This document discusses potential Islamic economic solutions to improve Pakistan's struggling economy. It provides an overview of challenges facing Pakistan's economy, including importing more than exporting, low savings rates, high government spending, and political instability. It then outlines some key principles of an Islamic economic system, including that property is held in trust for God, equitable distribution of wealth through zakat and inheritance laws, freedom and prohibition of interest in financial transactions. The document argues these Islamic economic principles could help address Pakistan's economic issues if implemented.
The document discusses the key challenges facing Pakistan's economy. It outlines that Pakistan consumes more than it saves, imports more than it exports, and the government spends more than it earns in revenues. This leads to high fiscal deficits and reliance on external financing. Other challenges include a shrinking share of world trade, poor social indicators like education and health, high costs of doing business, weak governance and a lack of policy continuity between governments. Addressing these challenges is important for sustainable economic growth and development in Pakistan.
Pakistan Challenges and Opportunities, Nadeem Riyaz, Ambassador of Pakistan t...Business Finland
Pakistan faces several challenges including issues with governance, corruption, terrorism, and economic problems. However, it also has opportunities due to its strategic location and potential for economic growth. Key sectors for investment include industry, manufacturing, mining, and energy. Addressing terrorism and engaging in regional stability and trade will be important for Pakistan's development.
The document discusses many of the economic problems facing Pakistan and potential solutions. It identifies 15 challenges including the war on terror, energy crisis, inadequate exports, high inflation, lack of tourism, large fiscal deficits, and corruption. It then provides recommendations such as improving technology, governance, energy solutions, private sector growth, and utilizing natural resources to address these issues. The document provides a comprehensive overview of Pakistan's economic issues and pathways towards improving the country's economy.
The Brief and informative presentation about Pakistan Economic Issue and its solution
so The audience can easily understood to this presentation and can easily take the point of view of pakistan economy and the problems and their solutions
and also the Eras are included from sense the Independence of pakistan
The economy of Pakistan faces several challenges. It has a semi-industrialized economy led by textiles, chemicals, food processing, and other industries. However, it struggles with problems like energy crisis, inflation, unemployment, overpopulation, illiteracy, and corruption. To address these issues, the government needs to resolve the energy crisis, reduce the gap between imports and exports, fight inflation through fiscal policy, increase education spending, promote family planning, and reduce corruption. Solving these economic problems is crucial for revitalizing Pakistan's economy.
This document discusses the economy of Pakistan. It defines what an economy is and identifies key factors that affect Pakistan's economy such as growth, investment, agriculture, manufacturing, trade, debt, education, health, population, and employment. It also outlines some of Pakistan's economic challenges including consuming more than saving, importing more than exporting, high government spending, energy and water shortages, and weak governance. The economic history of Pakistan shows it was initially very poor but grew steadily from the 1960s-1980s before slowing in the 1990s. The major sectors of Pakistan's economy include agriculture, industry, automobiles, CNG, cement, IT, textiles, services, communication, and electricity. Key economic measures discussed include consumer
The document discusses the key challenges facing Pakistan's economy. It outlines that Pakistan consumes more than it saves, imports more than it exports, and the government spends more than it earns in revenues. This leads to high fiscal deficits and reliance on external financing. Other challenges include a shrinking share of world trade, poor social indicators like education and health, high costs of doing business, weak governance and a lack of policy continuity between governments. Addressing these challenges is important for sustainable economic growth and development in Pakistan.
Pakistan Challenges and Opportunities, Nadeem Riyaz, Ambassador of Pakistan t...Business Finland
Pakistan faces several challenges including issues with governance, corruption, terrorism, and economic problems. However, it also has opportunities due to its strategic location and potential for economic growth. Key sectors for investment include industry, manufacturing, mining, and energy. Addressing terrorism and engaging in regional stability and trade will be important for Pakistan's development.
The document discusses many of the economic problems facing Pakistan and potential solutions. It identifies 15 challenges including the war on terror, energy crisis, inadequate exports, high inflation, lack of tourism, large fiscal deficits, and corruption. It then provides recommendations such as improving technology, governance, energy solutions, private sector growth, and utilizing natural resources to address these issues. The document provides a comprehensive overview of Pakistan's economic issues and pathways towards improving the country's economy.
The Brief and informative presentation about Pakistan Economic Issue and its solution
so The audience can easily understood to this presentation and can easily take the point of view of pakistan economy and the problems and their solutions
and also the Eras are included from sense the Independence of pakistan
The economy of Pakistan faces several challenges. It has a semi-industrialized economy led by textiles, chemicals, food processing, and other industries. However, it struggles with problems like energy crisis, inflation, unemployment, overpopulation, illiteracy, and corruption. To address these issues, the government needs to resolve the energy crisis, reduce the gap between imports and exports, fight inflation through fiscal policy, increase education spending, promote family planning, and reduce corruption. Solving these economic problems is crucial for revitalizing Pakistan's economy.
This document discusses the economy of Pakistan. It defines what an economy is and identifies key factors that affect Pakistan's economy such as growth, investment, agriculture, manufacturing, trade, debt, education, health, population, and employment. It also outlines some of Pakistan's economic challenges including consuming more than saving, importing more than exporting, high government spending, energy and water shortages, and weak governance. The economic history of Pakistan shows it was initially very poor but grew steadily from the 1960s-1980s before slowing in the 1990s. The major sectors of Pakistan's economy include agriculture, industry, automobiles, CNG, cement, IT, textiles, services, communication, and electricity. Key economic measures discussed include consumer
Pakistan faces several major economic issues, including low savings and high consumption rates, trade deficits due to low exports and high imports, declining share of world trade, shortages of energy and water, security issues like terrorism that hurt tourism, and law and order problems. These issues contribute to budget deficits, unemployment, inflation, lower investment and slower economic growth. Solutions proposed include increasing exports, reducing imports, improving infrastructure for energy and water, enhancing security, and promoting peace to revive tourism.
The document discusses underdeveloped economies around the world. It begins by defining an underdeveloped economy as having low living standards, high poverty, low income, poor health services, and reliance on foreign aid. It then compares developed and underdeveloped economies, noting that underdeveloped economies typically have lower income, more poverty, reliance on agriculture, and underutilized resources.
The document goes on to list the top 10 most underdeveloped economies by region, including countries in Asia like North Korea, Nepal, and Pakistan. It provides details on the economic conditions of Pakistan, Nepal, Moldova, and Ukraine, highlighting factors contributing to their underdevelopment such as political instability, corruption, lack of industrialization, and difficulties transitioning to a
This document provides an overview of Pakistan's economy. It discusses key sectors like agriculture, industry, and services. It notes that agriculture contributes 18.9% to GDP while industry contributes 24%. Services contribute the largest portion at 54% of GDP. The economy faces challenges like a growing trade deficit, high debt levels, energy shortages, and corruption. Solutions proposed include improving education, technology, taxation, and governance to help resolve Pakistan's current economic crisis.
