six months. Among the carriers, Mobilink topped with 878,107 new mobile broadband customers, followed by Ufone with 637,131 new 3G users during September 2015. Telenor is number 3 with 393,969 new 3G users during the month.

Coming on the heels of data indicating 72% jump in car sales and 17% rise in cement consumption, this data on 2.22 million new mobile broadband subscriptions in September is yet another confirmation of Pakistan's ongoing economic recovery.

Related Links:

Haq's Musings

Pakistan Car Sales Jump 72%; Cement Consumption Up 17%

iPhone 6 and 6S Launched in Pakistan

Pakistan Government Deploys Mobile Apps

E-Commerce Taking Off in Pakistan

Haier Pakistan to Manufacture Smartphones

Labels: , , ,

Sunday, October 18, 2015

Pakistan Economic Recovery: Car Sales Up 72%, Cement Shipments Up 16.89%

Pakistan auto industry is booming. Toyota, Suzuki and Honda factories are working around the clock in the southern port city of Karachi and eastern city of Lahore -- yet customers can still wait for up to four months for new vehicles to be delivered, according to media reports. At the same time, increased construction activity is visible everywhere in the country.


Local car sales, excluding imported cars, jumped to 54,812 units in the first three months (Jul-Sep) of fiscal year 2016, up 72% from 31,899 units in the same period of last year, according to data released by the Pakistan Automotive Manufacturers Association (PAMA).

Pak Suzuki led the pack with 33,770 units followed by Indus Motors (Toyota) 14,767 cars and Honda Motors 6,184 units. Industry analysts at Topline Securities expect local car sales to reach 203,653 units during the current fiscal year.

Car sales (excluding imported ones) in Pakistan grew at a five-year (FY11-15) compound annual growth rate (CAGR) of just 5.3% to 179,953 units. While volumes surged by 31% in fiscal year 2015 (FY15) on the back of the new model of Toyota Corolla, Punjab taxi scheme and an increase in car financing due to 42-year low interest rates in the country also helped, according to Express Tribune newspaper. “We forecast local car sales to grow at 13% in FY16 to reach 203,653 units,” Topline Securities reported on Monday.

In addition to car sales, domestic cement sales have also jumped by a phenomenal 16.89% to 4.29 million tons during July and August 2015 from 3.67 million tons shipped in the same period last year.

Car sales and construction activity are both believed to be driven by low interest rate financing available from banks and improved security situation across the country. With record low inflation, the State Bank of Pakistan (SBP), the nation's central bank, has cut discount rate to a 42-year low of 6%.

After its September meeting, the SBP said the rise in fixed investment financing in the energy generation and distribution, chemicals and services sectors signal possible increase in their productive activity in coming months. “The implementation of infrastructure development and energy projects under the China-Pakistan Economic Corridor (CPEC) will further enhance the improving investment environment. Therefore, there is anticipation of higher economic activity in 2015-16, which is expected to boost credit uptake,” it said.

Per Capita Cement Consumption Source: Global Cement


A dramatic decline in terrorist violence in the country since the launch of Pakistan Army's Operation Zarb-e-Azb and a big drop in international oil prices have helped drive economic recovery in the country in recent months.

Related Links:

Haq's Musings

Pakistan Auto Industry

Record Cement Sales Raise Hope Of Pakistan Economic Recovery

Credit Suisse Bullish on Pakistan Cement Industry

China-Pakistan Economic Corridor

Pakistan Army Acts Against Terrorists

Pakistan Middle Class Larger & Richer Than India's

Top Global Investor Bullish on Pakistan

The Role of Cement Industry in Economic Development of Pakistan

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Friday, October 16, 2015

Pakistan Middle Class Larger & Wealthier Than India's

Pakistan’s middle class consists of over 6.27 million adults, according to wealth criteria used by Credit Suisse in its Global Wealth Report 2015. It represents 5.7% share of Pakistan’s total adult population of 111 million, almost twice as large as India’s middle class made up of 3% of its adult population based on the same criteria.

Source: Credit Suisse Wealth Databook 2015

Average ($4,459) and median ($2,216) wealth figures for Pakistani middle class adults are higher than average ($4,352) and median ($868) wealth figures for their Indian middle class counterparts. It's a consequence of lower income wealth inequality in Pakistan compared to its neighbor.  For comparison, only 1.1% of Bangladesh adult population qualify as middle class. Their average wealth is $2,201 and median wealth $1,102 per adult.

