Pakistan: An Economic Turnaround?

I have wondered recently if Pakistan is moving slowly towards rightfully qualifying as a “failed state” or are things actually improving but just not visibly enough to those of us who are away from the country.

Needless to say, I am not the only one asking such questions. When I hear about the rising inflation, the social injustices against women, the radical religious and separatist movements, the gross inequities, and the failings of infratructure (roads, electricity, water etc), my head starts to feel heavy and fall in shame. These are real issues that people in Pakistan face every day, and they only see their problems becoming worse over time. I have been surprised by the number of my friends who have recently decided to move back to Pakistan, optimistic about opportunities there, but when I asked a friend who spent his entire life in Pakistan he said those moving back are either dreaming, or simply did not succeed abroad and hence have little options than to come back to a plush job with a “been-abroad” stamp on their back.

But there are other times when I do feel proud and am seriously tempted to think the tide may be turning (finally) in the right direction. I look at the team working on establishing a School of Science and Engineering at LUMS and I see how great things can happen when the right people put their minds to it. I hear about the success of some IT/Telecom firms (Al-Warid, TRG, Si-3), and the development of a non-profit, non-governmental culture and I am given some hope. However, its clear that there is a long road ahead and sustained effort from individuals and communities inside and outside Pakistan will be needed to keep the growth and development on track. As Pakistanis, if we do not succeed, and if we let people fall through the cracks, we will only have ourselves to blame. That would be the real shame!

Abrar Siddiqui has written a wonderful note on Pakistan’s recent economic trends for those who may be fishing for such information. Check out the full article here.

The numbers speak for themselves. Pakistan registered an economic growth rate of 8.4% last year, second only to China and highest in over two decades of the country’s history. With a steady increase in population of 1.9%, the per capita income also rose by 5.9% during last year. With the impact of high oil prices and 8th October Earthquake, the economy is still expected to keep its momentum and grow at a steady rate of 6.5% during the current year.

Targeting key services sectors, Pakistan has witnessed a boom in telecommunications, media and information technology while industrial and manufacturing growth created new records. As the budget deficit dropped from 8% to 4% and tax revenues went up by 20%, the government institutionalized a bold privatization policy that has attracted foreign investors from all over the world. A 26% stake in country’s telecom giant, PTCL, netted $2.6 billion for the government while two cellular-phone licenses grossed around $600 million last year. This year the government is aiming to attract $3 billion in foreign direct investment, highest ever for the 58 year old country.

Pakistan has eagerly emerged in very less time in the eyes of foreign investors as a prime location for investment. Still, the nation’s will and capacity to sustain the momentum in its growth and maintain its status in the eager eyes of foreign investors is yet to be tested. Perhaps, the country’s estimated growth till 2010 and its performance in next few more years will truly qualify this decade as the era of Pakistan’s re-emergence in the new global economy.

If you have not seen this before, I highly recommend Adil’s short video on Pakistan, inspired by Faiz’s classic poem “Hum Dekhein Gay“. Also Check out his blog.

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