Re: Pakistan: A most surprising success story - Newsweek
Very true. Peace = peas.
Re: Pakistan: A most surprising success story - Newsweek
Soomri, learn to read babu, i said shaukat aziz, kis class me partehy ho munna?
Promise in Pakistan - The world’s most surprising economic success story
Promise in Pakistan
*What’s behind one of the world’s most surprising economic success stories? *
By Ron Moreau
Newsweek International
March 27, 2006 issue - In the late 1990s Lahore-based businessman Iqbal Ahmed was depressed. Pakistan was isolated internationally and in the grip of a deep recession, and his modest, liquefied-petroleum-gas operation didn’t seem to be going anywhere. “I used to get up and say, ‘What the hell, it’s another day’,” he recalls. “Now I can’t wait for the day to begin. I see a very bright future.”
Ahmed has good reason to be optimistic. Two years ago he signed a deal with Houston’s Hanover Energy Co. that has helped transform his LPG extraction plant into the largest and most efficient in Pakistan, with revenues last year of $130 million. Backed by several international investors, Ahmed has bid some $400 million to buy a controlling interest in Southern Sui Gas, one of two state-owned gas production and distribution companies that are being privatized. And he recently signed a memorandum of understanding with Excelerate Energy of Houston to import liquefied natural gas into Pakistan in supertankers. “We’re enjoying a sea change in economic conditions and opportunities,” says Ahmed, 60. “Pakistan is open for business.”
The proof is in the numbers. Last year the country’s GDP growth rate hit 8.4 percent, the world’s second highest behind China, following two years of solid 6 percent growth. This year the economy is predicted to expand by nearly 7 percent. After years of instability, with the government and military trying to distract people from their economic woes by waging jihad in Kashmir and railing against neighboring India, a true middle class is now developing. Economic reforms have given the government money to invest in health and education, and foreign investors are eying Pakistan for the first time. In many ways the country has become the world’s most surprising economic success story.
It’s a heady turnaround for a nation that, in the late 1990s, was practically a failed state with near-zero GDP growth. Because of its headlong pursuit of nuclear weapons, Pakistan had become the world’s most sanctioned nation after Libya. International aid had dried up. The government was forced to borrow at exorbitant short-term rates, burdening the country with a crushing $38 billion debt. “We were in a real soup when [Gen. Pervez] Musharraf took over,” says Ziauddin (he uses only one name), the Islamabad editor of the Dawn newspaper.
One of Musharraf’s first and smartest moves after his 1999 coup was to appoint Shaukat Aziz, a dapper and urbane international banker, as his economic czar, and to give him a free hand to revive the economy. But what really turned the country’s fortunes around was September 11. “The 9/11 attack was the best thing that ever happened to Pakistan,” says Lahore-based businessman Salmaan Taseer. The United States and Europe immediately lifted all sanctions; Washington gave Pakistan $600 million outright to meet urgent debt payments, and forgave another $1.5 billion in debt. Working with Aziz, America and other creditor nations also rescheduled Pakistan’s heavy debt over a manageable 30 to 35 years. In 2004, the United States pledged $3 billion in economic and military assistance over the next five years, in addition to $100 million for education reform. The EU pitched in, lifting quota restrictions on Pakistan’s main export, textiles.
At the same time, Aziz, who is now prime minister, began enacting a series of common-sense economic reforms. They focused on boosting fiscal discipline, government transparency and accountability. He quickly cut the budget deficit from 8 percent to 4 percent by slashing spending, and lowered interest rates. Since 2002, he has increased tax revenues by 20 percent. He also instituted a sweeping privatization program that has won kudos from both domestic and foreign investors. State-owned companies in numerous industries—banking, cement, fertilizer, utilities—have been sold off, as has a chunk of the state’s inefficient telecom giant, PTCL.
The newly privatized and cash-flush banks have been on a lending spree, extending loans to capital-starved domestic businessmen and to the Pakistani middle class, which until 2002 had little access to consumer credit. People have snapped up credit cards, and are buying cars and other big-ticket products with easy-credit bank loans. “This is the best government we’ve had in the past 30 years,” says prominent Lahore businessman Syed Babar Ali, who heads some of the country’s biggest joint-venture companies, including Coca-Cola and Nestlé.
