Shift in focus: Rise of Pakistan just a matter of time, says David M Darst

Published: January 28, 2015
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Darst says Pakistan is one of nine nations that will add another China in 35 years. PHOTO: AFP

Darst says Pakistan is one of nine nations that will add another China in 35 years. PHOTO: AFP

KARACHI: 

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. 

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Reader Comments (42)

  • Atheist_Pakistani
    Jan 28, 2015 - 8:32AM

    how would they stop giving money to nawaz family and his government and set up project independently? that’s be great. same old ‘hype for progress’ b.s news.

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  • Tyggar
    Jan 28, 2015 - 9:45AM

    the rise of Pakistan is just a matter of time
    Yes it will rise and then land next to Saudi Arabia

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  • Saleem
    Jan 28, 2015 - 9:58AM

    In 1998 I heard the same thing. That rise of Pak was around the corner. 17 years later things are worse.

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  • M rahi
    Jan 28, 2015 - 11:17AM

    Good article. Lets work for a better tomorrow. Long live Pakistan.

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  • InvestorPakistani
    Jan 28, 2015 - 11:18AM

    I have been following and investing in KSE since last 15 years and have been able to time the market pretty well. I do not speculate and invest with intention of medium to long term only (I believe this is what as a Muslim I should do, i.e., not speculate). There were several excellent buying opportunities between 2007 and 2011. As a result my portfolio is doing just great. Unfortunately in stock markets, particularly our stock market, herd behavior rules. Meaning people do not invest on basis of individual stock fundamentals, but on the over all trend. For example in 2010 around the floods time, every one was selling like mad, and I picked up stocks. People thought I was crazy, but alhudulillah my buying spree paid off. The international investors also depend too much on secondary macro-level research on Pakistan which is seldom favorable. If international investors do their job well, they could earn much better from Pakistan than ANY of its neighbors or even western markets. And I am talking about returns on risk adjusted basis and on long term basis, not seasonal sporadic spikes.

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  • Jan 28, 2015 - 11:47AM

    Oh, no wonder! He’s in Pakistan, so he has to please the citizens and sponsors. Nevertheless, the young population under 30 is here to demand a better life, and all what the politicians can give them is guns, gore, and guts. Pity. Salams

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  • N.Sid
    Jan 28, 2015 - 12:37PM

    Though facing terrorism and other issues, the economy is still growing and now Pakistan GDP is 840 billion USD in purchasing power parity(26th largest in the world), and 245 billion USD on nominal basis. Need to let negativity go and start working, aspiring for greater heights and with lot of positive energy, this is what Pakistan need. The young generation is far too smart and brimming with positivity and this is what matters msot. Where there are challenges there are opportunities.

    http://en.wikipedia.org/wiki/EconomyofPakistan

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  • N.Sid
    Jan 28, 2015 - 12:40PM

    The rise of the billion dollar companies in Pakistan. Who says the economy is falling. You win some, you loose some.

    http://tribune.com.pk/story/483448/rising-tide-consumer-centric-companies-dominate-the-near-billion-dollar-club/

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  • Vectra
    Jan 28, 2015 - 12:50PM

    @N.Sid:
    The link you have given is of per capita income and that too world at large not pakistan specific and not of purchasing power parity

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  • N.Sid
    Jan 28, 2015 - 12:53PM

    Pakistan is all run by private enterprises. Even the education sector with more than 35000 private schools, close to 70 private universities, health sector is mostly private as well, the housing sector is all run by private real estate developers. So guess what, the failure of the government or incompetency doesn’t mean the failure of Pakistan and its close to 200 million people.
    What does it also mean…the government health/education/housing contribution(a paltry 2% of GDP) is substantiated by all private sector. In fact we don’t the government at all.

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  • N.Sid
    Jan 28, 2015 - 1:17PM

    @Vectra:
    Just type ‘GDP of Pakistan’ or ‘economy of Pakistan’ and open it on Wikipedia, World Bank or any other site.

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  • Abdul Malik
    Jan 28, 2015 - 1:33PM

    We Indians are eagerly waiting for Pakistan to rise and fly away to the moon, or anywhere else far away from the earth.

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  • Chachoo
    Jan 28, 2015 - 1:45PM

    Mark my words. The day Pakistan will end its discriminatory tactics in its constitution and will pave the way for the democracy like we see in Turkey then the whole world will be attracted to our country. We have to be a part of the modern world. At present even the Pakistani businessmen put their money in off-shore accounts because they are afraid. End Discrimination. End the Hatred. Embrace the modern world and progress.

