The document discusses the key problems facing developing countries like Pakistan, including high levels of poverty (39% of Pakistanis live below the poverty line), a large burden of internal and external debt, low per capita incomes, overdependence on agriculture, a backward industrial sector, high unemployment, low productivity, a lack of capital, inappropriate use of natural resources, limited foreign trade, and inflation. Some specific statistics provided about Pakistan include a per capita income of Rs. 1513, agriculture contributing 21% to GDP, industrial sector contributing 25.4% to GDP, an unemployment rate of 6%, and inflation averaging 7.74% from 2010 to 2017.

2.  1- General Poverty and Low Living Standard:
Poverty cannot be described, it can only be felt.
The most of the less developed countries (LDC) are
facing the major problem of general as well as
absolute poverty and low standard of living. Most
of the people in developing nations are ill-fed, ill-
housed, ill-clothed and ill-literate. In LDCs almost
1/3 population is much poor. But in Pakistan, 39 %
population is living below poverty.

3.  In monetary terms, poverty line stands at
Rs3,030 per adult equivalent per month,

4.  National poverty rates falling from 55% to
39% from 2004 to 2015.
 Progress across different regions of Pakistan
is uneven.
 Poverty in urban areas is 9.3 percent as
compared to 54.6 percent in rural areas.

5. GDP Growth: Pakistan
% per year
2012 3.8%
2013 3.7%
2014 4.1%
2015 4%
2016 4.7%

6.  2- Burden of Internal and External Debts:
Under developed countries (UDC) are loans and
grants receiving nations. Most of the
developing countries of the world are
depending on foreign economic loans. An
amount of foreign loans is increasing as the
years pass. Their foreign trade and political
structure is also dependent on the guidance of
foreigners. The outstanding total of services
charges of all types of debts are Rs. 730.733
billion during 2011-12, in Pakistan.

7.  3- Low Per Capita Income:
Due to low national income and huge
population growth rate, per capita income in
developing countries is very low. At constant
prices (Base Year 1959-60) per capita income
of Pakistan was Rs. 985 and according to the
Economic Survey of Pakistan 2015-16 per
capita income of Pakistan is Rs 1513.

8.  4- Over Dependence on Agriculture:
61% Population of Pakistan is living in more than
50,000 villages. Backward agriculture is the
major occupation of the population. Agriculture
sector is backward due to old and traditional
methods of cultivation, in-efficient farmers, lack
of credit facilities; un-organized agriculture
market etc. 66.7% population is directly or
indirectly depending on agriculture sector in
Pakistan. It contributes to GDP 21.0% while in
advanced nations it is less than 5 %. It employed
45.0 % of labour force while it is less than 5 % in
developed countries.

9.  5- Backward Industrial Sector:
Backward industrial sector is an additional
feature of under developed countries. Industrial
sector of Pakistani economy is backward since
independence. Pakistan got only 34 (3.7 % of
total industrial units) industrial units out of 921
units in sub-continent in 1947. Small and
backward industrial sector is based on low level
of capital formation, technology, training and
education and over dependence on agriculture
sector. 13.7% labor force is attached with
industrial sector in Pakistan. Its share to GDP is
25.4 % and to exports is more than 60 %.

10.  6- Unemployment :
An outstanding problem of developing countries
is their high rate of un-employment, under-
employment and disguised-unemployment. More
than 3.5 million people are unemployed in
Pakistan. There is 16 % underemployed and 20%
disguised unemployed of total labor force.
Unemployment rate is 6.0%; it is mainly due to
high population growth rate, which is 2.03%.

11.  7- Low level of Productivity:
 The productivity level is very low in under
developed countries as compared to
developed countries. Low level of productivity
is due to economic backwardness of people,
lack of skill, illiteracy and ill-training. Value
of annual productivity of labor is about $ 100
while it is more than $ 2500 in advanced
nations. In Pakistan, Minimum wages are
Rs.12000/- per month.

12.  8- Deficiency of Capital:
 Shortage of capital is another serious
problem of poor nations. Lack of capital leads
to low per capita income, less saving and
short investment. National saving is 10.7% of
GDP and total investment is 12.5% of GDP in
Pakistan. Rate of capital accumulation is very
low as 5%. On the other hand, capital output
ratio (COR) is very high which is not desirable
for economic development.

13.  9- In-appropriate Use of Natural Resources:
 Mostly there is shortage of natural resources in
developing nations and this is also a cause of
their economic backwardness. Natural resources
are available in various poor countries but they
remain un-utilized, under-utilized or mis-
utilized due to capital shortage, less efficiency of
labour, lack of skill and knowledge, backward
state of technology, improper government
actions and limited home market. Natural
resources contribute to the GDP about 1%.

14.  10- Limited Foreign Trade :
 Due to backwardness, developing countries
have to export raw material because the
quality of their products is not according to
international standard ISO etc. Lower
developing nations have to import finished
and capital goods. Imports of Pakistan are $
33 billion and exports are $ 20 billion that
cause into unfavourable balance of payment
of $ 13 billion.

15.  11- Inflation:
 High rate of inflation causes economic
backwardness in poor nations. Due to high
level of price, purchasing power, value of
money and saving of the consumers tend to
decrease. Rate of inflation averaged 7.74%
between 2010 until 2017 in Pakistan.