Thursday, January 7, 2010

Goldman Sachs Bullish on Pakistan

Pakistan's KSE-100 stock index surged 55% in 2009, a year that also saw the South Asian nation wracked by increased violence and its state institutions described by various media talking heads as being on the verge of collapse. Even more surprising is the whopping 825% increase in KSE-100 from 1999 to 2009, which makes it a significantly better performer than the BRIC nations. BRIC darling China has actually underperformed its peers, rising only 150 percent compared with energy-rich Brazil (520 percent) and Russia (326 percent) or well-regulated India (274 percent), which some investors see as a safer and more diverse bet compared with the Chinese equity market, which is dominated by bank stocks. This is the kind of performance that has got the attention of some of the top investors and investment firms around the world. Not only has Goldman Sachs reaffirmed Pakistan's place on the list of its top 15 emerging economies for 2010, smart international investment gurus are investing in Pakistan. For example, Mark Mobius of Franklin Templeton International Funds recently said he is "overweight compared with everyone else" in Pakistani stocks.

Ron Rowland, a researcher at Weiss Research, believes that the world is going to hear a lot more about the "Next 11", a group of 11 nations beyond the four "BRIC" nations of Brazil, Russia, India and China. Goldman Sachs "Next 11" group includes Mexico, Nigeria, Egypt, Turkey, Iran, Pakistan, Bangladesh, Indonesia, Vietnam, South Korea and Philippines. Like BRICs, the rationale for the selection of N-11 is a good-size and growing population with a modern industrial base for a critical mass: The ability to produce consumer goods, and the consumers who can afford to buy them. Having natural resources, such as oil, in your back yard helps too. All of this creates the potential for major consumer and business growth. And the investment opportunities — for those who are patient and do their homework — could be enormous!



However, except for population and good economic potential, the N-11 are a diverse group in terms of their level of economic and market development as well as integration in the world economy. As in the case of BRICs, the authors of the concept, Goldman Sachs Consulting Group, have used variables grouped under Macroeconomic stability, Macroeconomic conditions, Technological capabilities, Human capital and Political conditions to determine the speed with which N-11 will be able to converge or catch up with the developed economies. Indonesia, Mexico and Turkey are three of the N 11 nations are already members of the Group of 20 (G20) nations. The rest of the N11 have the potential to join the group of the twenty largest economies of the world in the next few decades.

Comparing Pakistan with other N-11 countries in 2009, we find that it is only second to Indonesia in terms of population. However, in terms of the size of GDP, it is in the middle of pack, ahead of Bangladesh, Egypt, Nigeria, Philippines and Vietnam. All of this points to the potential Pakistan has to become a major economy based on its population size and demographics in the years to come.

Goldman Sachs report on "Next 11" projects Pakistan's rank moving up from the 26th largest now to the 18th largest economy in the world by 2025. In this context of Pakistan's tremendous economic potential as outlined in the report, there is considerable interest among individual US investors looking for opportunities to invest in Pakistan stocks. Unfortunately, there are no pure-play mutual funds investing exclusively in Pakistan. However, in addition to Franklin Templeton Funds, there are at least two other companies specializing in Asian economies that invest part of the portfolio in Pakistan along with India, Sri Lanka and other countries in Asia. These companies are Matthews Funds and Eaton Vance Funds.

Eaton Vance has Eaton Vance Greater India A Fund(ETGIX) that describes itself as follows: The investment seeks long-term capital appreciation. The fund normally invests at least 80% of net assets in equity securities of companies in India and surrounding countries of the Indian subcontinent. At least 50% of total assets will be invested in equity securities of Indian companies, and no more than 5% of total assets will be invested in companies located in countries other than India, Pakistan or Sri Lanka. The fund invests in companies with a broad range of market capitalizations, including smaller companies.

Matthews Asia Funds has Matthews Asia Pacific Equity Income Fund (MAPIX) which describes its geographic focus as follows: The Asia Pacific Region, which includes Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.

It is heartening to see that top international investment professionals and firms continue to have faith in Pakistan's growth potential. To sustain and increase investor interest, it is absolutely essential that Pakistanis strive for a measure of peace and stability. The nation must also continue to increase the necessary investments in developing its human capital and infrastructure to support continued expansion of the economy and to realize the full potential of the country.

Related Links:

Goldman Sachs "Next 11"

Emerging Markets Expert Investing in Pakistan

Who Are the Next 11?

Is Pakistan Too Big to Fail?

GS Next 11 and Pakistan in 2050

Karachi Stock Exchange

Pakistan FDI Survey Report 2009

Emerging Markets: Brazil, China---and Pakistan?

Templeton's Asian Growth Fund

Pakistan Economic Survey 2008-2009

Pakistan's Infrastructure

Karachi Fashion Week

Is Pakistan Too Big to Fail?

How To Invest in Pakistan?

Karachi Fashion Week Goes Bolder

More Pictures From Karachi Fashion Week 2009

Pakistan's Foreign Visitors Pleasantly Surprised

Start-ups Drive a Boom in Pakistan

Pakistan Conducting Research in Antarctica

Pakistan's Multi-billion Dollar IT Industry

Pakistan's Telecom Boom

Pakistan Telecom Sector Investment Prospects

ITU Internet Data

Eleven Days in Karachi

Pakistani Entrepreneurs in Silicon Valley

Musharraf's Economic Legacy

Infrastructure and Real Estate Development in Pakistan

Pakistan's International Rankings

Foreign Direct Investments in Pakistan 1999-2009

Pakistan's Financial Services Sector

Assessing Pakistan Army Capabilities

Pakistan's Auto Industry

Pakistan is not Falling

Jinnah's Pakistan Booms Amidst Doom and Gloom

Pakistan's Higher Education Reform

The Next 11 Emerging Economies--Euromonitor

Karachi Stock Exchange Presentation

20 comments:

Riaz Haq said...

Here's a report on Goldman Sachs assessment of BRIC and N11 at the end of 2009:

MANILA, Philippines - Global investment bank Goldman Sachs said the Philippines performed better than most of the next 11 emerging economies (N-11) during the global crisis.

"Within the N-11, Indonesia and the Philippines have positively surprised," Goldman Sachs said in its latest Global Economics Paper.

The N-11 and the BRIC (Brazil, Russia, India, and China) are 2 terms coined by Goldman Sachs several years ago. The investment bank considers the BRIC as the fastest-growing developing economies, and the N-11 as the ones "worth keeping an eye on" outside of the BRIC.

