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Will Pakistan rejoin the emerging markets?

April 20, 2015

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It’s time to make global investors realise that a market of 200 million people is too significant to be ignored. —AP
It’s time to make global investors realise that a market of 200 million people is too significant to be ignored. —AP

Last week, I attended the Emerging Markets Summit in Chicago which had simultaneous sessions dedicated to four different parts of the world: Latin America, Africa, India and China/Asia Pacific. But, there was one country which no one even talked about. Any guesses?

(Hint: a country that might very well have been at the center of this Summit had it been taking place in the 1960s instead of 2015).

Yes, the answer is indeed Pakistan.

Although Pakistan made it to the list of “Next Eleven” released by Goldman Sachs in 2005, the report cautioned that instability could be a major obstacle to growth in several of these 11 economies, including Pakistan.

Indeed, this year Pakistan has no mention in Bloomberg’s Emerging Markets ranking. In fact, if you go to www.emergingmarkets.org and type Pakistan in the search box, you will find that the last time there was even a news update about us was more than six months ago.

The Emerging Markets Summit in Chicago. —Photo by author
The Emerging Markets Summit in Chicago. —Photo by author

Many would rightly point out at how this economic decline was caused by our geopolitical decisions. True, but the important part today is not our starting point and not the fact that we’re not in the top emerging markets list this year.

The important part rather is that we have every ability to be there in the coming years.

Also read: 2014: a year of growth for the Pakistani capital market

Just like Pakistan, Turkey was also adversely affected by the geostrategic imperatives of the great power politics during the Cold War. But once the country started standing up with its real weight, and once the people decided they could, they really did. As a result, in less than a decade, Turkey’s GDP nearly tripled, and imagine, that in 2011, growth rate in Europe was at a mere 1.8 per cent, while that in Turkey was at a high 8.5 per cent.

So where do we stand today? In Africa, a continent of 53 countries, Pakistan only has 15 foreign missions, whereas India has 35. Things get even depressing in Latin America, where we only have 5 foreign missions. In comparison, the neighboring Iran has 11.

But, foreign missions will only go where our people and interests will go.

Any observer of global politics will point out that in the decades ahead, power will not reside with a few big countries but it will rather be spread across networks of countries working together. Therefore, it is important for Pakistanis to cultivate people-to-people and business relations and develop interests in these nations. Indeed, any country’s leverage in the 21st century will be largely determined by its economic penetration in various parts of the world.

Also read: An emerging market?

In doing so, we will naturally have to work on both: our ground reality, as well as our international image.

There’s one reality of the need for structural reforms that can largely only be influenced by the government, but today, let’s discuss what we, as people, can do to change the situation.

Many countries in our immediate and distant neighborhood now have companies and brands which are globally known. The question is: why don’t we? Why do we have only one company (Oil & Gas Development) in the list of Forbes Global 2000, whereas Philippines has 8, Chile stands at 9, Thailand at 16 and India at 56?

Less ideology, more economics

Maybe it’s time to think less in terms of personal family businesses and more in terms of companies that can expand even more? Maybe, it’s time to think big and strategic.

But thinking big doesn’t necessarily mean that great ideas can only come from large businesses. Indeed, a successful economy has to be complemented with startups, which are, many times, the best sources of ideas.

One such example of promoting innovative and entrepreneurial environment within Pakistan are efforts of Professor Kashif Khan of Iqra University Islamabad, who, over the last few years, has developed numerous teams to improve Pakistan’s ranking in GEW (Global Entrepreneurship Week).

As for the image part, we will need to break out of the vicious cycle of pessimism and re-brand ourselves. Obstacles will have to be converted into opportunities. For example, both as a matter of image and as a matter of ground reality, why don’t we embark on a mission to convert our “youth bulge” into “Pakistan: A Country of the Youth” or say, “Pakistan: The Most Youthful Country”?

Such rebranding and positive slogans have the power to change national discourses. For instance, just look at the contribution of “Malaysia, Truly Asia” in attracting the number of tourists into that country.

An improvement in our national image will not only change perceptions of Pakistanis in the eyes of the global audience, but it will also have a positive effect on the markets. We all know that investors tend to have a herd mentality. Thus, a few good and successful stories can go much beyond in terms of attracting tremendous more investment as a domino effect.

Perhaps it’s time to make the global investors realise that a market of 200 million people is too significant to be ignored. But for that to happen, the positive narrative construction will have to begin at home.

I am confident that the day we decide we can, we will.