Hello Reality! The KSE heads to a 3 1/2 month high despite tipsy anti-pakistan diatribes being pushed in the US media

With all the nonsense in the press since May 2, you would think the world was about to come to an end. But no. As usual, the NY Times and WaPo have about as much credibility on the subject of Pakistan as do the predictions of that nutcase  Denver based right-wing priest, Harold Camping, and his Christian Family Radio on the subject of the Earth’s longevity. And if a loud echoing, face-reddening slap could be delivered to such naysayers for the animal excrement one now finds plastered on the front pages of the Post and the Times, it was this: The Karachi Stock Exchange, Pakistan’s largest bourse, has closed on a 3 1/2 month high at 12,198.12 points. Forget the PM’s speech in Parliament and forget whatever Gen. Kiyani has to say. Let’s focus on reality and the facts on the ground. Let’s focus on what thousands of investors and business people who are connected to the core of this country and are clued in to tens of thousands of active projects actually think about the future.

The KSE has done exceedingly well in the past couple of years and we’ve covered its performance here at TechLahore quite often. But beyond the economics, it’s important to keep in mind what the KSE represents. Usually, whenever we cover the KSE’s movements we get the odd, “Oh, but what does this really mean?” kind of comment. So for the sake of clarity, here’s what it means: The investors and participants in the KSE are confident about their future, which means they are confident about the future of Pakistan. No one throws money into a stock exchange because they think their investment will tank. So other than the financial implications, the main point of interest for us is how optimistic Pakistani businessmen and investors are in their future. And why shouldn’t they be? Pakistan is the world’s seventh most populous state, with the world’s fifth largest army and as Christina Fair put it, a country that “simply has many asymmetric options” which means that no one in their right mind is about to cross any red-lines with us. Moreover, Pakistan’s exports continue to do well in the EU with the recent positive movement on tariffs, remittances are growing fast, are at an all-time historic high and there seems to be national consensus on the issue that the “AID” bluff is exactly that, a bluff. The aid – mostly REIMBURSEMENTS – that “prop” up the economy in the vivid imagination of certain ill-informed senators in a foreign country and myopic media people, are actually neither necessary nor desirable. This aid bullcrap is simply used, at this point, as a political lever with no measurable impact on the economy or development of the country. And on this subject, I think the universal message from Pakistan is, “Stuff it!”. Indeed, the government of Pakistan’s most populous state, the Punjab, has voluntarily cancelled aid agreements with the USAID. How’s that for leverage? The KSE seems to be echoing this very signal because precisely during the period when noises were being made close to the banks of the Potomac about using aid as a threat, the KSE was heading into the stratosphere as if to laugh in the face of this nonsense which is everything but connected to reality.

We’ll try to do a longer piece on where we see things headed in the near future, but until then, let’s keep our eye on the jewel of Karachi. KSE FTW!

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The Karachi Stock Exchange was a star performer this year, showing near 20% gains, twice the Nasdaq and Dow!

Back in December 2009, I had come up with a list of predictions for 2010. I may have gotten a little lucky this year, because many of these predictions were spot-on to an uncanny degree. Here’s how I fared:

Political predictions

I don’t see Asif Zardari making it through 2010. I think he will be deposed as President.

Couldn’t have been more wrong on this. And for the second time in a row. El Presidente has shown himself to be a better survivor than I am a Futurist!

Though many political pundits talk about it, I don’t believe there will be mid-term elections this year. Whatever changes occur will be with individual and will not displace the entire post-2008 election scenario.

And thus it happened. No mid term elections, even though last year many pundits were proclaiming that this was a near guaranteed event.

Gen. Kiyani is scheduled to retire close to the end of the year, but I believe he will receive a rare 1 year extension of service. However it happens, I don’t believe we will see him retiring this year.

This happened too. Though the extension he received was even more generous than I had thought. Gen. sahib will be at the helm of affairs for another 3 years.