Foreign investors have been flocking to Pakistan to bid on privatizations and on licenses in the newly opened telecom sector. The sale of two cellular-phone licenses (won by U.A.E. and Norwegian companies) netted the government nearly $600 million. It’s a good investment as Pakistan, with 24 million cell-phone users, is now the world’s fastest-growing wireless market after China. Indeed, Pakistan is expected to receive upwards of $3 billion in foreign investment this year, largely in telecom and gas and oil exploration. The Karachi Stock Exchange recently hit a record high.
Bullish domestic investors, too, are snapping up telecom licenses and state assets. Businessman Taseer raised $40 million from Pakistani banks and $25 million from a U.S. venture-capital company in two months as part of his successful bid for a wireless license. He is also building a 350-room Hyatt hotel and shopping-mall complex in Lahore with $40 million in debt and equity that he organized from domestic banks and investors in just six weeks. “This would have been inconceivable before,” says Taseer, 50, a cigar-smoking tycoon who publishes the Daily Times newspaper and is constructing Lahore’s tallest office building. “Not long ago, we would have waited at least three years to get a loan from an international bank. In the last two years there has been more economic activity in Pakistan than in the past 50.”
Even Pakistan’s nascent technology sector—dwarfed by India’s—seems to be taking off. Salim Ghauri, the CEO of Lahore-based NetSol Technologies, says his company’s software revenues this year are expected to jump to $19 million, compared with last year’s $11 million. DaimlerChrysler uses Ghauri’s LeaseSoft auto-leasing and financing software in its operations in eight Asian countries, and Toyota uses it in Thailand and China. “We are competing with the best in the world, and we are coming out on top,” says Ghauri, 51, who set up NetSol in 1996 after he returned from working as an IT consultant in Australia.
Still, all is not rosy. Pakistan must modernize its creaky infrastructure, further improve tax collection and, most important, normalize economic relations with India. Government critics say the current boom is not benefiting the country’s poorest citizens, who make up more than one third of its 160 million people. “The rich have become very rich since 9/11, and the middle class is better off, but not the mass of Pakistanis,” says Dawn’s Ziauddin. Aziz counters that a recent government-sponsored survey indicates that the country’s heady growth has reduced the number of Pakistanis living below the poverty line from one third to a quarter of the population (interview).
Some bankers and economists warn that the economy is dangerously overheating, due to unsustainable consumer demand and easy credit to both industrialists and consumers. Aziz and the government dismiss the concern—but consumers and the private sector have borrowed more money from the banks in the past two years than they had in the previous 12. Critics argue that growth-spawned inflation, which hit a high of 11 percent one year ago and is running this year at 8.5 percent, is a big reason the poor are not benefiting from the boom. “Inflation is clearly eroding the purchasing power of the poor,” says a foreign banker in Islamabad. This year the price of sugar is up by 26 percent; wheat and potatoes, by 15 percent.
According to the foreign banker, who asked not to be named because of the sensitivity of his comments, “The government is running the [economy] like it’s heading for elections.” True: President Musharraf and Aziz areeying the crucial 2007 parliamentary elections. Organized political opposition to Musharraf is rising, and he and Aziz are hoping that an economic resurgence will persuade average voters to return them to power for another five years. That’s what most businessmen are hoping for, too. But if the rewards of the boom don’t start trickling down, the country’s runaway growth could ironically prove to be the government’s undoing.
Re: Promise in Pakistan - The world's most surprising economic success story
anice article on paks economy, shows proof of musharafs success once again.
go back to your bedroom and shed your tears oppersition.
