Thursday, April 3, 2008

Middle Class Clout Rising In Pakistan.

There is a quiet revolution taking place in Pakistani politics; the middle class clout is rising. This is something that has not received a lot of attention by the media. Here are some of key nuggets gleaned from the fine-print of media reports that support this conclusion:
1. Nafisa Shah, an upper middle class candidate of the PPP, defeated Pir Pagara's son in Khairpur.
2. In Jhang, ten out of eleven of those elected are from the middle class rather than the families of the usual feudal zamindars. This would have been unthinkable ten years ago.
3. Some of the most benign feudal lords suffered astonishing electoral reverses. Mian Najibuddin Owaisi was not just the popular feudal lord of the village of Khanqah Sharif in the southern Punjab, he was also the sajjada nasheen, the descendant of the local Sufi saint. Because of Najibuddin's personal popularity, his vote stood up better than many other pro-Musharraf feudal lords—and he polled 46,000 votes. But he still lost, to an independent candidate from a nonfeudal middle-class background named Amir Varan, who received 57,000 votes and ousted the Owaisi family from control of the constituency for the first time since they entered politics in the elections of 1975.
4. PML (N) led by Nawaz Sharif and MQM swept the urban vote in Punjab and Sindh respectively. Both parties have their power bases in the urban middle class.
5. The PPP's voter lives in a different world, a world that was dominant up to a decade ago. It is a world that is much more rural, more deferential, more rooted in tradition. Its nationalism is less marked and its Islam less influenced by the international trends of the last 30 years and thus much less politicized and much more based in centuries-old Sufi traditions. Describing this situation, Jason Burke of the Guardian argues that "This is a Pakistan that is disappearing". Burke goes on to say that a PPP candidate in rural Punjab recognized it telling him that his party needed to "re-invent itself".

While many rural residents in Sindh and Southern Punjab who voted for the PPP have remained relatively isolated from major developments in Pakistan in the last decade, the urban middle class has grown dramatically in numbers and influence during the military rule of President Musharraf. The New York Times reported on this expansion of Pakistani middle class last November in these words: "As he fights to hold on to power, General Musharraf finds himself opposed by the expanded middle class that is among his greatest achievements, and using his emergency powers to rein in another major advance he set in motion, a vibrant, independent news media". Acknowledging this fact, William Dalrymple, a British journalist/author considered knowledgeable about India and Pakistan, recently wrote as follows: "It was this newly enriched and empowered urban middle class that showed its political muscle for the first time with the organization of a lawyers' movement, whose protests against the dismissal of the chief justice soon swelled into a full-scale pro-democracy campaign, despite Musharraf's harassment and arrest of many lawyers. The movement represented a huge shift in Pakistani civil society's participation in politics. The middle class were at last moving from their living rooms onto the streets, from dinner parties into political parties."

In 2007, analysts at Standard Chartered bank estimated that Pakistan has a middle class of 30 million which earns an average of about $10,000 per year. And adjusted for purchasing power parity (PPP), Pakistan's per capita GDP is approaching $3,000 per head.

By enlarging and enriching the middle class in Pakistan, President Musharraf has unleashed the forces that he can not control. In some ways, this situation is similar to the Soviet leader Mr. Gorbachev's perestroika that eventually led to the rise of democracy and capitalism in Russia and many of the former Soviet republics.

The fact that this enlarged, enriched and energized middle class is beginning to assert itself in Pakistani politics is a welcome change. Democracies depend on the existence of large, powerful middle class for their sustenance. If the size, influence and participation of the middle class in Pakistani politics continue to grow under the new government, it will only strengthen democratic institutions and the rule of law in the country.

Sources: NY Times, William Dalrymple, The Guardian, News Agencies

Related Links:

Online Political Activism in Pakistan


Anonymous said...

I may be wrong but, isn't Nafisa Shah the daughter of Syed Qaim Ali Shah. Hardly a middle class family.

Riaz Haq said...

I guess you're right. But it's all relative in the context of Sindh. She's probably middle class compared with Sadruddin Shah, the son of Pir Pagara, who she deafeated. At least that's what William Dalrymple thinks of her in his reporting from Pakistan. Qaim Ali Shah's daughter Nafisa Shah is an Oxford graduate, and was a prominent human rights activist and journalist when, in 2001, she successfully contested the elections for the Khairpur district Nazim, after the Pakistan People's Party nominated her for the seat.