The surge in Afghanistan will not work. If not by the end of 2010 then in 2011 the US will have to sit and talk to elements of the Taliban. The commitment of these forces will prove politically costly for President Obama.

Has this not happened to the letter? Now we have news of a Taliban office opening in Turkey which Mr. Karzai has already supported and in fact requested the Turkish Government for. And Pakistan has come out in support of this initiative as well. We all know that the discussions with the Taliban have been initiated by NATO and not from a position of strength.

Security and the situation in northwest Pakistan

As I had mentioned last year, the Army certainly had an operation up their sleeve. What happened in Swat and South Waziristan was the result of meticulous planning that had occured for months prior to the execution of either campaign. I believe these campaigns will begin to bear fruit in 2010 in the form of a reduction in security incidents in Pakistan. While there will be a definite tapering off in 2010, the nihilists will continue to make their presence felt now and then. Unfortunately this is a process which will take a little bit of time to completely unfold. But 2010 will inshaAllah be more secure than 2009 and quite measurably so.

There was a 35%  reduction in the number of terrorist attacks in Pakistan in 2010, as compared to 2009. The number of people who perished in these attacks was roughly the same, but that was due mainly to the terrorists no longer having the reach they once did. The number of attacks in major cities was also markedly reduced. As I said, the process of securing Pakistan in light of what is going on in Afghanistan will take some time, but certainly, 2010 was an improvement.

The military will continue significant presence in Swat, Waziristan and will expand into other tribal agencies, expanding the writ of the government in an area that was always free of federal or provincial law enforcement since 1947. The action being conducted in these areas is certainly against the foreign nihilists who have taken refuge there and those who would seek to support them, but it also marks an expansion of writ into areas where it never existed previously (by design and by a 1947 era agreement which has clearly outlived its relevance).

The gorgeous Pakistan-China Joint Fighter (JF-17) wowed crowds at Farnborough and Zhuhai

In fact, the only agency where the Army has not entered in force is North Waziristan. And there’s a lot behind that, so I’ll avoid the urge to take that segue. The homes of Taliban terrorists have been converted to Girls’ Schools in the FATA area and the writ of the Government has been extended to areas that no central government has ever controlled in hundreds of years.

Pakistan will continue to implement its strategic weapons programs and reap the fruits of investment in tactical weapons development. In addition to the first JF-17 squadron being weaponized and fully operationalized, we will see the arrival of F-16 Block 52 (Yes, there will be no last minute ‘hitches’), additional Saab Eireye AWACS aircraft, significant progress on the FC-20 fighter program, new air-to-air weapons such as the AMRAAM, and air to ground munitions and the Sniper targeting pod. In addition, the missile program will continue at full speed and more details will emerge regarding the 7,000km range Taimur ICBM. Pakistan will, however, not make any official announcements concerning this system. The much delayed Pakistan Navy next generation submarine deal will be finalized – there is a German vs. French situation going on at the moment but this will succesfully be navigated and a firm deal will take shape in 2010.

It is absolutely irrefutable that Pakistan has made tremendous strides forward in national defence. The only item from the list above that did not materialize was the Sub deal with Germany and/or France. In stead, we know hear that the PN is evaluating Chinese submarines. There are even rumours that the Chinese – in addition to providing a diesel fleet – may also lease a nuclear submarine to Pakistan (an SSGN). Too little is known about this thus far to elucidate much further, but things are definitely in the works.

As for the Taimur ICBM, piece parts have begun to fall into place. The most recent Hatf-V tests in December were rumoured to have included a MIRV (Multiple Re-entry Vehicles) warhead, which goes hand in hand with effective ICBM technology.

In addition to the list above, the Pakistan Air force also took delivery of Iluyshin air-to-air refuellers, Chinese AWACS, in addition to the Swedish Erieye aircraft and the SD-10 Beyond Visual Range Air to Air missile made significant progress in its SD-10B incarnation. The JF-17s will be armed with SD-10As for now as the standard BVR weapon, soon to be upgraded to the B model.

