Pakistan is one of the few countries in the world which are blessed with many natural attractions, four weathers, high mountains, deserts, vast delta plains and sea. It has one of the oldest civilizations in the world, locations with attractive scenic beauty, sacred religious and historic places, and rich culture and heritage. These tourist attractions are spread across the country. Pakistan has everything that a country can wish for. It is home to many mountains above 7,000 metres; five of the world’s fourteen mountains taller than 8,000 metres are in Pakistan. Most of Pakistan’s high peaks are located in the…
Author: Arooj Asghar
A resilient nation must make sincere. honest efforts for economic boost and build a productive workforce Pakistan is a country of 240 million people with half of its population under the age of 20. It has one of the best lands for agri products, with plenty of natural resources and a vibrant and resilient workforce. Since independence, Pakistan has gone through many ups and downs, and anything that can be imagined to happen in any country has already happened in Pakistan, from a dictatorship to democracy, from joining a country through referendum to the break-up of half of the country,…
Govt must offer financing to small and medium enterprises on easy terms Pakistan’s economy is in crisis; worst inflation in Asia, high interest rates, an unstable currency, low exports, a record energy crisis and record circular debt, low tax collection and political unrest. Pakistan is probably the only country in the world which has a non-filer tax category. Tax rates for non-filers for different categories are slightly higher than the tax rate for filers. It was probably envisaged that people will get discouraged and would start filing tax returns and would come into the tax net instead of paying additional…
Pakistan’s economy is struggling to revive and is not moving in the right direction for the last few years. There is a consensus that structural reforms, prudent macroeconomic policies, financial discipline and consistency and continuity in policies can only transform Pakistan’s economy into a stable and resurgent economy. Pakistan’s exports to GDP ratio stands in around 9.06 percentage which is quite low as compared to Indonesia, Philippines; Thailand; Vietnam; or Malaysia. This means that Pakistan lags in generating enough cash as compared to other comparable countries. Pakistan’s export performance was impressive in 2021-22 and touched the highest level of USD…
Comprehensive strategy needed to address food security challenges Ensuring food security is now a challenge for Pakistan given its huge population and high level of poverty and malnutrition. The concept of food security is multi-dimensional, food security exists when all people at all times have physical and economic access to sufficient and nutritious food that meets their dietary needs and food preference for an active and healthy life. Food insecurity and, consequently, food poverty is on increasing over time in Pakistan. Article 38 (d) of the Constitution of Pakistan ensures provision of basic necessities of life including food for the…
Saudi Arabia Vision 2030 is launched by His Highness Muhammad Bin Salman, Crown Price and Prime Minister of Saudi Arabia. The modernization of the Kingdom of Saudi Arabia launched by the Crown Prince Mohammed bin Salman (MBS) and detailed in his Vision 2030 plan addresses multiple national and regional challenges. Saudi Arabia is likely to be one of the world’s fastest-growing economies this year as sweeping pro-business reforms and a sharp rise in oil prices and production power recovery from a pandemic-induced recession in 2020-22. Gross domestic product is expected to expand by 7.6 percent, the fastest growth in almost…
Sound agriculture plans and larger food supplies help the economy stable, efficient One of the most significant developments in the current economic scene in Pakistan has been the sharp increase in the rate of inflation. The annual average rate of increase in the wholesale price index during the last twelve months is more than 30 per cent. The inflation number is debatable and different economists give different numbers. Yet there is a consensus that inflation in Pakistan is all-time high. Such a sharp increase in prices in recent months has not only caused alarm in economic circles but has equally…
Pakistan’s economy is again going through a rough patch. Policymakers of Pakistan are unfortunately unable to put the economy and country on the right path even after 75 years of independence. Pakistan somehow missed its George Washington moment; post-independence, a nation could have been made, the rule of law could have been implemented and people could have been groomed like a nation. All missed. It is almost impossible to do this after 75 years of independence with 260 million people. It wouldn’t be wrong to say that Pakistan’s economic and social fabric is full of paradoxes. Over the years, things…
Export must be diversified and focus on industrialisation is important Federal Government has announced the federal budget for the fiscal year 2023-24, few of the highlights of the federal budget 2023-24 are: economic growth target fixed at 3.5 percent; Tax-to-GDP ratio at 8.7 percent; Rs1.1 trillion are allocated for subsidies; Rs761 billion has been allocated for pension payments. The government will spend Rs950 billion on account of the Public Sector Development Programme whereas, the revenue of FBR (Federal Board of Revenue) is expected to be around Rs7,200 billion and non-tax revenue of the federal government is expected to be around…
