Economic System of Pakistan

1. Economic
system of
Pakistan

2. What Is Economy?
 An economy consists of the economic system of a
country or other area, the labor, capital and land-
resources, and the economic agents that socially
participate in the production, exchange, distribution,
and consumption of goods and services of that area.

6. Socialism
 An economic system in which the factors of
production are owned and operated either by
the government itself or by the private sector
under strong government control. It is called
as planned or command economy. Ex. China,
New Zealand, Canada

7. Communism
 All the factors of production and enterprises
concerned with the production and distribution
of goods and services, is owned and operated
by the government and whole national income
is taken and distributed by the government
according to ability and need of individuals.
Karl Marx is the founder of Communism
philosophy. Example: Russia.

8. Mixed Economies
 Economies that combine several systems; for
example, an economy where the government
owns certain industries but others are owned
by the private sector. Examples: France, UK,
Pakistan

9. 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!

10. Difference between Economic Development
and Economic Growth
Economic Development
Economic development is a qualitative term as it indicates
continuous increase in the real national income and
structural changes in the economy of a country.
It means increase in output of goods and services in an
economy. Economic development is more important than
economic growth because economic development is
wider and more comprehensive process than economic
growth. Economic development is a process of economic
transition involving structural transformation of an
economy through industrialization, raising GNP and per
capital income.

11. Economic Growth
Economic growth is a quantitative term as it
represents quantitative increase in
production of goods and services in an
economy. Economic growth is a steady
process by which the productive capacity of
an economy increase overtime to bring
about rising levels of national output and
income.
Economic growth is the name of more
production. Growth is measured in terms of
an increase in real gross national product
(GNP/GDP) over time or an increase in per
capital income.

12. Economy of Pakistan
 Pakistan has a semi-industrialized economy, which
mainly encompasses textiles, chemicals, food
processing, agriculture and other industries

13. 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.

14. National Development
What is National Development?
 National development is the ability of a county or
countries to improve the social welfare of the
people e.g by providing social amenities like
quality education, potable water, transportation
infrastructure, medical care, etc.
 National development refers to the ability of a
nation to improve the lives of its
citizens. Measures of improvement may be
material, such as an increase in the gross
domestic product, or social, such as literacy rates
and availability of healthcare.

15. How can we measure
Development?
In a number of ways but the main one you need to
know about is the UN HDI- the Human Development
Index. HDI is an aggregate index of living standards
with 3 main components
 Mean Educational attainment
 Income (measured by real GDP per capita PPP)
 Life expectancy at birth
Highest HDI possible is 1.0

16. Economic Factors to Measure
Development
 Gross Domestic Product (GDP) is the total value
of goods and services produced by a country in a
year.
 Gross National Product(GNP) measures the total
economic output of a country, including earnings
from foreign investments.
 GNP Per Capita is a country's GNP divided by its
population. It reflects the average income of a
country's citizens. It is a useful way to assess
each country's relative wealth or poverty (Per
capita means per person.)

17. Cont……..
 Economic growth measures the annual increase
in GDP, GNP, GDP per capita, or GNP per capita.
 Inequality of wealth is the gap in income between
a country's richest and poorest people. It can be
measured in many ways, (eg the proportion of a
country's wealth owned by the richest 10 per cent
of the population, compared with the proportion
owned by the remaining 90 per cent).

18. Cont………
 Inflation measures how much the prices of goods,
services and wages increase each year. High
inflation (above a few percent) can be a bad thing,
and suggests a government lacks control over the
economy.
 Unemployment is the number of people who
cannot find work.
 Economic structure shows the division of a
country's economy between primary, secondary
and tertiary industries.

19. Cont………
 Demographics study population growth and
structure. It compares birth rates to death
rates, life expectancy and urban and rural
ratios.
 The birth rate in the UK is 11 per 1,000,
whereas in Kenya it is 40.

20. Economic Indicators of
Development
 GDP
 GNP
 PPP
 Economic structure (types of job)
 Inflation
 Unemployment
 Economic growth
 Educational profile (qualification of labour)

22. Taxes
 1.Tax is imposes by the Government on citizen of the
State.
 2.It is a compulsory payment to be made be the
citizens to the State.
 3. Tax is levied on income as well as on expenditure
of the individual.
 4. There are two kind of taxes Viz direct and indirect
tax.
 5. The rate of tax varies. It may be progressive
proportionate and regressive in character.
 6. Tax collected by the Government is spent to meet
administrative and defence expenditures. Small
amount of tax is spent for the welfare of tax-payer.
 7. This imposed on a person is subject to revision. It
can be waived by the government.