Riaz Haq said...

Here's an interesting analysis of how Pakistan has changed in this decade by a Ahsan, a blogger on Five Rupees:

In the last decade, this picture has changed dramatically due to three central factors.

The first and most important factor is the explosion of private electronic media. In the 1990s, it was difficult for most Pakistanis -- the vast majority of which cannot or do not read newspapers -- to get information that was not government-sponsored or, less mildly, propagandistic. ....

This picture has changed drastically, as anyone with even a cursory interest in Pakistan will be able to tell you. There are now dozens of news channels in Pakistan, each with their own ideological and partisan bent. Some are national-level, others more regionally and ethnically focused. The trend began in the early part of this decade and has plateaued only recently, as the market gets sated. And while few of these channels will win awards for calm understatement or presciently sedate analysis, the fact remains that the media -- if it can be spoken of as a collective -- has given voice to a mass of the population previously unheard from. It has become a player of truly monumental importance for its ability to shape, mold, and excite the public. It is, at once, sensationalistic, blood-thirsty, xenophobic, conspiratorial, humorous, investigative, and anti-government. And yet its arrival on the scene is more than welcome, first for providing the venue for disenfranchised interests to make themselves known and second because the alternative is much worse.

The second significant factor, related to but distinct from the first, is the rise of communication technologies in Pakistan, particularly cellular phones. In 2002, there were 1.2 million cell-phone subscriptions in the country. By 2008, this number had risen to 88 million -- an increase of more than seven thousand percent. In addition, more than one in ten Pakistanis had access to the internet by the end of the decade; low by advanced countries' standards but an astronomical rise by Pakistan's. These developments in communications meant that political narratives became congealed and disseminated at speeds never heard of before, and that information and the wider "war" for public opinion became incredibly hard to win if a battle was lost at any stage.

The third major factor is the economic growth that took place in Pakistan in the first half of the 2000s. Pakistan's GDP doubled between 1999 and 2007, and more than kept pace with population growth, as GDP per capita increased by almost sixty percent between 2000 and 2008. More to the point, this growth was overwhelmingly powered by expansion of the service sector, which is concentrated, quite naturally, in the urban centers of the country. For the first time since independence, the term "Pakistani urban middle class" was not a contradiction in terms.

This development had two effects. First, and more trivially, the urban middle class did what urban middle classes do: they bought televisions and computers. In turn, that allowed them to plug into the private media explosion in ways simply unimaginable previously. Second, it shattered the elite-only edifice of Pakistani politics, and made challenges to government based on Main Street issues -- the price of flour, the lack of electricity, the selective application of the rule of law -- a viable process. Fifty years ago, Seymour Lipset wrote one of the canonical articles in Political Science on the process of democratization, its relationship to urbanized middle classes, and how the demands and values of the latter lead almost inexorably to support for the former. Here was living proof of Lipset's analysis.

Riaz Haq said...

Here's an interesting except from analysis of Pakistan, calling it the Next BRIC, by

...much like Russia, Pakistan also has been one of the top-performing stock markets over the past decade. Had you been able to invest in the Karachi Stock Exchange at the turn of the millennium, you'd be sitting on a much bigger pile of profits than, say, if you had invested in the “China miracle.” Pakistan offers yet another lesson in how gleaming skyscrapers offer little guidance in predicting future stock market performance.

Investing in Pakistan: Surprisingly Big

Teeming with 169 million souls, Pakistan is the world's sixth-largest country by population. That makes it smaller than Brazil , but larger that Russia, as well as the “Next BRIC” candidates, Turkey, Mexico, South Korea and Egypt. Bordered by Afghanistan and Iran in the West, India in the East and China in the far Northeast, Pakistan is just about the size of France and the United Kingdom combined.

Pakistan's real per capita GDP of about $1,250 makes your average Pakistani slightly poorer than his counterpart in India -- and far behind the average in booming China. One third of Pakistan's population lives in poverty, and only half of the population is literate. Yet, Standard Chartered bank estimates that Pakistan has a middle class of 30 million that now earns an average of about $10,000 per year. And adjusted for purchasing power parity (PPP), Pakistan's per capita GDP approaches $3,000 per head. But take away that bit of economic affirmative action, and Pakistan's economy drops from the size of New Jersey's down to that of Alabama.

