Citibank sees opportunities in Pakistan

By Kazim Alam

KARACHI: Citibank CEO for Europe, Middle East and Africa (EMEA) James C. Cowles has said he expects economic growth to continue in Pakistan on the back of the multi-billion-dollar China-Pakistan Economic Corridor (CPEC).

Speaking at Citibank’s EMEA Media Summit held in London earlier this month, Mr Cowles said the global bank has got a “robust business” in Pakistan in terms of both international and local clients.

Refraining from making a direct comment, he skirted around the issue of growing political instability in Pakistan. “Many countries have got political challenges. I am encouraged by what I see from an economic perspective,” he said in response to a question about Citibank’s assessment of the political risk factor.

Citibank in 2012 shut down its consumer banking operation in the country. But it retains presence as a corporate and investment banking institution. It is involved in big merger-and-acquisition transactions in the capital market, including the in-progress $1.7 billion sale of K-Electric to Chinese investors.

“You’ll continue to see development in terms of infrastructure. And as you develop infrastructure, there will continue to be other commercial opportunities for our clients,” he said.

The federal government is a major client of Citibank. It is part of a consortium that advised the government in the recent issue of sukuk and eurobond, which raised $2.5 billion from global institutional investors. It also helped the government raise $500 million in 2015 through the eurobond.

The federal government has borrowed $167 million from Citibank for budgetary support so far in 2017-18. Citibank’s profit for the first six months of 2017 was a little over Rs1bn, down 42 per cent year-on-year.

According to Zain Zaidi, Citibank’s head of syndicated loans for the Middle East and North Africa, there is still significant global appetite for Pakistani bonds. “We were finalising some funding on the day the Supreme Court made the final Panama Leaks decision. Although it was negative news, investors went ahead and funded the transaction,” he said, noting that investors are “certainly buying into the Pakistan story”.

Although Mr Cowles shied away from making a negative comment about the economy of Pakistan, Citibank’s economists believe the risk of social unrest and political instability has risen and fiscal slippages have become “more likely”.

In a recent note on economic outlook, they said the removal of Finance Minister Ishaq Dar from the Ministry of Finance raises uncertainty about the continuity in fiscal policy. “This is compounded by the likelihood that the electoral battle ahead has just become more difficult, raising the risk of even greater fiscal slippage than we had already been anticipating,” they wrote.

Although Citibank views the CPEC as a “positive driver” that should help de-bottleneck the inadequate energy sector, it believes medium-term challenges have increased for Pakistan.

Factors that may erode fiscal and external balances of the country include a partial recovery in oil prices and a slowdown in remittances, it said.

Published in Dawn, December 1st, 2017

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Lack of capacity hindering microfinance outreach

By Kazim Alam

KARACHI: Bigwigs of banking and microfinance sectors were in for a rude awakening on Thursday evening: a young businesswoman from Lahore who they gave a hearty round of applause for setting up a successful business said her frequent loan applications to microfinance banks went nowhere during the four years of her entrepreneurial journey.

“I wanted to buy a van for my school, but they asked me to engage property (as collateral). I didn’t have any property. Microfinance banks never helped me in any way,” Rabia Ashiq, 24, told a panel of experts discussing youth entrepreneurship and financial inclusion for inclusive growth at the British Deputy High Commission.

Ms Ashiq is a graduate of the incubation centre, funded by Citi Foundation, at the Lahore University of Management Sciences (LUMS).

Responding to her comment, Pakistan Microfinance Investment Company (PMIC) Chairman Zubyr Soomro said microfinance institutions do not have the capacity to offer sophisticated loan products. “Microfinance institutions give only simple, one-year loans,” he said, adding that these institutions are likely to enhance their capacity in the next one year.

PMIC is the apex body for the country’s microfinance sector, which currently consists of around 35 institutions, including 11 microfinance banks that are allowed to collect deposits from micro-savers.

Latest statistics show there were 5.2 million active microfinance borrowers at the end of the second quarter of 2017. The gross loan portfolio of all microfinance institutions stood at Rs171 billion. The industry expects to grow it three times in the next three years.

But as Ms Ashiq’s case demonstrates, existing players have barely scratched the surface in the microfinance marketplace. According to financial inclusion data released by the World Bank, only 1.5 per cent Pakistanis borrowed from a financial institution in 2014 as opposed to 49.8pc people who borrowed from friends, family or any other informal lender.

