Tuesday 31 March 2020

PAK-USA Partnership


Joint Statement by President Obama and Prime Minister Nawaz Sharif ...Pakistan got independence from colonial rule of British in 1947. Although, Pakistan is a south Asian society, however, it kept and maintained Islamic civilization, hence, Pakistanis society is blend of South Asian and Middle Eastern civilizations. Pakistan preferred friendship of western capitalism over Soviet Socialism in earlier stages of its life. Pakistan remained a reliable friend of western democracies and such a friendship reached to peak in 1980s—resulting in fall of USSR after defeat of Russians in Afghanistan. After fall of USSR, west left Pakistan and Afghanistan alone to handle the post war issues, including governance and infrastructure of a war-ridden country, as well as, millions of Afghan refugees, displaced in Pakistan and Iran. However, Afghanistan could never get stability and dream of rebuilding could not be materialized. Middle Eastern crisis—invasion of Iraq in Kuwait and liberation of Kuwait by western powers—posed new challenges for Muslim-western relations. Yesterday’s friend of west—Mujahedeen (militants), fought against Russia in Afghanistan—became hostile to western establishment. News of terrorism activities emerged, with the name of Al-Qaida (AQ)—under the leadership of Osama Bin Laden (OBL). And attack of 9/11 changed the relationship of west with Mujahedeen, from friendship to hostility.
USA fixed the responsibility of attack on OBL—although various alternate theories do exist—however, this is the official position of USA. In retaliation, USA decided to capture and kill the leaders of AQ including OBL. At that time OBL was living in Afghanistan and prevailing government of Afghanistan (Taliban)—supported and friendly to Pakistan and Saudi Arabia—shown reluctance in handing over OBL to USA, in spite of deliberate efforts by Pakistan and Saudi Arabia.
To attack Afghanistan, USA needed support from neighboring countries, including Iran and Pakistan. As against to Pakistan, USA and Iran has an history of hostility, hence, USA focused on Pakistan for provision of all logistics, as well as, information support. Pakistan agreed to demands of USA, reluctantly, because Pakistan knew the consequences; however, USA twisted Pakistani arms to get desired support. Taliban had support across the Durand-line and Pakistan had to face the consequences of supporting America—although Pakistan never send troops to coalition forces, fighting inside Afghanistan. Consequences for Pakistan to support America in Afghanistan proved deadly and manifold in the area of security, as well as, economics.
As a war strategy, USA decided to attack some areas inside Pakistani territories—primarily tribal areas adjacent to Afghan border—resulting in more anger (among Taliban) for Pakistan and USA. Due to ease of distance and reach, Pakistan faced wrath of Taliban, in the form of suicidal attacks across the country, however, USA remained safe at home, primarily, due to lack of access (by Taliban).
Assessing the easy target—whole country of Pakistan—Taliban attacked Pakistan hundreds of times from 2007-onward. These Attacks include Masjids, markets, courts, schools, military camps and police force. Above 70,000 Pakistanis are killed and hundreds of thousands are injured. People lost confidence in their society and capital flown out of country, resulted into unemployment and economic losses. A conservative estimate of economic losses is more than US$118 billion. This all happened during a period when neighbors of Pakistan—India and China—were depicting phenomenal economic growth, and whole South Asia was growing, economically. Fact is USA had paid multi-billion US dollars to Pakistan, out of coalition support funds, however, such an amount is primarily used for military operations.  
Pakistan was a partner of America in defeating USSR in Afghanistan, but in the post-war era, America, and Pakistan could not agree on the choice of rulers in Kabul. Pakistan succeeded in finding a friendly government of Taliban in Afghanistan, but later on, America attacked Taliban and got Pakistani support through arms twisting. America could not succeed, [like earlier wars in Afghanistan] and promoted the role of anti-Pakistan elements in Afghanistan—including Northern Alliance and Indian influence. The increased role of these anti-Pakistan parties is certainly against the interests of Pakistan; hence, Pakistan could not support America, wholeheartedly. With every passing day, relations of America and Pakistan are moving towards less-friendly. Definitely, in this age of information, Pakistani youth are looking at all these developments. They question American actions because they knew their nation has sacrificed above seventy thousand lives and billions of US dollars in economic losses. They knew their streets and schools became red by the blood of their countrymen in a war, which was not their war—in fact, it was a western war but brought suffering for their community, more than anyone else in the world.
In Pakistan, western establishment, all the times supported military dictators and poured in billions of US dollars during those regimes—including Ayub, Zia, and Musharraf. While during civilian regimes—including Bhutto and Sharif—western establishments ignored Pakistan or at least reduced support including economic and political. Fact is Bhutto and Sharif had ground-level support, among the masses, and supporting them would have created a soft image of the west in the hearts of Pakistanis. America has helped Pakistan in many areas, including defense and education, but American image is more of an enemy than a friend in the eyes of masses. Clearly, American missed the opportunity, even after pouring billions of US dollars in cash, as well as, in kinds.
Kashmir is a disputed area between Pakistan and India. Globally, Muslims and others, alike, are unanimous on the resolution of this issue under the resolutions of United Nations. Clearly, United Nation resolutions guarantee the right of self-determination to Kashmiris. However, western establishment never acts overwhelmingly for implementation of such resolutions by pressing India. In fact, occasionally in case of Kashmir, western establishment put its weight against the oppressed Muslim community. In addition, there were two issues of persecution of Non-Muslims—in Indonesia and Sudan—and got quick resolution by dividing the countries and ensuring independence in South Sudan and East Timor.
At present [2016], Pakistan-USA relations are not friendly, and USA wants an increasing role for India in Afghanistan—clearly against the interest of Pakistan. This act has obliged Pakistan to shift focus towards Russia and China. China has already announced China Pakistan Economic Corridor (CPEC) with an investment reaching to US$ 60 billion. In international relations, countries follow their national interests, however, to succeed in global arena, internal strength and increased number of friendly countries is required. Pakistan has succeeded in developing some reliable and time-tested friends—including Saudi Arabia, Turkey and China. Although, Pakistan has no direct conflict with any country—except India—yet Pakistan needs to increase number of friends.
Pakistan is facing multiple challenges at internal as well as external fronts. Internal challenges include establishing a just society—with economic opportunities, speedy justice, infrastructure, sufficient supply of power and energy, education, healthcare and employment for increasing population. Persistent current account deficit is a big problem for Pakistan. Recent figure (US$ 12 billion) is highest in recent history of Pakistan. Pakistan economy has started showing positive signals—after significant reduction in terrorism and power breakdowns—but still a long way to reach the destiny of self-sufficiency.
Written in 2016

