x Abu Dhabi, UAEWednesday 26 July 2017

Pakistan's big spenders untroubled

While the Taliban insurgency, a massive refugee crisis and severe economic woes have left most Pakistanis reeling, they have not managed to snuff out the lavish tastes of the ultra-rich.

Asim Buksh, a retailer of high-end goods in Lahore, says his clients are still willing to spend hundreds of thousands of dollars.
Asim Buksh, a retailer of high-end goods in Lahore, says his clients are still willing to spend hundreds of thousands of dollars.

LAHORE // While the Taliban insurgency, a massive refugee crisis, rolling blackouts and severe economic woes have left most Pakistanis reeling, they have not managed to snuff out the lavish tastes of the ultra-rich. "What are ? billionaires from Sialkot and Faisalabad going to spend their money on? Luxury items," said Asim Buksh, the country's leading retailer of high-end international branded goods. Although the shrinking economy is sending many back down the class ladder after unprecedented middle class growth earlier in the decade, Mr Buksh's clients are still willing to spend hundreds of thousands of dollars on a car or on items from his line of handbags, clothes, watches and shoes. One client, whose family owns a chain of private schools, recently spent US$22,000 (Dh80,750) on suits and shirts. Sitting in his new Range Rover Sport on Lahore's busy tree-lined main boulevard, The Mall, he pointed out several other similar cars, among the ubiquitous Toyota and Honda models, that he had sold. "I am planning to start selling Bentleys here, too," he said. "There are plenty of people like me in Pakistan. It's a normal country. We holiday abroad - Bali and Maldives - and we travel for business - New York, Paris and London," said Mr Buksh, wearing a pinstripe Gucci suit. "This is not the Pakistan that people talk about. There is more to Pakistan than all that Taliban rubbish," he added. Lahore is the capital of the Punjab, Pakistan's most prosperous, populated and politically pivotal province. It is also the country's most brash and flashy city. Karachi, one of the largest cities in Asia, is wealthier, but its rich are less ostentatious because flaunting it carries the risk of carjacking, kidnapping and home invasions. In Mr Buksh's Lahore clothes store, a woman picked up a handbag off a shelf. "That is worth $5,000," he said. A pair of faux leopard-skin high-heeled shoes was selling for Rs 37,950 (Dh1,700), the equivalent of two months of the store manager's wages. In a country with such gaping disparities in wealth, where the poor are undernourished and illiterate, the display of great wealth is greeted with discomfort, even by some of the country's well-heeled. A woman from an aristocratic family, who did not want to be named, said: "It is not right to spend money on such frivolous and ostentatious goods in a poor country like ours." Discussions about wealth in ­Pakistan often end in the observation that the rich have "haraam ka paisa" - ill-gotten spoils resulting from business deals made with the help of political favour. And despite Mr Buksh's optimism, the luxury market has been affected by Pakistan's deep-seated economic crisis, which has seen overnight millionaires lose their money as fast as it was made. Foreign reserves hit a record high of $16.5 billion in Oct 2007, but fell steadily to $6.6bn by November last year, largely because of a soaring import bill. Pakistan agreed in November to an International Monetary Fund emergency loan package of $7.6bn to avert a balance of payments crisis and shore up reserves. Pakistan's economy may expand 2.5 per cent this year, the slowest pace in eight years, from 5.8 per cent last year. The country needs to generate revenue to help bridge a shortfall in government finances and pay for infrastructure projects, including roads, power plants and dams, to help revive the economy. The crisis has crippled the middle class that had managed to prosper during the boom years under the former president, Pervez Musharraf. Abuzar Bokhari, a Lahori businessman who represents Porsche cars in Pakistan, said the global economic downturn and Pakistan's security problems had also chipped away at the wealth of many major industrialists. "A property boom during the Musharraf years created millionaires. That wealth has now been neutralised," Mr Bokhari said. During that time Rolls-Royce, BMW and Porsche even set up ­outlets in Pakistan. The era heralded lots of "new money", he said. "We don't know who these people are," said Jamal Salahuddin, owner of Dish, an upmarket restaurant in Lahore, who pointed out that Lahore's prominent feudal land-owning families all knew each other. But Mr Bokhari added: "There still remains a smaller but distinct group which has handsome amounts of money who know how to spend it".

iwilkinson@thenational.ae