On Friendship and Ego

When a friend talks about how his/her ego is/was hurt, think about it. Not if you have actually hurt it but if that person actually lives up to the definition of a Friend?

Because to Me, the fact of the matter is that when it comes down to Friendship and Ego, one must die. If the Ego has survived.. then.. well..

How Remittances Can Aid Development

$8.9 billion in remittances by 7 million Pakistani’s living abroad is a figure; a figure that has always played a vital role in the development of economy. ‘Hawala’, which is the unaccounted part, is also estimated to be not less than $5 billion while remittances grew at a CAGR of 15.23 during fiscal 1997-2010.Remittance expectations are as high as $10.5 billion this fiscal year but whether this money can be used for more productive purposes or not stays a question.

In the absence of established capital markets and investment incentives almost 90 percent of the money is disappearing into consumption and land property holdings fuelling inflation as a consequence. Depreciation in rupee and high interest rates being offered in the banking coupled with operational problems in KSE explains why people want to hold their money in fixed-income securities as NSS attracted Rs267 billion in fiscal 2009.

Pakistan’s capital markets were able to get FPI but not the expatriate’s investment reason of which could be the trust deficit or the lack of options. UBL is the only local banking company which is floating investment products for expatriates. Same is the case with companies coming to capital market for IPO where share for overseas Pakistani is kept very low. The need of the hour is to grow specialized products for them which was taken up by government. NS bonds for expatriates holding CDC accounts were floated in the market but the response was halfhearted as it managed to raise only Rs3.5 billion against total of Rs224 billion raised that fiscal year. The need of a functioning capital market is imminent for the purpose valuing investments. Government can formalize development schemes and finance them with money from overseas Pakistani’s but for that they have to come clean.

Pakistan can easily raise investment from abroad by keeping the yield on securities a bit higher than LIBOR which through careful planning can both fulfill the capital requirement for growth and investor satisfaction. Government should benefit from the trust people have in NSS and strengthen capital markets to improve banking practices and capital availability situation. That way everybody would be better off.

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How Financial Crises in Donor Countries Affect Aid

Review

Since 2007, after the global financial crisis, developing countries have suffered big time in terms of drying up of aids from donor countries like Japan & America. The reason being a steep decline in incomes of the donor countries have put massive pressure on aid budgets explain their reluctance to free up money.

If we look a little back into history we find out that in 1980s and 1990s, when five major donor countries (Finland, Japan, Norway, Sweden and United States) were hit by the banking crisis, the aid from these donors stagnated while the aid from other donors rose steadily. But these drops in aid due to crisis in countries could reflect other factors besides banking crisis like the fall in per capita income. So, authors tend to explore the relationship between banking crisis and aid econometrically.

The authors of the paper found out that donor-country banking crises can cause steep and sustained drop in aid disbursements which could go up to 17% lower in 5 years compared to the situation had there been no crisis (analysis based on a total of 23 systematic and non-systematic crisis in 17 countries). One percent decline in per capita GDP is associated with a drop of about 3 percent decrease in aid outflows: one of the effects which are in addition to the declining incomes effects on aid.

One likely channel is the fiscal effect of financial crisis. The fiscal channel explains why aid stagnates for so long after crisis; as the public debts increases and bailout plans are in place it is quite plausible that debt pressure lead governments to cut back growth in aid for years afterwards.

The study implies, taking in consideration the historical patterns that the likely bath of aid disbursements is going to go down! The global financial crises does reduce aid significantly over medium term. in the countries like America and united kingdom who have suffered the most severe of banking crises are expected to cut down the aid by fifth to a quarter. This study doesn't take into account any strategic interactions among donors so past is not necessarily a prologue here. So if donors coordinate they may be able to reduce the collateral damage to aid.

(Hai-Anh Dang, Steve Knack, and Halsey Rogers. 2009. "International Aid and Financial Crises in Donor Countries." Policy Research Working Paper 5162. World Bank, Washington, DC)

Average is Over!

The article ‘Average is over’, written by Thomas L. Friedman, gives us a preview of the American economy’s deteriorating situation, blaming in on the administration for being non-serious and not asking the right questions.

The writer starts off, with an amusing rather sarcastic manner, pointing out the questionable spending of &787 billion by the state when it could have been diverted towards generating jobs and infrastructure. Besides the taxes, which have to be imposed to generate revenue and to get the multinationals to inject money is domestic ventures, attention has to be paid to the root causes of this problem too. The writer blames it on the stagnant middle-class wage subsidy, which kept the economy running fairly artificially, and says that to fix the problem more jobs have to be created for which more products have to be produced which are competitive both domestically and internationally.

The writer points out the technological advancements that are floating jobs in the market which can prove to be a perfect playground for competitive American labor. Lawrence Katz, the Harvard University labor economist, says that everybody has to bring something ‘extra’ to the table to excel. That way there work will be more meaningful and satisfactory compared to average labor.