23. Budgets
 A government budget is an annual financial
statement presenting the government's
proposed revenues and spending for a
financial year that is often passed by the
legislature, approved by the chief executive or
president and presented by the Finance
Minister to the nation.

24. 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.

25. 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.

28. Quiz Time
 _____________ is the study of how a society uses scarce
resources to produce and distribute goods and services.
 ________________ are the inputs available to supply goods
and services in an economy.
 An ______________ is the method used by the society to
produce and distributes goods and services by utilizing
factors of production.
 An economic system in which the factors of production are
owned and operated either by the government itself or by
the private sector under strong government control. It is
called as _________________
 ____________________ is the founder of Communism
philosophy.
 An economy where the government owns certain industries
but others are owned by the private sector is called
__________________________

29. Quiz Time
 The economy is an _________________ of development
and sustainability.
 __________________ is a qualitative term as it indicates
continuous increase in the real national income and
structural changes in the economy of a country.
 ___________________ refers to the ability of a nation to
improve the lives of its citizens.
 __________________measures how much the prices of
goods, services and wages increase each year.
 ______________is imposes by the Government on citizen
of the State.
 _________________ is the third largest exporter of rice in
the world and producing enough food grains to feed its
people
 PCEC stands for ________________________

31. Challenges to Pakistan’s
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

32. ECONOMIC PROBLEMS OF
PAKISTAN
 Poor Utilization Of Resources
 Unequal Distribution Of Wealth
 Poor Fiscal Policy
 Corruption
 Poverty
 Unstable Government
 Money Laundering
 Shortage Of Skilled Workers
 Wastage Of Economic Resources
 By Terrorism Activities

33. Solutions to improve the
economy
Change in National Psyche and Mindset.
 We as a nation are too much negative oriented
and too much cynical where we find everything
wrong in this country.
 Unless we change our mindset and unless
everybody who is doing what he is supposed to
do, carries out his or her task with sincerity and
honesty, we are not going to go anywhere.

34. 2. Building up of Human Capital.
 There is no substitute to building up human capital.
Private sector, public sector, NGOs, local communities
etc, all here to put their hands on deck and participate
in making sure that every child goes to school. Every
high school graduate has some technical and
vocational skill or goes for higher education.
 Unless we build up human capital, we are just going to
be left behind because the world economy is going to
be a knowledge based economy.
 Pakistan lags behind other countries in the institutions,
infrastructure and incentives for human capital
formation. We have no choice but to accelerate the
pace to catch up with others.

35. 3. Use of Technology.
 The technology is spreading like a wild fire. 95 million
Pakistanis have mobile phones today. We can use this
technology in order to provide them banking services,
information on climate/weather, agriculture extension,
health, education etc. It is a powerful tool which can
leapfrog a lot of time which we have wasted.
 Using technology particularly the
information/communication technology for the
betterment of social and economic problems of
Pakistan is something which needs to be done.

36. 4. Young Labour Force
 Pakistan is one of the few countries which has a young
labour force which can be harnessed for its own and
global economy.,
 Japan, Europe, USA and after 2050 China are going to
have aging population where the ratio of old to young
people is going to increase. India and Pakistan are two
countries where the ratio of younger people to the older
ones is going to increase. If we tool these young men
and women properly, we increase the female labour
force participation, give them skills and knowledge, they
can become the labour force for the rest of the world.
 This will give a big boost to Pakistan’s own economy.

37. 5. Governance, Devolution and
Decentralization.
 As the population is increasing, one cannot govern
Pakistan sitting in Islamabad, Karachi, Lahore, Peshawar
or Quetta. One has to devolve powers, decentralize and
delegate authority, provide resources to the local/district
governments so that they can take decisions at their own.
 Sitting in Islamabad one cannot visualize what is needed
in rural areas, but the people in rural areas know exactly
whether they need water, fertilizers or fruit processing
industry. Let us devolve powers to the people at the
grassroots level and there would be much better
allocation and utilization of resources. There must,
however, be accountability of the local governments by
the provincial governments and of provincial governments
by the federal government but not interference or
usurpation of powers.

38. Conclusion
 Pakistan and its people has a lot of potential
and we are blessed with a whole lot of natural
resources.
 If the government plans wisely, and the
people work hard, the economy of Pakistan
can be taken to a whole new level.

39. Cont…….
 We need to provide employment opportunities
for young people and to train them in the kind
of the skills which are needed not only by the
national economy but also by the international
economy.
 The moral is, that the government and every
individual in the system needs to play their
part to help in the economical progress of the
country

40.  https://www.slideshare.net/hashimcullen/econ
omy-of-pakistan-35229348
 https://www.slideshare.net/mjzape/economy-
of-pakistan
 http://notes4bcomii.blogspot.com/p/economy-
of-pakistan.html
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