Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
jyala ki pooja 
leken main na ye poocha hai agr ye sach mana jaye to haramkhori aur bhattakhori ka karobar JI main reh kr zayada acha chalta hota to wo PMLn ya MQM main q jatay.
Aur JI k trained banday hi q PMLn main jatay hain? matlb PLMn ko chaheay hi haramkhor. shareef banda to kisi kaam ka nahi pmln k leay
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
Bhai sahib
Aap ka jawab pichli post key pehli line main hay…JI eak institute eak University hay…ni matter how good or bad student u are, u have to leave…
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
Chalo ye bta do k saray ganday anday dooosri jamaton k PMLn main kyon atay hain? PMLn kyon oon ko jobs daitee hai?
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
Forget India, Its Neighbors Are the Next Big Thing - Barron’s
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
Honorable lady is given charge of Higher Education.
She has done matriculation herself. Only in Punjab.
Restored attachments:
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
Is it a buy?
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
Aap kyon jal rahay!@ aap bhi koy matric pass dhoond lo !!!
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
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Forget India, Its Neighbors Are the Next Big Thing: BARRON’S ASIA**
FEB 09, 2017by WEB DESKin BUSINESS
https://i2.wp.com/pakchinanews.pk/wp-content/uploads/2017/02/PSX.png?resize=800%2C522
Forget India. Investors looking for the next big thing should look to its South Asia neighbors instead – Pakistan, Bangladesh and Sri Lanka.
With a combined 390 million people, the three countries represent what Morgan Stanley chief global strategist Ruchir Sharma calls “the quiet rise of South Asia” as opposed to India which has been “flattered by spasms of hype for years”.
While overshadowed by their larger neighbor, the trio is enjoying fast-paced growth, embracing much needed reforms, and look set to enjoy a demographic dividend over the long term. “A substantially higher economic growth rate than in many other economies globally, coupled with fantastic demographics that will continue supporting growth for many years ahead”, East Capital fund manager Adrian Pop tells Barron’s Asia. The Stockholm-based firm manages nearly EUR3 billion in frontier markets.
Pakistan is the flag bearer of the positive changes taking place in the South Asian nations. Since coming to power five years ago, Prime Minister Nawaz Sharif has got inflation under control, cut the budget deficit and reined in the current account deficit. But more importantly, terrorism finally appears to be on the back-foot given more assertive action by the army. Chinese investment has also poured in: $50 billion will be spent on new roads, transport links and energy projects. “More power capacity is key for Pakistan to move to an even higher economic growth rate,” says Pop. That will benefit stocks in materials and energy. In December, the Pakistan Stock Exchange sold 40% of itself to consortium of Chinese investors.
The Karachi stock index is up by about 50% since the start of last year, propelled by index compiler MSCI’s decision to bump up the country to emerging markets status. That will bring in hundreds of millions of dollars from passive funds into the Pakistani benchmark. The rally in stocks has arguably left the market looking a little pricey as the KSE 100 index trades at over 12 times earnings, its heftiest valuation since late 2009. That’s still about a 15% discount to the MSCI emerging markets index, however, plus Pakistani stocks yield an attractive 4%-plus dividend.
Bangladesh’s rise has so far been more tempered. The country, which split from Pakistan in the early 1970s, benefits from a growing working age population and rising labor costs elsewhere in Asia. Garment manufacturing for Western clothing companies has increasingly moved from China to places like Bangladesh, where wages are lower. The government’s also investing billions in upgrading the country’s patchy power supply, which will address energy shortages and boost manufacturing.
Still, foreign participation in Bangladesh’s stock market is small. HSBC estimates foreigners make up only 2% of the Dhaka stock index’s market cap. The market does however look quite cheap on a historical basis, trading at 15 times trailing earnings. Return on equity, or profit generated as percentage of shareholder equity, is high at almost 20%.
Sri Lanka’s more understated still. The economy could slow in the short-term after an International Monetary Fund bailout in 2016 prompted by a huge budget deficit. Some of the reforms to balance the budget, like higher value-added taxes, will probably hit consumption. The government’s also been prodded to reform and privatize state-owned enterprises. “We view these measures as necessary for a healthier and more sustainable macro environment,” even if growth suffers in the meantime, says Pop. Tourism remains a bright spot, as arrivals continue to grow.
