Pakistan is located in a region that will bring major changes in the world economy in coming decades primarily due to its demographics.
With over 100 million people below the age of 30 aspiring to change their lives, the rise of Pakistan is just a matter of time, Morgan Stanley Chief Investment Strategist David M Darst said on Tuesday. Darst, however, was speaking in his personal capacity and not representing Morgan Stanley at the lecture.
“Demographics will play a major role in coming decades. Pakistan is among those nine countries in Asia that will add another China in the next 35 years and the impact of this change will be phenomenal on the world economy,” he said while giving a lecture on “The World Economic Environment: Where’s the Global Capital Going”.
It was part of a special series of lectures that was organised by The Aga Khan University here at its auditorium.
With a young population of an average age of 22 years, “I believe the opportunities that the young entrepreneurs from Pakistan have are going to make an exceptional contribution to the economy of the region,” he added.
Darst, who is the author of 11 books and has a PhD in economics from Yale, said it is wrong to believe that Pakistan is lagging behind due to its proximity with Afghanistan, Iran and India. “In fact, I believe Pakistan is in the centre of Asian countries like Iran, Bangladesh, Vietnam and Indonesia that will significantly contribute in the world economy in coming decades.”
Speaking about the strong fundamentals of Pakistan’s stocks, he said, with 31% returns in dollar terms Pakistan led the world markets in 2014. “What is important is that the stocks in Pakistan are still very cheap compared to the markets in the industrialised world and they are performing better than many markets in terms of returns,” he added.
“I am surprised to see low number of investors in the bourses of Pakistan. This must change considering the strong fundamentals of Pakistani stocks.”
Darst said women in the world are playing an important role in today’s world economy. The rise of the entrepreneurs from the developing world, especially women entrepreneurs, will also bring significant positive changes in this century.
Listing down the challenges to the global economy, he said though Pakistan and India have benefitted from the current sharp decline in oil prices, sudden fall in oil prices has rejuvenated fears of deflation in many countries.
He said Europe is redefining itself and the sharp changes in Europe can surprise the world at large.
Speaking on the challenges facing Europe in relation to Greece, he said the new elected prime minister of Greece could take decisions that may not go well with the euro and the overall economy of the continent.
Published in The Express Tribune, January 28th, 2015.