1. Pakistan has experienced significant economic growth and development over the past decades, with per capita incomes increasing over six-fold and the country becoming self-sufficient in food production and a leading cotton and textiles exporter.
2. However, social development has lagged behind with adult literacy around 50% rather than 100%, contributing to per capita income being around $640 rather than $1200. Neglect of education, population growth, and periods of policy instability have held Pakistan back from its full economic potential.
3. In recent years, Pakistan has achieved macroeconomic stability through reforms like fiscal discipline, trade liberalization, privatization, and improved governance. However, challenges of poverty and unemployment remain that will require continued strong
Political Economy of a Post-Colonial State; Economic Development of PakistanShahid Hussain Raja
Despite all the ups and downs, Pakistan is now the 26th largest economy in the world in terms of Purchasing Power Parity, (44th largest in terms of nominal GDP). With per capita income of US$ 4550, Pakistan occupies at 140th place on this count in the world, thanks to her burgeoning population of 200 million people. Pakistan is one of the Next Eleven, the eleven countries that, along with the BRICs, have a potential to become one of the world's large economies in the 21st century. By 2050, with an estimated GDP of $3.33 trillion, Pakistan is expected to become world’s 18th largest economy, according to Goldman Sachs. However, this progress is not as impressive as it looks or should have been keeping her potential. Similarly her dismal social indicators, structural anomalies and income disparities leave much to be desired.
This presentation sums up the development experience—what Pakistan did marvellously, what it did marginally and where it failed miserably during her development journey. It ends with an the lessons other developing countries can learn from this development experience of Pakistan.
Political Economy of a Post-Colonial State; Economic Development of PakistanShahid Hussain Raja
Despite all the ups and downs, Pakistan is now the 26th largest economy in the world in terms of Purchasing Power Parity, (44th largest in terms of nominal GDP). With per capita income of US$ 4550, Pakistan occupies at 140th place on this count in the world, thanks to her burgeoning population of 200 million people. Pakistan is one of the Next Eleven, the eleven countries that, along with the BRICs, have a potential to become one of the world's large economies in the 21st century. By 2050, with an estimated GDP of $3.33 trillion, Pakistan is expected to become world’s 18th largest economy, according to Goldman Sachs. However, this progress is not as impressive as it looks or should have been keeping her potential. Similarly her dismal social indicators, structural anomalies and income disparities leave much to be desired.
This presentation sums up the development experience—what Pakistan did marvellously, what it did marginally and where it failed miserably during her development journey. It ends with an the lessons other developing countries can learn from this development experience of Pakistan.
Economic challenges face by Pakistan"s economy and their solutions (1)Muhammad Zubair
After reading this chapter you will able to understand what are the economy issues face by Pakistan and what are the solutions to solve those economic issues.
Part 6 of the series on the politica economy of Pakistan which examines the global and domestic environment at the time of General Zia's take over,the economic policies pursued by his team during the 1977-88 decade and how these policies affected the process of economic development of Pakistan
In this report the topics are:
Introduction, An Overview
Challenges to Economy of Pakistan are War on terror, We consume more and save less, Poor academic set-up, Energy crisis, Inadequate exports, Inflation, Lack of tourism, Government spends more than it earns as revenues, Our share in the world trade is shrinking, Corruption, Kashmir issue, We badly lag in social indicators, Trade, Investment failing, Political stability, law and order, Poor use of natural resources, Poverty, We face energy and water shortages, Poor governance, Uncertainty and unpredictability due to lack of continuity
And Recommendations and solutions are:
To Improve Economy, Technology, Taxation, Governance, devolution and decentralization, Energy crisis, Private sector, Government should utilize the resources well, Stakeholders in the Pakistani, Possible solutions of Energy Crisis in Pakistan, Impacts of law and order situation on economy, Natural resources, Lack of tourism, Illiteracy, Change in national psyche and mind set, Inflation, Low export and high Import, Technology, Energy solutions and climate change, Conclusion, Bibliography.
Pakistan faces many challenges at the beginning of the second decade of the 21stcentury:
• Decades-long struggle with macroeconomic stabilisation arising from unsustainable fiscal policies
• Pressure of demography
• Legacy of economic distortions
• Battering from external events, including earthquakes, floods and a continuing
longstanding low intensity conflict
• A large and loss-making public sector that impedes market development
• Low and declining productivity
• Heightened expectations of the population for a better life from a democratic
government.
