ECONOMY OF PAKISTAN Lecture-2

Week 1: Introduction Week 2: Introduction to Economy of Pakistan Week 3: Pakistan Economy in Regional Perspective Week 4:History of Economic Planning in Pakistan Week 5 & 6: Agriculture Sector and its Role in Pakistanis Economy Week 7: Manufacturing/ Industrial Sector & Pakistans Economy Week 8: Transportation and Communication Sector of Pakistani Economy

Week 9 : Population Labour force and Unemployment & Presentations Week 10: Balance of Payments & Presentations Week 11& 12 :Resource Mobilizations (at domestic & National level) & Presentations Week 13 :Financial Sector in Pakistan & Presentations Week 14: Monetary Policies and its Effect on Pakistani Economy & Presentations Week 15 &16: Public Finance Concepts and Practices in Pakistan& Presentations

Consumer spending Exchange Rate Gross domestic product GDP per capita GNP Interest Rate National Debt Rate of Inflation Unemployment Balance of Trade

Black Economy - a hidden sector of the economy where private cash transactions go unreported. Informal Economy is economic activity that is neither taxed nor monitored by a government, contrasted with a formal economy. The informal economy is thus not included in that government's Gross National Product (GNP).

Economic Growth Concerned with increases in the economy's output

Quantitative. Increase in real GDP.

Narrower concept than economic development

Economic Development Concerned with Economic Growth + structural changes in the economy

Qualitative.HDI (Life expectancy, Educational attainment, Income level)

Developed Country "A developed country is one that allows all its citizens to enjoy a free and healthy life in a safe environment.

Developing Country A developing country, is a nation with a low living standard, undeveloped industrial base, and low Human Development Index (HDI) relative to other countries. OR A country where the people are underdeveloped and on the other hand the resources are under utilized

Developing Economy
Low-income country with promising growth But transition to middle-income nation held back

by chronic problems including

Rapidly rising population, Sizable government deficits, Heavy dependence on foreign aid, Large military expenditures, And recurrent governmental instability

Problems faced after Independence Lack of resources

(Lack of equipment, financial resources,

Lack of institutions
Lack of personnel

administrative staff) Ratio for division of assets India (17):Pakistan(5)

(out of 921 industrial units, 34 come to Pakistan) (out of 29 Banks, 2come to Pakistan)

101 out of 1157 civil servants were Muslims 95 out of 101 + 1 Christian officer select Pakistan

History Of Pakistan Economy

Country safety
Issues with Afghanistan and India Kashmir dispute/ Baacha Khan Govt. in North frontier

Demarcation of boundaries Refugee problem

Ferozpur , Jalendher Rehabilitation of 20 to24 million people

Province

Division of assets and military equipment Financial issues

16 Ordinance Factories (Financial settlement 60 mill) Share of Pakistan in deposits= 750 mill Given to Pakistan= 200+500 Not given=50 mill

Canal water dispute

Pakistan (Indus, Jehlum, Chanab ) India(Satluj, Bayaas, Ravi)

Constitution problem
1st in 1956 2nd in 1962 3rd in 1973

Economic Obstacles Economic Dualism Old methods of production Export of raw material Import of finished goods Mis-utilization/Underutilization/Unutilization of Natural resources. Out dated technology Inadequate infrastructure

Burden of debt Fiscal Deficit Depreciation of Pak rupee High Defense Expenditure Unequal distribution of wealth Vicious cycle of poverty Energy Issues Low foreign investment in Pakistan due to uncertain environment.

Non-Economic Obstacles Influence of Feudal Lords Population pressure Improper utilization of manpower Brain drain Low levels of literacy, and education National Integration Terrorism Red Tapism Corruption Problem of Attitude & Behaviour Rapid change of government

Negatives Pakistan economic environment is affected by intensification of war on terror . Internal political disputes Domestic economy effected by global financial crisis Slow Growth of GDP ( 3.7%) Fiscal Deficit (6.4 percent of GDP or Rs 1328 billion.) Rising unemployment (6% ) Inflation climbing from 7.7% in 2007 to more than 13% for 2011.(However 12.3% to 10% in September 2012)

Marginal increase in PCI 1.3%(from $ 1258 to $ 1372.) Slow growth in Pakistan's exports ( from 21 to 25 million) Growing imports (14.5% now at 33.1 billion) Heavy debt burden(Rs. 12,024 billion as of March 31, 2012.) Bad performance of Banking Sector ( Total Loans Rs. 3.5 T, NPLs Rs 582 billion)

The UN human development report estimated poverty in 2011 at almost 50% of the population. Pakistani rupee has depreciated more than 40% since 2007 Heavy losses due to flood.(around $ 10 billion.)

Some Achievements 7th National Finance Commission Award 18th Amendment in the Constitution Benazir Income Support Program (Rs 178 billion). Internship Program (100,000 internship) Doubling the FBR Tax Revenues (1 trillion in 2007-08 to around Rs 2 trillion in 2011-12.)

Investment in Education sector. Improvement in Agriculture Technique. Development of Industrial Sector. Improving the situation of Law and order. Change in Behaviors and Attitudes.