Pakistan's economy faces several challenges:
- It imports more than it exports, consuming more than it saves, while government spending exceeds revenues.
- Its share of world trade is shrinking while social indicators lag behind countries with similar incomes.
- It struggles with energy and water shortages due to inefficiencies and unequal distribution.
- Political instability, security issues, and poor law and order deter investment and economic progress.
To strengthen the economy, Pakistan must boost exports over imports, increase domestic savings and investment, improve social sectors like education and healthcare, address energy and water shortages, and ensure greater political stability and security to attract more investment.
The document discusses Pakistan's economy and economic institutions. It defines key economic concepts like production, distribution and consumption. It also outlines Pakistan's economic systems of capitalism and socialism. It then describes modes of subsistence like pastoralism, horticulture and agriculture. It identifies issues facing Pakistan's economy like fiscal and monetary policy challenges, power crisis, low exports and high imports. It concludes by suggesting reforms like increasing exports, improving governance, education and developing human capital.
This document provides an economic history of Pakistan from 1947 to 2013. Some key points:
- In 1947, Pakistan was predominantly agricultural but lost East Pakistan in 1971, which was its majority population province and major economic contributor.
- Under Ayub Khan from 1958-1968, Pakistan experienced significant economic growth and industrialization, though it benefited some regions more than others.
- The 1970s saw economic struggles due to the loss of East Pakistan in 1971 and global recessions.
- Economic reforms in the 1980s expanded industrialization and the service sector became dominant.
- The 2000s saw periods of growth under Musharraf but also economic issues like rising inflation.
The document discusses the economy of Pakistan. It provides an overview of Pakistan's economy, including key statistics and sectors such as agriculture. It outlines several challenges facing Pakistan's economy, including low savings and investment rates, a trade deficit, and fiscal deficits. It also discusses proposed solutions such as improving human capital through education, using technology, harnessing a young labor force, and decentralizing governance. The overall message is that Pakistan has potential for economic growth but must address challenges through strategic planning and hard work.
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.
Economic and educational issues of pakistannight seem
This document discusses the causes and current state of unemployment in Pakistan. It begins by defining different types of unemployment, noting that Pakistan's overall unemployment rate is 5.6% with higher rates for women. Major causes of unemployment include low industrial growth, population growth, lack of employment opportunities, and illiteracy. Suggested measures to reduce unemployment are establishing employment offices, controlling population growth, increasing capital accumulation, and promoting growth in industrial and agricultural sectors.
The document summarizes population growth trends in India from 1891 to 2011 based on census data. Some key points:
- India's population grew rapidly after independence, increasing by over 7.8 crore between 1951-1961 which exceeded the previous 40 years' growth.
- The population growth rate was 24.8% between 1971-1981 and 23.8% between 1981-1991, indicating a period of population explosion.
- The population reached 121.02 crore in 2011, growing by approximately 1.8 crore every year.
- India's population is projected to reach 140 crore by 2026 with the growth rate slowing to 0.9% annually.
Pakistan faces several economic challenges that have hindered its development since its formation. Its economy was initially weak due to the British government making it dependent and India refusing to share capital and resources. Additional challenges include high defense spending due to wars, political instability, foreign debt obligations, low tax revenues, a shortage of electricity, and fluctuations in the foreign exchange rate. While the economy has grown in some areas like exports, long-term economic planning has faced issues achieving targets due to these various economic problems. As a result, Pakistan remains dependent on foreign loans and aid rather than being fully self-reliant.
The document summarizes key information about Pakistan's economy. It states that Pakistan has the 26th largest economy by PPP and 44th largest by nominal GDP. The economy has grown at an average of 4.14% annually and per capita income is $3,144, ranking 140th globally. However, Pakistan faces challenges such as a low savings rate, high imports, energy shortages, and security issues that impact the business environment.
Despite a substantial decline in poverty, a persistent increase in inequality in favour of the top 1 per cent of the population over the decades has been a global phenomenon.
Economic challenges face by Pakistan"s economy and their solutions (1)Muhammad Zubair
Pakistan's economy faces several challenges including a large debt burden requiring significant debt servicing payments, balance of payments deficits as imports exceed exports, low domestic savings rates, government spending exceeding revenues, a shrinking share of world trade, chronic energy shortages exacerbated by high load shedding, and damage from frequent natural disasters. Addressing these economic issues will be important for Pakistan to achieve greater economic stability and growth.
The Indian rupee has recently experienced a steep decline in value against other currencies. This document analyzes some of the political, social, and economic reasons behind the rupee's fall. Politically, elected representatives focus more on retaining power by appealing to minority voting blocs rather than long-term economic stability. Socially, policies aimed at empowering farmers and reducing poverty have not improved conditions for most Indians. Economically, a large fiscal deficit from numerous government assistance programs and corruption have undermined the fundamentals of India's economic policies and growth. Upcoming national elections will be crucial for choosing new leadership that can enact reforms to stabilize the rupee and restore confidence in India's economy.
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.
Background of Pakistan Economy a historical perspectiveAyesha Majid
- Pakistan experienced high economic growth during Ayub Khan's rule from 1958-1968, with GDP growth averaging nearly 7% annually. This exceeded growth in other large countries.
- Large increases in investment, especially private investment, contributed significantly to economic growth. Investment as a percentage of GDP peaked at 21.5% in 1964-1965.
- Inflation remained low at an average annual rate of 3.3% due to price controls and reduced government borrowing.
- Tax revenues increased substantially during this period, allowing additional spending on defense while keeping inflation in check. This was unique for Pakistan's fiscal history.
Pakistan has significant economic potential due to its large population and natural resources, but has failed to realize its full potential. To improve the economy, Pakistan must change its negative national mindset, invest heavily in building human capital through education, make better use of technology, develop its young labor force, and decentralize governance. With coordinated efforts from the government and citizens, Pakistan can tap into its resources and strengths to boost economic growth.
The document discusses the economy of Pakistan. It provides an overview of Pakistan's economy, including key sectors like agriculture. It notes challenges facing the economy such as low savings and investment rates, a large trade deficit, and fiscal deficits. Solutions proposed to improve the economy include changing mindsets to be more positive, investing in human capital through education and skills training, using technology more effectively, and decentralizing governance.
