Friday, March 27, 2015

Median Incomes and Middle Class Bangladeshis, Indians and Pakistanis

Pakistan's per capita median income is $73.26 per month in terms of 2005 PPP (purchasing poverty parity) US dollars as of 2010. It is higher than India's $60.48 and Bangladesh's $51.67 per capita per month, according to the World Bank.

Source: World Bank


Median income is the amount that divides the income distribution into two equal groups, half having income above that amount, and half having income below that amount. Mean income (average) is the amount obtained by dividing the total aggregate income of a country by the number of people in that country.  A country's median income is a better indicator than the average income to gauge how a population is faring economically.

Median income also helps assess the size of the middle class in India, Pakistan and Bangladesh based on the definition used by Asian Development Bank and World Bank. Both of these institutions define middle class as those earning $2 or more per capita per day in terms of 2005 PPP US$.

Pakistan median income of $73.26 per month translates into $2.44 per day, higher than $2 per day income level used by ADB and WB to define middle class. It means that more than 50% of Pakistanis are in middle class. India's $60.48 per month puts 50% of Indians in middle class while Bangladesh's $51.67 means fewer than 50% of Bangladeshis are in middle class.

Source: Asian Development Bank 2010



A 2010 Asian Development Bank's report titled "Asia's Emerging Middle Class: Past,. Present, And Future" reported Pakistan's middle class size as 40.12%  of the country's population as of 2005.  It also estimated Bangladesh's middle class at 20.25% and India's at 25.05% of their total populations.

Source: Institute of Business Administration Karachi Pakistan


More recently, research conducted by Dr. Jawaid Abdul Ghani of Karachi School of Business and Leadership (KSBL) concluded that Pakistan's middle class rose to 55% of the country's population in 2010.

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 increases but the median per capita income 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.

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Friday, March 20, 2015

Tipping Point: Pakistan Middle Class Rises to 55% of Population

Majority of the households in Pakistan now belong to the middle class, a first in Pakistan's history, according to research by Dr. Jawaid Abdul Ghani of Karachi School of Business and Leadership (KSBL).

It's an important tipping point that puts Pakistan among the top 5 countries with fastest growing middle class population in Asia-Pacific region, according to an Asian Development Bank report titled Asia's Emerging Middle Class: Past, Present, And Future. The ADB 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.

Source: Dr. Abdul Ghani



From 2002 to 2011, the country's middle class, defined as households with daily per capita expenditures of $2-$10 in 2005 purchasing power parity dollars, grew from 32% to 55% of the population, according to a paper presented by Dr. Abdul Ghani at Karachi's Institute Business Administration's International Conference on Marketing. Dr. Ghani has cited Pakistan Standards of Living Measurement (PSLM) Surveys as source of his data.

Growing middle class is a major driver of economic growth, as the income elasticity for durable goods and services for middle class consumers is greater than one, according to a Brookings Institution study titled The Emerging Middle Class in Developing Countries.



Among some of the manifestations of the rising middle class, Dr. Abdul Ghani reports dramatic increase in the ownership of television sets, refrigerators and motorcycles in households in all income deciles in Pakistan.  At the same the total household assets have nearly doubled from $387 billion in 2001-02 to $772.6 billion in 2010-11 in terms of 2005 purchasing power parity dollars.

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 data compiled by Euromonitor International, a consumer research firm. Pakistan's rising middle class consumers  in major cities like Karachi, Lahore and Islamabad are driving sales of international brand name products and services.  Real estate developers and retailers are responding to it by opening new mega shopping malls such as Dolmen in Karachi and Centaurus in Islamabad.

Pakistan's transition to middle-class middle-income country over the last decade mainly during Musharraf years represents a major tipping point for the country's economy. It is likely to accelerate economic growth driven by consumption and draw greater investments in production of products and services demanded by middle class consumers. Some of it is already in evidence in booming sales of durable goods (TV sets, refrigerators, motorcycles) AND non-durables (cosmetics, shampoo, toothpaste, processed foods, etc) in Pakistan's booming FMCG sector.

Related Links:

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Friday, March 13, 2015

Pakistan Burraq Drone to Help Fight Terror

Pakistan has successfully flight-tested Burraq, its first armed drone. The new unmanned combat aerial vehicle (UCAV) fired and precisely hit both still and moving targets with Barq, a laser-guided missile it carried under its wings.

