Trump's Policies Ringing Alarm Bells in Delhi

"We are in Zelenskyy’s shoes now", read a recent headline in a major Indian newspaper. There are similar concerns being raised in other world capitals in Asia and Europe after President Donald Trump's decisions to cut military supplies and stop sharing intelligence with Ukraine following a White House summit with President Volodymyr Zelenskyy of Ukraine who is facing the military might of Russia on the battlefield in Europe.    

From L to R: Putin, Trump, Xi and Modi

“My absolute priority will be to strengthen Europe as quickly as possible so that, step by step, we can really achieve independence from the USA,” said Friedrich Merz, Germany's chancellor-elect. Singapore Defence Minister Ng Eng Hen said the  US has “changed from liberator to great disruptor to a landlord seeking rent”.

The events of last week have revived the memory of a quote attributed to former US Secretary of State Dr. Henry Kissinger who is reported to have said: "The word will go out to the nations of the world that it may be dangerous to be America's enemy, but to be America's friend is fatal."

New Delhi has been counting on Washington's help to fend off hostile China which sits on its doorsteps. There are some Indians who believe Russia would come to India's help in the event of war with China.  But former US National Security Advisor Jake Sullivan threw cold water on this idea when he said: "In fact, it (Russia) is becoming the junior partner to China.  And in that way, they would side with China over India any day of the week". 

Trump has fundamentally changed the geopolitics of Asia and Europe. Old alliances no longer matter. Now it's all about each transaction which Trump wants to ensure favors the United States. 

During the last Trump Administration in 2019, India's friends in Washington argued for a US policy of "strategic altruism" with India. The new Trump administration seems to be rejecting such talk. Prior to his recent meeting with Prime Minister Narendra Modi at the White House, President Donald Trump described India as the "worst abuser of tariffs" and announced "reciprocal tariffs" on Indian imports to the United States.  At the same time, Mr. Trump cracked down on both legal and illegal immigration from India. His administration is deporting thousands of illegal Indian immigrants in handcuffs and shackles on US military aircraft. Meanwhile, stringent new regulations on temporary work visas could significantly delay visa processing times and reduce the number of Indian workers employed in the United States on H1B visas. 

Tariffs Comparison. Source: BBC

In a 2019 piece titled "The India Dividend: New Delhi Remains Washington’s Best Hope in Asia" published in Foreign Affairs journal, authors Robert Blackwill and Ashley Tellis argued that the Trump Administration should continue the US policy of "strategic altruism" with India that began with US-India nuclear agreement. They asked President Trump to ignore the fact that the US companies and economy have only marginally benefited, if at all, from this policy. They see India as a "superpower in waiting" and urge Washington to focus on the goal of having India as an ally to check China's rise. They see Chinese support for India's arch-rival Pakistan and China’s growing weight in South Asia and beyond as a threat to India. 

India Tops Source Countries For H1B Visa Holders. Source: USCIS

Trump's trade and immigration policies are going to hurt India at a time when its economic growth is declining and job growth is stagnant.  The latest Indian annual budget has offered middle class tax relief to spur growth.  But economists warn it may not be enough for the vast majority of Indians, whose income still falls below taxable limits and who may still be reeling from the impact of the COVID pandemic, which devastated their earnings, according to a report in Aljazeera. “There is a vast base [of people] where recovery has not come back after the pandemic,” says Kaushik Basu, professor of economics at Cornell University. “We see this in data that the agricultural labour base has increased. And agriculture may well be just a parking spot.”

Illegal immigration from India to the US has dramatically increased on Prime Minister Modi's watch. A Pew Research Center report said that as of 2022, India ranked third, after Mexico and El Salvador, on the list of countries with the largest number of undocumented immigrants — 725,000 — living in the U.S.

India has a serious unemployment problem, particularly for the young people entering the job market by the millions each year. This problem is concealed by headline  economic growth figures highlighted by the Modi government. At the same time, India is losing its best and brightest in a massive brain drain. 

President Trump has clearly not taken the advice of India's friends in Washington. He is in no mood for "strategic altruism". Instead, the Trump Administration has signaled that it will treat ties with India as just another transactional relationship. 