Aside from the Philippines and Indonesia, other members of the N-11 include Bangladesh, Egypt, Korea, Turkey, Nigeria, Vietnam, Iran, Pakistan, and Mexico.

Goldman Sachs said the Philippines exceeded growth expectations, along with China, Brazil, India, and Indonesia. On the other hand, countries which performed in line with the investment bank's projections include Bangladesh, Egypt, Korea, Turkey, Nigeria, and Vietnam.

Meanwhile, Goldman Sachs said Iran, Pakistan, and Mexico have "largely disappointed" its expectations.

Stronger rebounds

While the BRIC and N-11 saw sharper contractions than developed countries in general, Goldman Sachs said these economies also posted stronger rebounds. The investment bank grouped the BRIC and the N-11 in terms of the differentiation, with the Philippines still at the top tier.

"This group of winners includes Brazil, China, India, Egypt, Indonesia, and the Philippines. They have experienced a relatively mild slowdown, and have shown an impressive rebound in growth and activity this year."

In the middle group are Korea, Nigeria, Turkey, and Vietnam, which have also seen impressive rebounds despite relatively sharp contractions, Goldman Sachs said.

Meanwhile, Iran, Mexico, Pakistan, and Russia belong to the bottom level given the depth of their recessions and sluggishness of recoveries.

"While overall the BRICs and N-11 saw much sharper contractions than the developed countries, they also saw much stronger rebounds," Goldman Sachs said.

World growth

Since 2007, Goldman Sachs said the BRIC has contributed 45% of world growth, while the N-11 countries account for 11%. The Group of 7 (G7), on the other hand, only contributed 20% in the past 2 years.

The G7, a group of industrialized nations, includes Canada, France, Germany, Italy, Japan, United Kingdom, and the United States.

"While the 2000-2006 contribution to global growth was almost equally split between the developed and developing world, the last 2 years saw the trend change sharply, with the divergence mainly driven by the BRICs," Goldman Sachs said.

On an individual country basis, Goldman Sachs said all of the BRICs and 7 of the N-11 (Bangladesh, Egypt, Indonesia, Iran, Nigeria, Philippines, and Vietnam) contributed more to world growth in 2007 to 2008 than from 2000 to 2006.

Riaz Haq said...

Here's a relevant opinion by Soutik Biswas of BBC:

Has India's "Deciding Decade" begun? A study, done by a Delhi-based economic research firm along with a leading newspaper, thinks so. It says that India's GDP can grow at an average annual rate of 9.6% for the next 10 years even if there were no reforms. Incomes will double, the middle class will burgeon and urbanisation will proceed at breakneck speed.

Now the bad news. Even with this scorching growth, more than 250 million people of a total population of 1.3bn will still be "very poor" in 2020, the study says. That's not all: not even 100 million Indians will be graduates or post graduates despite the growth. Clearly, without radical reforms in education and infrastructure taken up with missionary bipartisan zeal, millions of Indians will still be hungry, poor and illiterate. Are India's politicians and bureaucrats up to the task? On present evidence, hardly. But we all live in hope.

The decade has also begun with a rash of good news stories. The government is planning to give out passports within three days of verification, make compulsory baby seats in cars and provide cheaper food for the poor. At least one state is launching madrassas or religious schools where English will be the medium of instruction. The government is also promising to introduce more women-friendly laws, harsher punishment for sexual crimes and fast track courts. All this just proves how much ground India has to cover. And Indian governments are famous for making announcements that take months, sorry, decades to implement. So we will wait and see.

But there is a piece of truly good news that holds out hope for India. Bihar, India's basket case state - poorest, most lawless, underdeveloped - appears to have clocked the fastest rate of growth during 2008-2009. If the Bihar government is to believed, the state's growth rate - 11.4% - is higher than India's industrially developed states. It is being attributed to good governance, buoyant revenues, increased government spending and a swelling unorganised private sector. If this is true then Bihar has all the makings of a miracle economy.

Bihar's remarkable "turnaround" shows the way for India, in a way. It also proves, as political philosopher Pratap Bhanu Mehta says, that "for the first time in modern Indian history, Indians, including the very marginalised, have a sense that change is possible: our destinies are ours to shape".

A sobering thought to keep in mind though. Impressive growth figures are unlikely to stun the poor into mindless optimism about their future. India has long been used to illustrate how extensive poverty coexists with growth. It has a shabby record in pulling people out of poverty - in the last two decades the number of absolutely poor in India has declined by 17 percentage points compared to China, which brought down its absolutely poor by some 45 percentage points. The number of Indian billionaires rose from nine in 2004 to 40 in 2007, says Forbes magazine. That's higher than Japan which had 24, while France and Italy had 14 billionaires each. When one of the world's highest number of billionaires coexist with what one economist calls the world's "largest number of homeless, ill-fed illiterates", something is gravely wrong. This is what rankles many in this happy season of positive thinking.

Riaz Haq said...

Here's a London trader Manraj Singh talking about Pakistan's KSE stocks potential:

Taliban and credit crunch or not, I expect to uncover some absolute bargain investments in this country. Three Pakistani companies that I have had my eye on have shares that trade in London. I think that they are worth a closer look.

Two long-term plays on Pakistan’s turnaround

United Bank(ticker:UBLS) is one of Pakistan’s top commercial banks. It focuses on servicing the corporate sector and has more than 1100 branches across the country. It has the big advantage of being backed by the colossally rich royal family of Abu Dhabi, the Al-Nahayans. The bank’s chairman, Shaikh Nahayan Mabarak Al Nahayan, is also the United Arab Emirates Minister of Higher Education and Scientific Research. So there doesn’t seem much chance of United Bank running into funding problems even if credit conditions in Pakistan stay tight.

Then there is MCB or Muslim Commercial Bank(ticker: MCBS). This is one of Pakistan’s biggest banks. It focuses on retail customers and has an impressive network of over a thousand branches and some 4 million customers. That makes it a good proxy for the long-term growth of the country’s middle class.

MCB is a highly professional organisation and it has attracted a big international shareholder base. Its biggest shareholder is the Malayan Banking group, which owns a 20% stake. And the Templeton emerging markets funds headed by investment bigwig Mark Mobius are also major shareholders.

