Amid the conventional wisdom that Pakistan’s economy is falling to pieces — a view reinforced inside the country by soaring food prices and frequent power cuts — it’s interesting to see that someone still sees it as a hot market for foreign funds.
The Melchior Selected Trust Pakistan Opportunities Fund, one of the first funds to target Pakistan, believes the country’s problems have been exaggerated and sees its market as having the potential of “India at half the price”, according to this Reuters story.
It quotes Naz Khan, chief executive officer of KASB Funds in Karachi, as saying there is no reason to be particularly concerned by the tensions along the border with Afghanistan. “We have locked horns with India many times along the border with them in the last few decades,” he says. “This is just a different border and it shouldn’t affect the overall economy.”
The story prompted me to hunt around to see what else is out there painting a positive picture of Pakistan’s economy.
For starters, there is an economic growth forecast of 5.5 percent for the fiscal year starting in July, according to preliminary details on the budget due out next week. That is a level that the recession-haunted west can barely remember, let alone dream about.
Then there are record oil prices swelling the coffers of Gulf Arab states for whom Pakistan is a near neighbour and obvious investment target. The Dubai-based CPI Financial online newsletter says that investors are taking a long-term view on Pakistan’s economic turmoil. Of particular interest is a boom in Islamic banking — a sector relatively insulated from the credit crunch and dominated in the Gulf by Pakistani bankers.
CPI Financial quotes Mansoor Khan, managing director of Lahore-based law firm Khan Associates, as saying that conventional banks would probably be more affected by Pakistan’s economic turmoil than their Islamic counterparts. “The conventional banks are western, risk-averse and do not understand ‘Pakistan risk.’ Islamic banks are primarily Middle Eastern or Asian and have a better understanding of the mentality of Pakistan. They will not be put off.”
It’s also worth reading this blog on the South Asia Investor Review about Gulf Arab investors buying up farmland in Pakistan to increase food security and control inflation.
Pakistan’s economy has proved incredibly resilient in the past, surviving amongst other things, military coups, three wars with India, the division of the country into West and East Pakistan (now Bangladesh) in 1971, and tough economic sanctions after its 1998 nuclear tests. So are reports of its demise premature?
The picture may be clouded by the volatility of Pakistan’s stock market, hanging on every word of the bickering political parties elected in February, and feverishly debating the future of President Pervez Musharraf. But according to the last IMF report, a boom in foreign direct investment into Pakistan (more than $5 billion in 2006/07) was driven not so much by its — until recently — soaring stock market, but primarily by greenfield investment in areas like telecoms, manufacturing and financial services.
I’ll return to the downside risks in another blog, but in the meantime would be interested in hearing whether other people out there think Pakistan still makes it as a hot, or at least warm, emerging markets destination. It’s also worth wondering whether any shift in the origins of foreign investment in Pakistan — still dominated by the United States — towards more Gulf Arab funding would affect the political make-up of the country.
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wow @ all you illiterate people
- Posted by tjgo and learn the history of the taliban, (began with us funding and support) , then learn the history of kashmir, and then learn the history of pakistan and india
i am from neither of those countries, and neither would i want to be
Chatterjee, you are telling indians to get off, why are you still on
This was about the positive side of Pakistan’s economy, not who owns kashmir
get a life, and step in the 21st century, where the west doesnt care much about india or pakistan
Great post!
I always say to my friends especially foreigners that look @ Pakistan beyond the media propaganda created by Fox, Sky, etc. Pakistan is not or near it but you won’t be disappointed!
- Posted by Webdesign PakistanWishful thinking pakistan Law. Zardari and rulers like him will make us so impoverish in 1-2 year’s time, we won’t even know what will happen to our country. Just wait and watch. Don’t rely on media coz they are all sold out. We are in for a big crisis from all sides as long as Mr. 10% is the sole ruler of Pakistan.
- Posted by KhurramDespite all the problems with Pakistan from in side or out side, Pakistan always overcomes all the obstacles. The days are near when Pakistan will soon be know as Asian Tiger.
- Posted by Pakistan LawIf you read the debate again, Im not threatening anybody.
- Posted by SamiAll I want to know if India is not violating human rights of its minorities then why does this country have second highest number of UN resolutions against it.
As for Pakistan, any time people like Sanat Sur hear anything postive said about Pakistan they get on the band wagon to proove wrong however they can,even if they have to lie.
Give it up Mr. Sur, read the article again. The heading itself is “Looking at the positive side of Pakistan’s economy”. So things there are not as bad as you would like to falsly proove. This is a Rueters report too.
As for Muslim massacre in Gujrat, why is Mr. Narendra Modi elected after ordering mass murder of Muslims in the riots? Why was he not jailed? How was he elected again to be minister? a minister or a monster?
