A successful economic development strategy must focus on improving the skills of the area’s workforce, reducing the cost of doing business and making available the resources business needs to compete and thrive in today’s global economy- Rod Blagojevich
The Economy of Pakistan is 47th largest in the world (in nominal terms) and 27th largest in the world (in absolute dollar terms). Pakistan has a semi-industrialized economy, which mainly encompasses textiles, chemicals, food processing, agriculture and other industries. Growth poles of Pakistan’s economy are situated along the Indus River; diversified economies of Karachi and Punjab‘s urban centers coexist with lesser developed areas in other parts of the country.
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 in the year 2000 by the Musharraf government. In 2005, the World Bank named Pakistan the top reformer in its region and in the top 10 reformers globally.
In 2005, the World Bank 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.”
The World Bank (WB) and International Finance Corporation’s flagship report Ease of Doing Business Index 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.
Economy of Pakistan
|Currency||1 Pakistani Rupee(PKR)Rs. = 100 Paisas|
|Fiscal year||July 1–June 30|
|Trade organisations||ECO, SAFTA, ASEAN, WIPO and WTO|
|GDP||$174.8 billion (nominal)(2010) $464 billion (GDP-PPP) (2009)|
|GDP growth||4.2% (2009)|
|GDP per capita||$2400 (2010)|
|GDP by sector||agriculture: 19.6%, industry: 26.8%, services: 53.7% (2007)|
|Inflation (CPI)||14.17% (2009-2010)|
below poverty line
|Labour force||55.88 million (2009 est.)|
|Unemployment||11.2% (2009 est.)|
|Main industries||textiles, chemicals, food processing, steel, transport equipment, automobiles, telecommunications, machinery, beverages, construction, materials, clothing, paper products|
|Ease of Doing Business Rank||83rd|
|Exports||$19.55 billion (2010 est.)(67th|
|Export goods||textile goods (garments, bed linen, cotton cloths, and yarn), rice, leather goods, sports goods, chemicals manufactures, carpets and rugs|
|Main export partners||United States 22.4%, UAE 8.3%, UK 6%, China 15.4%, Germany 4.7% (2006 est.)|
|Imports||$28.31 billion f.o.b. (2009 est.)|
|Import goods||Petroleum, Petroleum products, Machinery, Plastics, Transportation equipment, Edible oils, Paper and paperboard, Iron and steel, Tea|
|Main import partners||China 14.7%, Saudi Arabia 10.1%, UAE 8.7%, Japan 6.5%, United States 5.3%, Germany 5%, Kuwait 4.9% (2006 est.)|
|Public debt||$58 billion (2010)|
|Revenues||$23.21 billion (2009 est.)|
|Expenses||$30.05 billion (2009 est.)|
|Credit rating||Standard & Poor’s:
B- (T&C Assessment)
The Government of Pakistan has granted numerous incentives to technology companies wishing to do business in Pakistan. A combination of decade-plus tax holidays, zero duties on computer imports, government incentives for venture capital and a variety of programs for subsidizing technical education, are intended there.
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.
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.
Measured by purchasing power, Pakistan has a 35 million strong middle class, according to Dr. Ishrat Husain, Ex-Governor (2 December 1999 – 1 December 2005) of the State Bank of Pakistan. 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.
Pakistan is one of the world’s largest producers of the following commodities according to FAOSTAT, the statistical arm of the Food and Agriculture Organization of The United Nations, given here with the 2008 ranking:
- Apricot (3rd)
- Buffalo Milk (2nd)
- Chickpea (3rd)
- Cotton, lint (4th)
- Cotton, Seed (3rd)
- Dates (5th)
- Mango (6th)
- Onion, dry (4th)
- Oranges (11th)
- Rice,paddy (11th)
- Sugarcane (5th)
- Tangerines, mandarin orange, clementine (9th)
- Wheat (10th)
In Pakistan SMEs have a significant contribution in the total GDP of Pakistan, according to SMEDA and Economic survey reports, the share in the annual GDP is 40% likewise SMEs generating significant employment opportunities for skilled workers and entrepreneurs. Small and medium scale firms represent nearly 90% of all the enterprises in Pakistan and employ 80% of the non-agricultural labour force. These figures indicate the potential and further growth in this sector.
Pakistan’s service sector accounts for about 53.3% of GDP. Transport, storage, communications, finance, and insurance account for 24% of this sector, and wholesale and retail trade about 30%. Pakistan is trying to promote the information industry and other modern service industries through incentives such as long-term tax holidays.
After the deregulation of the telecommunication industry, the sector has seen an exponential growth. Pakistan Telecommunication Company Ltd 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 Association in 2006.
The contribution of the telecom sector to the national exchequer increased to Rs 110 billion in the year-end 2007-08 on account of the general sales tax, activation charges and other steps as compared to Rs 100 billion in the year-end 2006-07.
The World Bank estimates that it takes about 3 days to get a phone connection in Pakistan.
In Pakistan, the following are the top mobile phone operators:
- Mobilink (Parent: Orascom Telecom Holding, Egypt)
- Ufone (Parent: PTCL (Etisalat), Pakistan/UAE)
- Telenor (Parent: Telenor, Norway)
- Warid (Parent: Abu Dhabi Group / SingTel, UAE/Singapore)
- Zong (Parent: China Mobile, China)
By March 2009, Pakistan had 91 million mobile subscribers – 25 million more subscribers than reported in the same period in 2008. In addition to the 3.1 million fixed lines, while as many as 2.4 million are using Wireless Local Loop connections.
- Pakistan’s economy grew by 100% — to become $ 160 billion
Revenue grew by 100% — to become $ 11.4 billion
- Per Capita Income grew by 100% — to become $ 925
- Foreign Reserves grew by 500% — to become $ 17 billion
Exports grew by 100% — to become $ 18.5 billion
Textile exports grew by 100% — to become $ 11.2 billion
Karachi Stock Exchange grew by 500% — to become $ 75 billion
Foreign Direct Investment grew by 500% — to become $ 8 billion
Annual Debt servicing decreased by 35% — to become 26%
Poverty decreased by 10% — to become 24%
literacy rate grew by 10% — to become 54%
Public development Funds grew by 100% — to become Rs 520 billion
Part of protecting our homeland means being less dependent on foreign countries for our energy – Rod Blagojevich
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