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Pakistani Students Account For Largest Share of Increase in Interest in Europe

Interest in studying in Europe  is growing in certain key markets like Pakistan and Bangladesh in particular, according to a recent report on foreign students coming to Europe. Although India generates the largest share of relative demand, this fluctuates drastically and has gradually declined overall in recent years, the report adds.  

Interest in Bachelor's Programs. Source: StudyPortals.com

The chart above shows the top origin countries for interest in Bachelor’s programs in Europe, as well as the evolution of that interest over the last four years. 

Interest in Bachelor's Programs. Source: StudyPortals.com

Bangladesh and Pakistan also show strong demand in Master’s programs, alongside students in Turkey and Iran. The report reveals widening European interest and shift towards STEM. 

Among 2,835 students from 143 countries selected for the Erasmus Mundus Joint Masters program, Pakistani students rank at the top with 192 scholarships, followed by India 174, Bangladesh 140, Mexico 118, and Nigeria 109, according to an EU tweet. Currently, there are 7.114 Pakistani students studying in Germany. 

The United Kingdom emerged as the top destination for Pakistani students with 28,188 student visas granted in 2022,  up 95% from the previous year. The UK has now surpassed China has the biggest draw for Pakistani students after the COVID19 pandemic.  Of the 486,868 UK student visas granted (to both main applicants and their dependents), 117,965 went to Indian nationals. This is an increase of 80,569 (+215%) compared to 2019, and slightly more than the 115,056 granted to Chinese nationals — but Pakistani nationals saw a bigger increase in approvals for their UK student visas at 377% compared to India’s 215%, according to Study International. 

Foreign Students in the US. Source: Open Doors

The US also reported a 17.4% increase in the number of Pakistani students studying in the United States during 2021-22. This brought their number to 8,772, according to Open Doors. The Open Doors Report identified China and India as the largest sources of international students to the United States. During 2021-22, China sent 290,086 students, which is 30.6% of the total number of international students in the US, a decline of 8.6% from the previous year. India, which sent 199,183 students this year — 21% of the total — saw a 19% year-over-year increase. Toge­ther, China and India make up more than half of all international students in the United States.

The number of Pakistani students studying in Australia has also increased 21% to 20,935 in 2022.  The number of first-time enrollments of Pakistanis jumped 71% in the year, according to ICEF Monitor. 

Offsetting a decline in Chinese enrollments in Australia (177,470 in 2022, down 11% y-o-y) and zero momentum from India (128,980, up .03%) were notable enrollment increases from:

Thailand, the 6th largest market, up 61% to 25,792

Nepal, the 3rd largest market, up 21% to 71,805

Colombia, the 4th largest market, up 21% to 28,435

Pakistan, the 9th largest market, up 21% to 20,935

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Pakistani Students Win Highest Number of US and EU Scholarships Among 143 Countries

Pakistani students have received more EU-funded Erasmus scholarships and US-sponsored Fulbright scholarships this year than students from any other country in the world. These are fully-funded scholarships for recipients to study at universities in the European Union and the United States. Pakistan has also seen a post-pandemic surge  of student visas to study in Australia, the US and UK this year. 

EU Scholarships. Source: EU Pakistan

Among 2,835 students from 143 countries selected for the Erasmus Mundus Joint Masters program, Pakistani students rank at the top with 192 scholarships, followed by India 174, Bangladesh 140, Mexico 118, and Nigeria 109, according to an EU tweet. 

Within the EU, Germany is hosting 7,114 Pakistani students, according to Erudera. Among the major countries of origin of foreign students in Germany are: China 40,055, India 33,753, Syria 16,712,  Iran 11,625, Russia 10,739, Italy 9,887, Cameroon 7,692 and Egypt 7,214.  

The Fulbright scholarship program of the United States Government has awarded 189 scholarships for Pakistanis to study at US universities. Fulbright is the flagship scholarship program of the United States Government, operating in 160 countries.  Pakistan has the largest Fulbright program in the world in terms of U.S. government contribution, with $18.44 million dollars this year to support 189 students, according to the US Embassy in Islamabad, Pakistan. 

The United Kingdom emerged as the top destination for Pakistani students with 28,188 student visas granted in 2022,  up 95% from the previous year. The UK has now surpassed China has the biggest draw for Pakistani students after the COVID19 pandemic.  Of the 486,868 UK student visas granted (to both main applicants and their dependents), 117,965 went to Indian nationals. This is an increase of 80,569 (+215%) compared to 2019, and slightly more than the 115,056 granted to Chinese nationals — but Pakistani nationals saw a bigger increase in approvals for their UK student visas at 377% compared to India’s 215%, according to Study International. 