Mr Soomro, who formerly led Citibank and United Bank, listed a number of initiatives that his organisation is working on to make access to finance easy, especially for entrepreneurs.

“Our institution’s capital by the middle of the next year will be Rs20bn. We can leverage that 10 times, taking it up to Rs200bn. Therefore, funding for the growth of the sector is not unmanageable,” he said, noting that the issue is the ability and willingness of microfinance institutions to lend to entrepreneurs.

PMIC is engaged in product development for entrepreneurs’ specific needs as each of these institutions cannot be expected to come up with sophisticated products themselves, he said.

Additionally, PMIC is providing microfinance institutions with financing through loans as well as equity. “Through equity, we will get our people on their boards. Through that, we’ll look to drive the process of capacity building in those institutions,” he said.

Moreover, the apex body is trying to help 25 institutions get microfinance banking licences. “Initially at the lower level, district licence, regional licence or provincial licence. Through that you help them build products and capacity. We are at early stages in this process,” he added.

The size of an average loan extended by a microfinance institution was nearly Rs45,000 at the end of June. The upper limit of a microfinance loan is Rs500,000. In other words, a small business that needs, for example, Rs2m for expansion or working capital is not eligible for a microfinance loan. But commercial banks are rarely willing to extend that kind of funding to small businesses.

Speaking on the occasion, Citibank Pakistan Managing Director Nadeem Lodhi said commercial banks should not be expected to play an active role in this particular segment of clients, for now at least.

“Commercial banks have neither the infrastructure nor the products or risk architecture to actually assess that need and monitor that lending,” he said, advising entrepreneurs to gain “network and confidence” through incubation programmes.

Published in Dawn, November 25th, 2017

World Bank urges caution against regulatory duties

By Kazim Alam

KARACHI: Pakistan should reduce average tariffs and minimise the use of para-tariffs, such as regulatory duties, World Bank Senior Economist Nadia Rocha said on Thursday.

Speaking at the launch of the Pakistan Development Update, a twice-a-year publication, the World Bank official said the country’s current tariff policy is based on “revenue and protectionist considerations” instead of long-term competitiveness-enhancing measures.

Contrary to the World Bank’s advice against the use of para-tariffs, Pakistan recently imposed regulatory duties on 731 items to control the burgeoning import bill.

Pakistan imposes import tariffs that are almost twice as high as the world average, and three times higher than those in Southeast Asia, according to the World Bank.

She said the country imposes high import duties on intermediate inputs and raw materials used by exporters, which hurt the competitiveness of its exports. Pakistan’s exports grew only 27.3 per cent from 2005 to 2016 against an increase of 276pc, 445pc and 165pc in the exports of Bangladesh, Vietnam and India, respectively, over the same period.

“Pakistan’s poor trade performance in recent years is an outcome of diminishing export competitiveness,” the World Bank report said.

The country has lost 1.5pc annually in the export market share over the past decade while peer economies like Malaysia, Mexico and Thailand doubled their market share of global exports.

Exporters in Pakistan have difficulty retaining export relationships, it said, noting that they succeeded in retaining only 41.5pc of export relationships in 2010-15 as opposed to India and Vietnam that preserved 54.7pc and 66.4pc of their export relationships over the same period, respectively.

Speaking on the occasion, Sustainable Development Policy Institute Deputy Executive Director Vaqar Ahmed said the recent efforts to enhance the documentation of the economy have also led to increased compliance costs for businesses.

He called for a single tax collection body instead of 14 federal and provincial authorities that taxpayers currently deal with to pay as many as 47 different kinds of taxes. He said provinces currently collect over a dozen taxes separately. Revenue collection under some of these heads is minuscule, he said, adding that these should be consolidated into a single tax to facilitate taxpayers.

Mr Ahmed noted that Pakistan’s exports to China declined even though it has a free trade agreement with it. World exports to China decreased 5.4pc in 2013-15 while the decline in Pakistan’s exports to Beijing was almost 10pc over the same period.

Taking part in a panel discussion, cab-booking service Careem Pakistan Managing Director Junaid Iqbal urged the State Bank of Pakistan to allow fin-tech companies, like Easypaisa and JazzCash, to “pull money directly from bank accounts”.