Investing in Pakistan: Edgy Relations with Uncle Sam

In the bad old days of the Soviet Union, Pakistan was a major U.S. ally. That relationship soured after the United States imposed sanctions on Pakistan after it refused to abandon its nuclear program. The “War on Terror” changed all that. After Pakistan ended its support of the Taliban regime in Kabul, American economic and military aid to Pakistan soared to more than $4 billion within three years of the 9/11 attacks. Indeed, American aid has played no small part in helping Pakistan's economy flourish over the past decade or so.

But as with most forms of handouts, gratitude is the least heartfelt of emotions. Anti-Americanism in Pakistan’s free media is just about as virulent as neighboring Iran. The Wall Street Journal’s Pakistan correspondent was ejected from the country after being charged with spying for the United States and Israel. The U.S. State Department advises U.S. citizens not to visit the country and has forbidden the families of its diplomats in Pakistan to visit since 2002.

Investing in Pakistan: A Solid Start to the Millennium

Economically, the first decade of the 21st century has been good to Pakistan. Thanks to economic reforms introduced in 2000 by the former Musharraf government, Pakistan has privatized $5-billion worth of assets, simplified its tax system and attracted large amounts of foreign direct investment (FDI) compared to its GDP. By mid-2005, the Pakistani economy was growing by 8.6%, and the World Bank named Pakistan as the top reformer in its region and among the top 10 reformers globally.

That changed abruptly with the onset of the “Great Recession.” Pakistan's ensuing balance-of-payments crisis and runaway inflation forced the IMF to step in, and offer a $7.6-billion emergency financing package in late 2008. To its credit, the Pakistani government kept its side of the bargain, maintaining its foreign exchange reserves above target and its fiscal deficit below. The Pakistani economic crisis has eased substantially, and in 2010, the economy is expected to grow at least 4%.

... The stock market index in Karachi has risen by more than 1,000% since 1999. And in 2002, Pakistan was the top-performing stock market in the world.

Riaz Haq said...

Here are interesting excerpts from an analysis of how Pakistanis in Britain (70% from Mirpur in Azad Kashmir) vote in British elections:

But there are those who are angered by what they see as the tribalism of Mirpuri politics being transferred to the UK, where clans stick together and elders make decisions for the whole extended family.

"The vote is a very private and individual matter for any person," says Khwaja Sohail Bashir, 54, a British Mirpuri businessman and political activist who has recently settled back in Pakistan.

He says only voters themselves can understand the issues that affect them, and questions whether Pakistani politicians would appreciate what is happening with the British economy or the National Health Service and take that into account when trying to influence opinions.

"Every community should maintain its culture, it is what makes Britain such a beautiful society," says Mr Bashir. "But voting has got nothing to do with culture."

But others, like Rose FM's manager, disagrees. "These links cannot be broken," he says. He talks of the British government itself trying to promote connections between far-flung Mirpuri communities.

"We have had British politicians from various parties come to these very studios in Mirpur, talking about their agendas, so why shouldn't our politicians go to the UK?" he asks.

'Everybody does it'

But Mirpur's influence on this election does not stop at encouraging people to vote one way or another.

Sitting in the garden of a large villa in Mirpur, a British citizen who has been a taxi driver in Halifax in Yorkshire for more than 20 years, talks of a practice which has become widespread here.

For obvious reasons the man, in his fifties, does not want us to publish his name. He describes how people are going door to door asking Britons to blindly sign proxy forms for the upcoming elections, allowing someone else in the UK to vote on their behalf.

"They said I didn't have to fill in any details, just to sign my name at the bottom of the form," he says, smiling. "So I signed two."

He laughed as he told me he had no idea who was going to vote on his behalf, and whom they were going to vote for.

"I personally know 25 other people who did the same thing, lots of people just on this street, but everybody does it."

Many others, among the contingent of thousands of British citizens thought to be here, have admitted signing proxy forms in this way.

