Pakistan Seeing Entrepreneurial Boom

Some of the ferocious entrepreneurial energy that has propelled India to a growth rate of over 9% lately seems to be moving westward – to Pakistan.

Writing in today’s Wall Street Journal (subscription required), Peter Wonacott sees a new class of entrepreneurs in Pakistan ushering in pockets of dramatic change:

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.

Unlike its arch-enemy India, Pakistan missed the software and outsourcing boats that have ushered in a new generation of entrepreneurs and dramatically expanded the Indian middle class.

Caught between the Scylla of Islamic militants and the Charybdis of an army that has refused to let democracy take roots in the country, Pakistan seems to be sinking slowly into a violent hellhole.

At first glance, that’s how it seems. But look deeper and Wonacott sees lively economic activity in the country.

Wonacott argues that Pakistan’s violence and clashes between the militants and the security forces are overshadowing the changes happening in this South Asian nation.

A new class of entrepreneurs is emerging who, in small but significant ways, have challenged the religious orthodoxy. They provide a stark counterpoint to the rising Islamic radicalism that the U.S. and others view as a threat to Pakistan’s position as a staunch Western ally. And with many importing ideas from abroad, they are contributing to Pakistan’s 21st-century search for itself.

Seed capital from abroad, U.S. economic aid and expansion of credit facilities have contributed to the recent economic activity in Pakistan and the rise of the middle class.

But with civilian political leaders Benazir Bhutto and Nawaz Shariff expected to return to Pakistan soon from exile, that could mean more political uncertainty and cast a cloud over the economic growth of this combustible nation.

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