Our growth experience of the last four decades has been volatile annual growth and
declining trend in long run growth patterns. In addition, productivity growth (a
measure of efficiency) has been low in comparison to our comparators. For the last
four years per-capita incomes have not increased in real terms while double-digit
inflation has prevailed.
Re-Engineering the fiscal Budget of PakistanWaqas Siddiqui
The National Budgeting process of Pakistan fails to entertain and cater the national aspiration of the fiscal demands and people, hence severely disappoint year by year the people and the institutions of country every time. To fill this , this paper considers a number of Problem areas in Budgeting Policies, Processes, and Priorities along with concise yet clear indicative studies.
Economic challenges face by Pakistan"s economy and their solutions (1)Muhammad Zubair
After reading this chapter you will able to understand what are the economy issues face by Pakistan and what are the solutions to solve those economic issues.
Part 6 of the series on the politica economy of Pakistan which examines the global and domestic environment at the time of General Zia's take over,the economic policies pursued by his team during the 1977-88 decade and how these policies affected the process of economic development of Pakistan
In this report the topics are:
Introduction, An Overview
Challenges to Economy of Pakistan are War on terror, We consume more and save less, Poor academic set-up, Energy crisis, Inadequate exports, Inflation, Lack of tourism, Government spends more than it earns as revenues, Our share in the world trade is shrinking, Corruption, Kashmir issue, We badly lag in social indicators, Trade, Investment failing, Political stability, law and order, Poor use of natural resources, Poverty, We face energy and water shortages, Poor governance, Uncertainty and unpredictability due to lack of continuity
And Recommendations and solutions are:
To Improve Economy, Technology, Taxation, Governance, devolution and decentralization, Energy crisis, Private sector, Government should utilize the resources well, Stakeholders in the Pakistani, Possible solutions of Energy Crisis in Pakistan, Impacts of law and order situation on economy, Natural resources, Lack of tourism, Illiteracy, Change in national psyche and mind set, Inflation, Low export and high Import, Technology, Energy solutions and climate change, Conclusion, Bibliography.
Pakistan faces many challenges at the beginning of the second decade of the 21stcentury:
• Decades-long struggle with macroeconomic stabilisation arising from unsustainable fiscal policies
• Pressure of demography
• Legacy of economic distortions
• Battering from external events, including earthquakes, floods and a continuing
longstanding low intensity conflict
• A large and loss-making public sector that impedes market development
• Low and declining productivity
• Heightened expectations of the population for a better life from a democratic
government.
Our growth experience of the last four decades has been volatile annual growth and
declining trend in long run growth patterns. In addition, productivity growth (a
measure of efficiency) has been low in comparison to our comparators. For the last
four years per-capita incomes have not increased in real terms while double-digit
inflation has prevailed.
Re-Engineering the fiscal Budget of PakistanWaqas Siddiqui
The National Budgeting process of Pakistan fails to entertain and cater the national aspiration of the fiscal demands and people, hence severely disappoint year by year the people and the institutions of country every time. To fill this , this paper considers a number of Problem areas in Budgeting Policies, Processes, and Priorities along with concise yet clear indicative studies.
Dr. Alejandro Diaz-Bautista, Korea Mexico Economy Presentation, University of...Economist
“Competitiveness and Economic Growth. An Analysis of Mexico and Korea.” Crecimiento Económico y Competitividad. Un Análisis de México y Corea.
Dr. Alejandro Díaz-Bautista
Professor of Economics and Researcher at
El Colegio de la Frontera Norte (COLEF)
Profesor Investigador del Colef. Miembro del SNI Conacyt.
adiazbau@hotmail.com
Prepared for the Conference at the Faculty of Economics, University of Colima, April 29-30, 2010. Colima, Colima, Mexico.
Preparado para la Conferencia en la Facultad de Economía de la Universidad de Colima, para los estudios en Cuenca del Pacífico en la Universidad de Colima, los días 29 y 30 de abril de 2010.
Presentation on Globalization and it's impact on Pakistan
course: Pakistan Economic Policy
Instructor: Mr,Zia Abbas
by: Shumaila Zaheer Siddiqui and Nauman Ahmed
Institute of business management (Iobm),Karachi
International business1. What is the current status of Pakistan in.pdflohithkart
International business
1. What is the current status of Pakistan in the world market place? support your answer with
research. please give citiation.
2. What is the ease of doing business in Pakistan? support your answer with research. please give
citiation.
