Wednesday, September 05, 2007

More on the Pakistan Boomlet

Earlier this year I briefly noted that Pakistan may be on the verge of a significant economic takeoff, something very much out of character for that country in recent years, and something that India began to do years ago. The Wall Street Journal has now noticed, on their front page:

Pakistan's political scene is growing more clouded, but a clear demonstration of confidence in the country's future is coming from an emerging economic force: entrepreneurs.

Scores of new businesses once unseen in Pakistan, from fitness studios to chic coffee shops to hair-transplant centers, are springing up in the wake of a dramatic economic expansion. As a result, new wealth and unprecedented consumer choice have become part of Pakistan's volatile social mix.

The article goes on to note, accurately, that political uncertainty - the looming return of two astonishingly corrupt prime ministers (Benazir Bhutto and Nawaz Sharif) who ran the economy into the ground in the 1980s and 1990s, and the ever-present threat of Islamist mayhem - could still undo the incipient miracle. And the vast, desperately poor majority of Pakistan's huge population has yet to taste much of the fruit of several years of growth. But economic reform has stimulated entrepreneurship and foreign investment, and Pakistan looks a lot like India c. 1995 or China c. 1982. Pakistan may be a test of the hypothesis that economic growth corrodes support for radical Islam. It bears watching.

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