An Analysis of International Trade of Pakistan

Abstract
Pakistan is facing a persistent trade deficit, resulting in foreign debts—leading to compromise on national policies and sovereignty. This study analyzes international trade of Pakistan with a special focus on exports. The analysis is conducted by various lenses including goods traded, trading partners (in exports as well as imports), trading regions (including Australian, Asian, African, European and American regions) and economic cooperation organizations including Organization of Islamic Cooperation-OIC, Economic Cooperation Organization-ECO, and Association of Islamic Developing countries (D-8). International trade Data is extracted from State bank of Pakistan for 12 years (Jul-03 to Jun-15). Findings suggest Pakistan has trade linkages with multiple countries, across various regions, however, the volume of exports is significantly low than potential, as well as, than the volume of imports—resulting in trade deficit. The major import partners are China, UAE, Singapore, Saudi Arabia and Kuwait, while major export-partners of Pakistan are United States of America, China, Afghanistan, United Kingdom, United Arab Emirates and Germany. Pakistan needs to capitalize on less-expensive young population (rising in skills), low cost (indigenous) raw material, basic industrial infrastructure and agricultural and natural resources, etc. to achieve higher economic growth and exports. Policy makers need to encourage exports in less focused regions including Centrel Asia, Middle East, Africa, Australia and South America. To the best of author’s knowledge, this is first ever effort to present a comprehensive analysis of international trade of Pakistan and suggest measures to improve the state of affairs, in recent years. 
Key Words: International trade, Exports, Imports, Pakistan 
JEL Classification: F10, F14 
Hanif, M (2018) An Analysis of International Trade of Pakistan with Focus on Exports. Paradigms: A Research Journal of Commerce, Economics, and Social Sciences, Vol. 12, No. 1 Page 22-30 DOI: 10.24312/paradigms120104

Portfolio selection in Asia/Pacific region-Islamic markets


Islamic capital markets, i.e. ICMs, featured as socially responsible investments, less levered and more reflective of the real sector, are a recent development in financial markets showing an impressive growth and offering the potential for portfolio diversification benefits. The purpose of this study is to understand the long-run integration of ICMs in the Asia/Pacific region. 

This sample includes ICMs of Asia/Pacific region (such as Pakistan, India, China, Japan, Thailand, Malaysia and Indonesia) for 280 weeks between 2011 and 2016. Selected indexes are FTSE Islamic except for Pakistan and Indonesia. Evidence was obtained through the application of correlation, unit root, Johansen cointegration and Granger causality tests. 

This study documents the results of the integration of ICMs based on developmental stage, geographic location, economic cooperation and shared religious beliefs/civilization. Partial support was observed for all hypotheses: integration of markets based on economic grouping, location, economic treaties and shared civilization. The Japanese market was the most integrated, while the Indian and Malaysian markets are the least. Evidence supports the shift of leadership role from advanced markets to emerging markets. 
Selected diversification opportunities are available for global Islamic as well as conventional investors. This study recommends closer cooperation among Muslim majority countries of the region, as well as the effective use of economic cooperation treaties for joint economic growth and prosperity. 
This study contributes to the literature by providing evidence on the integration of ICMs in an economically important region (Asia/Pacific) that is witnessing an increasing role in the global gross domestic product and international trade. 
Full-Text Access [Non-Commercial]:
Portfolio Selection

Hanif, M. (2020), "Portfolio selection in Asia/Pacific region-Islamic markets", Journal of Islamic Accounting and Business Research, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JIABR-02-2018-0022

Monday 30 March 2020

COVID-19 Pandemic Crushes Economies

Novel coronavirus not only damaging health but also crushing economy too. Stock markets are under significant pressure. In March 2020 alone, some stocks lost 25% in value. furthermore, lockdowns and self-isolation contributes to low productivity. Schools and learning centres are closed and switched to online teaching and learning to reduce the damage in this sector to an extent. The pandemic has trembled the world and complete damage is yet to be assessed.