South Asia Investor Review

Independent candidates backed by the Pakistan Tehreek e Insaf (PTI) party emerged as the largest single block with 93 seats in the nation's parliament in the general elections held on February 8, 2024.  This feat was accomplished in spite of huge obstacles thrown in front of the PTI's top leader  Imran Khan  and his party leaders and supporters by Pakistan's powerful military to prevent their victory.  Pakistan's Official Election Results 2024. Source: Aljazeera   Imran Khan and his top party leaders were thrown in jail on trumped up charges, his party was denied a unified electoral symbol of cricket bat, his supporters' rallies were banned, the mainstream media were prevented from carrying PTI leaders' speeches and the Internet was repeatedly blocked when the party held online events. So how did they succeed in spite of it? The answer lies in how skillfully the PTI activists used  technology  to get the party's messages out to the country's young elec...

Did the U.S. make it clear to Pakistan in 2022 that Imran Khan was not acceptable as the prime minister of the South Asian country? Did the Pakistani military then use the Opposition parties led by Nawaz Sharif and Asif Ali Zardari to remove Imran Khan from power through a successful No-Confidence vote in the parliament? The answer to both of these questions appears to be a resounding "yes" based on the leaked contents of a secret diplomatic cable, the actions of the Opposition politicians and the attempts to dismantle the Pakistan Tehreek-e-Insaf (PTI) and the jailing of Imran Khan on trumped-up charges. These events have created significant political instability in the country and prompted former US National Security Advisor John Bolton  to urge the Biden administration to take a clear position before the “terrorists, China and Russia take advantage” of the situation. Former Prime Minister Imran Khan (L) and General Asim Munir Diplomatic Cable: A leaked diplomatic cable fro...

Pakistan is experiencing one of the darkest periods of its history. Political instability is eroding confidence in the nation's future. Declining economic growth and high inflation are hurting the people of all strata of society, particularly the poor whose numbers are rapidly rising. Is there any  hope  left for the country? Is it a case of the "darkest before dawn"? How do investors see it?  Ex PM Imran Khan (R) with President Erdogan Writing in the Time magazine immediately after the recent arrest of former Prime Minister Imran Khan, American investor, author and commentator Zachary Karabell who has invested in Pakistani startups sees rare hope for Pakistan. He sees Pakistan where Turkey was back in 2001-2003, "when a series of elections brought Recep Erdogan to power even as he was repeatedly disqualified by a military that was determined to retain control". Here's an excerpt of his article titled " The Contrarian Case for Pakistan " published ...

Multiple polls over the years have found that the Pakistani military has traditionally enjoyed widespread  popular support  in the country. This support has been particularly strong among the urban middle class Pakistanis who have now become the backbone of Imran Khan's Pakistan Tehreek-e-Insaf (PTI) party which has accused the Pakistani military of orchestrating an assassination attempt against the former Prime Minister. The events of the last several months, particularly this week's assassination attempt on the PTI chief's life, are forcing the people to choose sides. By-election results and huge attendance of the PTI rallies confirm that most of the people are supporting  Imran Khan  over the military.   Pakistan's Ex PM Imran Khan and Current Army Chief General Bajwa Some Pakistani political analysts have long speculated about the possibility of the loss of public support for the Pakistani military.  Back in 2019, I met  Sohail Warraich , a se...

Soaring demand for consumer electronics and low labor costs are attracting major global smartphone manufacturers like Samsung to Pakistan. In 2021, local manufacturers produced 25 million handsets, up a whopping 88% increase from 13 million produced in 2020. A key factor credited for this rapid production ramp-up is the new Mobile Device Manufacturing Policy announced and implemented by former Prime Minister Imran Khan's government in 2020. It imposes high tariffs on the import of mobile phone sets and offers tax rebates for local manufacturing. The policy set a 49% localization target by June 2023, including 10% localization of components on the motherboard and 10% localization of batteries.  Pakistan is forecast to be the world's 7th largest consumer market by 2030. The key to attracting more manufacturing in Pakistan lies in continuation of pro-investment policies and a measure of political stability.  Pakistan Going From Imports to Exports of Mobile Handsets. Sourc...

