Pakistan registering on emerging markets’ maps: Nokia executive

Says technology can help the country realise its full economic potential.

KARACHI: Slowly but surely, Pakistan is beginning to register on the maps of international emerging markets’ investors, according to D Shivakumar, the head of Nokia’s sales in India, the Middle East and Africa.

“For a country that has about 3% of the world population; one of the youngest populations; the tenth largest workforce and the potential of being the fifth or sixth largest telecom market in the world, the opportunities can only be immense,” said Shivakumar, who is one of the four people responsible for overseeing the Finnish mobile giant’s global sales efforts.

In an e-mail interview with The Express Tribune, Shivakumar laid out some of the key reasons why he felt Pakistan might be able to attract investment and which sectors he felt would most rapidly spur economic growth in the country.

Sectors like telecom and retail – the sectors in which Pakistan has seen massive growth in the recent years – would be an ideal combination for most emerging markets, he said. According to various industry reports including the impact of telecom on the GDP by London School of Business, Shivakumar said, a 10% increase in telecom penetration has a direct impact of 1.2% increase in the country’s GDP.

He said telecommunications can overcome many traditional barriers and costs to serve of many ‘physical’ industries like banking, health, education. “Telecom also generates many jobs in the value chain, something every emerging economy needs,” he added.

Highlighting the importance of agriculture – another important sector, which accounts for 21% of the country’s GDP – Shivakumar said Pakistan employs 43 % of its workforce in this sector. “Clearly, it needs to do a lot of work in the area of agriculture since so many families depend on this sector,” he added.

Pakistan’s $210 billion economy has been included in four emerging markets list: Dow Jones list, Goldman Sachs Next 11, Emerging and Growth-Leading Economies (EAGLEs) and FTSE – a list, representing economies that are expected to become some of the most important sources of global growth.

“Pakistan’s inclusion in four lists augurs well for the country; shows the confidence that the institutions have in Pakistan’s future growth potential,” said Shivakumar.

His diagnosis seems to be in line with that of Pakistani institutional investors. Executives at Cyan, a private equity firm based in Karachi, point out that according to a list published by Allworld Live, out of the 25 fastest growing Pakistani private companies, 10 were technology companies with an average (revenue) growth rate of 80%.

The same report also said that as investments pour into the core sectors – agri-business, logistics, consumer products, specialty manufacturing and technology – of Pakistan, technology adoption will likely increase in sectors that have historically not been much of a technology consumer.

Shivakumar is not one of those international executives who shy away from visiting Pakistan. He gave a detailed presentation titled ‘Winning in emerging markets’ at the 12th Management Association of Pakistan conference in Karachi earlier this month.

He said that with the world shifting its focus to emerging economies, Pakistan can greatly benefit as it has many strategic advantages.

“Pakistan’s young population and a favourable workforce to retiree ratio will see it reaping the benefits of the population dividend,” Shivakumar said. “This will also help in savings, thus helping investment.”

Pakistan can leapfrog from a physical infrastructure mode into a virtual infrastructure mode, he said, thanks to mobile technology. “Every service like banking, education, health etcetera can be offered virtually at a fraction of the current cost,” he said.

Published in The Express Tribune, December 30^th, 2011.