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Showing posts from January, 2018

Pakistan's Debt Crisis: Fact or Fiction?

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Pakistan is taking on significant amounts of domestic and foreign debt to finance its budget deficits and to support major energy and infrastructure development projects as part of China-Pakistan Economic Corridor (CPEC).  Over one-third of this public debt is external debt denominated in US dollars, Euros and other hard currencies. At the same time, Pakistan's exports have declined over the last several years and the country's current account deficits have grown.


Critics Warnings: 

Critics believe that Pakistan is facing a severe debt crisis. They fear that it could get caught in a big debt trap laid by foreign governments. They warn that Pakistan will go broke. It will be unable to repay these mounting debts. Are they right? To answer this question, Dr. Ishrat Husain, a former central banker and governor of the State Bank of Pakistan, has analyzed Pakistan's debt as of June 30, 2017. Here are some of his key findings:
Total Public and Private Debt:

Pakistan’s total debt and…

Electric Power Rates in India and Pakistan

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Pakistan National Electric Power Regulatory Authority (NEPRA) has cut electricity price by 2.99 rupees (2.7 U.S. cents) per unit under the fuel adjustment for the month of December, 2017, according to news reports. This reduction brings the price per kilowatt-hour to Rs. 5.11 (4.60 US cents), down from Rs. 8.10 (7.30 US cents).

Power Rate in Pakistan:

Reduction brings the price per kilowatt-hour to Rs. 5.11 (4.60 US cents), down from Rs. 8.10 (7.30 US cents). The CPPA (Central Power Purchasing Authority) said total energy was generated at the cost of Rs. 25.24 billion, or Rs. 3.52/unit for the month of November, 2017.

The reduction in the actual generation cost is mainly because of a decline in fuel prices, zero use of high-speed diesel in the power plants and higher contribution from the cheapest source – hydropower. The furnace oil (Rs. 9.03 per unit) has been replaced by domestic natural gas at Rs. 4.49 per unit and liquified natural gas (LNG) at Rs. 6.33 per unit.

This decision wil…

Madrasa Teacher Inspired Pakistani-American to Transform Medical Education Online

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Inspired by a madrasa teacher in Islamabad, Pakistani-American Dr. Husain Sattar is revolutionizing medical education in a similar way that Salman Khan of Khan Academy has transformed K-12 education. Dr. Sattar has written a widely used medical textbook titled "Fundamentals of Pathology" along with a series of videos called Pathoma available online.

University of Chicago Professor:

Currently an Associate Professor at  the University of Chicago Pritzker School of Medicine, Dr. Sattar credits his innovation to his madrasa teacher who had the "ability to take vast amounts of information and summarize it in the most eloquent, simple, principle-based method", according to a piece written by Nancy Averett and published on the University of Chicago website.

Madrasa Education:

Born in Chicago in 1972, Dr. Husain Sattar, MD, took a leave of absence after first year of medical school in the United States to study Arabic and Islamic spirituality in Islamabad, Pakistan.  It was …

Modi's Hypocrisy on Full Display at Davos 2018

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Indian Prime Minister Narendra Modi spoke today at the World Economic Forum in Davos, Switzerland in support of globalization and talked of his commitment to diversity in his country.



Modi's Rhetoric:

Prime Minister Modi warned that "forces of protectionism are raising their heads" against international trade and commerce. "Bilateral and multilateral trade negotiations have come to a kind of standstill," he said.

He also praised his country's commitment to democracy and diversity. "For a society with diverse religions, cultures, languages, attires and cuisines, democracy is not just a political system but a way of living," he said, adding that inclusion is the "main principle" of his government.

Is Modi living up to the ideals of globalization and diversity that he spoke of in his Davos speech? Let's compare these words to his government's actions.

Globalization:

In December 2017, Modi's government imposed stiff tariffs on impo…

WEF Reports More Pakistanis Sharing Fruits of Economic Growth

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More and more Pakistanis are sharing in their nation's development, according to World Economic Forum (WEF). Pakistan ranks 47 among 74 emerging economies ranked for inclusive development by WEF released recently at Davos, Switzerland. Inclusive development in the South Asian country has increased 7.56% over the last 5 years. World Economic Forum assesses inclusive development  based on "living standards, environmental sustainability and protection of future generations from further indebtedness."

WEF Inclusive Development Report 2018:

The WEF inclusive development index ranks Pakistan at 47, below Bangladesh at 34 but above India at 62. The 7.56% rate of increase in inclusive development in Pakistan is higher than 4.55% in Bangladesh and 2.29% in India. China ranks 26 and its inclusion is rising at a rate 2.94%.


Pakistan has improved its ranking from 52 last year to 47 this year, while India's rank worsened to 62 this year from 60 last year.  China's ranking also…

Pakistan Rising or Failing? Reality vs Perception

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Pakistan has a population of over 200 million people and a booming trillion dollar economy ranked among the top 25 largest economies of the world.

Pakistan's 135 million millennials have made it the world's fastest growing retail market. There is surging demand for fast moving consumer goods (FMCG) and durables like smartphones, computers, cars, motorcycles and home appliances.


Major energy and infrastructure projects, part of China-Pakistan Economic Corridor (CPEC), are transforming the country and creating millions of new jobs.

Incidents of terrorism and terror related deaths are in sharp decline since the country's military started nation-wide anti-terror operations in 2013.

