Never have I been so emotional while writing a post as I am today because I have witnessed something today which could melt any stone heart. Today, as I rushed to get ready for the Friday prayers, my younger brother raced across the house carrying a weird looking gadget. I would not have given it a second thought-or look for that matter (I have grown up with my brother's idiosyncrasies) but when my brother screamed at the top of his voice that it was a miniature motor boat that his newly made friend had made. Expecting the typical childish hodgepodge, I asked him to show me the boat. When I saw the boat, to say that I was amazed would be an understatement. I was stunned. The boat was a perfect miniaturization of its normal counterpart-everything from the realistic wood-like paint-job to the intricately designed mast, was immaculately done. However, my amazement on seeing the boat was not solely due to its aesthetics. The simple yet elegant engineering involved was even more brilliant-from aerodynamically cut propeller to carefully hoisted battery,everything looked perfect.
And the surprises did not stop here. I asked my brother to introduce me to such a genius friend of his (I has yet to meet this new friend of his), he told me the most amazing thing of all. His friend was only five years ols and was studying in 1st grade. His family is extremely poor-so much that his family has to skip lunch because they simply can not afford it. He reminded me that once my mother made lunch for both of them and his friend was overjoyed because he got to ate three meals in a day after such a long time. His friend had actually sold that boat to me so
What I felt after that can hardly ever be described in words. The magnitude of the grief that I felt for the abject conditions of this wunderkid is just beyond words. Tears actually welled up in my eyes when I thought about how this genius might be wasted because of poverty. I always thought that I was considerably disadvantaged (I can not say that I had to skip lunches but yes, I can talk about many other things which would definitely be classified as financial hardship) but my problems seem trivial when compared to this kid. I have been thinking about this kid thw whole day.
This event is not something strange. Our country is brimming with talent but the many problems we face have hindered our intellectual and personal growth. It is high time for us to realize that we have to solve our problems not only for our own sake but more importantly, for gems like my brother's friend who, if nurtured and mentored, could be a valuable asset for Pakistan.

India announces its budget

Amidst dying hopes of tensions curbing through the talks between her and Pakistan, India has decided to announce her proposed budget for the next fiscal year and I could not resist myself from posting about it.Here, I would like to remind the readers of the prevalent poverty in India even though it is said to be the emerging economic superpower in the world (India has the 4th biggest GDP in the world but ranks a meager 128 in GDP per capita- a mere 4 positions higher than Pakistan). The point here is that due to it being the second most populous country in the world, it faces major poverty problems. Now, the government of India is extremely aware of the perennial thorn in the flesh and thus, this budget seems to be dedicated to curb the problems of the poor majority of the populace of India. The government has made it their first priority to combat the spiraling food prices and a tight monetary policy is what seems imminent in the review in April. However in the budget itself, the government seems pretty lax. a major boost to disposable income of the middle class has been given by decreasing the income tax rate of the taxable income between 300,000 and 500,000 from 20% to 10%. This reform, apart from strengthening the voter base for Mr. Purnab Mukerji, will also stimulate growth in the economy. However, it may also have the effect of causing demand pull inflation. Corporate tax has also been reduced serving further to stimulate growth. Speaking of corporate, the IT industry seems all too happy with the budget because it is so supportive of SEZs. Even though, they are not too happy with the extension of tax breaks under the Software Technology Parks of India (STPI) scheme, the big of the IT industry feel that they are not being made to compromise much.
As if giving a thumbs up to the Mr. Mukerji, the stock market jumped 391 points and it seems that the market will certainly continue its roll on the budget. Pakistan is going to be majorly affected by the decision to increase the money spent on defen. The Indian government increased its defence budget to 1.47 lac crores. Hardly a thing for Pakistanis to laugh at. Rs.24000 crores has been allotted to micro, small and medium industries (something Pakistan needs to desperately learn from).
Now, here comes the views on the budget part. Manmohan Singh has remarked on a budget that it would increase growth and it is an exceedingly well done. Mr. Bajaj of Bajaj industries said on a BBC interview that some have said that it could have been done a little better but he would like to see anybody do it in a better way than present. So, overall, it seems that people are pretty happy about the budget. Even though, relations between India and Pakistan remain constricted. I pray that this budget does manage the difficult balance allowing growth while controlling price level gracefully.
(Image from Panasianbiz.com)

Micro or Macro?

Micro or Macro? It is not as if I am given a choice to chose between the two but my mind has been arguing over which of these super-general classification of economics I like better. Although, I hardly do think that this needs to be written but Microecon deals with individuals while macroecon, as the name suggests, deals with bigger agents such as the governments banks etc. I think that my mind has made a pretty tentative decision that I like micro better. Now why is that the case? Well, even I dont believe that the answer is much discernible but I do feel that it is much easier for me to analyze and predict situations in micro. This is definitely due to the reason that I can put myself in different scenarios and decide what I would do (and hope that I am as sane as the ubiquitous 'rational consumer'). It is easier to think of indifference curve in terms of my indifference to either Coke or Pepsi than it is to think about loanable funds and interest rates. However, it is not that I hate macro. It is just that I like micro more. But this is very tentative and I know that tomorrow, I may change my choice.