Pakistan UCAV Burraq Source: ISPR

Based on Chinese CH-3 specification,the indigenously developed Burraq can carry 100-kilogram payload.  It is a medium altitude long endurance (MALE) drone which can stay up for 12 hours. The payload can be laser-guided missile Barq, similar to Chinese  AR-1 missiles, or a pair of precision guided small-diameter bombs like the Chinese FT series PGM.

With its successful Burraq test, Pakistan joins eight other countries — the United States, South Africa, France, Nigeria, Britain, Iran, Israel and China — which have already put weapons onto unmanned aircraft, according to the New America Foundation. Of these, only the US, Britain and Israel have successfully deployed armed drones during military operations, the foundation said.

Pakistani military's interest in armed drone technology is based on its direct knowledge of how effective American Predator drones have been in targeting and eliminating Taliban terrorists in Pakistan's FATA (Federally Administered Tribal Areas).

The objections to US drone strikes in Pakistan have mainly been due to the political sensitivity with violation of sovereignty, not due to lack of precision and effectiveness. Top TTP terrorist leaders Nek Mohammad, Baitullah Mehsud and Hakimullah Mehsud have all been killed in US drone strikes.

In a rare public statement on the effectiveness of the US drone campaign in FATA, General Officer Commanding 7-Division Maj-Gen Ghayur Mehmood serving in Waziristan in 2011 confirmed the effectiveness of US Predators when he said: "Yes there are a few civilian casualties in such precision strikes, but a majority of those eliminated are terrorists, including foreign terrorist elements.”

Pakistan is hoping to emulate the success of American drones in FATA by deploying Burraq in its ongoing anti-terror campaign in Waziristan and other tribal agencies.  Burraq has the ability to linger over targets for long periods of time, gather intelligence and fire deadly missiles precisely at much lower cost than fighter planes like F-16 and JF-17.

Here's a video of Burraq Test:

http://dai.ly/x2jf47j



Pakistan successfully tests 'Burraq' first... by dawn-news

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Thursday, March 12, 2015

Success of Shaheen 3 to Boost Pakistan's Space Program

Pakistan has successfully tested Shaheen III ballistic missile with 1700 mile range. The intermediate range missile can hit deep inside India and Israel. Its multi-stage solid-fuel technology can also be used to launch satellites into space. It has been jointly developed by the National Engineering and Scientific Commission (NESCOM) and the Space and Upper Atmosphere Research Commission (SUPARCO). It's the latest example of dual-use technology.

Pakistan Shaheen 3 Missile Range Source: Washington Post
The missile was successfully test-fired into the Arabian Sea on Monday, March 9, 2015, according to the Strategic Plans Division (SPD) which oversees Pakistan’s nuclear program. Announcing the result, General Zubair Mahmood Hayat, the head of SPD, congratulated NESCOM (National Engineering and Scientific Commission) scientists and engineers for “achieving yet another milestone of historic significance.”


Shaheen-III is the latest in the series of the indigenously produced Shaheen-I and Shaheen-II, which had shorter ranges. “The test launch was aimed at validating various design and technical parameters of the weapon system at maximum range,” the Pakistani military said in a statement. Pakistani military leaders are trying to maintain a “credible deterrence” as arch-rival India continues to invest heavily in military hardware.

Since the technology used in satellite launch vehicles (SLV) is virtually identical to that used in a ballistic missile, Shaheen 3, the latest enhancement to Shaheen series of missiles, is expected to boost Pakistan's space program as well.  Several nations, including India and Israel recently, have used same rocket motors for  both ballistic missiles and satellite launch vehicles (SLVs).  Israel's Shavit SLV and India's SLV-3 are examples of it.

The success of Shaheen 3 multi-stage solid-fueled ballistic missile is a confirmation of Pakistan's determination to ensure its security AND to pursue its space ambitions at the same time. I congratulate Pakistani engineers and scientists at NESCOM and SUPARCO on their hard work, continuing deep commitment and the latest achievement.

Here's Pakistan's General Kidawi speaking at a Washington Conference:

https://youtu.be/CNZCw0BXKyE





Related Links:

Haq's Musings

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Revolution in Military Affairs

Pakistan Defense Production Goes High-Tech

Drones Outrage and Inspire Pakistanis

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Cyber Wars in South Asia

Pakistan's Biggest Ever Arms Bazar

Genomics and Biotech Advances in Pakistan

India's Israel Envy: What if Modi Attacks Pakistan

Eating Grass: Pakistan's Nuclear Program