The F-16 Bl 52s were delivered on time, the JF-17 squadron is impressing people within the country as well as without. They participated in a static display at one of the world’s most famous airshows at Farnborough, in the UK, and then wowed crowds at China’s largest air event in Zhuhai.

Technology Predictions

There will be a near-breakout level of success with a Pakistani based mobile software company. At least one company will claim 250K users for its mobile products by the end of 2010. It is very likely that two will.

Pepper.pk announced that they have over 1 million users using their software products, but what’s more, Pepper’s Photo Editor software for the Blackberry made it to World #1 on AppWorld. So not only was there a breakout success, Pakistanis were literally on top of the world as far as this area of technology is concerned. I’ve never been happier at being right about something! More great things will come from Pepper and many other Pakistani technology startups in 2011 inshaAllah.

Netsol will see its fortunes improve in 2010 from a share price perspective. Hovering now at around $1, they can expect to be at least 25% better off by the end of the year.

Netsol fared even better! They are ending the year almost 50% up, at 1.50. They traded as high as $2 in 2010!

2010 is going to be a really bad year for Palm in terms of adoption of the Pre. I had predicted in 2008 that the Hail Mary piece of technology demo’d at CES fail for Palm. It has almost happened, but not quite completely yet. Palm will be relegated to a fourth tier player at best and 2010 will mark a signifciant reduction in its brand equity and influence.

I covered this one earlier this year… Palm got sold to HP and for not all that much. It’s Intellectual Property portfolio (patents) was probably worth 60-70% of the price paid by HP. So the operational parts of the business and the products themselves got valued at almost nothing. The good news is that HP will continue Palm products and may even be coming out with a Tablet leveraging the WebOS platform. Let’s see how it fares. Either way, let’s be clear that the Palm logos you see now don’t represent the good old Palm we knew and loved. That Palm is gone forever.

The Apple Tablet will be released and it will be a major hit. Even though I don’t like Apple, I will buy it  It will be iPhone OS based and will not have the full functionality of a Mac. eReader apps for it will be absolutely killer and very successful.

“Apple Tablet”… what a blast from the past! We all know now that the “Tablet” I spoke of in December 2009 ended up being the massively successful iPad. Yes, I bought it, and the product didn’t just achieve success, it launched a new market for similar devices. eReader apps were in fact a killer app, with Zinio launching digital magazine subscriptions straight to the iPad, and Apple itself showcasing iBooks as a major attraction. And aren’t you impressed that I even got the OS right? The iPad is indeed iOS based and not derived from OS X.

Windows Mobile 7 will come out in 2010 but will not be ‘all that’. It will take several updates and major enhancements to improve it. It will not reverse the market share trend away from Microsoft based phones that has taken hold over the last few years. Android will be the biggest gainer on the Smartphone side and will continue to whittle away at the Windows lead. Microsoft will undergo some pain in this area in 2010.

Yes, Phone7 did launch this year and thus far has sold about 1.5 million devices. In comparison, 300,000 Android devices are being sold every day. Phone7 may still impress, but certainly it hasn’t been a 2010 winner. Android, as I had predicted, went from 5% to 25% market share within a year! It is the biggest tech success story of 2010 in many ways.

ARM based devices and cheaper laptops will start to chip away at Netbook growth. There will at most 20% growth in the Atom based Netbook segment. A market which went from 0 units in 2007 to close to 40M units in 2009.

Netbooks slowed down immensely in 2010. In 2009, about 36.3 million units shipped and according to estimates in 2010 the number will be 40 million. As I had said, growth would be under 20%, and so it was. In 2011, this growth will decline even further.

Nokia is not being succesful in its move from basic and feature phones to truly smart phones. Their UI development and OS skills are not in the top 3 at all. I think this will be Nokia’s downfall… as smartphones become less expensive in markets outside the US, fewer people will choose Nokia as it will no longer provide the best experience primarily due to software reasons. From the low end, Samsung and LG feature phones will continue to become better thus providing competition to the traditional Nokia feature phone niche. All in all, 2010 will see other mobile companies grow at the expense of Nokia.

