Pakistan: Now or Never?
Perspectives on Pakistan
But the idea appears to be gaining momentum. Saudi Arabia is holding talks with officials in Pakistan, among other countries, to set up projects to grow wheat and other grains to protect itself from crises in world food supplies. Dubai-based private equity firm Abraaj Capital has already said it is looking at investing in agriculture in Pakistan and other Gulf countries are also showing an interest.
So is this good or bad news for Pakistan?
U.S. News & World Report says there may be ”potential for large and enduring benefits on both sides. The reported sellers of under-developed farmland, Pakistan and Sudan, for example, are poor and lack the resources to make their own land productive,” it says. “Foreign investment is meant to help the investor, but in these cases it might also help the host countries by improving roads and irrigation and, of course, providing cash.”
The Financial Times last month quoted a senior Pakistani official as saying of the talks to sell farmland to the United Arab Emirates: “Our aim is not to do away with precious farmland but in fact to raise the productivity of our farms and turn barren land in to fertile farmland.”
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.
After asking last month whether the media should be more positive about Pakistan – the comments on the whole seemed to suggest we should be, while not being blind to the risks– it was interesting to see that Malaysia’s top lender, Malayan Banking, had no such doubts.
Maybank said it had bought a 15 percent stake in Pakistan’s largest listed lender MCB Bank for $680 million, the largest banking acquisition into Pakistan, as it bet on a bright economic future despite the recent political turbulence. It said the acquisition would give it access to ”a high-growth and under-penetrated banking market with a large population”, and that it was confident about Pakistan’s political outlook.