The document discusses the key challenges facing Pakistan's economy. It outlines 10 major challenges: 1) Low savings and high consumption rates, 2) Large trade deficits due to low exports and high imports, 3) Large fiscal deficits as government spends more than it collects in revenues, 4) Shrinking share of world trade, 5) Poor social indicators like literacy and health, 6) Energy and water shortages, 7) High costs of doing business, 8) Weak governance and poor implementation of policies, 9) Lack of policy continuity between governments, and 10) Issues with political stability, security and law and order that undermine the economy. Addressing these challenges is needed to strengthen and grow Pakistan's economy.
Pakistan faces several major economic issues, including low savings and high consumption rates, trade deficits due to low exports and high imports, declining share of world trade, shortages of energy and water, security issues like terrorism that hurt tourism, and law and order problems. These issues contribute to budget deficits, unemployment, inflation, lower investment and slower economic growth. Solutions proposed include increasing exports, reducing imports, improving infrastructure for energy and water, enhancing security, and promoting peace to revive tourism.
The document discusses underdeveloped economies around the world. It begins by defining an underdeveloped economy as having low living standards, high poverty, low income, poor health services, and reliance on foreign aid. It then compares developed and underdeveloped economies, noting that underdeveloped economies typically have lower income, more poverty, reliance on agriculture, and underutilized resources.
The document goes on to list the top 10 most underdeveloped economies by region, including countries in Asia like North Korea, Nepal, and Pakistan. It provides details on the economic conditions of Pakistan, Nepal, Moldova, and Ukraine, highlighting factors contributing to their underdevelopment such as political instability, corruption, lack of industrialization, and difficulties transitioning to a
This document provides an overview of Pakistan's economy. It discusses key sectors like agriculture, industry, and services. It notes that agriculture contributes 18.9% to GDP while industry contributes 24%. Services contribute the largest portion at 54% of GDP. The economy faces challenges like a growing trade deficit, high debt levels, energy shortages, and corruption. Solutions proposed include improving education, technology, taxation, and governance to help resolve Pakistan's current economic crisis.
Pakistan's economy faces several challenges:
- It imports more than it exports, consuming more than it saves, while government spending exceeds revenues.
- Its share of world trade is shrinking while social indicators lag behind countries with similar incomes.
- It struggles with energy and water shortages due to inefficiencies and unequal distribution.
- Political instability, security issues, and poor law and order deter investment and economic progress.
To strengthen the economy, Pakistan must boost exports over imports, increase domestic savings and investment, improve social sectors like education and healthcare, address energy and water shortages, and ensure greater political stability and security to attract more investment.
The document discusses Pakistan's economy and economic institutions. It defines key economic concepts like production, distribution and consumption. It also outlines Pakistan's economic systems of capitalism and socialism. It then describes modes of subsistence like pastoralism, horticulture and agriculture. It identifies issues facing Pakistan's economy like fiscal and monetary policy challenges, power crisis, low exports and high imports. It concludes by suggesting reforms like increasing exports, improving governance, education and developing human capital.
This document provides an economic history of Pakistan from 1947 to 2013. Some key points:
- In 1947, Pakistan was predominantly agricultural but lost East Pakistan in 1971, which was its majority population province and major economic contributor.
- Under Ayub Khan from 1958-1968, Pakistan experienced significant economic growth and industrialization, though it benefited some regions more than others.
- The 1970s saw economic struggles due to the loss of East Pakistan in 1971 and global recessions.
- Economic reforms in the 1980s expanded industrialization and the service sector became dominant.
- The 2000s saw periods of growth under Musharraf but also economic issues like rising inflation.
The document discusses the economy of Pakistan. It provides an overview of Pakistan's economy, including key statistics and sectors such as agriculture. It outlines several challenges facing Pakistan's economy, including low savings and investment rates, a trade deficit, and fiscal deficits. It also discusses proposed solutions such as improving human capital through education, using technology, harnessing a young labor force, and decentralizing governance. The overall message is that Pakistan has potential for economic growth but must address challenges through strategic planning and hard work.
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.
Economic and educational issues of pakistannight seem
This document discusses the causes and current state of unemployment in Pakistan. It begins by defining different types of unemployment, noting that Pakistan's overall unemployment rate is 5.6% with higher rates for women. Major causes of unemployment include low industrial growth, population growth, lack of employment opportunities, and illiteracy. Suggested measures to reduce unemployment are establishing employment offices, controlling population growth, increasing capital accumulation, and promoting growth in industrial and agricultural sectors.
The document summarizes population growth trends in India from 1891 to 2011 based on census data. Some key points:
- India's population grew rapidly after independence, increasing by over 7.8 crore between 1951-1961 which exceeded the previous 40 years' growth.
- The population growth rate was 24.8% between 1971-1981 and 23.8% between 1981-1991, indicating a period of population explosion.
- The population reached 121.02 crore in 2011, growing by approximately 1.8 crore every year.
- India's population is projected to reach 140 crore by 2026 with the growth rate slowing to 0.9% annually.
Pakistan faces several economic challenges that have hindered its development since its formation. Its economy was initially weak due to the British government making it dependent and India refusing to share capital and resources. Additional challenges include high defense spending due to wars, political instability, foreign debt obligations, low tax revenues, a shortage of electricity, and fluctuations in the foreign exchange rate. While the economy has grown in some areas like exports, long-term economic planning has faced issues achieving targets due to these various economic problems. As a result, Pakistan remains dependent on foreign loans and aid rather than being fully self-reliant.
The document summarizes key information about Pakistan's economy. It states that Pakistan has the 26th largest economy by PPP and 44th largest by nominal GDP. The economy has grown at an average of 4.14% annually and per capita income is $3,144, ranking 140th globally. However, Pakistan faces challenges such as a low savings rate, high imports, energy shortages, and security issues that impact the business environment.
Despite a substantial decline in poverty, a persistent increase in inequality in favour of the top 1 per cent of the population over the decades has been a global phenomenon.
Economic challenges face by Pakistan"s economy and their solutions (1)Muhammad Zubair
Pakistan's economy faces several challenges including a large debt burden requiring significant debt servicing payments, balance of payments deficits as imports exceed exports, low domestic savings rates, government spending exceeding revenues, a shrinking share of world trade, chronic energy shortages exacerbated by high load shedding, and damage from frequent natural disasters. Addressing these economic issues will be important for Pakistan to achieve greater economic stability and growth.
The Indian rupee has recently experienced a steep decline in value against other currencies. This document analyzes some of the political, social, and economic reasons behind the rupee's fall. Politically, elected representatives focus more on retaining power by appealing to minority voting blocs rather than long-term economic stability. Socially, policies aimed at empowering farmers and reducing poverty have not improved conditions for most Indians. Economically, a large fiscal deficit from numerous government assistance programs and corruption have undermined the fundamentals of India's economic policies and growth. Upcoming national elections will be crucial for choosing new leadership that can enact reforms to stabilize the rupee and restore confidence in India's economy.
