The
economy of Pakistan is the
27th largest economy in the world in terms of
purchasing powerThe purchasing power parity theory uses the long-term equilibrium exchange rate of two currencies to equalize their purchasing power...
, and the
48th largest in absolute dollar terms. Pakistan's economy mainly encompasses textiles, chemicals,
food processingFood processing is the set of methods and techniques used to transform raw ingredients into food or to transform food into other forms for consumption by humans or animals either in the home or by the food processing industry...
,
agricultureAgriculture is the production of food and goods through farming and forestry. Agriculture was the key development that led to the rise of human civilization, with the husbandry of domesticated animals and plants creating food surpluses that enabled the development of more densely populated and...
and other industries. The economy has suffered in the past from decades of internal political disputes, a fast growing population, mixed levels of foreign investment, and a costly, ongoing confrontation with neighboring
IndiaIndia, officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the south, the Arabian Sea on the west, and the Bay of Bengal...
. However, IMF-approved government policies, bolstered by foreign investment and renewed access to global markets, have generated solid macroeconomic recovery the last decade. Substantial macroeconomic reforms since 2000, most notably at privatizing the banking sector have helped the economy.
GDP growth, spurred by gains in the industrial and service sectors, remained in the 6-8% range in 2004-06. Due to Economic Reforms of the Year 2000 by the Musharraf government. In 2005, the
World BankThe World Bank is an international financial institution that provides leveraged loans to poorer countries for capital programs, tied to neoliberal market restructurings...
named Pakistan the top reformer in its region and in the top 10 reformers globally. Pakistan's then Prime Minister Shaukat Aziz stated Pakistan grew at a rate of 8.4% making it the 2nd Fastest Growing Economy in the World, after China, in the same year.
IslamabadIslām ābād is the capital of Pakistan, and is the tenth largest city in Pakistan with an estimated population of over 673,766 in 2009...
has steadily raised development spending in recent years, including a 52% real increase in the budget allocation for development in FY07, a necessary step toward reversing the broad underdevelopment of its social sector. The fiscal deficit - the result of chronically low tax collection and increased spending, including reconstruction costs from the devastating
Kashmir earthquakeThe 2005 Kashmir Earthquake was a major earthquake centered in Pakistan-occupied Kashmir and in North West Frontier Province near the city of Muzaffarabad, Pakistan. It occurred at 08:52:37 Pakistan Standard Time on 8 October, 2005...
in 2005 was manageable.
InflationIn economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the price level rises, each unit of currency buys fewer goods and services; consequently, inflation is also an erosion in the purchasing power of money – a loss of real...
remains the biggest threat to the economy, jumping to more than 9% in 2005 before easing to 7.9% in 2006. In 2008, following the surge in global petrol prices inflation in Pakistan has reached as high as 25.0%. The central bank is pursuing tighter monetary policy while trying to preserve growth.
Foreign exchangeForeign exchange may refer to:* Exchanging money in one currency for another,the cost of one currency in terms of another. Traded on foreign exchange markets* Forex trading software, a trading platform...
reserves are bolstered by steady worker remittances, but a growing current account deficit - driven by a widening trade gap as import growth outstrips export expansion - could draw down reserves and dampen GDP growth in the medium term.
Since the beginning of 2008, Pakistan's economic outlook has taken stagnation. Security concerns stemming from the nation's role in the War on Terror have created great instability and led to a decline in FDI from a height of approximately $8 bn to $3.5bn for the current fiscal year. Concurrently, the insurgency has forced massive capital flight from Pakistan to the Gulf. Combined with high global commodity prices, the dual impact has shocked Pakistan's economy, with gaping trade deficits, high inflation and a crash in the value of the Rupee, which has fallen from 60-1 USD to over 80-1 USD in a few months. For the first time in years, it may have to seek external funding as Balance of Payments support. Consequently, S&P lowered Pakistan’s foreign currency debt rating to CCC-plus from B, just several notches above a level that would indicate default. Pakistan’s local currency debt rating was lowered to B-minus from BB-minus. Credit agency Moody’s Investors Service cut its outlook on Pakistan’s debt to negative from stable due to political uncertainty, though it maintained the country’s rating at B2.The cost of protection against a default in Pakistan’s sovereign debt trades at 1,800 basis points, according to its five year credit default swap, a level that indicates investors believe the country is already in or will soon be in default.
The middle term however may be less turbulent, depending on the political environment. The EIU estimates that inflation should drop back to single digits in 2010, and that growth should pick up to over 5% per annum by 2011. Although less than the previous 5 year average of 7%, it would represent a overcoming of the present crisis wherein growth is a mere 3.5-4%.
First five decades
Pakistan was a very poor and predominantly agricultural country when it gained independence in 1947 from Britain. Pakistan's average economic growth rate since independence has been higher than the average growth rate of the world economy during the period. Average
annual real GDP growth rates were 6.8% in the 1960s, 4.8% in the 1970s, and 6.5% in the 1980s. Average annual growth fell to 4.6% in the 1990s with significantly lower growth in the second half of that decade. See also
http://www.statpak.gov.pk/depts/fbs/statistics/national_accounts/table2.pdf
Industrial-sector growth, including manufacturing, was also above average. In the late 1960s Pakistan was seen as a model of economic development around the world, and there was much praise for its economic progression. Later, economic mismanagement in general, and fiscally imprudent economic policies in particular, caused a large increase in the country's public debt and led to slower growth in the 1990s. Two wars with India in Second Kashmir War 1965 and Bangladesh Liberation War 1971 and separation of Bangladesh adversely affected economic growth. In particular, the latter war brought the economy close to recession, although economic output rebounded sharply until the
nationalizationNationalization, also spelled nationalisation, is the act of taking an industry or assets into the public ownership of a national government or state. Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such as municipalities, being state...
s of the mid-1970s. The economy recovered during the 1980s via a policy of deregulation, as well as an increased inflow of foreign aid and remittances from expatriate workers.
Recent decades
This is a chart of trend of gross domestic product of Pakistan at market prices estimated by the International Monetary Fund with figures in millions of Pakistani Rupees. See also
http://www.statpak.gov.pk/depts/fbs/statistics/national_accounts/table2.pdf
| Year |
Gross Domestic Product |
US Dollar Exchange |
Inflation Index
(2000=100) |
Per Capita Income
(as % of USA) |
| 1960 |
20,058 |
4.76 Pakistani Rupees |
|
3.37 |
| 1965 |
31,740 |
4.76 Pakistani Rupees |
|
3.40 |
| 1970 |
51,355 |
4.76 Pakistani Rupees |
|
3.26 |
| 1975 |
131,330 |
9.91 Pakistani Rupees |
|
2.36 |
| 1998 |
283,460 |
9.97 Pakistani Rupees |
21 |
2.83 |
| 1985 |
569,114 |
16.28 Pakistani Rupees |
30 |
2.07 |
| 1990 |
1,029,093 |
21.41 Pakistani Rupees |
41 |
1.92 |
| 1995 |
2,268,461 |
30.62 Pakistani Rupees |
68 |
2.16 |
| 2000 |
3,826,111 |
51.64 Pakistani Rupees |
100 |
1.54 |
| 2005 |
6,581,103 |
60.40 Pakistani Rupees |
126 |
1.71 |
Background
Historically, Pakistan's overall economic output (
GDPThe gross domestic product or gross domestic income is a basic measure of a country's economic performance and is the market value of all final goods and services made within the borders of a country in a year...
) has grown every year since a 1951
recessionIn economics, a recession is a general slowdown in economic activity over a long period of time, or a business cycle contraction. During recessions, many macroeconomic indicators vary in a similar way...
. Despite this record of sustained growth, Pakistan's economy had, until a few years ago, been characterized as unstable and highly vulnerable to external and internal
shocksIn economics a shock is an unexpected or unpredictable event that affects an economy, either positively or negatively. Technically, it refers to an unpredictable change in exogenous factors -- that is, factors unexplained by economics -- which may have an impact on endogenous economic variables.The...
. However, the economy proved to be unexpectedly resilient in the face of multiple adverse events concentrated into an four-year (1998-2002) period —
- the Asian financial crisis;
- economic sanctions
Economic sanctions are domestic penalties applied by one country on another for a variety of reasons. Economic sanctions include, but are not limited to, tariffs, trade barriers, import duties, and import or export quotas...
— according to Colin PowellColin Luther Powell is an American statesman and a retired four-star general in the United States Army. He was the 65th United States Secretary of State , serving under President George W. Bush. He was the first African American appointed to that position...
, Pakistan was "sanctioned to the eyeballs";
- The global recession
A global recession is a period of global economic slowdown. The International Monetary Fund takes many factors into account when defining a global recession, but it states that global economic growth of 3 percent or less is "equivalent to a global recession".By this measure, three periods since...
of 2001-2002;
- a severe drought
A drought is an extended period of months or years when a region notes a deficiency in its water supply. Generally, this occurs when a region receives consistently below average precipitation. It can have a substantial impact on the ecosystem and agriculture of the affected region...
— the worst in Pakistan's history, lasting about four years;
- heightened perceptions of risk as a result of military tensions with India — with as many as 1 million troops on the border, and predictions of impending (potentially nuclear) war;
- the post-9/11 military action
The War in Afghanistan is an ongoing coalition conflict which began on October 7, 2001, as the British military participated in the US military's Operation Enduring Freedom that was launched in response to the September 11 attacks...
in neighboring Afghanistan, with a massive influx of refugees from that country;
Despite these adverse events, Pakistan's economy kept growing, and economic growth accelerated towards the end of this period. This resilience has led to a change in perceptions of the economy, with leading international institutions such as the IMF, World Bank, and the ADB praising Pakistan's performance in the face of adversity.
More recent reports of resilience
Additional confirmation that the country's economy is not as weather-sensitive as had been previously perceived comes from a 2008 analysis that "examined 68 countries, quantifying their sensitivity to fluctuations in weather, using figures on GDP by industry sector and the sensitivity of particular sectors to given weather variables." The analysis found that of the 68 countries, the "least weather-sensitive country was Pakistan."
http://www.wbcsd.ch/plugins/DocSearch/details.asp?type=DocDet&ObjectId=MzEyNTc http://ftalphaville.ft.com/blog/2008/08/26/15357/save-the-economy-hedge-the-weather http://theusdaily.com/articles/viewarticle.jsp?id=498202&type=home
After the
highly destructive 2005 earthquakeThe 2005 Kashmir Earthquake was a major earthquake centered in Pakistan-occupied Kashmir and in North West Frontier Province near the city of Muzaffarabad, Pakistan. It occurred at 08:52:37 Pakistan Standard Time on 8 October, 2005...
