South Asia Investor Review

Indian economy shrank 7.3% in fiscal year 1920-21, its worst performance since independence in 1947. Nearly 230 million middle class Indians have slipped below the poverty line, constituting a 15 to 20% increase in poverty since Covid-19 struck last year, according to  Pew Research . Middle class consumption has been a key driver of economic growth in India. Erosion of the middle class will likely have a significant long-term impact on the country's economy. “India, at the end of the day, is a consumption story,” says Tanvee Gupta Jain, UBS chief India economist, according to Financial Times. “If you never recovered from the 2020 wave and then you go into the 2021 wave, then it’s a concern.”   India's Economic Performance Since Independence. Source: Bloomberg Mainstream Indian media have long been afraid to cover the incompetence and failures of Prime Minister  Modi's government . But this is finally changing with the COVID pandemic hitting India's newsrooms. Dozens ...

Although the rate of growth has slowed since 2018, Pakistan's middle class consumer population still remains among the fastest growing in the world. In a report titled " Emerging Markets Transforming As Velocity Markets ", Ogilvy and Mather, a global market communications firm, has put Pakistan among what it calls "Velocity 12" group of economies that include Bangladesh, Brazil, China, Egypt, India, Indonesia, Mexico, Myanmar, Nigeria, Pakistan, Philippines and Vietnam.  The term velocity describes both the rate of real change in the size of the middle class as well as a priority for companies as they consider business investment and marketing in V12 countries. These 12 countries will be the biggest contributors to the next billion middle class consumers, according to the report. The Velocity 12 report says that this next billion middle-class group will: 1. Be increasingly defined by women and youth as the change agents, with purchasing power crossing cultur...

I had a chance to meet well-known Pakistani journalist Sohail Warraich recently during his visit to  Silicon Valley . He was here to record an interview with successful Pakistani-American entrepreneur  Osman Rashid , founder of Chegg and Kno. Sohail Warraich is a senior journalist and political analyst as well as a popular host of "Ek Din Geo K Sath" aired on Geo TV. Warraich's show features interviews with top politicians, businessmen, entrepreneurs, entertainers, sportsmen and other personalities and celebrities. He often points out contradictions and hypocrisies in the lives of his guests on his show by asking them: "Kia yeh khula tazad naheen" (Is it not an obvious contradiction)?  Warraich is known to be close to former Prime Minister Nawaz Sharif who is currently in jail for owning overseas assets beyond means. He wrote Nawaz Sharif's hagiography  "Ghaddar Kaun". Warraich believes the rise of Imran Khan and his Pakistan Tehreek e Insaf (PTI...

Private vehicle ownership in Pakistan has risen sharply over the last 4 years. More than 9% of households now own cars, up from 6% in 2015. Motorcycle ownership has jumped from 41% of households in 2015 to 53% now, according to data released by Federal Bureau of Statistics (FBS) recently. There are 32.2 million households in Pakistan, according to 2017 Census. Vehicle Ownership in Pakistan. Source: PBS Total number of vehicles registered in Pakistan increased 9.6% to 23,588,268 in 2018, up from 21,506,641 vehicles in 2017. Of all the vehicle categories, motorcycles saw the biggest increase of 11.5% reaching 17,465,880. Cars, jeeps and station wagons rose 5.3% reaching 3,043,593. Trucks surged to 277,416 and buses to 236,461, according to Pakistan Today . Pakistan is now 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-wheele...

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, ...

Ownership of consumer durables like computers, home appliances and vehicles is often seen as an important indicator of the size and health of the middle classes in emerging economies. Examples of periodic household surveys used by researchers to measure such data include NSS (National Sampling Survey) in India and PSLM (Pakistan Social and Living Standards Measurement) in Pakistan. Durables Ownership in India and Pakistan. Source: KSBL India-Pakistan Comparison: Dr. Jawaid Abdul Ghani, a professor at Karachi School of Business Leadership, has recently analyzed household surveys in India and Pakistan to  discover the following : 1.  As of 2015, car ownership in both India and Pakistan is about the same at 6% of households owning a car. However, 41% of Pakistani household own motorcycles, several points higher than India's 32%. Appliance Ownership in South Asia. Source: Seeking Alpha 2. 12% of Pakistani households own a computer, slightly higher than 11% in In...

Real estate developers have so far built over 250 gated communities across Pakistan in response to rising demand from upwardly mobile Pakistanis . Eden Housing Gated Community in Lahore, Pakistan These communities cater to insatiable demand for world-class and well-appointed housing with modern infrastructure including well-built wide roads and reliable supply of water and electricity. Additionally, they offer various state-of-the-art amenities such as schools, hospitals, mosques, restaurants, theaters, shopping malls and parks located within secure communities, according to a report by Adrian Bishop, editor of Opp.Today . Gated communities are being offered at multiple price points and payment plans that suit not just the rich but the middle class buyers as well. They offer condos (flats), townhouses and single-family homes on lot sizes ranging from 125 square yards to  2000 square yards. These communities are fueling a construction boom in Pakistan . Defense Housing ...

Pakistan's fiscal year 2015-16 saw production of motorcycles soar to a new high of over 2 million units. This represents a 16.5% surge from last year.  At the same time, passenger cars and light trucks sales rose to over 200,000 in fiscal 2016, a 20% jump over the same period last year. Motorcycle Sales: Rising motorcycle sales in Asia's developing nations like Pakistan are seen as a barometer of  expanding middle class . It is, in part, attributed to rising incomes and availability of  bank financing  at historic low interest rates in the country. As many as 2,071,123 motorcycles were manufactured during July-June (2015-16) compared to 1,777,251 units during July-June (2014-15), according to the latest data released by Pakistan Bureau of Statistics (PBS) and reported by  Pakistani media . Pakistan is the World's Sixth Largest Motorcycle Market Car Sales: In addition to the double digit increase in motorcycle sales, Pakistan also ex...

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 Marketin...

Over the last two decades, Pakistan has continued to offer much greater upward economic and social mobility to its citizens than neighboring India. Since 1990, Pakistan's middle class had expanded by 36.5% and India's by only 12.8%, according to an ADB report on Asia's rising middle class released recently. The simplest definition of the middle class is a group of people in a society who are neither rich nor poor. The middle class has always been considered vital to a country's political stability and economic growth. The rich and the poor simply distrust each other too much to let the other govern. Nations with large middle class populations find it easier to reach consensus on sustaining good, democratic governance. Unfortunately for Pakistan, the size of the middle class was very small when it came into existence, and the country was dominated by a small powerful feudal elite created by the British rulers to sustain their colonial rule. And the urban middle class r...