3. Are other countries wanting to invest in Pakistan? support your answer with research. please
give citiation.
4. What do you see as the future of your country in the world market place? support your answer
with research. please give citiation.
Solution
Answer 1). According to World Bank report Pakistan ranks fourth in terms of value (4.2 billion
dollars) with the same global market share as Sri Lanka, although apparel’s share of total country
exports is lower at 19 percent. Foreign direct investment (FDI) has not played an important role;
in the apparel sector, the share of foreign-owned firms is estimated to be less than 2 percent, and
only slightly higher in the textile sector. Wages and working conditions are better in the formal
industry than in the large cottage sector, but short term or temporary contracts are widely used,
particularly for women. The September 2012 factory fire in Karachi recently highlighted poor
safety standards in the country. Pakistan can benefit from the following policies: increase
product diversity by reducing barriers on imports so as to ease access to manmade fibers (such as
duty and tax remission for exports, and export processing zones); attract foreign direct
investment (FDI) by adopting policies to reduce red tape and increase transparency to close the
gap with South Asian countries whose textile and apparel industries are located primarily on the
coast; diversify markets by taking advantage of access to emerging markets; shorten lead times
by improving road infrastructure to facilitate access to ports for exporting firms; shorten lead
times by clustering strategies to provide key infrastructure and common facilities; enhance
perceptions of stability as many buyers will not travel to Pakistan, which makes sourcing
complicated.
Answer 2) Pakistan has slipped three places on the Word Bank’s Ease of Doing Business Index
and is now ranked a lowly 147th among 190 economies, denting the government’s pro-business
image ahead of next general elections.
The index is mostly used as a guide by foreign investors to learn more about a country, aiding
decisions on pouring in money in the economy.
Pakistan, however, slipped from its last year’s rating despite the introduction of some reforms in
areas of starting a business and making international trade relatively easier. If one government
department is to be blamed for the overall poor performance, it is the Ministry of Finance, as the
country’s ranking nosedived on the indicators of paying taxes and getting credit.
The World Bank released the Doing Business 2018 report on Tuesday that covers 190 economies
and measures how close each economy is to global best practices in business regulations.
In South Asia, Bhutan.
Brazil will not overcomes the current crisis without abandonment of neolibera...Fernando Alcoforado
It was the neoliberal prescription implemented in 1990 that led the Brazilian economy to bankruptcy during the Dilma Rousseff government. The practice has demonstrated the infeasibility of the neoliberal economic model in Brazil inaugurated by President Fernando Collor in 1990 and maintained by presidents Itamar Franco, Fernando Henrique Cardoso, Lula and Dilma Roussef. The very low economic growth in Brazil, the sharp de-industrialization of the country, the disproportionate rise in federal debt, widespread business failure, the back of double-digit inflation and mass unemployment during the Dilma Roussef government demonstrate the impracticability of the neoliberal model deployed in the country. Given the accursed economic heritage of PT (Workers`Party) governments, particularly Dilma Rousseff the government, the economic team of the Michel Temer government intends to adopt immediately, measures aimed at the search for the balance of public accounts to deal with the insolvency of the Union and then continue the failed neoliberal economic model. This is an irrationality try to resurrect the failed neoliberal economic model when it should restructure the Brazilian economy inspiring in the developmental experience of the successful Asian countries like Japan, South Korea, Taiwan and China.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
1. 1
ECONOMY OF PAKISTAN: AN OVERVIEW
Ishrat Husain
Pakistan was one of the few developing countries that had achieved an
average growth rate of over 5 percent over a four decade period ending 1988-89.
Consequently, the incidence of poverty had declined from 40 percent to 18
percent by the end of the 1980s. Table I lays down the main economic and
social indicators in 1947 and compare them with 2004. The overall picture that
emerges from a dispassionate examination of these indicators is that of a country
having made significant economic achievements but a disappointing record of
social development. The salient features of Pakistan’s economic history are:
• Pakistan is self sufficient in most food production.
• Per capita incomes have expanded more than six-fold in US Dollar terms.
• Pakistan has emerged as one of the leading and successful producers of
cotton and cotton textiles.
• Pakistan has developed a highly diversified base of manufactured
products for domestic and world markets.
• Physical infrastructure network has expanded with a vast network of gas,
power, roads and highways, ports and telecommunication facilities.