Wouldn’t change a thing even if I wrote the above earlier this morning instead of last year. As you can see from this IDC report, Nokia indeed lost market share. Samsung launched Bada, focused on foreign markets and the lower end of the smartphone cost spectrum. LG continues to grow. And from the top end you have the iPhone, Android and Windows Phone7 appearing as significant challengers to Nokia.

I was wrong on this one last year, and this is almost too easy for 2010, but then again – you never know! The Software Park Tower in Lahore will be completed and will become fully operational in 2010. It is going to be too expensive sq ft cost wise for most companies so move-ins will be slower than expected.

The building’s done, but rates are super expensive and I think move-ins will be few and far between until something is done to incent companies to move in.

Financial and Economic Predictions

The S&P will show a better than 7% gain in 2010. The Dow and NASDAQ will also come close to 10% gains.

The Dow was under 10,500 at the end of 2009, and is just under 11,600 now. That’s a better than 10% gain, as predicted. The NASDAQ went from just around 2,300 to over 2,650 at the end of 2010, that too is better than 10%. The S&P went from about 1125 to 1260 which handily beats the conservative 7% projection I made.

The recession in the US will be over officially – it technically is already – but you’ll hear common people saying it. There will be a net reduction in the unemployment rate in 2010.

Unemployment went down a mere .2% from Jan to December 2010, as shown here. There’s still a long way to go. The recession is technically over and the markets performed well, but until unemployment is reduced significantly, common people will continue to feel the pinch. I was only half right on this one.

The KSE, having recovered more rapidly than expected in 2009, will show more modest gains of in the 10-15% neighbourhood in 2010.

Well the KSE was the star of the year, showing better than a 20% gain and hitting a multi-year high. It did twice as well as the US markets. There’s something to be said for the fortitude of the Pakistani markets!

The Pakistani Rs. will continue to trade between 82 and 86 to the USD through the year.

Well, here’s the list of daily closes and we stayed under 87, so there you have it!

In summary, of 18 predictions, I was completely wrong on one (Asif Zardari) and half wrong on the US recession (ordinary people have yet to feel the effects of the technical data). Probably my most successful year of predictions thus far! And hopefully I haven’t jinxed myself by saying that.

So, stay tuned for the 2011 predictions. Watch this space!

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2010 is here, and so are TechLahore's predictions for the new year

I recently evaluated the predictions from last year. In a nutshell, I was about 80% correct. 2009 has certainly been filled with unique challenges, both at a global and national level. We’re all hopeful the future holds better things, and on that subject, I’ll share with you what I think will go down in 2010. Once again, while I’ve been lucky enough to be fairly accurate over the course of 2008 and 2009, it doesn’t mean the trend will continue in 2010. I won’t try and make safe predictions just so that they come true, but rather focus on things that I beleive all of us are thinking about… even though predicting their course might be fraught with risk.

So here goes:

Political predictions

I don’t see Asif Zardari making it through 2010. I think he will be deposed as President.

Though many political pundits talk about it, I don’t believe there will be mid-term elections this year. Whatever changes occur will be with individual and will not displace the entire post-2008 election scenario.

Gen. Kiyani is scheduled to retire close to the end of the year, but I believe he will receive a rare 1 year extension of service. However it happens, I don’t believe we will see him retiring this year.

The surge in Afghanistan will not work. If not by the end of 2010 then in 2011 the US will have to sit and talk to elements of the Taliban. The commitment of these forces will prove politically costly for President Obama.

Security and the situation in northwest Pakistan

As I had mentioned last year, the Army certainly had an operation up their sleeve. What happened in Swat and South Waziristan was the result of meticulous planning that had occured for months prior to the execution of either campaign. I believe these campaigns will begin to bear fruit in 2010 in the form of a reduction in security incidents in Pakistan. While there will be a definite tapering off in 2010, the nihilists will continue to make their presence felt now and then. Unfortunately this is a process which will take a little bit of time to completely unfold. But 2010 will inshaAllah be more secure than 2009 and quite measurably so.