Currently, users of e-commerce platforms, like Careem, pay through either cash or online wallets. The regulator’s view that allowing fin-techs to draw money from customers’ conventional bank accounts would drain money out of the banking system is misplaced, he said. He also asked the central bank to do away with the upper limits on the value of daily transactions.

Urging conventional banks to jump on the bandwagon of e-commerce, he said they will become irrelevant if they stick to their current business model that revolves around taking deposits from the public to invest in riskless government securities.

Published in Dawn, November 10th, 2017

World Bank projects GDP growth rate at 5.5pc for 2017-18

By Kazim Alam

KARACHI: The World Bank projects that Pakistan’s GDP growth rate will be 5.5 per cent and 5.8pc for 2017-18 and 2018-19, respectively, “despite an increase in macroeconomic imbalances” in the last financial year.

In its Pakistan Development Update, a biannual publication shedding light on the state of the economy and its future prospects, the global lender said the economic growth rate projection assumes that oil prices would increase slightly and that “political and security risks will be managed”.

Speaking at the official launch of the report on Thursday, llango Patchamuthu, the World Bank’s country director, said: “Pakistan will need to continue with economic reforms and pursue policies that make the country compete better in global markets.”

The bank believes that aggregate consumption, one of the key determinants of GDP, will grow because of a marginal recovery in remittances and higher government expenditure due to the election cycle.

It expects that the services sector will grow 5.8pc in 2017-18 against 6pc in the preceding year due to healthy contribution from the sub-sectors of wholesale and retail trade and transport, storage and communications.

The industrial sector is likely to post a growth of 7pc against 5pc in 2016-17, thanks to improved power supplies and the China-Pakistan Economic Corridor (CPEC). The bank estimates that the agriculture sector will expand 2.9pc in 2017-18 against 3.5pc a year ago.

Pakistan’s current account balance is already under pressure and the World Bank believes the imbalance can become unsustainable “in the absence of timely corrective policy measures”. It projects that the current account deficit will be 4pc of GDP in 2017-18 against 4.1pc in the last fiscal year.

The current account deficit jumped 112pc year-on-year in the first quarter of the current fiscal year to $3.5 billion. Although the bank anticipates a rise in foreign direct investment in view of the CPEC, it notes that capital and financial flows will not fully finance the current account deficit, resulting in a drawdown of foreign exchange reserves.

The fiscal deficit is expected to widen in the election year amidst a slower increase in tax revenues, while inflation will likely reach 6pc in 2017-18, the World Bank says.

Remittances from the Gulf countries amounted to 62.6pc of total inflows in 2016-17. But growth in remittances would be subdued going forward, the bank said, as Gulf nations make gradual economic recovery.

The World Bank also called for increased rupee flexibility in order to help narrow the trade deficit. The gap between imports and exports of goods widened 37.1pc year-on-year to $7.2bn in July-September.

“Policymakers are usually concerned with the short-term adjustment costs of a weaker currency,” it said, noting that the currency depreciation would lead to “a moderate increase” in inflation and a “manageable increase” in debt financing costs.

“Higher inflation could affect consumption negatively, but the overall impact of a moderate depreciation on growth is likely to be positive,” it said.

The country’s ability to withstand external shocks would be compromised with declining reserves and elevated debt ratios, the World Bank said, noting that short-term measures to preserve stability must be combined with longer-term structural reforms.

Published in Dawn, November 10th, 2017

HBL CEO Nauman K. Dar bows out

By Kazim Alam

KARACHI: Habib Bank Ltd (HBL) President and CEO Nauman K. Dar will retire on Dec 31, according to a stock exchange filing on Monday.

The bank did not specify any reason for Mr Dar’s exit. His term at the helm of the country’s largest bank was marred by a penalty of $225 million that the New York State Department of Financial Services (DFS) recently imposed on HBL for its non-compliance with risk management and anti-money laundering rules.

As a result, HBL suffered a net loss of Rs14.1 billion in July-September against a net profit of Rs9.8bn in the comparable quarter last year.

HBL is Pakistan’s biggest lender with net assets of nearly Rs175bn at the end of September.

Mr Dar took the top job in 2012, although his association with HBL began in 2003 when he joined Habib Allied International Bank UK as CEO. He previously worked at Citibank and Bank of America.

