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Showing posts from March, 2009

China Sees Opportunity Where Others See Risk

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China has agreed to build several power plants in Pakistan to help the South Asian nation deal with its worsening electricity crisis . When completed over the next several years, these plants, including Nandipur (425 MW, Thermal), Guddu(800 MW, Thermal) and Neelam-Jhelum (1000 MW, Hydro), Chashma (1200 MW, Nuclear) will add more than 3000 MW of power generating capacity for the energy-hungry country. Pakistan is currently facing a deficit of 4,000 to 5,000 megawatts, resulting in extensive load-shedding (rolling blackouts) of several hours a day. China has already installed a 325-megawatt nuclear power plant (C1) at Chashma and is currently working on another (C2) of the same capacity that is expected to be online by 2010. The agreements for C3 and C4 have also been signed. The United States has objected to China supplying C3 and C4 on the grounds that any Pak-China nuclear cooperation would require consensus approval by the NSG, of which China is now a member, for any exception to the

World Water Day: Water Scarcity Hurting Pakistan

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More than a billion people in the world do not have access to safe drinking water, a basic necessity, on World Water Day today. In Pakistan alone, 38.5 million people lack access to safe drinking water and 50.7 million people lack access to improved sanitation, according to published data . Pakistanis are facing unprecedented shortage of clean drinking water and electricity due to the lowest recorded levels of water in the country's dams, according to Pakistani Meteorological Department. The mortality rate for children under-five in Pakistan is 99 deaths per 1000 children, according to Global Health Council . About half of under-five deaths occur in six countries with large populations: India, Nigeria, Democratic Republic of Congo, Ethiopia, Pakistan and China. Water and sanitation related diseases are responsible for 60% of the total number of child mortality cases in Pakistan, with diarrheal diseases causing deaths of 200,000 under-five years’ children, every year. Unsafe drin

Auto Industry in China, India and Pakistan

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Tata Motors is set to launch its low-cost Nano minicar Monday, March 23, according to media reports from India. With a starting price of about $1,945, which doesn't include dealer markup and other charges that consumers will pay, the Nano will be one of the world's cheapest cars. This product launch comes at a time when the auto industry is facing a severe downturn, attributed to the worldwide consumer credit crunch amidst a serious global financial crisis. Like other auto makers around the world, Tata Motors is also contending with declining demand, both for its bread-and-butter commercial vehicles in India and its luxury brands, Jaguar and Land Rover. The company reported its first quarterly net loss in seven years in the October-December 2008 quarter, and saw its debt rating cut by ratings firms. More immediately, Tata Motors faces a June deadline to repay $2 billion in loans related to its Jaguar-Land Rover acquisition from Ford Motor Co. last year, according to the Wal

Beware of Schumer's AIG Bonus Outrage

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"If you don't return it on your own, we will do it for you," Senator Charles E. Schumer warned the AIG bonus recipients, as he joined in the public outrage against AIG's executive bonuses of $165 million. After receiving $170b in US taxpayer money, AIG announced these scandalous bonuses for their executives in the financial products unit which sold derivatives that cratered the company and the entire financial system. The grandstanding by the senator from Wall Street, as Mr. Schumer is known because of his close links to the financial services industry, seems to be designed to deflect public anger and scrutiny from the real scandal and the main culprits of collapse of AIG and other financial institutions --the politicians in Washington. For years, as the Wall Street cheerleader on Capitol Hill, the senator joined his other corrupt colleagues in preventing any regulation of the financial weapons of mass destruction such as credit default swaps (CDS) and collaterlized

Global Slowdown Hits Foreign Workers Hard

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As the global economic crisis continues to take its toll in US, Europe, Middle East and East Asia, South Asian workers overseas are being let go in large numbers Faced with rising unemployment in Malaysia, the Kuala Lumpur government on Tuesday said it will reduce the number of foreign workers in the country to 1.8 million by 2010 from the present over two million. This decision has serious implications for tens of thousands of South Asians, mostly from Bangladesh, India and Nepal, who currently work in the island nation. Malaysian minister Syed Hamid Albar said the authorities had managed to reduce the number of foreign workers by 60,000 since last March, according to media reports. Last week, the minister ordered the cancellation of 55,000 visas granted to Bangladeshis in 2007, eliciting protests from Bangladesh. Though reliable unemployment figures are hard to find in the United Arab Emirates , there is evidence to suggest that joblessness is rapidly growing in the Gulf region. Duba

Chinese Do Good and Do Well in Developing World

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The world's GDP in 2009 will shrink for the first time since WWII, according to the World Bank. Poor developing nations will be particularly hard hit with a shortfall of $270 billion to $700 billion, which will set them back by many years. Many of these nations are looking for help from the traditional donors in the West. But the West itself is preoccupied by its economic woes , with tent cities popping up all over the United States as home foreclosures rise. According to the latest estimates of the World Bank, almost 40 percent of 107 developing countries are highly exposed to the poverty effects of the current economic crisis, less than 10 percent face little risk and the remainder are moderately exposed. Bangladesh, India, Nepal and Pakistan are ranked among the 43 countries most exposed to poverty risks, raising the horrible specter of further political instability and dangerous social strife in a very important region of the world. As one of the developing nations facing a s

Can Chimerica Rescue World Economy?

