Good article in the 5/10/05 Washington Post about offshoring in Pakistan. Despite challenges including an unstable power grid that may cause cumulative work outages of more than a day a month, there's an economic appeal to hiring mid-level programmers who are willing to work for "as little as $6 an hour," according to staff writer S. Mitra Kalita.
To be honest, Pakistan isn't alone in facing power shortages, as you can read in Sumanthi Vaidyanathan's 5/10/05 WSJ article, "India Continues to Face Power Shortages, Hindering Businesses." In the article, Vaidyanathan cites an investment-climate survey for India conducted jointly by the World Bank and the Confederation of Indian Industry (CII), noting that "access to reliable power at reasonable prices is the single most significant constraint facing Indian businesses."
1/29/05 article by Evelyn Iritani in the Indian Express, "Pakistan makes the outsourcing pitch."
11/2/04 article by Anthony Mitchell,in the E-Commerce Times, "Pakistan Now a Hot Spot for IT Outsourcing." In the article, Mitchell speculates that the September 28, 2004, announcement by India's finance ministry of an income tax of more than 36 percent on foreign firms with software, R&D, and customer service operations in India will drive business to its neighbor which, in addition to offering cost advantages, also offers a large labor pool of English speakers – and a country that has fewer national holidays.