These achievements in income, consumption, agriculture and industrial
production are extremely impressive and have lifted millions of people out of
poverty levels. But these do pale into insignificance when looked against the
missed opportunities. The largest setback to the country has been the neglect of
human development. Had adult literacy rate been close to 100 instead of close
to 50 today, it is my estimate that the per capita income would have reached at
least US$1200 instead of US$640.
Keynote address at the Expo 2005 Conference held at Karachi on February 3, 2005
2. 2
Pakistan’s manufactured exports in the 1960s were higher than those of
Malaysia, Thailand, Philippines and Indonesia. Had investment in educating the
population and upgrading the training, skills and health of the labour force been
up to the level of East Asian Countries and a policy of openness to world market
would have been maintained without any break, Pakistan’s exports would have
been at least US$100 billion instead of paltry US$13-14 billion. Had the
population growth rate been reduced from 3 percent to 2 percent, the problems
of congestion and shortages in the level of infrastructure and social services
would have been avoided, the poor would have obtained better access to
education and health and the incidence of poverty would have been much lower
than what it is today.
But as if this neglect of human development was not enough, the country
slacked in the 1990s and began to slip in growth, exports, revenues, and
development spending and got entrapped into external and domestic
indebtedness. This was due to both fundamental structural and institutional
problems as well as to poor governance and frequent changes in political
regimes. With short life spans, succeeding governments were hesitant, if not
outright unwilling to take tough and unpopular economic decisions to set the
economy right. Moreover, the average lifespan of two to three years was clearly
inadequate for implementing meaningful policy or institutional changes. The
external environment had also become unfavorable after the event of May 1998,
when Pakistan conducted its first nuclear test. The aftermath of this test led to
further economic isolation of Pakistan and a considerable erosion of confidence
by domestic and non-resident Pakistanis. Economic sanctions were imposed
against Pakistan by the western governments. By the late 1990s Pakistan had
entered almost a critical state of paralysis and stagnation in its economy
particularly in its external sector. There was a significant drop in workers’
remittances, export growth was negative, IMF programme and World Bank
assistance were suspended, bilateral donors had terminated their aid while debt
payments due were in far excess of the liquid foreign exchange resources the
3. 3
country possessed. Pakistan was almost at the brink of default on its external
payments. Economic growth was anemic, debt ratios were alarmingly high, and
the incidence of poverty had once again risen to 32 percent.
It was at this stage that the military government under General Pervez
Musharraf assumed power in October 1999. The initial period was devoted by
the economic team of the new government in managing the crisis and making
sure that the country avoided default. A comprehensive programme of reform
was designed and implemented with vigour and pursued in earnest, so as to put
the economy on the path of recovery and revival. The military government did not
face the same constraints and compulsions as the politically elected
governments. It was therefore better suited to take unpopular decisions such as
imposing general sales tax, raising prices of petroleum, utilities and removing
subsidies so badly needed to bring about fiscal discipline and reduce the debt
burden. The IMF and the World Bank were invited to enter into negotiations on
new stand-by and structural adjustment programmes.
Although the canvas of reform in Pakistan was vast and corrective action
required on a number of fronts, there was a conscious effort to focus on
achieving macroeconomic stability, on certain key priority structural reforms and
improving economic governance. The structural reforms included privatization,
financial sector restructuring, trade liberalization, picking up pace towards
deregulation of the economy and generally moving towards a market-led
economic regime. A stand-by IMF programme was put in place in November
2000, which was successfully implemented followed by a three-year Poverty
Reduction and Growth Facility (PRGF), which was successfully completed in
December 2004. It is a matter of pride that Pakistan decided not to draw down
the last two tranches although it was eligible to do so. The IMF has also decided
that Pakistan will not be subject to the usual post-program monitoring due to its
good economic standing.
4. 4
Pakistan’s economic turnaround during the last five years is even more
impressive because the country was faced with a critical and fragile regional and
domestic environment with constant threats to security (a result of playing key
role as a frontline state in the war against terrorism) a prolonged and severe
drought, tensions with India and high oil prices.
Macroeconomic Stability:
Macroeconomic stability has been achieved through reduction in fiscal
deficit, acquiring a surplus on the current account balance of payments, lowering
of inflation, and a transformation of external debt profile. These have been
brought about partially through the support of international financial institutions
and the Paris Club bilateral creditors which significantly eased the external
payments position that had been a major and consistent risk to the economy
since 1998.