Foreign Students in the US. Source: Open Doors

The US also reported a 17.4% increase in the number of Pakistani students studying in the United States during 2021-22. This brought their number to 8,772, according to Open Doors. The Open Doors Report identified China and India as the largest sources of international students to the United States. During 2021-22, China sent 290,086 students, which is 30.6% of the total number of international students in the US, a decline of 8.6% from the previous year. India, which sent 199,183 students this year — 21% of the total — saw a 19% year-over-year increase. Toge­ther, China and India make up more than half of all international students in the United States.

The number of Pakistani students studying in Australia has also increased 21% to 20,935 in 2022.  The number of first-time enrollments of Pakistanis jumped 71% in the year, according to ICEF Monitor. 

Offsetting a decline in Chinese enrollments in Australia (177,470 in 2022, down 11% y-o-y) and zero momentum from India (128,980, up .03%) were notable enrollment increases from:

Thailand, the 6th largest market, up 61% to 25,792

Nepal, the 3rd largest market, up 21% to 71,805

Colombia, the 4th largest market, up 21% to 28,435

Pakistan, the 9th largest market, up 21% to 20,935

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Pakistan: The Only Country in Asia With Birthright Citizenship

Pakistan is the only country in Asia that recognizes citizenship as a birthright. Only one in four nations in the world grant citizenship to all those born within their borders, according to a review of the nationality laws reviewed by EUI Global Citizenship Observatory.  Instead of birthright citizenship, the majority of countries today have citizenship by blood, in which children inherit citizenship from their parents. 

Citizenship as Birthright. Source: Quartz

Based on a review of the nationality laws of 174 nations, only 39, or about 1 in 4, grant citizenship to people born in the country, barring exceptions to children of diplomat parents, according to an article published in QUARTZ.  

Pakistan stands out as the only nation in Asia that grants citizenship as birthright.  It is the most common practice for the countries in the Americas: Canada, Mexico, Argentina, Brazil, among others, all follow this practice. Birthright citizenship is seen as a key measure of a nation's openness to immigrants.

Birthright citizenship didn’t exist in the US at the time of its founding. It was granted as part of the Civil Rights Act of 1866, followed by the Fourteenth Amendment and the 1898 Supreme Court decision in United States v. Wong Kim Ark, which led to the racial and ethnic diversity in the United States today.

The United Kingdom used to recognize birthright citizenship but the British government removed unconditional citizenship by birth in the British Nationality Act of 1981. Children born in the UK today can get citizenship only if they have at least one parent who’s a citizen or is a resident of the British territories. Germany loosened its policy in 2000, replacing the parent’s citizenship requirement with residency. Children born to a parent who has a German resident permit or has lived in Germany for at least eight years can get German citizenship.

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European Union: Fastest Growing Source of Remittances to Pakistan

Remittances from the European Union (EU) to Pakistan soared 49.7% in FY 21 and 28.3% in FY22, according to the State Bank of Pakistan. With $2.5 billion remittances in the first 9 months (July-March) of the current fiscal year, the EU ($2.5 billion) has now surpassed North America ($2.2 billion) to become the third largest source of inflows to Pakistan after the Middle East and the United Kingdom. Remittances from the US have grown 21%, second fastest after the EU (28.3%) in the first 9  months of the current fiscal year. 

Country-wise Remittance Inflows in Pakistan. Source: State Bank of Pakistan

Pakistanis in European Union: 

The population of Pakistan-born migrants to European Union countries has been growing in recent years. With over 120,000 Pakistani migrants, Italy is the most popular destination for Pakistanis in the EU. 

Italy is followed by Germany with 75,495 Pakistani migrants. Then comes Spain with 61,953 migrants, France 21,900 (2017), Sweden 11,674, Denmark 10,669, Ireland 7,351 (2016), Belgium 5,927, Portugal 5,310, Norway 5,157, Netherlands 4,723 and Austria 4,112. There are smaller populations of Pakistanis in several other European countries. 