Re: Promise in Pakistan - The world’s most surprising economic success story
Re: Pakistan: A most surprising success story - Newsweek
Poverty, unemployment declines: govt
The overall poverty across the country has declined by 6.7 per cent as in the urban areas it has reduced by 5.30 per cent and in the rural areas it fell by 7.2 per cent, Dr Akram Sheikh, deputy chairman Planning Commission, said in a press briefing after a meeting of the National Economic Council (NEC). The National Economic Council (NEC) that met here on Tuesday with Prime Minister Shukat Aziz in the chair was told that the overall poverty has reduced by 6.7 per cent from 32.1 per cent in 2001 to 25.4 per cent in 2005. The NEC meeting reviewed the mid-year economic performance, mid-year implementation of the Public Sector Development programme 2005-06 and Vision 2030. The meeting was attended among others by governor NWFP, chief ministers, Punjab, NWFP, Sindh, Balocistan, president AJK, federal ministers and senior officials. Dr Sheikh said poverty in the urban areas was at 22.7 per cent in 2001, which reduced to 17.2 per cent in 2005. In the rural areas poverty was at 39 per cent in 2001, which declined to 31.8 per cent in 2005. He said the Federal Bureau of Statistics completed a survey with regard to poverty. However, its detailed analysis is under way which is to be completed by the end of this month. The World Bank, ADB, DFID and local NGOs have been invited to inject their contribution in the ongoing detail analysis about poverty. He said that according to preliminary analysis of the survey conducted by the FBS, poverty has reduced to 6.7 per cent. The detail analysis of the poverty survey will be the part of the report of millennium development goals for 2006 that will be printed by April next.
He said that unemployment rate for current year has fallen to 6.8 per cent as in 2003-04, 42 million jobs were created which swelled to 47.55 million in 2005-06. Dr Sheikh said the expected GDP growth is close to 6.5 to 7 per cent in the FY 2006 and the additional fiscal space created mainly due to better revenue collection and debt management has allowed government to increase development expenditure and the development spending today is all times high. He said that in the agriculture sector, over 3 per cent growth is expected, in the industrial sector, over 9 per cent growth is likely, while in large scale manufacturing, over 12 per cent, in services, 6.8 per cent and the country is expecting 6.5 to 7 per cent overall GDP growth this financial year. About the Public Sector Development Programme, he said the federal government has increased its share in the PSDP by 85 per cent from Rs 113 billion in 2003-04 to Rs 204 in 2005-06. He said there are 1,512 ongoing projects in Pakistan under the PSDP, which cost Rs 1.734 trillion. He said it shows that development activity is picking up in the country. He said Pakistan’s exports would cross the figure of $18 billion against the target of $17 billion this year. During the last six months period (July-December), he said, Rs 52.8 billion were spent on the Public Sector Development Programme showing an increase of 46 percent if compared to the expenditures made during the same period of last year 2004-05. However, he said the implementation mechanism needs further improvement. Replying to a question, Dr Sheikh said 25 per cent projects in the PSDP are moving slowly, as they are behind the schedule. To another question, he said that for dams, the government would have no financing problems. About foreign direct investment (FDI) in the country, Dr Sheikh said that during the six-month period of the current fiscal, Pakistan received FDI of $1.462 billion as against the investment of $540 million during the same period in 2004-05 showing an increase of 190 percent. Dr Sheikh said Pakistan is to achieve the target of $3 billion for attracting foreign investment in the country in this year. He said Vision-2030 will be focused on energy security, water security, food security, up-gradation of infrastructure, better logistics, end-to-end supply chains, new technology to improve productivity and sustain growth as well as competitiveness.
http://www.jang.com.pk/thenews/mar2006-daily/01-03-2006/main/main3.htm
Re: Pakistan: A most surprising success story - Newsweek
encouraging... WEST PUNJAB BIG UP YOUR SELF
Re: Promise in Pakistan - The world's most surprising economic success story
go back to your bedroom and shed your tears oppersition.
Already being discussed,read before you post.
Anyways, a reality check for you, quote from the article, something which everyone already knows:
But what really turned the country's fortunes around was September 11. "The 9/11 attack was the best thing that ever happened to Pakistan
Re: Pakistan: A most surprising success story - Newsweek
very good news.
hopefully musharaf would get elected again and pakistan would continue to grow like this.
i see a prosperous pakistan by 2010.
Re: Pakistan: A most surprising success story - Newsweek
The FDI you see coming in Pakistan is basically from government shedding somes of its excess (corporations, banks etc) while not a lot of new business is coming in. It makes sense as why would even me would want to invest in pakistan where taliban / alqaeda can bomb, riot and whatnot (negative image also boosted by real facts).
not true, there are many businesses coming in, makro is investing $5 billion, river island, debeinums, selfridges and many more are investing here.
plus there are soo many big multinational firms investing in real estate.