, Pakistan's economy kept expanding, growing by over 7 percent in the twelve months ending June 30, 2006.
Pakistan emerged as one of the best performers in the wake of the global financial crisis, even as the country waged a costly war against militants. Its domestically-driven economy was minimally affected and its banking sector boasted surplus liquidity while remaining unharmed.
Macroeconomic reform and prospects
According to many sources, the Pakistani government has made substantial economic reforms since 2000, and medium-term prospects for job creation and poverty reduction are the best in nearly a decade.
Government revenues have greatly improved in recent years, as a result of economic growth, tax reforms - with a broadening of the tax base, and more efficient tax collection as a result of self-assessment schemes and corruption controls in the
Central Board of RevenueThe Federal Board of Revenue is a federal agency of Pakistan that is responsible for collecting revenue for the government of Pakistan. Sohail Ahmed is the current chairman of the board.-History:...
- and the privatization of public utilities and telecommunications. Pakistan is aggressively cutting tariffs and assisting exports by improving ports, roads, electricity supplies and irrigation projects. Islamabad has doubled development spending from about 2% of GDP in the 1990s to 4% in 2003, a necessary step towards reversing the broad underdevelopment of its social sector.
Liberalization in the international textile trade has already yielded benefits for Pakistan's exports, and the country also expects to profit from freer trade in agriculture. As a large country, Pakistan hopes to take advantage of significant economies of scale, and to replace China as the largest textile manufacturer as the latter China moves up the value-added chain. These industries play to Pakistan's relative strengths in low labor costs.
Growing stability in the nation's monetary policies has contributed to a reduction in money-market interest rates, and a great expansion in the quantity of credit, changing consumption and investment patterns in the nation. Pakistan's domestic
natural gasNatural gas is a gas consisting primarily of methane. It is found associated with fossil fuels, in coal beds, as methane clathrates, and is created by methanogenic organisms in marshes, bogs, and landfills...
production, and its significant use of
CNGCompressed Natural Gas is a fossil fuel substitute for gasoline , diesel, or propane fuel. Although its combustion does produce greenhouse gases, it is a more environmentally clean alternative to those fuels, and it is much safer than other fuels in the event of a spill .CNG is made by compressing...
in automobiles, has cushioned the effect of the oil-price
shockIn economics a shock is an unexpected or unpredictable event that affects an economy, either positively or negatively. Technically, it refers to an unpredictable change in exogenous factors -- that is, factors unexplained by economics -- which may have an impact on endogenous economic variables.The...
of 2004-2005. Pakistan is also moving away from the doctrine of import substitution which some developing countries (such as Iran) dogmatically pursued in the twentieth century. The Pakistani government is now pursuing an export-driven model of economic growth successfully implemented by South East Asia and now highly successful in
ChinaChina is a cultural region, an ancient civilization, and, depending on perspective, a national or multinational entity extending over a large area in East Asia....
.
In 2005, the
World BankThe World Bank is an international financial institution that provides leveraged loans to poorer countries for capital programs, tied to neoliberal market restructurings...
reported that
- "Pakistan was the top reformer in the region and the number 10 reformer globally — making it easier to start a business, reducing the cost to register property, increasing penalties for violating corporate governance rules, and replacing a requirement to license every shipment with two-year duration licenses for traders."
Doing Business
The World Bank (WB) and International Finance Corporation’s flagship report ‘Ease of Doing Business 2010’ ranked Pakistan 85 among 181 countries around the globe. Pakistan comes highest in South Asia but also ranks higher than China, Russia and India which is at 133. The top five countries are Singapore, New Zealand, the United States, Hong Kong and United Kingdom.
http://www.doingbusiness.org/ExploreEconomies/?economyid=147
The
Government of PakistanThe Government of Pakistan is a federal parliamentary system, with an indirectly-elected President as the Head of State and Commander in Chief of the Armed Forces, and an indirectly-elected Prime Minister as the Head of Government. The President’s appointment and term are constitutionally...
has, over the last few years, granted numerous incentives to technology companies wishing to do business in Pakistan. A combination of decade-plus
tax holidayA tax holiday is a temporary reduction or elimination of a tax. Governments usually create tax holidays as incentives for business investment. The taxes that are most commonly reduced by national and local governments are sales taxes...
s, zero
dutiesA tariff is a duty imposed on goods when they are moved across a political boundary.-History:...
on computer imports, government incentives for
venture capitalVenture capital is a type of private equity capital typically provided for early-stage, high-potential, growth companies in the interest of generating a return through an eventual realization event such as an IPO or trade sale of the company...
and a variety of programs for subsidizing technical education, are intended to give impetus to the nascent
Information TechnologyInformation technology , as defined by the Information Technology Association of America , is "the study, design, development, implementation, support or management of computer-based information systems, particularly software applications and computer hardware." IT deals with the use of electronic...
industry. This in recent years has resulted in impressive growth in that sector.
The economy today
By October 2007, Pakistan raised back its Foreign Reserves to a handsome $16.4 billion. Exceptional policies kept Pakistan's trade deficit controlled at $13 billion, exports boomed to $18 billion, revenue generation increased to become $13 billion and attracted foreign investment of $8.4 billion.
Economic Comparison of Pakistan 1999-2008
| Indicator |
1999 |
2007 |
2008 |
2009 |
| GDP |
$ 75 billion |
$ 160 billion |
$ 170 billion |
$ 185 billion |
| GDP Purchasing Power Parity (PPP) |
$ 270 billion |
$ 475.5 billion |
$ 504.3 billion |
$ 580.6 billion |
| GDP per Capita Income |
$ 450 |
$ 925 |
$1085 |
$1250 |
| Revenue collection |
Rs. 305 billion |
Rs. 708 billion |
Rs. 990 billion |
Rs. 1.05 trillion |
| Foreign reserves |
$ 700 million |
$ 16.4 billion |
$ 10 billion |
$ 14 billion |
| Exports |
$ 7.5 billion |
$ 18.5 billion |
$ 19.22 billion |
$ 18.45 billion |
| Textile Exports |
$ 5.5 billion |
$ 11.2 billion |
- |
- |
| KHI stock exchange (100-Index) |
$ 5 billion at 700 points |
$ 75 billion at 14,000 points |
$ 56 billion at 9,000 points |
| Foreign Direct Investment |
$ 1 billion |
$ 8.4 billion |
$ 5.19 billion |
$ 4.6 billion |
| Debt servicing |
65% of GDP |
26% of GDP |
- |
- |
| Poverty level |
34% |
24% |
- |
- |
| Literacy rate |
45% |
53% |
- |
- |
| Development programs |
Rs. 80 billion |
Rs. 520 billion |
Rs. 549.7 billion |
Rs. 880 billion |
Economic Comparison 1999-2008
Stock market
In the first four years of the twenty-first century, Pakistan's
KSE 100 IndexKarachi Stock Exchange 100 Index is a stock index acting as a benchmark to compare prices on the Karachi Stock Exchange over a period of time. In determining representative compaines to compute the index on, companies with the highest market capitalization are selected...
was the best-performing
stock market indexA stock market index is a method of measuring a section of the stock market. Many indices are cited by news or financial services firms and are used to benchmark the performance of portfolios such as mutual funds.- Types of indices :...
in the world as declared by the international magazine “Business Week”. The stock market capitalisation of listed companies in Pakistan was valued at $5,937 million in 2005 by the
World BankThe World Bank is an international financial institution that provides leveraged loans to poorer countries for capital programs, tied to neoliberal market restructurings...
.
http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,,contentMDK:20394793~menuPK:1192714~pagePK:64133150~piPK:64133175~theSitePK:239419,00.html. But in 2008, after the General Elections, uncertain political environment, rising militancy along western borders of the country, and mounting inflation and current account deficits resulted in the steep decline of the
Karachi Stock ExchangeThe Karachi Stock Exchange or KSE is a stock exchange located in Karachi, Sindh, Pakistan. Founded in 1947, it is Pakistan's largest and oldest stock exchange, with many Pakistani as well as overseas listings...
. As a result, the
corporate sectorPakistan Inc. is a common term used by the Pakistani media to refer to the corporate sector of the nation.The Companies Ordinance 1984 allows a variety of formations in the mixed economy of Pakistan....
of Pakistan has declined dramatically in significance in recent times.
Manufacturing and finance
Pakistan's manufacturing sector has experienced double-digit growth in recent years, from 2000 to 2007, with Large-scale manufacturing growing from a minimal 1.5% in 1999 to a RECORD 19.9% in 2004-05 and averaged 8.8% by end of 2007.
http://economicpakistan.wordpress.com/2009/02/01/large-scale-manufacturing/
The Federal Bureau of Statistics valued the finance and insurance sector at Rs.311,741 million in 2005 thus registering over 166% growth since 2000. A reduction in the fiscal deficit has resulted in less government borrowing in the domestic money market, lower interest rates, and an expansion in private sector lending to businesses and consumers.
Growing middle class
Measured by purchasing power, Pakistan has a 30 million strong middle class, according to Dr.
Ishrat HusainIshrat Husain, HI, has been appointed Dean and Director of the Institute of Business Administration, Karachi. He assumed office as the 13th Governor of the State Bank of Pakistan, Pakistan's Central bank on 2 December 1999, and retired on 1 December 2005 after six years of service. He also heads...
, Ex-Governor (2 December, 1999 - 1 December, 2005) of the
State Bank of PakistanThe State Bank of Pakistan is the central bank of Pakistan. While its constitution, as originally laid down in the State Bank of Pakistan Order 1948, remained basically unchanged until January 1, 1974, when the bank was nationalized, the scope of its functions was considerably enlarged...
. It is a figure that correlates with research by Standard Chartered Bank which estimates that Pakistan possesses a "a middle class of 30 million people that Standard Chartered estimates now earn an average of about $10,000 a year." Latest figures put Pakistan's Middle Class at 35 million strong. In addition, Pakistan has a growing upper & upper middle class, estimated at 6.8 million in 2002 and projected to grow to 17 million people by the year 2010, with relatively high per capita incomes.
On
measures of income inequalityThe concept of inequality is distinct from that of poverty and fairness . Income inequality metrics or income distribution metrics are used by social scientists to measure the distribution of income, and economic inequality among the participants in a particular economy, such as that of a specific...
