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VOL. 27, NO. 35, May 16, 2008 (Jestha 01 2065 B.S.)
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Resilient And Ready
Despite political turmoil and occasional problems like food prices and weakening rupee, Pakistan’s economy is growing by seven percent. It looks set to take off further following introduction of democratic government
By SANJAYA DHAKAL in Islamabad, Pakistan
At a time when Nepal is constantly hearing about the astounding growths in two of its neighboring countries India and China, there is another neighbor, which is also attaining a handsome growth in all these years - Pakistan.
Like Nepal, Pakistan also went through political instability and conflict in the last couple of years but unlike Nepal, Pakistan was able to maintain a robust economic growth as well.
The bustling city of Karachi, the busy streets of Lahore and posh business centers of Islamabad – all point to the resilience of Pakistan’s economy.
Nepal and Pakistan have been through similar political problems in the last many years, which were marked by perpetual political uncertainties and turmoil.
However, Pakistan has provided an important lesson to be learned on how the economy can be kept growing amid such difficult circumstances.
The decade-long conflict has dragged Nepal’s growth below 2 percent while Pakistan has steadied itself on around seven percent growth for the last five years.
A country of over 160 million people, Pakistan has been successful in steering its economy on a right course despite political instability as well as energy crisis. It also suffers from load shedding problems like Nepal.
Located in a geo-strategic vantage point between energy-rich Middle East and Central Asian countries and market-rich China and India, Pakistan attracted Foreign Direct Investment (FDI) totaling $ 5.12 billion in 2007, according to Shafqat Saeed Piracha, vice president of Lahore Chamber of Commerce and Industry. The FDI level was way down at $ 485 million five years ago.
The size of Pakistan’s economy has nearly trebled from $ 58 billion to $ 148 billion in the last five years.
Although the level of poverty is still dissatisfactory, the per capita income has gradually increased reaching $ 925.
Its exports have increased by 86 percent in the period from $ 9.13 billion to $ 17.01 billion. The foreign exchange reserves have surged to $ 16.10 billion from $ 10.72 billion five years ago.
Textiles, food products, pharmaceutical products, construction materials, leather products are major export items of Pakistan. “We have plenty of cement, which we can export to Nepal if we can get access to transport them,” said Piracha, adding that his country has also been exporting cement to India.
In recent months, the price of cement in Nepal has increased by many folds due to lack of its availability since India has restricted its export in order to control inflation.
Exploring such avenues could be beneficial since the current level of Nepal-Pakistan trade is quite low. “Trade between us is not very high and is at around $ 4.7 million, mainly due to logistical difficulties. Pakistan has also provided duty free access to 10,000 metric tons of tea from Nepal,” said Masood Khalid, Additional Foreign Secretary of Pakistan.
Inflation, particularly in food prices, have hurt Pakistan like all other countries in the world. “We are also concerned by weakening rupee value against dollar,” Piracha said pointing to new challenges of Pakistani economy.
A huge market on its own, Pakistan was able to survive the turbulent times due to its robust indigenous economy. “We are large country of 160 million people. All of us will need certain products like we all will drink tea or buy something, travel somewhere – causing the economy to roll on,” said Khalid Maqbool, governor of Punjab province.
Over 50 million mobile phones have been sold in Pakistan, where 800,000 motorcycles are manufactured every year.
“But we are facing problem of energy. We have 3000 MW deficit in the energy at present,” said Dr. Ishrat-ul-abab, governor of Sindh province.
However, experts and businessmen believe that following the February election and transition to democracy, the economy of Pakistan could grow further in the coming years.
