Pakistan Economy

1. Topic of Presentation
Lack of consensus
Pakistan Economy
Presented to : Ma’am Shumaila
Presented by : Salman Jabbar

2. Contents
 Why Economy Matters
 Economy of Pakistan
 Crisis In Economy
 The Economy Today
 Why Have we Landed in Such a Difficult
Situation?
 WHAT NEEDS TO BE DONE?
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3. WHY ECONOMY MATTERS?
 Economy affects the lives of the people of Pakistan
 Two Pillars of the State –
Strong Economy - Strong Defense
 A strong economy can ensure strong defense; it will
enhance country’s power and hence make the
country’s defense even more stronger
 Economic Backwardness generates violence, social
conflicts and political turmoil.
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4. WHY ECONOMY MATTERS?
 Power can lead to prosperity and prosperity may
generate more power
 Former US Secretary of Defense Robert McNamara
said that “Security means development and without
development there is no security”.
 According to historian Paul Kennedy, “a nation’s
military strength rests on its economic strength”
 What is military strength? It is nothing but power.
What is power? It is the ability to influence the
behaviour of others in accordance with one’s aims
and objectives4

5. Economy of Pakistan
 The economy of Pakistan is the 27th largest
economy in the world in terms of purchasing
power, and the 45th largest in absolute dollar
terms. Pakistan has a semi-industrialized
economy, which mainly encompasses
textiles, chemicals, food processing,
agriculture and other industries.
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6. Statistics
 Rank: 28th
 Currency:1 Pakistani Rupee (PKR
(Rs. = 100 Paisas
 GDP: $431.2 billion
 GDP growth: 2.0% (2009 est
 GDP by sector: agriculture 19.6%,
industry: 26.8%,
services: 53.7% (2016
 Inflation (CPI): 11.17% (2009-2015)
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7. Statistics
 Population below poverty line: 23% (2007
 Labor force: 55.88 million (2009 est
 Unemployment: 15.2% (2009 est
 Main industries: textiles, chemicals, food
processing, steel, transport equipment,
automobiles, machinery, beverages,
construction, materials, clothing, paper
products
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8. External
 Exports :$17. 87 billion (2009 est.) (67th in
rank
 Export goods: textile goods (garments,,
cotton cloths,), 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.)
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9. Public Finances
 Public debt: $50 billion
 Revenues: $23.21 billion
 Expenses: $30.05 billion
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10. Crisis In Economy
 The economy has suffered in the past from decades
of internal political disputes, a fast growing
population, mixed levels of foreign investment, and a
costly, ongoing confrontation with neighboring India
 Inflation remains the biggest threat to the economy,
jumping to more than 9% in 2005 before easing to
7.9% in 2006
 In recent few years, load-shedding has destroyed
industrial growth in Pakistan.
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11. The ECONOMY today
 Due to inflation and economic crisis worldwide, Pakistan's
economy reached a state of Balance of Payment crisis. "The
International Monetary Fund bailed out Pakistan in November
2008 to avert a balance of payments crisis and in July last year
increased the loan to $11.3 billion from an initial $7.6 billion.
 Since the beginning of 2008, Pakistan's economic outlook has
taken stagnation. Security concerns stemming from the nation's
role in the War on Terror have created great instability and led
to a decline in FDI from a height of approximately $8 bn to
$3.5bn for the current fiscal year
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12. Why Have we Landed in Such a
Difficult Situation?
 Economy Never Received Due Attention by the
Outgoing Government
 Political Instability continued since March 2007
 War on Terror
 Deteriorating Security Environment
 Frequent Changes in Economic Team
 Absence of Key Ministers for six months
 Weak Economic Team
 Food & Fuel Price Shocks

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13. Why Have we Landed in Such a
Difficult Situation?
 Energy Mismanagement Resulting in “Crisis”
 Weak Governance
 Weakening of Key Economic Institutions
 Ministry of Finance
 State Bank of Pakistan - Planning Commission
 No Interaction of Government with Private Sector
 Deliberate or Incompetence?
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14.  Newly Elected Government must bring a strong
economic team
 Political Leadership must provide full support to the
team
 No Room for Business-as-usual Policy
 Extraordinary situation Demand Extraordinary
Measures
 Financial Discipline is the key to success
 Bring Budget Deficit down to 3.0 – 3.5 percent of
GDP in the next 3-5 years •
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15. WHAT NEEDS TO BE DONE?
Undertake wide-ranging structural reforms
- Taxation side
- Expenditure side
- Accelerating Privatization
- Power Sector Reform
- Circular Debt Issues
- Correcting the Manufacturing defects of the NFC Award
- Strengthening of Infrastructure
- Strong Linkages with Private Sector
- Road show in major capital markets
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16. WHAT NEEDS TO BE DONE?
 Challenging Time Ahead but Surmountable
 New government appears to be the continuation of
the previous regime
 Weak Economic Team
 Same old Economic Team
 Why should we Expect Different Result?
 New Government has thus far borrowed from the
SBP Rs. 15.3 billion per day as compared with Rs.
1.3 billion per day by the previous regime
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17. WHAT NEEDS TO BE DONE?
 • Implementation of the IMF conditionality's
will be extremely painful for the people
 • The new program of the IMF is not likely to
be completed
 • The general perception is that IMF wishes
to keep Pakistani economy hanging in
balance during the US withdrawal out of
Afghanistan
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18. Thank You
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