Pakistan’s economic crisis is deepening, with the Pak rupee hitting its lowest level in history against the US dollar, foreign exchange reserves are running out, the state has cash only to pay for the vital imports that too the import bill of few days only. IMF is in standoff with the government on various known and unknown matters. IMF has asked for structural reforms, which should have been done a long time back, though it’s late, yet it should be done now so as to revive the economy. On top of that, Pakistan faced the worst flood in living memory,…
Efforts needed to overcome major challenges hindering their performance Pakistani economy consists of over 4 million Small and Medium Enterprises (SMEs). These consist of service providers, manufacturing units, and startups. As per an estimate; SMEs make up over 30 percent of Pakistan’s GDP and approximately 25 percent of generating exports. SMEs are generally regarded as the engine of economic growth and equitable development in developing economies. These are labor intensive, capital saving, and capable of helping create new jobs and can be channelized as the key to Pakistan’s economic growth, poverty alleviation, and employment generation in the future. However; their…
Water outlook of Pakistan is not promising and is facing various grave challenges. Pakistan has three main sources of water; rainfall, underground water, and river system. Rivers entering into Kashmir, Punjab and KPK provinces from India and Afghanistan merge into the Indus River at one point, which is why almost 90% of the population is concentrated around the rivers particularly around the Indus River and its doab areas. It wouldn’t be wrong to say that Indus River is the life blood of Pakistan’s economy. Despite its importance; Pakistan is fast approaching to become an ‘absolute’ water scarce country (by 2025)…
Like other developing countries, foreign investment in Pakistan is widely considered an important vehicle for its economic growth. Pakistan provides numerous opportunities with attractive returns for multinational companies; fully protects foreign investment under the law and has also signed double taxation treaties with various countries to give benefits to foreign investors. The legal framework for foreign investment is provided through Foreign Private Investment (promotion and protection) Act, 1976, and the Protection of Economic Reform Act, 1992. Most of the existing multinational companies are more or less satisfied with the concessions and regulations especially related to the repatriation of dividends, whereas…
Pakistan’s construction industry has always been of economic and social significance to the country. However, the share of construction industry in Pakistan’s economy is not as big as we see in other countries, whereas we see a lot of demand for new houses, apartments, and many other related structures in Pakistan. Present federal government has promised to construct 5 million new houses in its five years term, out of which almost 3.5 years have gone, which means 5 million houses in next 1.5 years, few thousand houses are near completion. Besides others, one of the attractive features of construction industry…
Pakistan is in its 75th year of independence, in all these years, Pakistan initially progressed very well and had somewhat reasonable economic performance in the later years. However, it is on a decline since 2005, which is very unfortunate. Almost everyone now feels that country is slipping from the hands and going down and down. In one of the World Bank’s reports, main risks to the economic outlook of Pakistan are domestic, including fiscal slippages, increasing liabilities related to infrastructure projects and weak tax revenues that derail the fiscal consolidation efforts. Pakistan’s economy in 2021 faced many challenges like trade,…
Pakistan’s power sector remains in news for all the wrong reasons. Circular debt is continuously increasing where private power producers are primarily accused for the increase in high electricity prices in the country and mounting circular debt. Besides other measures, it is believed that if tariffs are awarded through competitive bidding process then tariffs of new power projects would be very low and circular debt would taper off. Policy makers are considering various plans e.g. IGCEP, CTBCM, and DISCOs long-stop date for managing the current crisis of the power sector; but it seems that all are not well synchronized. It…
Defining Microfinance is not easy as no proper definition of the term exists. Some say it could mean anything from what a villager provides when handing small items to what state banks offer to their least affluent clients. But a general consensus is that it is the provision of financial services (whether loans, deposit accounts, insurance or otherwise) to poor and low-income individuals and households. International financial Institutions have been providing financial assistance countries like Pakistan since long. These funds mainly allocated for poverty reduction used to be provided to the government but after the false claims and release of…
Pakistan is celebrating its 75th independence day with full zeal and enthusiasm. Seventy five years, yes seventy five years full of roller coaster ride, so many ups and downs. Journey started from virtually nothing to one of the most modern and advanced country till 1970 and then comes a gradual decline yet Pakistan remained among advanced countries but as soon as country entered into new a millennium, country speedily slipped into the darkness and still it is struggling to find its way to light. Most of the present day crises in Pakistan are self-created however we cannot rule out foreign…