The military will continue significant presence in Swat, Waziristan and will expand into other tribal agencies, expanding the writ of the government in an area that was always free of federal or provincial law enforcement since 1947. The action being conducted in these areas is certainly against the foreign nihilists who have taken refuge there and those who would seek to support them, but it also marks an expansion of writ into areas where it never existed previously (by design and by a 1947 era agreement which has clearly outlived its relevance).

Pakistan will continue to implement its strategic weapons programs and reap the fruits of investment in tactical weapons development. In addition to the first JF-17 squadron being weaponized and fully operationalized, we will see the arrival of F-16 Block 52 (Yes, there will be no last minute ‘hitches’), additional Saab Eireye AWACS aircraft, significant progress on the FC-20 fighter program, new air-to-air weapons such as the AMRAAM, and air to ground munitions and the Sniper targeting pod. In addition, the missile program will continue at full speed and more details will emerge regarding the 7,000km range Taimur ICBM. Pakistan will, however, not make any official announcements concerning this system. The much delayed Pakistan Navy next generation submarine deal will be finalized – there is a German vs. French situation going on at the moment but this will succesfully be navigated and a firm deal will take shape in 2010.

Technology Predictions

There will be a near-breakout level of success with a Pakistani based mobile software company. At least one company will claim 250K users for its mobile products by the end of 2010. It is very likely that two will.

Netsol will see its fortunes improve in 2010 from a share price perspective. Hovering now at around $1, they can expect to be at least 25% better off by the end of the year.

2010 is going to be a really bad year for Palm in terms of adoption of the Pre. I had predicted in 2008 that the Hail Mary piece of technology demo’d at CES fail for Palm. It has almost happened, but not quite completely yet. Palm will be relegated to a fourth tier player at best and 2010 will mark a signifciant reduction in its brand equity and influence.

The Apple Tablet will be released and it will be a major hit. Even though I don’t like Apple, I will buy it  It will be iPhone OS based and will not have the full functionality of a Mac. eReader apps for it will be absolutely killer and very succesful.

Windows Mobile 7 will come out in 2010 but will not be ‘all that’. It will take several updates and major enhancements to improve it. It will not reverse the market share trend away from Microsoft based phones that has taken hold over the last few years. Android will be the biggest gainer on the Smartphone side and will continue to whittle away at the Windows lead. Microsoft will undergo some pain in this area in 2010.

ARM based devices and cheaper laptops will start to chip away at Netbook growth. There will at most 20% growth in the Atom based Netbook segment. A market which went from 0 units in 2007 to clost to 40M units in 2009.

Nokia is not being succesful in its move from basic and feature phones to truly smart phones. Their UI development and OS skills are not in the top 3 at all. I think this will be Nokia’s downfall… as smartphones become less expensive in markets outside the US, fewer people will choose Nokia as it will no longer provide the best experience primarily due to software reasons. From the low end, Samsung and LG feature phones will continue to become better thus providing competition to the traditional Nokia feature phone niche. All in all, 2010 will see other mobile companies grow at the expense of Nokia.

I was wrong on this one last year, and this is almost too easy for 2010, but then again – you never know! The Software Park Tower in Lahore will be completed and will become fully operational in 2010. It is going to be too expensive sq ft cost wise for most companies so move-ins will be slower than expected.

Financial and Economic Predictions

The S&P will show a better than 7% gain in 2010. The Dow and NASDAQ will also come close to 10% gains.

The recession in the US will be over officially – it technically is already – but you’ll hear common people saying it. There will be a net reduction in the unemployment rate in 2010.

The KSE, having recovered more rapidly than expected in 2009, will show more modest gains of in the 10-15% neighbourhood in 2010.

The Pakistani Rs. will continue to trade between 82 and 86 to the USD through the year.

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The Universe continues to be random, but we try and extract some order from it here at TechLahore!