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.
Background of Pakistan Economy a historical perspectiveAyesha Majid
- Pakistan experienced high economic growth during Ayub Khan's rule from 1958-1968, with GDP growth averaging nearly 7% annually. This exceeded growth in other large countries.
- Large increases in investment, especially private investment, contributed significantly to economic growth. Investment as a percentage of GDP peaked at 21.5% in 1964-1965.
- Inflation remained low at an average annual rate of 3.3% due to price controls and reduced government borrowing.
- Tax revenues increased substantially during this period, allowing additional spending on defense while keeping inflation in check. This was unique for Pakistan's fiscal history.
Pakistan has significant economic potential due to its large population and natural resources, but has failed to realize its full potential. To improve the economy, Pakistan must change its negative national mindset, invest heavily in building human capital through education, make better use of technology, develop its young labor force, and decentralize governance. With coordinated efforts from the government and citizens, Pakistan can tap into its resources and strengths to boost economic growth.
The document discusses the economy of Pakistan. It provides an overview of Pakistan's economy, including key sectors like agriculture. It notes challenges facing the economy such as low savings and investment rates, a large trade deficit, and fiscal deficits. Solutions proposed to improve the economy include changing mindsets to be more positive, investing in human capital through education and skills training, using technology more effectively, and decentralizing governance.
The document discusses the key challenges facing Pakistan's economy. It outlines 10 major challenges: 1) Low savings and high consumption rates, 2) Large trade deficits due to low exports and high imports, 3) Large fiscal deficits as government spends more than it collects in revenues, 4) Shrinking share of world trade, 5) Poor social indicators like literacy and health, 6) Energy and water shortages, 7) High costs of doing business, 8) Weak governance and poor implementation of policies, 9) Lack of policy continuity between governments, and 10) Issues with political stability, security and law and order that undermine the economy. Addressing these challenges is needed to strengthen and grow Pakistan's economy.
PAK-STUDIES THE ECONOMY OF PAKISTAN..pptxRanaHaris41
The document provides an overview of Pakistan's economy presented by 4 students to their professor. It discusses the importance of economy, gives a historical overview from 1947-2020 highlighting growth rates and challenges during different time periods under different governments. Some of the key challenges identified are importing more than exporting, low savings rates, and government spending exceeding revenues. Solutions proposed include changing mindsets, increasing human capital through education, leveraging the young workforce, decentralizing governance, and ensuring political stability.
The document provides an overview of Pakistan's economy, including key challenges and potential solutions. It notes that while Pakistan has made progress since independence, with per capita income increasing 10-fold, it still faces major issues like low savings and investment rates, a large trade deficit, high government spending, and shortages of energy and water. Suggested solutions include changing mindsets to be more positive, and significantly increasing investment in education and technical skills to build human capital for future growth.
Current Economic situation of Pakistan .pptxuzma244191
The document summarizes the economy of Pakistan, including its structure, key sectors, challenges, and comparisons to other countries. Some of the main points are:
1) Pakistan has transitioned from an agriculture-based to a services-based economy, with agriculture now accounting for 21% of GDP compared to over 50% in 1947.
2) Key challenges include low savings and investment rates, a large trade deficit, high fiscal deficits, shrinking global trade share, and poor social indicators in areas like education and health.
3) Social spending is only 3% of GDP, lagging other countries, and issues like energy shortages and political instability also pose economic challenges. Addressing these challenges is important for Pakistan
This document provides an overview of key economic challenges facing Pakistan. It discusses that Pakistan consumes more and saves less than needed for sufficient investment. It imports more than it exports, leading to reliance on foreign financing. Government spending exceeds revenues, resulting in high fiscal deficits. Social indicators like literacy and health lag behind other countries with similar incomes. Energy and water shortages are exacerbated by inefficiencies. The cost of doing business is high due to bureaucracy and outdated regulations. Overall, it summarizes Pakistan faces challenges including low savings and investment, trade imbalances, high government debt, poor social development, and an unfavorable business environment.
Pakistan has a population of over 186 million and is one of the developing countries with potential to become a large economy in the 21st century. However, Pakistan currently faces many problems like energy shortages, terrorism, and inflation. To solve these issues and achieve economic growth, the document recommends establishing social justice, improving education and healthcare, developing the energy sector, countering terrorism, and fostering good governance through honest leadership. The future prospects of Pakistan depend on addressing these challenges through coordinated efforts of the government and its youthful population.
There are many economic, social, cultural, political, and administrative obstacles that have slowed Pakistan's economic development. The key economic obstacles include a low savings rate and investment due to poverty, a reliance on the low-productivity agricultural sector, high inflation, and a lack of capital and natural resources. Major social obstacles are high illiteracy rates, low standards of living, and a rapidly growing population. Cultural factors such as traditions and outmigration of skilled workers also pose issues. Frequent changes in fiscal policy, corruption, and political instability have created political and administrative barriers to development. Overcoming these many challenges is difficult but necessary for Pakistan to achieve sustainable economic growth.
1) Argentina and Pakistan share similarities in their economic histories, with both countries experiencing default on debt, high inflation, currency devaluations, and political instability leading to economic decline.
2) Pakistan currently faces threats of default and economic challenges exacerbated by problems with governance, corruption, and weak institutions that concentrate wealth and power in the hands of elites.
3) To overcome structural inequality and economic issues, Pakistan must strengthen inclusive institutions by advancing accountability, rule of law, and access to education to create a more equitable society and distribute wealth more fairly.
The document provides an overview of Pakistan's economic system and economy. It defines key economic concepts like economy, socialism, communism, and mixed economies. It then describes Pakistan's semi-industrialized economy, which includes textiles, chemicals, food processing, and agriculture. It notes that Pakistan has come a long way since independence, with its per capita income increasing tenfold. It also outlines some of Pakistan's economic challenges as well as solutions to improve its economy like investing in human capital, using technology, and decentralizing governance.
This document provides an overview of Pakistan's economic system and some key economic concepts. Pakistan has a mixed economy, combining elements of socialism, communism, and private sectors. Its economy is the 26th largest globally and includes industries like textiles, chemicals, food processing and agriculture. The document discusses economic growth versus development, factors that measure development like GDP and HDI, the role of taxes and budgets, challenges facing Pakistan's economy like imports/exports and energy issues, and potential solutions around changing mindsets and building human capital.
This document outlines several challenges facing the Pakistani economy and some prospects for improving it. The key challenges discussed are low domestic savings and investment rates, large trade and fiscal deficits, a shrinking share of global trade, poor social indicators, and shortages of energy and water. Prospects for improving the economy that are mentioned include changing the national mindset, building human capital through education, using technology more effectively, leveraging the large young labor force, and improving governance through decentralization.