While proxy voting is a mechanism which does allow British citizens abroad to cast their vote, many will undoubtedly look upon this way of doing it as unethical.

Riaz Haq said...

Here's a recent excerpt from a piece by Dawn columnist Irfan Husain about Pakistan's middle class influencing nation's politics:

While external debt increased from $39bn in 1999 to $50bn in 2009, poverty levels have fallen by over 10 per cent since 2001. Indeed, there are now around 30 million Pakistanis who are considered to be in the middle class with an average income of $10,000 annually, while some 17 million are now bracketed with the upper and upper-middle classes.

Even though this does not approach China’s and India’s spectacular progress in this period, it does represent a solid advance. If one factors in the political turmoil the country has gone through, together with its ongoing insurgencies in the tribal areas and Balochistan, Pakistan’s progress has been impressive by any standard.

How do these numbers translate into day-to-day life in Pakistan? To examine the social transformation the country is undergoing, Jason Burke uses the Suzuki Mehran as a yardstick to measure change. In his ‘Letter from Karachi’ published in the current issue of Prospect, the Guardian reporter writes:

“In Pakistan, the hierarchy on the roads reflects that of society. If you are poor, you use the overcrowded buses or a bicycle. Small shopkeepers, rural teachers and better-off farmers are likely to have a $1,500 Chinese or Japanese motorbike…. Then come the Mehran drivers. A rank above them, in air-conditioned Toyota Corolla saloons, are the small businessmen, smaller landlords, more senior army officers and bureaucrats. Finally, there are the luxury four-wheel drives of ‘feudal’ landlords, big businessmen, expats, drug dealers, generals, ministers and elite bureaucrats. The latter may be superior in status, power and wealth, but it is the Mehrans which, by dint of numbers, dominate the roads.”

This growing affluence has already caused a major power shift, with the urban population now having a bigger say after years of being ruled by feudal landowners. As urbanisation gathers pace, Pakistan’s traditional power elite will increasingly come from the cities, and not from the rural hinterland. This will have a profound impact not just on politics, but on society as a whole. As Burke observes in his Prospect article:

“Politically, the Bhutto dynasty’s Pakistan People’s Party, mostly based in rural constituencies and led by feudal landowners, will lose out to the Pakistan Muslim League of Nawaz Sharif with its industrial, commercial, urban constituency. Culturally, the traditional, folksy, tolerant practices in rural areas will decline in favour of more modernised, politicised Islamic strands and identities. And as power and influence shifts away from rural elites once co-opted by colonialism, the few elements of British influence to have survived will fade faster.”

Often, perceptive foreigners spot social trends that escape us because we are too close to them to see the changes going on around us. For instance, Burke identifies the shift away from English, and sees ‘Mehran man’ as urban, middle class and educated outside the elite English-medium system. He sees Muslims being under attack from the West, and genuinely believes that the 9/11 attacks were a part of a CIA/Zionist plot. Actually, my experience is that many highly educated and sophisticated people share this theory.

Burke continues his dissection of the rising Pakistani middle class: “Mehran man is deeply proud of his country. A new identification with the ummah, or the global community of Muslims, paradoxically reinforces rather than degrades his nationalism. For him, Pakistan was founded as an Islamic state, not a state for South Asian Muslims. Mehran man is an ‘Islamo-nationalist’. His country possesses a nuclear bomb….”

Riaz Haq said...

Huma Yusuf blogs for Pakistan's site in Karachi and is a close watcher of new media in Pakistan. She says that in her country, new media has spawned a pithy brand of citizen journalism. The reason: “unlike Indians, we feel like we’re in a state of war”.

She says that during the Pakistan Emergency of 2006-7, Pakistan’s online population grew from 2.5 million to 18 million.

Click here for an MIT media labs paper she published on activism by Pakistan's online population.

Riaz Haq said...

Pakistan is more urbanized with a larger middle class than India as percent of population. In 2007, Standard Chartered Bank analysts and SBP estimated there were 30 to 35 million Pakistanis earning more than $10,000 a year. Of these, about 17 million are in the upper and upper middle class, according to a recent report.