Fiscal deficit was reduced by pursuing a combination of four set of policy
measures (i) mobilizing additional tax revenues (ii) reducing subsidies to public
enterprises and corporations and (iii) bringing about a significant decline in debt
servicing payments and (iv) containing defence expenditures.
Monetary policy was kept reasonably tight during the first two years with
money supply growth at about 9 percent. Expansion in private sector credit, in
the subsequent years, did not put much pressure as the government borrowing
was limited to a manageable level. As the monetary conditions improved the
interest rate came down gradually to a single digit and demand for credit by the
private businesses picked up resulting in higher capacity utilization in
manufacturing and increased industrial production.
External debt management focused on (a) reprofiling of the stock of official
bilateral debt, (b) substituting concessional loans for non-concessional from
international financial institutions, (c) pre-paying expensive loans and (d)
5. 5
liquidating short term liabilities. Debt ratio was thus reduced from 100 percent of
GDP to 60 percent in five years time.
Trade policy in Pakistan has been categorized by the World Bank as one
of the least restrictive in S. Asia along with Sri Lanka and this policy has
gradually provided incentives to exporters to increase their market share in the
global markets. Exchange rate policy was pursued to maintain stability in the
foreign exchange markets while at the same time keeping the competitiveness of
Pakistani exports intact. Large accumulation of foreign reserves played an
important role in stabilizing the exchange rate.
Current account has turned around from chronic deficit to a surplus,
mainly due to renewed export growth and resurgence of workers’ remittances.
Inflation rate during the last four years remained below 4 percent. External debt
burden has been reduced in absolute terms from US$38 to US$35 billion and as
a proportion of GDP from 62.5% to 46%. The risk of default on external debt,
which loomed large on the horizon in 1999 and 2000, was mitigated and the
country's capacity to service its restructured debt has considerably improved.
Table II shows the changes in the key economic indicators between October
1999 and October 2004.
Structural Reforms - Privatization, Deregulation, Liberalization:
The Musharraf Government actively pursued an aggressive and
transparent privatization plan whose thrust was sale of assets in the oil and gas
industry as well as in the banking, telecommunications and energy sectors, to
strategic investors, with foreign investors encouraged to participate in the
privatization process. This plan was followed by the elected Government under
Prime Minister Jamali and by the present Prime Minister Shaukat Aziz.
To demonstrate the seriousness of the government in encouraging foreign
investment flows in Pakistan; there has been a major and perceptible
6. 6
liberalization of the foreign exchange regime. Foreign investors can now bring in
and take back their capital, remit profits, dividends and fees etc., without any
restrictions. Foreign Portfolio Investors (FPI) can also enter and exit the market
without any restrictions or prior approvals. In the Karachi Stock Exchange with a
market capitalization of US$33 billion, over 650 listed companies showed
average returns of 15 per cent that were higher than those in most emerging
countries. This makes Pakistan an attractive place to invest for foreign portfolio
investors. As part of this liberalization, non-residents and residents are allowed to
maintain and operate foreign currency deposit accounts, and a market-based
exchange rate in the inter-bank market is at work.
The financial sector too, has been restructured and opened up to
competition. Foreign and domestic private banks currently operating in Pakistan
have been able to increase their market share to more than 80 percent of assets
and deposits. The interest rate structure has been deregulated and monetary
policy uses indirect tools such as open market operations, discount rates etc.
Domestic interest rates on lending have dropped to as low as 5 percent from 20
percent substantially reducing financial costs of businesses.
Central to the economic reforms process has been a clear progression
towards deregulation of the economy. Prices of petroleum products, gas,
energy, agricultural commodities and other key inputs are determined by market.
Imports and domestic marketing of petroleum products have been deregulated
and opened up to the private sector. The markets do not always function
effectively. Independent regulatory agencies have been set up to protect the
interests of consumers and end-users of utilities and public services.
Tax Reforms:
Taxation reform has figured prominently on the government's agenda, as
this is another area where the business community has innumerable grievances
and dissatisfaction with the arbitrary nature of tax administration. Tax reforms are
7. 7
aimed at broadening the tax base, bringing in tax evaders under the tax net,
minimizing personal interaction between tax payer and tax collector, eliminating
the multiplicity of taxes and ultimately reducing the tax rate over time. A massive
survey and documentation drive was undertaken to widen the tax base, extend
incidence to all sectors of the economy and develop the data for purposes of
assessment. Universal self assessment system has been introduced for tax
collection whereby the returns submitted by the tax payers are taken as final
settlement of their tax liabilities. Only a random sample of returns is picked up
for audit. This system has been welcomed by the tax payers. The Central Board
of Revenue (CBR) is being restructured to improve tax administration including
taxpayer facilitation.