Ah, it’s that time of year again! And how quickly it comes. It seems like yesterday that I wrote the predictions reproduced below, but look, three hundred and sixty five days have passed already. We must continue the tradition we started in 2007 and built upon in 2008… so here we go!

I was right on most issues this past year, but wrong on a few. There are still a handful of days left in 2009 but my guess is nothing material will change, so I’ll bite the bullet and get into the annual prediction review…

Political Predictions:

1. Asif Zardari is heading down a dangerous path. He will be significantly weakened and potentially removed in 2009. The conflicts with Amin Fahim, Nawaz Sharif and now Yusuf Raza and Mumtaz Bhutto, are fundamentally unsustainable. Combined with the Benazir tragedy fading further and further into the past, time will rob him of his number 1 political ally: sympathy. Were he a sounder statesman, he would have used 2008 to build alliances; he has tried, but ineffectively. 2009 will not be good for him.Well, the “potential” removal didn’t happen, but has Zardari been weakened or what?! The authority to use strategic assets has been transferred to the PM, the run-in with parts of the establishment on the issue of the NRO left him embarrassed at best, the ISI apparently despises (and we don’t blame them!) the pretender, Hussain Haqqani, Zardari’s blue eyed boy, to the extent that visa applications are being double checked for security in Islamabad. Haqqani’s washington embassy is no longer trusted. The Long March was stopped only after Zardari back tracked and restored the suo-moto-happy CJ. And then there was the NRO disaster. One can go on and on. If Zardari resides in the Presidency it is only by the skin of his teeth. He has been weakened significantly, no question. 100%.
   
2. Despite rumours, there will be no martial law in 2009; the Army will certainly have their input, but they will abstain from direct political involvement.There were rumours. And there was no martial law. 100%.
   
3. In the US, Obama will be constrained in his ability to implement his election promises. In Iraq, he will find that he will either have to come to grips with an out-right US ‘loss’ in the sense the that government there, in 2-5 years, will not be pro-US. Or he will have to do an about turn on his election promises and find some way of prolonging US involvement. This will be hard to do, because the US cannot afford it politically and financially. Any progress claimed by the pro-surge camp, will be seen to be visibly undone – but we’ll get to that in 2010 and 2011.Also in the US, Obama will have a very hard time with Afghan policy. Troop levels are going up as we speak, but the US military will soon discover that even 70,000 soldiers in Afghanistan are probably 130,000 too few. Afghanistan will not be policeable directly by the US military and sometime in 2009 we will see the US buying off warlords selectively, claiming that everything is ok and trying to set a course for departure. Of course, underneath the surface, nothing would have changed and Afghanistan will revert to being Afghanistan.Obama campaigned essentially on an anti-war platform. He is still in Iraq and has increased his presence in Afghanistan. As I said a year ago, the US cannot afford this financially, but thanks to Bush, they are stuck. Blasts continued to rip through Iraq in 2009, including some of the biggest ones leaving hundreds dead in individual incidents. The buying off of warlords, including talks with the Taliban happened on various levels throughout 2009. I also said the US would set a course for departure from Afghanistan, and we now have a date in 2011-2012. So, I would say I was on the mark as far as this prediction goes. 100%
   
4. 2009 will not be a good year for Pakistan-India relations. While there is an understanding that two nuclear armed neighbours have to live in peace, there is also a realization in Pakistan that India is an ungracious and scheming neighbour that sees itself as a global power – which it is not. Due to these grandiose visions it has of itself, India feels it can deal with Pakistan brusquely, and in this it is deeply mistaken. The region will continue to pay the price, through 2009, of these Indian misconceptions.
   
   No surprises here. Whereas Pakistan was still keen to extend extra effort at the end of 2008, we finally got fed up of Indian intransigence and constant conspiracy and disengaged.
   

5. 

   The Naxalite Communist Insurgency has ravaged 170 districts in India

   Terrorism in India will continue to hit hard through 2009. The insurgency in Assam will not be controlled and will continue to get more serious. It already poses a threat to the Indian federation, and this threat will get more severe in 2009.

