Despite terrorism incidents, Pakistan’s economy on the rise

WASHINGTON: Pakistan's economy is on the rise and the country presents a vital success story due to an improved security climate, relative political stability and a growing middle class, says an article in the prestigious newspaper the Washington Post published on Wednesday.

The government of Prime Minister Nawaz Sharif and the army have gotten a reasonable handle on the deteriorating security climate, the opinion article said written by Afshin Molvai, a senior fellow at the Foreign Policy Institute of the John Hopkins University School of Advanced International Studies.

The article says several factors are fuelling Pakistan's enormous economic growth which also attracts foreign investment. Three key factors driving Pakistan's economic awakening are: an improved security climate, relative political stability and a growing middle class.

"These three interlocking pieces are fuelling Pakistan's growth story – a vital story given the size and geo-political weight of the nuclear-armed South Asian nation of nearly 200 million people," it added.

The Washington Post says Pakistan boasted the best stock market in Asia in 2016. The high-flying Karachi Stock Exchange Index is up more than 52 per cent over the past year – and rising. The exchange broke through the vaunted 50,000 mark last month – a first in history.

"What's more, Pakistan is winning plaudits from the International Monetary Fund, and its economy is forecast fora healthy 5.2 per cent growth rate in 2017, according to the World Bank," the article adds.

It says 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-capitalized – “emerging market” index. It will join 23 other countries on the index that represents10 percent of world capitalisation.

In 2013, when Nawaz was elected, it marked the first democratic transition of power in the country. He entered office as the great global transformation was taking place worldwide – of technological connectivity, rapid urbanisation and rising middle class consumption – continued to churn. And Pakistan has not missed that train.

The article says robust middle classes are vital to healthy societies and growing economies, and Pakistan's middleclass may have reached a tipping point, with some estimates suggesting that it accounts for more than half the population.

A Brookings Institution scholar argues that Pakistan's consumer middle-class market could hit $1 trillion by 2030. These middle classes are also attracting foreign investment. That bullishness has led Pakistan to enter the emerging-markets.

One of the latest post-BRICS acronyms of rising economies making the rounds: VARP, for Vietnam, Argentina, Romania and Pakistan. Yes, that Pakistan. Pakistan's giant neighbour China, the article says, has pledged a whopping $46 billion programme to build the China-Pakistan Economic Corridor (CPEC) that would build new highways, overhaul railway and create new infrastructure to support 10,000 megawatts of additional power.