Neither of these banks is dirt cheap right now. MCB’s share price has more than doubled since February and United Bank is up by some 80% over that period. They now trade at about eight times earnings. Not expensive, but not cheap either. But they are big, liquid companies and they will be among the first to benefit when international investors start looking at Pakistan seriously again.

Major banks are a good proxy for the performance of emerging markets. So as longer-term investments over the next 3-5 years, these two could pay-off massively.

And one punt for the brave…

On a completely different note is Lucky Cement(ticker:LKCS). Thisis Pakistan’s biggest cement producer. It is also a major exporter to countries in the surrounding region. It ships cement to neighbouring Afghanistan and India as well as to Ceylon and the Middle East. The region is still seeing strong economic growth and that has helped this company.

Lucky Cement has delivered impressive financial results . Despite the credit crisis, political upheaval and Taliban uprisings, profits have more than doubled this year. Its share price has risen by 148% since the start of the year. But it still trades at a reasonable five times earnings. It’s an interesting company, but not without risk. Its major cement production plant is located in the volatile North West Frontier Province where the Pakistani Taliban is active. Appropriately, its shares in Karachi trade under the ticker symbol LUCK. Here in London, its GDRs trade under the less ominous ticker symbol LKCS.

There’s more work to be done and I have other candidates I’m looking at. But I believe Pakistan will be an outstanding investment opportunity in the next few years. The time to get in is when investors fear to go there. That’s now.

I’ll get back to you when I have decided the best way to profit from Pakistan’s undervalued markets.

Till then, good investing.

Manraaj Singh
For The Right Side

http://www.fleetstreetinvest.co.uk/emerging-markets/asian-markets/pakistan-investment-opportunities-51623.html

Riaz Haq said...

Seeking Alpha webite is reporting that a Pakistan ETF is in the works.

Global X, the developer of several sector-specific China funds, has filed for several new country-specific funds, continuing its push to develop a line of innovative international funds. Among the most interesting of the batch are funds targeting Norway, Pakistan and the United Arab Emirates. While most details are still not available for these proposed funds, a look at the outline provided in the prospectus of the economies on which they will reportedly focus provides some insights into the risk and return profiles (it should be noted that not all funds for which a prospectus is filed are eventually launched, so it’s entirely possible these ETFs never make it to market).

Riaz Haq said...

Here's an interesting except from analysis of Pakistan, calling it the Next BRIC, by theglobalguru.com:

...much like Russia, Pakistan also has been one of the top-performing stock markets over the past decade. Had you been able to invest in the Karachi Stock Exchange at the turn of the millennium, you'd be sitting on a much bigger pile of profits than, say, if you had invested in the “China miracle.” Pakistan offers yet another lesson in how gleaming skyscrapers offer little guidance in predicting future stock market performance.

Investing in Pakistan: Surprisingly Big

Teeming with 169 million souls, Pakistan is the world's sixth-largest country by population. That makes it smaller than Brazil , but larger that Russia, as well as the “Next BRIC” candidates, Turkey, Mexico, South Korea and Egypt. Bordered by Afghanistan and Iran in the West, India in the East and China in the far Northeast, Pakistan is just about the size of France and the United Kingdom combined.

Pakistan's real per capita GDP of about $1,250 makes your average Pakistani slightly poorer than his counterpart in India -- and far behind the average in booming China. One third of Pakistan's population lives in poverty, and only half of the population is literate. Yet, Standard Chartered bank estimates that Pakistan has a middle class of 30 million that now earns an average of about $10,000 per year. And adjusted for purchasing power parity (PPP), Pakistan's per capita GDP approaches $3,000 per head. But take away that bit of economic affirmative action, and Pakistan's economy drops from the size of New Jersey's down to that of Alabama.

Investing in Pakistan: Edgy Relations with Uncle Sam

In the bad old days of the Soviet Union, Pakistan was a major U.S. ally. That relationship soured after the United States imposed sanctions on Pakistan after it refused to abandon its nuclear program. The “War on Terror” changed all that. After Pakistan ended its support of the Taliban regime in Kabul, American economic and military aid to Pakistan soared to more than $4 billion within three years of the 9/11 attacks. Indeed, American aid has played no small part in helping Pakistan's economy flourish over the past decade or so.

But as with most forms of handouts, gratitude is the least heartfelt of emotions. Anti-Americanism in Pakistan’s free media is just about as virulent as neighboring Iran. The Wall Street Journal’s Pakistan correspondent was ejected from the country after being charged with spying for the United States and Israel. The U.S. State Department advises U.S. citizens not to visit the country and has forbidden the families of its diplomats in Pakistan to visit since 2002.

Investing in Pakistan: A Solid Start to the Millennium

Economically, the first decade of the 21st century has been good to Pakistan. Thanks to economic reforms introduced in 2000 by the former Musharraf government, Pakistan has privatized $5-billion worth of assets, simplified its tax system and attracted large amounts of foreign direct investment (FDI) compared to its GDP. By mid-2005, the Pakistani economy was growing by 8.6%, and the World Bank named Pakistan as the top reformer in its region and among the top 10 reformers globally.

That changed abruptly with the onset of the “Great Recession.” Pakistan's ensuing balance-of-payments crisis and runaway inflation forced the IMF to step in, and offer a $7.6-billion emergency financing package in late 2008. To its credit, the Pakistani government kept its side of the bargain, maintaining its foreign exchange reserves above target and its fiscal deficit below. The Pakistani economic crisis has eased substantially, and in 2010, the economy is expected to grow at least 4%.

... The stock market index in Karachi has risen by more than 1,000% since 1999. And in 2002, Pakistan was the top-performing stock market in the world.

Riaz Haq said...

Templeton Asset Management Ltd. is buying shares in Pakistan, the worst-performing stock market globally this month (August 2010), after the nation’s worst-ever floods prompted a sell-off, investor Mark Mobius told Businessweek:

About 1,600 people have been killed and 20 million lost homes, farms and livelihoods as heavy monsoon rains sent flood waters across the South Asian nation. The disaster may cut Pakistan’s economic growth in half, Finance Secretary Salman Siddique said Aug. 13, with expansion falling as much as 2.5 percentage points short of a 4.5 percent target.

“There will be an impact on growth but company valuations are very, very attractive now and therefore we continue to invest in Pakistan despite all the negatives,” Mobius said in an interview in Singapore yesterday. “The bottom line is that Pakistan is not going to go away. We want to buy stocks that look cheap as prices come down as a result of the flood.”