Pakistan-born Migrants in European Union. Source: OECD

With $5.74 billion in the first 9 months of current fiscal year FY22, Saudi Arabia remains the top source of remittances to Pakistan, followed by $4.28 billion from the United Arab Emirates (UAE). However, the Saudi remittances are essentially flat while those from the UAE have declined 5.3% in this period.  Pakistani diaspora is sending home over $30 billion a year, about 10% of the country's GDP. It is badly needed foreign exchange to balance Pakistan's external accounts.  

Pakistanis in Italy. Source: Italian Government

Pakistan's Worldwide Diaspora:

Over 10 million Pakistanis are currently working/living overseas, according to the Bureau of Emigration. Before the COVID19 pandemic hit in 2020,  more than 600,000 Pakistanis left the country to work overseas in 2019. The average yearly outflow of Pakistani workers to OECD countries (mainly UK and US) and the Middle East has been over half a million in the last decade.  

Pakistan’s economy created 5.5 million domestic jobs during the past three years –on an average 1.84 million jobs a year, which is far higher than yearly average of creation of new jobs during the 2008-18 decade, according to the Labor Force Survey (LFS) published by the Pakistan Bureau of Statistics (PBS). 

Worker Remittances as Percentage of Pakistan GDP. Source: World Bank

Pakistan ranks 6th among the top worker remittance recipient countries in the world.  India and China rank first and second, followed by Mexico 3rd, the Philippines 4th, Egypt 5th and Pakistan 6th.  

Pakistan Demographics

Pakistan's Demographic Dividend: 

About two million Pakistanis are entering the workforce every year. The share of the working age population in Pakistan is increasing while the birth rate is declining. This phenomenon, known as demographic dividend, is coinciding with declines in working age populations in developed countries. It is creating an opportunity for over half a million Pakistani workers to migrate and work overseas, and send home record remittances. These overseas Pakistanis are now sending home over $30 billion a year, about 10% of the country's GDP. It is badly needed foreign exchange to balance Pakistan's external accounts.  

Projected Population Decline in Emerging Economies. Source: Nikkei Asia

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Pakistan Pursues Hydroelectric Projects

Pakistan and Germany have initiated serious discussions of German funding of eight ongoing and new hydropower projects worth billions of dollars. These talks are taking place in Islamabad between visiting German Minister for Economic Co-operation and Development Ms. Heidemaire Wiegoreak Zeul and Pakistani Prime Minister's Adviser on Finance Mr. Shaukat Tarin, according Business Recorder newspaper.

The projects currently under discussion include 621 MW Palas hydropower project, 567 MW Spat Gah hydropower project, 28 MW Basho hydropower project, 33 MW Harpo hydropower project, 70 MW Lawi hydropower project, Naigaj hydropower project and 300 KW Hingol hydropower project, 43 KW Kurram Tangi Dam. As a start, the German Economic Minister said her country had already committed finances for Keyal Khwar hydropower project located in NWFP on river Indus at Dasu. The project would generate 130 MW power. The focus of many of these development projects are the rural areas in the North West Frontier Province and the least developed federally administered tribal areas of the country affected by insurgencies.



Ms. Heidemaire Wiegoreak Zeul said that Germany was part of Friends of Democratic Pakistan (FoDP) and she had come here for the assessment of the situation and development needs to be discussed at Tokyo in April 17 and then again at the end of April during the annual meeting of the World Bank and IMF. She added that this support was important for Pakistan's development to stabilize the country and the region.

In addition to megaprojects such as 1000 MW Neelum-Jhelum hydropower project, a number of community-based micro hydro projects are being executed with the help of the Agha Khan Foundation in Pakistan's Northern Areas and NWFP. Within this region, out of a total of 137 micro-hydro plants, the AKRSP has established 28 micro-hydros with an installed capacity of 619kW. Initially, in 1986, these plants started as research and demonstration units. These projects were extended to Village Organizations (VOs) and became participatory projects. A Village Organization (VO) is a body of villagers who have organized themselves around a common interest.

After formation, each village organization signed a partnership with AKRSP to abide by all terms and conditions necessary for the village development. The entire responsibility of implementation was passed on to the VOs. AKRSP provided the negotiated cost of the plants and technical input required during the construction period. All the VOs completed the civil work of the plants. They purchased and transported machinery from other parts of Pakistan. The VO members provided subsidized or free unskilled labour and locally produced building material.