, the country ranks
slightly better than the median. In late 2006, the
Central Board of RevenueThe Federal Board of Revenue is a federal agency of Pakistan that is responsible for collecting revenue for the government of Pakistan. Sohail Ahmed is the current chairman of the board.-History:...
estimated that there were almost 2.8 million income-tax payers in the country.
http://www.dawn.com/2006/10/11/ebr2.htm
Poverty levels have decreased by 10% since 2001
http://news.bbc.co.uk/1/hi/business/4145562.stm. Foreign Companies which provide for Pakistani middle classes have been very successful. For example, demand for Uniliver products have recently been so high that even after doubling production the Anglo-Dutch company struggled to meet demand and it's Chairman stated "Pakistanis can’t seem to have enough"
http://www.thenews.com.pk/print1.asp?id=100155.
Poverty alleviation expenditures
Pakistan government spent over 1 trillion Rupees (about $16.7 billion) on poverty alleviation programs during the past four years, cutting poverty from 35 percent in 2000-01 to 24 percent in 2006. Rural poverty remains a pressing issue, as development there has been far slower than in the major urban areas.
Demographics
With a per capita
GDPThe gross domestic product or gross domestic income is a basic measure of a country's economic performance and is the market value of all final goods and services made within the borders of a country in a year...
of over $3000 (
PPPThe purchasing power parity theory uses the long-term equilibrium exchange rate of two currencies to equalize their purchasing power...
, 2006) compared with $2600 (
PPPThe purchasing power parity theory uses the long-term equilibrium exchange rate of two currencies to equalize their purchasing power...
, 2005) in 2005 the World Bank considers Pakistan a medium-income country, it is also recorded as a "Medium Development Country" on the
Human Development IndexThe Human Development Index is an index used to rank countries by level of "human development", which usually also implies whether a country is developed, developing, or underdeveloped.-Summary:...
2007. Pakistan has a large informal economy, which the government is trying to document and assess. Approximately 49% of adults are literate, and life expectancy is about 64 years. The population, about 168 million in 2007, is growing at about 1.80%.
Relatively few resources in the past had been devoted to socio-economic development or infrastructure projects. Inadequate provision of social services, high birth rates and immigration from nearby countries in the past have contributed to a persistence of poverty. An influential recent study concluded that the fertility rate peaked in the 1980s, and has since fallen sharply. Pakistan has a family-income Gini index of 41, close to the world average of 39.
Employment
The high population growth in the past few decades has ensured that a very large number of young people are now entering the labor market. Even though it is among the seven most populous Asian nations, Pakistan has a lower population density than Bangladesh, Japan, India, and the Philippines. In the past, excessive red tape made firing from jobs, and consequently hiring, difficult. Significant progress in taxation and business reforms has ensured that many firms now are not compelled to operate in the underground economy.
In late 2006, the government launched an ambitious nationwide service employment scheme aimed at disbursing almost $2 billion over five years.
http://www.dawn.com/2006/09/06/top7.htm http://www.dawn.com/2006/09/06/ebr8.htm
Tourism
Tourism in PakistanWhile Pakistan has some social and political problems, it has also widely been stated as being the tourism industry's next big thing. Pakistan has diverse cultures, peoples and landscapes ....
is a growing industry. Major attractions include ruins of Indus valley civilisation and mountain resorts in the
HimalayasThe Himalaya Range or Himalayas for short , meaning "abode of snow", is a mountain range in Asia, separating the Indian subcontinent from the Tibetan Plateau...
. Himalayan and
KarakoramKarakoram is a large mountain range spanning the borders between Pakistan, India and China, located in the regions of Gilgit-Baltistan , Ladakh , and Xinjiang...
range (which includes
K2K2 is the second-highest mountain on Earth . With a peak elevation of , K2 is part of the Karakoram range, and is located on the border between the Taxkorgan Tajik Autonomous County of Xinjiang, China and Gilgit, in Gilgit-Baltistan of Pakistan.K2 is known as the Savage Mountain due to the...
, the second highest mountain peak in the world, attracts adventurers and mountaineers from around the world.
Revenue
The
Board of RevenueThe Board of Revenue was a Colonial British institution and part of the British Raj in India. It provided the crucial role of revenue management during the period when the British East India Company ruled.- References :...
has collected nearly one trillion Rupees($14.1 billion) in taxes in the 2007-2008 financial year.
Currency system
Rupee
The Pakistani Rupee was pegged to the US Dollar until 1982. When the government of General Zia-ul-Haq, changed it to managed float. This has been regarded as the best decision by Zia. As a result, the rupee devalued by 38.5% between 1982/83 and 1987/88 and the anti-export bias in the economy was reduced. The basic unit of currency is the
RupeeThe rupee is the currency of Pakistan. The issuance of the currency is controlled by the State Bank of Pakistan, the central bank of the country. The most commonly used symbol for the rupee is Rs, used on receipts when purchasing goods and services. In Pakistan, the rupee is referred to as the...
, ISO code PKR and abbreviated Rs, which is divided into 100 paisas. Currently the newly printed 5,000 rupee note is the largest denomination in circulation. Recently the SBP has introduced all new design notes of Rs. 5, 10, 20, 50, 100, 500, 1000, and 5000 denomination, while the design work of Rs.10,000 note is in progress which will help the banking industry in keeping few notes in saving accounts. The new notes have been designed using the euro technology and are made in eye-catching bright colours and bold, stylish designs.
Foreign exchange rate
- 1 Pakistani Rupee (PKR) = 100 Paisa
The Pakistani rupee depreciated against the US dollar until the turn of the century, when Pakistan's large current-account surplus pushed the value of the rupee up versus the dollar. Pakistan's central bank then stabilized by lowering interest rates and buying dollars, in order to preserve the country's export competitiveness
- Exchange rates: Pakistani rupee
The rupee is the currency of Pakistan. The issuance of the currency is controlled by the State Bank of Pakistan, the central bank of the country. The most commonly used symbol for the rupee is Rs, used on receipts when purchasing goods and services. In Pakistan, the rupee is referred to as the...
(PKR) per US$1
PKR per US dollar 1995-2008
| Year |
Highest ↑ |
Lowest ↓ |
| Date |
Rate |
Date |
Rate |
| 1995 |
|
PKR 30.930 |
|
|
| 1996 |
|
|
|
PKR 35.266 |
| 1997 |
|
PKR 40.185 |
|
|
| 1998 |
|
PKR 44.550 |
|
|
| 1999 |
|
PKR 51.90 |
|
|
| 2000 |
|
PKR 53.6482 |
|
|
| 2001 |
|
PKR 61.9272 |
|
|
| 2002 |
|
PKR 59.7238 |
|
|
| 2003 |
|
PKR 57.752 |
|
|
| 2004 |
|
PKR 58.000 |
|
|
| 2007 |
Aug 05 |
PKR 60.75 |
Nov 01 |
PKR 60.50 |
| 2008 |
October 10 |
PKR 80.00 |
Apr 01 |
PKR 63.50 |
| Source: PKR exchange rates in USD, SBP The State Bank of Pakistan is the central bank of Pakistan. While its constitution, as originally laid down in the State Bank of Pakistan Order 1948, remained basically unchanged until January 1, 1974, when the bank was nationalized, the scope of its functions was considerably enlarged...
|
Foreign exchange reserves
By October 2007, at the end of Prime Minister Shaukat Aziz’s tenure, Pakistan raised back its Foreign Reserves to $16.4 billion. Pakistan's trade deficit was at $13 billion, exports grew to $18 billion, revenue generation increased to become $13 billion and the country attracted foreign investment of $8.4 billion.
On October 11, 2008
State Bank of PakistanThe State Bank of Pakistan is the central bank of Pakistan. While its constitution, as originally laid down in the State Bank of Pakistan Order 1948, remained basically unchanged until January 1, 1974, when the bank was nationalized, the scope of its functions was considerably enlarged...
reported that country's foreign exchange reserves had gone down by $571.9 Million to $7749.7 Million. The foreign exchange reserves had declined more by $10 billion to an alarming rate of $6.59 billion.
Structure of economy
The economy of the Islamic Republic of Pakistan is suffering with high inflation rates well above 26%.
Over 1,081 patent applications were filed by non-resident Pakistanis in 2004 revealing a new-found confidence.
Agriculture accounted for about 53% of GDP in 1947. While per-capita agricultural output has grown since then, it has been outpaced by the growth of the non-agricultural sectors, and the share of agriculture has dropped to roughly one-fifth of Pakistan's economy.
In recent years, the country has seen rapid growth in industries (such as apparel, textiles, and cement) and services (such as telecommunications, transportation, advertising, and finance).
Agriculture
Pakistan is one of the world's largest producers and suppliers of the following according to the 2005
Food and Agriculture OrganizationThe is a specialised agency of the United Nations that leads international efforts to defeat hunger. Serving both developed and developing countries, FAO acts as a neutral forum where all nations meet as equals to negotiate agreements and debate policy...
of The United Nations and
FAOSTATThe FAO Corporate Statistical Database is a multilingual on-line database of statistics on agriculture, nutrition, fisheries, forestry, food aid, land use and population that is administered by the United Nations Food and Agriculture Organization...
given here with ranking:
- Chickpea
The chickpea is an edible legume of the family Fabaceae, subfamily Faboideae. Chickpeas are high in protein and one of the earliest cultivated vegetables...
(2nd)
- Apricot
The Apricot is a species of Prunus, classified with the plum in the subgenus Prunus...
(4th)
- Cotton
Cotton is a soft, staple fiber that grows in a form known as a boll around the seeds of the cotton plant, a shrub native to tropical and subtropical regions around the world, including the Americas, India and Africa. The fiber most often is spun into yarn or thread and used to make a soft,...
(4th)
- Sugarcane
Sugarcane, or sugar cane, is any of six to thirty-seven species of tall perennial grasses of the genus Saccharum . Native to warm temperate to tropical regions of Asia, they have stout, jointed, fibrous stalks that are rich in sugar, and measure two to six meters tall...
(4th)
- Milk
Milk is an opaque white liquid produced by the mammary glands of mammals. It provides the primary source of nutrition for young mammals before they are able to digest other types of food. The early lactation milk is known as colostrum, and carries the mother's antibodies to the baby. It can reduce...
(5th)
- Onion
Onion is a term used for many plants in the genus Allium. They are known by the common name "onion" but, used without qualifiers, it usually refers to Allium cepa. Allium cepa is also known as the "garden onion" or "bulb" onion...
(5th)
- Date Palm
Phoenix dactylifera , commonly known as the Date Palm, is a palm in the genus Phoenix, extensively cultivated for its edible sweet fruit...