Yes if there is anything done wrong by Pakistan, we Pakistani’s never cover up or become deffenssive. Wrong is wrong. Just watch Pakistani media anywhere in the world. On the other hand you people never admit the atrocities against your minorities, terrorism by your country, occupied Kashmir issue and many other problems.
Lets be honest here.
I have been reading the blog, it was just a simple talk about economy and ended up in threats from both sides. That is a real SHAME, for both sides.
- Posted by SarfrazThis is another report. It has been published in Reuters and making headlines across the world. Look and the sharp contrast between these two reports.
The report is this:
MUMBAI (Reuters) - The chief economic advisor in India’s Finance Ministry on Thursday said the country will grow at an average rate of 9 percent in the 11th plan period, which covers 2007-2012.
- Posted by Sanat SurAND ANOTHER REPORT FOR YOU. This report was published in CNN a few days back
“RAND: Pakistan helped Taliban
KABUL, Afghanistan (AP) — Pakistani intelligence agents and paramilitary forces have helped train Taliban insurgents and have given them information about U.S. troop movements in Afghanistan, said a report published by a U.S. think tank.
Taliban militants stand near a burnt police Jeep vehicle in Ghazni, Afghanistan.
The study published Monday by the RAND Corp. also warned that the U.S. will face “crippling, long-term consequences” in Afghanistan if Taliban sanctuaries in Pakistan are not eliminated.
It echoes recent statements by U.S. generals, who have increased their warnings that militant safe havens in Pakistan are threatening efforts in Afghanistan. The study was funded by the U.S. Defense Department.
“Every successful insurgency in Afghanistan since 1979 enjoyed safe haven in neighboring countries, and the current insurgency is no different,” said the report’s author, Seth Jones. “Right now, the Taliban and other groups are getting help from individuals within Pakistan’s government, and until that ends, the region’s long-term security is in jeopardy.”
Pakistan’s top military spokesman rejected the findings.
The study, “Counterinsurgency in Afghanistan,” found some active and former officials in Pakistan’s intelligence service and the Frontier Corps — a Pakistani paramilitary force deployed along the Afghan border — provided direct assistance to Taliban militants and helped secure medical care for wounded fighters.
It said NATO officials have uncovered several instances of Pakistani intelligence agents providing information to Taliban fighters, even “tipping off Taliban forces about the location and movement of Afghan and coalition forces, which undermined several U.S. and NATO anti-Taliban military operations.” No timeframes were given.
The report said Pakistan’s intelligence service and other government agencies provided Taliban and other insurgents with training at camps in Pakistan, as well as intelligence, financial assistance and help crossing the border.
When asked in an Associated Press interview last month what the state of the insurgency might be in 2013, the outgoing NATO commander in Afghanistan, U.S. Gen. Dan McNeill, said: “If there are going to be sanctuaries where these terrorists, these extremists, these insurgents can train, can recruit, can regenerate, there’s still going to be a challenge there.”
Afghan President Hamid Karzai has pleaded with the world community to address the issue of militant sanctuaries in Pakistan. Afghan intelligence officials say young, uneducated males are recruited in the border tribal areas to become suicide bombers and fighters. After battles or attacks in Afghanistan, militants flow back into Pakistan to rest and rearm, officials say.
Pakistan — which supported the Taliban regime in Afghanistan before the September 11, 2001, attacks — denied it is supporting the insurgents but acknowledged the problem of militant infiltration. Watch the new government explain efforts to talk with militants »
“Whenever these kinds of places are identified or pointed out, action is taken against these places and there are umpteen examples in the past where the actions have been taken against these insurgents, or, for that matter, foreigners,” said Pakistan military spokesman Maj. Gen. Athar Abbas. “Therefore, we reject this claim of sanctuaries being aided by Pakistan’s army or intelligence agencies.”
Pakistan Interior Ministry chief Rehman Malik said Monday that he met with Karzai in the Afghan capital over the weekend, and the two sides agreed to set up biometric screening at key border checkpoints.
Malik said tens of thousands of people cross each day without any documentation.
“They go without any checking — no passport, no documentation. It’s a free-for- all,” he told reporters. He said the new computerized system would begin operating within two weeks.
Nevertheless, he defended Pakistan’s efforts to police the border, saying the government had deployed 120,000 troops and had set up five times more border posts than there are on the Afghan side.
Malik expressed willingness to share intelligence on extremists and conduct joint operations with Afghan security forces. He denied that Pakistan would strike peace deals with terrorists in order to calm Islamic militancy on its own soil.
Pakistan has insisted it is only pursuing negotiations with militant groups willing to lay down their arms, and it has relied partly on tribal elders to mediate. A handful of deals have already been struck.
