Mohsin Hamid's new novel comes with a ringing endorsement on its back cover from Jay McInerney, a writer one doesn't readily associate with subcontinental fictions about escaping poverty. But McInerney can speak with authority on second-person narration, having written Bright Lights, Big City, one of the more successful examples of this rare literary undertaking.

With The Reluctant Fundamentalist, Hamid produced a thoroughly gripping and unsettling piece of "voice" writing in the first person, but the second person is a much trickier perspective to master. There's something accusatory about the narrational "you" that can sound wearyingly declarative, as though the writer were issuing a stream of instructions.

But Hamid is too deft a craftsman simply to bully the reader. Instead he seeks to create a more collusive enticement in How to Get Filthy Rich in Rising Asia, made explicit with the conceit of a self-help guide. It's a clever idea that soon falls victim to Hamid's cleverness, as he can't seem to make up his mind if he wants to parody the genre or use it as a springboard for quasi-philosophical digressions on the "self".

The self, or the directly addressed "you" at the centre of the story, is a peasant male in some unspecified corner of Asia  although it doesn't take a lot of guesswork to identify Hamid's native Pakistan as the inspiration  whom we follow from impoverished birth through to a more comfortable death.

Given the advantage over his siblings of some basic education, he migrates to a slum in a sprawling megacity. Hamid is particularly good on the stomach-churning depths of squalor  placing the reader right inside the dank confines of the poor  and the stagnant ironies of developing nations, where teachers dream of being electricity meter readers.

With admirable determination our hero uses his street cunning and entrepreneurial instincts to work his way out of grinding destitution. He sells food with false eat-by dates and then creates his own business boiling water, bottling it in used containers and relabelling it as mineral water.

If he's a rogue trader, he's operating in a vast gallery of rogues  business competitors, police, bureaucrats, politicians  and in his case, at least, he's a lovable rogue. We warm to his pluck and his latent sense of romance as well his absence of self-pity.

There's a tremendous energy about the novel, reflected in the protagonist's unstoppable drive, but sometimes one wishes it didn't move quite so fast. Whole stages of life pass by in a few pages and given Hamid's rich descriptive skills, it's tempting to imagine a larger novel which burrowed deeper into the specificities of the central figure's struggle and environment.

That of course would be to transgress the generic aims of this work with its unnamed cities and unnamed characters. The idea is that this is what it's like for huge swaths of humanity, and here's the opportunity for the privileged reader  literacy in these circumstances is a privilege  to grasp something of the ordeal in being this anonymous "you".

But like unhappy families, all poverty is different. The corruption and religious intolerance that Hamid invokes have distinctive qualities and particular implications. It's interesting in this respect to note the debate that has recently flared concerning wholesale tax evasion among Pakistan's elite and its middle classes.

There are historical and political reasons why Pakistan is what one writer has called a "procrustean hell". And I for one would like to see Hamid bring his considerable talents to the task of examining those causes in greater detail. But perhaps that's for another time.

In this one he essays a touching love story between the protagonist and a beautiful village girl who uses her physical attributes to build her own wealth. But love is a luxury in conditions of economic struggle. The pair remain tantalisingly estranged for much of the book, only finding each other when  tellingly  they abandon their material ambitions.

If Hamid set out to write a satire on the globalised dream of consumer-driven economic development, he ends up being undermined by the strength of his characters. You can't help but root for them in their perilous climb out of the mire of penury, while all the time being relieved that you are not really "you".

A few years ago, Rana Dasgupta wrote an eye-opening article in Granta about India's new rich, in which he explained that the country's economic growth had been far too explosive for the small English-speaking upper class to monopolise its rewards. The old cosmopolitan elite have done well enough, with their degrees from Berkeley and Cambridge, and their jobs in banking and management consulting: "But they are surrounded by very different people  private businessmen, entrepreneurs, estate agents, retailers and general wheeler-dealers  who are making far more money than they are, and wielding more political power. These people may come from smaller cities, they may be less worldly, and they may speak only poor English. But they are skilled in the realm of opportunity and profit, and they are at home in the booming world of overlords, connections, bribes, political loopholes, sweeteners  and occasional violence  that sends their anglicised peers running for the nearest cappuccino."

In Mohsin Hamid's dazzling third novel, we follow the rise and fall of one of these wheeler-dealers, these new lords of opportunity and profit. How to Get Filthy Rich in Rising Asia is set in Pakistan, not India, in a "megalopolis" that mostly resembles Hamid's home town, Lahore (though neither the country nor the city is named  in fact there's hardly a proper noun in sight). This might come as a surprise in Britain, where we hear a lot about the "new India", while Pakistan  which has seen a comparable, if more limited, boom  is generally portrayed as the poor, backward neighbour, afflicted by Islamist terrorism, insurgency and floods. But this is a novel that aims to strip resaders of their preconceptions.

Hamid shows us the same powerful forces are at work in a Pakistani megacity as in Bombay or Delhi or Bangkok. And while the new breed of entrepreneurs are often portrayed as unscrupulous or grotesque, like the murderous taxi tycoon in Aravind Adiga's scabrous The White Tiger, Hamid asks us to consider that they might in fact be rational, honourable people responding as best they can to their environment  just like you or me.