Pakistan Wealth Source: Global Wealth Report 2015 Via Express Tribune
Credit Suisse's report estimates Pakistan's total private wealth in mid-2015 at $495 billion, Bangladesh's at $237 billion and India's at $3.45 trillion.

Credit Suisse said Pakistan's middle class is the 18th largest and India's 8th largest in the world. The report says 14% of world adults qualify as middle class in 2015 and they own 32% of the world's wealth. 6.7 million Pakistani adults make up 0.9% of the world's middle-class adult population. China tops the list with 108.7 million, followed by the United States 91.8 million and Japan 62 million.

A little more than 90% Pakistani adults had wealth less than $10,000 in 2015. The share of Pakistani adults with wealth between $10,000 and $100,000 in 2015 was 9.8% while only 0.1% adults owned wealth in the range of $100,000 and $1 million, the report revealed.

Other studies based on income criteria of $2 or more per day put Pakistan's middle class at 55% of the population. A 2010 ADB report titled "Asia's Emerging Middle Class: Past, Present and Future" report put Pakistan's middle class growth from 1990 to 2008 at 36.5%, much faster than India's 12.5% growth in the same period. Other reports have indicated Pakistan's median per capita income is higher than both India's and Bangladesh's.

Even though Pakistan's GDP growth has been relatively low compared to India and Bangladesh in recent years, the country's middle class has continued to grow rapidly. It's explained as follows: It's not the overall GDP growth and average per capita income and wealth increases but the median per capita income and wealth growth that tells you how the GDP gains are shared among the population.

Data shows that economic gains in Pakistan are shared better than India and Bangladesh because of lower inequality. Income poverty rate (those below $1.25 per capita per day) in India is 33% and Bangladesh 43% versus 13% in Pakistan, according to WB data on povcalNet. Gini Index for India is 33, Pakistan 29 and Bangladesh 32, indicating that Pakistan has lower inequality.

Related Links:

Haq's Musings

Pakistan's Middle Class Grows to 55%

Upwardly Mobile Pakistan

Median Per Capita Incomes of Bangladesh, India and Pakistan

India and Pakistan Compared in 2014

Bangladesh-Pakistan Comparison in 2012

Modi's Superpower Delusions

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Wednesday, October 14, 2015

Is US Aid Good or Bad For Pakistan?

This year's Nobel Prize winning economist Angus Deaton of Princeton University considers foreign aid to developing nations a curse like the oft-mentioned resource curse of energy and mineral-rich nations of Africa and the Middle East.

Deaton has studied poverty in India and Africa and spent many decades working at the World Bank whose charter it is to fight poverty. He argues that, by trying to help poor people in developing countries, the rich world may actually be corrupting those nations' governments and slowing their growth and hurting the poor in the process. Prof William Easterly of New York University has published a paper titled "Can Foreign Aid Buy Growth?" that supports the view that increase in foreign aid has reduced economic growth in Africa.

Source: William Easterly of NYU


In addition to being recipients of foreign aid, most African countries are also rich in resources ranging from oil and gas to diamonds and metals. Yet, their people are among the poorest in the world.  Why is it? The biggest reason appears to be their corrupt leaders who pocket most of the proceeds from mining. They also siphon off a big chuck of foreign aid left after paying the expensive western consultants employed by aid agencies.



So where does Pakistan stand in this mix? Charts published by Washington Post show that Pakistan, in spite of not being a major exporter of minerals, enjoyed an average economic growth rate of about 5% from 1970 to 2008.  This is about the same as India's but higher than Brazil's and Turkey's GDP growth rates. The economic growth rates for China and Korea are much higher than Pakistan's in this period.

Foreign aid to Pakistan has also been more effective in promoting economic growth than much of Africa. Even Dambisa Moyo, author of "Dead Aid" and a critic of western aid, acknowledges that the US aid for "the Green Revolution in India (and Pakistan) played vital roles in economic (re)construction" of the South Asian nations in 1960s and 1970s. The South Asian subcontinent could have faced starvation without this aid.