The Karachi Stock Exchange 100 Index has dropped 8.7 percent this month, the most among 93 benchmark indexes tracked by Bloomberg globally. The gauge is valued at 7.1 times this year’s estimated earnings, making it cheaper than any other Asian or emerging-market benchmark index tracked by Bloomberg.

The Karachi index climbed as much as 1.2 percent, the most in a month, and traded 0.7 percent higher to 9,604.65 as of 11:37 a.m. local time on speculation that recent losses were excessive. The gauge plunged 2.9 percent yesterday, the most in more than two months.

‘Oversold’

“The market was oversold from yesterday and news of Mark Mobius’s plans to buy Pakistani Stocks because of their attractive valuations supported overall market sentiments,” said Khurram Schehzad, head of research at Invest Capital & Securities Ltd., in Karachi. “Local investors are encouraged and realize the prospect of future gains.”

The World Bank yesterday pledged $900 million in financial support to Pakistan, joining the United Nations, the U.S. and other countries in providing aid.

Mobius, who oversees about $34 billion in developing-nation assets as executive chairman of Templeton’s emerging markets group, said the investment company favors banks and energy companies within Pakistan. He didn’t identify any companies.

Templeton owned more than 5 percent of MCB Bank Ltd., the nation’s biggest lender by market value, as of June 30, according to data compiled by Bloomberg.

MCB gained 1.7 percent to 185.50 rupees today, trimming losses for the year to 7.1 percent. Oil & Gas Development Co., Pakistan’s biggest energy explorer, rose 1.3 percent, extending its 2010 gains to 23 percent.

Riaz Haq said...

Pak Suzuki Motors (PSMC) to gain from Punjab govt's yellow cab scheme, according to The News:

KARACHI: Pak Suzuki Motor Company (PSMC) stands to gain from the Yellow Cab Scheme announced by the government of Punjab in its budget for 2011/12, analysts said.

The provincial government has announced that a grant of Rs4.50 billion has been allocated for the scheme, which will partly finance 20,000 vehicles.

Contrary to the yellow cab scheme, the Nawaz Sharif government introduced in 1992/93, this scheme relies on locally-made vehicles.

‘Mehran’ and ‘Bolan’, the two most popular makes of Pak Suzuki, have been short-listed for the scheme.

The analysts said the ultimate beneficiary will be the PSMC, which has been suffering from appreciating yen, relaxation in import policy and production constraints since a tsunami-hit Japan.

Gross profit margin of the company has squeezed to mere two percent in 2010, which was around four percent a year back, they added.

Details of the scheme are yet to be unveiled, but it is expected that the vehicles would be 50 percent financed by the government of Punjab, while the buyer would have to pay the rest.

There are concerns of possible lack of transparency in financing.

Besides, there is a lack of clarity about the time period over which the scheme would be spread.

Furqan Punjani, an analyst at the Topline Research, said that there are possibilities that out of 20,000 only 12,000 to 15,000 units will go in the said scheme and the rest might fall victim to corruption.

An analyst at Arif Habib Research said that it is believed that PSMC’s car volumes would spike by nine percent and 16 percent in CY11E and CY12F.

Consequently, the earning pershare (EPS) of the company would improve by 75 percent and 116 percent in CY11E and CY12F, respectively, he said.


http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=53955&Cat=3&dt=6/23/2011

Riaz Haq said...

South Korea's Posco (PKX, 005490.SE) is looking to invest in steelmaking projects in Africa and Pakistan to capture the growing demand in those parts of the world, an executive told MarketWatch:

Posco Executive Vice President Sung-Kwan Baek told Dow Jones Newswires on the sidelines of a business conference in Bali Friday the company hasn't decided on the location of the planned project in Africa, but he mentioned some possible countries such as Ghana, Mozambique, South Africa and Zimbabwe because those countries hold abundant iron ore reserves, the basic steel raw material.

Baek said that the African plant will also serve the Middle Eastern market.

"At the same time we are thinking about Pakistan and India because of their big population," Baek added.

In India, the company has started to build downstream production facilities such as coating lines, cold-rolling mills and silicon-steel lines in the Maharashtra state, he said.

Meanwhile, for the upstream projects, Posco is planning three projects, one of which is expected to come through next year. The projects will be located in Karnataka state with six-million tons of annual production capacity, in Orissa, which will have eight million tons capacity. The other one will be developed with India's state-owned Steel Authority of India Ltd., which will have three million tons in production capacity.

The company's offshore investment is part of the plan to boost its total production capacity to 70 million tons by 2020, with 40 million will be produced by its plants in South Korea.

Posco is currently also developing a plant in Indonesia, which will have a six-million-ton annual capacity and a similar project in Brazil.

"Outside the two countries, we need 20 million tons in production capacity. Our goal is in 2020, we have 30 million tons [in production capacities] in foreign countries," the official said.

He added that the company will try to finance future projects with its own cash, but it doesn't rule out any fundraising activities if necessary.

Baek said that the company will closely watch how the global economy will affect China in determining its offshore investment for next year.

"If China survives, we will still have room to invest in foreign countries," Baek said.

China currently produces half of the global steel supply. Baek said that if China's economy slows down the country will likely boost its steel exports, making competition tougher.

http://www.marketwatch.com/story/posco-looks-to-enter-africa-mideast-pakistan-2011-11-19

Riaz Haq said...

KARACHI: The German parliament has ratified the Bilateral Investment Treaty (BIT) signed by Germany and Pakistan in the year 2009 and has sent it to the European Commission for its final approval, Pakistan’s Ambassador to Germany Shahid Kamal told PPI.

Under the Bilateral Investment Treaty, investors of both the countries will be given protection and there will be more German investment in Pakistan in next 3 to 5 years, Kamal added.

Pakistan’s exports to Germany during 2011 calendar years will be around $1.5 billion, with the balance of trade in favour of Pakistan, as against $700 million in the last year.

Quoting official German statistics, Kamal said the trade between the two countries from January to July 2011, was $800 million, 45 percent more than in 2010.

Germany - the largest economy in Europe - was the fifth largest investor in Pakistan in the years 2009 and 2010.

“We are trying to set up German Pakistan Chambers of Commerce, which will enhance connectivity between the private sectors of both the countries,” Kamal stated.

He spoke of immense prospects to export rice, fruits, and vegetables to Germany, where prices of these items were rising. He said Germany was supporting Pakistan for greater market access to EU member states.