(6th)
- Mango
Mangoes belong to the genus Mangifera, consisting of numerous species of tropical fruiting trees in the flowering plant family Anacardiaceae. The mango is indigenous to the Indian Subcontinent...
(3rd)
- Tangerines, mandarin orange
The Mandarin orange, also known as mandarin or mandarine, is a small citrus tree with fruit resembling other oranges. The fruit is oblate, rather than spherical. Mandarin oranges are usually eaten plain, or in fruit salads...
, clementine (8th)
- Rice
Rice is the seed of a monocot plant Oryza sativa, of the grass family . As a cereal grain, it is the most important staple food for a large part of the world's human population, especially in East, South, Southeast Asia, the Middle East, Latin America, and the West Indies...
(8th)
- Wheat
Wheat is a worldwide cultivated grass from the Fertile Crescent region of the Near East. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize and rice...
(9th)
- Oranges
An orange—specifically, the sweet orange—is the citrus Citrus ×sinensis and its fruit. The orange is a hybrid of ancient cultivated origin, possibly between pomelo and tangerine...
(10th)
Pakistan
ranks fifth in the
Muslim worldThe term Muslim world has several meanings. In a cultural sense it refers to the worldwide community of Muslims, adherents of Islam. This community numbers about 1.3-1.5 billion people, roughly one-fifth of the world population. This community is spread across many different nations and ethnic...
and twentieth worldwide in farm output. It is the world's fifth largest milk producer.
Pakistan's principal natural resources are
arable landIn geography, arable land is an agricultural term, meaning land that can be used for growing crops. It is distinct from cultivated land and includes jungles that are not currently used for human purposes. Arable land covers an area of approximately 12 million square miles...
and water. About 25% of Pakistan's total land area is under cultivation and is watered by one of the largest irrigation systems in the world. Pakistan irrigates three times more acres than Russia. Agriculture accounts for about 23% of GDP and employs about 44% of the labor force. Zarai Taraqiati Bank Ltd. is the largest financial institution geared towards the development of agriculture sector through provision of financial services and technical know how.
Industry
Pakistan's two leading companies, as per Forbes Global 2000The Forbes Global 2000 is an annual ranking of the top 2000 public companies in the world by Forbes magazine. The ranking is based on a mix of four metrics: Sales, Profit, Assets and Market value...
ranking for 2005.
Global
ranking | Company Name |
|---|
| 1,284 |
Oil & Gas DevelopmentOil and Gas Development Company Limited is a state corporation of Pakistan. It was established in 1961 to prospect, refine and sell oil and gas in Pakistan....
|
| 1,316 |
PTCL Pakistan Telecommunication Company Limited is the largest telecommunication company in Pakistan. This company provides telephony services to the nation and still holds the status of backbone for country's telecommunication infrastructure despite arrival of a dozen other telcos including telecom...
|
| Forbes Global 2000 |
|
Pakistan
ranks forty-first in the world and fifty-fifth worldwide in factory output.
Pakistan's industrial sector accounts for about 24% of GDP. Cotton textile production and apparel manufacturing are Pakistan's largest industries, accounting for about 66% of the merchandise exports and almost 40% of the employed labour force.
http://www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2006/05/23/000012009_20060523095241/Rendered/PDF/354991PK0rev0pdf.pdf Other major industries include cement, fertilizer, edible oil, sugar, steel, tobacco, chemicals, machinery, and food processing.
The government is privatizing large-scale parastatal units, and the public sector accounts for a shrinking proportion of industrial output, while growth in overall industrial output (including the private sector) has accelerated. Government policies aim to diversify the country's industrial base and bolster export industries.
- Industries: textiles (8.5% of the GDP), fertilizer
Fertilizers are chemical compounds applied to promote plant and fruit growth. Fertilizers are usually applied either through the soil or by foliar feeding...
, cementIn the most general sense of the word, a cement is a binder, a substance which sets and hardens independently, and can bind other materials together. The word "cement" traces to the Romans, who used the term "opus caementicium" to describe masonry which resembled concrete and was made from crushed...
, oil refineries, dairy products,food processing, beverages, construction materials, clothing, paperPaper is thin material mainly used for writing upon, printing upon or for packaging. It is produced by pressing together moist fibers, typically cellulose pulp derived from wood, rags or grasses, and drying them into flexible sheets....
products, shrimpShrimp are swimming, decapod crustaceans classified in the infraorder Caridea, found widely around the world in both fresh and salt water. Adult shrimp are filter feeding benthic animals living close to the bottom. They can live in schools and can swim rapidly backwards. Shrimp are an important...
- Industrial production growth rate: 6% (2005)
- Large-scale manufacturing growth rate: 19.9% (2005)
Automobile industry
Pakistan is an emerging market for automobiles and automotive parts offers immense business and investment opportunities. The total contribution of Auto industry to GDP in 2007 is 2.8% which is likely to increase up to 5.6% in the next 5 years. Auto sector presently, contributes 16% to the manufacturing sector which also is expected to increase 25% in the next 7 years.
http://economicpakistan.wordpress.com/2009/02/01/automobile-industry/
CNG industry
As of 2009, Pakistan is the largest user of CNG in the world. Presently, more than 2,900 CNG stations are operating in the country in 85 cities and towns, and 1000 more would be set up in the next three years. It has provided employment to over 50,000 people in Pakistan.
http://www.economicpakistan.wordpress.com/2009/02/01/cng-industry/
Cement industry
In 1947, Pakistan had inherited four cement plants with a total capacity of 0.5 million tons. Some expansion took place in 1956–66 but could not keep pace with the economic development and the country had to resort to imports of cement in 1976-77 and continued to do so till 1994-95. The cement sector comprising of 27 plants is contributing above Rs 30 billion to the national exchequer in the form of taxes.
http://economicpakistan.wordpress.com/2009/02/01/cement-industry/
IT industry
Pakistan’s IT industry has been rising steadily since the last three years. A marked increase in software export figures are an indication of this booming industry’s potential. The total number of IT companies increased to 1306 and the total estimated size of IT industry is $2.8 billion.
http://economicpakistan.wordpress.com/2009/02/01/it-industry/ In 2007, Pakistan was for the first time featured in the
Global Services Location Index by
A.T. KearneyA.T. Kearney is a global management consulting firm, focusing on strategic and operational CEO-agenda concerns. The stated mission of A.T. Kearney is to help the world’s leading corporations gain and sustain competitive advantage, and achieve profound, tangible results. Its slogan is: Ideas that last...
and was rated as the 30th best location for
offshoringOffshoring describes the relocation by a company of a business process from one country to another -- typically an operational process, such as manufacturing, or supporting processes, such as accounting. Even state governments employ offshoring....
By 2009, Pakistan had improved its rank by ten places to reach 20th.
http://www.atkearney.com/index.php/News-media/geography-of-offshoring-is-shifting.html
Textiles
The Textile Industry is dominated by Punjab. For example, only 1.5 million people from NWFP are employed in the Industry. 3% of United States imports regarding clothing and other form of textiles is covered by Pakistan. Textile exports in 1999 were $5.2 billion and rose to become $10.5 billion by 2007. Textile exports managed to increase at a very decent growth of 16% in 2006. In the period July 2007 – June 2008, textile exports were US$10.62 billion. Textile exports share in total export of Pakistan has declined from 67% in 1997 to 55% in 2008, as exports of other non-textile sectors grew.
http://economicpakistan.wordpress.com/2009/02/01/textile-industry/
Mining
Pakistan is endowed with significant mineral resources and emerging as a very promising area for prospecting/exploration of mineral deposits. Bases on available information, the country's more than 6,00,000 km² of outcrops area demonstrates varied geological potential for metallic and non-metallic mineral deposits. Except oil, gas and nuclear minerals regulated at federal level, Minerals are a provincial subject, under the constitution of Islamic Republic of Pakistan. Provincial governments are responsible for development and exploitation of minerals, besides, enforcing regulatory regime. In line with the constitutional framework the federal and provincial governments have jointly set out Pakistan first National Mineral Policy in 1995, duly implemented by the provinces, providing appropriate institutional and regulatory framework and equitable and internationally competitive fiscal regime.
In the recent past, exploration by government agencies as well as by multinational mining companies presents ample evidence of the occurrences of sizeable minerals deposits. Recent discoveries of a thick oxidized zone underlain by sulphide zones in the shield area of the Punjab province, covered by thick alluvial cover have opened new vistas for metallic minerals exploration. Pakistan has large base for industrial minerals. The discovery of coal deposits having over 175 billion tones of reserves at Thar in the Sindh province has given an impetus to develop it as an alternate source of energy. There is vast potential for precious and dimension stones.
The enforcement of Mineral Policy (1995) has paved way to expand mining sector activities and attract international investment in this sector. International mining companies have responded favorably to the NMP and presently at least four are engaged in mineral projects development.
Currently about 52 minerals are under exploitation although on small scale. The major production is of coal, rock salt and other industrial and construction minerals. The current contribution of mineral sector to the GDB is about 0.5% and likely to increase considerably on the development and commercial exploitation of Saindak & Reco Diq copper & Gold deposits (World Largest Gold Mine), Duddar Zinc lead, Thar coal and Gemstone deposits.
Services
Pakistan's service sector accounts for about 53.3% of GDP.
TransportTransport or transportation is the movement of people and goods from one location to another. Transport is performed by modes, such as air, rail, road, water, cable, pipeline and space...
,
storageA warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial areas of cities and towns. They usually have loading docks to load and...
,
communicationsTelecommunication is transmission over a distance for the purpose of communication. In earlier times, this may have involved the use of smoke signals, drums, semaphore, flags or heliograph. In modern times, telecommunication typically involves the use of electronic devices such as the telephone,...
,
finance Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are banks, credit card companies, insurance companies, consumer finance companies, stock...
, and insurance account for 24% of this sector, and wholesale and retail trade about 30%. Pakistan is trying to promote the
information industryInformation industry or information industries is a loosely defined term for industries that are information intensive in one way or the other. It is considered one of the most important economic sectors for a variety of reasons....
and other
modern service industriesThe quaternary sector of the economy is an extension of the three-sector hypothesis of industry. It principally concerns the intellectual services: information generation, information sharing, consultation, education and research and development...
through incentives such as long-term
tax holidaysTax competition exists when governments are encouraged to lower fiscal burdens to either encourage the inflow of productive resources or discourage the exodus of those resources...
.
The government is acutely conscious of the immense job growth opportunities in service sector and has launched aggressive privatisation of telecommunications, utilities and banking despite union unrest.
