Pakistan is a third world state with
a agricultural based economy. The nation which has nearly 190 million
inhabitants is facing numerous issues and obstacles. Yet it is part of the
group of emerging nations after BRIC with a potential for growth.
Pakistan
economy outlook
The GDP growth rate in Pakistan is
at levels that more developed nations such as the USA and Britain would be
eager to have. The nation also enjoys a young population with over 505 of
Pakistanis under the age of 25. The economy is growing and the per capita
income has increased over the years along with the country’s foreign
reserves. The growth spurt has been
somewhat decreased in the recent past due to the worsening situation and
political uncertainty.
However an idea of the resilience
and strength of the Pakistani economy can be gauged from the fact that the
global financial crisis did not impact the nation till about a year or a year
and a half after it broke. The country’s
growth is attracting major MNCs –those already in the market are gearing up and
putting their money on Pakistan while new companies are eager to set up shop.
The companies are ready to meet government requirements such as having an
infrastructure of over 60,000 sq ft and face extra regulation especially in the
pharma sector.
Recently it was reported that big
companies such as Unilever and Nestle with a sizeable investment in Pakistan
are hoping the country will be a source of growing profits. Figures suggest
that Nestlé Pakistan boosted sales by
29% in 2011This is in line with the Swiss brand owner has a target of deriving
45% of total revenues from the emerging world by 2020. Unilever Pakistan also
enjoyed sales growth of 15% over the period of January to June 2011. Globally,
the company has set a goal of increasing sales 100% by 2020, with most of the
growth coming from outside the USA and Europe.
The fact that Pakistan has a largely
untapped rural market is a great incentive for big MNCs. Local companies are
hard pressed to compete with the incredible economies of scale that these mega
corporations (what multinational corporations are called by some detractors)
can bring to bear.
Issues of sovereignty and transfer
pricing as well as the ability of the MNCs to put pressure on the government
which sorely requires the advantages they bring will continue to cloud the
issue. However it is clear to people who are realistic that the future of
Pakistan depends on multinational corporations and the benefits they bring.
