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Pakistan's economy turns the corner :-
Karachi | September 16, 2005 11:25:06 AM IST


Once looked down upon as a political pariah infested with institutional corruption, Pakistan seems to have turned a corner, with economic indicators pointing to a revival of business confidence.
A spectacular 8.4 per cent growth rate in the fiscal year ending in June has surprised many analysts. Among the most impressive indicators is the booming business in Karachi, the 15-million-population city located on the Arabian Sea.

In the last five years, the automobile sector, mostly based in Karachi, has seen a five-fold expansion - from 30,000 cars per annum to almost 150,000 during 2004-2005, according to the central State Bank of Pakistan.

Motorbike sales have surged to half a million a year, with export earnings during 2005-2006 expected to reach the $17 billion mark.

The figures are impressive for an economy that long suffered from mismanagement, fiscal and trade deficits, bureaucratic bottlenecks and corruption that, according to the Berlin based Transparency International, made it the second most corrupt nation in the world in the late 90s.

"After four consecutive years of growth rates, the incomes of people have risen and this is expressed in the purchasing power and the purchasing power raises the demand for the various goods and services," Ishrat Hussein, the head of the State Bank told DPA.

While the element of institutional corruption still remains a debatable issue, the economy seems to have turned the corner. Hussein, an ex-World Bank official, says the country has moved out of a decade-old vicious cycle of stagnation and structural snags that impeded progress and obstructed investment.

In early 2001, Pakistan's per capita income growth was negative, largely because of the economic repercussions of the 1999 bloodless coup staged by President Pervez Musharraf and the country's association with radical militants in Afghanistan and Kashmir, the Himalayan state disputed between India and Pakistan.

Today the per capita income has risen to almost $700 per year, compared to $400 in 2001, as a result of financial and administrative reforms coupled with privatisation and liberalisation of the banking sector.

"Pakistan's economy is on solid ground due to macroeconomic fundamentals, more private investment and significant expansion in the Public Sector Development Programme (PSDP)," a recent Asian Development Bank report said.

When Musharraf seized power in October 1999, Pakistan's external debt - a staggering $38 billion - to Gross Domestic Product (GDP) ratio was over 60 percent, today it has come down to 37 percent, said Nadeem Naqvi, CEO of AKD securities, one of the brokerage houses.

Pakistan's membership in the international coalition against terrorism, however, also has provided a big breather to Pakistan as far as its external debt is concerned.

"No doubt 9/11 has been the most critical factor in the restructuring of high-cost debts and a renewed inflow of new resources from donor countries, the World Bank and the ADB (for infrastructure projects), replacing the expansive with soft loans," said Naqvi.

One indicator of the renewed trust in the business environment is registration of 410 new public and private companies in IT, Telecom, and the Energy sector with the Securities and Exchange Commission of Pakistan (SECP) in August alone.

Long live Pakistan. Yes,indeed, Pakistan's economy has turned a corner. But one hopes that the economy continues the upward trend.. But still there is a long way to go.. This country surely has the potential to be one of the best...
Pakistan Zindabad

Actually, Pakistan is sustaining higher GDP for many years now and by looking at the past trend and policies, one can indicate that Pakistan will be able to sustain it's higher growth.

Export earnings for motor bikes 17 billion mark wow? is this correct reporting?

well there is some mistake... the total export level will be $17billion not just motorbike sales..

most important indicators in my opinion, and its from an indian website!