Communication
Pakistan Telecommunication Company LtdPakistan Telecommunication Company Limited is the largest telecommunication company in Pakistan. This company provides telephony services to the nation and still holds the status of backbone for country's telecommunication infrastructure despite arrival of a dozen other telcos including telecom...
has emerged as a successful Forbes 2000 conglomerate with over US $1 billion in sales in 2005. The mobile telephone market has exploded fourteen-fold since 2000 to reach a subscriber base of 91 million users in 2008, one of the highest mobile teledensities in the entire world.. In addition, there are over 6 million landlines in the country with 100% fibre-optic network and coverage via WLL in even the remotest areas.. As a result, Pakistan won the prestigious Government Leadership award of
GSM AssociationThe GSM Association is an association of mobile operators and related companies devoted to supporting the standardizing, deployment and promotion the GSM mobile telephone system....
in 2006..
The contribution of telecom sector to the national exchequer increased to Rs 110 billion in the year 2007-08 on account of general sales tax, activation charges and other steps as compared to Rs 100 billion in the year 2006-07.
http://economicpakistan.wordpress.com/2009/02/01/communication-industry/
The World Bank estimates that it takes about 3 days only to get a phone connection in Pakistan.
In Pakistan, following are the top mobile phone operators:
- Mobilink
Pakistan Mobile Communications Limited, better known as Mobilink GSM, is a telecommunication service provider in Pakistan. According to PTA statistics, Mobilink has 29.55 million customers by July 2009...
(Parent: Orascom Telecom HoldingOrascom Telecom Holding S.A.E. is the first multinational Egyptian corporation. It is one of the core Orascom Group companies, and considered among the largest and most diversified network operators in the Middle East, Africa, Europe...
, Egypt)
- Ufone
Ufone GSM is a Pakistani GSM cellular service provider. It is one of six GSM Mobile companies in Pakistan and is a subsidiary of Pakistan Telecommunication Company. It has a subscriber base of 20.05 million as of July 2009...
(Parent: PTCL (EtisalatEtisalat is a UAE-based telecommunications services provider, currently operating in 17 countries across Asia, the Middle East and Africa. As of July 2009, Etisalat is the 15th largest mobile network operator in the world....
), Pakistan/UAE)
- Telenor
Telenor is the incumbent telecommunications company in Norway, with headquarters located at Fornebu, close to Oslo. Today, Telenor is mostly an international wireless carrier with operations in Scandinavia, Eastern Europe and Asia. It is ranked as the seventh largest carrier in the world, with...
(Parent: TelenorTelenor is the incumbent telecommunications company in Norway, with headquarters located at Fornebu, close to Oslo. Today, Telenor is mostly an international wireless carrier with operations in Scandinavia, Eastern Europe and Asia. It is ranked as the seventh largest carrier in the world, with...
, Norway)
- Warid (Parent: Abu Dhabi Group / SingTel, UAE/Singapore)
- Zong
ZONG is the first International brand of China Mobile being launched in Pakistan. The company is often cited as China Mobile .-CMPak:...
(Parent: China MobileChina Mobile Limited provides mobile voice and multimedia services through the nationwide mobile telecommunications network it operates in China, the largest of its kind in the world. It is a state-owned enterprise, but is listed on the NYSE and the Hong Kong stock exchange...
, China)
By March 2009, Pakistan had 91 million mobile subscribers - 25 million more subscribers than reported in the same period 2008. In addition to 3.1 million fixed lines, while as many as 2.4 million are using Wireless Local Loop connections. Sony Ericsson, Nokia and Motorola along with Samsung and LG remain to be the popular brands among customers.
Pakistan is on the verge of a telecom revolution and it is by far the most attractive sector in Pakistan in terms of Foreign Direct Investment coming into the country. Since liberalisation, over the past four years, the Pakistani telecom sector has attracted more than $9 billion in foreign investments. During 2007-08, the Pakistani communication sector alone received $1.62 billion in Foreign Direct Investment (FDI) – about 30% of the country’s total foreign direct investment.
Present growth of state-of-the-art infrastructures in telecom sector during the last four years has been the result of the PTA's vision and implementation of deregulation policy. Paging and mobile (cellular) telephones were adopted early and freely. Cellular phones and the Internet were adopted through a rather
laissez-faireThe general meaning of Laissez-faire is to allow events to take their own course, or to let people do what they choose. The term is a French phrase literally meaning "let it be" or "leave it alone"....
policy with a proliferation of private service providers that led to fast adoption. With a rapid increase in the number of Internet users and
ISPAn Internet service provider is a company that offers its customers access to the Internet...
s, and a large English-speaking population, Pakistani society has seen an unparalleled revolution in communications.
According to the
PC World, a total of 6.37 billion text messages were sent through Acision messaging systems across Asia Pacific over the 2008/2009 Christmas and New Year period. Pakistan was amongst the top five ranker with one of the highest SMS traffic with 763 million messages.
Pakistan is ranked 4th in terms of broadband Internet growth in the world, as the subscriber base of broadband Internet has been increasing rapidly. The rankings are released by Point Topic Global broadband analysis, a global research centre.
- Pakistan has more than 17 million Internet users in 2009.http://propakistani.pk/2009/01/24/internet-users-in-pakistan-hit-175-million-mark/ The country is said to have a potential to absorb up to 50 million mobile phone Internet users in the next 5 years thus a potential of nearly 1 million connections per month.
- Almost all of the main government departments, organisations and institutions have their own websites.
- The use of search engine
A web search engine is a tool designed to search for information on the World Wide Web. The search results are usually presented in a list and are commonly called hits. The information may consist of web pages, images, information and other types of files. Some search engines also mine data...
s and instant messagingInstant messaging is a form of real-time communication between two or more people based on typed text. The text is conveyed via devices connected over a network such as the Internet.-Overview:...
services is also booming. Pakistanis are some of the most ardent chattersOnline chat can refer to any kind of communication over the Internet, but is primarily meant to refer to direct one-on-one chat or text-based group chat , using tools such as instant messengers, Internet Relay Chat, talkers and possibly MUDs...
on the Internet, communicating with users all over the world. Recent years have seen a huge increase in the use of online marriage services, for example, leading to a major re-alignment of the tradition of arranged marriageArranged marriage is a marriage arranged by someone other than the couple getting wedded, curtailing or avoiding the process of courtship. Such marriages had deep roots in royal and aristocratic families around the world, including Europe. Today, arranged marriage is still practiced in South...
s.
- As of 2007 there were six cell phone companies operating in the country with nearly 90 million mobile phone users in the country.
- Wireless local loop
WLL redirects here. Not to be confused with Weight Load Limit, the maximum weight that a given apparatus can bearWireless local loop , is a term for the use of a wireless communications link as the "last mile / first mile" connection for delivering plain old telephone service and/or broadband...
and the landlineA landline, main line or fixed-line is a telephone line which travels through a solid medium, either metal wire or optical fibre. This is distinguished from a mobile cellular line, where the medium used is the airwaves...
telephony sector has also been liberalized and private sector has entered thus increasing the teledensity rate. In mid-2008, the Local Loop installed capacity reached around 5.5 million.
- Telecom industry created of 80,000 jobs directly and 500,000 jobs indirectly.
The
Federal Bureau of StatisticsThe Federal Bureau of Statistics is one of the departments of the Statistics Division of the Ministry of Economic Affairs and Statistics of Pakistan....
provisionally valued this sector at Rs.982,353 million in 2005 thus registering over 91% growth since 2000.
Railways
A massive rehabilitation plan worth $1 billion over five years for Pakistan Railways has been announced by the government in 2005.
A new rail link trial has been established from Islamabad-Pakistan via Teharan-Iran Via Istanbul-Turkey .Furthermore it would promote trade ,tourism, and would also would serve as an effective link for exports to Europe (as Turkey part of Europe and Asia] .
Aviation
Pakistan International AirlinesPakistan International Airlines Corporation, more commonly known as PIA , is the flag carrier airline of Pakistan, headquartered in Karachi. It is the 31st largest airline in Asia, operating scheduled services to 23 domestic destinations and 36 international destinations in 25 countries across...
, the flagship airline of Pakistan's
civil aviationCivil aviation is one of two major categories of flying, representing all non-military aviation, both private and commercial. Most of the countries in the world are members of the International Civil Aviation Organization and work together to establish common standards and recommended practices...
industry, has turnover exceeding $1 billion in 2005.
http://www.piac.com.pk/PIA_About/profiles/2005/ANNUAL_REPORT_2005.pdf The government announced a new shipping policy in 2006 permitting banks and financial institutions to mortgage ships.
http://www.pakakhbar.com/civil/portship.html
Private sector airlines in Pakistan include
AirblueAirblue is a private airline based in Karachi, Pakistan. It is Pakistan's second largest airline with over 30% share of the domestic market.. Airblue operates scheduled flights operating 30 daily services linking seven domestic destinations and international services to Dubai, Abu Dhabi, Sharjah,...
and
Shaheen Air InternationalShaheen Air International is a Pakistani private airline based in Karachi. It operates scheduled services in the main cities of Pakistan and to the Persian Gulf countries. Its main base is Jinnah International Airport , Karachi, with a hub at Benazir Bhutto International Airport , Islamabad.-...
. Many private airlines are in the pipeline including Air Mashreq, Dewan Air, and Pearl Air.
Airblue is using state-of-the-art Airbus A320 and A321 aircraft for flying domestically, to the UAE, Oman, and UK; and will soon commence Norway, Kuwait, Malaysia, and India operations. Airblue has recently ordered six factory-fresh A321 aircraft, while two dry-leased aircraft will also soon be added to the existing fleet of five, making it the second biggest fleet behind PIA, which has 42 aircraft.
Wholesale and retail trade
The
Federal Bureau of StatisticsThe Federal Bureau of Statistics is one of the departments of the Statistics Division of the Ministry of Economic Affairs and Statistics of Pakistan....
provisionally valued this sector at Rs.1,358,309 million in 2005 thus registering over 96% growth since 2000.
http://www.statpak.gov.pk/depts/fbs/statistics/national_accounts/table4.pdf
Finance and insurance
A reduction in the fiscal deficit has resulted in less government borrowing in the domestic money market, lower interest rates, and an expansion in private sector lending to businesses and consumers. Foreign exchange reserves continued to reach new levels in 2007, supported by robust export growth and steady worker remittances.