He said under an agreement signed recently, German government will provide economic assistance of $58 million for training in electronics, mechanics to Pakistanis over five years.

Shahid Kamal said another $85 million worth of German economic cooperation was underway in renewable wind and solar energy, which will help overcome load shedding in the country. He also said that 340 PhD Pakistanis were working in German universities. German Consul General in Karachi Dr Tilo Klinner, who was also present during the discussion, said that under German economic cooperation program, people in Khyber Pakhtunkhwa and Sindh provinces will get Pakistanis will get vocational training under the Public Private Partnership. Dr Klinner said German government will co-host an International Conference on Afghanistan in Bonn on December 5, 2011.

http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=77558&Cat=3

Riaz Haq said...

Goldman Sachs' Jim O'Neill, who coined BRIC, says India's performance most disappointing, according to Economic Times:

LONDON: Growth in all four BRIC economies has surpassed expectations in the decade since the term came into existence but India's record on productivity, FDI and reform has been the most disappointing, the chairman of Goldman Sachs Asset Management Jim O'Neill said on Tuesday.

O'Neill, who coined the term, BRIC, in December 2001 to jointly describe the four biggest developing economies, Brazil, Russia, India and China, was speaking at the London leg of the Reuters 2012 Investment Outlook Summit.

"All four countries have become bigger (economies) than I said they were going to be, even Russia. However there are important structural issues about all four and as we go into the 10-year anniversary, in some ways India is the most disappointing," said O'Neill who oversees almost a trillion dollars in assets at Goldman.

Just this week, India's government caved in to opposition pressure and put on hold a landmark reform of the retail sector that was seen opening the doors to billions of dollars in foreign direct investment in the supermarket sector.

The long-awaited measure, passed earlier this month, had been hailed as ending the government's economic reform paralysis that is widely seen as the root cause of high inflation, shrinking capital inflows and a wider current account deficit.

"India has the risk of ... if they're not careful, a balance of payments crisis. They shouldn't raise people's hopes of FDI and then in a week say, 'we're only joking'," O'Neill said. "India's inability to raise its share of global FDI is very disappointing," he said.

United Nations data shows that India received less than $20 billion in FDI in the first six months of 2011, compared to more than $60 billion in China while Brazil and Russia took in $23 billion and $33 billion respectively.

The glacial reform pace has hit India's hopes for double-digit economic growth, O'Neill said, adding: "India is as bad as Russia is on governance and corruption and, in terms of use of technology, Russia is in fact much higher than India."

On the other BRICs, O'Neill said Brazil's main problem was an overvalued currency which puts the country in danger of "Dutch disease" - a term first used to describe how North Sea oil discoveries in the 1960s triggered a surge in Dutch energy exports but also in the Dutch currency, pummelling much of the country's manufacturing. China's challenge was to effectively manage a transition to a higher-consumption economy with slower growth, he said.

O'Neill remains positive on Russia but said much depends on what Prime Minister Vladimir Putin can deliver in terms of reform following an election at the weekend that left his ruling party with a much reduced parliamentary majority.


http://m.economictimes.com/news/economy/foreign-trade/india-most-disappointing-among-bric-nations-goldmans-oneill/articleshow/11008228.cms

Riaz Haq said...

Here's an Express Tribune report tiled "Nokia Sees Pakistan Becoming a High-Growth Market":

KARACHI: Foreign delegates and local entrepreneurs discussed challenges facing businesses, sought greater industry-academia collaboration and highlighted business models to succeed in an emerging market at the 12th Management Association of Pakistan (MAP) Convention on Leadership Challenges for Business Success here on Wednesday.

Emerging markets will account for 80% of the world’s growth the next decade and Pakistan will be an important emerging market in future, Senior Vice President of Nokia India, Middle East and Africa Shivakumar said in a speech titled “Winning in emerging markets”.

Speaking to a conference packed with businessmen, Shivakumar – who is also the senior vice president of All India Management Association (AIMA) – said growth in developed economies has slowed down dramatically and the world is now looking at emerging markets, which account for 42% of population and 13% of income.

Pakistan is listed in four categories of emerging markets including Dow Jones 35 and emerging and growth level economies (EAGLES), he said. “Pakistan will be an important high-growth emerging market.”

In order to succeed in an emerging economy, he said, it is important to understand its segments and consumers. The emerging market consumers – most of whom live under $2 a day – are value-sensitive and not price-sensitive, he said and added entrepreneurs have to work on their business models to accommodate that segment of consumers who believe in the doctrine of “pay more, get more” and “pay less, get less”.

Sharing his experiences, he said, there are three things that he applied and succeeded. “Always put the country’s interest first, keep fixed costs very low and turn as many cost variables as possible,” he said.

“Never cut the features and offer your product at half the price. Consumers don’t want an incomplete product.”

Speaking to the participants earlier on, event’s chief guest and State Bank of Pakistan Governor Yaseen Anwar said it is time for all business leaders and managers to take the lead. Leaders must be more aware of the challenges facing the country – inflation, unemployment and power crisis.

There are no shortcuts to sustained economic development, Anwar said. “We need to develop the right strategies and then translate these strategies into action.”

AIMA President Rajiv Vastupal also addressed the event, saying IMF has lowered growth projection for both 2011 and 2012. “Today’s corporate leaders must focus on innovation to counter the global economic challenges,” he said. He elaborated the successful example of Apple’s iPad, which was launched during recession and earned a great success.


http://tribune.com.pk/story/306766/nokia-sees-pakistan-becoming-a-high-growth-market/

Riaz Haq said...

Goldman Sachs' Jim O'Neill has reaffirmed his optimism about N-11 group of countries which includes Pakistan. Here's an excerpt from a Vancouver Sun story:

In his book, The Growth Map, O’Neill attempts to look beyond the original concept and expand on it. Hence his “Next 11”: Bangladesh, Egypt, Indonesia, Iran, South Korea, Mexico, Nigeria, Pakistan, the Philippines, Turkey, and Vietnam. However, O’Neill is quick to point out that not all of these countries are equally primed for investment.

This is a group of “very, very diverse countries,” he says. “On one level, I’m always quite embarrassed about the acronym N-11 because all it is ... is a phrase to describe the next 11 population countries after the BRICs, and that’s it.”

Indeed. The N-11 ranges from stalwarts of emerging-market investing, such as South Korea, Turkey, and Mexico, to countries that even the boldest investors tend to be wary of, such as Pakistan and Iran.