Federal government claims that it has given a growth budget this time and is also consolidating its reforms introduced in the last two years. Pakistan has seen a contraction in the economy due to Covid-19, which has badly affected the economy. However, federal government has made such polices through which it has partially recovered the economy effectively. It is being said that economic growth of the last government was primarily based on loans and through managing rupee artificially whereas current government has made the growth on the solid grounds. Prices of almost everything have increased in the last few months.…
IMF program has now been resumed while government has also changed its Finance Minister in April 2021. A number of events happened in March, Pakistan got the IMF review board approval and Pakistan also floated Euro bond in March 2021 after five years. Just one day before the floatation of the euro bond, finance minister who signed the bond and documents was fired. Surprisingly, IMF has not yet released Memorandum on Economic and Financial Policy paper, which it signed with Pakistan in 2019. This document contains the terms and conditions on which Pakistan got the bailout package from IMF. This…
Pakistan is a land of opportunities with numerous openings in every sector where a lot of things can be done commercially and socially and above all people are super resilient. Pakistan is the only country in the world where Armed forces with the support of the people have successfully defeated terrorism. Now, it is important for the decision makers to revamp the entire social fabric and build a society and nourish a culture based on tolerance and acceptance of other people’s views. Reconciliation among the stakeholders is the only way forward. The current political intolerance is not good for the…
Govt must make youth to tech-savvy workers to achieve Digital Pakistan goal Pakistan’s Information Technology (IT) sector has a huge potential and is progressing as well. IT have a special role to play in the growth and development of a country simply because of its significance in every sector. No sector can operate and grow without progress in the IT sector. There is no doubt that IT and digital economy present new opportunities in all the sectors of an economy and in coming months, we will see a lot of new initiatives. Today, Pakistan’s economy is undergoing fundamental changes mainly…
Pakistan will have a growth rate of 1.5 percent in fiscal year 2020-21, as per IMF. government is trying to revive the economy and working on various initiatives for the industry in this respect. Stimulus packages due to COVID-19 and various incentives to the industries have been offered in the last few months and we now see their positive results as well. A couple of years back, the current account deficit was around USD 20 billion but it remained positive in the first five months of fiscal year 2020-21. Today, there is a record increase of 7 percent in large…
Islamic banking, like any other banking system, is an evolving system worldwide. Since the inception of conventional banking system; work on the concept of Shariah compliant Islamic banking system was also started. A number of financial instruments are available in the market now while work is still going on inventing new solutions. We see exceptional progress in Islamic finance industry, exhibiting annual average growth of about 20 percent in recent years. The growth is not only because of rising demand but also because of increased number of banks offering Shariah-complaint products not only in the Muslim countries but even European…
Cost of electricity in Pakistan is one of the highest in the region, which makes the businesses uncompetitive; though electricity at subsidized rates is charged to the consumers. Out of three segments of power sector; distribution segment has the key to open the door of efficient power sector while transmission and generation contribute differently in the overall matrix. Continual losses have not only diluted the creditworthiness of DISCOS (distribution companies) but their share in the circular debt is also biggest. DISCOS have three buckets of losses; i) technical and admin; ii) under-collection of bills and iii) the delta (cost-revenue gap).…
Prime Minister claims that the government has created financial discipline for the first time in the history of the country whereas current account is in surplus for the first time in last 17 years. International media is praising Pakistan on its handling of coronavirus. Government of Pakistan gave an economic stimulus package of Rs. 1,240 billion mainly to the business community by deferring their electricity bills and repayment of loans and providing concessional loans from the State Bank for retaining their employees. In addition, government also announced a wheat procurement package, which supported the agriculture sector and disbursed billions of…
Whenever thinking about investing, one thing that pops up in most people’s minds is real estate. Even in the time of recessions, real estate can offer some great investment potential. While most people think that real estate investment is solely about buying homes, apartments and flats, or commercial property, there is another side of real estate that the investor can take advantage of, even with a small investment– plots and lands. There are several advantages in choosing to invest in plots and lands; and by learning more about them, one may find that this kind of investments is the right…