The time of ‘average’ is over! People demand ‘extra’. The need of the hour is an inspired, skilled more competitive labor force and the job of the government being making this happen and providing them protection.

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On Etiquette

A couple of weeks back while surfing the internet trying to find something to read (that’s what I do most of the time when I surf). I came across a very interesting article talking about “Skype Etiquette” and it made me wonder how would our people react to it? “Excusez Moi?? Etiquette?? Naam Suna Suna Sa Lagta Hai, Do I Know Him??” Sadly, in our part of the world people know Skype more than the Etiquette.

It is not just the matter of electronic communication—not even communication itself for that matter which involves at least two people and some feedback to complete the loop of communication (I hope y’all familiar with the Communication Model). We are short of Etiquette on individual level. I believe that we all lack Etiquette in one way or the other (you can keep telling yourself that this article is not about you :P) and, sadly so, we take pride in lacking them (not to forget that not having them and not practicing them, that too for some legit reason, are two very different things, and debatable too). Don’t believe me? Look around! Where are we doing something according to the ways? Traffic?? Civic Sense?? Politics?? As A Nation?? Sports?? We don’t even prepare for exams the way we must, damn it! Do you have a queue culture anywhere? Do you even know what queue culture is? Negative!

Let’s talk about this queue culture and bear me while I relate it to the etiquette. To me, queue culture is about being organized, abiding the laws, following the ways, the norms, the rules, or in other words, the etiquette. On the other hand etiquette means the code of polite behavior in a society which makes me assert that the queue culture is the foundation stone of etiquette. It teaches us to be respectful towards the intangible queue of rules and to make it, not to break it. Only if we be a little patient and don’t put Me in front of We then we would surely be called a civilized society... Some Day!

Let's see.. Have you ever questioned why we eat from the mouth and not the ears? Why the mother gives birth to the baby and not the father? Why do we shake the right hand not the left? Why are we taught to be respectful to elders and loving towards the younger? Have you ever thought to change that? Have you ever tried changing it? (Not the giving birth phenomenon of course :P) It would look odd spooning your ear wouldn’t it? or too rude to be rude to your elders (however it is in and cool now a days). It is about the same intangible queue, the code, the polite (or in my opinion, the reasonable slash acceptable) way to do things.

For instance, what do you do bypassing the people in a queue? Save Time? How Much? 5mins? 10? 30? An hour? Ok! Big Deal! What do you actually do with that time you saved? Reach home a bit early? Listen to another song? Send 5 more forwarded texts to people just to show that you’re there?? How Mature!

How about using the indicators while driving?? Haven’t it ever occurred to you that your car has them for some reason?? Have you not been told that using them is free?? Don’t you like to be alive and not been run-over by a truck while taking a turn using your suicidal tendency?

Do you deliver what is expected of you being a student? Hell, you don’t even know what is expected of you being a student. When was the last time you called your teachers with good names?? When was the last time you actually gave a damn to what they were saying in the class?? When was the last time you submitted your work in time?? BLEEP It, when was the last time you actually did your work on your own?? It was like… NEVER! Wasn’t it? You have always been looking for a way to bypass the ways and have struggled more to break the queue than to make it, haven’t you??

Have you ever thought about the people you bypassed? The people you freaked out by your heroic moves?? People you robbed of their intellectual property and never acknowledged?? How does their day go?? How many times during the day they curse the BLEEP who bypassed them? Who they said BLEEP BLEEP, BLEEP BLEEP to at the top of their lungs?? How many other people they are going to tell about that BLEEP?? How many times in their lifetime they are going to wish you bad luck for being a user?? A friendship abuser?? How would they take out their frustration by bypassing others the next time they would be in a queue (just to avenge the long gone you) and making a total BLEEP of themselves?? How would they stay occupied by the thought of saying all the swear words to whosoever gets heroic? How would they tend to be not a helping hand that they used to be just because you took them for granted??

Don’t you ever realize that you just add to the negativity and misery by messing around like that? That you spread this plague in the society? Don’t you feel ashamed of moving around photocopying your BLEEPaholic self like that? Don’t you have any moral values?? Had your parents been busy while you were to learn values?? Did I step over something?? Oh, did it hurt?? I’m glad it did for that is exactly what was intended and that is the way I am! The list would go on and I would keep on hurting you till you’d just roll over and die. But that is not what I want. I want you to live. To turn. To argue. I want you to defend yourself on this till your last breath, but believe you me, I never back down.