   The deadly insurgency in India spread from the state of Assam to more than half the territory of India. The map to the right, courtesy India’s own IBN, shows that the violence and rebellion have now spread to 170 Indian districts. 2009 was a disastrous year for security in India as hundreds of terrorist attacks occurred. The violence on the Afghan border has received a lot of attention in the international press, but the magnitude of the insurgency in India dwarfs the FATA situation. 100%

Financial and Economic Predictions:

1. There is a belief that the economic problems in America can be solved – to some degree – by spending gobs and gobs of money. This money is essentially being borrowed from the future and raised through excessive taxation. While in the long term, society in the US will pay the price on both counts, in 2009 at least, Obama will have to take measures to inflate the stock exchange – even if artificially. This will be done through the passage of trillions of dollars of bailout packages. Therefore, in 2009 the major US stock indices will likely see a very modest increase.Well, in spades on this… the stocks have bounced back over 15%. So you could say that while I was directionally correct, I underestimated the ‘bounce’ in the market. But do see below… 50%
   
2. Not to be confused with the increase in stock indices, the US economy on the whole will be in bad shape through 2009. Many major businesses will file bankruptcy, unemployment will continue to rise at least through the first quarter or two of 2009 and spectacular corporate failures will continue to make headlines for the foreseeable future.Most experts agree that with high unemployment, continuing corporate layoffs, jobless profitability achieved mainly through OPEX cuts, the US economy is far from healthy. There were high profile bankruptcies throughout 2009 and unemployment has been growing throughout the year. 100%.
   
3. In Pakistan, the KSE has taken a massive battering due to the incorrect policies of the SEC, KSE and the Ministry of Finance. Specificaly, the lower lock prevented investors from selling when they wanted to and that caused an avalanche when the lower lock was ultimately removed. But everyone realizes this. And 2009 will see Pakistani stocks head higher. I would guess by as much as 10%.KSE is higher by over 50%. I will give myself 50% here, because while I was directionally correct, the increase in Pakistani stocks has been far greater than I could estimate.
   
4. The trade gap in Pakistan will be reduced somewhat and the out-of-control imports that were a major issue through the second half of 2007 and most of 2008, will be arrested.This too, happened. Imports were cut even at the expense of a slower resolution to the power issues. Fiscal discipline has been fairly tight, but thankfully not at the expense of development projects such as the Ring Road, the reconstruction of Swat Valley, the signal free corridors in Karachi, various Dams and of course the Centaurus, ISE HQ and Telecom tower in Islamabad.
   
5. Food will be big on the international economic agenda and corporate farming in Pakistan will mark 2009 as the year of its birth. This is one of the biggest trends to watch in Pakistan and globally, for the foreseeable future.Things are going slow here. I will give myself zero % – there wasn’t much action this year on this front even though Mian Mansha continues to make investments in this area and several Arab states, including the UAE and Saudi Arabia have expressed serious interest and applied for Government of Pakistan permission to conduct corporate farming.
   
6. Iran will begin to supply about 1 Gigawatt of electricity to Pakistan and an additional 600-900MW will come online within the country in 2009. While this will reduce the power deficiencies to a great degree, it won’t be until 2010 that load shedding is firmly in our past.Meh… 50% on this one. The Iran electricity import did not hit 1 Gw though significant amounts are being imported to power many areas in Baluchistan. Mian Mansha’s Nishat power alone added over 250MW of capacity in 2009, Wind power plants close to 100MW came online in addition to some rental units. The Turkish ship-based power generation scheme didn’t materialize, but new capacity did approach that lower end 600MW estimate I had come up with. I expect more will happen on this front in 2010, but then more on that in another post.
   
7. The US$ will trade between Rs. 75 and 85 through 2009. While the Rs. might weaken, we believe the US $ isn’t on very firm ground either. One risk to this prediction is a potential devaluation of the Pakitani Rs. to spur exports and narrow the trade gap. We don’t think that would be a very smart move…100%. That’s exactly what happened.

