Economic Development of Pakistan

• Economic development process

• GDP
• Per Capita Income
• Factors encouraging economic development
• Key Indicators of Economic Development
• ways to measure economic activity?
• Goals of economic Policy
• Overwieve of Pakistan economic development
Economic development process
Economic Development is the creation of
wealth from which community benefits are
realized. It is more than a jobs program, it's an
investment in growing your economy and
enhancing the prosperity and quality of life for
all residents. Economic development means
different things to different people
 GDP Definition
Gross domestic product (GDP) is the monetary
value of all finished goods and services made
within a country during a specific period. GDP
provides an economic snapshot of a country,
used to estimate the size of an economy and
growth rate. GDP can be calculated in three
ways, using expenditures, production, or
incomes
 Per Capita Definition
Per capita income is a measure of the amount
of money earned per person in a nation or
geographic region. Per capita income can be
used to determine the average per-person
income for an area and to evaluate the
standard of living and quality of life of the
population
Factors encouraging economic Growth
• Natural Resources: Natural resources are the
number one factor that spurs economic
growth. ...
• Deregulation: People were meant to trade with
each other. ...
• Technology: Technology has always played a
pivotal role in economic growth. ...
• Human Resources: ...
• Infrastructure:
Key Indicators of Economic Development

• Key Indicator # 1. Per Capita Income:

• Key Indicator # 2. Poverty:
• Key Indicator # 3. Social and Health Indicators
• Key Indicator # 4. Operational Pattern
ways to measure economic activity
• Government borrowing/national debt.
• Real disposable incomes.
• Income inequality.
• Labour productivity.
• Investment levels.
• Exchange rate.
• Misery index (inflation rate + Unemployment rate)
• Poverty levels.
 Goals of economic policiy

• There are four major goals of economic

policy: 
• stable markets
• economic prosperity,
• business development and
• protecting employment
 Economic development of
Pakistan
•Pakistan's average economic growth rate in the first
five decades (1947–1997) has been higher than the
growth rate of the world economy during the same
period. 
•Average annual real GDP growth rates were 6.8% in
the 1960s, 4.8% in the 1970s, and 6.5% in the 1980s.
• Population below poverty line: : 35.7% on
less ...
• Country group: Developing/Emerging
• GDP growth: 5.8% (17/18) 3.1% (18/19);
• GDP per capita rank: 173rd
 Major Sectors
• Agriculture
• Mining
• Industry
 Agriculture
• Majority of the population, directly or indirectly,
dependent on this sector.
• It contributes about 19.2% percent of gross
domestic product (GDP) and accounts for 37.4%
of employed labor force in 2021 and is the largest
source of foreign exchange earnings. 
• The most important crops are wheat, sugarcane,
cotton, and rice, which together account for more
than 75% of the value of total crop output
• The economic importance of agriculture has
declined since independence, when its share
of GDP was around 53%
• From 1993 to 1997, real growth in the
agricultural sector averaged 5.7%
• During 2017–18, agriculture sector recorded a
remarkable growth of 4.00 percent and
surpassed its targeted growth of 3.5 percent.
 Minerals
• Pakistan is endowed with significant mineral resources and
is emerging as a very promising area for
prospecting/exploration for mineral deposits.
• Based on available information, the country's more than
6,00,000 km2 of outcrops area demonstrates varied
geological potential for mineral deposits.
• In the wake of 18th amendment to the constitution all the
provinces are free to exploit and explore the mineral
resources which are in their jurisdiction.
• Mining contributes 13.19% in industrial sector and its share
in GDP is 2.4%.
 Industry
• Pakistan's industrial sector accounts for approximately 19.12%
of GDP.
•  In 2021 it recorded a growth of 3.57% as compared to the
growth of negative 3.77% in 2020.
• Manufacturing is the largest of Pakistan's industrial sectors,
accounting for approximately 12.13% of GDP.
• Manufacturing sub-sector is further divided in three
components including large-scale manufacturing (LSM) with the
share of 79.6% percent in manufacturing sector, small scale
manufacturing share is 13.8 percent in manufacturing sector,
while slaughtering contributes 6.5 percent in the manufacturing
• Major sectors in industries
include cement, fertiliser, edible
oil, sugar, steel, tobacco, chemicals, machinery
, food processing and medical instruments,
primarily surgical. Pakistan is one of the
largest manufacturers and exporters of  Sports
and surgical instruments
• Government policies aim to diversify the
country's industrial base and bolster export
industries.
• Large Scale Manufacturing is the fastest-
growing sector in Pakistani economy. 
• Major Industries include textiles, fertiliser,
cement, oil refineries, dairy products, food
processing, beverages, construction
materials, clothing, paper products.
• Pakistan's largest corporations are mostly
involved in utilities like oil, gas, electricity,
automobile, cement, food, fertilizer, civil
aviation, and telecommunication.
• E.g Pakistan State Oil Co. Ltd., OGDC, SNG,
Lucky Ciment, Engro Fertilizer Ltd.
 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 until 1994–95.
• However, by 2013, Pakistan's cement is fast-growing
mainly because of demand from Afghanistan and
countries boosting real estate sector. 
 Fertilizer industry