Could the election of Donald Trump halt the quiet rise of South Asia? Trump wants to bring blue collar jobs back to the States and penalize American companies that manufacture overseas. Some are sanguine, though. “We do not believe that these companies will move production back to their home countries,” says East Capital’s Pop, reasoning that the spread between wages in the West and in markets like Bangladesh is too big to realistically think about moving these jobs back.
Another threat is the rising price of oil. Crude prices have risen by about 50% from their 2016 lows, which isn’t great news for all three countries, as they’re all net importers of the black stuff. Higher oil prices can cause higher inflation, a hot button issue in lots of developing countries, and bigger trade deficits. Pop argues that higher oil prices can also be a positive given the huge number of South Asians work employed in the oil-rich Gulf nations. A rosier economic outlook in these countries boosts the flow of remittances back to workers’ home countries.
Back in August, Barron’s Asia recommended readers buy three Pakistan blue-chips ahead of the country’s inclusion in the MSCI Emerging Markets index. They’ve risen by 20% on average and now trade near recent historical peaks on a price-to-earnings basis. In other words, they look expensive. We’ve found two new overlooked Pakistani stocks investors should consider, as well as picks for Bangladesh and Sri Lanka.
PAKISTAN
Oil & Gas Development Co
In August we tipped downstream firm Pakistan State Oil (PSO.PK), which has since risen 10%. It’s worth hanging onto that stock, but we’d add upstream exploration player Oil & Gas Development (OGDC.PK) to the mix too.
Shares in the Islamabad-based company have powered up 45% in the last year, and could rise by a further 30%. Oil & Gas Development will benefit from any further recovery in oil prices, which have roughly doubled since hitting their nadir last February. Earnings per share should rise by 17% in full-year 2017 and 20% in full-year 2018.
Oil & Gas Development trades at eight times forward earnings, which is toward the higher end of its historical valuation. That multiple is more compelling than exploration peer Pakistan Petroleum (PPL.PK), however, which trades at 10 times next 12 months’ earnings.
Oil & Gas Development also pays a 3% dividend.
DG Khan Cement
Lahore’s DG Khan Cement (DGKC. PK) is one of the country’s largest cement producers, with a capacity of more than four million tons a year. The stock also makes a good foundation for a Pakistan portfolio.
The firm should benefit from billions of dollars of new infrastructure in the South Asia country, much of it coming courtesy of investment from China. At the end of December, the countries jointly announced a $14 billion dam project close to DG Khan’s HQ in northern Pakistan. The dam will need about a million tons of cement.
Shares in the company have returned a solid 50% over the last year. DG Khan’s valuations looks a bit less stretched than that of rival Lucky Cement (LUCKY.PK), which we told investors to pour into their portfolio over summer. DG Khan trades at 10 times forward earnings, compared to Lucky’s 16 times. Its dividend yield of 2.6% is also bigger than its rival. Brokers think DG Khan can rise by as much as 25%.
BANGLADESH
BRAC Bank
BRAC Bank is one of Bangladesh’s biggest lenders, specializing in credit to small-to-medium-sized businesses. More than a third of the country’s entire SME loan book goes through BRAC, according to estimates.
Some of BRAC’s strengths include its large retail and ATM network, while the bank’s also well-positioned to comply with Basel III requirements within the next couple of years. Analysts think BRAC is unlikely to have to raise more capital and dilute investors as a result.
The most exciting aspect of the stock, however, is its mobile payments platform. Bangladesh is one of the world’s fastest-growing markets in the use of mobile payments, and BRAC’s bKash platform has the vast majority of market share, with 17 million users. The platform’s been profitable since 2014.
In the last year BRAC Bank’s shares have returned over 40% and the stock also yields about 4%. BRAC is thinly covered by sell-side analysts, but recent target price estimates suggest the stock could rise by almost 15% this year.
SRI LANKA
John Keells Holdings
Colombo’s John Keells Holdings (JKH.LK) is Sri Lanka’s top conglomerate, with interests spanning transport, food, property and plantations. It’s also the biggest component of the local index, at about 8% of market capitalization. The shares could rise by 15% in the next year.
The shares haven’t performed well of late, though. John Keells has slipped almost 3% in the last year, compared to an almost 20% rise in Sri Lanka’s benchmark stock index. Catalysts for a turnaround include new consumer offerings in underpenetrated areas like ice cream and soda. John Keells is also bidding to operate a proposed new container port on the island.
