Pak­istan thrives...

Pakistan Observer - - IN­TER­NA­TIONAL -

tak­ing on mil­i­tants and terrorists in­side the coun­try.

Fol­low­ing Panama Pa­pers leaks which named Prime Min­is­ter Nawaz Sharif’s family mem­bers as own­ers of off­shore com­pa­nies, the gov­ern­ment sur­prised ev­ery­one by writ­ing a let­ter to the Chief Jus­tice of Supreme Court to set up a com­mis­sion to probe al­le­ga­tions lev­elled against the prime min­is­ter and his family.

On the other hand, in an ex­tremely rare move late last month, the Army Chief Gen­eral Ra­heel Sharif dis­missed 12 high-rank­ing of­fi­cers, in­clud­ing two gen­er­als and three brigadiers, over cor­rup­tion. This prompted a warn­ing from Pak­istan’s top gen­eral of across-the-board ac­count­abil­ity in the coun­try.

Many in Pak­istan are used to be­liev­ing the ob­vi­ous to hap­pen un­der the po­lit­i­cal cir­cum­stances, but to their dis­may it did not hap­pen.

De­spite the Op­po­si­tion’s hue and cry fol­low­ing Panama Pa­pers leaks, Pak­istani stocks closed at a record high ear­lier on Mon­day, ris­ing for the fifth straight ses­sion on buy­ing led by for­eign funds and on hopes the coun­try’s main stock ex­change would soon be in­cluded in a key emerg­ing mar­kets in­dex, lo­cal me­dia re­ports quoted the deal­ers as say­ing.

The bench­mark 100-share in­dex of the Pak­istan Stock Ex­change fin­ished 0.73 per cent higher, or 261.30 points, to hit a record high clos­ing level of 36,234.99, breach­ing the 36,000-mark for the sec­ond con­sec­u­tive ses­sion ear­lier in the day. The in­dex crossed the 36,000 level in in­tra­day trade last Fri­day, the first time since Aug 12, 2015.

Mor­gan Stan­ley Cap­i­tal In­ter­na­tional (MSCI) is ex­pected to dis­cuss the in­clu­sion of the Pak­istan Stock Ex­change (which was ear­lier known as the Karachi Stock Ex­change) in its emerg­ing mar­kets in­dex dur­ing an up­com­ing an­nual mar­ket clas­si­fi­ca­tion re­view on June 14, said Fawad Khan, head of re­search at KASB Se­cu­ri­ties Pvt Ltd.

Pak­istan was ex­cluded from the MSCI Emerg­ing Mar­kets In­dex and clas­si­fied as a higher-risk fron­tier mar­ket af­ter the Karachi Stock Ex­change was tem­po­rar­ily closed in late 2008 to pre­vent in­vestors from with­draw­ing funds.

Ex­perts in Pak­istan be­lieve coun­try is mov­ing in right di­rec­tion de­spite all odds.

Ac­cord­ing to a World Bank’s lat­est sur­vey, Pak­istan’s fast-grow­ing re­mit­tances ris­ing investments un­der the China Pak­istan Eco­nomic Cor­ri­dor (CPEC) have sup­ported eco­nomic growth of the coun­try.

Ac­cord­ing to the same re­port, Pak­istan’s mod­est eco­nomic re­cov­ery would con­tinue.

How­ever growth re­mains well be­low the 5.5 per cent tar­get en­vis­aged in the Pak­istan’s An­nual Plan and the South Asia av­er­age of 7.5 per cent, the bank re­ported.

Pak­istan’s growth, the bank said, is ex­pected to pick up to 4.5 per cent from 4.2 per cent.

Like the rest of the re­gion, the coun­try is ben­e­fit­ting sup­ported by low oil prices, high re­mit­tances and CPEC in­vest­ment from low oil prices, which have re­duced the trade deficit (de­spite a no­table de­cline in ex­ports) and in­creased con­sump­tion, it said.

The World Bank is of the view that struc­tural chal­lenges pre­vent Pak­istan from grow­ing as quickly as its neigh­bours. The ef­fects of the high re­mit­tances and low oil price wind­fall (driv­ing such high growth rates in the rest of South Asia) are some­what ham­pered in Pak­istan by its con­tin­u­ing do­mes­tic struc­tural chal­lenges.

The bank said that the gov­ern­ment is mak­ing progress on the struc­tural re­forms that will be es­sen­tial to safe­guard growth. It also said that the gov­ern­ment has made great strides in in­creas­ing for­eign ex­change re­serves and has re­cently made progress in the power sec­tor and rev­enue re­forms, but its am­bi­tious re­forms agenda is nec­es­sar­ily a medium- to long-term plan.

In short, off the record con­ver­sa­tion with well in­formed peo­ple in­clud­ing politi­cians, diplo­mats and bu­reau­crats and back­ground in­ter­views re­vealed that in­cum­bent gov­ern­ment was likely to com­plete term and that there is no threat to democ­racy in Pak­istan.

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