Not far from Bhatty's clinic, in Kashmir Colony, one of Karachi's poorer neighborhoods, Palim Khan, a 70-year-old watchman with a big white beard, sits in a grocery store under a poster of Osama bin Laden. If there is an economic boom going on in Pakistan, Khan doesn't know of it.
He earns $70 a month and supports seven family members. He complains about the rising cost of food and the lack of water. "The government of this country might say we are now rich, but the poor here have nothing, not even water," Khan says.
Pakistanwhere many suspect bin Laden is hidingis growing at an impressive clip. The economy, which grew at just 1.8% in 2000-01, expanded by 8.4% last year, one of the best rates in Asia. Evidence of the boom is visible in much of Karachi, where giant billboards advertise Japanese cars, Finnish mobile phones and American fast-food chains. Low interest rates have spurred a consumer finance revolution, and the middle class is rushing to buy cars on attractive payment schemes. Three years ago, shops in Karachi's Electronics Market were selling fridges and radios; today, they overflow with Nokia and Samsung phones. Foreign investors are getting interested in the country, whose government has embarked on an ambitious privatization program. In June, Etisalat, a Middle Eastern telecom firm, offered $2.6 billion for a 26% stake in Pakistan's state-owned telecommunications company. "Pakistan has gone through a tough metamorphosis," Prime Minister Shaukat Aziz told Time. "We see a feel-good factor." For many Pakistanis, the current boom is just the break their nation required. "This economic activity was the need of the hour for Pakistan," says Amer Siddiqui, an executive at the National Bank of Pakistan. "It's cooled things off inside the country. Young men in this country now want to get rich, not go to madrasahs."
Not so fast. Pakistan is not yet an Asian economic tiger. On May 27, a suicide bomber detonated his explosives in a popular shrine in Islamabad, killing 20 people. Three days later, a bomber blew himself up in a Shi'ite mosque in Karachi, killing himself and four other people. The crowd near the mosque went wild, attacking shops and cars, before taking out their rage on a nearby KFC, which they set on fire. Four KFC employees died in the blaze; two others hid in the restaurant's freezer, and froze to death. Even business leaders aren't convinced by the economic figures. "The problem with this boom is that it's all in the air, it's not on the ground," says Javaid Puri, a Karachi-based textile businessman. Puri notes that Pakistan's economy was a major beneficiary of evolving global politics after the Sept. 11 attacks in the U.S. Fearing that they would be targeted for being Muslims, Pakistanis living in Europe and America began sending money home: remittances went up from about $1 billion in the 2001 fiscal year to $4 billion by the 2005 fiscal year. At the same time, recognizing the country's importance in the war on terror, Pakistan's donors agreed to restructure part of its external debt. Overseas remittances flowed into stocks and propertythe price of prime real estate in cities like Lahore and Karachi has shot up by 300% or more in the past two yearsand triggered the current effervescence. But they have done little to stem the most ominous long-term crisis facing Pakistan: a steady increase in poverty.