Pakistan has been ranked 34 out of 52 countries in the World Economic Forum's first Financial Development Report, which was released in Pakistan through the Competitiveness Support Fund (CSF) in December, 2008. Under Factors, Policies and Institutions pillar, Pakistan ranks 49th in institutional environment, 50th in business environment and 37th in Financial Stability. In the Financial Intermediation Pillar Pakistan ranks 25th in banks, 42nd in non banks and 17th in Financial Markets. Under Capital Availability and Access, Pakistan ranks 33rd.
http://www.economicpakistan.wordpress.com/2009/01/26/financial-services-sector/
Pakistan's banking sector has remained remarkably strong and resilient during the world financial crisis in 2008–09, a feature which has served to attract a substantial amount of FDI in the sector. Stress tests conducted on June 2008 data indicate that the large banks are relatively robust, with the medium and small-sized banks positioning themselves in niche markets. Banking sector turned profitable in 2002. Their profits continued to rise for the next five years and peaked to Rs 84.1 ($1.1 billion) billion in 2006.
http://www.economicpakistan.wordpress.com/2009/01/26/financial-services-sector/
The credit card market continued its strong growth with sales crossing the 1 million mark in mid-2005.
http://www.dawn.com/2005/08/20/ebr6.htm Since 2000 Pakistani banks have begun aggressive marketing of consumer finance to the emerging middle class, allowing for a consumption boom (more than a 7-month waiting list for certain car models) as well as a construction bonanza.
The
Federal Bureau of StatisticsThe Federal Bureau of Statistics is one of the departments of the Statistics Division of the Ministry of Economic Affairs and Statistics of Pakistan....
provisionally valued this sector at Rs.311,741 million in 2005 thus registering over 166% growth since 2000.
http://www.statpak.gov.pk/depts/fbs/statistics/national_accounts/table4.pdf
Ownership of dwellings
The property sector has expanded twenty-threefold since 2001, particularly in metropolises like Lahore. Nevertheless, the Karachi Chamber of Commerce and Industry estimated in late 2006 that the overall production of housing units in Pakistan has to be increased to 0.5 million units annually to address 6.1 million backlog of housing in Pakistan for meeting the housing shortfall in next 20 years. The report noted that the present housing stock is also rapidly aging and an estimate suggests that more than 50 percent of stock is over 50 years old. It is also estimated that 50 percent of the urban population now lives in slums and squatter settlements. The report said that meeting the backlog in housing, besides replacement of out-lived housing units, is beyond the financial resources of the government. This necessitates putting in place a framework to facilitate financing in the formal private sector and mobilise non-government resources for a market-based housing finance system.
The
Federal Bureau of StatisticsThe Federal Bureau of Statistics is one of the departments of the Statistics Division of the Ministry of Economic Affairs and Statistics of Pakistan....
provisionally valued this sector at Rs.185,376 million in 2005 thus registering over 49% growth since 2000.
Public administration and defence
The Federal Bureau of Statistics provisionally valued this sector at Rs.389,545 million in 2005 thus registering over 65% growth since 2000.
http://www.statpak.gov.pk/depts/fbs/statistics/national_accounts/table4.pdf
Social, community and personal services
The Federal Bureau of Statistics provisionally valued this sector at Rs.631,229 million in 2005 thus registering over 78% growth since 2000.
http://www.statpak.gov.pk/depts/fbs/statistics/national_accounts/table4.pdf
Electricity
For years, the matter of balancing Pakistan's supply against the demand for electricity has remained a largely unresolved matter. Pakistan faces a significant challenge in revamping its network responsible for the supply of electricity.
While the government claims credit for overseeing a turnaround in the economy through a comprehensive recovery, it has just failed to oversee a similar improvement in the quality of the network for electricity supply.
Some officials even go as far as claiming that the frequent power cuts across Pakistan today are indicative of an emerging prosperity as there is fast-rising demand for electricity. And yet, the failure to meet the demand is indeed indicative of a challenge to that very prosperity. This is despite Pakistan having tremendous potential to generate wind power. Apart from this, most cities in Pakistan receive substantial sunlight throughout the year, which would suggest good conditions for investment in solar energy.
Recently, the minister for Water and Power Development, Raja Pervez Ashraf, has claimed that load-shedding will end by December 2009 through employing rental power generation units and that the country will be self-sufficient by the year 2011. Critics argue that this is overly optimistic.
Investment
Foreign direct investment (FDI) in Pakistan soared by 180.6 per cent year-on-year to US$2.22 billion and portfolio investment by 276 per cent to $407.4 million during the first nine months of fiscal year 2006, the
State Bank of PakistanThe State Bank of Pakistan is the central bank of Pakistan. While its constitution, as originally laid down in the State Bank of Pakistan Order 1948, remained basically unchanged until January 1, 1974, when the bank was nationalized, the scope of its functions was considerably enlarged...
(SBP) reported on April 24. During July-March 2005-06, FDI year-on-year increased to $2.224 billion from only $792.6 million and portfolio investment to $407.4 million, whereas it was $108.1 million in the corresponding period last year, according to the latest statistics released by the State Bank.
Pakistan has achieved FDI of almost $8.4 billion in the financial year 06/07, surpassing the government target of $4 billion.
Pakistan is now the most investment-friendly nation in South Asia. Business regulations have been profoundly overhauled along liberal lines, especially since 1999. Most barriers to the flow of capital and international direct investment have been removed. Foreign investors do not face any restrictions on the inflow of capital, and investment of up to 100% of equity participation is allowed in most sectors. Unlimited remittance of profits, dividends, service fees or capital is now the rule. Business regulations are now among the most liberal in the region. This was confirmed by the
World BankThe World Bank is an international financial institution that provides leveraged loans to poorer countries for capital programs, tied to neoliberal market restructurings...
's
Ease of Doing Business IndexThe Ease of Doing Business Index is an index created by the World Bank. Higher rankings indicate better, usually simpler, regulations for businesses and stronger protections of property rights...
report published in September 2009 ranking Pakistan (at 85th) well ahead of neighbours like China (at 89th) and India (at 133rd).
http://www.doingbusiness.org/EconomyRankings/
Pakistan is attracting an increasingly large amount of private equity and was the ranked as number 20 in the world based on the amount of private equity entering the nation. Pakistan has been able to attract a large portion of the global private equity investments because of economic reforms initiated in 2003 that have provided foreign investors with greater assurances for the stability of the nation and their ability to repatriate invested funds in the future.
Tariffs have been reduced to an average rate of 16%, with a maximum of 25% (except for the car industry). The privatisation process, which started in the early 1990s, has gained momentum, with most of the banking system privately owned, and the oil sector targeted to be the next big privatisation operation.
The recent improvements in the economy and the business environment have been recognised by international rating agencies such as Moody’s and Standard and Poor’s (country risk upgrade at the end of 2003).
Foreign acquisitions and mergers
With the rapid growth in Pakistan's economy, foreign investors are taking a keen interest in the corporate sector of Pakistan. In recent years, majority stakes in many corporations have been acquired by multinational groups.
- PICIC by Singapore based Temasek Holdings
Temasek Holdings is an investment company owned by the government of Singapore. With an international staff of 350 people, it manages a portfolio of about S$185 billion, or more than US$127 billion, focused primarily in Asia...
for $339 million
- Union Bank by Standard Chartered Bank
Standard Chartered Bank is a British bank headquartered in London with operations in more than seventy countries. It operates a network of over 1,700 branches and outlets and employs 73,000 people....
for $487 million
- Prime Commercial Bank by ABN Amro
ABN AMRO is a Dutch bank, currently owned by RFS Holdings B.V., a consortium of Royal Bank of Scotland Group, the Government of the Netherlands, and Banco Santander...
for $228 million
- PakTel by China Mobile
China Mobile Limited provides mobile voice and multimedia services through the nationwide mobile telecommunications network it operates in China, the largest of its kind in the world. It is a state-owned enterprise, but is listed on the NYSE and the Hong Kong stock exchange...
for $460 million
- PTCL by Etisalat
Etisalat is a UAE-based telecommunications services provider, currently operating in 17 countries across Asia, the Middle East and Africa. As of July 2009, Etisalat is the 15th largest mobile network operator in the world....
for $1.8 billion
- Additional 57.6% shares of Lakson Tobacco Company acquired by Philip Morris International
Philip Morris International is an international tobacco company, with products sold in over 160 countries. In 2007, it held a 15.6% share of the international cigarette market outside of the USA and reported revenues net of excise taxes of $22.8 billion and operating income of $8.9 billion.Until...
for $382 million
The foreign exchange receipts from these sales are also helping cover the current account deficit.
Foreign trade
Pakistan is a member of the
World Trade OrganizationThe World Trade Organization is an international organization designed by its founders to supervise and liberalize international capital trade. The organization officially commenced on January 1, 1995 under the Marrakesh Agreement, replacing the General Agreements on Tariffs and Trade , which...
, and has bilateral and multilateral trade agreements with many nations and international organizations.
Fluctuating world demand for its exports, domestic political uncertainty, and the impact of occasional droughts on its agricultural production have all contributed to variability in Pakistan's trade deficit.
In the six months to December 2003, Pakistan recorded a current account surplus of $1.761 billion, roughly 5% of GDP. Pakistan's exports continue to be dominated by cotton textiles and apparel, despite government diversification efforts. Exports grew by 19.1% in FY 2002-03. Major imports include petroleum and petroleum products, edible oil, chemicals, fertilizer, capital goods, industrial raw materials, and consumer products.
Past external imbalances left Pakistan with a large foreign debt burden. Principal and interest payments in FY 1998-99 totaled $2.6 billion, more than double the amount paid in FY 1989-90. Annual debt service peaked at over 34% of export earnings before declining.
With a current account surplus in recent years, Pakistan's hard currency reserves have grown rapidly. Improved fiscal management, greater transparency and other governance reforms have led to upgrades in Pakistan's credit rating. Together with lower global interest rates, these factors have enabled Pakistan to prepay, refinance and reschedule its debts to its advantage. Despite the country's current account surplus and increased exports in recent years, Pakistan still has a large merchandise-trade deficit. The budget deficit in fiscal year 1996-97 was 6.4% of GDP. The budget deficit in fiscal year 2003-04 is expected to be around 4% of GDP.
In the late 1990s Pakistan received about $2.5 billion per year in loan/grant assistance from international financial institutions (e.g., the IMF, the World Bank, and the
Asian Development BankThe Asian Development Bank is a regional development bank established in 1966 to promote economic and social development in Asian and Pacific countries through loans and technical assistance. It is a multilateral development financial institution owned by 67 members , 48 from the region and 19...