The shares look quite cheap at 12 times forward earnings, compared to their five-year average of 16 times. Another option is rival conglomerate Hemas Holdings (HEMS.LK), but the stock trades at a chunkier 15 times next 12 months’ earnings. John Keells also pays a 3% dividend.
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
all bs, nothing for common man.
just more price increases and more taxes.
this is the most corrupt pml govt in history!
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
NASIR JAMAL — UPDATED about 15 hours ago
Barely a year into it and the new Auto Industry Development Policy (AIDP) seems to have begun to yield the intended results: new non-Japanese car brands are coming to the Pakistani market, and the existing ones are forced to invest in new variants and models as well as improve the quality and passenger safety features of their vehicles in line with global standards.
**At least three new carmakers plan to enter Pakistan’s market whose size, some analysts believe, will almost double to half a million units by 2025.
French Renault was the first carmaker to announce its plan to invest $100m in the Ghandhara Nissan plant to bring its brand into the country’s market.
South Korean companies — Hyundai and Kia — followed the French carmaker, announcing their intentions to stage a comeback in collaboration with reputable local industry giants — Nishat Group and Younus Brothers — with deep pockets.**
Now the German Audi is also said to have approached the Board of Investment through its local authorised dealer with a proposal to start an OEM (original equipment manufacturer) plant here.
Pakistan being the 6th largest populated country, with half of its population below 30 years and car penetration as low as 13 vehicles per 1,000 persons, offers a huge potential for growth to global carmakers.
[HR][/HR]At least three new carmakers plan to enter Pakistan’s market whose size, some analysts believe, will almost double to half a million units by 2025
[HR][/HR]
“The development of infrastructure under the $57bn China-Pakistan Economic Corridor (CPEC), a large young population, increasing buying capacity, rapid urbanisation and a growing economy offers an enormous opportunity to carmakers to come and invest here,” says Rao Khalique, a Lahore-based banker who didn’t want to give his bank’s name.
He claimed that car leasing has been growing rapidly for the last two years to peak at Rs127bn by the end of 2016. “The size of financing shows the quick growth in car demand over the last couple of years.”
While the new car brands have expressed their intention of setting up assembly plants in the country in order to reap the benefits of a growing demand, it remains unclear as to how much they and their local partners plan to invest and what plant capacities and engine sizes they are targeting.
“We are working on the project. It will take some time to finalise all the details,” Mohammad Ali Tabba, Chief Executive Officer of Lucky Cement, which is partnering with the Kia Motor Company to produce its cars in Pakistan, told Dawn. But, he added, “We plan to produce cars as well as commercial vehicles.”
Ali Asghar Poonawal, an analyst at AKD Securities, is of the view that local partners of foreign carmakers are tight-lipped about their plans owing to their non-disclosure agreements with the principals.
He points out that the establishment of new assembly plants and development of a dealer network usually takes two years.
“I think both Lucky and Nishat will start by importing different variants of Kia and Hyundai cars to first ascertain demand in the Pakistani market before launching actual assembly plants,” he adds.
“They will likely venture into a small car segment where the demand is growing more rapidly,” he says.
Renault, on the other hand, is expected to enter in the 1,200cc and above segment.
Watching these developments closely, the existing OEMs appear to be losing hope of a change in the AIDP that favours new investments in the auto industry and seem to have decided to brace for the upcoming competition.
Pak Suzuki, which had earlier threatened to withdraw a planned investment of $450m in a new plant, unless the government extended same incentives for new investment by the incumbents that the AIDP offered to the new entrants, is now said to be moving ahead with it — albeit not as aggressively as it intended to.
Besides, it is also replacing old models and bringing in new ones to prepare for competition.
Indus Motors, the producer of Toyota cars, is tweaking its plant and de-bottling its facility to raise its production capacity to above 65,000 units on a double shift basis, as well as bringing in operational and cost efficiencies.
Constrained by its production capacity, Honda too is changing its variants and models in order to maintain its clientele in the country’s high prices car market.
“The existing players are conscious of the likely competition going forward. Therefore, the old models are being scrapped and new ones, with features that they had never thought of offering in Pakistani market before, are being rolled out,” says Ali Asghar Poonawal.
There’s a consensus among industry analysts that the new competition in the country’s car market would help dismantle the ‘cartel’ of the existing Japanese carmakers. “The car companies have enjoyed government patronage and protection from competition for far too long a time. Now it is time for them to learn to compete, improve their quality and give their customers value for their money,” a Lahore-based car dealer contends.
