Tuesday, January 8, 2013

Pakistan's Economic Recovery Amid Violence in 2012

The year 2012 was a mixed bag. Economy continued its modest recovery with the stock market hitting new records but it was marred by rising civilian casualties and the worsening energy crisis. The coalition government led by the Pakistan Peoples' Party is nearing its full term with a new prime minister and the political parties have begun campaigning for general elections in the first half of 2013.

 Below is a summary of positive trends and problems witnessed by Pakistanis in 2012:

 Positive Trends:

1. GDP growth rate doubled from the low of 1.71% in 2009 to 3.67% in 2012.   Consumer price index hit a low of 7.9% in December, the lowest in South Asia region.

2.  Terrorism related fatalities declined from the peak of 11,700 in 2009 to 6,211 in 2012, and slightly decreased from 6,303 in 2011, according to SATP. Sectarian deaths accounted for 507 of the 6,2011 victims of terrorism in 2012.

3. Karachi's KSE-100 index surged nearly 50% (37% in US $ terms) in 2012 to top all Asian and BRIC market indices.

4. Elected coalition government led by the Pakistan Peoples' Party is close to completing its term with a new prime minister.

5. Retired Justice Fakhruddin G. Ibrahim was appointed by consensus of all political parties as  an independent Chief Election Commissioner with broad powers under the 18th amendment.

6.  Fair Trials Bill (aka Patriot Act) passed the House. This anti-terror legislation is now pending approval by the Senate. Witness protection program is being planned for terrorism cases.

 7. The latest Pak Army doctrine named internal terrorism as the #1 threat. 

 8. Relations with US improved after the American apology over the Salala incident. The US aid and CSF funds flow resumed.

 9. Despite the backlash from the CIA-sponsored bogus vaccination campaign and more recent polio worker shootings, the polio cases significantly declined from 198 in 2011 to 57 in 2012.

10.  Domestic cement consumption, an important barometer of national economic activity, was up 8% in  2012, according to a research report compiled by a Credit Suisse analyst.

11.  Al-Twariqi Steel Mill in Karachi to produce 1.28 million tons of steel per year and Byco refinery to refine 120,000 barrels of crude per day in Balochistan were completed in 2012 for full production planned in early 2013.

12.  FFC and Zorlu Energy wind farms with combined 106 MW capacity were inaugurated in Jhimpir near Karachi in December 2012.

13.  Sharmeen Obaid-Chinoy, journalist and documentary filmmaker, won Pakistan’s first Oscar for her documentary ‘Saving Face’ documenting the stories of resilience and courage of Pakistan’s acid attack survivors. Sharmeen was also featured on TIME’s 100 Most Influential Peoples list for 2012.

14.  Pakistan’s Muhammad Asif won the World Amateur Snooker Championship in Sofia, Bulgaria.

15. Pakistanis set several records for the Guinness Book of World Records. Amongst them, 44,200 Pakistanis sang the national anthem together at the National Hockey Stadium to set a new world record breaking India’s record of 15,243 people. Also, more than 24,000 Pakistanis formed the world’s largest ‘human national flag’, smashing a previous record set in Hong Kong.

Low-lights: 

 1. There was lack of clear political consensus on military action against the Taliban even as they tried to assassinate innocent civilians like Swat schoolgirl Malala Yousufzai.  She was shot in the head with the TTP claiming responsibility for the attack.

2. Energy crisis, particularly gas shortages, became more acute.

3. Civilian casualties in incidents of terrorism jumped from 2,738 in 2011 to 3,007 in 2012 as the Taliban went after soft targets, including minorities, school girls and aid workers.

4. Karachi saw a dramatic increase in ethnic and sectarian violence claiming over 2000 lives. Bank robberies, extortion and kidnapping increased as the Taliban sought to fund their insurgency.

5. Public finances remained weak with no real progress in improving tax collection and enhancing tax-to-gdp ratio.

6.  Pakistani currency continued to decline nearing Rs. 100 to a US dollar exchange rate. The rupee  slid 7 percent versus US dollar in the past year, with reserves down about 19 percent to $13.8 billion raising fears of another balance of payments crisis. 

7. Worsening energy crisis across the nation and increasing violence in Karachi, the economic hub of the country, present a very serious threat to Pakistan's fragile economy and democracy. 


Here's a video discussion on year 2012 in Pakistan:


Related Links:

Haq's Musings

Pakistan's GDP Grossly Underestimated, Shares Highly Undervalued

Investment Analysts Bullish on Pakistan

Precise Estimates of Pakistan's Informal Economy

Comparing Pakistan and Bangladesh in 2012

Pak Consumer Boom  Fuels Underground Economy

Rural Consumption Boom in Pakistan

Pakistan's Tax Evasion Fosters Aid Dependence

Poll Finds Pakistanis Happier Than Neighbors

Pakistan's Rural Economy Booming

Pakistan Car Sales Up 61%

Resilient Pakistan Defies Doomsayers

Land For Landless Women in Pakistan

Pakistan's Circular Debt and Load-shedding

Hypermart Pakistan