The Pakistani economy has doubled in the past decade. It has the highest per capita income in South Asia. The view of Pakistan through the lenses of the agenda laden Fox CNN and its affiliate Geo is very different than the Pakistan that exists today.
A few foreign mercenary suicide bombers and bombs has not dampened the spirit of Pakistanis. Pakistanis faced bombs during the occupation of Afghanistan by the USSR. Today she again faces bombs. Attempts to destabilize the country continue, but the economic engine directed by Chinese and Arab investors is relentless and is continuing.
A shortage of electricity is because of the massive electrification campaign that has brought electricity to the remote villages. Energy consumption is up and doubled.
There is a construction boom unparallelled in the history of Pakistan. Islamabad now boasts skyscrapers like Dubai. New cities like Gwadar are attracting attention as new posts. Karachi is witnessing the construction of 9 new 5 star hotels, and the rebuilding of Manora for the Water Front Karachi construction that will eliminate the old archaic building of Manora and build modern skyscrapers. Lahore and Rawalpindi are witnessing “signal free corridors”, flyovers and freeways that are the envy of South Asia.
There is an attempt to derail the economy. But it is not succeeding. The spirit of the country is lively and high. Music and art is energising the young.
The capital and brain drain that used to help the USA and UK now stays in Pakistan. Pakistanis have realized that the Pakistani careers are tied to Pakistan.
No structural risks to foreign investment
ABU DHABI: Pakistan’s strong macro-economic indicators will help sustain the political crisis, and there is no risk to foreign investment, said Merrill Lynch.
“Though in short-term jitters cannot be ruled out,” world top investment bank said.
In its analysis on Pakistan economy, it said that investment flows into Pakistan will sustain, driven by its young population and strong economy driven by private and public investments.
Pakistan economy has a strong balance sheet, built up in the past five years.
Hence, investors fearing $100 oil price, slower foreign investments and higher current account deficits as high risks to economy, should find comfort in Pakistan’s forex reserves (five months’ import cover), declining external debt-to-GDP, long-term loan facilities from IFIs and support from the US and allies on the war against terror.
While foreign investments could be potentially lower relative to last year, Merrilll Lynch report says it impact can be offset through a mix of debt disbursements and reserve drawdown, if warranted.
Foreign fund flow: “Foreign flows into Pakistan are structural, not cyclical.
The bulk of the money targets the robust domestic economy, and not oil, agriculture and other commodity-related avenues”, the report said.
World’s top investment bank is expected that the trend to sustain, due to a strong domestic economy that should be driven by sustained medium-term flows through remittances, private and public investments.
Risks to the currency: Pakistan rupee exchange rate to remain stable, thanks to sustained capital flows in the medium-term and an expected decline in the current account deficit in first half of fiscal year 2008-09 (July-December 2008).
The recent two per cent slide in Pak rupee against the US dollar is likely to sustain REER (trade-weighted index) at par, which was threatening to appreciate due to persistently higher inflation.
This should also help keep export growth at 10 per cent intact and contain the import bill.
Stable rupee: Investment perspective on the basis of stable Pak rupee exchange rate call, Merrilll Lynch recommends investors to take exposure in the local debt market, which offers attractive yield relative to peers. This has resulted in the KSE trading at about 10x 2008E and below 9x 2009E earnings.
With business returning to normal, Merrilll Lynch expects the focus to turn to attractive valuations and fundamentals. It favoured energy sector’s exploration and production, oil marketing companies and power companies apart from fertilizers and banking scrip. – KT
Karachi – Dubai’s Envy !!
This is a presentation prepared by Emaar, KPT and Nakheel. All this is in the works. These companies have bought most of the property in Karachi. They include :
Bandoo and Bundal Islands, Minora semi-island, Sands Pit and Hawks bay etc. Varify at Wikipedia, KPT site and Emaar web site.
( Turn up the volume and click)
Also see this about Karachi Mega City
Pakistan and Asian Development Bank (ADB) will hold ‘final negotiations’ on January 16, 2008 for $800 million loan for Karachi Mega City Development Project (KMCDP). The KMCDP is a project sponsored jointly by Sindh government and ADB with the main objective of enhancing the economic potential and living standard of Karachi and strengthening the mega city functions. A five-member delegation, led by City Nazim Mustafa Kamal, would leave for Manila late on Monday, the Nazim told on Monday. “We are going to hold final negotiations with the ADB on $800 million financial assistance for the Karachi Mega City Development Project”, he said.
The delegation during its three-day visit would hold different rounds of talks with the officials of ADB. “We will discuss various modalities and, after successful negotiations, would proceed further”, he added. Beside the Nazim, the delegation includes Ghulam Mohammad Mehar, Mumtaz-ur-Rehman, Shoaib Ahmed Siddiqui, and Roshan Ali. Project Co-ordinator Roshan told this reporter that the City government was likely to sign the agreement with the ADB next month. “During the visit we will be holding loan appraisal meeting with the ADB which would be followed by the loan appraisal mission within next weeks and then finally loan negotiations would be held,” Roshan said.
He said the delegation would return by January 18. According to official sources the loan would be from the Bank’s concessional Fund, and would cover 75 percent of total cost of the project.
The loan would be for a 32-year term including a grace period of eight years with a one-percent interest rate to be charged annually during the grace period and 1.5 percent thereafter. Sindh government would contribute the balance of $3.33 million equivalent, they said.
Projects to be undertaken under KMCDP include technical assistance in organisational development of Mega City Planning and capacity building of the CDGK, town municipal administrations and other civic agencies, water and solid waste management, katchi abadis, Urban Road Transport System, Corridors-I and II, Urban Traffic Control Project etc.