South Asia Hydropower Potential Source: Economist Magazine

Pakistan's current installed capacity is around 19,845 MW, of which around 20% is hydroelectric. Much of the rest is thermal, fueled primarily by gas and oil. Per capita energy consumption of the country is estimated at 14 million Btu, which is about the same as India's but only a fraction of other industrializing economies in the region such as Thailand and Malaysia, according to the US Dept of Energy 2006 report. To put it in perspective, the world average per capita energy use is about 65 million BTUs and the average American consumes 352 million BTUs.

The electric power situation in India is not much better. The country is suffering its worst electricity crisis and it has become a key election issue in states like Karnataka and Maharashtra. Some major cities in India are facing alarming situations; continuous load shedding in Bangalore has led to diesel shortage as people are using diesel generators to deal with the crisis. Maharashtra, Uttar Pradesh, West Bengal and Haryana are the worst hit by the ongoing crisis and they are facing power gaps of about 5,000MW, 1,000MW, 2000MW, 1,500MW respectively. In Maharashtra, state officials are asking industrial consumers to lower their demand by 10% or be ready to face forced load shedding (rolling blackouts). Cities and towns are facing 7 to 13 hours blackouts.

With 40% of the Pakistani households that have yet to receive electricity, and only 18% of the households that have access to pipeline gas, the energy sector is expected to play a critical role in economic and social development. With this growth comes higher energy consumption and stronger pressures on the country’s energy resources. At present, natural gas and oil supply the bulk (80 percent) of Pakistan’s energy needs. However, the consumption of those energy sources vastly exceeds the supply. For instance, Pakistan currently produces only 18.3 percent of the oil it consumes, fostering a dependency on expensive, imported oil that places considerable strain on the country’s financial position, creating growing budget and trade deficits. On the other hand, renewable energyfrom hydro, wind and solar are perhaps underutilized and underdeveloped today, as Pakistan has ample potential to exploit these resources.

Pakistan has vast reserves of coal. But there is very little energy produced by burning coal. China has now agreed to invest about $600 million for setting up an integrated coal mining-cum-power project in Sindh. The project will produce 180 million tons of coal per year, which is sufficient to fuel the proposed 405 MW power plant. Pakistan is currently world's seventh largest coal-producing country, with coal reserves of more than 185 billion tons (second in the world after U.S.A.'s 247 billion tons). Almost all (99 percent) of Pakistan's coal reserves are found in the province of Sindh. Pakistan's largest coal field is Thar coal field which is spread over an area of 9100 square kilometers, and contains 175 billion tons of coal. So far this coal field has not been developed but efforts are underway.

In addition to the coal project, China has agreed to build several other power plants in Pakistan to help the South Asian nation deal with its worsening electricity crisis. When completed over the next several years, these plants, including Nandipur (425 MW, Thermal), Guddu(800 MW, Thermal) and Neelam-Jhelum(1000 MW, Hydro), Chashma (1200 MW, Nuclear) will add more than 3000 MW of power generating capacity for the energy-hungry country. Pakistan is currently facing a deficit of 4,000 to 5,000 megawatts, resulting in extensive load-shedding (rolling blackouts) of several hours a day.

China has already installed a 325-megawatt nuclear power plant (C1) at Chashma and is currently working on another (C2) of the same capacity that is expected to be online by 2010. The agreements for C3 and C4 have also been signed. The United States has objected to China supplying C3 and C4 on the grounds that any Pak-China nuclear cooperation would require consensus approval by the NSG, of which China is now a member, for any exception to the guidelines. The US is applying double standards since it supported and got approval for such an exception from NSG for its own nuclear deal with India.

Beyond the power generation capacity expansion projects, Pakistan must also pay attention to modernizing its national grid. The country's creaky and outdated electricity infrastructure loses over 30 percent of generated power in transit, more than seven times the losses of a well-run system, according to the Asian Development Bank and the World Bank; and a lack of spare high-voltage grid capacity limits the transmission of power from hydroelectric plants in the north to make up for shortfalls in the south.

The current power crisis has given a significant impetus for serious efforts to develop a series of power projects. With so many projects in the pipeline, it can be expected that there is relief on the way for the electricity deprived nation in not too distant a future. In rural areas in particular, Pakistan has a better chance of meeting the UN Millennium Development Goals by building infrastructure projects and providing energy and water for development.

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