“While new players in the car industry pose a challenge to the existing OEMs and will depress their margins, we do not anticipate any immediate arrival.
This will give the incumbents in the industry enough time to tweak their plants to bring cost efficiencies, as well as to improve the quality of their cars. If they don’t prepare for the coming competition, their brands will suffer once their new competitors start eating into their market share,” an analyst who didn’t want to give his name remarks.
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Published in Dawn, Business & Finance weekly, February 13th, 2017*
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
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37 Special Economic Zones to boost Production**
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ISLAMABAD: The government has devised a comprehensive plan to set up 37 special economic zones (SEZs) across four provinces and special areas under the China-Pakistan Economic Corridor (CPEC) to boost industrial production.
SEZ Act 2012 provides the governing structure for these zones and allows both federal and provincial governments to set them up under various administrative frameworks.
The list of the proposed sites for establishing SEZs was shared with Chinese authorities in the last Joint Cooperation Committee (JCC) meeting held in Beijing recently.
A source in the Planning Commission told Dawn that the sites were identified by the provinces themselves.
For attracting Chinese enterprises, the government is working on an investment package, which is expected to be finalized before the end of March, the source added.
At the same time, the Board of Investment (BoI) will host potential investors from China, including the Tianjin region, for an exploratory visit. SEZs are believed to be critical for the industrial sector as they have played a key role in the industrial development in many Asian economies.
Four SEZ sites were identified in Punjab. Punjab-China Economic Zone and Quaid-i-Azam Apparel Park SEZ are in Sheikhupura while M-3 Industrial City and Value Addition City are in Faisalabad.
Out of these four SEZ sites, the JCC referred only two to the joint working group (JWG) on industrial cooperation for consideration: Punjab-China Economic Zone (priority) and M-3 Industrial City Faisalabad (alternative).
In Balochistan, nine places were identified for SEZs: Bostan Industrial Zone, Dasht Industrial Zone, Turbat Industrial Zone, Industrial Zone at the Junction of Qilla Saifullah, Zhoband Loralai, Gwadar Industrial Estate, Lasbela Industrial Estate, Dera Murad Jamali Industrial and Trading Estate and Winder Industrial and Trading Estate.
Only two of these requests were referred to the JWG for further action: Bostan Industrial Zone (priority) and Khuzdar Industrial Zone (alternative).
In Sindh, four sites were identified for SEZs. These are China Special Economic Zone at Dhabeji in Thatta, China Industrial Zone near Karachi, Textile City and Marble City. Two of these projects were considered in Thatta: China Special Economic Zone, Dhabeji (priority) and Keti Bandar (alternative).
The Khyber Pakhtunkhwa government requested the establishment of SEZs in 17 places under the CPEC. These include economic zone at Karak, Nowshera, Bannu, Jalozai, Rashakai, Risalpur, Chitral, Buner, Swat, Batagram, Jahangir, Mansehra and Gadoon Amazai. Others include Hattar Phase VII Industrial Zone, Ghazi Economic Zone and Gomal Economic Zone in Dera Ismail Khan.
Only two of the 17 sites were referred to the JWG for consideration: Rashakai Economic Zone (priority) and Hattar Phase VII Industrial Zone (alternative).
Moqpondass SEZ will be established in Gilgit-Baltistan.
In Azad Jammu and Kashmir, Bhimber Industrial Zone will be the priority project while Muzaffarabad SEZ will be the alternative.
In Fata, the only SEZ will be Mohmand Marble City.
ICT Model Industrial Zone will be established in Islamabad while an industrial park will be developed on Pakistan Steel Mills’ land in Port Qasim near Karachi.
According to the source, Pakistan agreed to provide gas, water, electricity and other facilities to factories in industrial parks. “Pakistan will also consider providing Chinese enterprises with a suitable policy package to attract potential investors,” the source said.
Experts on industrial zones from China will be visiting Pakistan in the near future to advise the country regarding the most suitable places for economic zones, the source said.**
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
Pakistan to be 20th most powerful economy by 2030: PwC
Home / Business/ Pakistan to be 20th most powerful economy by 2030: PwC
By Web Desk
February 08, 2017
The report, titled “The long view: how will the global economic order change by 2050?” ranked 32 countries by their projected global gross domestic product by purchasing power parity.