Pakistan has accumulated over $65 billion in total debt, including $35 billion in external debt. Debt servicing consumes nearly half of Pakistan's budget, diverting funds away from critical social services like education, health, and infrastructure. The high debt burden is restricting Pakistan's development and trapping it in a cycle where new loans are taken out just to service old debts. The document proposes several reforms that could help Pakistan escape this debt trap, including increasing tax revenue, improving fiscal management, encouraging investment in water, agriculture and other sectors, and reforming the financial system. Political stability and security are also needed to attract investment and support sustained economic growth.
This document is a manifesto from the Pakistan Muslim League (N) outlining their economic agenda and plans for reviving Pakistan's economy. It discusses the major economic challenges currently facing Pakistan like low growth, high inflation, poverty, and unemployment. It then outlines PML(N)'s priorities and plans to double GDP growth, increase investment levels, develop key sectors like energy and agriculture, and attract overseas Pakistani investments. Specific targets are set for reducing the budget and trade deficits, inflation, and increasing tax revenues.
This document discusses reasons why India is still considered a developing country rather than a developed one. It provides several key factors, including: very high income inequality, lack of population control, widespread corruption, an agrarian rather than industrial economy, lower literacy and education rates, a mediocre judicial system, caste-based discrimination, tax evasion, and a political system that employs divide and rule tactics. While India has seen strong economic growth, it still lags in important human development and quality of life indicators needed to be seen as fully developed.
The following is a short and simple powerpoint presentation on the topic of $5 Trillion Economy of India made for the subject "Indian Economy" which falls under BBA course.
Rostow's stages of economic growth theory outlines 5 stages of development: 1) Traditional society, 2) Preconditions for take-off, 3) Take-off, 4) Drive to maturity, 5) Age of high mass consumption. Poverty can be absolute, relative, or in a vicious cycle passed between generations. Governments define poverty lines to determine those living in poverty based on minimum income needed for basic needs.
Pakistan has a mixed economy that relies on agriculture, services, and light industries. It faces several economic challenges including low savings and exports, high imports and government spending, and lagging social indicators. The economy suffers from issues like corruption, poverty, and periods of political instability including military dictatorships. Education levels are relatively low, inflation and poverty are problems, and child labor remains widespread. Monetary and fiscal policies aim to influence economic activity but challenges persist.
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This document discusses magnetism and magnetic fields. It begins by defining magnetism and describing some everyday examples of magnetism. It then discusses applications of magnetism such as electromagnets, motors, and magnetic storage devices. The document also covers the nature and properties of magnetism, including Earth's magnetic field and how it is used in applications like labeling airport runways. Key concepts discussed include the right-hand rules for determining magnetic force and field direction. An example of magnetic force on a current-carrying wire is given for speakers.
1. The document discusses a group discussion report comparing digital and analog oscilloscopes. It provides introductions to oscilloscopes, comparisons of analog and digital oscilloscopes, and advantages and disadvantages of each.
2. The main difference is that analog oscilloscopes display waveforms in real-time, while digital oscilloscopes convert waveforms to digital numbers and store them for later analysis.
3. Digital oscilloscopes have advantages like analyzing stored data and high frequencies, while being more expensive, whereas analog oscilloscopes are cheaper but can only analyze signals in real-time.
The document describes the design and implementation of a low-cost wireless home automation system controlled by a smartphone. It discusses:
1) The objectives of designing a cost-effective home automation system using an Arduino and Bluetooth module to control appliances via a smartphone, aimed to help the elderly and handicapped.
2) The experimental setup including components like the Arduino, Bluetooth module, relay board, and smartphone app. Flow charts and diagrams illustrate the system design and operation.
3) Testing results showing the system successfully controlled lights and fans wirelessly via an Android app as intended.
The presentation discusses designing a home automation system using Arduino that allows controlling electrical appliances like lights and fans via a smartphone. It aims to create a low-cost, user-friendly system especially for elderly and disabled users. The system uses an Arduino board, Bluetooth module, relay board and smartphone app to wirelessly control connected devices. Experimental tests showed the prototype system was effective with satisfactory performance at low cost.
Sensor, Transducers and Actuator in RoboticsIkram Arshad
This presentation discusses sensors, transducers, and actuators for robots. It is presented by Bilal Raza, Hamza Qaisar, Ikram Arshad, and Bilal Ashraf to Engr. Asma Katiar. The presentation defines sensors as devices that sense and measure physical properties of the environment. It classifies sensors as proprioceptive or exteroceptive and discusses common sensor types like light, sound, temperature, and force sensors. It also explains transducers as devices that convert one type of energy to another for measurement or information transfer. Finally, it discusses common actuator types for robot locomotion like wheels and legs and for manipulation like arms and grippers.
How to Add Chatter in the odoo 17 ERP ModuleCeline George
In Odoo, the chatter is like a chat tool that helps you work together on records. You can leave notes and track things, making it easier to talk with your team and partners. Inside chatter, all communication history, activity, and changes will be displayed.
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...PECB
Denis is a dynamic and results-driven Chief Information Officer (CIO) with a distinguished career spanning information systems analysis and technical project management. With a proven track record of spearheading the design and delivery of cutting-edge Information Management solutions, he has consistently elevated business operations, streamlined reporting functions, and maximized process efficiency.
Certified as an ISO/IEC 27001: Information Security Management Systems (ISMS) Lead Implementer, Data Protection Officer, and Cyber Risks Analyst, Denis brings a heightened focus on data security, privacy, and cyber resilience to every endeavor.
His expertise extends across a diverse spectrum of reporting, database, and web development applications, underpinned by an exceptional grasp of data storage and virtualization technologies. His proficiency in application testing, database administration, and data cleansing ensures seamless execution of complex projects.
What sets Denis apart is his comprehensive understanding of Business and Systems Analysis technologies, honed through involvement in all phases of the Software Development Lifecycle (SDLC). From meticulous requirements gathering to precise analysis, innovative design, rigorous development, thorough testing, and successful implementation, he has consistently delivered exceptional results.
Throughout his career, he has taken on multifaceted roles, from leading technical project management teams to owning solutions that drive operational excellence. His conscientious and proactive approach is unwavering, whether he is working independently or collaboratively within a team. His ability to connect with colleagues on a personal level underscores his commitment to fostering a harmonious and productive workplace environment.
Date: May 29, 2024
Tags: Information Security, ISO/IEC 27001, ISO/IEC 42001, Artificial Intelligence, GDPR
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বাংলাদেশের অর্থনৈতিক সমীক্ষা ২০২৪ [Bangladesh Economic Review 2024 Bangla.pdf] কম্পিউটার , ট্যাব ও স্মার্ট ফোন ভার্সন সহ সম্পূর্ণ বাংলা ই-বুক বা pdf বই " সুচিপত্র ...বুকমার্ক মেনু 🔖 ও হাইপার লিংক মেনু 📝👆 যুক্ত ..