Or, more specifically, like you, since the book is written in the second person, in the style of Jay McInerney's 1984 Bright Lights, Big City or a role-playing story. At first sight, it poses as a self-help book. The chapter titles take the form of instructions to the reader: "Move to the city", "Get an education", "Work for yourself", "Befriend a bureaucrat", and so on. But after a couple of paragraphs of ironic motivational talk, each chapter moves into a narrative mode: "you" are a poor village boy, first seen "huddled, shivering, on the packed earth under your mother's cot one cold, dewy morning".

At your mother's insistence, your family moves from the village to the city to join your father, who works as a domestic chef: "As you and your parents dismount [from the bus], you embody one of the great changes of your time." Thereafter, you are seen going to school, while earning money for the family on the side as a pirate-DVD delivery boy; then working as a "non-expired-labeled expired goods salesman" (knocking off out-of-date cans of tuna with new labels). Step by step, you find your true calling, in the fake bottled-water trade. You start off with a back-room operation: a donkey pump, a water tank, a gas-burner, a filter and a pile of old mineral water bottles. But soon you hit the big time, and before long you have your own semi-legit factory out in the ballooning industrial suburbs.

Hamid's debut, Moth Smoke, was formally conventional, though its subject matter caused a stir  imagine a McInerney party novel, set in Lahore, with bootleg whisky, cheap heroin and nuclear neighbours. But these days he seems to specialise in ambitious, highly compressed novellas, which address the reader in an unusual and slightly tricksy fashion. He's best known in this country for The Reluctant Fundamentalist, a 9/11 novel about a Pakistani financial worker falling out of love with America. Like Camus's The Fall, it was written in the form of a monologue, from one man in a café to another.

How to Get Filthy Rich also pulls a few fairly complex moves. Initially, it seems to be a satire powered by a cool, rational fury about the conditions of life in Pakistan  from the landlords whose gaze the villagers are not permitted to meet, to the place-holders and rent-seekers who run schools and politics alike, to the undrinkable water: "Your city's neglected pipes are cracking, the contents of underground water mains and sewers mingling, with the result that taps in locales rich and poor alike disgorge fluids that, while for the most part clear and odourless, reliably contain trace levels of feces and microorganisms capable of causing diarrhea, hepatitis, dysentery and typhoid."

At another level, the book is a love story disguised as a satire. "You" fall in love, with a woman known as "the pretty girl", who comes from the same city slum, and works her way up into modelling and acting. The lovers are driven apart by circumstance, but re-enter each other's lives at significant moments. Finally, in its later stages, How to Get Filthy Rich becomes a meditation on mortality in the form of a love story.

Furthermore, it becomes clear as the book proceeds that each chapter corresponds to a significant span of "your" life, and is set in the historical present. If, like me, you don't know Pakistan, then this only gradually becomes clear, when the technology stays the same though decades pass in the lives of the characters; and when the few news incidents alluded to, such as the 2008 truck-bombing of the Marriott hotel in Islamabad, don't seem to fit into any comprehensible time scheme. In short, there's a hell of a lot going on in the 200 or so widely spaced pages of How to Get Filthy Rich. Some readers might find that the novel trips up from time to time on its own conceits; but it is an addictive, muscular piece of storytelling, and the few moments of clumsiness and archness that Hamid's formal experiments produce are a price well worth paying.

Hamid is a great admirer of Pereira Maintains by Antonio Tabucchi, a 1994 novella written in the form of a testimony given, we are led to believe by its amiable Portuguese hero, to a secret policeman. In his introduction, Hamid writes that he likes this device, because "we are unsettled and given more to do. An unexpected interpretative space opens up before us, nags at us, seduces us. We feel more like characters than we are used to."

Similarly, his chosen form of address in How to Get Filthy Rich co-opts the reader as a character ("So you have grown a beard and joined a religious organisation," Hamid writes, and indeed makes it seem like a sensible career move.) It also allows him to move between a very intimate perspective and an objective, generalising one. Similarly, the compression of the book's time zones enables him to portray a dozen different levels of Pakistani society at once, giving a sense of people inhabiting entirely different worlds at the same time. The bus ride from village to city appears "to span millennia"; "buildings go from mud to brick to concrete, then shoot up to an unimaginable four stories, even five".

Perhaps all this makes How to Get Filthy Rich in Rising Asia sound a little complicated. It isn't, really. In fact, it is quite a simple proposition: it shows a writer at the height of his powers, with a hell of a story to tell. Like most good novels, it is in one sense archetypal  rags-to-riches, boy-meets-girl  while in another, it is highly specific to the society in which it is set: feudalism, the clan system, radical Islam and water shortages are all there, woven into the fabric of the story. Unlike The Reluctant Fundamentalist, it's not decorous and elegant. It's rude and gaudy, loaded with sentences that positively bulge with their desire to bear witness, whether to the construction boom ("a ribbon of convenience stores, auto garages, scrap-metal dealers, unregistered educational institutes, fly-by-night dental clinics, and mobile-phone top-up and repair points") or to certain sharply drawn social types (the "cocaine-snorting man-child too chronically insecure to appear in his father's head office much earlier than 11 or to stay much later than three, prone to picking up teenage girls at parties in his muscular European limousine and to sobbing unpredictably when drunk"). This is a tremendous novel: tender, sharp and formally daring, a portal into a fast-moving, vividly realised world.