Purchasing Power Parity (PPP) is an economic theory that compares different countries’ currencies through a market “basket of goods” approach. PPP determines the economic productivity and standards of living of various countries over a period. Since market exchange rates fluctuate substantially, many economists consider PPP as a more precise way of estimating a country’s economy.
The consulting firm also predicted 2050 GDP numbers based on market exchange ratings, an alternative method for GDP calculation. In these rankings, the US will lose global dominance by 2030, and the gap will only grow by 2050 with China having a nearly $50 trillion GDP, and the US having the same $34.1 trillion.
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
when is your leader going to do something about National Action Plan ?? When is he going to denounce india publicly?
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
Please send him fax to share govt’s top priorities and secrets…and also make a suggestion that Hafiz Saeed should be make PM…
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
My dear , same rule applies for HESCO & SEPCO with lowest recovery rates & rampant theft, you cannot compare them with IESCO,FESCO,LESCO & GEPCO with almost 90% + recovery rates. Just the same in Karachi with Liyari & Keamari having 7.5 hrs load shedding today while DHA & Clifton with 0 load shedding.
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
Any authentic document to prove better recovery rates of Power distribution companies in Punjab than in Sindh with historical trends?
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
Will a letter from abroad works here? 
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
KP electricity bills recovery improving, but Punjab takes lead
PUBLISHED Mar 01, 2016 06:53am
LAHORE: Khyber Pakhtunkhwa is showing improvement in recovery of electricity bills, but Punjab is quite ahead of it.
According to overall recovery ratios of power distribution companies (Discos), which saw a slump in the financial year 2014-15, KP’s recovery against electricity bills showed improvement.
Official statistics of Discos show the province registered 87pc collection in 2014-15 against 74pc in 2013-14, which was 91pc in 2012-13.
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But Punjab is far better than other province as its collection stood at 97pc in 2014-15 against 96pc in 2013-14 and 2012-13.**
However, the recovery of Discos was 88pc in the 2014-15 against 100pc billing. It was 90pc in 2013-14 and 94pc in 2012-13. Company-wise analysis disclosed the Lahore Electric Supply Company lost recovery ratio a bit with 96pc collection in 2014-15 against 98pc in 2013-14 and 2012-13.
**Hyderabad Electric Supply Company’s recovery declined to 78pc in 2014-15 against 81pc in 2012-13, and Sukkur Electric Power Company (Sepco) is still struggling with recovery that is hovering around 57pc for three years.
Sepco’s collection in 2014-15 was 58pc, 59pc in 2013-14 and 54pc in 2012-13. Similarly, collection against export to Karachi Electric faced a sharp decline. The collection was 142pc against export to KE in 2012-13, which declined to 98pc in 2013-14 and was now 70pc in 2014-15.**
The Quetta Electric Supply Company also registered a decline in collection with just 33pc in 2014-15 against 42pc in 2013-14 and 32pc in 2012-13. Independent Power Producers also faced a decline in collection as the ratio was 102pc in the reported year against 124pc in 2013-14.
On the other hand, the Gujranwala Electric Power Company exhibited better recovery with 97pc, while Faisalabad Electric Supply Company stood tall with 100pc, but Multan Electric Power Company crossed it all with 102pc recovery.
The Peshawar Electric Supply Company registered 88pc collection in 2014-15 against 86pc in 2013-14; Tribal Electric Supply Company (Tesco) showed great improvement with 76pc against just 8pc in 2013-14. The company registered 119pc collection in 2012-13.
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Published in Dawn, March 1st, 2016*
Re: Pakistan’s Middle Class Soars as Stability Returns: WSJ
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WASHINGTON POST
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Beyond the headlines of terrorism, Pakistan’s economy is on the rise**
By Afshin Molavi
February 21
Pakistan’s Prime Minister Nawaz Sharif in 2013. (Mian Khursheed/Reuters)
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Afshin Molavi is co-director of the emerge85 Lab and a senior fellow at the Foreign Policy Instituteof the Johns Hopkins University School of Advanced International Studies.*
Shortly after Egypt’s 2011 uprising ended with the fall of President Hosni Mubarak, prominent Egyptian investor Ahmed Heikal said: “If we get things right, we could be Turkey in 10 years. If we get them wrong, we could be Pakistan in 18 months.”