) and bilateral donors. Increasingly, the composition of assistance to Pakistan shifted away from grants toward loans repayable in foreign exchange. All new U.S. economic assistance to Pakistan was suspended after October 1990, and additional sanctions were imposed after Pakistan's May 1998 nuclear weapons tests. The sanctions were lifted by president George W. Bush after Pakistani president Musharraf allied Pakistan with the U.S. in its war on terror. Having improved its finances, the government refused further IMF assistance, and consequently the IMF program was ended. The government is also reducing tariff barriers with bilateral and multilateral agreements.
While the country has a current account surplus and both imports and exports have grown rapidly in recent years, it still has a large merchandise-trade deficit. The budget deficit in fiscal year 2004-2005 was 3.4% of GDP. The budget deficit in fiscal year 2005-06 is expected to be over 4% of GDP. Economists believe that the soaring trade deficit would have an adverse impact on Pakistani rupee by depreciating its value against dollar (1 US $ = 60 Rupees (March 2006) ) and other currencies.
One of the main reasons that contributed to the increase in trade deficit is the increased imports of earthquake relief related items, especially tents, tarpaulin and plastic sheets to provide temporary shelter to the survivors of earthquake of October 8, 2005 in Pakistan Occupied Jammu and Kashmir and parts of the NWFP, an official said. The rise in the trade gap was also fuelled by high oil import prices, food items, machinery and automobiles.
The Petroleum Ministry says that this year the bill of oil imports was expected to reach $6.5 billion against $4.6 billion in the last fiscal year, which is the main reason behind the all-time high trade deficit.
The EU is the single largest trading partner of Pakistan absorbing over one-third of the exports in 2003.
Exports
Pakistan's exports increased more than 100% from $7.5 billion in 1999 to stand at $18 billion in the financial year 2007-2008.
http://economicpakistan.wordpress.com/2009/02/01/data-boi/
Pakistan exports
riceRice is the seed of a monocot plant Oryza sativa, of the grass family . As a cereal grain, it is the most important staple food for a large part of the world's human population, especially in East, South, Southeast Asia, the Middle East, Latin America, and the West Indies...
,
furnitureFurniture is the mass noun for the movable objects intended to support various human activities such as seating and sleeping in beds, to hold objects at a convenient height for work using horizontal surfaces above the ground, or to store things...
,
cottonCotton is a soft, staple fiber that grows in a form known as a boll around the seeds of the cotton plant, a shrub native to tropical and subtropical regions around the world, including the Americas, India and Africa. The fiber most often is spun into yarn or thread and used to make a soft,...
fiberFiber, also spelled fibre, is a class of materials that are continuous filaments or are in discrete elongated pieces, similar to lengths of thread. They are very important in the biology of both plants and animals, for holding tissues together. Human uses for fibers are diverse...
,
cementIn the most general sense of the word, a cement is a binder, a substance which sets and hardens independently, and can bind other materials together. The word "cement" traces to the Romans, who used the term "opus caementicium" to describe masonry which resembled concrete and was made from crushed...
,
tileA tile is a manufactured piece of hard-wearing material such as ceramic, stone, metal, or even glass. Tiles are generally used for covering roofs, floors, and walls, showers, or other objects such as tabletops...
s,
marbleMarble is a non foliated metamorphic rock resulting from the metamorphism of limestone, composed mostly of calcite . It is extensively used for sculpture, as a building material, and in many other applications...
,
textileA textile is a flexible material consisting of a network of natural or artificial fibres often referred to as thread or yarn. Yarn is produced by spinning raw wool fibres, linen, cotton, or other material on a spinning wheel to produce long strands...
s,
clothingA feature of nearly all modern human societies is the wearing of clothing or clothes, a category encompassing a wide variety of materials that cover the body....
,
leatherLeather is a material created through the tanning of hides and skins of animals, primarily cattlehide. The tanning process converts the putrescible skin into a durable and versatile material....
goods, sports goods (renowned for footballs/soccer balls), surgical instruments, electrical
applianceHome appliances are electrical/mechanical appliances which accomplish some household functions, such as cooking or cleaning.Traditionally, home appliances are classified into:*Major appliances *Small appliances...
s, software,
carpetA carpet is a textile floor covering consisting of an upper layer of "pile" attached to a backing. The pile is generally either made from wool or a manmade fibre such as polypropylene, and usually consists of twisted tufts which are often heat-treated to maintain their structure.- Etymology :The...
s, and
rugRUG or rug can mean:* carpet** specifically, one made by rug making* slang for toupee* rug , to keep domesticated animals warm and/or dry* University of Groningen, Dutch Rijksuniversiteit Groningen, RuG or RUG...
s, ice cream, livestock meat,
chickenThe chicken is a domesticated fowl. As one of the most common and widespread domestic animals, and with a population of more than 24 billion in 2003, there are more chickens in the world than any other bird...
,
powdered milkPowdered milk is a manufactured dairy product made by evaporating milk to dryness. One purpose of drying milk is to preserve it; milk powder has a far longer shelf life than liquid milk and does not need to be refrigerated, due to its low moisture content. Another purpose is to reduce its bulk for...
,
wheatWheat is a worldwide cultivated grass from the Fertile Crescent region of the Near East. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize and rice...
,
seafoodSeafood is any sea animal or plant that is served as food and eaten by humans. Seafoods include seawater animals, such as fish and shellfish...
(especially shrimp/prawns), vegetables, processed food items, Pakistani assembled
Suzukiis a Japanese multinational corporation headquartered in Hamamatsu, Japan that specializes in manufacturing compact automobiles, a full range of motorcycles, all-terrain vehicles , outboard marine engines, wheelchairs and a variety of other small internal combustion engines...
s (to Afghanistan and other countries),
defenseDefense has several uses in the sphere of military application.Personal defense implies measures taken by individual soldiers in protecting themselves whether by use of protective materials such as armor, or field construction of trenches or a bunker, or by using weapons that prevent the enemy...
equipment (submarines, tanks, radars), salt, marble, onyx,
engineeringEngineering is the discipline, art and profession of acquiring and applying technical, scientific and mathematical knowledge to design and implement materials, structures, machines, devices, systems, and processes that safely realize a desired objective or inventions.The American Engineers' Council...
goods, and many other items. Pakistan now is being very well recognized for producing and exporting cements in Asia and Mid-East. Starting August 2007, Pakistan will be exporting
cementIn the most general sense of the word, a cement is a binder, a substance which sets and hardens independently, and can bind other materials together. The word "cement" traces to the Romans, who used the term "opus caementicium" to describe masonry which resembled concrete and was made from crushed...
to India to fill in the shortage there caused by the building boom.
Imports
Pakistan's imports stood at $30.54 billion in the financial year 2006-2007, up by 8.22 percent from last year's imports of $28.58 billion.
Pakistan's single largest import category is
petroleumPetroleum or crude oil is a naturally occurring, flammable liquid found in rock formations in the Earth consisting of a complex mixture of hydrocarbons of various molecular weights, plus other organic compounds.The term "petroleum" was first used in the treatise De Natura Fossilium, published in...
and petroleum products. Other imports include: industrial machinery, construction machinery, trucks, automobiles, computers, computer parts, medicines, pharmaceutical products, food items, civilian aircraft, defense equipment, iron, steel, toys, electronics, and other consumer items.
Sales tax is levied at 15 percent both on imports and domestically produced products. The income
withholding taxWithholding tax is an amount withheld by the party making a payment to another and paid to the taxation authorities. The amount the payer deducts may vary, depending on the nature of the product or service being paid for. The payee is assessed on the gross amount, and the tax to be withheld is...
is levied at 6 percent on imports and at 3.5 percent on the sales of domestic taxpayers.
http://www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2006/05/23/000012009_20060523095241/Rendered/PDF/354991PK0rev0pdf.pdf
External Imbalances
Pakistan suffered a merchandise trade deficit of $13.528 billion for the financial year 2006-7. The gap has considerably widened since 2002-3 when the deficit was only $1.06 billion. Services sector deficit for 2006-2007 stood at $4.125 billion which equals the services export of $4.125 billion for the same year.
The combined deficit in services and goods stand at $17.653 billion which is approx 83.5 percent of country's total export of $21.136 (Goods and services). The rise in the trade gap has been attributed to high oil import bill, and rise in the prices of food items, machinery and automobiles.
Current account deficit - Current account deficit for 2006-7 reached $7.016 billion up by 41 percent over previous year's $4.490 billion.
Since the beginning of 2008, Pakistan's economic outlook has taken a dramatic downturn. Security concerns stemming from the nation's role in the War on Terror have created great instability and led to a decline in FDI from a height of approximately $8 bn to $3.5bn for the current fiscal year. Concurrently, the insurgency has forced massive capital flight from Pakistan to the Gulf. Combined with high global commodity prices, the dual impact has shocked Pakistan's economy, with gaping trade deficits, high inflation and a crash in the value of the Rupee, which has fallen from 60-1 USD to over 80-1 USD in a few months. For the first time in years, it may have to seek external funding as Balance of Payments support. Consequently, S&P lowered Pakistan’s foreign currency debt rating to CCC-plus from B, just several notches above a level that would indicate default. Pakistan’s local currency debt rating was lowered to B-minus from BB-minus. Credit agency Moody’s Investors Service cut its outlook on Pakistan’s debt to negative from stable due to political uncertainty, though it maintained the country’s rating at B2.The cost of protection against a default in Pakistan’s sovereign debt trades at 1,800 basis points, according to its five year credit default swap, a level that indicates investors believe the country is already in or will soon be in default
http://www.paklinks.com/gs/pakistan-affairs/22960-should-pakistan-default-its-debt.html.
The middle term however may be less turbulent, depending on the political environment. The EIU estimates that inflation should drop back to single digits in 2010, and that growth should pick up to over 5% per annum by 2011. Although less than the previous 5 year average of 7%, it would represent a overcoming of the present crisis wherein growth is a mere 3.5-4%.
Economic aid
Pakistan receives economic aid from several sources as loans and grants. The
International Monetary FundThe International Monetary Fund is an international organization that oversees the global financial system by following the macroeconomic policies of its member countries, in particular those with an impact on exchange rates and the balance of payments...
(IMF),
World BankThe World Bank is an international financial institution that provides leveraged loans to poorer countries for capital programs, tied to neoliberal market restructurings...
(WB),
Asian Development BankThe Asian Development Bank is a regional development bank established in 1966 to promote economic and social development in Asian and Pacific countries through loans and technical assistance. It is a multilateral development financial institution owned by 67 members , 48 from the region and 19...
