Pakistan crisis worries investors: analysts
Analysts warn that emergency rule, imposed by Pervez Musharraf, could put growing foreign investment at risk in the country.business Updated: Nov 25, 2007 11:54 IST
With names like Next, McDonald's and Rolls Royce appearing in Pakistan's cities, evidence of growing foreign investment is easy to see, but analysts warn that emergency rule could put it all at risk.
President Pervez Musharraf imposed a state of emergency three weeks ago warning that Islamic militancy and a meddling judiciary were imperilling not only the country's stability, but also its economy.
The nuclear-armed Islamic republic has experienced a boom since Musharraf seized power in a coup in 1999, with government figures recording growth last year of 7.0 per cent, one of the fastest rates in the world.
Foreign investment was around 10 billion dollars for the past year, much of it from Arab nations and the United States.
Despite continuing mass poverty, signs of that growth are widespread.
Mobile phone masts are popping up everywhere, with people benefiting from lower tariffs due to heated competition between Pakistani, Norwegian, United Arab Emirates, Chinese and Egyptian-owned companies.
In the cities, banks offer easy loans for almost anything -- houses, cars, televisions, computers, microwave ovens, refrigerators and air conditioners.
Porsche, Mercedes, Audi and Rolls Royce have all opened gleaming showrooms in the eastern city of Lahore.
But analysts and business leaders say the negative image of emergency rule, together with curbs on the media and the arrests of thousands, may have harmed the country economically.
Credit rating agencies Moody's and Standard & Poor's downgraded Pakistan's debt outlook to negative from stable after Musharraf imposed the emergency.