Pakistan’s Middle Class the Key Driver as the World Takes Notice

The past decade has been instrumental in bringing back stability in Pakistan, both in economic as well as in democratic terms. The internationally renowned Wall Street Journal has further solidified that belief by publishing a report on Pakistan and how its middle class has managed to propel the country towards stability.

The Journal takes a look at a number of studies and researches done over the past few years along with the personal opinions of a number of industry veterans, including Nestle’s CEO for Pakistan, Engro’s new CEO, and more. Here is a brief look at some of the main points made in the article.

A Burgeoning Middle Class

According to an unpublished study from Pakistani market research firm Aftab Associates, that measured living standards in the country, 38% of the country is middle class while 4% belongs to the upper class. Combined, it amounts to a total of 84 million people; a number bigger than the whole population of Germany.

The study considered middle class households as the ones which have a motorcycle, a TV, refrigerator, washing machine and at least one member who has completed school up to the age of 16.

“Official figures show that the proportion of households that own a motorcycle soared to 34% in 2014 from 4% in 1991, and a washing machine to 47% from 13% over that same period.”

Increased Consumer Spending

The flourishing middle class has resulted in a monumental increase in consumer spending, attracting international players from around the world.

In December of 2016, Royal FrieslandCampina NV, a Dutch dairy company, paid an estimated $461 million to buy control of Engro Foods— the largest packaged milk producer in the country.

“What we see is consumer spending is rising and a middle class coming up,” said Hans Laarakker, Engro’s new chief executive.

Just a few months before that, Turkey-based Arçelik Group announced its acquisition of Dawlance Pakistan, and in the very same year, Chinese Shanghai Electric Power agreed to buy a 66.4% stake in K-Electric Company Limited against the value of US$ 1.77 billion.

“All these big companies globally, if they’re not looking at Pakistan, need to look at Pakistan, because it’s a huge consumption economy emerging,” said Saquib Shirazi, chief executive of Honda’s Pakistan joint venture.

Improved Security Condition

In the past three years alone, Pakistan has managed to reduce deaths by terrorist attacks by a margin of two-thirds. The improved security condition alone has convinced many international investors and companies alike to invest in the country. Being the sixth most populous country in the world, Pakistan has plenty of unexplored potential.

Numerous auto-manufacturers like Volkswagen, Peugeot, Renault, KIA, have expressed their interest, while BMW has even revealed its plans to launch cheaper models of its cars in Pakistan. Meanwhile, one of the world’s richest man and the founder of the world’s biggest retail giant, Jack Ma, has also expressed his interest in Pakistan.

Ride-sharing services like Uber and Careem have also managed to gain a stronghold in the country— a feat which wouldn’t have been possible had the security condition not been improved.

Fall in Poverty

The 2013 election were historic in the sense that they assured a smooth democratic transition, for the first time in the country’s over 65 years of independence. That has contributed in stabilizing the economy and Karachi’s stock market rose 46% last year. Just last week, the Pakistan Stock Exchange crossed an all-time-high of 50,000 points.

“Pakistan experienced a “staggering fall” in poverty from 2002 to 2014, according to the World Bank, halving to 29.5% of the population.”

A considerable proportion of the population in Pakistan still lives below the poverty line but the situation is way better than it was a few years ago.

There is still a considerable difference in the living standards of the middle class between Pakistan and that of Western countries, like America. However, the American middle class is shrinking. In Asia, meanwhile, the middle class is expected to keep growing.

“A study by the Organization for Economic Cooperation and Development forecasts that the bulk of the growth in the middle class in the years ahead will come from Asia, which will account for two-thirds of the global middle class by 2030.”

Pakistan may have its own issues and scandals that continue to plague the government as well as its people, but if this report is any evidence, the past decade has undoubtedly been one of the best in the country’s history.

Source— WSJ

Image— Dawn

  • This is the result of the Raheel – Nawaz – Imran troika, and each of them played a part in this. Although at times we disliked one or the other but the overall result has been favorable.

    • Nope this is because of Nawaz sharif and his team as all of this is only possible as a result of great economic policies .Raheel Sharif has also helped in.Dont you put Imran who has only danced on a container and tried to bring in martial law.And before any one says it was because of imrans pressure ,lol he doesn’t even have 6% of national vote so don’t kid yourself.

      • When I mentioned “at times we disliked one or the other” it is evident who was referred to and why. But still this is how it will go down in history my friend.

      • Don’t forget the biggest indicators “Panama” and “Karz utaro mulk sanwaro”. That’s only Nawaz Sharif you are right.

          • Pakistan mai aaj tak jo bhi achha hua hay us ka sehra IK k sar per hay. Because he barks very loudly on 50% + Pakistani Nation. Only 6% people are deciding the “Qismat” of our nation.

          • Well I just saw it now and unlike you I actually am busy but I’ll enlighten you why I didn’t reply him.the reason is that he first of all wouldn’t agree with my points and I won’t agree with him so it’s just wasting my time .But unlike Nawaz who never even had his name in Panama papers to begin with , your papa Imran and jahangeer actually admitted owning them.So wait for the actual verdict before believing those that actually looted the country e.g PPP and PTI
            There,my reply Lol. :)

        • Dear “Panama” mai to har party involve hay. Koi major political party aisi nhi jis ka hissa panama papers mai na ho. Aap sirf NS ko kio blame kartay hain?

          • Baki log hisab dene ko tayyar hain but Mr, Nawaz shareef bachna chahte hai, he caught red handed

        • Every Pakistani who taunts “Karz utaro mulk sanwaro” should go ahead and read state bank data for it audited and published by mush govt. For all the hype govt created around it and people keep crying about “kha gaye”, it generated only enough money to buy 3-4 F-16 jets. And if you think that mush govt ignored corruption in this while coercing statement out of ishaq on other stories then its time to come out of lala land.

  • Haye Meri Pakistan ki bold Awam… Ya Queen kerti is Paid Type Article per… Serkaari Adaad-o-Shumar hen yeh WSJ men pro Nawaz Mr Saeed Shah ka Article hai jo Dawn ne bhi Jun ka tun chaap diya hai.. jis unpublished survey ka hawalay diya gya hai that is also too hilarious pta nhi kya daikh k takhmeena lagaya gya hai k Middle class berh gyi… Werna haqeeqat yeh hai k mehngayi berhne se Overall standard of life decrease howa hai middle class ka… Tijarti khasara berh k na qabil e berdasht ho chuka… Beramdaat ghut gyi hn.. Deramdaat mn izafi howa hai… Remittance jis se yeh gap fill hota tha us mn bhi Kami ayi hai in ki buri kharja policy ki waja se… MASHALLAH se wazeer e kharja+wazeer e azam to road block ker k Motorway ka iftitah kerne mn masroof hn

    • so true, though you did miss out the noora trick of covering chinese eyes and ears and fooling them to put 50B$ in Pak which they will never get back, noora agents also installed special wifi roads in their jahil bhoole voters home to send more electricity, geo noora channel, paid saeed shah articles and qeeme vale naan. Its disgusting how we educated open minded people are suffering with 12-18 hours load shedding like last govt while jahil patwaris keep getting perks through those wifi roads made by our tax.

    • Bilkul theek. Jo log 8-10 saal pehle Middle Class mein shamil hotay thay wo bhi Lower middle class mein shamil ho gae hain.
      Living standard kam ho gya hai.
      Lekin Security or thori c new investment (i.e. Uber, Careem, Auto & mobilephone industry) k hawalay se baat sahi ki hai.

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