Ten Economic Solutions

Ten economic solutions, written by Dr. Ashfaque H Khan (director general and dean at NUST business school), highlights the ten economic blunders and provides a thorough solution for them, a brief of which is produced as under:

First, and the foremost, economy has to be given the top priority. State has to take strong steps to reform economic policies and to re-establish investor confidence while strengthening ties with the private sector. Second, improvement in the financial position is vital via fiscal adjustments and mobilization of resources for sustained economic growth and poverty reduction. As far as the revenues are concerned, implementation of reformed GST at its earliest will be the key to success of IMF program whereas discrepancies in the tax collection system also need attention. On the revenue side, we must cut down any unnecessary government expenditure. Third, the budget deficit needs to be reduced to 3 percent in the next 3 years. Fourth, as the new NFC awards is termed as a cause of continuous macroeconomic instability, as the government has overlooked its growing financial need in the wake of war on terror, its implementation should be postponed for the next 3 years till we achieve fiscal consolidation. Fifth, public sector enterprises which are draining the national resources for no good should be privatized at once. Sixth, the problem of circular debt cannot be resolved by increasing the power tariff. Corrective steps have to be taken to curb evasion of bills and free provision of electricity to WAPDA employees. Moreover restructuring of certain departments and induction of professionals in WAPDA is necessary. Seventh, besides the wheat lobby efforts, government should fix the support-wheat price at the current level for two years so as to save the poor and the fixed income group. Eight, learning from the past blunders, government should not incur heavy debts from IMF over and above 100 of the quota. Ninth, finance minister should stand in face of the problems and lead from the front taking along the private sector. Tenth, economic governance must not fall victim to political somersaults as it will only result in deterioration of the economic situation.

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Rising inflation: Floods not the sole reason

With the state reeling from the perils of recent devastating floods and the continued disability of the authorities to curb hoarding, smuggling and fiscal imbalances has given the common man yet another blow – food inflation! Not being able to tax the elite and questionable appropriations by the authorities have done nothing but to aggravate the situation while CPI rose to 15.71 percent this September.

Writer of the article asserts that the causes of food inflation, which rose from 21 to 24 percent this September, are not just floods, hoarding and smuggling but there are number of other reasons like mismanagement, misappropriations and carelessness. The first and the foremost cause is the continuing fiscal imbalance because of poor tax collection and misappropriations of funds example of which is the recent expenditure of Rs30 billion on reinstatements of 9, 000 PPP supporters in SOEs all over the country, cooperative societies and bullet proof vehicles for NA employees. Monetary policy, being another reason for this high inflation, continues to take inconsistent steps resulting in unwanted outcomes. While the whole world is recovering from recession, states are slashing down the interest rates to encourage investment. On the contrary our state caused an upsurge in the interest rate thence the negative fallout on productivity. Rise in electricity tariff has also not done anything fancy as there are no improvements in the load shedding situation for two and a half years.

The right thing to do at this time is to focus on management issues rather than looking outwards for aids and grants. The state authorities need to take effective remedial measures to rectify the shortcomings in fiscal and monetary department as well as the private sector.

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Who will be the main global IT services hub: India or China?

Review

Over the past few decades India and China have made huge development in major sectors of their respective economies. Of these sectors the development in the services sector holds special importance. With over $60 billion of business in IT sector, India has emerged as a one of the big players in computer related services in Asia and perhaps in the world with China having matching figures as a competitor. As the experts see it India has the fastest growing IT business in the whole world but a bit weak infrastructure to handle such fast growth whereas china is lagging a little behind with strong infrastructure. Now the battle is that in the coming decade who is going to capture the world’s IT market, India or China? And on the basis of what?

This paper “who will be the main global IT services hub: India or China” by Seema Joshi holds a study on the basis of several key indicators that tells us what are the prospects of both the countries as to growth in IT sector in the coming decade. In this article writer makes a comparison between the growth facts of India and China showing that China is growing at a faster rate than India with former growing at 10 percent and the latter at 6 percent.

From GDP statistics, the writer showed that in 2006/07 the miscellaneous portion of the exports of India was around 77 percent of which 38 percent was related to software exports bringing in around $30 billion in revenue. That revenue was expected to rise at $60 billion in 2008/09 which was successfully achieved. The writer also provided stats in the form of a breakdown of IT industry earning by sector with software exports as the major component standing at $39.7 billion in 2007.  A comparative analysis of services sector performance in China and India was also provided showing the respective A-I-S output and their respective growth rates with China taking a lead in all sectors. The writer also included the comparison of the sources of strength of the services sectors in China and India with poor infrastructure in India holding back its growth. Lagging behind in transport infrastructure, social infrastructure, ICT diffusion infrastructure and business environment; the prospects for India doesn’t look so good as to growth in IT sector.

From all the statistics and data analysis provided in the paper, it is fair of the writer to say that, India right now has an advantage over China in export of software service but in long term China hold the advantage in growth of both software exports and services sector as a whole as China has all the better infrastructure to support the higher growth rate and business environment whereas India don’t! Unless and until there are drastic measure to improve infrastructure in all above mentioned areas calling India an IT powerhouse may be too soon but still Indian IT market has a long way to go.

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