US governors assert that worst is yet to come in recession

Even though Washington and other private surveys report some growth in these past months, Governors of the different states of the US said at the National Governors Associations meeting this Saturday that the worst has still not come and they had to brace themselves for it. The representative stated that there is rowing unemployment and price level is rising. The governors also said that states face a budget deficit totaling $134 billion.
The governors agreed that the solution to this problem is only job creation. They said that Obama had helped them out at the edge of a major economic abyss but much more needs to be done to help bring things back to normal. The governors agreed that that'much more' means creating more jobs to counter the growing rate of unemployment. They looked forward to the still-being-debated $25 billion infusion of cash that the Congress is considering to give to states. Even though January has marked a slight fall in the unemployment rate, states are still facing double-digits unempolyment rates ans the governors seemed pretty anxious to do something about it. With President Obama busy in convincing the senate about the benefits of his health care program, it would be interesting to see what exactly states do to help that growing unemployment.
Attached is a graph of unemployment rates and FedFunds Rate by MarketOracle.co.uk

Pirated or special price books?

Even taking into account the fact that I am a student, I am proud of the fact that I buy more books than what is usually expected from a teenage boy like me in Pakistan. Therefore, I have become accustomed to facing the perennial problem of developing countries like ours face:rampant piracy. I thoroughly detest piracy for the obvious fact that it is extremely unfair for the actual author of the book (which is the same line of reasoning for plagiarism which I also thoroughly detest; I am very careful to cite the sources in my blog but you people are more than welcome to point out any place where I might not have cited the source due to my negligence). Ok, so we were on piracy of books. Well, it is pretty rampant in Pakistan to be honest and the worst part is almost everyone is ignorant about it. Almost everyone thinks that it is just as legitimate to buy the five hundred percent reduced-price books but hardly anybody realizes that it is not because that is piracy. The money does not go to the author. This is a disincentive for authors and we might end up with no books at all.
However, the other side is just as convincing. I know that I talk more about the importance of education in my life than I talk about myself but in Pakistan, where the median wage per day falls far below the price of the original books, things are not that simple. People in Pakistan are almost justified to say that pirated books provide them with reading at an affordable price.
However, I feel that there is only one solution to this dilemma. Many publishers now also have special low-price editions specifically aimed at people of developing countries. These editions not only provide the books at an affordable price but also help fight the problem of piracy. I feel that our only way forward is that more of these books are published. I believe that the publishing of these books will help both authors and the readers because authors would be able to gain from reaching out to the untapped markets of developing countries.

President's education

I have been thinking for some time that its been long since I have not written anything related with education. And Whoala! I just read an article today that I knew I had to write about. The article was about the education of US Presidents. This article here describes the various degrees that the US presidents up til now have achieved. Almost everyone know that Obama has achieved a JD from Harvard but so have other 44 presidents also. In fact, 2 of the US presidents have been engineers and basically you can go ahead and read the rest of the article. What instantly hit me was the relative education of our own presidents. The education of our presidents pales in comparison with that of the US presidents. The Wikipedia page of our incumbent president says that he 'claims' to have a degree from London, nut this degree has not been proven. I guess few of us have forgotten the attempt the of an MNA who was a "Haji" making his nephew give his bachelor exam but getting caught in the act. I realize that I am not here to enumerate the wrong things that people who run our country have done but this can give us a clue as to why our educational system lags far behind that of other comparable nations. If faking degrees and illegally trying to pass bachelors examination (which incidentally was the minimum eligibility criteria for an MNA not long ago) seems to be the favorite pastime of those in charge, we can hardly expect to see major strides in our educational system. We should take a page out of Bangladesh's book where the British A level system was the option for the elite while the rest mere mortals were forced to study under the outdated local system. However, they brought major reforms in their own system, bringing it at par with the British system. The result is that much of the students returned back to their local system and the relatively stronger economic progress could be attributed to partially to this sudden change.
Another problem that this revolution brought was that it made the Balance of Payments better off for Bangladesh. Britain earns huge amounts for itself by selling its top notch services but since Bangladesh has steered away from the need to import the pricey British education, it has also helped its B.O.P.
I look forward to the impending changes that our educational system has been crying out for so long. It is only with these changes that we can truly make ourselves better off.

Tarain says his has not thought of his resignation

Today after such a long time (nine days can never seem any longer), I actually went through the newspaper to catch up on what is happening in the world. The news item that caught my eye was Tarain's vehement denial that he had any plans to resign. Sensing that I am reading the middle of the story, I started looking for more information on why he was to resign. The story was this: Tarain was not very happy with the government's "reckless" spending on rental power plants and therefore, did not feel that he was really a part of he government. Rumor has it that even went ahead with handing in his resignation to Mr. Zardari which Mr. Zardari allegedly refused to accept. However, Mr. Tarain has come up with a statement vehemently denying any plans to resign and has been reported to have said that he wonders where do these rumors originate from and that he has not hitherto thought of leaving the ministry but he can not predict the future. This statement of his could be interpretted by political analysts as a confirmation of an imminent resignation but what is interesting is the supposed point of argument between Tarain and the rest of the goverment- rental power plants. I strongly feel that I should side with Mr. Tarain on this issue as I feel that he is right in his stance against the power plants because their incredulously hefty price tags DO impose a burden on our trade balance. With our economyu on ventilator support, I believe that these resources would be much better spent on finding other sustainable sources of electricity instead of spending these on earning short-lived political motives. We could do without electricity with another day or two but we could scarcely make it with a filing economy.