Tariff Reforms
Pakistan made significant efforts in liberalizing its trade regime during the
1990s. The maximum tariff rate has declined from 225 percent in 1990-1 to 25
percent; the average tariff rate stands at just 11 percent compared to 65 percent
a decade ago. The number of duty slabs has also been reduced to four.
Quantitative import restrictions have already been eliminated except those
relating to security, health, public morals, religious and cultural concerns. The
number of statutory orders that exempted certain industries from import duties
has been phased out by June 2004 and import duties on 4,000 items were
reduced. These measures have brought down effective rate of protection,
eliminated the anti-export bias and promoted competitive and efficient industries.
A number of laws have also been promulgated to bring the trade regime in
conformity with World Trade Organization regulations. These include anti-
dumping and countervailing measures intellectual property rights.
Financial Sector Reforms
Financial sector has made the farthest progress by transforming itself into
a market oriented, private sector dominated sector performing efficient
intermediation. The regulatory and supervision functions of the State Bank of
8. 8
Pakistan have been significantly strengthened, and strict enforcement of
prudential regulations have led to widespread recapitalization and a consequent
improvement in the efficiency and profitability of banking system. More than 80
percent of banking assets are now owned and managed by the private sector.
The ratio of net Non-Performing Loans (NPLs) to total advances in
Pakistan has been brought down to less than 5 percent through a variety of
strategic measures. An asset management company, the Corporate and
Industrial Restructuring Corporation (CIRC), has taken over a large volume of
non-performing loans of NCBs and DFIs at a discount and disposed them off to
third party buyers.
Development Financial Institutions (DFIs) have been restructured through
mergers and acquisitions, closure, liquidation and reorganization. Auction of
Pakistan Investment Bond (PIB) for tenures of five to ten years government
paper and a burgeoning corporate bond market has begun to emerge bringing
together long term institutional investors and borrowers interested in long term
sources of financing.
Economic Governance:
The most dramatic shift introduced by the military government is in
promoting good economic governance. Transparency, consistency, predictability
and rule-based decision-making have begun to take roots. Discretionary powers
have been significantly curtailed. Freedom of press and access to information
has had a salutary effect on the behaviour of decision makers.
Pakistan’s history provides ample evidence that foreign enterprises have
never been expropriated or taken over by any government during the last 57
years. Even when the Z.A. Bhutto government nationalized domestic
manufacturing, banks, insurance companies, etc. the foreign companies were
9. 9
exempted and left untouched. Thus, the risk of expropriation of foreign capital is
almost zero in Pakistan.
Foreign investors are treated at par with domestic investors for purposes
of equity ownership, access to domestic financial market, tax and tariff regime
and legal rules and regulations. This level playing field is one of the strong and
distinctive features that make Pakistan an investor-friendly country.
The other pillars of good governance are, (a) devolution of power to the
local governments who will have the administrative and financial authority to
deliver public services to all citizens, and (b) an accountability process which will
take to task those indulging in corruption through a rigorous process of detection,
investigation and prosecution.
The cornerstone of the governance agenda is the devolution plan which
transfers powers and responsibilities, including those related to social services
from the federal and provincial governments to local levels. This plan was put
into effect in 2001. The development effort at the local level is expected to be
driven by priorities set by elected local representatives, as opposed to
bureaucrats sitting in provincial and federal capitals. Devolution of power will
thus strengthen governance by increasing decentralization, transparency,
accountability of administrative operations, and people’s participation in their
local affairs.
Other essential ingredients for improving economic governance are the
separation of policy and regulatory functions, which were earlier combined within
the ministry. Regulatory agencies have been set up for economic activities such
as banking, finance, aviation, telecommunications, power, oil, gas etc. The
regulatory structures are now independent of the ministry and enjoy quasi-judicial
powers. The Chairman and Board members enjoy security of tenure and cannot
10. 10
be arbitrarily removed. They are not answerable to any executive authority and
hold public hearings and consultations with stakeholders.
The National Accountability Bureau (NAB) has been functioning quite
effectively for the last five years as the main anti-corruption agency. A large
number of high government officials, politicians and businessmen have been
sentenced to prison, subjected to heavy fines and disqualified from holding public
office for twenty-one years on charges of corruption after conviction in the courts
of law. Major loan and tax defaulters were also investigated, prosecuted and
forced to repay their overdue loans and taxes.