One of the key reasons for the success of Green Revolution was the ability of the human capital in India and Pakistan to absorb the technological knowhow that it brought along with money. Ms. Moyo offers the same reason for the success of Marshall Plan aid in Europe.

Foreign Aid to Pakistan as Percent of GDP Source: World Bank 


US aid to Pakistan after the Green Revolution has been much smaller as percentage of the nation's GDP and much less effective.  Total foreign aid to Pakistan has dramatically declined from a peak of over10% of GDP to less than 2% of GDP now, too little to impact economic growth even if it is utilized better.

The expected size and speed of the Chinese FDI of $46 billion in energy and infrastructure is much more likely to spur Pakistan's economic growth than the western aid has been in the recent past. It will put Pakistan on a path to rely much more on investment and trade than on aid or debt for its foreign exchange earnings.

Related Links:

Haq's Musings

Aid, Investment, Trade and Remittances for Pakistan

Declining Investment Hurting Pakistan's Economic Growth

Pak-China Industrial Corridor to Boost Investment and Trade

Pak Army Completes Over Half of CPEC Western Corridor

Pakistan Economic History 1947-2010

Top Global Fund Investor Bullish on Pakistan

Culture of Corruption in Pakistan

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Tuesday, October 13, 2015

US-Pakistan Civil Nuclear Deal

"The Pakistani establishment, as we saw in 1998 with the nuclear test, does not view assistance -- even sizable assistance to their own entities -- as a trade-off for national security vis-a-vis India". US Ambassador Anne Patterson, September 23, 2009


Having failed to persuade, intimidate, bribe and sanction Pakistan to abandon its nuclear weapons program, there are credible reports that Washington is now ready to accept Pakistan as a legitimate nuclear weapons state in exchange for limiting the range of the country's ballistic missiles.

Washington is abuzz with the news of major think tank analyses and credible media reports indicating that the October 22, 2015 Obama-Sharif summit agenda includes US-Pakistan civil nuclear deal along the lines of India-US civilian nuclear deal.


According to a Washington Post report, the deal with Pakistan centers around a civilian nuclear agreement similar to the one the United States arrived at with India, in exchange for a Pakistani commitment that would "restrict its nuclear program to weapons and delivery systems that are appropriate to its actual defense needs against India's nuclear threat."

As part of such a deal,  the United States will support an eventual waiver for Pakistan by the 48-nation Nuclear Suppliers Group, of which the United States is a member. At U.S. urging, that group agreed to exempt India from rules that banned nuclear trade with countries that evaded the Non-Proliferation Treaty. This so-called “civil nuclear agreement” allowed India partial entry into the club of nuclear powers, in exchange for its willingness to apply International Atomic Energy Agency safeguards to its civilian program, according to the Washington Post's veteran columnist David Ignatius.

Prior to the Washington Post report, the Washington-based Stimson Center and the Carnegie Endowment think tanks published a 20,000-word essay on Pakistan’s nuclear program and diplomatic ambitions last week. Written by Toby Dalton and Michael Krepon and titled "Nuclear Mainstream", it recommends Pakistan to agree to meet five conditions for its nuclear mainstreaming:

(1) Shift from the full spectrum deterrence to strategic deterrence

(2) Limit production of tactical weapons or short range delivery weapons

3) Become amenable to talks on the fissile material cut off treaty (FMCT)

4) Delineate civil and military nuclear programs

5) Sign the Comprehensive Test Ban Treaty (CTBT)


Given Pakistan's growing energy needs,  the country will most likely engage with the United States to try and get a stamp of legitimacy from the NSG. However, the Washington Posts's Ignatius believes that such "negotiations would be slow and difficult, and it's not clear that Islamabad would be willing to accept the limitations that would be required." Meanwhile, the issue is being discussed quietly in the run-up to Prime Minister Nawaz Sharif's visit to Washington on October 22.

