Credit Cards and Pakistan - OscarTango by Irshad Salim

JAN 23 - Pakistanis are second only to Chinese, and much ahead of Indians in using credit cards for purchases.

If this is any consolation to those who only consider Pakistan and the Pakistanis to be embodiments of Islamic radicalism, they should now shower bouquets instead of throwing brickbats. For, using plastics in lieu of the greenback, spending more than you earn, and purchasing what you want rather than what you need are the atoms that make the molecule of consumerism - the fulcrum of Western lifestyle.

Isn't this what the West really wanted Musharraf to do with the Pakistani social fabric? Enlightened moderation in thought and rationality, liberalism in attitude but consumer mindedness in lifestyle, commented Khurram, a Pakistani friend of mine.

According to a news reports, Rs15 billion worth of transactions were made in Pakistan through Visa cards in just one quarter - July to September 2006 (3 months) - that's more than $1 billion a year if the figures are extrapolated.

With over 160 million residents, the country now has a fast-growing economy, that recorded a strong GDP growth of 7 percent last year, and currently maintaining 7.5% GDP growth rate.

Its per capita income is $ 850 now - having doubled over the last six years, and "purchasing power has soared, demand for consumer items is rapidly growing," and poverty which stood at 34 percent few years back has come down to 24 percent in the year 2005-06.

But how much of that has been propelled by plastic cards usage, I mean living beyond means, remains unknown though. Only Visa International's computers carry this data for sure.

Goldman Sach, which is a leading American investment Bank has included Pakistan�s economy among 11 most fastly growing economies of the world, saying that Pakistan is set to take control of the world�s economy in next 40 years.

They even invented a new term (BRIC) consisting of Brazil, Russia, India and China five years ago and predicted that Pakistan, Turkey and Egypt will progress faster than the BRIC countries.

Interestingly, the affairs of these three Muslim countries are being run and managed through the "barrel of the gun" - they also happen to be the largest recipients of American tax dollars at work - of course to eliminate Islamic extremism and replace it with Western lifestyles - they call it "institutionalized", "holistic changes."

Here's another insightful data: Almost 55 percent of the 160 million Pakistanis are under nineteen years of age, which makes it a pretty youthful nation.

Does that mean its the Pakistani youth who are mostly using theirs or their parents plastics? If that is the case then no extent of education and training or discipline can galvanize them into becoming a real productive power for sure, commented my Pakistani friend who says he is not religious but spiritual for sure.

Khurram is a naturalized American citizen but loves his country of origin more than any one would love his or her pet.

According Dr Salman Shah, advisor to the Prime Minister on Finance, "these youngsters will play key role in economic dynamics of next 40 years. These people not only help enhance production but also create demands of consumer goods."

"It is sad though that people at the helm of Pakistan's affairs have started to look at the youth only as economic fodder, consumer head counts, tax figures, bytes."

There was a time when being a youth meant respect - was well respected in the society and no one in power dared using them - least of all just as "consumers" or "future consumers" in the making.

What a turn around in thinking, quipped Khurram.

The country has seen an annual 80 per cent growth in Visa card business after 140 per cent growth by China, says the credit card company. While some may say it shows Pakistan's economy booming, others say Pakistanis are being made debt-burdened - debt-riders at breaking speeds!

Visa International's spokesman for South and Southeast Asia hassaid "(Pakistani) cardholders used their cards most often to purchase retail goods that constituted almost 39 per cent of their Visa purchases, followed by 26 per cent transport, nine per cent professional and commercial services, eight per cent in restaurants and food outlets, four per cent healthcare and four per cent in accommodation.''

It is no wonder that so many super retail stores from Europe and the United States are parachuting down into the country's growing middle class, albeit rising consumer economy - just as Navy Seals would soft land on a friendly country's beachhead in the bizarre hours of the night - incognito.

This, the Visa spokesman said, illustrates how Pakistani cardholders are becoming increasingly sophisticated and are more willing to embrace electronic payments in more aspects of their lifestyle.

"Actually it is the other way around. Its these merchants of moral and social destruction who have sophisticatedly tiptoed into our society and embraced us and our lifestyle," my friend says.

"What an eloquent way of spinning the most obvious into the subtle. You need a round bat to hit a round ball they say. But that's baseball, stupid! If Japan, Korea, and Puerto Rico can become baseball countries, why not Pakistan?"

PS: One analyst says there may be several explanations why the growth in the use of credit cards in India is less.

"The banks may not be promoting the credit cards aggressively but that will be against their own interest; credit card charges bring in a lot of money for them. That leaves only one possibility. The Indian middle class has a lot of black money and does not want to leave a paper trail for the tax authorities while making purchases."

(-Filed by Irshad Salim)

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