O’Neill posits that countries with huge populations and low gross domestic products per capita will be able to catch up to the developed world more quickly than they could have 50 or 100 years ago, as the economic centre of gravity shifts away from the West.

In order to assess countries’ capacity to generate sustainable growth, O’Neill has come up with a set of 13 variables (from education to rule of law to fiscal health to internet penetration) that combine to make what he calls a “growth environment score.” On this measure, the highest-scoring country, South Korea, tops every G8 country except one – Canada.


Read more: http://www.vancouversun.com/business/emerging-markets/Looking+beyond+BRICs+Neill+next/6252450/story.html

Another excerpt from UAE's The National:

Mr O'Neill, as one of the world's top economists and global chairman of Goldman Sachs' asset management business, has detailed answers for all the critics, although he does concede: "Maybe I'm too proud of my creation".

He was speaking in Dubai ahead of the Goldman Sachs Asset Management conference on the Middle East and North Africa, an annual gathering designed to work out the bank's broad investment approach to the region.

Whatever the critique of the Bric concept, there is no doubt it has become one of the guiding principles of economic and financial theory of the past decade, and has helped to change the way businessmen and financiers view the world.

He recently updated the concept to take in what he calls the Next 11 or N-11 economies: Bangladesh, Egypt, Indonesia, Iran, South Korea, Mexico, Nigeria, Pakistan, the Philippines, Turkey and Vietnam.

His visit took in the UAE and other GCC states, and prompted some typically down-to-earth observations on the region's potential.

"From the broad Middle East region, there are two countries that have the population size to eventually become big enough, or N-11: Egypt and Iran. Both are in our list already," he says.

"No individual GCC country could reach their potential. If you thought of the GCC collectively, then you might think of them as having Bric-like potential, but not alone."

Even the biggest GCC country, Saudi Arabia, with its population of an estimated 25 million, is not a candidate for the lists currently, mainly because it lacks the basic criterion of having an economy that is more than 1 per cent of global GDP, Mr O'Neill argues.


http://www.thenational.ae/thenationalconversation/industry-insights/economics/master-brickie-builds-new-creation

Riaz Haq said...

A recent book "The Growth Map" features Goldman Sachs' Jim O'Neill's personal account of the BRIC phenomenon, how it has evolved, and where those four key nations currently stand after a turbulent decade.

And the book also offers an equally bold prediction about the "Next Eleven" countries: Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey, and Vietnam. These developing nations may not seem exceptional today, but they offer exciting opportunities for investors over the next decade, just as BRIC did before them.

http://books.google.com/books?ei=k49mT87qIOqsiQKJ_PGiDw&id=C-yqJ8ftFBgC&dq=the+growth+map&q=Pakistan#v=snippet&q=Pakistan&f=false

Riaz Haq said...

Here's a Daily Times story on Pakistan's capital markets:

The capital markets in Pakistan offer transparency, best price and efficient execution coupled with attraction for foreigners as equity market trades at discount as compared to regional valuations.

Based on price earning (PE), price by volume (PBV) and payout, the Pakistani capital markets trades at lower levels as compared to regional markets. Such attractiveness must catch the eyes of foreign fund managers to explore the opportunities offered by the Pakistani capital markets.

Securities and Exchange Commission of Pakistan’s (SECP) Shahid Naseem and Imran Inayat Butt said this while making a presentation at an institute, organised by the US Securities and Exchange Commission (SEC) in Washington, DC.

The SECP strives to maintain fair, orderly and efficient markets, they said. It protects the rights of investors, facilitates capital formation and develops an efficient and dynamic regulatory framework in line with the principles of the International Organisation of Securities Commissions (IOSCO).

The participants were told that the SECP has a vast mandate, which includes corporate sector regulation, regulating securities markets, commodities market, insurance, pension, private equity, venture capital, NBFC, debt securities trustees and rating agencies. It is also responsible for the registration and licensing, supervision, enforcement, adjudication, appellate bench, investors’ education and awareness, development of legal framework, implementation of corporate governance and AML (anti-money laundering) and administration of professionals.

It was highlighted that after the 2008 stock market crash (when the index fell from 15,500 to 4,500 points), due to successful reform process led by the SECP the index has successfully recovered by almost 200 percent. With the recent developments on the regulatory and operational front and future roadmap, the Pakistani capital market will be comparable with developed international jurisdictions that meet the IOSCO benchmarks.

The International Institute for Securities Enforcement and Market Oversight for the past 18 years has been one of the US SEC’s flagship programmes to promote the quality of securities enforcement programmes around the globe, and strengthening and deepening international cooperation among securities regulators.

This time over 180 regulators from about 73 countries and jurisdictions from around the world are having intensive training and discussions on the most significant issues of securities enforcement. The ongoing seminar is providing an opportunity to participants to brainstorm on and learn from the challenges faced by the capital markets around the globe. It was a rare opportunity for the Pakistani regulator to address such an institute, showcase Pakistan capital market and interact with fellow regulators.


http://www.dailytimes.com.pk/default.asp?page=2012\04\27\story_27-4-2012_pg5_5

Riaz Haq said...

Here's Pak Observer report on South Korean investment in Pakistan:

Ambassador of South Korea, Choong Joo Choihas has said that Tuwairqi Steel Mill (TSML) potentially rich to serve as a catalyst for industrial growth in Pakistan.

During a visit to TSML, the Korean diplomat said “South Korean steel giant POSCO, has so far invested US$ 15 million in this project, and contemplating to invest more. Owing to the strategic geographical location of Pakistan, in central and south Asia, this joint venture appears to be vital initiative in the global business operations of POSCO,” he said.

Choong Joo also said that South Korea is willing to invest in different sectors, particularly steel sector, which offers huge growth opportunities spurred by government’s investment-friendly policies

He said, that scores of South Korean companies are operating in energy, petrochemical and infrastructure industries, while many more have plans to invest in future, provided law and order situation improves in Pakistan. He further informed, that around 10,000 workers from Pakistan are currently serving in Korea.

Young-Ho Yoo, the Resident Director of POSCO said that the new plant is now on the verge of completion and is expected to commence operations by the end of the second half of the current year. “After completion of the first phase, we are looking forward to examine the feasibility for the second and third phase of the project, as its forward and backward integration,” he remarked.

