Why Pakistan?

Why Pakistan Primary Image
Saturday, September 22, 2012 - 4:45pm

While U.S. companies have been committed to Pakistan for over six decades, the opportunity presented by the country is finally maturing. Pakistan is a young, growing nation with an increasingly large and sophisticated domestic consumer market. The country’s economy has grown sixfold over the past three decades, and the government is committed to a seven to eight percent economic growth rate in the coming years. That’s crucial since Pakistan’s population is expected to overtake that of both Brazil and Indonesia, making Pakistan the world’s fourth-largest country by 2050.

 

 

Location

Pakistan sits in the heart of Asia, on one of the world’s most important trade routes. Pakistan is the gateway to the energy-rich Central Asian states, financially liquid Gulf states and economically powerful Southeast Asian tigers. The country offers maritime traders a vast coastline while strong bonds with Middle Eastern and South Asian nations permit investors to tap many services and facilities without duty.

Population and workforce

Pakistan is the giant you haven’t considered. One hundred ninety million people call the country home, making it the sixth most populous nation on earth. It is a young nation. Sixty percent of the population is under 30 years of age, and with a birthrate more than 60% higher than the regional average, the nation will not face the problems of a graying society for decades to come.

Pakistan fields a labor force of 55.8 million people. The largest chunk of this population — 44% — is in the agricultural segment, but that is sure to decline as 3% of the rural population moves into the cities each year, hungry for improved lifestyles and opportunities.

Growing consumer spending

Pakistani consumers love to buy foreign brands — especially recognizable ones — as local products are believed to be of inferior quality. Naturally, this drives a strong and growing demand for imported products. The appetite for foreign goods led the government to open its markets in 2011 by allowing an additional 7,000 products to be shipped from India. Western companies are also doing well in many market segments, from value-priced mass products to exclusive outlets for wealthy urbanites.

Economic growth

While Pakistan still reels from the global economic crisis, its own economy ought to see moderate growth in 2012. Medium-term growth will be considerably stronger. Real GDP is expected to rise by 3.8% this year, and most of the growth will be concentrated in the industrial and service sectors. In 2013 and through the end of the decade, Pakistan expects to produce 5% annual growth, but high inflation remains both a worry and a drag on the economy. U.S. imports from and exports to Pakistan declined during the financial uncertainty, as did foreign direct investment from the U.S. However, the rates are once again climbing.