Despite these positive outcomes and their impact on the business
community and other stakeholders, within the country as well as abroad, the
incidence of poverty is still quite high and unemployment rates are worrisome.
The challenge therefore for the next phase of the reform process is to accelerate
growth rate and reduce poverty and unemployment.
Concluding Remarks:
Pakistan today meets most of the essential requirements that the foreign
businesses and investors are looking for. Macroeconomic stability, deep-rooted
structural reforms, high standards of economic governance, outward looking
orientation, liberalized trade and investment regime, easy access to policy
makers, low production costs, sophisticated financial sector and its location as a
regional hub make it a highly attractive country for business and investment.
Investors’ concerns about security, law and order are being addressed
and the situation is improving gradually. But the negative perception that prevails
about Pakistan abroad due to the hype created by the median can only be
removed if the potential businessmen and investors visit Pakistan and make on-
the-spot assessment for themselves.
11. 11
TABLE I
LONG-TERM STRUCTURAL CHANGE AND GROWTH
1947 1970 2004
Population In million 33 60 151
GDP (current m.p.) Rs. billion 58 151 5,458
GDP (US$)billion 3.8 10.8 92.5
Per Capita Income (Constant Rs.) 1,638 2,541 5,767
Per Capita Income (US$) 85 170 640
Income
Per Capita Income (Current Rs.) 405 809 37,495
Production Index 100 219 591
Fiber Production Index 100 172 866
Water Availability (MAF) 55 76 97
Wheat Production (m. tons) 3.3 7.3 20
Rice Production (m. tons) 0.7 2.4 5
Cotton Production (m. bales) 1.1 3.0 10
Agriculture
Fertilizer per ha. Crop (kg) 0 23 212
Manufacturing Production Index 100 2346 17,047
Steel Production (000 tons) 0 0 2203
Cement Production (000 tons) 292 2656 12,957
Chemical Production (000 tons) 0 130 758
Sugar Production (000 tons) 10 610 4021
Industry
Cloth Production (000 Sq. meter) 29,581 60,544 657,887
Per Capita Electricity Generation (Index) 1000 1950 9,924
Per Capita Electricity (kwh) 6 63 520
Infrastructure
Road Length (km)
Area under Canal Irrigation(mill. ha)
50,367
7.9
72,153 255,856
22.0
Natural Gas billion cu. Meters 0 2.9 26.1
Road Vehicles per 1000 Persons 1 3 33
Telephone Connections per 1,000 Persons 0.4 2.5 33.4
Consumption
TV Sets per 1,000 Persons 0 1.5 26.3
Primary Enrolment Rate 5 22 84
Population per Doctor 23,897 4,231 1,397
Population per Nurse 369,318 13,141 3,261
Social Indicators
Literacy Rate
Infant Mortality Rate
Total Fertility Rate
Population with Access to Safe Water
Under Five Mortality Rate
11
N.A.
N.A.
N.A.
N.A.
20
117
6.3
25
181
54
80
4.0
90
102
12. 12
TABLE – II
CHANGES IN KEY MACRONOMIC INDICATORS
October 1999 October 2004
Change in
the
Indicator
GDP Growth Rate 4.2% 6.4% Positive
Inflation 5.7% 4.6% Positive
Fiscal Deficit/GDP -6.1% -2.4% Positive
Current Account/GDP -4.1% +1.4% Positive
Public Debt/GDP 100% 68% Positive
External Debt/GDP 52% 37% Positive
Interest Payments/Govt.
Revenues
50% 25% Positive
Remittances US$ 88 million
per month
US$ 300 million
per month
Positive
Exports US$ 7.8 billion US$ 13 billion Positive
Tax Revenues Rs. 391 billion Rs. 600 billion Positive
Rupee-Dollar Parity Depreciating Stable Positive
Foreign Direct Investment US$ 472 million US$ 950 million Positive
Foreign Exchange Reserves US$ 1.6 billion US$ 12.0 billion Positive
Poverty Incidence 33%
Data not available
but perhaps rising
Negative
Poverty Related Expenditure Rs. 133 billion Rs. 161 billion Positive
Unemployment 6% 8% Negative
Note: All indicators in Column 1 pertain to 1998-99 or October 1999. All indicators in
Column 2 pertain to 2004-05 or end October 2004.