Saturday, February 27, 2016

Pakistan Ranks 4th Highest Source of Foreign Remittances to India

Pakistanis sent nearly $5 billion to help their relatives in India in 2015, according to data released by the World Bank. This makes Pakistan the 4th largest source of foreign remittances to India, putting Pakistan ahead of Kuwait and the United Kingdom. Only United Arab Emirates, United States and Saudi Arabia sent more money to India.

Source: Wall Street Journal 

With over 1.4 million Pakistanis born in India, there are literally millions of family connections between the two countries and millions of reasons a person in Pakistan might find a way to get money to relatives in India. The money could be sent for a brother in need, a cousin’s wedding, an uncle’s funeral or even to help educate a niece, according to a report in the Wall Street Journal.


Source: Hindustan Times

I personally know people in my own circle of friends and family in Pakistan who regularly send money to relatives in India to help them out in times of need. Such remittances are used to build homes, educate children, pay for health care or girls' weddings.

While Muslims in Pakistan have prospered, the Indian Muslims have become the new untouchables in their land of birth. They suffer widespread discrimination in education, employment, housing and criminal justice. Muslims make up 13% of India's population but 28% of Indian prisoners. Similarly, Christians make up 2.8% of India's population but 6% of India's prison population.  Meanwhile, the newly elected parliament has just 4% Muslim representation. Housing discrimination in India is so bad that an Indian MP Shashi Tharoor recently tweeted: "Try renting an apartment using a #Muslim name (In #India )".

The latest World Bank remittance offers yet another confirmation that the South Asian Muslims who migrated from what is now India to Pakistan have fared relatively better in terms of economic and other opportunities. Pakistani Muslims have the means to help their relatives in India. It reinforces my own anecdotal observation during my visits to both countries.  I see that my own relatives in Pakistan are much better off than those in India. My Pakistani relatives enjoy better opportunities for education and jobs giving them higher standards of living than those in India.

In fact, Pakistan has continued to offer much greater upward economic and social mobility to its citizens than neighboring India over the last two decades. Since 1990, Pakistan's middle class had 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.

Source: ADB
New York Times' Sabrina Tavernise described the rise of Pakistan's middle class in a story from Pakistani town of Muzaffargarh in the following words:

For years, feudal lords reigned supreme, serving as the police, the judge and the political leader. Plantations had jails, and political seats were practically owned by families.

Instead of midwifing democracy, these aristocrats obstructed it, ignoring the needs of rural Pakistanis, half of whom are still landless and desperately poor more than 60 years after Pakistan became a state.

But changes began to erode the aristocrats’ power. 
Cities sprouted, with jobs in construction and industry. Large-scale farms eclipsed old-fashioned plantations. Vast hereditary lands splintered among generations of sons, and many aristocratic families left the country for cities, living beyond their means off sales of their remaining lands. Mobile labor has also reduced dependence on aristocratic families.

In Punjab, the country’s most populous province, and its most economically advanced, the number of national lawmakers from feudal families shrank to 25 percent in 2008 from 42 percent in 1970, according to a count conducted by Mubashir Hassan, a former finance minister, and The New York Times.

“Feudals are a dying breed,” said S. Akbar Zaidi, a Karachi-based fellow with the Carnegie Foundation. “They have no power outside the walls of their castles.”


In yet another confirmation that Pakistani Muslims are much better off than Indian Muslims, the World Bank data has revealed that $5 billion were remitted by Pakistanis to help their Indian Muslim relatives in 2015 alone. Such remittances are used to build homes, educate children, pay for health care or girls' weddings. This flow will have to increase in the future given the Modi government policies of Hinduization that are adversely impacting Indian Muslims by worsening the depth of their deprivations.

Related Links:

Haq's Musings

Are Muslims Better Off in Jinnah's Pakistan?

Maulana Azad's Grand-Niece India's BJP Minister

Hinduization of India Under Modi

Tarek Fatah vs Riaz Haq on India, Pakistan and Muslims

Hindu Nationalists Admire Nazis

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Friday, February 19, 2016

Assessing Qatar-Pakistan LNG Deal

Pakistan has recently negotiated a good bargain with Qatar for importing $16 billion worth of liquified natural gas (LNG).

Pakistan will import as much as 20 million tons of the super-chilled gas annually from various sources including Qatar, enough to fuel about two-thirds of Pakistan’s power plants. Gas shortage has idled half the nation’s generators. A 75 percent drop in LNG prices since 2014 has  dramatically reduced the cost of the South Asian country’s energy needs, according to a Bloomberg report.

LNG arriving in Pakistan from Qatar will fetch 13.37% of the preceding three-month average price of a Brent barrel (considering the present Brent price as a proxy, that would equate to $167.5 per 1000 cubic meters), according to a report in Azerbaijan's Trend News.  It translates to $4.50 per million BTUs.

A comparison with Iran's gas deals with Turkey and Iraq indicates that Iranian gas will not be competitive with Qatari LNG on Pakistani market. In 2014 Iran was exporting gas to Turkey at above $420 per 1000 cubic meters, but the figure plunged to $225, or $6 per million BTUs, currently due to low oil price. Iran previously said that the price of gas for Iraq would be similar to Turkey's price.

International Chamber of Commerce (ICC) arbitration court has recently ordered Iran to reduce its gas price to Turkey by 15% after Turkey complained. It's not clear if Iran will comply but even if it does, its price will still be $5.10 per million BTUs, much higher than the Qatari LNG price of $4.50 per million BTUs for Pakistan.

As recently as two years ago, LNG shipped to big North Asian consumer like Japan and Korea sold at around $15 to $16 a million British thermal units. Late last year, the price hit $6.65 a million BTUs, down 12% from September, according to research firm Energy Aspects. It expects prices to fall further in Asia this 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.

Will Pakistan be able to negotiate a better price with Iran? It seems difficult given the fact that Iranians have a reputation of being very difficult to deal with. Here's an excerpt about Iranians' negotiating style from Iranian-American author Vali Nasr's book "The Dispensable Nation":

"I remember a conversation in 2006 with Jack Straw, who was then Britain’s foreign secretary, about his time talking to Iran. He said, People think North Koreans are difficult to negotiate with. Let me tell you, your countrymen [Iranians] are the most difficult people to negotiate with. Imagine buying a car. You negotiate for a whole month over the price and terms of the deal. You reach an agreement and go to pick up the car. You see it has no tires. “But the tires were not part of the discussion,” the seller says. “We negotiated over the car.” You have to start all over again, now wondering whether you have to worry about the metal rim, screws, or any other unknown part of the car. That should give you a sense of what talking to Iran looks like".


Source: US EIA
Regardless of whether Pakistan succeeds in using Qatar price leverage with Iran. it's good to see Pakistan finally beginning to take advantage of historic low gas prices to alleviate its severe load-shedding of gas and electricity.

Growing Demand-Supply Gap in Pakistan

In addition to signing the Qatar LNG deal, 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

Can Pakistan Take Advantage of Historic Low LNG Prices?

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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