IT Industry Predictions:

1. The Software Tower in Lahore will finally get wrapped up close to the end of 2009. Fingers crossed.I was wrong. This has gone into March of next year. 0%.
   
2. Netsol will remain in serious trouble through 2009 and will either face some sort of shareholder action or will become a dirt-cheap acquisition target.50%. Netsol remained in serious trouble throughout 2009, at one point their stock dropped to a paltry 25c on the NASDAQ. They’ve since recovered, but still under $1, are far from their 2008 peak of almost $3.50.
   
3. The economic downturn in the West will make it harder for Pakistani companies to expand services and we will start to see some very interesting Web 2.0 and other consumer-focused products emerging from Lahore, Islamabad and Karachi in particular. Due to the massive adoption of mobile technology in Pakistan, many of these products will cater to mobile phones/users.In spades, my friends, in spades. We have so many product based successes to celebrate this year… The recent article I did on Pepper.pk – a spinoff from a Pakistan based software services company, FiveRivers Technologies – is indicative of this trend. We’ve got Cricket Revolution from Mindstorm, with true international bestseller potential. Then we have Geniteam working on mobile apps. 2009 also saw a Pakistani product on the Top 10 list on the Apple Appstore… Jaadu VNC.
   
4. 2009 will be a good year for WiMAX in Pakistan. There are now two competing offerings and Wateen is working hard to resolve coverage issues. Pakistan will be a WiMAX success story.WiMAX has truly taken off in Pakistan. There are three providers and there is serious penetration. And the nice surprise has been the excellent EVDO mobile broadband services. See both our articles on PTCL/Wordcall’s services in this area. Beautiful! 100%.
   
5. Windows 7 will be released early – before the holiday season in the US – and it will do well. It will be the only new version of a Microsoft operating system that will have more modest hardware requirements as compared to the previous version, and this will be a key reason why it will succeed.Windows 7 is going to be a success. The reviews so far are pretty good. It already has almost 4% market share, and by any measure, it is on its way to being a blockbuster. 100%.
   
6. Android will threaten to become pretty big in 2009, but will not actually become a dominant platform for the next year or more.With the Motorola Droid riding high in Q4 2009 and Android devices ready to break through big time in 2010, I couldn’t have been more right on this one. Android doesn’t have threatening market share this year, but just wait and see.
   
7. Palm will come out with a ‘Hail Mary’ piece of technology during CES, and it will not work for them. Palm will be pretty close to an untimely death by the end of 2009.Are we ready to call the Pre a failure? I think so. It’s pretty clear there is no room beyond Android, iPhone, Windows Mobile, Nokia and RIM for a SIXTH platform. And we haven’t even counted Samsung’s new mobile OS and all sorts of proprietary solutions in use today. No sir. The Hail Mary piece of technology I predicted in 2008 turned out to be the Pre, and it is a failure.
   
8. PSEB will remain relatively ineffective through 2009; since Yusuf Husain’s departure, this has unfortunately been the case and will continue to be the case… The primary reason is that the Ministry of S&T is being fundamentally mishandled and with the government’s occupation with all sorts of ridiculous infighting, the PSEB is not getting the attention necessary to attract and retain a top-class Managing Director.I was polite about this last year, but let me just say it out loud now. Can we boot this useless bureaucrat Talib Hussain out of the PSEB already? What has he done? He is utterly unimpressive, he knows nothing about IT, he has absolutely no vision and he doesn’t belong in this department at all. Boot him out and replace him with someone who knows his bits from his bytes. Seriously. This guy is zero in technology, zero in marketing and zero in, well, pretty much everything else. Get him out and stop wasting our time. We have to develop this industry and he is not the man to do it.

So, let’s see now. Where do we stand? 20 predictions, 2 wrong and 4 at 50%. That’s 16 out of 20, or about 80%. There you have it folks. Get ready for the 2010 list!

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