As to India's much hyped middle class, a new report by Nancy Birdsall of Center for Global Development says it is a myth. She has proposed a new definition of the middle class for developing countries in a forthcoming World Bank publication, Equity in a Globalizing World. Birdsall defines the middle class in the developing world to include people with an income above $10 day, but excluding the top 5% of that country. By this definition, India even urban India alone has no middle class; everyone at over $10 a day is in the top 5% of the country.

This is a combination both of the depth of India's poverty and its inequality. China had no middle class in 1990, but by 2005, had a small urban middle class (3% of the population). South Africa (7%), Russia (30%) and Brazil (19%) all had sizable middle classes in 2005.

Riaz Haq said...

Here's the story of a cat-fight between two of Punjab's women legislators from the PPP, as published in Express Tribune:

Only 12 countries in the world have acted upon the ideological commitment to ensure women’s participation in the formal political arena, as embodied by the Convention on the Elimination of All Forms of Discrimination Against Women and the Beijing Platform for Action. Pakistan is one of them. Under the Local Government Ordinance of 2001, 33 per cent of seats at all tiers of local government and 17 per cent in the national and provincial legislatures were reserved for women. Given the long history of discrimination against women and their exclusion from politics, this was a revolutionary step.

As a result, since elections in 2002 a record number of women have contested the polls and joined the ranks of legislators. However, concerns remained that women are powerless proxies for male relatives but women members of the PPP Punjab Assembly have put to rest any such concerns with great displays of aggression and power.

For far too long we have associated macho deep-throated growling, shouting and name calling in menacing voices with Sultan Rahi but the women MPs of Punjab are not to be left behind.

On June 14, before the budget for the province was presented, PPP MPA Sajida Mir from Lahore said that there was rampant rigging in rural areas where women were heavily influenced by feudals. She praised Iffat Liaquat of the PML-N who had won an election from Chakwal despite not having the backing of the feudal elite. Now this would sound like a fairly normal conversation to you unless you happen to be a feudal from Chakwal.

Luckily MPA Fouzia Behram, belonging to the same party as Ms Mir, was on hand to act the part (or embody the true likeness) of an enraged feudal from Chakwal. Ms Mir bellowed that MPAs from Lahore are ignorant. And in order to truly put the erring non-feudal in her place, she decided to insult her a little more by labelling her with the most derogatory word she could find in her feudal dictionary —“kammi” which means from a low caste. Ms Mir remained calm and reminded the enraged feudal that this insulted not just her but the philosophy of the party that both MPAs represent, not to mention the majority of its supporters since most of them happen to be “kammis”. This further enraged Ms Behram who then charged towards Ms Mir and tried to slap her.

Ladies, in this day and age of political crisis and misery for the entire country, couldn’t you maybe reserve your passions for topics of greater importance and substance like the budget, the state of education, healthcare or inflation? And could you please try and take the job of legislating on behalf of your constituents a little more seriously than the men who have failed us for so many years?

Riaz Haq said...

A pre-requisite for a responsive and accountable democracy is a substantial middle class population.

An ADB report on Asia's rising middle class released today confirms that Pakistan's middle class now is 40% of the population, significantly larger than the Indian middle class of about 25% of its population.

The other significant news reported by Wall Street Journal today says the vast majority of what is defined as India's middle class is perched just above $2 a day.

Most of this middle class growth in Pakistan occurred on Musharraf's watch.

Riaz Haq said...

Here are a few excerpts from a New York Times report filed Sabrina Tavernise on Pakistan:

In Mr. Dasti’s area, one of the hardest hit by the recent flooding, the state has all but disappeared. Not that it was ever very present. In the British colonial era, before Pakistan became a separate country, the state would show up a few times a month in the form of a representative from the Raj dispensing justice.

Later, the local landowner took over. For years, feudal lords reigned supreme, serving as the police, the judge and the political leader. Plantations had jails, and political seats were practically owned by families.

Instead of midwifing democracy, these aristocrats obstructed it, ignoring the needs of rural Pakistanis, half of whom are still landless and desperately poor more than 60 years after Pakistan became a state.

But changes began to erode the aristocrats’ power. Cities sprouted, with jobs in construction and industry. Large-scale farms eclipsed old-fashioned plantations. Vast hereditary lands splintered among generations of sons, and many aristocratic families left the country for cities, living beyond their means off sales of their remaining lands. Mobile labor has also reduced dependence on aristocratic families.