Mr Dar’s annual remuneration in 2016 was Rs81.3m, up 8.2 per cent from a year ago. This translates into a monthly remuneration of nearly Rs6.8m for 2016.

Chief Financial Officer Rayomond Kotwal will serve as interim CEO until the board makes a formal appointment.

Meanwhile, HBL appo­inted former central bank governor, Salim Raza, as director on the board. Before his stint at the helm of the State Bank of Pakistan, Mr Raza worked for Citibank in the Middle East, Africa and United Kingdom.

Separately, the board created a new position in the bank’s hierarchy and appo­inted Sagheer Mufti as chief operating officer with effect from Jan 8, 2018. “In his last assignment with Citigroup, Mr Mufti was Citibank’s global head for anti-money laundering operations,” the bank statement said.

Last month, HBL appo­inted another former central bank governor, Ashraf Mah­mood Wathra, as senior consultant on international strategy and operations.

The exit of Mr Dar and the appointment of at least three seasoned bankers with experience in international banking suggest that the bank is trying to address “control and compliance issues” that have hit its profitability.

Published in Dawn, October 24th, 2017

Abraaj buys stake in cinema operator

By Kazim Alam

KARACHI: Cinema operator Cinepax Ltd said on Wednesday it is going to develop 80 new screens across the country over the next four years using fresh investment from Abraaj Group, a UAE-based private equity firm.

Established in 2006, Cinepax currently operates 29 screens in 12 locations. Besides increasing the number of screens 3.75 times by 2021, the company also plans to use liquidity injection from Abraaj to “grow other entertainment-related ventures,” according to a press release.

A separate emailed statement from Abraaj confirmed that the private equity firm has acquired a minority stake in Cinepax. It refused to disclose the amount of investment in the Pakistani company.

The current ratio of cinema screens is only 0.5 per million population, the statement said.

Cinepax General Manager for Marketing Mohsin Yaseen also refused to divulge the investment amount or exact shareholding of Abraaj in the cinema operator.

Cinepax is going to set up cinemas in Sialkot, Multan and Sargodha besides expanding its footprint in major cities like Karachi, Lahore and Islamabad, Mr Yaseen said. “We plan to go into the video-on-demand segment,” he said while referring to a digital service that allows viewers to choose and watch entertainment programmes through an interactive TV system.

This will be the ninth transaction of Abraaj in Pakistan since 2004.

Published in Dawn, October 5th, 2017

Stocks down 5pc in turbulent week on panic-selling

By Kazim Alam

KARACHI: Politics took a heavy toll on the share market in the outgoing week as the KSE-100 index slid 4.9 per cent to close at 43,078 points.

Unending political uproar affected the average daily turnover, which shrank 3.4pc from the preceding week to 184 million shares.

The benchmark index has lost about 10pc value since the start of 2017. It’s down 19pc since reaching its peak of 52,876 points on May 24.

Foreign investors have been net sellers in recent months. But selling pressure from foreigners eased off a little in the outgoing week. Although their net sell amounted to $2 million, the figure was notably down from the preceding week when they sold equities worth $31.2m on a net basis.

In contrast, mutual funds emerged as the largest sellers in aggregate terms. Their net sell was $23.6m against the net buying of $6.5m a week ago. Interestingly, mutual funds were the only local players that sold stocks on a net basis because the rest of domestic investors – individuals, companies, banks, brokers and insurance companies – remained net buyers.

Analysts attribute the surge in selling by mutual funds to the typical retail investor psyche. Small-ticket investors who invest through mutual funds base their investment decisions on the recent market performance. Resultantly, they end up sitting out a stock rally and are the last ones to exit the market after big investors have already booked profits.

Volume-wise, top contributors in the outgoing week were Azgard Nine, Bank of Punjab, Aisha Steel, TRG Pakistan and K-Electric.

According to Elixir Securities, the top gainer within the KSE-100 index was National Foods, which went up 10.3pc, followed by Crescent Jute 6.4pc, Soneri Bank 1.4pc, Dolmen City REIT 0.5pc and Pakistan International Container Terminal 0.4pc.

Pak Suzuki recorded a decline of 15.4pc, followed by The Searle Company 15pc, Ferozsons Laboratories 14.8pc, Feroze 1888 Mills 13.9pc and Engro Foods 13pc.

