Comment by Riaz Haq on August 14, 2022 at 6:20pm

#PakistanAt75: Pak PM on his drive to modernize the country. In 1960s, #Pakistan brimmed with hope & promise. The nation was widely thought ready to become next #Asian tiger. In 2022, however, Pakistan finds itself mired in its latest #economic #crisis https://www.economist.com/by-invitation/2022/08/13/pakistans-prime-...

By Shahbaz Sharif

This (crisis) is born out of the most challenging global policy environment of our lifetime, characterised by a commodity supercycle, historic monetary tightening at America’s Federal Reserve and a conflict in Europe that is tearing apart the post-war global order. But it also stems from home-grown weaknesses: weaknesses that have been left unaddressed for the better part of five decades; weaknesses that have forced us to approach the imf multiple times during that time. This is not how successful nations are built.

Although there are many, three critical structural flaws stand out. These have prevented economic take-off, stunted our growth and led to repeated boom-bust cycles since the late 1980s.

First, our political environment has become increasingly polarised. Instead of debating how to run Pakistan better and rid the country of poverty, political parties have been at each other’s throats. Second, we have not invested enough in the nuts and bolts of development: education, health and infrastructure. This is in part due to an abysmally low tax take, but it also reflects our priorities in public spending, some of which can be attributed to the complicated neighbourhood we live in, including a long-standing adversarial relationship with India, the Russian and then the American invasion of Afghanistan and the influx of millions of refugees into Pakistan.

Third, we have turned inwards in a way that has prevented us from reaping the benefits of globalisation through the free exchange of people, goods, capital and ideas. Our ability to make―and keep―friends on the international stage has significantly weakened over time. Today, we hardly make anything that the world wants and our companies remain very comfortable only operating within our borders, often protected by barriers to competition. Pakistan today is one of the most consumption-oriented economies in the world, with consumption accounting for more than 90% of our gdp. By contrast, we only invest 15% of our output and export just 10%. Annual inflows of foreign direct investment are less than 1% of gdp. These sorry statistics are a reflection of the flaws in our economic model. No successful country has ever grown this way.

As Pakistan turns 75, it is a moment that merits serious introspection. The fifth-largest country in the world, where two out of every three people are below the age of 30 and full of aspirations, finds itself stuck with an income level of just $1,798. Every third person lives on less than $3.20 a day. And less than a quarter of our women work outside the home; more than a third of our people can neither read nor write.

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No nation is destined to rise or fall for ever. During my time as the chief minister of Pakistan’s most populous province, I witnessed first-hand how encouraging talent and new ideas, planning on the basis of data and evidence, and close monitoring of execution can quickly lead to lasting improvements in people’s lives. For instance, partnering with Britain’s Department for International Development we were able to monitor and thus improve teacher and student attendance by over 35% in schools across Punjab. And using computer models, we were able to predict and stop the spread of dengue fever.

The rapidity of these achievements was affectionately dubbed by outsiders as “Punjab speed”, at a time when the rest of Pakistan remained stuck in low gear. With a similar orientation, there is no reason why the whole country cannot march forward at “Pakistan speed” during the next generation. With unity and discipline, Pakistan at 100 promises to be a vastly different country.

Comment by Riaz Haq on August 14, 2022 at 6:22pm

#IndiaAt75: #Modi is Proving #Pakistan's Case For #Partition1947. 75 years after #India split apart, the nation’s beleaguered #Muslims increasingly face the marginalization and brutal prejudice that Pakistan’s founder #QuaideAzam predicted. #PakistanAt75 https://www.bloomberg.com/opinion/articles/2022-08-14/india-s-75th-...

Opinion by Nisid Hajari

Jinnah’s main fear was how little power Muslims would wield in a united India. That’s what drove the initial break with his former allies in the Indian National Congress party — including Mohandas K. “Mahatma” Gandhi and Jawaharlal Nehru, India’s first prime minister— a decade before independence. And it’s why Jinnah retracted his support for a last-minute compromise brokered by the British in 1946, after Nehru intimated that the Congress would not honor the agreement once the British were gone.

Partition very nearly proved Jinnah’s case. Somewhere between 200,000 and two million Muslims, Hindus and Sikhs were killed within a few short weeks of independence; 14 million were uprooted from their homes. The biggest massacres arguably began with attacks on Muslim villages on the Indian side of the new border.