In Punjab, the country’s most populous province, and its most economically advanced, the number of national lawmakers from feudal families shrank to 25 percent in 2008 from 42 percent in 1970, according to a count conducted by Mubashir Hassan, a former finance minister, and The New York Times.

“Feudals are a dying breed,” said S. Akbar Zaidi, a Karachi-based fellow with the Carnegie Foundation. “They have no power outside the walls of their castles.”

Mr. Dasti, a young, impulsive man with a troubled past, is much like the new Pakistan he represents. He is one of seven siblings born to illiterate parents. Despite his claims of finishing college, he never earned a degree, something his political opponents used against him in court this spring. One of the 35 criminal cases against him is for murder, a charge he said was leveled by his political opponents. Detractors accuse him of blackmailing rich people in a job at a newspaper. He said he was writing exposés.

“I have more enemies than numbers of hairs in my head,” he said, bouncing down a road in a borrowed truck. “They don’t like my style, and I don’t like theirs.”

Riaz Haq said...

Here are a few excerpt from an Op Ed piece by Francis Fukuyama in today's Wall Street Journal. It's titled "Is China Next?":

Observing the high levels of political instability plaguing countries in the developing world during the 1950s and '60s, Mr. Huntington noted that increasing levels of economic and social development often led to coups, revolutions and military takeovers. This could be explained, he argued, by a gap between the newly mobilized, educated and economically empowered people and their existing political system—that is, between their hopes for political participation and institutions that gave them little or no voice. Attacks against the existing political order, he noted, are seldom driven by the poorest of the poor in such a society; they tend to be led, instead, by rising middle classes who are frustrated by the lack of political and economic opportunity.

All of these observations would seem to apply to Tunisia and Egypt. Both countries have made substantial social progress in recent decades. The Human Development Indices compiled by the United Nations (a composite measure of health, education and income) increased by 28% for Egypt and 30% for Tunisia between 1990 and 2010. The number of people going to school has grown substantially; Tunisia especially has produced large numbers of college graduates. And indeed, the protests in Tunisia and Egypt were led in the first instance by educated, tech-savvy middle-class young people, who expressed to anyone who would listen their frustrations with societies in which they were not allowed to express their views, hold leaders accountable for corruption and incompetence, or get a job without political connections.......

It is certainly true that the dry tinder of social discontent is just as present in China as in the Middle East. The incident that triggered the Tunisian uprising was the self-immolation of Mohamed Bouazizi, who had his vegetable cart repeatedly confiscated by the authorities and who was slapped and insulted by the police when he went to complain. This issue dogs all regimes that have neither the rule of law nor public accountability: The authorities routinely fail to respect the dignity of ordinary citizens and run roughshod over their rights. There is no culture in which this sort of behavior is not strongly resented....

Indeed, there is some reason to believe that the middle class in China may fear multiparty democracy in the short run, because it would unleash huge demands for redistribution precisely from those who have been left behind. Prosperous Chinese see the recent populist polarization of politics in Thailand as a warning of what democracy may bring.

The fact is that authoritarianism in China is of a far higher quality than in the Middle East. Though not formally accountable to its people through elections, the Chinese government keeps careful track of popular discontents and often responds through appeasement rather than repression. Beijing is forthright, for example, in acknowledging the country's growing income disparities and for the past few years has sought to mitigate the problem by shifting new investments to the poor interior of the country. When flagrant cases of corruption or abuse appear, like melamine-tainted baby formula or the shoddy school construction revealed by the Sichuan earthquake, the government holds local officials brutally accountable—sometimes by executing them.

Riaz Haq said...

Here's an ET story about rising middle class consumption in Pakistan:

It is the paradox that puzzles everybody: the headline numbers indicate an economy in an abysmal state, but everywhere one looks, there are people shopping like there is no tomorrow. How is this possible? An analysis conducted by The Express Tribune reveals a surprising answer: women.

While the headline GDP numbers suggest sluggish economic growth, not all sectors are underperforming. A closer look suggests that the economic slowdown has been far from uniform, with some sectors booming, while others are in a deep slump. The retail and wholesale sector in Pakistan was worth about $40 billion in fiscal year 2012, and has been growing at 5.3% in real (inflation-adjusted) terms for the past five years, much faster than overall economic growth during that period.

