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‘Pakistan’s economy on path of growth’

Updated Mar 01, 2017 07:42am


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KARACHI: Beyond the headlines of terrorism, Pakistan’s economy is on the path of growth, senior fellow at the Foreign Policy Institute of the Johns Hopkins University School of Advanced International Studies, Afshin Molavi wrote in a recent issue of ‘The Washington Post’.

The writer says: “Shortly after Egypt’s 2011 uprising ended with the fall of President Hosni Mubarak, prominent Egyptian investor Ahmed Heikal said: “If we get things right, we could be Turkey in 10 years. If we get them wrong we could be Pakistan in 18 months”.

Everyone understood the subtext: Turkey was the model; Pakistan was the train wreck, said Molavi.

While Turkey had come off a decade of high growth; doubled its gross product over the previous decade and ’still was emerging market darling’ Pakistan was known for headlines of terrorism, instability, plus years of development and poverty. Here the writer changes his tone. “But not so fast. Look beyond the headlines and see Pakistan today.” It boasted the best stock market in Asia in 2016; it is winning plaudits from IMF and its economy is forecast for a healthy 5.2 per cent growth rate in 2017, according to World Bank.

Three key factors are identified as driving Pakistan’s economic awakening: An improved security climate, relative political stability and a growing middle class. “These three interlocking pieces are fueling Pakistan’s growth story”. In mid-May, the world’s largest research based provider of index funds, MSCI will officially “graduate” Pakistan from its frontier-market category to the more prestigious — and well capitalised — “emerging market” index.

Security situation: Pakistan may finally have gotten a reasonable handle on the deteriorating security climate — although attacks such as the suicide bombing at the Sufi shrine a week ago are likely to persist.

Middle class: Some estimates suggest that Pakistan middle class accounts for more than half the population. Brookings Institution scholar Homi Kharas argues that Pakistan’s consumer middle class market could hit $1 trillion by 2030. These middle classes are also attracting foreign investment. Quoting Ishrat Hussain, former governor SBP, the writer says: He told me that middle class was driving impressive 25pc rates of return for large multinational consumer companies such as Nestle and Proctor & Gamble and that the middle-class growth is sparking increased production of cement, steel automobiles and the like. Former governor SBP sees it as one of the key reasons for current bullishness of Pakistan.

But the biggest test for the country is to continue to deliver is its ability to overcome the electricity shortage problem, says the writer. “If Pakistan succeeds in taming its electricity gaps with China’s help, the virtuous circle of growth will continue, and a key South Asian, nuclear-armed power could be headed for a decade of normalcy”.

Published in Dawn, March 1st, 2017


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Comments (13) Closed

omveer Mar 01, 2017 07:51am

What a joke! Improved security climate, political stability etc are a pipe dream. Pakistan has miles to go before realizing her economical recovery

Sajjad Kamran Mar 01, 2017 08:41am

"An improved security climate"? Where is improvement? The twin cities of Islamabad and Rawalpindi have been officially shut down today in view of the ECO Summit. Troops have descended upon Ghaddafi Stadium in Lahore for PSL final.

Is this called "improved security climate"?

Mohammad anjarwala Mar 01, 2017 09:04am

Fight against terrorism should be the bigger agenda then setting up power plants. Statement like attacks like that of sufi Saint are likely to persist should be taken with a grain of salt. We need to prove these motion wrong before we head on the path to development.

The Choice DoT One Mar 01, 2017 11:21am

A people without the knowledge of their past history, origin and culture is like a tree without roots.

abood Mar 01, 2017 01:12pm

well Egypt has gone to worse .its easy to talk what matters is the implementation .Pakistan has democracy continued for the first time.look at india they were in bad condition in the late 90s.But with democracy continued things changed so will things change for paksitan.what matters is to strengthen the institutions and with time things will improve.egypt doesn't have democracy they are begging Dubai and Saudi for money.its not a good example to be discussed.

Saif zulfiqar Mar 01, 2017 01:37pm

This report by reputed Johns Hopkins University is neutral report.

Nomi Goraya Mar 01, 2017 01:38pm

I know it would be real difficult to digest the very fact that LAW and ORDER situation has improved in country with the headlines in international media about suicide bombing spate killing more than hundred. But the matter of fact is it is it is TRUE isolated as Pakistan has successfully eliminated terrorist at home and have proper mechanism and resolve to deal with the rest. With regional alliance and connectivity out reach to important regional countries like Iran, China, Russia and Central Asia on mutual grounds Pakistan is on way to regional integration. Terrorism is threat for Pakistan so it for the rest of WORLD even for Europe and USA. Need of the hour is to keep the direction and focus on work than to gain political millage. Democratic and enlightened Pakistan with strong defense but very diplomatic and flexible approach towards region is the key to success.

Saif zulfiqar Mar 01, 2017 01:39pm

@abood, This laughable Indian democracy is destroying India under BJP/Modi.

D.H Mar 01, 2017 05:07pm

Pakistan a poor country. The PSL final tickets for a whooping Rs12,000/- (Imran Khan) enclosure and Rs8,000 (Miandad enclosure) sold like hot cakes, in less than an hour while hundreds had to return disappointed....Now consider four members in a family and see how many famililies can afford to throw away Rs48,000, just to watch a cricket match (which anyway would appear live on TV) in the stadium. A match that could be over in an hour.

Dil Mar 01, 2017 07:39pm

There have been alot of optimism in world Media regarding the economical progress in Pakistan latetly except recent terror attacks put us on backfoot temprarily .

Sameer Mar 01, 2017 11:06pm

I wonder what incentives are provided to such outlets to suppress the truth. No jobs, government sector has nepotism, private sector has dead service structure, addicts are increasing and narcassists running the country off a cliff. Last month Inflation speaks for itself, heavy taxes on those already paying taxes, merit is dead, beaurcracy is a slave and we see the slow and painful exploitation of our people and our resources. Its a matter of time before this borrowinc comsumes us.I wonder if john hopkin's professor will be this positive then.

Kamran Mar 01, 2017 11:10pm

Growing middle class?Middle class in Pakistan is shrinking because of employment issues everywhere. Water problems and transport and safety. Loadshedding still here.

Omar Mar 03, 2017 04:37pm

@Kamran you apparently don't understand the concept of middle class and society as a whole. If you have nothing good or constructive to say don't say it at all.