FDI is expected at $3 billion this year, only pak steal would be privatised which should be under $1 billion, so thats alot more left for businesses.
but remember targets are always set lower then expected, i pridict $3.5 billion investment in fdi this year/
Re: Pakistan: A most surprising success story - Newsweek
congrats. economic progress and education are the only andidotes for factional malaise. Musharaf and Aziz have provided much needed stability. It is important people of Pakistan ensure they don't fall prey to the inevitable fundos and nay sayers.
JAI HIND but best of luck to you guys too.
Re: Pakistan: A most surprising success story - Newsweek
when inflation is higher than growth it is called charity driven economy the moment tap is off same old crap comes in fore
Re: Pakistan: A most surprising success story - Newsweek
I disagree. Solution of Kashmir dispute will probably bring down Pakistan’s defence expenditure, but India will not stop.
Re: Pakistan: A most surprising success story - Newsweek
Goodluck Pakistan.
Re: Pakistan: A most surprising success story - Newsweek
FDI continuing to flood into Pakistan.
Warid to invest $1bn
KARACHI, March 22: Warid Telecom will invest $1 billion in Pakistan by mid of 2007. The company has already invested $450 million during the current phase of operation. This was stated by Chief Executive Officer Warid Telecom Hamid Farooq. He said that the company had a customers’ base of three million providing coverage in 100 cities and links with 100 international roaming partners, says a press release.
Re: Pakistan: A most surprising success story - Newsweek
The German Metro Cash and Carry firm has pledged $500 million investment in Pakistan, along with others.
http://www.dailytimes.com.pk/default.asp?page=2006\03\23\story_23-3-2006_pg12_1
“Pakistan’s market potential would fit very well with the business concept of Metro Cash & Carry“, said the CEO and President of METRO Group, Dr. Hans-Joachim Körber, at a joint press conference with the Pakistani Prime Minister Shaukat Aziz in Islamabad. “With its population of around 154 million, a noticeably developing infrastructure and an impressive growth perspective, Pakistan is a very promising market for us“.
http://www.metro-cc.com/servlet/PB/menu/1019035_l2/index.html
Re: Pakistan: A most surprising success story - Newsweek (Merged)
Pakistan sells $800m global bonds
NEW YORK: Pakistan sold $800 million in a two-part 10 and 30-year global bond deal on Thursday, market sources said. Pakistan sold $500 million in notes maturing on March 31, 2016 at a 7.125 per cent coupon, priced at par to yield 239.6 basis points over US Treasuries. The $300 million in notes maturing on March 31, 2036, were sold at a 7.875 per cent coupon, priced at par to yield 301.8 basis points over US Treasuries. Demand for the 10-year bond was above $1.3bn, while demand for the 30-year note was around $700m, a source said. Investors had been expecting smaller amounts for the deals, such as a $500m tranche for the 10-year and just $250m for the 30-year. Citigroup, Deutsche Bank and JP Morgan were the lead managers of the bond issue which is rated “B2” by Moody’s Investors Service and “B+” by Standard & Poor’s. The issue settles on March 30. Pakistan, which had been under economic sanctions after conducting nuclear tests in mid-1998, returned to the international debt market for the third time since 2004 when it issued a $500m five-year eurobond. In Jan 2005, it sold a $600m Islamic bond.
http://www.jang.com.pk/thenews/mar2006-daily/25-03-2006/business/b8.htm
Re: Pakistan: A most surprising success story - Newsweek (Merged)
Yes there has been excellant progres on the economic front. Shaukat Aziz is doint terrific work. His installation was Musharrafs best move.