India’s founding fathers, however, risked their lives to undercut Jinnah’s argument. When riots spread to the Indian capital Delhi and police and petty government officials joined in pogroms targeting Muslims, Nehru took to the streets, remonstrating with mobs and giving public speeches promoting communal harmony while only lightly guarded. He insisted the government machinery exert itself to protect Muslims as well as Hindus.

With even members of his cabinet convinced that India would be better off without tens of millions of citizens suspected of split loyalties, Nehru barely prevailed. The pressure to expel Muslims only really subsided months later after a Hindu fanatic assassinated the revered Gandhi, shocking the cabinet into unity and prompting public revulsion against Hindu bigotry.

That consensus and the rights enshrined in India’s secular constitution largely preserved religious harmony in India for more than seven decades. Al-Qaeda and other transnational terrorist groups made few inroads among Indian Muslims, even as jihadists flourished in nearby countries. While sectarian riots have repeatedly broken out, especially after provocations such as the 1992 demolition of a mosque in Ayodhya to make way for a Hindu temple, tensions have for the most part remained local and limited. And even if Indian Muslims faced discrimination and were on average poorer and less well-educated than Hindus, few doubted that they were full citizens — especially when their votes were needed at election time.

What makes the changes that have proliferated under Modi so dispiriting and dangerous is their corrosive impact on those feelings of belonging. The problem isn’t even so much the most horrific cases of bigotry, including dozens of lynchings of Muslims around the country. Those at least still draw outrage in some quarters, as well as international attention.

What’s worse is the steady and widely accepted marginalization of India’s nearly 200 million Muslims. An overheated and jingoistic media portrays them as potential fifth columnists, who should “go back” to a Pakistan most have never visited if they don’t like the new India. (Pakistani sponsorship of extremist groups that have carried out brutal attacks in India has exacerbated fears of an internal threat.) There’s widespread acceptance of hate speech, including open calls to exterminate Muslims. Modi’s Bharatiya Janata Party has pursued laws that threaten to disenfranchise millions of them.

Comment by Riaz Haq on August 14, 2022 at 6:22pm

#IndiaAt75: #Modi is Proving #Pakistan's Case For #Partition1947. 75 years after #India split apart, the nation’s beleaguered #Muslims increasingly face the marginalization and brutal prejudice that Pakistan’s founder #QuaideAzam predicted. #PakistanAt75 https://www.bloomberg.com/opinion/articles/2022-08-14/india-s-75th-...

Indeed, an Indian state once convinced of its duty to protect minorities now seems unremittingly hostile. Prejudice has seeped into the courts and the police, as well as all levels of government. Laws have accepted at face value ludicrous conspiracy theories such as “love jihad” — the idea that Muslim men are romancing Hindu women in order to convert them. Modi’s decision to strip Kashmir, India’s only Muslim-majority state, of its constitutionally guaranteed autonomy has made clear that even enshrined protections are vulnerable.

Meanwhile, at the federal level, Muslims’ share of political power is dwindling. Though they make up more than 14% of the population, they account for less than 4% of members of the lower house of parliament. Among the BJP’s 395 members of parliament there isn’t a single Muslim.

True, India remains a democracy not an authoritarian state, with powerful regional politicians and some brave and independent activists and journalists. In states where Muslims make up a larger share of the voting population, they have been better able to defend their rights. Nor is India the only country where politicians and media figures are fanning ethno-nationalism for partisan gain.

Yet the trend lines are ominous. India’s political opposition is weak and divided. The mainstream media has caricatured Muslims to a degree that would have been unthinkable a decade ago. The northern Hindi belt is bursting with millions of undereducated, underemployed and angry young men. Politicians there and elsewhere know it is far easier to direct those frustrations at defenseless scapegoats than it is to fix schools and create jobs.

Modi likes to call India the “mother of democracy.” But the central test of a democracy is how it treats its most vulnerable citizens — whether their rights are protected and their views heard. Nehru and India’s other founding fathers saw it as their most basic duty to prove Jinnah wrong, forging a pluralistic India that would thrive because of its diversity not despite it. Three quarters of a century later, Indians should ask themselves whether they, not their former brethren across the border, are the ones now making a mistake.

Comment by Riaz Haq on August 16, 2022 at 5:29pm

#Pakistan’s #rupee, #bonds & #stocks are rallying as #investors bet the nation will win a #bailout from the #IMF this month & avoid #debt #default. Pakistan has also secured $4 billion from friendly countries. #economy #currency #SriLanka #Dollar #Euro
https://www.bloomberg.com/news/articles/2022-08-16/pakistan-assets-...