Sector-wise, banks went down 4pc while the drop in exploration and production was 3pc. Cement stocks fell 7pc on concerns about a price war among producers, according to Topline Securities. Fertiliser shares dropped 5pc because of weak demand and excess inventory levels.

AKD Securities expects the market will continue its bearish momentum given the ongoing political crisis involving the ruling party. However, analysts at Arif Habib Ltd believe the market will heave a sigh of relief as valuations become attractive and political noise takes a back seat. With a slowdown in foreign selling, confidence of investors should help the index rise again.

Companies that are going to hold board meetings next week to approve quarterly results include Kot Addu Power, Bestway Cement, Dawood Hercules, Faysal Bank, Bank Al Habib, Cherat Cement, Fatima Fertiliser, Oil and Gas Development Company, Natio­nal Bank and Indus Motor.

Published in Dawn, August 20th, 2017

Dalda plans Rs7bn share offer for public

By Kazim Alam

KARACHI: Dalda Foods Ltd and its parent company are going to raise more than Rs7 billion through the stock market by selling 25 per cent shares in the edible oil business, according to a recent regulatory filing.

The food entity will issue 30 million new shares at the minimum price of Rs85 apiece while its holding company, DFL Corporation, will sell 52.5m existing shares at the same price.

Dalda Foods wants to reduce its reliance on the import of edible oil by backward-integration. It will use the raised funds to expand the crushing capacity of its seed extraction plant from 300 tonnes per day to 500 tonnes.

The country’s edible oil industry is worth around Rs500bn and has been growing at an average annual rate of 7pc, according to industry estimates. About 4m tonnes of edible oil and fats are consumed in Pakistan annually. More than 60pc of it is used for home cooking while the rest is utilised by the industrial sector. Dalda Foods operates in both segments.

The company’s popular brands include Dalda, Tullo and tea whitener Cup Shup.

Deal structure

The Pakistan Stock Exchange (PSX) has placed the draft prospectus carrying the financial accounts of the company on its website to seek public comments until Aug 9.

The issue will take place later through book building in which high net worth individuals and institutions will bid for the stock to determine ‘strike price’ at or above the minimum price of Rs85 per share. They will be allotted 75pc of the issue while retail investors will be offered the remaining 25pc at the same price. Sales and profit of Dalda Foods have grown at an average rate of 12.8pc and 17.4pc, respectively, since 2010.

According to unconsolidated financial statements released to the public, the company recorded sales of Rs26.8bn for 2015-16, up 11.6pc annually. Its profit dipped 14.5pc to Rs1.6bn over the same period.

Assuming the strike price of Rs85 a share, the company offers investors the price-to-earnings multiple of 12.5. The ratio reflects investors’ willingness to pay Rs12.50 for every single rupee of profit earned by Dalda Foods. In contrast, eight peer-group companies listed on the stock exchange, including Engro Foods, Unilever Pakistan Foods and Nestle Pakistan, offer the average multiple of 31.2. This means Dalda Foods offers investors a discount of 60pc at the base price of Rs85 per share.

Speaking to Dawn, Insight Securities Executive Director for Research Zeeshan Afzal said the company offers ‘attractive’ valuation. “The company’s fair value could be around Rs150 per share after the public offering, assuming the price multiple of 24 for peer companies (excluding Engro Foods),” he said.

But the time of the listing may not be opportune, he added. The benchmark index has shed about 11pc value since hitting its peak on May 24 partly because of political turmoil. Moreover, recent public listings, such as Roshan Packages, Ittefaq Steel and the PSX, failed to generate immediate capital gains for investors, Mr Afzal said.

Published in Dawn, August 4th, 2017

Business that’s not for money

For-profit entities exist to make profit.

But some businesses exist for another reason: to bring prestige to a conglomerate.

Here’re a few lines that the head of the news division in HBO series The Newsroom says to a sister-brother duo that is attempting a hostile takeover of ACN, a news network that’s trying to do journalism the way it should be done.

“CNN represents a small fraction of Time Warner’s revenue. NBC Nightly News a small fraction of Comcast. And ACN an even smaller fraction of Atlantis. But they are the face and voice of their parent corporations.”

Running a newspaper is different from selling burgers, toothpaste, soaps and detergents.

Selling consumer goods can make you rich. But it gets you no prestige, no influence, no pull in society.

Prestige, influence and pull are intangible assets that don’t show on the balance sheet.