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  • fazal gafur
    Jan 28, 2015 - 1:53PM

    Agreed with this and for sure Pakistan will be changed and Economic Leader in a decade if this country is run by a proper Govt., not by the Private Limited Company Management

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  • Pakistani
    Jan 28, 2015 - 2:43PM

    I fully agree. This can be accelerated if:

    1) We have honest leadership

    2) An effective legal system

    3) Security (which will allow foreigners to come and do business)

    We have all the resources and potential, but the absense of the above is stopping us from taking off.

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  • fact is fact
    Jan 28, 2015 - 2:54PM

    there is a need of will to prosper as a nation… where there is a will there is a way

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  • Omer
    Jan 28, 2015 - 3:05PM

    He is the EX-Chief Investment Strategist at Morgan Stanley, coming in and speaking as a Public Speaker and Author of Books.

    Other wise it sounded too optimistic!

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  • Bablu
    Jan 28, 2015 - 3:11PM

    Extraordinary person with extraordinary skills to deliver lecture. Good to listen to him yesterday.

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  • N.Sid
    Jan 28, 2015 - 3:42PM

    @Pakistani:
    Yes good suggestions, but to begin with one need to start with what is possible and pragmatic. Instead of looking for leader,… be one. Start with your home, your office, your vicinity, your area of expertise. Why wait for foreigners(point 3) to come and do business, make a head-start yourself. No one succeeds with foreign help, stand tall on one feet and use your expertise, education, talent, money to the best cause of yourself, your family, and will trickle down to the country as well.

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  • khaptaan
    Jan 28, 2015 - 3:44PM

    isko bhi paisay khila diey.. only khaptan can do this only khaptaan can do that as he is doing in KP (ordinary inkalabi)

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  • Kanwar
    Jan 28, 2015 - 4:12PM

    I have invested both in India and Pakistan markets and my return was 61% from India and 22% from Pakistan. Pakistan could do a lot better now because they are removing instability due to non state actors. If Pakistan irradicates terror issues, my returns can be a lot better and I will invest more in Pakistan.

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  • Agnostic Khan
    Jan 28, 2015 - 9:29PM

    He does not take into account the institutional buying by such giants as NIT…I have invested in it and the return is almost 40 %. The trick is to do it smartly…the general public with little Financial acumen usually sells in panic while stocks are sliding low and buys when they are high..while it should be the reverse…I hope every Pakistani invests their savings in stocks and forget about them for five years…it would do wonders…

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  • Blah
    Jan 28, 2015 - 10:02PM

    With only 220,000 investor accounts Pakistan has the lowest saving to GDP ration in the region. Stocks hold no appeal for common man. The stock exchange management, CDC, brokerage houses and corporates need to work together to educate people abt the importance of investing in businesses. Introduction to saving and investments should be taught as a course in universities,

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  • Jan 28, 2015 - 10:14PM

    Its a good hope I think and Pakistan will lead a big role in international economy, InshaAllah.

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  • umar waqas
    Jan 28, 2015 - 10:41PM

    Hope for the best,

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  • Jan 29, 2015 - 1:25AM

    I started stocks consulting service about 13 months back from scratch. During this time the investment of my clients increased to Rs.80 million. It shows that the goodwill made by experience and honesty pays off well in Pakistan. All clients are online connections and 95% have not seen me physically but the trust level is immense. We just need proper guidance and we can do anything.

    Recommend

  • Zerqa
    Jan 29, 2015 - 7:42AM

    http://1drv.ms/1zwlCrG

    This link provides a view of Pakistan through a business/enterprising lens. What we have, How we could,etc. Its yours!

    Recommend

  • Khalid Bugti
    Jan 29, 2015 - 8:12AM

    @Abdul Malik:
    Why do you come here if you hate it so much?

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  • Jan 29, 2015 - 10:32AM

    @Saleem:
    This is because our democracy didn’t survive.

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  • Raza Mohsin
    Jan 29, 2015 - 11:25AM

    The only thing in favor of Pakistan is that it has a population of 200mn and hence it is too big to fail as never a country so big has collapsed in the history of humanity.

    Unfortunately, there is always a first time

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  • Farzan Khan
    Jan 29, 2015 - 1:28PM

    The problem is that he is not well-aware of the mentality of the Pakistani youth. The youth is corrupt, uneducated, emotional, selfish and above all, the youth is not law abiding nor it is Pakistan loving.

