LAHORE: The Nawaz Sharif government is having a ball right now because, despite terrorism, chronic energy shortages, natural disasters and political upheavals like the PTI-led crippling 126-day long protest in Islamabad, numerous highly reputed media outlets like Bloomberg, Forbes and the Economist etc have reported that with a fast-improving security, dynamic Pakistan has the potential to become a global turnaround success story.
These media houses have asserted that while Prime Minister Nawaz Sharif is working in tandem with the military to deliver peace in the country, inflation here has slowed each month this year through April because transport and food prices had plunged forcing the State Bank of Pakistan to cut the benchmark interest rate in the month of May to its lowest level in 42 years.
Interestingly, the ‘Economist’ had gone ahead of others in May 2015 by saying that Pakistan’s economy was doing even better than the economies of Canada and the USA. It also said there was no corruption scandal at all in Nawaz Sharif’s current tenure and that transparency was being ensured.
This is a food for thought for Nawaz Sharif’s political adversaries.However, none of these outlets under review have questioned the components of the food basket that helped economic wizards calculate inflation.
In a nation whose 60 per cent of the population is of working age and which is undergoing rapid urbanisation process, massive future demands for food, energy, water and consumer goods have been rightly predicted.
With no mention of the dismal tax-to-GDP ration primarily owing to just 0.9 million assessees out of a population of 180 million, Bloomberg, Forbes and the Economist have lauded the influx of $1.45 billion Foreign Direct Investment in 2013.
These media houses have states that that the $46 billion China-Pakistan Economic Corridor was the key reason why the United States should reassess its Pakistan calculus, because this initiative has not only injected optimism in a country starved for infrastructure and energy investment, but the Pak-China deal has also greatly incentivised the government to harness terrorism.
Therefore, these esteemed Western media outlets think that the United States should encourage greater investment by using specialised agencies like the Overseas Private Investment Corporation, the US Trade Development Agency and USAID’s Development Credit Authority.
“Forbes.com,” the web site of the renowned 98-year old American business magazine “Forbes” that specialises in printing thought-provoking articles on finance, investment, industry and marketing issues, has recently stressed in its August 3, 2015 story that American policymakers and business leaders should be looking at Pakistan beyond the security lens.
The total circulation of “Forbes” magazine was 931,558 in 2013 and the allied websites, part of its Digital Division, reach out to more than 27 million visitors each month.The “Forbes.com” article writer has added in his report: “Getting our relationship right will require deeper thinking and action on issues around trade and investment, education, and broader economic development. The United States ought to be Pakistan’s preferred partner given its 70-year relationship. But in order to participate in the upside of the Pakistan story, the United States will need to view Pakistan not as a problem to be solved but as a potential partner. There are several changes that suggest the United States should soon act on this opportunity.”
This particular website, dubbed one of the top five financial sites by “Time” magazine, has actually compared Pakistan to Colombia in its August 3, 2015 report.It states: “The Pakistan of today is similar to that of Colombia in the late 1990s. Back then, words like “drugs, gangs, and failed state” were freely associated with the Andean country. Today, Colombia has a free trade agreement with the United States, a stable 3.5 per cent annual GDP growth, and security is vastly improved. Similarly, Western headlines on Pakistan today gloss over the progress on the security front, the increased political stability, and incremental progress on the economic front. In spite of this potential for Pakistan, it continues to suffer from a terrible country brand that has not caught up with realities on the ground.”
“Forbes.com” has acknowledged that Pakistan’s improving security dynamic was the first change to note, stating that soon after the December 16, 2014 attack on Peshawar’s Army Public School that had killed 145 people including 132 children, the country’s military had responded in force by taking out 157 terrorists via air strikes and ground operations in the North Waziristan and Khyber tribal areas adjacent to Peshawar.
The website maintains: “What has not sunk into international perceptions about the country is the tangible consensus among government, military, and Pakistani citizens against violent terrorists including the Pakistani Taliban and the alphabet soup of other terrorist groups in and around the country. Pakistan will continue to experience attacks by fringe groups, but policymakers and investors need to stop operating as if the Pakistani Taliban is at Islamabad’s doorstep.”
“Bloomberg,” a privately held financial software, data and media company headquartered in New York, had also gone on to write in one of its June 30, 2015 reports that the construction boom had marked the nation’s emergence as a leading market after Prime Minister Nawaz Sharif had succeeded in averting a Balance-of-Payment crisis with help from the International Monetary Fund.
“He is boosting infrastructure spending as the $232 billion economy expands at the fastest pace since 2008 amid the cheapest borrowing costs in 42 years. Shrugging off sectarian violence, bombings, killings and kidnappings, the benchmark KSE-100 stock index has advanced about 16 percent in the past 12 months, featuring among the world’s top 10 performers,” the report had said.
“Bloomberg” was quiet over stagnant industrialisation in the country and the flight of capital from country’s bourses, which should in no way be termed a failure for the sitting regime because it has been a continuous process at least since the 9/11 episode.
