Pakistan: The Most Surprising Economic Success Story

The proof is in the numbers. Last year the country’s GDP growth rate hit 8.4 percent, the world’s second highest behind China, following two years of solid 6 percent growth. It’s a heady turnaround for a nation that, in the late 1990s, was practically a failed state with near-zero GDP growth. Because of its headlong pursuit of nuclear weapons, Pakistan had become the world’s most sanctioned nation after Libya. One of Musharraf’s first and smartest moves after his 1999 coup was to appoint Shaukat Aziz, a dapper and urbane international banker, as his economic czar, and to give him a free hand to revive the economy. At the same time, Aziz, who is now prime minister, began enacting a series of common-sense economic reforms. They focused on boosting fiscal discipline, government transparency and accountability. He quickly cut the budget deficit from 8 percent to 4 percent by slashing spending, and lowered interest rates.