Circular debt is one of the biggest challenges Pakistan’s energy sector is facing since 2008-09, which has just crossed the PKR 2.2 trillion mark. As a matter of fact, circular debt is quite a natural phenomenon in the energy sector, which ideally occurs due to timing difference between receipts and payments of various companies within the ecosystem. Since long, circular debt is being associated with high cost of generation and that too with the highreturn on equity (ROE) of investors thus entire focus is on the reduction in profits of the investors that is actually just one component of the…
Pakistan is one of the major beneficiaries of foreign remittances, whereas the volume of foreign remittances to Pakistan has also increased in recent past. The growth of these flows has outpaced Foreign Direct Investment (FDI) and official development assistance to the country. Pakistan started to export manpower abroad particularly in the Middle East countries following oil price boom in the early 1970s. Because of labor shortage in the Middle East, they had to import foreign labor to gear up huge development activities financed by surplus oil revenues. Since then, exports of manpower and remittance inflows are increasing every year with…
Pakistan has successfully managed to handle COVID-19 so far but its impact on Pakistan’s economy is so far massive. In coming months; when the dust will settle only then the real impact could be determined. As a matter of fact; economy drives all the decisions even foreign policies are now being made on the basis of economic relations. We have seen this in recent events where relations between the countries are determining the economic growth of a country. As per latest statistics; there are signs of economic recovery as all major indicators are positive so far. However, it is not…
The biggest challenge Pakistan is facing today is to reduce poverty and achieve sustained economic growth. Present government is committed to address this challenge in consultation with key stakeholders in the economy, especially the private sector, civil society organizations and other development partners. We see multi-dimensional poverty in Pakistan; it includes inadequacy of income and deprivation of basic needs and rights, and lack of access to productive assets as well as to social infrastructure. The government has launched an ambitious social welfare and poverty alleviation program ‘Ehsaas’ for the poor segments of society. The plan includes a constitutional amendment to…
COVID 19 (coronavirus) pandemic has affected almost all countries and has made a significant effect on all the aspects of the life, every filed and business including healthcare facilities and treatment systems. It is obvious that in current age and time, there is a requirement for the introduction of various advance technologies to tackle various problems related to this pandemic. It is being said that a fourth industrial revolution is fast approaching once COVID-19 is over, which will include advance manufacturing and information technologies to fulfil the customized requirements of different areas. These technologies will also provide wireless connectivity in…
These are extraordinary days where extraordinary steps and out of box solutions are required. Budget deficit was estimated around 7.2 percent in fiscal year 2019-20 which is around 8.9 percent; likewise budget deficit is being estimated at around 9.1 percent which will cross 10 percent when the actual numbers will be calculated in 2021. Pakistan’s public debt has risen by almost 40 percent in the past two years; from Rs. 30 trillion to Rs. 41 trillion. As a percentage of revenue, debt servicing has gone up from 37 percent to 62 percent within one year and per capita income has…
The devastating economic fallout of the pandemic is being felt across the globe but for poor people in Pakistan who are already struggling to survive there are almost no safety nets to stop them falling into poverty. Over 50 million people in Pakistan live under poverty line. This tragic waste of human potential is caused by unemployment, underemployment and low productivity in existing jobs, particularly in agriculture and in the urban informal economy – the main source of employment in Pakistan’s economy. The performance of economy has gradually deteriorated in last two years and now due to COVID 19, it…
Thanks to the government for forming a commission to look into the matters Pakistan’s power sector is facing over the years but no thanks to the IPP Commission (“Commission”) for creating confusion. As a matter of fact; development of the power sector is highly contingent upon the growth of the country. It was prudent to install power projects, in anticipation of economic growth. Almost all the other sectors and state owned enterprises (SOEs) are in bad shape and are relying on government support and subsidies. One of the most sorted out questions by local and international investors till 2015 was…
The coronavirus (COVID-19) outbreak has already led to a major health crisis worldwide and is a major disruptions of the global economy. The situation is likely to become even worse in the coming weeks and months, and the economic fallout from the pandemic might represent one of the biggest shocks of recent centuries. International business have already come under pressure as the existing system is chocked and a lot many loop holes have been identified in the system. Some analysts expect a major reshuffling of the global production network as a result of the pandemic, which was already triggered by…