Re: Pakistan: A most surprising success story - Newsweek (Merged)
Pakistan’s forex reserves reaching $14 billion
Pakistan’s foreign exchange reserves will reach $14 billion with money generated from 10 and 30-years Sovereign Bonds, said Adviser to Prime Minister on Finance Dr Salman Shah told reporters on Sunday. Earlier, addressing a press conference at the State Bank of Pakistan’s Lahore office, Salman Shah said, “Subscription of Sovereign Bonds by leading asset management companies in the US and the UK shows investors’ confidence in Pakistan’s economic and political stability.” He said a team headed by the State Bank governor focused on the Far Eastern and European markets, and another team headed jointly by him and Dr Ashfaque Hasan Khan focused on the North American markets. The two teams organised road shows to attracting $2 billion in investment, he said. “10-year bonds earned $1.3 billion and 30-year bonds fetched $700 million in subscriptions.” Dr Ashfaque said 31 percent of the 10-year bond investors were from the US, 45 percent from Europe and 24 percent from the Middle East and Far East, and 32 percent investors of 30-year bonds were from the US, 42 percent from Europe and 26 percent from Middle East and Far East. He said 50 percent of the buyers of 10-year bonds were asset managers, 28 percent were banks, 13 percent were insurance companies and 10 percent were from retail, while 50 percent of buyers of 30-year bonds were asset managers, 27 percent were banks, 18 percent were insurance companies and 5 percent buyers were from retail. The bonds were listed in Luxembourg. He said the government was planning 15, 20 and 25-year investment instruments as well. Dr Salman Shah said this would send a positive signal to investors and would also facilitate the inflow of funds for mega projects in the near future. Pakistan is likely to achieve a landmark $3 billion foreign investment this year according to government estimates.
http://www.dailytimes.com.pk/default.asp?page=2006\03\27\story_27-3-2006_pg7_19
Good news…
http://www.msnbc.msn.com/id/11902379/site/newsweek/from/ET/
Pakistan’s Economy second best after China :D](http://www.msnbc.msn.com/id/11902379/site/newsweek/from/ET/)
Promise in Pakistan
What’s behind one of the world’s most surprising economic success stories? In part, September 11.
By Ron Moreau
Newsweek International
March 27, 2006 issue - In the late 1990s Lahore-based businessman Iqbal Ahmed was depressed. Pakistan was isolated internationally and in the grip of a deep recession, and his modest, liquefied-petroleum-gas operation didn’t seem to be going anywhere. “I used to get up and say, ‘What the hell, it’s another day’,” he recalls. “Now I can’t wait for the day to begin. I see a very bright future.”
Ahmed has good reason to be optimistic. Two years ago he signed a deal with Houston’s Hanover Energy Co. that has helped transform his LPG extraction plant into the largest and most efficient in Pakistan, with revenues last year of $130 million. Backed by several international investors, Ahmed has bid some $400 million to buy a controlling interest in Southern Sui Gas, one of two state-owned gas production and distribution companies that are being privatized. And he recently signed a memorandum of understanding with Excelerate Energy of Houston to import liquefied natural gas into Pakistan in supertankers. “We’re enjoying a sea change in economic conditions and opportunities,” says Ahmed, 60. “Pakistan is open for business.”
The proof is in the numbers. Last year the country’s GDP growth rate hit 8.4 percent, the world’s second highest behind China, following two years of solid 6 percent growth. This year the economy is predicted to expand by nearly 7 percent. After years of instability, with the government and military trying to distract people from their economic woes by waging jihad in Kashmir and railing against neighboring India, a true middle class is now developing. Economic reforms have given the government money to invest in health and education, and foreign investors are eying Pakistan for the first time. In many ways the country has become the world’s most surprising economic success story.
It’s a heady turnaround for a nation that, in the late 1990s, was practically a failed state with near-zero GDP growth. Because of its headlong pursuit of nuclear weapons, Pakistan had become the world’s most sanctioned nation after Libya. International aid had dried up. The government was forced to borrow at exorbitant short-term rates, burdening the country with a crushing $38 billion debt. “We were in a real soup when [Gen. Pervez] Musharraf took over,” says Ziauddin (he uses only one name), the Islamabad editor of the Dawn newspaper.
One of Musharraf’s first and smartest moves after his 1999 coup was to appoint Shaukat Aziz, a dapper and urbane international banker, as his economic czar, and to give him a free hand to revive the economy. But what really turned the country’s fortunes around was September 11. “The 9/11 attack was the best thing that ever happened to Pakistan,” says Lahore-based businessman Salmaan Taseer. The United States and Europe immediately lifted all sanctions; Washington gave Pakistan $600 million outright to meet urgent debt payments, and forgave another $1.5 billion in debt. Working with Aziz, America and other creditor nations also rescheduled Pakistan’s heavy debt over a manageable 30 to 35 years. In 2004, the United States pledged $3 billion in economic and military assistance over the next five years, in addition to $100 million for education reform. The EU pitched in, lifting quota restrictions on Pakistan’s main export, textiles.