Dollar bonds due in December were indicated at about 95 cents on the dollar on Tuesday from a low of 85 cents in July, as investors turn more confident the debt will be repaid. The rupee surged 11% this month to 213.87 per dollar as of Monday, the biggest gainer in the world. The benchmark stock index climbed 9%, the top performer in Asia after Sri Lanka.

Pakistan has adopted austerity measures to win approval from the IMF to resume its stalled bailout package as frontier nations from Egypt to El Salvador battle the threat of a default. Fitch Ratings and Moody’s Investor Service said in late July they expect the nation to secure $1.2 billion from the IMF, while Saudi Arabia is said to renew its $3 billion deposit in assistance, easing financing pressure on Pakistan.



“After completing a slew of difficult prior actions, Pakistan finally received staff-level approval to resume and extend its IMF program, which should pave the way for board approval barring any policy mistakes,” said Patrick Curran, a senior economist at London-based research firm Tellimer Ltd. “With the program back on track, Pakistan will be given additional runway to avoid a crisis.”


Pakistan will sign the IMF’s letter of intent on Monday. The IMF board meeting is expected on Aug. 29 for the loan approval.

“The strength of the rupee reflects the strength of the economy,” Finance Minister Miftah Ismail said. “The currency movement is not cosmetic. The government’s decision to curb imports is helping the rupee to gain against the US dollar.”

Pakistan has secured $4 billion from friendly countries, a condition set by the IMF, according to Finance Minister Miftah Ismail. The IMF is set to decide on the loan on August 29, The News reported Saturday, citing Ismail.


“The IMF loan has been partially priced-in but there are a couple of other triggers going forward,” said Mohammed Sohail, chief executive of Topline Securities in Karachi. “Falling oil prices will continue to help, and once the IMF is approved, bilateral money will flow in.”

Comment by Riaz Haq on August 16, 2022 at 7:05pm

Arif Habib Limited
@ArifHabibLtd
Large Scale Manufacturing Industries (LSMI) output witnessed an increase of 11.5% YoY during Jun’22 (+0.2% MoM). Moreover, latest data suggests that during FY22, LSMI output increased by 11.7% YoY.

https://twitter.com/ArifHabibLtd/status/1559506139917828098?s=20&am...

Comment by Riaz Haq on August 19, 2022 at 8:27am

#Pakistan pledges $1 billion aid for #water, #electricity and waste projects in #Tanzania. The proposal was unveiled recently at the launch of Tanzania-Pakistan Business Council (TPBC) in Dar es Salaam. https://www.afrik21.africa/en/tanzania-pakistan-pledges-1bn-for-wat... #Afrik21

The Islamic, federal and multiparty Republic of Pakistan plans to invest $1 billion in Tanzania over a five-year period. The funds will accelerate the implementation of several projects in the East African country, particularly in the water, power and waste sectors.
Tanzania will benefit from a new loan for sustainable development. The funding proposal from the Pakistani government was unveiled recently during the launch of the Tanzania-Pakistan Business Council (TPBC) in Dar es Salaam. The amount of the future funding is $1 billion.

According to TPBC chairman Shaidi Majeed, Pakistan will mobilise the funds over five years to support Tanzania’s efforts in water supply, power supply and waste management.

Building new facilities
In 2020, the total funding provided to the Tanzanian government already amounted to $490 million, says the Pakistani embassy in Tanzania. The $1 billion loan will thus increase its financing portfolio in the East African country.

Tanzania is facing drought, which is manifested in the lack of rainfall. In order to secure water supplies for households and farmers, the government is implementing a number of projects, the latest of which will see the construction of 21 irrigation schemes in the Mbeya region. The future facilities will boost production of paddy to 97,300 tonnes per year. Paddy is a rice grain that has kept all its husks intact.


In terms of drinking water, the Tanzanian government plans to invest US$12.1 billion between 2022 and 2023, as part of the Arusha Urban Water Supply and Sanitation Improvement Project. In terms of electricity, the Tanzanian government is increasingly focusing on hydro and solar power to diversify the country’s electricity mix. According to a 2015 report by the International Energy Agency (IEA), Tanzania is 66% dependent on natural gas and oil for its electricity production.