Earlier, Zaigham Adil Rizvi, Director (Projects), TSML gave a detailed presentation about the project and shared statistics about the global steel industry. “There is a consistent growth in the production of DRI over the years, owing to environment-friendly production process and consistent quality of the product,” he said.

He was of the view that currently, Pakistan was among the countries that relied mostly on imports, when it comes to heavy mechanical structures and engineering goods. “By producing high-quality steel within Pakistan, we can manufacture such equipment locally by value addition, with the help of downstream industries,” he concluded.

Tuwairqi Steel Mills Limited (TSML) is Pakistan’s first private sector integrated environment-friendly steel manufacturing project of Al Tuwairqi Holding.

The plant spreads over an area of 220 acres at Port Qasim, Karachi and employs the world’s most advanced DRI (Direct Reduction of Iron) technology of the MIDREX process, owned by Kobe Steel of Japan. The first phase of the project, that constitutes a DRI plant, to produce 1. 28 million tons of high-quality DRI, is now on the verge of completion.

POSCO is the world’s third-largest steel maker, by market value, and Asia’s most profitable steelmaker. It has been the bedrock of Korea’s industrial development over the past 40 years. The Korean shipbuilding and automobile industries primarily are dependent on POSCO for their steel requirements. POSCO produces some 33.7 million tons of steel products each year. Currently, POSCO ships those products to over 60 countries around the globe, satisfying some of the world’s most quality-sensitive manufactures.


http://pakobserver.net/detailnews.asp?id=153766

Riaz Haq said...

Here's a CNN report on Pakistani city of Sialkot which manufactures musical instruments, surgical equipment and sports goods:

Which cities can boast more than a dozen bagpipe factories? Edinburgh? Glasgow? How about, Sialkot, Pakistan?

Sialkot is located in north-east Pakistan, some 125 kilometers from the capital Lahore. Legend has it that the city started making bagpipes during the British Raj, when a Scottish businessman came to town and set up a factory.

More than a century later Sialkot is one of the world’s biggest manufacturers of bagpipes, with more than a dozen bagpipe factories, both big and small.

The bagpipe business became so successful that manufacturers started making and exporting other specialty items - including staples of American culture such as vintage basketballs, American footballs and even replica civil war uniforms.

Today the city manufactures hundreds of items. Sports companies such as Nike and Adidas make their soccer balls here. Dozens of kinds of musical instrument, and even surgical equipment, are made in Sialkot.

Naeem Qureshi, of the Sialkot chamber of commerce, told CNN’s Reza Sayeh that the city's exports are increasing, and are now worth $1.4 billion.

While Pakistan often makes headlines these days because of militant attacks and extremism, local manufacturers say security concerns are overblown. Pakistan has plenty of space, as well as cheap raw materials and labor. And local businesses say Sialkot is a perfect example of why it pays to invest in Pakistan and do business there.


http://business.blogs.cnn.com/2012/07/05/bagpipes-made-in-pakistan/

Riaz Haq said...

Here's a DNA Op Ed o India story unraveling:

These days, I tell my kids to go, and not look back. My eldest is at university in the US and my son is preparing for admissions. Make your lives in America, I tell them. For the first time in a quarter century I’m pessimistic about India. In fact, 20 summers ago I visited the US and found its mood so negative and in such contrast to newly-liberalised India’s optimism that it seemed the two countries were on different trajectories; and I believed the choice to live in India was the right one.

In 2004 the US National Intelligence Council projected the 2020 world scenario in a report called “Mapping the Global Future”. It mostly dwelled on how the rise of China and India would affect the US and the rest of the planet. It was optimistic about India’s prospects in the long term — though by 2050 our per capita GDP was projected to be only 20% of the USA’s, even though our total GDP might be second in the world; and demography and political development gave India more hope than China — but it still listed three economic growth prospects for India: good, bad and ugly. Here, bad meant middling along, always verging on greatness but never quite there; and ugly meant slipping back into a 1970s-type morass.

Midway between the year of the report and the year of its projections, it is not a stretch to say that India would be lucky to achieve the bad scenario outlined by the USA’s NIC. The irony is that Prime Minister Manmohan Singh, who, under the direction of the late PV Narasimha Rao, liberalised the economy and gladdened the middle-class’s heart, is the same man responsible for the despondency that has now set in. For it is now a commonplace to hear that there no longer is an “India story”.
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Frankly, nothing is going to move in this country (except for prices, upwards) for the next few years. Not many of us expect that 2014 will bring us a purposeful and politically sound government; in fact, most of us expect a short-lived regional coalition. If political strategists are looking towards 2016 as a time when a proper agenda can be implemented, then governance between now and then will continue to be characterised by limbo.

And if we have this kind of drift for the next four years, during which time the demands of ordinary citizens increase — political action on land, water, power, education, health, the economy, etc — then do you blame some of us for losing hope and telling our children to jump ship? By the time India becomes a big power, if ever, my children will be grandparents. They might as well go out and enjoy life right now.


http://www.dnaindia.com/analysis/column_india-sinking_1738624

Riaz Haq said...

Here's a Reuters' report on Templeton and Goldman Sachs bullishness on Pakistan:

After 18 years as a banker at firms such as Citigroup and Nomura, Shaheryar Chishty took a different direction in late 2011, starting an investment firm that, among other things, helped guide Chinese and South Korean money into Pakistan.

While Pakistan is probably not the first place the average investor would choose to park cash, Chishty's timing was spot on. The country's stock market surged 49 percent last year to become one of the five best performing markets in the world.

The victory by former prime minister Nawaz Sharif in Pakistan's general election lifted the stock market to an all-time high on Monday, in a sign that investors, which include Goldman Sachs (GS.N) and Mark Mobius of Templeton, are betting on the prospect of further market gains through a stable government.

"I'm not under-estimating the challenges, but we have one party with a simple majority," Chishty, the Pakistan-origin chief executive of Asiapak Investments Ltd, told Reuters in an interview in Hong Kong on Monday. "A lot of the market's rise happened despite the previous government."

Risks, especially violence by Islamic militant groups, remain constant, yet Pakistan's market is up another 21 percent this year, behind only Japan and the Philippines as Asia's top gainers, according to Thomson Reuters data.

Pakistan's uncertain security environment and a deteriorating economy have failed to keep emerging market fund guru Mobius and Goldman Sachs Asset Management out of the country.

Mobius invested 4.6 percent of his $18.5 billion Templeton Asian Growth Fund's assets in Pakistani shares as of the end of March, more than his exposure to shares in Hong Kong, Singapore or Taiwan, according to data from Thomson Reuters Lipper.