আমাদের সবার জন্য খুব খুব গুরুত্বপূর্ণ একটি বই ..বিসিএস, ব্যাংক, ইউনিভার্সিটি ভর্তি ও যে কোন প্রতিযোগিতা মূলক পরীক্ষার জন্য এর খুব ইম্পরট্যান্ট একটি বিষয় ...তাছাড়া বাংলাদেশের সাম্প্রতিক যে কোন ডাটা বা তথ্য এই বইতে পাবেন ...
তাই একজন নাগরিক হিসাবে এই তথ্য গুলো আপনার জানা প্রয়োজন ...।
বিসিএস ও ব্যাংক এর লিখিত পরীক্ষা ...+এছাড়া মাধ্যমিক ও উচ্চমাধ্যমিকের স্টুডেন্টদের জন্য অনেক কাজে আসবে ...
Strategies for Effective Upskilling is a presentation by Chinwendu Peace in a Your Skill Boost Masterclass organisation by the Excellence Foundation for South Sudan on 08th and 09th June 2024 from 1 PM to 3 PM on each day.
This document provides an overview of wound healing, its functions, stages, mechanisms, factors affecting it, and complications.
A wound is a break in the integrity of the skin or tissues, which may be associated with disruption of the structure and function.
Healing is the body’s response to injury in an attempt to restore normal structure and functions.
Healing can occur in two ways: Regeneration and Repair
There are 4 phases of wound healing: hemostasis, inflammation, proliferation, and remodeling. This document also describes the mechanism of wound healing. Factors that affect healing include infection, uncontrolled diabetes, poor nutrition, age, anemia, the presence of foreign bodies, etc.
Complications of wound healing like infection, hyperpigmentation of scar, contractures, and keloid formation.
Chapter wise All Notes of First year Basic Civil Engineering.pptxDenish Jangid
Chapter wise All Notes of First year Basic Civil Engineering
Syllabus
Chapter-1
Introduction to objective, scope and outcome the subject
Chapter 2
Introduction: Scope and Specialization of Civil Engineering, Role of civil Engineer in Society, Impact of infrastructural development on economy of country.
Chapter 3
Surveying: Object Principles & Types of Surveying; Site Plans, Plans & Maps; Scales & Unit of different Measurements.
Linear Measurements: Instruments used. Linear Measurement by Tape, Ranging out Survey Lines and overcoming Obstructions; Measurements on sloping ground; Tape corrections, conventional symbols. Angular Measurements: Instruments used; Introduction to Compass Surveying, Bearings and Longitude & Latitude of a Line, Introduction to total station.
Levelling: Instrument used Object of levelling, Methods of levelling in brief, and Contour maps.
Chapter 4
Buildings: Selection of site for Buildings, Layout of Building Plan, Types of buildings, Plinth area, carpet area, floor space index, Introduction to building byelaws, concept of sun light & ventilation. Components of Buildings & their functions, Basic concept of R.C.C., Introduction to types of foundation
Chapter 5
Transportation: Introduction to Transportation Engineering; Traffic and Road Safety: Types and Characteristics of Various Modes of Transportation; Various Road Traffic Signs, Causes of Accidents and Road Safety Measures.
Chapter 6
Environmental Engineering: Environmental Pollution, Environmental Acts and Regulations, Functional Concepts of Ecology, Basics of Species, Biodiversity, Ecosystem, Hydrological Cycle; Chemical Cycles: Carbon, Nitrogen & Phosphorus; Energy Flow in Ecosystems.
Water Pollution: Water Quality standards, Introduction to Treatment & Disposal of Waste Water. Reuse and Saving of Water, Rain Water Harvesting. Solid Waste Management: Classification of Solid Waste, Collection, Transportation and Disposal of Solid. Recycling of Solid Waste: Energy Recovery, Sanitary Landfill, On-Site Sanitation. Air & Noise Pollution: Primary and Secondary air pollutants, Harmful effects of Air Pollution, Control of Air Pollution. . Noise Pollution Harmful Effects of noise pollution, control of noise pollution, Global warming & Climate Change, Ozone depletion, Greenhouse effect
Text Books:
1. Palancharmy, Basic Civil Engineering, McGraw Hill publishers.
2. Satheesh Gopi, Basic Civil Engineering, Pearson Publishers.
3. Ketki Rangwala Dalal, Essentials of Civil Engineering, Charotar Publishing House.
4. BCP, Surveying volume 1
How to Build a Module in Odoo 17 Using the Scaffold MethodCeline George
Odoo provides an option for creating a module by using a single line command. By using this command the user can make a whole structure of a module. It is very easy for a beginner to make a module. There is no need to make each file manually. This slide will show how to create a module using the scaffold method.
This presentation was provided by Steph Pollock of The American Psychological Association’s Journals Program, and Damita Snow, of The American Society of Civil Engineers (ASCE), for the initial session of NISO's 2024 Training Series "DEIA in the Scholarly Landscape." Session One: 'Setting Expectations: a DEIA Primer,' was held June 6, 2024.
Leveraging Generative AI to Drive Nonprofit InnovationTechSoup
In this webinar, participants learned how to utilize Generative AI to streamline operations and elevate member engagement. Amazon Web Service experts provided a customer specific use cases and dived into low/no-code tools that are quick and easy to deploy through Amazon Web Service (AWS.)
1. Faculty of Engineering, Sciences & Technology
INDUS UNIVERSITY
GROUP DISCUSSION ON
REASON OF DECLINE ECONOMY OF PAKISTAN AND
SOLUTION IN THE LIGHT OF QURAN AND SUNNA
Submitted by Group Members:
1. Bilal Raza (2383-2017)
2. Hamza Kaiser (3126-2017)
3. Abdullah Khero (2862-2017)
4. Ikram Arshad (1897-2017)
5. Muhammad Ahsan (2767-2017)
6. Aqsa Maria (3127-2017)
Submitted to Sir Owais Anwer
2. TOPICS INCLUDED
IMPORTANCE OF ECONOMY
AN OVERVIEW OF PAKISTAN’S ECONOMY
CHALLENGES TO PAKISTAN’S ECONOMY
ISLAMIC SOLUTIONS TO IMPROVE THE ECONOMY
3. WHY IS ECONOMY IMPORTANT?
The economy is an indicator of development and sustainability.
A good economy ensures better chances of survival and development or a state.
If we understand the cycles and system in Economics, we can better understand how to
manage our money and society!