Viewpoint From Overseas host Misbah Azam discusses US-Pak Civil Nuclear Deal and other subjects with panelists Ali Hasan Cemendtaur and Riaz Haq (www.riazhaq.com).

http://www.dailymotion.com/video/x39adcl_na-122-poll-significance-ghulam-ali-s-indian-concert-us-pakistan-civil-nuclear-deal_news



NA-122 Poll Significance; Ghulam Ali's Indian... by ViewpointFromOverseas

https://youtu.be/YD25bAMc-Jo




Related Links:

Haq's Musings

US Must Accept Pakistan as Legitimate Nuclear Weapons State

Pakistan's Shaheen 3 Can Hit Deep Inside India and Israel

India-US Civilian Nuclear Deal 

Eating Grass: The Making of the Pakistani Bomb

Gen Kidwai on Pakistan 2nd Strike Capability and Nuclear Triad

India's Israel Envy: What If Modi Attacks Pakistan?


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Tuesday, September 29, 2015

Indian Prime Minister Narendra Modi in Silicon Valley

"The 21st century belongs to India', declared Indian Prime Minister Narendra Modi to thousands of his adoring fans at SAP Center in San Jose, California. As he spoke inside the Arena, protestors carrying anti-Modi posters condemned the presence in Silicon Valley of the person they choose to describe as the "Butcher of Gujarat".

My Invitation and Ticket:

I had received an invitation and a ticket to attend Prime Minister Modi's reception at SAP Center. I thought about attending it long and hard. I was really conflicted about attending and, in the end, I chose not to.






Modi's Soaring Rhetoric:

As Prime Minister Modi wowed almost exclusively Indian-American techie audience in Silicon Valley, there were many who compared his rhetoric to US President Barack Obama's 2008 soaring speeches promising "Change" in America which, for many, have led to a huge letdown in the last 6 years. Modi led his audience with chants of "Bharat Mata ki Jai" and "Jai Baghat Singh" and the they responded by cheering the Prime Minster on with screams of "Modi! Modi".

“[India] has moved on from scriptures to satellites,” Modi said. “The world has started to believe that the 21st century belongs to India.”

"Unwelcome Modi" Rally:

As the Indian Prime Minister spoke to thousands of his adoring supporters inside San Jose Arena, a group estimated by some at 3000 staged a rally against him.



"Prime Minister Modi's 'Rock Star' visit to Silicon Valley can't make up for his rock bottom performance in human and civil rights," Virali Modi-Parekh of Alliance of South Asians Taking Action (ASATA) told NBC News. "Since Modi's been in office, violence against religious minorities has spiked. But Modi turns a blind eye while churches are burned and Muslims and Christians are being forcibly converted. There is a culture of fear and victimization, especially against minorities in India, which undermines Modi's standing as a business partner."



Campaign against Modi's presence in Silicon Valley included billboards across Silicon Valley focusing attention on Modi's human rights record; hundreds of bottles of Purell hand sanitizer sent to Facebook CEO Mark Zuckerberg, each with a name of a person killed in the Gujarat riots; challenges from South Asian LGBTQ employees of high-tech companies of India's Penal Code 377; a "faculty statement" from 125 academics on Modi's history; a "die-in" dramatizing continuing attacks against minority groups; and social media campaigns using the hashtags #ModiFail, #ChallengeModi, #ModiLiestoUS, #ZuckWashYourHands, according to NBC News.

Academics Letter:

Over 100 US academics wrote an open letter to Silicon Valley tech executives warning them against doing business with Prime Minister who came to push his "Digital India" initiative. The US professors reminded the technology executive that Modi and his Hindu allies are using their power to censor dissident voices in India.

Hindtuva activists allied with Modi have been attacking dissidents with impunity since the Prime Minister's elevation to power in Delhi. M.M. Kalburgi, a 78-year-old professor, was assassinated by the Sangh activists recently. Hours after Kalburgi's murder, Bhuvith Shetty, a member of the Hindu militant group Bajrang Dal, tweeted in celebration: "Mock Hinduism and die a dog's death. And dear K.S. Bhagwan you are next."

Two other high-profile rationalists, Narendra Dabholkar and Govind Pansare, were shot point-blank 18 months apart in the western state of Maharashtra. Dabholkar, a 68-year-old activist who worked on behalf of villagers exploited by local gurus and so-called godmen, campaigned for the state government to pass an anti-superstition bill. It's been two years since he was killed in the city of Pune, and no one has been charged, according to a report in Los Angeles Times.