At the same time, Aziz, who is now prime minister, began enacting a series of common-sense economic reforms. They focused on boosting fiscal discipline, government transparency and accountability. He quickly cut the budget deficit from 8 percent to 4 percent by slashing spending, and lowered interest rates. Since 2002, he has increased tax revenues by 20 percent. He also instituted a sweeping privatization program that has won kudos from both domestic and foreign investors. State-owned companies in numerous industries—banking, cement, fertilizer, utilities—have been sold off, as has a chunk of the state’s inefficient telecom giant, PTCL.
The newly privatized and cash-flush banks have been on a lending spree, extending loans to capital-starved domestic businessmen and to the Pakistani middle class, which until 2002 had little access to consumer credit. People have snapped up credit cards, and are buying cars and other big-ticket products with easy-credit bank loans. “This is the best government we’ve had in the past 30 years,” says prominent Lahore businessman Syed Babar Ali, who heads some of the country’s biggest joint-venture companies, including Coca-Cola and Nestlé
Foreign investors have been flocking to Pakistan to bid on privatizations and on licenses in the newly opened telecom sector. The sale of two cellular-phone licenses (won by U.A.E. and Norwegian companies) netted the government nearly $600 million. It’s a good investment as Pakistan, with 24 million cell-phone users, is now the world’s fastest-growing wireless market after China. Indeed, Pakistan is expected to receive upwards of $3 billion in foreign investment this year, largely in telecom and gas and oil exploration. The Karachi Stock Exchange recently hit a record high.
Bullish domestic investors, too, are snapping up telecom licenses and state assets. Businessman Taseer raised $40 million from Pakistani banks and $25 million from a U.S. venture-capital company in two months as part of his successful bid for a wireless license. He is also building a 350-room Hyatt hotel and shopping-mall complex in Lahore with $40 million in debt and equity that he organized from domestic banks and investors in just six weeks. “This would have been inconceivable before,” says Taseer, 50, a cigar-smoking tycoon who publishes the Daily Times newspaper and is constructing Lahore’s tallest office building. “Not long ago, we would have waited at least three years to get a loan from an international bank. In the last two years there has been more economic activity in Pakistan than in the past 50.”
Even Pakistan’s nascent technology sector—dwarfed by India’s—seems to be taking off. Salim Ghauri, the CEO of Lahore-based NetSol Technologies, says his company’s software revenues this year are expected to jump to $19 million, compared with last year’s $11 million. DaimlerChrysler uses Ghauri’s LeaseSoft auto-leasing and financing software in its operations in eight Asian countries, and Toyota uses it in Thailand and China. “We are competing with the best in the world, and we are coming out on top,” says Ghauri, 51, who set up NetSol in 1996 after he returned from working as an IT consultant in Australia.
Still, all is not rosy. Pakistan must modernize its creaky infrastructure, further improve tax collection and, most important, normalize economic relations with India. Government critics say the current boom is not benefiting the country’s poorest citizens, who make up more than one third of its 160 million people. “The rich have become very rich since 9/11, and the middle class is better off, but not the mass of Pakistanis,” says Dawn’s Ziauddin. Aziz counters that a recent government-sponsored survey indicates that the country’s heady growth has reduced the number of Pakistanis living below the poverty line from one third to a quarter of the population (interview).
Some bankers and economists warn that the economy is dangerously overheating, due to unsustainable consumer demand and easy credit to both industrialists and consumers. Aziz and the government dismiss the concern—but consumers and the private sector have borrowed more money from the banks in the past two years than they had in the previous 12. Critics argue that growth-spawned inflation, which hit a high of 11 percent one year ago and is running this year at 8.5 percent, is a big reason the poor are not benefiting from the boom. “Inflation is clearly eroding the purchasing power of the poor,” says a foreign banker in Islamabad. This year the price of sugar is up by 26 percent; wheat and potatoes, by 15 percent.
According to the foreign banker, who asked not to be named because of the sensitivity of his comments, “The government is running the [economy] like it’s heading for elections.” True: President Musharraf and Aziz areeying the crucial 2007 parliamentary elections. Organized political opposition to Musharraf is rising, and he and Aziz are hoping that an economic resurgence will persuade average voters to return them to power for another five years. That’s what most businessmen are hoping for, too. But if the rewards of the boom don’t start trickling down, the country’s runaway growth could ironically prove to be the government’s undoing.