Comment by Riaz Haq on August 20, 2022 at 10:43am

'Pakistan isn't Collapsing, India Should Focus on Silver Linings. Boycott or War Aren't Options'


https://youtu.be/GNapL0APNUY


In a 30-minute interview to Karan Thapar for The Wire to discuss his book ‘India’s Pakistan Conundrum’, Sharat Sabharwal ( ex Indian Ambassador to Pakistan) identified three preconceived notions that the Indian people must discard. First, he says it’s not in India’s interests to promote the disintegration of Pakistan. “The resulting chaos will not leave India untouched”.

Second, Indians must disabuse themselves of the belief that India has the capacity to inflict a decisive military blow on Pakistan in conventional terms. “The nuclear dimension has made it extremely risky, if not impossible, for India to give a decisive military blow to Pakistan to coerce it into changing its behaviour.”

Third, Indians must disabuse themselves of the belief that they can use trade to punish Pakistan. “Use of trade as an instrument to punish Pakistan is both short-sighted and ineffective because of the relatively small volume of Pakistani exports to India.”

https://youtu.be/GNapL0APNUY

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Historically, the relationship between India and Pakistan has been mired in conflicts, war, and lack of trust. Pakistan has continued to loom large on India's horizon despite the growing gap between the two countries. This book examines the nature of the Pakistani state, its internal dynamics, and its impact on India.


The text looks at key issues of the India-Pakistan relationship, appraises a range of India's policy options to address the Pakistan conundrum, and proposes a way forward for India's Pakistan policy. Drawing on the author's experience of two diplomatic stints in Pakistan, including as the High Commissioner of India, the book offers a unique insider's perspective on this critical relationship.


A crucial intervention in diplomatic history and the analysis of India's Pakistan policy, the book will be of as much interest to the general reader as to scholars and researchers of foreign policy, strategic studies, international relations, South Asia studies, diplomacy, and political science.


https://books.telegraph.co.uk/Product/Sharat-Sabharwal/Indias-Pakistan-Conundrum--Managing-a-Complex-Relationship/26726289

Comment by Riaz Haq on August 21, 2022 at 12:38pm

Opinion
Seventy-five years of Pakistan’s economy
By Ishrat Husain August 19, 2022

https://www.thenews.com.pk/print/983444-seventy-five-years-of-pakis...


At the time of independence, the prospects of the economic survival of a ramped Pakistan appeared quite dim as it inherited an extremely weak and fragile economy. More than 80 per cent were small farmers, and the rest were shopkeepers and artisans. From India, Pakistan got another eight million impoverished Muslim peasants and hardly any skilled technicians or businessmen. The country had no big industry worth the name except a few cotton mills, a cement factory, railway repair shops.

The financial resources allocated to it at the time of Partition were never released by the Reserve Bank of India and the salaries of the civil servants were paid by a few rich Muslim businessmen. Only a few hundred civil servants opted to serve the country and they formed the nucleus of the new government machinery sitting in dilapidated and makeshift offices. LIFE Magazine had predicted in its issue of January 1948 that Pakistan would collapse within six months as it would not be able to sustain itself economically.

From such a shaky start, Pakistan today is the 24th largest economy in the world with a GDP of approximately 1500 billion (PPP dollars) and per capita income of PPP $6672. In terms of official exchange rate, per capita income is $1700 compared to $100 in 1947. Pakistan's overall growth record has been quite impressive; on average, the economy grew at an annual rate of slightly above 5 per cent during the last six decades. In per-capita terms, the growth rate was 2.5 per cent annually. Consequently, the incidence of poverty has halved from 40 per cent to around 20 per cent. The manufacturing sector has been the most dynamic sector of the economy.

For the first four decades – 1950-1990 – Pakistan was among the fastest growing economies in the developing world. This achievement was remarkable because Pakistan without any industrial base had to rehabilitate and absorb eight million refugees – almost one fourth of the total population; had to fight a war with a much bigger and stronger neighbour in 1965; lost its eastern wing and suffered a trauma in 1971. In the 1970s all major industries, banks, and educational institutions were nationalized. In the 1980s, the country participated in the Afghan war against the Soviet Union which created some harsh social and geopolitical consequences. India in this same period was growing at 3 per cent per annum – almost half of Pakistan’s growth rate. But there are other remarkable achievements that the country can proudly boast of.

A country with 30 million people (present-day Pakistan) in 1947 couldn’t feed itself and had to import all its food from abroad. By 2016, the farmers of Pakistan were not only able to fulfill the domestic needs of wheat, rice, sugar, milk for 200 million people at a much higher per capita consumption level but also export wheat and rice to the rest of the world. Pakistan has emerged as the world’s fourth largest exporter of rice.