And the benefits of this growth have been visible throughout the country. While large shopping malls opening up has become common place in cities like Lahore and Karachi, national newspapers now carry advertisements for shopping malls in smaller cities like Dera Ghazi Khan, Sukkur, Sargodha, etc as well. The average Pakistani household is very clearly more able and more willing to shop than ever before.

The reasons for this newfound consumerism are complex. Despite all the complaints about inflation, household incomes for Pakistanis in urban areas rose faster than inflation by an average of about 1.5% per year between 2006 and 2011, a period of extraordinarily high inflation rates. (Rural Pakistan did not fair quite as well.) The average household size also fell during that period, further raising per capita gains....
The reasons for why women have entered the workforce are manifold. Education levels have been rising rapidly across the board. Fertility rates have dropped from 7.1 in 1980 to just over 3.1 in 2011, causing household sizes to decline. Women with fewer children have more freedom to pursue careers outside the home.

And persistently high inflation may also have forced many families to consider being more open to women working outside the house: a second income can clearly go a long way in changing the fortunes of a household. It has clearly already helped the economy through a particularly difficult time.

Riaz Haq said...

Here's an ET story on middle class powering FMCG growth in Pakistan:

Procter & Gamble (P&G), one of the world’s largest consumer goods company, has recognised Pakistan as one of the top 10 emerging markets to focus investment in. This sounds like good news for our cash-strapped economy, and it is equally good news for those who have invested in P&G.
It makes sense for any fast moving consumer goods (FMCG) to invest in a country where the world’s biggest consumer goods names – Unilever, P&G, Nestle and Mondel-z (formerly Kraft Foods) – are not only operating, but also growing significantly.
According to the State Bank of Pakistan, the net profits of FMCG companies listed on the Karachi Stock Exchange grew in excess of 20% in fiscal year (FY) 2011-12. P&G, which is not listed on the KSE, has witnessed tremendous growth in revenues during the past three years – including 50% revenue growth in FY2012. Besides the consumer goods sector, its supporting industries like packaging and distribution companies have also seen their toplines grow significantly.
So what are the factors contributing to this growth?
If the fact that these companies are selling essential food items and consumer goods in the world’s sixth-largest market by consumer size is not satisfying enough for you, here’s a more detailed and nuanced explanation.
“Economics and demographics are together at play in Pakistan,” P&G Pakistan Country Manager Faisal Sabzwari told this correspondent in a recent interview. The boom in the rural economy has also been a major contributor to their growth – thanks to a series of bumper crops of agricultural produce and wheat support prices, which were raised by the government in recent years.
Besides this, according to Sabzwari, Pakistan is one of the top countries adding 20-somethings to its workforce; these are the people establishing families, getting new jobs and helping market sizes grow.
“We have millions of consumers entering independent disposable income space in their lives every year,” Sabzwari said, while referring to the growing middle class.
The market size in Pakistan has also grown in terms of volumes, without taking pricing into account. “Increasing urbanisation and the growing middle class are key drivers of the FMCG business,” Sabzwari said.
Pakistan’s is urbanising faster than other developing countries, according to Sabzwari. “The country’s population is growing at under 3%, while the rate of migration to urban centres is even higher,” according to Muzammil Aslam, managing director at Emerging Markets Rsearch.
“A population base of 180 million talented and hard-working people hungry for prosperity ensures that nothing can hold this country back from growing,” P&G Pakistan’s chief said. While looking at the growing middle class, he said, it is important to look at their consumption habits. “We are exposing more consumers to value brands like Pampers and Always,” he explained.
It may be added here that consumer spending in Pakistan has increased by an average of 26% in three years, according to a Bloomberg report published on November 21, 2012 – a strong sign that people are consuming more goods than ever before.
This rise in consumer demand has spurred the growth of supermarkets across major urban centres, which include, but are no longer limited to Karachi, Hyderabad, Multan, Lahore, Faisalabad and Islamabad.
Such superstores are getting larger and asking manufacturers for broader brand portfolios in order to serve their customers better. They have larger shelves, enabling them to have more sophisticated and developed categories in which they can stock more products than ever before....