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Friday, April 2, 2010
PAKISTAN - ZARDARI IS NOT MUSHARRAF AND THIS IS NOT A WELL-FUNCTIONING DEMOCRACY. SOME REFLECTIONS ON PAKISTAN
Pakistan is one of the promising frontier economies, and part of Goldman's famous Next-11 concept. This concept was branded by Goldman chief economist Jim o'Neill and introduced in 2005. The potential is there ...economically, but the political situation remains a powder keg.
Actually, we at LMG believe that the shift from military strong man Pervez Musharraf to Asif Ali Zardari - Benazir Bhutto's widower - was not necessarily one that made political life easier. Sure, it was a move toward more democratization, but with so much turbulence, violence and uprising going on in various parts of the country it remained to be seen to what extend democracy was the right answer. When Zardari was slow to work on promised changes in the power of the president vis-a-vis the prime minister our skepticism grew. However, it looks as if this change is going to happen based on the presidential reforms that were announced this week.
But don't overestimate what is going to happen. The PPP is still the most powerful party and Zardari is its party leader. The reduction in presidential power will definitely not go hand-in-hand with a reduction in his position within the PPP and he will therefore enter a situation that reminds the one in Russia when looking at relative powers of Medvedev and Putin (albeit here with Zardari in a more ceremonial presidental seat).
So far we felt that business opportunities in Pakistan are definitely clearly there as long as you stay away from entering the Northern provinces where Pashtuns and Al Qaida and Taliban supporters clash with the government. National Bank of Pakistan for instance is a stock market listed firm that has been praised as one of the better managed stock-market listed financial enterprises in Asia. Last year we wrote about NBP in our About Tigers and Frontiers Blog.
Former president Musharraf was and is still one of the more impressive leaders of the last few decades when 'adjusting his results for the risks and constraints that were at stake during his presidency'. At the moment it is possible to book him for your seminar, conference or business party for a far lower fee than what is paid for dozens of other leaders who don't even have half his talent. Maybe an idea to get him in the spotlight again and ask his opinion on what is going on in Pakistan?
Principal at LMG Emerge. LMG is an internationally operating independent financial consultancy firm headquartered in Zeist, The Netherlands.
Our clientele consists of institutional and high net-worth private investors (investment advice) and corporates (valuation advice, risk analyses).
Our areas of activity include: Asset Allocation, Selection of Financial Providers/Asset Managers and Emerging Markets advice.