(ADB), etc provides long term loans to Pakistan. Pakistan also receives bilateral aid from developed and oil-rich countries.
The
Asian Development BankThe Asian Development Bank is a regional development bank established in 1966 to promote economic and social development in Asian and Pacific countries through loans and technical assistance. It is a multilateral development financial institution owned by 67 members , 48 from the region and 19...
will provide close to $6 billion development assistance to Pakistan during 2006-9.
http://www.brecorder.com/index.php?id=480165&currPageNo=1&query=&search=&term=&supDate=
The
World BankThe World Bank is an international financial institution that provides leveraged loans to poorer countries for capital programs, tied to neoliberal market restructurings...
unveiled a lending program of up to $6.5 billion for Pakistan under a new four-year, 2006-2009, aid strategy showing a significant increase in funding aimed largely at beefing up the country's infrastructure.
Japanis an island country in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, People's Republic of China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
will provide $500 million annual economic aid to Pakistan. In November 2008, The International Monetary Fund(IMF) has approved a loan of 7.6 Billion to Pakistan, to help Stabilize and rebuild the country's economy.
More recently the govt of Pakistan received an economic aid of US $5bn dollars out of which the US pledge of $1bn was described as a down-payment on the previously announced $1.5bn already promised to Pakistan for each of the next five years.The European Union promised $640m over four years, while reports said Saudi Arabia had pledged $700m over two years.
Remittances
The remittances of Pakistanis living abroad has played important role in Pakistan's economy and foreign exchange reserves. The Pakistanis settled in Western Europe and North America are important sources of remittances to Pakistan. Since 1973 the Pakistani workers in the oil rich Arab states have been sources of billions dollars of remittances.
The 7 million strong
Pakistani diasporaAn overseas Pakistani is a Pakistani citizen who has migrated to another country or a person of Pakistani origin who is born outside Pakistan. There are approximately 7 million Pakistanis living abroad, remitting US$8 billion to Pakistan...
, contributed US$8 billion to the economy in 2008.
An IMF research paper has revealed that workers’ remittances contribute 4% to the GDP of Pakistan and are equivalent to about 22 percent of annual exports of goods and services.
Government finances
Fiscal budget summary
- Fiscal year: 1 July - 30 June
- Revenues: $19.8 billion
- Expenditures:
- Debt - external: $39.94 billion (2005 est.)
- Economic aid - recipient: $2 billion (FY97/98)
Revenues and taxation
Pakistan has a low tax/GDP ratio, which it is trying to improve.
http://www.brecorder.com/index.php?id=526258&currPageNo=1&query=&search=&term=&supDate=
Tax evasion
Unfortunately for Pakistan, the level of tax evasion is very high amongst the population and there are apparently no laws against tax evasion or punishments against tax evaders. Out of a total population of 170 million people, fewer than 1.7 million pay taxes. This means only 1% of the total population pay taxes. To make matters worse, since Pakistan first gained independence in 1947, not a single person has ever been sent to prison for tax evasion. As a result of this chronic low tax collection, Pakistan is still a
third worldThe term Third World arose during the Cold War to define countries that remained non-aligned or neutral with either capitalism and NATO or communism and the Soviet Union...
country which heavily relies on foreign aid. This has also seriously hampered Pakistan's economic development. Corruption within the authorities combined with illiteracy and ignorance among the population has not made things any better. Any attempts into solving this problem is almost impossible because it is believed that roughly 70% of Pakistan's population are living
off the gridOff the grid may refer to:*Off-the-grid, housing not connected to public utilities*Off the Grid , the first single from the Beastie Boys album The Mix-Up*Off the Grid with Les Stroud, a 2006 documentary of a family's building of an off-the-grid home...
.
Sovereign bonds
Pakistan is expected to sell a dual-tranche sovereign bond worth $750 million on March 23, 2006 that analysts said should ensure a favorable reception in the bond market. The 10-year tranche would be $500 million and the 30-year portion $250 million. Pricing is expected during New York trading hours on March 23, 2006. The sources said that the 10-year tranche was expected to be priced at around 7.125 percent, while the longer-dated tranche was expected to be sold at around 7.875 percent, the top end of the indicative yield range of 7.75 to 7.875 percent.
The bonds, comprising 10-year and 30-year tranches, had generated $1.5 billion in orders and a total size of as much as $1.25 billion had been anticipated for what is Pakistan’s third foray into the international debt market since 2004.
Government of Pakistan has been raising money from the international debt market from time to time.
Details of amount raised in various issues is as follows:
1999 - $623 million
2004 - $500 million @ 6.75 Percent
2005 - $600 million worth Islamic bonds
2007 - $ 750 million @ 6.875 Percent worth Euro Bonds which were highly over subscribed
Income distribution
- Gini Index: 41
- Household income or consumption by percentage share:
- lowest 10%: 4.1%
- highest 10%: 27.7% (1996)
- lowest 20% : 27.7% (2006)
See also
- Economic Pakistan
- Ministry of Commerce (Pakistan)
The Ministry of Commerce is headed by the Commerce Minister of Pakistan, who must be a member of Parliament of Pakistan.- State Life Insurance Corporation :State Life Insurance Corporation - See also :* Economy of Pakistan* Ministry of Finance...
- List of tariffs in Pakistan
- Ministry of Finance (Pakistan)
- Pakistan Board of Investment
Board of Investment is the investment promotion agency of Pakistan. The Board of Investment assists companies planning to invest in Pakistan or to expand their Pakistani operations. The Board of Investment is a member of the World Association of Investment Promotion Agencies .- History :The...
- Trading Corporation of Pakistan
The Trading Corporation of Pakistan , part of the Government of Pakistan's Ministry of commerce, is responsible for export and import of commodities in Pakistan. Trading Corporation of Pakistan issues tenders for export and import of agricultural products....
- Rice Export Association of Pakistan
The Rice Export Association of Pakistan , part of the Government of Pakistan's Ministry of commerce, is responsible for export and import of Rice in Pakistan. Rice Export Association of Pakistan issues tenders for export and import of Rice. .- See also :...
- Economy of the OIC
Further reading
- Ahmad, Viqar and Rashid Amjad. 1986. The Management of Pakistan’s Economy, 1947-82. Karachi: Oxford University Press.
- Ali, Imran. 1997. ‘Telecommunications Development in Pakistan’, in E.M. Noam (ed.), Telecommunications in Western Asia and the Middle East. New York: Oxford University Press.
- Ali, Imran. 2001a. ‘The Historical Lineages of Poverty and Exclusion in Pakistan’. Paper presented at Conference on Realm, Society and Nation in South Asia. National University of Singapore.
- Ali, Imran. 2001b. ‘Business and Power in Pakistan’, in A.M. Weiss and S.Z. Gilani (eds), Power and Civil Society in Pakistan. Karachi: Oxford University Press.
- Ali, Imran. 2002. ‘Past and Present: The Making of the State in Pakistan’, in Imran Ali, S. Mumtaz and J.L. Racine (eds), Pakistan: The Contours of State and Society. Karachi: Oxford University Press.
- Ali, Imran, A. Hussain. 2002. Pakistan National Human Development Report. Islamabad: UNDP.
- Ali, Imran, S. Mumtaz and J.L. Racine (eds). 2002. Pakistan: The Contours of State and Society. Karachi: Oxford University Press.
- Amjad, Rashid. 1982. Private Industrial Investment in Pakistan, 1960-70. London: Cambridge University Press.
- Andrus, J.R. and A.F. Mohammed. 1958. The Economy of Pakistan. Stanford: Stanford University Press.
- Barrier, N.G. 1966. The Punjab Alienation of Land Bill of 1900. Durham, NC: Duke University South Asia Series.
- Jahan, Rounaq. 1972. Pakistan: Failure in National Integration. New York: Columbia University Press.
- Kessinger, T.G. 1974. Vilyatpur, 1848-1968. Berkeley and Los Angeles: University of California Press.
- Kochanek, S.A. 1983. Interest Groups and Development: Business and Politics in Pakistan. New Delhi: Oxford University Press.
- LaPorte, Jr, Robert and M.B. Ahmad. 1989. Public Enterprises in Pakistan. Boulder, Colorado: Westview Press.
- Latif, S.M. 1892. Lahore. Lahore: New Imperial Press, reprinted 1981, Lahore: Sandhu Printers.
- Low, D.A. (ed.). 1991. The Political Inheritance of Pakistan. London: Macmillan.
- Noman, Omar. 1988. The Political Economy of Pakistan. London: KPI.
- Papanek, G.F. 1967. Pakistan’s Development: Social Goals and Private Incentives. Cambridge, Massachusetts: Harvard University Press.
- Raychaudhuri, Tapan and Irfan Habib (eds). 1982. The Cambridge Economic History of India, 2 vols. Cambridge: Cambridge University Press
- White, L.J. 1974. Industrial Concentration and Economic Power. Princeton, N.J.: Princeton University Press.
- Ziring, Lawrence. 1980. Pakistan: The Enigma of Political Development. Boulder, Colorado: Folkestone.
- Ali, Imran. 1987. ‘Malign Growth? Agricultural Colonization and the Roots of Backwardness in the Punjab’, Past and Present, 114
- Ali, Imran. August 2002. ‘The Historical Lineages of Poverty and Exclusion in Pakistan’, South Asia, XXV(2).
- Ali, Imran and S. Mumtaz. 2002. ‘Understanding Pakistan—The Impact of Global, Regional, National and Local Interactions’, in Imran Ali, S. Mumtaz and J.L. Racine (eds), Pakistan: the Contours of State and Society. Karachi: Oxford University Press.
- Hasan, Parvez. 1998. Pakistan’s Economy at the Crossroads: Past Policies and Present Imperatives. Karachi: Oxford University Press.
- Hussain, Ishrat. 1999. Pakistan: The Economy of an Elitist State. Karachi: Oxford University Press.
- Khan, Shahrukh Rafi. 1999. Fifty Years of Pakistan’s Economy: Traditional Topics and Contemporary Concerns. Karachi: Oxford University Press.
- Kibria, Ghulam. 1999. Shattered Dream: Understanding Pakistan’s Development. Karachi: Oxford University Press.
- Kukreja, Veena. 2003. Contemporary Pakistan: Political Processes, Conflicts and Crises. New Delhi: Sage Publications.
- Zaidi, S. Akbar. 1999. Issues in Pakistan’s Economy. Karachi: Oxford University Press
External links