Pakistan’s economy is on the rise despite being perceived as unsafe around the world due to headline-making terrorist attacks, a Washington Post article has noted.
In an opinion piece for the US daily, Afshin Molavi – co-director of the emerge85 Lab and a senior fellow at the Foreign Policy Institute of the Johns Hopkins University School of Advanced International Studies – said the country is on track to becoming one of the world’s most exciting emerging markets.
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“Look beyond the headlines and see Pakistan today. It boasted the best stock market in Asia in 2016… is winning plaudits from the International Monetary Fund, and its economy is forecast for a healthy 5.2% growth rate in 2017, according to the World Bank,” Molavi wrote.
“That bullishness has led Pakistan to enter the emerging-markets acronym vernacular. One of the latest post-BRICS acronyms of rising economies making the rounds: VARP, for Vietnam, Argentina, Romania and Pakistan.”
Molavi credited three factors for Pakistan’s economic turnaround – an improved security climate despite the recent terror wave, relative political stability and a growing middle class. He said that while terrorist incidents like those last week may persist, Prime Minister Nawaz Sharif and the Pakistan Army leadership “may finally have a reasonable handle” on security.
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As for Pakistan’s middle class, the analyst said “it may have reached at tipping point, with some estimates suggesting that it accounts for more than half the population.”
“Brookings Institution scholar Homi Kharas argues that Pakistan’s consumer middle-class market could hit $1 trillion by 2030,” he wrote, adding that as the middle class grows, so will demands for more opportunities, and better services, security and stability.
“These middle classes are also attracting foreign investment,” Molavi said, pointing out that in mid-May the world’s largest research-based provider of index funds MSCI, will officially graduate Pakistan from the frontier-market category to the emerging market index.
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The analyst added that if Pakistan succeeds in taming its electricity gaps with China’s help, the circle of growth will continue and the country could be headed for a decade of ‘normalcy’.
“As Pakistan turns a corner, Trump administration policymakers fixated on the terrorism threat just might miss this extraordinary opportunity in a country that has long been a terror bane,” Molavi wrote.
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