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  • Saira Rizvi
    Jan 29, 2015 - 5:17PM

    @Farzan Khan:
    Please don’t confuse “youth” with “youthias”. The former word is used for the younger, energtic & ambitious generation while the later word is synonymous with confused, self-rightist & pessimist pseudo-intellectual followers of Imran Khan.
    Unlike youthias, the youth of Pakistan is optimistic and is contributing a positive role in the development of Pakistan and has won various international accolades Dr Umar Saif, Sharmeen Chinoy and Malala Yousafzai are few of the shining examples of Pakistani Youth.

    Recommend

  • Salam kamal
    Jan 30, 2015 - 9:18PM

    With such enormous levels of corruption, not a chance

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  • Ehtesham
    Jan 31, 2015 - 10:16AM

    The Youth Bulge is a very rare opportunity as well as an intense threat. If you are able to utilize the energies of your youth you are bound to prosper; alternatively the same demographic will express it anyway unlike their old predecessors. No wonder why we see every Telco Company, every political party, every local brand targeting youth as they are in majority with over 66% of total population under the age of 30. At the same time however the same disgruntled youth has been hired, trained and misused by Non – State Criminal groups and armed groups of political parties. This still goes on. So beware, it’s a Missile that be guided or misguided. Guide it or it will explode within.

    Recommend

  • Ehtesham
    Jan 31, 2015 - 10:17AM

    The Youth Bulge is a very rare opportunity as well as an intense threat. If you are able to utilize the energies of your youth you are bound to prosper; alternatively the same demographic will express it anyway unlike their old predecessors. No wonder why we see every Telco Company, every political party, every local brand targeting youth as they are in majority with over 66% of total population under the age of 30. At the same time however the same disgruntled youth has been hired, trained and misused by Non – State Criminal groups and armed groups of political parties. This still goes on. So beware, it’s a Missile that be guided or misguided. Guide it or it will explode within.Recommend

  • Ehtesham
    Jan 31, 2015 - 11:51AM

    Quantity doesnt matter as much as quality. Where will we go with such a big number of youth population if they aren’t qualified, skilled and are not absorbed by the economy. Either we can make make our humans a resource or leave them to loot and plunder the meager resources that we ate left with. The next 10 years are crucial in terms of directing priorities. Either we can rise as a regional power or get devoured by regional powers owing to our disorganized structure.

    Recommend

  • Greater Pakistan
    Jan 31, 2015 - 1:03PM

    My Pakistani fellows, Please let us start change from our ownself rather than pointing finger at gov. If everyone starts to think like that, it will change sharply and dramatically.

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  • khan
    Jan 31, 2015 - 5:18PM

    @khaptaan:
    What has he done in kpk ?

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  • Feb 1, 2015 - 6:41AM

    Well, really heartening to see the PTI comments up there. Instead of looking at the positives, they just flogged at the leaders. And Mr. Stanley is banking on these guys for this economy to improve. Pity him..

    Recommend

  • Shahbaz
    Feb 2, 2015 - 3:12PM

    @Abdul Malik: Your wish will never come true.

    Recommend

  • Sohail Sherali
    Feb 8, 2015 - 12:10PM

    Accumulation of Wealth is a subject taught in many universities.

    Investment into the stock market is also part of the course. Some 15 years back, I went on training course, there I came to know that some countries have negative rate on saving in the banks. I do not recall all the name of the countries but one was Japan other one was Swiss.

    Stock Exchange has create more training courses / awareness sessions. Here in Pakistan people do not do their own research, they look for tips to make money.

    Major Foreign funds manager are eyeing on the Pakistan Equity market.

    Mutual fund industry is growing. Do not look at the Index, Study the balance sheet, Profit & loss account, Chairman review, then you go for the investment, Stock brokerage house also help you. Recommend

  • Danish
    Feb 15, 2015 - 3:42AM

    I am a jobby and almost an year ago I started my own side business with very high risks. The risks paid me off and today masha allah I m doing great. It is very easy to pin-point the lows of government but we should understand our responsibility as well. We are being victim of issues because we are not doing anything for ourselves. We are not building ourselves. Laying back with a coffee cup and criticizing PAKISTAN is not the rightful act of any one, not even the citizens of Pakistan. If you want a change, be the change. People criticizing Pakistan are those who do not even stop at the red light! Is that also the government’s fault? There is only one question that matters, Did you grow yourself on your homeland? If not, then you would be weak within even after having a CEO bum in US.

    The youth need to understand that there are ways that can take you to prosperity within your homeland. Everything has a day one, have the guts and give it a start. Pakistan has an absolutely shining future. Recommend

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