Having 192 offices worldwide, the above-cited “Bloomberg” report had carried a photograph of an under-construction Bahria Town underpass near the shrine of Hazrat Abdullah Shah Ghazi in Karachi.Its data had suggested that Pakistan’s construction sector had grown by 11.3 per cent till June 2014, almost double the 5.7 per cent target.
“Bloomberg” had reported that Nawaz Sharif, who assumed power in May 2013, had boosted the infrastructure spending by 27 per cent to Rs1.5 trillion for the financial year starting July 1, 2015, besides making significant progress in accomplishing targets under IMF’s $6.6 billion loan programme.
The report had quoted Charlie Robertson, a London-based chief economist at Renaissance Capital Ltd, as saying: “What’s changed is the delivery of reforms — privatisation, an improved fiscal picture and good relations with the IMF. D.G. Khan Cement Co., controlled by billionaire Mian Muhammad Mansha and Cherat Cement Company have announced expansion plans, while steel makers are selling shares.”
It had noted that while Pakistan’s cement industry had rallied 57 percent in the past year, more than triple the gains by the benchmark, Messrs D.G. Khan Cement, the third-largest maker of the construction material, had jumped 62 per cent, the Maple Leaf Cement Factory Ltd. had surged 161 per cent and Fauji Cement Co. Ltd. had gained 81 per cent.
The “Bloomberg” story had more to mention: “Moody’s Investors Service upgraded Pakistan’s sovereign credit ratings for the first time since 2008 in June but said stalling of the ongoing IMF programme or an unstable political environment would be credit negative. Violence, mostly from Taliban-linked insurgents who want to impose their version of Islamic law, has claimed more than 60,000 lives since 2001.”
Meanwhile, in one of its earlier reports of June 12, 2015, Messrs “Bloomberg” had revealed that Moody’s Investors Service had upgraded Pakistan’s sovereign credit ratings for the first time since 2008, making a strong mention of the soaring Forex reserves and the state’s economic overhauling under an IMF programme.
The report had further stated: “The yield on Pakistan’s dollar bonds maturing in April 2024 declined six basis points, the most in almost two months, to 6.97 per cent as of 12:53 p.m. in Karachi, data compiled by Bloomberg show. The Karachi Stock Exchange 100 Index of shares rose 0.1 percent in a fifth day of gains and the rupee advanced as much as 0.2 percent to the strongest since May 8, 2015.”
In its May 28, 2015 report, “Bloomberg” had highlighted Prime Minister Nawaz Sharif’s continuing emphasis to build power plants, roads and rail links, country’s increasing Forex reserves of $17.7 billion, the increase in development spending by 25 per cent to Rs525 billion for the year through June and the government’s plans to add 2,000 Megawatts of generation capacity in 12 months.
On May 5, 2015, the “Bloomberg” had revealed that Messrs Standard & Poor’s had raised Pakistan’s credit rating outlook to positive from stable, as lower energy costs and an IMF loan had triggered growth and had improved finances.
This is what this American media house had opined: “The positive outlook reflects our expectations of Pakistan’s improved economic growth prospects, fiscal and external performance, and the supportive relationship of external donors over the next 12 months. It affirmed its B- rating, which is among the so-called junk grades, and raised the 2015-2017 average growth projection to 4.6 percent from 3.8 percent. Risks include higher oil prices, weakness in key trading partners and violence, S&P said.”
The May 2, 2015 edition of the reputed London-based “Economist,” which is published since September 1843 with a global circulation in excess of 1.5 million, had written that Pakistan’s economy was doing even better than economies of Canada and America.
The “Economist” had contended: “Pakistan’s economy is growing at over 4 per cent when the whole Europe and Canada are below 3 per cent. Terrorism incidents have dramatically gone down in the last year. Operations in Fata and Karachi and throughout Pakistan are producing fruits. That and the economic policies of Nawaz Sharif regime have put the the economy back on track and economists and IMF are predicting that Pakistan’s economy would grow 4.7 per cent next year.”
According to the “Economist,” the key economic indicators in Pakistan’s economy include $17.7 billion Forex reserves, raised electricity tariffs and collection of some unpaid bills that have helped ease the cash burden on hard-pressed distribution companies, increase in tax receipts to broaden the base and cut exemptions, dispatch of over 150,000 tax notices to non-payers, roping in more retailers into the indirect-tax net, bringing the budget deficit below 4 per cent of GDP in 2015-16 from a peak of over 8% per cent, an under-control inflation, creation of jobs in services sector, increase in sale of cement, lowering of interest rates twice this year only, a 22 per cent upward trend in car sales, a projected saving a total of $12 billion in the next three years due to low oil prices and doubling of Pakistan’s stock market in dollar terms since the start of 2012 etc.
“The Economist” had gone on to comment: “Besides of these Key Performance Indicators (KPIs) of improving and booming economy, Pakistani government in Islamabad is very keen on the privatisation. There is no corruption scandal at all in their tenure and transparency is being ensured. Chinese $46 billion investment is besides of this economic upturn.”