Its $20 billion tourism industry is seeing rapid growth.

And yet, many continue to call Pakistan a "failed state". Why is it? Why is perception lagging reality?

Viewpoint From Overseas host Faraz Darvesh discusses these questions with Monis Rehman, Pakistani entrepreneur and CEO of Rozee.p…

Pakistan's $20 Billion Tourism Industry is Booming

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Pakistan's tourism industry, currently estimated at $20 billion (6.9% of GDP in 2016), is booming, according to data available from multiple reliable sources. World Travel and Tourism Council (WTTC) forecasts it to grow to over $36 billion within a decade.

Economic Impact of Tourism:

Pakistan tourism industry generates $20 billion in revenue and supports 3.6 million jobs directly and indirectly, according to the World Travel and Tourism Council. Foreign visitors generate nearly a billion US$ in exports.


Tourism Growth: 

Significantly improved security situation has helped boost annual tourist arrivals in Pakistan by 300% since 2013 to 1.75 million in 2016, while domestic travelers increased 30% to 38.3 million, according to the state-owned Pakistan Tourism Development Corp.  Hotel bookings increased 80 percent in 2016, according to Jovago, Pakistan’s biggest hotel booking website.


By contrast, foreign tourist arrivals in the country’s larger neighbor, India, jumped from 6.97 million…

Pakistan is the World's 5th Largest Motorcycles Market

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Pakistan is the 5th largest motorcycle market in the world after China, India, Indonesia and Vietnam. With 7,500 new motorcycles being sold everyday, Pakistan is also the among the world's fastest growing two-wheeler markets. Passenger car and motorcycle sales in Pakistan are both soaring at rates of over 20% a year.



Auto Demand Soaring:

Nearly 2.3 million motorcycles have rolled off the factories in Pakistan in the last 10 months. The production of motorcycles jumped 22.34 percent in the first four months of fiscal year 2017-18 (FY18), over the corresponding period of in FY17, according to the latest data from Pakistan Bureau of Statistics (PBS) as reported by the media.

Pakistan automobile market is also expanding along with the motorcycle market. Sales of passenger cars soared 20.4% to 103,432 units in the first half of the current fiscal year of 2017/18, recently released official data shows. Car sales were 85,901 in the same period of last fiscal year, according to Pakistan Au…

Pakistan Economy is the World's Third Fastest Growing Among Top 25 Economies

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Pakistan is now the world's third fastest growing economy among the world's top 25 economies with PPP GDP of over one trillion US dollars, according to  the International Monetary Fund (IMF). IMF has recently raised the country's 2018 growth forecast to 5.6%.

Pakistan 3rd Fastest Among Top 25: 


Spectator Index has ranked India first with 7.3% growth, followed by China (6.5%), Pakistan (5.6%), Indonesia (5.3%) and Turkey (3.7%) among the world's 25 largest economies in terms of PPP GDP.

Earlier in October 2017, the International Monetary Fund (IMF) forecast Pakistan's economy to grow at 6.3% CAGR over 2017-2022.

World Bank: 

The World Bank sees Pakistan's GDP to grow 5.5% in current fiscal year 2017-18 ending in June 2018, a full percentage point faster than the 4.5% average GDP growth for Emerging and Developing Economies (EMDEs) that include Argentina, Brazil, China, India, Nigeria and Russia among others. However, Pakistan economic growth continues to lag growth…

World Bank: Pakistan Outperforming Emerging Economies Average

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The World Bank sees Pakistan's GDP to grow 5.5% in current fiscal year 2017-18 ending in June 2018, a full percentage point faster than the 4.5% average GDP growth for Emerging and Developing Economies (EMDEs) that include Argentina, Brazil, China, India, Nigeria and Russia among others. However, Pakistan economic growth continues to lag growth forecast for regional economies of India and Bangladesh. The report also highlights the issue to growing trade deficit and current account gap that could lead to yet another balance of payments crisis for Pakistan requiring another IMF bailout.

Pakistan GDP Growth: 

Here's an excerpt of the January 2018 World Bank report titled "Global Economic Prospects" as it relates to Pakistan:

"In Pakistan, growth continued to accelerate in FY2016/17 (July-June) to 5.3 percent, somewhat below the government’s target of 5.7 percent as industrial sector growth was slower than expected. Activity was strong in construction and services, a…

CPEC is Transforming The Least Developed Parts of Pakistan

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In a New York Times Op Ed titled "How Not to Engage With Pakistan",  ex US Ambassador to Pakistan Richard G. Olson says "Its (CPEC's) magnitude and its transformation of parts of Pakistan dwarf anything the United States has ever undertaken".  Olson goes on to warn the Trump Administration that "Without Pakistani cooperation, our (US) army in Afghanistan risks becoming a beached whale".

Among the parts of Pakistan being transformed by China Pakistan Economic Corridor (CPEC) are some of the least developed regions in Balochistan and Sindh, specifically Gwadar and Thar Desert. Here is more on these regions:

Gwadar Port City:

Gwadar is booming. It's being called the next Shenzhen by some and the next Hong Kong by others as an emerging new port city in the region to rival Dubai. Land prices in Gwadar are skyrocketing, according to media reports. Gwadar Airport air traffic growth of 73% was the fastest of all airports in Pakistan where overall air traff…