For more than a decade, Pakistan has partnered with the United States to combat extremism and militancy that threatens stability of our region and the world. This fight has taken an enormous human toll on our people, with over 37,000 civilians killed and more than 5,000 police and soldiers lost. In addition to the enormous human tragedy, this struggle has directly and negatively impacted our economy and the development of our nation.
We have witnessed loss of more than $100 billion of foreign investment, a tightening of our financial markets, and a freeze on the progress of many social programmes. But that trend has now dramatically reversed, and there is an emerging story of a new Pakistan strategically located at the crossroads of world’s most dynamic economies, ready to take its place as a critical emerging market.
We have a consumer base of more than 170 million, a young and educated work force, and a culture of entrepreneurship. The opportunity for our economy to grow is immense. People in the West may not be aware, but positive change that is sweeping Pakistan as we speak has profound economic and political consequences for future.
Pakistan was not immune to the global financial crisis, which struck just as we began the transition from a military dictatorship to a thriving democracy. The new democratically elected government inherited staggering domestic challenges, rising commodity prices, financial turmoil and a severe energy crisis resulting from years of mismanagement and poor planning associated with the priorities of dictatorship. Natural disasters further complicated our recovery.
Yet over the last four years, the Pakistani government has taken difficult but important steps to get our economy back on track. This year real growth in Gross Domestic Product (GDP) is likely to reach 4pc, nearly double last year’s rate. During the first nine months of fiscal year 2012, tax collections have surged by 24pc, remittances from Pakistanis abroad by 21pc (to $9.7 billion), and our exports by 5.5pc over last year’s base of $25 billion.
Inflation and consumer prices were down in March, easing pressure on small and medium-size companies. The Karachi Stock Exchange KSE-100 Index now stands at 14,000, having been at 6,000 in 2008. Pakistan’s foreign exchange reserves increased to $18 billion in 2011, the largest in history, and our financial obligations are declining. In 2015, Pakistan’s annual repayment to the International Monetary Fund will be a quarter of its 2012 obligation.
Six months ago, Pakistan granted Most Favourite Nation trading status to India, a paradigm-shifting policy change driven by the business sectors on both sides of the border. With its complete implementation and the concomitant reduction of India’s non-tariff barriers, this decision has the power to reconfigure the region’s economic landscape and dramatically increase its stability. Today, bilateral trade between India and Pakistan stands at $2.7 billion per year. Business chambers in both countries predict that figure could quadruple to $10 billion by 2015.
Pakistan is committed to promoting an investor-friendly environment. We offer most liberal investment policy regime in the region, including incentives such as full repatriation of capital, capital gains, dividends and profits. We have signed Business Investment Treaties with many nations and are currently in the final stages of negotiating such a treaty with the US.
Investing in any emerging market has its challenges but Pakistan is poised for growth. For the first time in our history, a democratically elected government will complete a full five-year term next year. Our judiciary is independent and upholding rule of law. Our military is working with our civilian government to protect borders and keep militancy and extremism in check. Our civil society is expanding while media showing robust and uncensored.
Business contracts have been consistently honoured and the return on investment for many investors has been enormous. And though the last decade has taken a toll on our economy and our infrastructure, our resilience is evident and turning the tide. We are building infrastructure and expanding our energy capacity, we are modernising our agriculture sector, we are a leader in telephone access, our textile sector is one of the largest in the region and our information-technology companies are some of the best in the world. This is the new Pakistan.
–Wall Street Journal