Thanks to the government for forming a commission to look into the matters Pakistan’s power sector is facing over the years but no thanks to the IPP Commission (“Commission”) for creating confusion. As a matter of fact; development of the power sector is highly contingent upon the growth of the country. It was prudent to install power projects, in anticipation of economic growth. Almost all the other sectors and state owned enterprises (SOEs) are in bad shape and are relying on government support and subsidies. One of the most sorted out questions by local and international investors till 2015 was…
Pakistan is facing various challenges where some are because of international factors but most of Pakistan’s current problems are self-created, which could have been avoided or at least would have been better managed. Whether it’s the large population to feed, or low per capita income, or persistent trade deficit, or low exports; all are manageable by the economic team of any country. Country’s economy is dominated by agriculture and over the period economy is increasingly moving towards the market-based trading economy as a result of receiving assistance under structural adjustment programs of the World Bank, and IMF. Despite these foreign…
For the first time in the history of National Electric Power Regulatory Authority (NEPRA), Pakistan’s power sector regulator organized the Energy Week from 24-28 February 2020 in Islamabad. Five full days were dedicated to discuss various aspects of the power sector with the objective to listen to the views of sector experts; to figure out the most suitable and efficient solution of various challenges currently Pakistan’s power sector is facing and thereafter devise a way forward. Probably the best aspect of the event was attendance of the Authority in all the sessions with keen interest while Tauseef H. Farooqi, Chairman…
Islamic banking and finance are emerging as viable alternatives to conventional interest-based banking and financing. Islamic financing is not only expanding its footprint in Muslim countries but also expanding in Western countries. In today’s connected world of business, Islamic finance is a concept that people working in the banking and finance industries are likely to come across in their careers. Islamic finance is not limited to Muslim countries. It has shown growth globally, including in Europe. Total Islamic finance assets worldwide are projected to grow to USD3.5 trillion by 2021 from USD2.5 trillion currently, according to a report. There are…
The automobile industry, along with the auto components industry, is one of the core industries in Pakistan. A well developed transportation system plays a key role in the development of an economy, and Pakistan is no exception to it. Automobile is one of the largest industries in the global market as well. Owing to its strong forward and backward linkages with several key segments of the economy. Automobile sector occupies a prominent place in the fabric of Pakistan’s economy. As a matter of fact, automobile sector is leader in product and process technologies in the manufacturing sector. It has been…
Pakistan’s construction industry has always been of economic and social significance to the country. However, the share of construction industry in Pakistan’s economy is not as big as we see in other countries, whereas we see a lot of demand for new houses, apartments, and many other related structures in Pakistan. Present federal government has promised to construct 5 million new houses in its five years term, out of which almost 2 years have gone, which means 5 million houses in next 3 years. Besides others, one of the attractive features of construction industry these days is government commitment to…
Inclusive Capitalism is one new concept which covers the human equality and diversity alongside driving returns to the shareholders of a venture. Most of the Fortune 500 companies give stock options to their executives, shares to their staff in addition to annual bonus while also make heavy contribution toward corporate social responsibility by providing a proportion of their profits as grants to social impact causes. The concept of building shareholders value has always been a driving force of a business especially for the listed companies. In a recent wave in the corporate world, businesses are not only viewed as a…
Pakistan’s economy in 2019 faced many challenges like trade, current account and budget deficits, increase in electricity and gas prices, high inflation and political situation of the country. Trade deficit is continuously increasing; government is trying to control this as well by taking various measures. In 2019, government took various steps in improving the economy. Government is trying to control its expenditures, Pak rupee is stable now after massive depreciation, stock market is improving as well, foreign exchange reserves of the state bank are increasing, the World Bank has included Pakistan in top 10 countries of the world where serious…