I just wish somebody showed this beautiful clip to the publishers of major Pakistani newspapers and news channels.

Is Pakistan running out of physical space?

By Kazim Alam

A storm of self-congratulatory tweets brought to our attention a pleasant surprise a couple of months back: Pakistan is set to become the 16th largest economy by 2050, according to a report by PricewaterhouseCoopers (PwC), one of the world’s biggest consulting firms.

Using values from past data to derive future estimates is called extrapolation. Extrapolation lies at the centre of economic planning. But it can also be misleading for a simple reason. It involves the risk of overemphasising some variables while ignoring others.

Now what’s wrong with the PwC estimate about Pakistan’s economic size in 2050? It gives us a false satisfaction that we’re destined to be a major global economic player 30-odd years down the road. What the report completely ignores is the heavy toll that simultaneous growth in the country’s population will take on the economy and living standards.

In an article for Dawn, noted public intellectual Pervez Hoodbhoy says that Pakistan’s population is growing exponentially. This means that instead of growing at an arithmetic rate (1, 2, 3, 4, 5, 6, 7…), the rise in population is at a geometric rate (1, 2, 4, 8, 16, 32, 64…).

“In 1947 [Pakistan] had 27 million people and now has over 200m. This gives a doubling time of roughly 25 years. Now assume for a moment that the ultras have their way and the doubling time stays unchanged. Then 25 years later there will be 400m Pakistani CNIC holders. Wait for another 100 years and that number will comfortably exceed the world’s current population of 7.2 billion.”

Just like PwC, Hoodbhoy is also extrapolating data. But Hoodbhoy’s extrapolation has the potential to toss aside the extrapolation of PwC by rendering its whole feel-good exercise meaningless. What good will becoming the 16th largest economy bring to Pakistanis if they literally run out of physical space in the coming decades?

“Short of nuclear war or a miracle, nothing can now prevent Pakistan from reaching 400m people in 35-40 years. Hence the demand for living space will vastly accelerate. Even now, green areas are vanishing as villages become towns, and one city spills over into the next. Karachi and Hyderabad are approaching their eventual merger, just as Islamabad and Rawalpindi have become practically one city, and Islamabad is furiously racing towards Taxila.”

What standard of living will the citizens of the 16th largest economy will have in 2050 if “there will only be half as much fresh water as today, the air will become yet filthier, pollutants will poison the land and sea, and road traffic will become nearly impossible”?

If the situation is indeed as dire as Hoodbhoy suggests, then why is no one making a fuss about the oncoming Armageddon? Having talked to a number of people about the issue, I have reached the following conclusion:

  1. People don’t believe the dark forecast because they are optimistic that human ingenuity will overcome all big problems – like it always has.
  2. People believe every child is born with his rizq already promised by God.
  3. The human race has existed for millennia and the physical space has demonstrably not run out so far. Thus, the whole argument seems like a red herring to many people.

Some of the people familiar with western political ideas also referred to Thomas Malthus, the 19th century philosopher who painted a pessimistic picture of the future for the human race by pointing out that food production in Europe rose at an arithmetic rate while population grew at a geometric rate. Of course, few of Malthus’s predictions proved right: technological advancements have so far ensured sufficient food for everyone (in theory, at least).

But an outright rejection of Hoodbhoy’s argument by calling him a 21st-century Malthusian isn’t very intelligent. The Malthusian view of the world was turned upside down by the agricultural and industrial revolutions.

Plus, famine, disease and wars ensured a regular trimming of the world populations for hundreds of years.

But the latest data from around the world shows that child mortality is at a record low, the number of war-related deaths has rapidly come down from its average of half a century ago, diseases that would kill millions of children every year are disappearing and the world population is – by and large – healthier, more prosperous and living longer than its historical average.

As for technological advancement, I remain a staunch believer in human ingenuity. But should we bet the future of human race on our intuition alone? Optimism cannot undo hard facts. Pakistan already has two million people entering the job market every year. This means we need at least 7% GDP growth rate per annum – a far cry from the current growth rate of hardly 5%. Consider this in view of the prevailing housing shortage, water scarcity and streets teeming with undernourished and out-of-school children, you’ll realise Pakistan is a ticking bomb.

Next time you read a PwC report talking about the size of Pakistan’s economy 30 years down the road, take it with a sack of salt.