Agriculture production has risen more than five times with cotton attaining a peak level of more than 14 million bales compared to one million bales in 1947. Pakistan has emerged as one of the leading world exporters of textiles. Steel, cement, automobiles, sugar, fertiliser, cloth and vegetable ghee, industrial chemicals, refined petroleum and a variety of other products that did not exist at the time are now manufactured for the domestic market and, in many cases, for the world markets too.

Per capita electricity generation is 10,160 kwh compared to 100 in 1947. Pakistan’s vast irrigation network of large storage reservoirs and dams, barrages, link canals constructed during the last six decades has enabled the country to double the area under cultivation to 22 million hectares. Tubewell irrigation provides almost one-third of additional water to supplement canal irrigation.

Comment by Riaz Haq on August 21, 2022 at 12:39pm

Opinion
Seventy-five years of Pakistan’s economy
By Ishrat Husain August 19, 2022

https://www.thenews.com.pk/print/983444-seventy-five-years-of-pakis...


The road and highway network in Pakistan spans 260,000 kms – more than five times the length inherited in 1947. Modern motorways and superhighways and four-lane national highways link the entire country along with secondary and tertiary roads.

Natural gas was discovered in the country in the 1950s and supply has been augmented over time. At its peak, almost four billion cubic feet/day of natural gas was generated, transmitted and distributed for industrial, commercial and domestic consumption and until recently accounted for 40-50 per cent of the country’s energy needs.

Private consumption standards have kept pace with the rise in income. There are 30 road vehicles for 1,000 persons compared with only one vehicle for the same number of people in 1947. Mobile phone penetration is 88 per cent compared to almost less than one per cent having phone connection in the 1950s. TV sets, which were nonexistent then, adorn 122 out of every 1,000 houses.

These achievements in income, consumption, agriculture and industrial production are extremely impressive and have lifted millions of people out of poverty. But these do pale into insignificance when missed opportunities are looked at. Since 1990, the tables have turned. India has surpassed Pakistan not only in per capita income, GDP growth, human development indicators but has become one of the fastest growing economies in the world. Bangladesh which was way behind us in all economic and social indicators in 1990 has forged ahead of us and is recording 6-7 per cent growth rate with impressive gains in social and human development.

Pakistan has become a laggard in South Asia, facing episodes of boom and bursts. The country had to approach the IMF for meeting its balance of payments crisis 22 times in the last thirty years. What explains this reversal from a dynamic and vibrant to an externally dependent economy? There are many factors, but I would confine them to only a few.

The largest setback to the country has been the neglect of human development. Had adult literacy rate been close to 100 per cent, it is estimated that per capita income would have reached at least $ 3000. Pakistan ranks low in human development indicators with an adult literacy rate of 60 per cent, average schooling of five years, high infant and maternal mortality rates. Science and technology, which are the drivers of productivity and efficiency, have been neglected and innovation is missing from the production structure. Modi is personally leading the move to transform India into an advanced technological power; 16 unicorns were added only in one year.

The respective roles of state and markets have been distorted. Markets which allocate resources efficiently have been rigged by a small class of elites to their benefits while the state that ensures benefits of growth are widely distributed among the population has also been hijacked by the same elite class. We end up with the worst of both worlds – inefficiency and inequity – that slows down our economic progress and creates a sense of deprivation.

Comment by Riaz Haq on August 21, 2022 at 12:40pm

Opinion
Seventy-five years of Pakistan’s economy
By Ishrat Husain August 19, 2022

https://www.thenews.com.pk/print/983444-seventy-five-years-of-pakis...



Pakistanis consume more than they save – both the government as well as households. They import more than export, have low investment rates in private and public sectors but aspire to grow beyond their means. Unless these recurrent imbalances of fiscal, trade, financial, savings investment gap are bridged the situation would remain unchanged.

Finally, Pakistan’s institutions of governance – parliament, judiciary, media and civil services – which brought about spectacular results in the first 40 years have decayed. Patronage-based politics and polarization have weakened these institutions. Loyalty rather than competence has become the hallmark of appointments in the executive branch resulting in waste, corruption and nepotism. The private sector has also become used to rent seeking with the help of the tax and regulatory authorities – and, with a few exceptions, lost its vibrancy and dynamism.

The above agenda for structural reforms has to be pursued vigorously if Pakistan is to resume its journey that it had traversed in the first 40 years of its existence and has since deviated from it in the last 35 years.

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