Everyone understood the subtext: Turkey was the model; Pakistan was the train wreck. After all, at that time Turkey had come off a decade of high growth, doubled its gross domestic product over the previous decade, tripled its per capita income and was still seen as an emerging-market darling. It even lent its first initial to the latest and newest acronym by Goldman Sachs’ Jim O’Neill (he of BRICS fame) — Turkey was the “T” in MINT: Mexico, Indonesia, Nigeria and Turkey.
As for Pakistan, well, it was *Pakistan, *known mostly for terrorist attacks like the one perpetrated last weekby an Islamic State suicide bomber that left at least 80 people dead and incited a furious government crackdown on militants. Headlines of terrorism, coups and instability, plus years of underdevelopment and poverty meant that no one was going to add Pakistan to a catchy acronym.
But not so fast. Look beyond the headlines and see Pakistan today. It boasted the best stock market in Asia in 2016. The high-flying Karachi Stock Exchange Index is up more than 52 percent over the past year — and rising.
The exchange broke through the vaunted 50,000 mark last month — a first in history. What’s more, Pakistan is winning plaudits from the International Monetary Fund, and its economy is forecast for a healthy 5.2 percent growth rate in 2017, according to the World Bank.
As Pakistan turns a corner, Trump administration policymakers fixated on the terrorism threat just might miss this extraordinary opportunity in a country that has long been a terror bane.
**Three key factors are driving Pakistan’s economic awakening: an improved security climate even despite the most recent attack, relative political stability and a growing middle class. These three interlocking pieces are fueling Pakistan’s growth story — a vital story given the size and geopolitical weight of the nuclear-armed South Asian nation of nearly 200 million people.
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In mid-May, the world’s largest research-based provider of index funds, MSCI, will officially “graduate” Pakistan from its frontier-market category to the more prestigious — and well-capitalized — “emerging market” index. It will join 23 other countries on the index that represents 10 percent of world capitalization.
Turkey is also on that index, but its fortunes are diverging rapidly. It is no longer the emerging-market economy on the rise, as it slows under the weight of political uncertainty, a deteriorating security situation, questions over its relations with the European Union and an intensified Kurdish militant insurgencyin the southeast.
Pakistani Prime Minister Nawaz Sharif and the generals may finally have gotten a reasonable handle on the deteriorating security climate — although attacks such as the suicide bombing at the Sufi shrine last week are likely to persist. And in 2013, when Sharif was elected, it marked the first democratic transition of power in the coup-prone country. Sharif entered office as the great global transformation taking place worldwide — of technological connectivity, rapid urbanization and rising middle class consumption — continued to churn. And Pakistan has not missed that train.
Robust middle classes are vital to healthy societies and growing economies, and Pakistan’s middle class may have reached a tipping point, with some estimates suggesting that it accounts for more than half the population.
Brookings Institution scholar Homi Kharas argues that Pakistan’s consumer middle-class market could hit $1 trillion by 2030. To be sure, the country still suffers from deep pockets of poverty, a backward education system and the jihadist threat, but as the middle class grows, demands will grow for more opportunities, better services and more security and stability.
These middle classes are also attracting foreign investment. Ishrat Husain, former governor of the State Bank of Pakistan, told me that middle classes are driving impressive 25 percent rates of return for large multinational consumer companies such as Nestle and Procter & Gamble, and that the middle-class growth is sparking increased production of cement, steel, automobiles and the like. He sees it as one of the key reasons for current bullishness on Pakistan.
**That bullishness has led Pakistan to enter the emerging-markets acronym vernacular. One of the latest post-BRICS acronyms of rising economies making the rounds: VARP, for Vietnam, Argentina, Romania and Pakistan. Yes, *that *Pakistan.
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But the biggest test of whether Pakistan’s government can deliver might be something more simple: Will the lights stay on? Pakistan has an electricity problem. The country has long had electricity shortages with widespread rolling blackouts plaguing both urban and rural areas. In fact, Sharif made expanding electricity access a major campaign promise.
Enter China. Pakistan’s giant neighbor has pledged a whopping $46 billion program](http://thediplomat.com/2016/11/cpec-boon-or-bane-for-pakistan/) to build the China-Pakistan Economic Corridor that will build new highways, overhaul railway and create new infrastructure to support 10,000 megawatts of additional power.
If Pakistan succeeds in taming its electricity gaps with China’s help, the virtuous circle of growth will continue, and a key South Asian, nuclear-armed power could be headed for a decade of normalcy. If this materializes, that would be a big relief to the international community in dire need of countries of Pakistan’s size to begin delivering more for their people.