U.S. officials say attacks where U.S. troops operate in eastern Afghanistan have gone up significantly since those deals were reached earlier this year.
The study said that besides the Taliban, other major militant groups find sanctuary in Pakistan. These include al Qaeda, Gulbuddin Hekmatyar’s radical Hezb-i-Islami group and the Haqqani network, led by Jalaluddin Haqqani and his son, Siraj.
“These insurgent groups find refuge in Pakistan’s Federally Administered Tribal Areas, North West Frontier Province, and Baluchistan Province,” RAND said in a news release. “They regularly ship weapons, ammunition and supplies into Afghanistan from Pakistan, and a number of suicide bombers have come from Afghan refugee camps based in Pakistan.”
The report also called on the U.S. and its allies to help build the Afghan security forces, particularly the police, and to improve the quality of local governments, especially in rural regions.
It also claimed that Afghanistan’s police are incompetent and “almost uniformly corrupt,” echoing frequent criticism of the police by international officials here.
The U.S. is spending billions of dollars to train and equip the Afghan police, but the efforts are still years away from being completed.
- Posted by Sanat SurHuman rights violations you say lets see.
1.Ahmediya sect students kicked out of college in Lahore.
2.Hudood ordinance(gross violation of rights of 50% of population ie women.)
3.terror bombing using F-16 fighter jets of Balochistan.
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…
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And as for as our minorities:
1.Muslims
There was a proper inquiry into Gujrat riots and many many people were given life sentences(practically all hindus),muslims are equal partners in our growth India’s richest man:Azim Premji,fmr prez:APJ Kalam,Pharma baron:Yousuf Hamid etc etc etc.Most of them are acutely aware of the fact that pakistan is a feudal punjabi muslim state and many have died fighting against pakistan in the many wars we have fought (and won).
2.Sikhs
Sikhs are 4 times richer than hindus and are fully integrated in Indian society they don’t exactly have fond memories of what your dear Aurangzeb did to teg bahadur etc.I know you are trying to stir things up keep trying,really please do.
3.Christians
wow what’s next parsee,jain,bahai ?
Try tolerating the rights people who aren’t punjabi sunnis males(>70% of your pop) then we’ll talk.
Till then please please fix your economy we don’t want a illegal immigrant problem on our western border like we have with Bangladesh.
- Posted by Shantanu ChatterjeeAgain, the occupiers mind speaks proudly of another occupied land, Hyderabad.
- Posted by SamiIt was Muslim Kings, one of the richest places in the world, who was thrown out, robbed by their ennormous wealth. their family was asked to leave.
And now you are so proudly bragging about Hyderabad?
Go back and read the history. Then again, occupiers are prone to change the history books.
The Muslim culture is still very apparent there.
Pakistan is not an occupier. India is. You cannot admit because the con artists always believe in taking over others wealth however you can.
Sami
READ THIS YOU CRAZY PAKISTANIS.
I copied for you from one of the India related blogs in Reuters.
“Sometimes journalists are accused of only writing about bad news, so I wanted to share with you a wonderful day I had last Friday travelling to Hyderabad.
For a change, even the journey was smooth. I went on a brand-new plane with one of India’s new airlines — not only was the service good, but it actually left exactly on time, and arrived early. A bit of a rarity in my recent experience of India’s congested airports and airspace.
And when I arrived, what an airport. The Rajiv Gandhi International Airport, which was opened in March, is truly state-of-the-art, incredibly clean, very spacious and stylish. A public-private partnership, it would grace any country in the world, and clearly had been built with room for Hyderabad to expand. Again, a pleasant change from Delhi’s chaos, where the airport is several steps behind demand.The private sector won’t solve all of India’s problems, but here were a couple of examples of liberalisation at its best, of reforms which have unleashed the country’s vast economic potential.
My destination was the new Google office and India headquarters, where I was giving a talk on my life as a foreign correspondent, and especially the last six years in South Asia. I also gave a similar talk to a smaller crowd at Indian School of Business, recently ranked at number 20 in the Financial Times list of the top business schools around the world.
The people I met at both places were enthusiastic, intelligent and dynamic. They asked plenty of thoughtful, probing questions about the media, and were generally fun to hang out with. The energy at Google was pretty contagious.
It’s the sort of day which made me genuinely optimistic about India’s potential. If there is a downside, though, it is that very little of this energy and dynamism seems to be going towards solving India’s continuing problems, of poverty and heathcare and education.
The young seem pretty cynical about politics, and probably have good reason to be. Not that many of them could break into politics even if they wanted to, without the right family or vote bank behind them.
Still, let’s just hope that India continues to harness the energy and dynamism of its young people. I guess quite a few of the Googlers will go on to do MBAs, and with a bit of luck a few will stay and use their expertise in India, rather than go abroad.”
- Posted by Sanat Sur