Economic Survey of Pakistan 2021-22 confirms that the nation's GDP grew nearly 6% in the current fiscal year, reaching $1.62 Trillion in terms of purchasing power parity (PPP). It first crossed the trillion dollar mark in 2017. In nominal US$ terms, the size of Pakistan's economy is now $383 billion. In terms of the impact of economic growth on average Pakistanis, the per capita average daily calorie intake jumped to 2,735 calories in FY 2021-22 from 2,457 calories in 2019-20. Pakistan experienced broad-based economic growth across all key sectors in FY 21-22; manufacturing posted 9.8% growth, services 6.2% and agriculture 4.4%. The 4.4% growth in agriculture is particularly welcome; it helps reduce rural poverty.  The country's per capita income is $1,798 in nominal terms and $7,551 in PPP dollars.  These figures do not yet show up in Google searches. Under former Prime Minister  Imran Khan's leadership , Pakistan succeeded in achieving outstanding economic growth and ...

Pakistan poverty headcount, as measured at the lower-middle-income class line of US$3.20 PPP 2011 per day, declined from 37% in FY2020 to 34% in FY2021 in spite of the  COVID19 pandemic , according to the World Bank's Pakistan Development Update 2022 released this month. The report said Pakistan's real GDP shrank by 1% in FY20, followed by 5.6% growth in FY21.  The report highlights high inflation and low savings rate as key economic issues.  Pakistan's Macroeconomic Indicators. Source: World Bank The report credited the PTI government led by former  Prime Minister Imran Khan  for timely policy measures, particularly the  Ehsaas program , for mitigating the adverse socioeconomic impacts of the COVID-19 pandemic. Here's an excerpt of the report titled  Pakistan Development Update 2022 :  "The State Bank of Pakistan (SBP) lowered the policy rate and announced supportive measures for the financial sector to help businesses and the Government expanded...

A snap poll conducted by Gallup Pakistan on April 3 and 4 shows broad support for Prime Minister  Imran Khan 's decision to seek dissolution of the National Assembly and call fresh elections.  Support for the decision is nationwide with 66% in Punjab, 69% in Sindh and 78% in KPK province. It is the strongest among those identifying themselves as PTI voters with 95% of them approving the decision. Among the Opposition parties, 44% of PMLN voters and 50% of PPP voters agree with the decision.   Source: Gallup Pakistan Here are the key findings of the  Gallup Pakistan Poll :  1) Widespread support for dissolution of National Assembly in Pakistan Respondents were asked ‘ PM has dissolved the national assembly and called for fresh elections. Do you Support or are you against this’ To this question a wide majority 68% say they support and 32% say they oppose PM Imran Khan’s move. Source: Gallup Pakistan 2) Majority don’t believe in US Conspiracy to remove Imran K...

Multiple media reports and analysts have suggested that there is civil-military divide in Pakistan on the question of relations with the United States. These reports cite General Bajwa's statement that "We share a long history of excellent and strategic relationship with the United States" and the fact that this statement came a day after the government of Prime Minister Imran Khan formally protested to the United States for allegedly backing his opponents in a parliamentary no-confidence vote seeking his ouster from power. However, a look at more detailed remarks by General Bajwa at the Islamabad Security Dialogue 2022 (ISD2022) lead to an entirely different conclusion: There is no civil-military divide in Islamabad on the question of US-Pakistan ties.   Prime Minister Imran Khan (L) with General Bajwa Answering a question about US-Pakistan ties at the Islamabad Security Dialogue 2022, Pakistan Army Chief General Qamar Javed Bajwa said China is "off course our nei...

Prime Minister Imran Khan has effectively led Pakistan through multiple crises in the last 4 years. Khan inherited dangerously low forex reserves in 2018 which are now at  $23 billion, near the highest level in the nation's history. The COVID pandemic that hampered Pakistan's recovery has been handled well with the fully vaccinated rate for the eligible population at more than 75%. Not only has Khan deftly navigated his nation through these crises but his government has also revived the country's economy and grown exports by 26%.  Domestic savings rate recovered to nearly 17% after plunging to a low of 12% in 2018.  The year 2021 was a banner year for Pakistan's  technology startups  that raised over $350 million in funding, more than the amount raised in the previous 5 years. Manufacturing and construction industries are enjoying a boom last seen during the  Musharraf years  in 2000-2007.  Pakistan has pursued an independent foreign policy under ...