AN OVERVIEW OF PAKISTAN’S ECONOMY
The economy of Pakistan is the 26th largest in the world in terms of purchasing power
parity (PPP), and 44th largest in terms of nominal GDP
In 1947, Pakistan had 30 million people with per capita income of 100$. Agriculture
accounted for almost 50% of economic output with hardly any manufacturing, as all
industries were located in India.
Therefore, it was unable to feed 30 million people and was dependent on imports from
the USA. From thereon, Pakistan has come a long way. Today with 170 million people,
our per capita income in 2008 was 1000$ which is ten times more than it was in the
beginning.
AGRICULTURE
Pakistan is the third largest exporter of rice in the world and producing enough food grains to feed
its people
Pakistan is also one of the five major textile producing countries in the world.
Pakistan also produces third largest quantity of milk in the world.
MANUFACTURING AND INDUSTRY
Manufacturing and industry now account for 25% of the income; when we recall there was not even
a single industry worth its name at the time of partition.
So if we look where we were and where we are, I think the justification for Pakistan in terms of
betterment of economic conditions of Muslims in this part is very strong.
But, we have not lived up to our potential. We can do much better
than this.
WHERE ARE WE LAGGING BEHIND?
In 1969, Pakistan exports of manufactured goods were higher than the combined exports of
Indonesia, Malaysia, Philippines and Thailand.
In 1960’s Korea emulated Pakistan in its five years planning process.
The tragedy is that even a country such as Vietnam which was completely devastated by the war
has now overtaken Pakistan.
Ten years ago, India which was way behind Pakistan (till 1990’s)is now way ahead.
4. As an economist the biggest challenge is: how can we organize ourselves to improve our economy.
We Import More and Export Less.
We Consume More and Save Less.
Government Spends More than it Earns as Revenues
Our Share in the World Trade is Shrinking
We Face Energy and Water Shortages
Crisis of Governance and Implementation Weaknesses
Political Stability, Law and Order/Security
WE CONSUME MORE AND SAVE LESS.
Out of every hundred rupees of our national income, we consume 85 rupees and save only 15
rupees.
Pakistan’s saving rate is 6%. We need at least 24-25% investment rate to grow, and if we want to
rely on domestic savings, your saving rate should be 25%.
India has 34% saving rates. While China’s saving rate is 50%.
WE IMPORT MORE AND EXPORT LESS
Till 2007-2008, 80% of our imports were financed by our export earnings.
This ratio has come down to only 50%, it may go up to 60% but a gap of 40% of financing needs in
order to keep with the import level still exists.
We have to change the attitude of preferring the imported goods in order to fill in the gap b/w our
imports and exports.
Government Spends More than it Earns as Revenues.
Pakistan’s government takes away 20% of national income as its own.
80% is left in the private sector and 20% in the hands of the government is spent on defense, debt
servicing, development on education, health, general administration etc.
The revenue generated is only 15% of the GDP at best, and in the worst days it is 12 to 13%.
Out of every rupee of income received by a Pakistani, on average, tax paid is only 9 paisas and 91
paisas remain withthe individual.
In 2007-2008, Pakistan’s fiscal deficit was more than 7% which means its income or revenues were
only 13% of GDP whereas, expenditures were 20%.
Therefore, fiscal deficits have to be financed from somewhere, so how do you finance them; you
either go again begging the external donors, or to the State bank of Pakistan.
The financing provided by the State bank of Pakistan is dangerous because it creates high inflation
in the economy, which is injurious to the middle class, those earning fixed wages and salaries, and
the poor.
The country if the inflation rate goes up. In 1999, our Debt to GDP ratio was 100%, which means
that the entire national income was pledged as debt.
So Pakistan is way below the norm for developing countries.
Many people say that defense takes away a lot of government expenditure.
The fact is that defense expenditure is only 20% of government expenditure. It is only 4% of GDP,
and is not such a large expenditure as compared to debt servicing which is 7-8% of GDP and
almost 40% of government expenditure. Therefore, government has to contain its fiscal deficit by
raising revenues.
5. Our Share in the World Trade is Shrinking.
In 1990, Pakistan’s share was 0.2% of the world trade.
After 20 years it has come down to 0.12% in a very buoyant world economy.
World trade has been growing faster as compared to the world output. India in the same period had
doubled its share from 0.7% to 1.4%, while Pakistan is going the other way and that is the reason
why exports/imports imbalance is increasing.
All our exports are to a few markets – the USA, EU and the Middle East.
WE BADLY LAG IN SOCIAL INDICATORS
One of the most glaring weaknesses is that a country like Pakistan that should have had best
indicators in literacy, infant mortality, fertility rates, in access to water supply, in primary enrolment
ratios has social indicators which are more comparable to Africa rather than to the countries of
similar per capita income.
Even Tajikistan, which is a very poor country, has better literacy rate and primary enrolment ratios
than Pakistan.
If we had literacy rate of 100% instead of 55%, then in 2009-2010 our per capita income would
have been 2000$ rather than 1000$. Instead of 30 million middle class in Pakistan we would have
60-70 million middle class people; we would have poverty reduced to 15- 20%.
Another challenge we face today is energy and water shortages, and that is not because we are
not generating enough electricity or we are not having enough water. With the losses of KESC from
the point it has generated to the point they realize the billing is 45%, so 55% people are paying for
those who are stealing the electricity. Government of Pakistan out of its own limited resources is
paying 200 billion rupees every year as subsidies for electricity.
The productivity of poor farmer is only one ton per acreas compared to 3 tons by large holders
POLITICAL INSTABILITY, LAW AND ORDER/SECURITY. The overall arching theme is that for a
robust economy we should have political stability, law and order and security. Until country has
gotten rid of the image of political instability, poor law and order situation and insecurity, where
investors from all over the world hesitate from coming to Pakistan and invest, we will not be able to
make any progress in this country.
6. SOLUTIONS TO IMPROVE THE ECONOMY ISLAMIC ECONOMIC SYSTEM
The Islamic economic system is the collection of rules, values and standards of conduct that
organize economic life and establish relations of production in an Islamic society. These rules
and standards are based on the Islamic order as recognized in the Koran and Sunna and the
corpus of jurisprudence opus which was developed over the last 1400 years by thousands of
jurist, responding to the changing circumstances and evolving life of Muslims all over the
globe.
Three aspects of the economic system are usually referred to as the major distinguishing
elements of any economic system.
1. PROPERTY
In the Islamic system, property is a trust. The real owner is Allah (Subhanahu Wa Ta’ala).