"Pakistan is not a small country and it is strategically significant. However, with the negative press surrounding the country, it has tended to be ignored by investors," said Mobius, executive chairman of Templeton Emerging Markets Group.

Last year, 15 equity funds from Pakistan were among the world's top 100 performers, the Thomson Reuters Lipper data show....


http://in.reuters.com/article/2013/05/14/pakistan-election-investment-idINDEE94D0HM20130514

Riaz Haq said...

Here's an AOL piece on Pakistan's economy in 2050:

Recently, Jim O'Neill, one of the most renowned British economist predicted that Pakistan could become world's 18th largest economy by 2050 and its per capita income will cross the 20,500 dollars mark with its GDP around US$ 3.33 trillion in 2050. This means that Pakistan's economy will grow 15 times more than what it stands today within the next 35 years.

Jim became famous for analyzing and coining the world's most powerful economies in a single term, 'BRIC' meaning Brazil, Russia, India and China in 2001. He recently developed another term, 'MINT', meaning Mexico, Indonesia, Nigeria and Turkey and has projected them to be coming up as strong economies in the coming decades.

Currently, Pakistan is ranked the 44th largest economy of the world with GDP of US$ 225.14 billion. If Jim O'Neill's predictions turn out to be true, Pakistan's economically sound conditions can be fruitful for the country's development. Not just this but it can also lead to amicable living conditions for its people and can lead to smooth social atmosphere there.

Other than the 2050 predictions, we should not forget about the serious economic challenges being faced by Pakistan currently. International Monetary Fund signed a financial assistance of USD 6.7 billion to save the country from falling into the periphery of an economic collapse back in September 2013. The energy sector is a cause of severe poverty and growing labour force. Pakistan has failed to develop a variegated economy. Pakistan will need to boost up its confidence in order to attract FDIs, said IMF.

Terrorism is another reason behind the slower economy of Pakistan. It has damaged the image and the economy of Pakistan on numerous levels. Normal business and tasks require more time and extra security due to the challenge of terrorism. Terrorism leads Pakistan to have an extra expenditure on humanitarian aid, law and order and various other fiscal, economic, cultural and social charges.

Pakistan's economic circumstances have different root causes and solutions to those causes are demanding but a lot has changed over the years. Since 2007, the domestic consumer demand has been rising. Many multinational corporations have brilliantly performed in Pakistan. The Pakistani markets have proven to hold better potential than the African markets. It has also been said that if the job crisis in Pakistan is resolved, its economy will outdo the economies of many other countries.

"It would be a great achievement for Pakistan if Jim's predictions turn out to be true. Pakistan will then be entering into the positive spheres of world economics. This will be beneficial for the country," said Sukriti, a student of English Honors who holds high interests in economical issues of the world.

"If Pakistan is able to achieve the mark of GDP US$ 3.33 trillion, then nothing like it. It will be a great achievement not just for Pakistan but also for the neighboring countries. The economical ties will bolster and not just Pakistan but all the surrounding countries will flourish with it," said Arushi, a student of Jesus and Mary College.

Pakistan's growing economy will be a big challenge for the other economies of the world.


http://www.coolage.in/2014/01/24/pakistan-can-have-18th-largest-economy-in-2050/

Riaz Haq said...

Here's an interesting Op Ed by a NZ doctoral candidate Christopher Barber in the Diplomat on Pakistan-China economic corridor:

Historian Daniel Headrick made the crucial connection between means and ends in the projection of global influence. For instance, Headrick argued that the Suez Canal, which opened in 1869, acted a tool of empire for the great powers of the nineteenth century. The building of a canal through the Sinai Peninsula not only made trade and empire in Asia faster by avoiding the Cape of Good Hope, but more economical too. This was particularly the case for the world’s superpower, Great Britain. For Britain, the Suez was an important strategic consideration in its imperial outlook, making the transport of goods, officials and soldiers to Bombay and other key colonial hubs easier and affordable....
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With the development of the corridor, Central Asia, traditionally an economically closed region owing to its geography and lack of infrastructure, will have greater access to the sea and to the global trade network. For Afghanistan and Tajikistan, both of which have signed transit agreements with Pakistan, it will provide a more economical means of transporting goods, making their export products more competitive globally. For China, meanwhile, the corridor will provide it with direct access to the Indian Ocean, enabling China to project itself strategically into the mineral and oil rich regions of Western Asia and Africa (and beyond). And for Pakistan, the project provides the country not only a third deep-sea port but also a better connected gateway into China’s backyard, giving Pakistan the potential to make good on its free trade agreement with the dragon economy.

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Nevertheless, the corridor will play a crucial role in advancing Pakistan’s economic power. Exporting, transiting, and transporting goods into and out of Central Asia and carrying them away on the current of the world’s sea lanes, the Pakistan-China corridor will be a vital factor in Pakistan’s economic future. The corridor is best thought of as a comprehensive infrastructure package encompassing a wide range of spinoffs, including gas and oil pipelines, railways, an expressway from Karachi to Lahore, fiber-optic cabling, metro bus and underground services for key Pakistani cities....

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In reality, agriculture, chemicals, textiles, and various other manufactured items are the stuff of Pakistan’s true productivity—items that are tradable on the global market and capable of boosting national income. Pakistan has always been well placed to export given its access to the Indian Ocean and proximity to key markets in the West and East, to say nothing of its international reach through the Pakistani diaspora and the fact that it has the third largest English-speaking population in the world. Despite government absenteeism—that reoccurring failure within the political sphere to respond to the Taliban and to the reactionaries that routinely thwart Pakistan’s potential—as well as rampant inflation and a serious lack of currency reserves, Pakistan’s private sector has proven resilient, capable of going in for global trade with the right encouragement. The cue is now for the Pakistani government and the business community to formulate a more global economic policy.

As it stands, the failure to fully capitalize on the free trade agreement between China and Pakistan demonstrates the need for a major policy effort to make the most of the corridor. For one, the Pakistani government needs to place greater emphasis on trade relations in its overall foreign policy as well as foster the exporting aspirations of small and midsize companies. Expansive economic policy, continued liberal reform, and, above all, an improved security situation are the formula needed to make full use of the tools of globalization which Pakistan will soon have at its disposal.

http://thediplomat.com/2014/02/the-pakistan-china-corridor/