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Forget Chinindia , G7 , or even G20 . Consensus is growing that it's G2, the governments of China and the United States, that will lead the world out of the current global economic crisis. The combined behemoth of China and America has been labeled by Harvard business school professor Niall Ferguson as "Chimerica" . Ferguson believes "we are living through a challenge to a phenomenon Moritz Schularick and I christened “Chimerica.” In this view, the most important thing to understand about the world economy over the past decade has been the relationship between China and America. If you think of it as one economy called Chimerica, that relationship accounts for around 13 percent of the world’s land surface, a quarter of its population, about a third of its gross domestic product, and somewhere over half of the global economic growth of the past six years." The Group of 20 finance ministers (G2) gathering this weekend in England are of various minds but the U.S.

Pakistan's Banking and Insurance Sector

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Pakistan's financial system has been ranked 34 out of 52 countries in the World Economic Forum's first Financial Development Report, which was released in Pakistan through the Competitiveness Support Fund (CSF) in December, 2008. A financial system is a structure that channels funds from savers/investors to those who require funds for building infrastructure, starting and running businesses, building or improving houses, consumer financing of big-ticket items like automobiles, etc. Financial systems are crucial for the allocation of resources in a modern economy. Currently, Pakistanis save about 15% of the GDP to provide a pool for domestic investments from private savings, which amount to nearly $ 25 billion a year. In addition, Pakistani expatriates remit nearly $ 8 billion a year that flow into Pakistan's economy through the banking sector. The WEF report is a comprehensive analysis of financial systems and capital markets in 52 countries that explores key drivers of fi

Mathematician's Formula Wrecked Global Economy

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Not unlike Albert Einstein whose equation E=MC2 made possible the creation of physical weapons of mass destruction, Chinese mathematician David X. Li could go down in history as the man who enabled the development of financial weapons of mass destruction on Wall Street. Li's Gaussian copula models for the pricing of collateralized debt obligations (CDOs)are being blamed for the catastrophic losses leading to the global financial collapse . In addition to underlying bonds, bond investors also invest in pools of hundreds or even thousands of mortgages. The sums involved are mind boggling: Americans now owe more than $11 trillion on their homes, according to Wired Magazine . But mortgage pools are not as simple as most bonds. There's no guaranteed interest rate, since the amount of money homeowners collectively pay back every month is a function of how many have refinanced and how many have defaulted. There's certainly no fixed maturity date: Money shows up in irregular chun

Pakistan Tops SMS Growth

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With cellular phone penetration exceeding 50%, the Pakistan mobile market is continuing to experience rapid subscriber growth with thousands of customers signing up every month. The growth in subscriber rate has consequently led way to triple digit growth in messaging traffic over last year, according to Acision , a major international player in the mobile messaging business. A total of 6.37 billion text messages were sent through Acision messaging systems across Asia Pacific over the 2008/2009 Christmas and New Year period. The top five countries with the highest SMS traffic processed over the festive season were the Philippines, again leading the ranking with 2.36 billion messages, closely followed by Indonesia (1.193 billion), Malaysia (1.075 billion) and Pakistan (763 million), according to the PC World . While Pakistan ranks fourth in the total number of text messages sent during Christmas-New Year season of 2008-2009, the country tops the list with 253% annual growth in traffic

Poll Finds American Muslims Doing Well

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Not only is Islam the fastest growing of the monotheistic religions in America, Asian-American Muslims (from countries like India and Pakistan , constituting the third largest ethnic group , after African-Americans and Whites) have more income and education and are more likely to be thriving than other American Muslims. In fact, their quality of life indicators are higher than for most other Americans, except for American Jews, according to a recent Gallup poll in US. The only countries where Muslims are more likely to see themselves as thriving are Saudi Arabia and Germany, according to the poll. For example, 41% of American Muslims say they are thriving, as compared to 51% of Saudis, 47% of German Muslims and only 11% of Pakistanis. Among the prominent Muslim nations surveyed by Gallup, Pakistanis are among the most dissatisfied in their home country, with 44% reporting they are struggling and 45% saying they are suffering. In sharp contrast to Pakistanis, Bangladeshis report high