Man’s disposal of worldly goods is in the capacity of a viceroy and a trustee. His rights are,
therefore, circumscribed by the limits Allah has prescribed, and should be exercised toward
the ends Allah has defined. Unlike the capitalist system, the right to property is not absolute
but has limitations and qualifications enforced not by the power of the government but by the
power of one's faith and desire to be a pious Muslim. Hence, the common-good and the
welfare of fellow Muslims are internalized in the decision making process of every Muslim. It
is Socialism with at the state.
In view of the purposive nature of man's life in the Islamic world view, even these limited
rights of ownership are not devoid of purpose. Wealth is an instrument in the effective
discharge of man responsibilities as the viceroy of Allah, and the achievement of well-being in
the life for himself, his fellow Muslims and fellow human beings. No where this viceroy ship is
displayed like in the Shari’ah laws of inheritance. These laws clearly assume that once the
individual is dead, his wealth goes back to the original owner, who specifies to whom the
wealth should go. The laws of inheritance specify where exactly this wealth should go,
regardless of the approve or the consent of the deceased owner. He is permitted to endow
only 1/3 of his legacy. Even then, such endowment should not go to a beneficiary (one also is
included in the inheritors) not to uses that are not considered is Shari’ah a charity.
2. DISTRIBUTION
Because al-adl (justice and fairness) is a basic value of the Islamic economic order,
distributive justice is a major concern of the system. Equitable distribution of income and
wealth is therefore an objective by itself. Operationally, this is accomplished through certain
institutions which form the backbone of the social security in Islam. Examples are a bound:
3. ZAKAH
Zakah is the third pillar of the Islamic faith. It is a unique system of social security. Zakah is
not a hand-out from the rich to the poor. It is a right of the have nots in the wealth of the
haves. It is a measure designed to directly transfer part of the wealth from the well-to-do to
the poor and not to the government. Because the purpose is redistribution of income and
7. wealth, without creating a class society zakah is levied on almost everyone. Even the not very
well to do, pay zakah. He may then receive the zakat of others at the same time. Zakah is
levied annually on the wealth itself and not on the individual or income, at a general rate of
2½ % per annum. This is not all. Zakah is a requirement. However, a Muslim is always
engaged not to confine his charity to that requirement by giving alms (sadaqat).
4. LAWS OF INHERITANCE
It would not be possible to guarantee the functioning of the system free from injustices without
a built-in-mechanism to prevent injustice reproducing itself generation after generation.
Studies show that one of the major causes of inequality in income distribution, is the
distribution of wealth. One major outcome of the Islamic laws of inheritance, is to prevent
concentration of wealth. This is because legacy is distributed in a pre-set ratio which take into
consideration need and closeness to the deceased. Yet giving the deceased the right to
assign part of his wealth (not exceeding 1/3) to charitable uses.
5. ECONOMIC FREEDOM
Freedom is a cornerstone in the Islamic economic system. In fact, it is so basic that the whole
message of Islam came to free man from all kind of slavery. Freewill is a necessary condition
for the validity of all contracts. The basic human rights which are now included in the laws of
civilized countries has been a part of legal system of Islam since the Prophet (P.B.U.H) . In
fact, all the so-called Magna Charta has been enjoyed as the basic individual rights in Islam
for centuries. Furthermore, to guarantee competition in the marketplace and freedom of
transaction, many measures were adopted by the Prophet (P.B.U.H). Prohibition of
monopoly, manipulation of prices and restricting entry to the market are but a few of these
measures.
6. THE ISLAMIC ECONOMY IS INTEREST-FREE
Today’s trade and commerce in the whole world is run on the basis of interest-based debt. If
we look at the money and capital markets in any country, we find that they are basically
markets for exchanging financial obligations and receivables. It is no wonder that just the
mere thought that interest rate may go up (or down) will bring havoc to all sectors of the
economy. Standard economic analysis tells that interest rates play important roles in the
economy. Firstly, that it provides incentives for savings, and secondly that it performs an
allocative function with regard to capital. The argument goes as follows:
Saving is essential to any economy because on which depends the rate of investment, and
hence the rate of growth of the economy and the property of its citizens. Since economic
development is the objective of every society, improving the nascent rate of saving becomes
a basic requirement for the achievement of a viable and sustainable economic
growth. Because too much saving may be just as unproductive as too little, interest rates,
furthermore, provide a tool for policy as regards savings where this rate is controlled in such a
way as to attain the right magnitude of savings as required by the going economic
8. circumstances.
7. IS INTEREST RIBA?
It is not difficult to see that interest in conventional banking is riba. It does fit the definition: an
increase stipulated in a loan contract. Credit provided by the bank to its clients which is based
on interest is clearly so. But even time deposits and current accounts are nothing but loan
contracts (The lender here is the depositor and the borrower is the bank) with stipulated
increase. (current accounts are loans with no stipulated increase). Furthermore, revolving
credit is a type of loan where interest calculation is based on outstanding debt which is
payment postponed. Claiming that interest is not riba is therefore unattainable.
8. ISLAMIC MODEL OF FINANCIAL INTERMEDIATION
The function of banks is financial intermediation. While experts may differ on the history of
banking, there is no question that the importance of financial intermediation had been
recognized even by ancient societies. It is because of this, we find that people in antiquity had
always had arrangements to carry out such function. Temples and chapels at the time of the
Pharaohs and the time of Hamorabi carried out the function of by arranges the transfer of
funds between lenders and borrowers financial intermediation. The Greeks did have an even
more advanced arrangements for financial intermediation.
What gave rise to such financial intermediation is the fact that human societies, since time
immemorial had been divided to two groups. One with more resources that it needs now and
the other needs more resources now that it owns today. People discovered very early that the
welfare of both groups will be significantly improved if a process of transferring resources
from the first to the second group was initiated. Because every individual in society is prone to
be m the first or the second, it is quite advantages to everyone to participate in this process.
The ‘bank” as an institution for financial intermediation was born.
It was quite natural that such institution is built on the same arrangement which was the basis
of financial intermediation in almost all historical stages, that is the Loan contract.
The bank is, therefore, based on a borrower-lender relationship. The bank borrows (and
depositors lend) and then lends (and users of tends borrow)
In both asset and liability sides of the bank’s balance sheet, this borrower lender relationship
is easily recognizable. The term "loan" is never used in the realign of banks relations with its
sources of funds (depositors). This, however, doesn't hide the legal and actual fact that all
bank deposits are loans; the borrower is the bank and the lender is the bank client.
But why didn't savers go directly to borrowers and cut the cost of the middle man? In other
words: why did bank came to existence? The answer relates to the cost of information. An
institution that specializes in credit analysis is more efficient in minimizing the risk involved in
lending because of its ability to gather and analysis information. It is because of this the role
of banks is decreasing as the cost of information is reduced, giving more space to finance
market where savers select their choice of visits.