Washington: Security situation in Pakistan has improved significantly and country is fast gaining economic stability, said The Worldfolion, a globally renowned content provider in its report posted on the official website.
The report said, “while the country experiences increased political stability and is poised to be the world’s next economic turnaround story,” it is believed to be on sound footing. Referring to the meeting at White House with President Obama, the report said Prime Minister Nawaz Sharif was set to bring good news.
After Prime Minister Sharif accepted his White House invitation in August, US National Security Adviser, Susan Rice, commended him for supporting recent talks between the Afghan government and the Taliban.
The report noted that Pakistan’s efforts to combat terrorism are paying off: government statistics show that major terrorist attacks have declined by 70% since last year.
“This significantly improved security environment combined with the economic policies of Sharif’s government are bearing fruit,” the report said adding that for the first time in years, hope is palpable for Pakistani entrepreneurs and the general population.
The Pakistani army, the report said, has been combating the domestic front of the Taliban and its allies in the north of the country, along the border with Afghanistan.
“We will fight terrorism in all its forms and manifestations, irrespective of who their sponsors are,” the report quoted Prime Minister as saying recently in his address at the 70th session of the UN General Assembly.
“The global threat of terrorism cannot be defeated unless we address its underlying causes.”
The report titled ‘Security and economic gains awaken investor interest’ also referred to international rating agencies which have praised Pakistan over progress made on the security front and international institutions as well as investors are taking note of it.
In August, the International Monetary Fund (IMF), which extended a $6.2 billion loan, praised the 4.1% growth in gross domestic product this year, projecting 4.5% growth for next year.
“This performance is helped by macroeconomic stability, low oil prices, planned improvements in the domestic energy supply, and investment related to the China-Pakistan Economic Corridor. Inflation also dropped to 1.8% in July.”
The external current account deficit narrowed to 0.8% of GDP and foreign exchange reserves continued to increase at a healthy pace, said the IMF.
“Pakistan’s three-year IMF-supported program has produced significant achievements in reducing near-term risks, improving the fiscal balance, and strengthening the foreign exchange reserves of the State Bank of Pakistan,” the report said quoting the IMF’s Mission Chief for Pakistan, Harald Finger.
The World Bank, for its part reported in September, “Pakistan’s economic growth is showing signs of sustained recovery. Supported by a favourable slump in international oil prices and stellar implementation of the IMF reform programme, growth recovery remains underway, with projected GDP growth now at 4.3-4.6%.”
As credit rating agencies are upping Pakistan’s ratings in June, Moody’s upgraded its sovereign credit ratings for the first time since 2008 and in September, Fitch assigned it a B credit rating with a stable outlook, and foreign investors are starting to see potential in this strategic Asian country.
About the China Pakistan Economic Corridor, the report said as in most parts of the developing world, China is leading and has pledged to invest about $46 billion in infrastructure projects, nearly equal to the amount of foreign aid the US has provided to Pakistan over the past decade to support its war in Afghanistan, according to Bloomberg.
Fitch also noted that the China-Pakistan Economic Corridor initiative announced in April could significantly strengthen Pakistan’s economy.
The report noted that Western investors have also shown interest, as reflected by major international business media such as The Wall Street Journal noted ‘Pakistan’s pleasant surprise’ and The Economist said, ‘Pakistan is enjoying a rare period of optimism about its economy.’
As the London-based chief economist at Renaissance Capital, Charlie Robertson, told Bloomberg News in June, Pakistan is the best, undiscovered investment opportunity in emerging or frontier markets.