Index provider MSCI is considering upgrading Pakistan from frontier to emerging-market status next year. The index, introduced by Morgan Stanley Capital International, is designed to measure equity market performance in global emerging markets. According to experts, up-gradation of the status will be a morale booster for the government which is desperately seeking appreciation for its economic achievements. The MSCI has cited a number of steps taken by the government over the course of one and half years and it is ready to include Pakistan on its review list of 2016. The new government of Prime Minister Nawaz Sharif was established at a time when the country recorded low growth, high inflation, a foreign-exchange reserve crisis and crippling electricity shortages. However, inflation has now dropped significantly and foreign exchange reserves are at a comfortable level. The government has now planned to boost economic growth from the 3 percent to around 7 percent by the end of its five-year term. The IMF expects minimum GDP growth at 4.3 percent this year and it should be up to 4.7 percent in 2016. The frontier-markets analysts, Renaissance Capital, has already describes the country as the best undiscovered investment opportunity in emerging or frontier markets.
The country has been facing security challenges and terrorism and its economy has incurred a loss of over $100 billion during the last one and half decades. However, the economy is back on track now and foreign investors have started taking interest in the economic opportunities in the country. The Karachi Stock Exchange has recorded 72 percent improvement since the 2013 elections and positive aspects of the country’s economy are visible on the world economic forums. According to foreign media reports, investors are taking enormous interest in the country’s first real estate investment trust which is heavily over-subscribed.
According to the western media, India is emerging economic power and a success story whereas Pakistan is lagging behind in every sector of the economy. However, factual position is that instead of a success story India is not even a full stop. Despite all odds, Pakistan economy is developing at a fast rate but the financial managers of the country should also carefully design economic policies keeping in view the ground realities. There are two aspects of the economy – stability and growth. The country’s economy not only needs stability but also growth and this cannot be possible without the participation of the private sector in the economic activities.