Digital Censorship:

Facebook has published data indicating that India leads the world in censoring Facebook posts.  Indian government demanded Facebook blocks 4,765 times in a six month period.India’s approach to Internet speech has been a flash point for years, with the government saying it wants to regulate content that is offensive to religious or ethnic groups, and companies such as Facebook and Google (GOOG) bristling at the restrictions, according to Bloomberg News.

Source: Bloomberg


Summary:

There's no question that Mr. Narendra Modi is wildly popular with Indians at home and abroad. The Prime Minister has made a lot of promises to the Indian people. And the more he speaks, the higher the expectations. Meanwhile, India's exports have declined every month for the last 9 months and the corporate profits of Indian companies continue to be weak. At the same time, Mr. Modi's allies in the Sangh Parivar are stepping their activities challenging the "Secular" foundations of the Indian Constitution. So the question is:  Is the Modi phenomenon beginning to unravel already?

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Pakistan Launching T20 Cricket League

Pakistan will soon be starting its first professional sports league along the lines of for-profit sports leagues like Major League Baseball (MLB) or National Football League (NFL) in the United States.

 India's IPL (Indian Premier League) was the first such league in the cricket world. It was started by India's Lalit Modi who studied professional sports business at Duke University in Durham, North Carolina.

Several other countries, including Australia, Bangladesh, England, Sri Lanka, South Africa and the Caribbean nations (West Indies), followed suit with their own versions of premier league. Pakistan is the latest country to join this movement with its own league called PSL or Pakistan Super League.

Pakistan is the 2nd largest cricket market after India in terms of viewership. It's the 4th largest market after India, England and Australia in revenue terms.

The launch of Pakistan Super League (PSL) will help significantly increase cricketing revenue and put Pakistan in second place in revenue terms. It will also help generate revue for Pakistan Cricket Board (PCB) to promote domestic cricket in the country.

There are five categories of players being recruited to be part of PSL — Platinum, Diamond, Gold, Silver and Emerging.

PSL has already signed up top international cricket stars like Kevin Peterson (England), Chris Gayle (West Indies) , Brad Haddin (Australia), Grant Elliot  (New Zealand) , James Franklin (New Zealand), Brad Hogg (Australia), Shakibul Hasan (Bangladesh), Dwayne Bravo (West Indies), Sunil Naraine (West Indies) and Ravi Bopara (England) . Other names will soon be revealed.  Several top international coaches have also agreed to join.

The star power is attracting major broadcasters to bid for media rights in different regions of the world. Broadcasters can expect high advertising rates with many big international stars playing in each team. In addition, big businesses will provide funding as sponsors of league matches.

Each team will have a salary cap of about $1 million for about 3 weeks of work. PSL will comprise of just 24 matches, with each team playing the other twice. Each tournament will end in less than a month.

There will be 4 foreign players and 2 under-19 Pakistani players in each of the 5 team currently in the works. The rest of the teams will be made up of Pakistani players who are now playing at the national level and the first class matches.  The teams are: Islamabad Blasters, Karachi Super Stars, Lahore Warriors, Peshawar Kings, Quetta Challengers.  80% of the league's revenue will be shared among the franchisees.

Under-19 Pakistani players will receive Rs. 2.5 million fees for 3 months of play. This will encourage more talent to compete and help improve the quality of young players in the country.

Pakistan Super League is expected to be played in February 2016 in Dubai and Sharjah stadiums in the United Arab Emirates (UAE). It's the best thing to happen to Pakistan cricket in a long time. Let's hope that the security situation will soon allow future tournaments to be played on Pakistani soil.


Related Links:

Haq's Musings

Wahab Vs Watson: Cricket At Its Absolute Best

Pakistan Cricket Needs Top Sports Psychologist and World-Class Batting Coach

Pakistan Won 1992 World Cup After Losing to India and West Indies

Top Ten Sledges in Cricket

Pakistan Breaks Australia's 34-Match Winning Streak

Obama on Cricket

Case For Resuming India-Pakistan Peace Talks

Pakistan Punish Aussie 2-0 in T20 Series 

Afridi's Leadership

Pakistan In, India Out of T20 Semis

Pakistan Beat India in South Africa 

Kiwis Dash Pakistan's ICC Championship Hopes

Pakistan Crowned World T20 Champs

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