• Fertilizer is an important and costly input

responsible for 30 to 50 percent increase in
the crop productivity.
• The overall objective is sustainability and
growth in agricultural sector that should
match the growing population for food
security and the promotion of economic
growth
 Defence industry

• The defence industry of Pakistan, under the

Ministry of Defence Production, was created in
September 1951
• It is currently actively participating in many joint
production projects.
• Pakistan is manufacturing and selling weapons to
over 40 countries, bringing in $20 million annually.
The country's arms imports increased by 119
percent between the 2004–2008 and 2009–13
 Textiles industry

• Textile is the most important manufacturing

sector of Pakistan and has the longest production
chain.
• This sector contributes nearly one-fourth of
industrial value-added and provides employment
to about 40 percent of industrial labor force.
Barring seasonal and cyclical fluctuations, textiles
products have maintained an average share of
about 60 percent in national exports.
 Automobile Industry

• The auto sector constitutes about 7 percent to LSM in

2021.
• In 2021, government has announced Pakistan's new
Auto Policy 2021–2026 focuses on local manufacturing.
• Among the automakers that are yet to start
production, Proton and  MG are the names that could
make a significant impact in the local passenger vehicle
market.
• Meanwhile, KIA, Hyundai, Changan, and Prince  have
already started productions in Pakistan
 Services Industry

• Pakistan's service sector accounts for about

61.7% of GDP.
• Transport (Air Lines, Railway, Road linkages)
• Communications (PTCL, Jazz, Xong etc..)
•  Finance, and insurance account for 24% of
this sector, and wholesale and retail trade
about 30%.
 Foreign Trade
• Pakistan witnessed the highest export of
US$25.4 billion in 2010–11. However, in
subsequent years exports have declined
considerably.
• During 2018 Pakistan's exports picked up and
reached to US$24.8 billion showing a growth
of 12.6 percent over previous year 2017
 Economic issues in Pakistan?
• The core economic issues with reference to
Pakistan's economy are
• Development policy and Planning gaps
• Unemployment,
• poverty,
• income distribution,
• Economic growth and
• sectoral imbalances
 Strengths of economic development in
context of Pakistan
• Large internal market supported by dynamic
demographics
• Large remittances from migrant workers
• Large and inexpensive labour force
• Development of economic corridors with China
and Central Asia, door to the Indian Ocean
• A major player in Islamic finance
• Mineral potential
 Weaknesses of economic development in context of Pakistan

• Tense neighbourhood, political fragility and domestic insecurity

• Informality (40% of GDP and 60% of employment) and low tax revenues
(14.5% of GDP)
• Inadequate education (40% illiterate, three parallel systems producing
three hardly connected groups), health, infrastructure and agriculture
• Delayed development of Balochistan, favouring separatism, and rural
areas, conducive to the development of radical Islamism
• Energy dependency (oil = 25% of imports), deficient electricity
production
• Weak manufacturing (20% of GDP) and export base, weak sectoral
diversification
• 20% of GDP and 40% of the workforce depend on the agricultural sector,
which is sensitive to climatic hazards and global prices