Pakistan is a country of natural beauty, hilly mountains, longest beach, favorable climate, four seasons which are the key factors to develop eco-tourism, sustainable tourism and rural tourism. Pakistan has many archeological and historical sites too. And the hospitality of people and local culture, life style is a unique selling point. Tourism is a growing industry in Pakistan. Pakistan doesn’t not have much big hotels but have a lot of small hotels and motels in almost every city especially in the northern areas of Pakistan. Tourism and hospitality are favorable for the countries that are under developed and people are…
Prime Minister of Pakistan has recently claimed that economy is back on track and now stabilized, rupee is gaining without any support, main indicators are positive, current account deficit is in control and foreign reserves are increasing. On the other hand, Federal Board of Revenue (FBR) is saying that it has collected 17 percent more tax as compared to last year though FBR is considering to revise downward its annual target of PKR 5.5 trillion for the fiscal year 2019-20. Based on fresh numbers released by the government, it seems that there is an increase in exports and reduction in…
Two different opinions exists on the economic condition of Pakistan. Government claims that economy is back on track whereas independent analysts portray a different picture. There is no doubt that there is some improvement in some areas whereas a lot of improvement measures are not even under consideration. Government claims that they are now in a position to fulfill their election promises. Recently government has passed the first review of IMF, which is being presented as an endorsement from an international organization on the economic performance of the current government. Yet, independent economists have different opinion on the economic performance…
Pakistan’s topography and climatic conditions are ideal for the utilization of solar energy at its maximum level. Geographically, Pakistan lies in the sun-belt and receives massive amounts of sunlight all through the year. Therefore, it is very important to exploit the existing solar energy resources. Solar energy can lessen the pressure on the federal budget which is being used for importing expensive fossil fuels, especially oil and RLNG. The use of solar energy is only limited to solar PV, solar water heaters, solar geysers, solar cookers and solar pumps in Pakistan. Solar PV Rooftop market potential for Pakistan has been…
Pakistan’s fisheries and aquaculture constitute an integral component of agriculture, providing employment, food and nutritional security to people, particularly to the rural poor. Pakistan earned US$250 million from exports of fish and fishery products last year. Pakistan, having 1,120 km of coastline and inland water reserves are 3,102,408 ha, respectively. The major fish harbors of Pakistan are Karachi Fisheries Harbor, Korangi Fish Harbor, Pasni Fish Harbor and Gwadar Fish. Karachi Fisheries Harbor handles about 90 percent of fish and seafood catch with 95 percent of its fish products exports from Pakistan. Pakistan fish production mostly comes from capture fishery. In…
It is important for the government to revive the economy but it is equally important to attract foreign investors to invest in the country. Economic team of the government has recently visited US and Europe and tried their best to convince and attract foreign investors to invest in government treasury bills and bonds because lending rates in Pakistan are currently very high. Interest rates in Europe and US are not so high therefore, foreign investors can get higher returns by lending money to Pakistan because of high interest rates whereas Pakistan would get foreign currency, which will help building its…
Pakistan is facing numerous challenges, which is not new for this country. The economic situation in Pakistan today is indeed worrying, even last Economic Survey of Pakistan also painted a dismal picture of the domestic economy. Almost all financial indicators have seen a downward trend. The growth rate fell by more than 50 percent from almost 6 percent to less than 3 percent. It is expected to go down even further to 2.4 percent next year, which will be the country’s lowest in the past 10 years. The Pakistani rupee has lost a fifth of its value against the dollar…
Revival of economy is the biggest issue of present day Pakistan. It is important to address this issue just now as country cannot afford any further meltdown, delay in policies making thereafter its implementation. It is being said that government is focusing on the revival of economy and addressing to correct the fundamentals whereas all state institutions are supporting the initiative of the government. Inflation, high interest rates and fear of FBR and NAB are three most important issues presently Pakistan is facing. There was a time when security and terrorism was the prime concern but thanks to the security…
The history of Pakistan’s automotive industry is one of the oldest in the Asian countries. The industry started semi knockdown production of trucks (Bedford) in 1949 by General Motors, which marked the start of the industry’s history after the independence from British India. Trade liberalization has not been supported by the automotive industry of Pakistan, which has led to consumers facing higher prices, low quality standards and inadequacy of competition in this sector. Being the sixth largest manufacturing subsector of the economy the automobile industry employs over 3.5 million workers, Pakistan’s auto sector has potential to create much value for…
Pakistan is blessed with one of the best sea routes of the world. Pakistan’s coastline is about 990 km long, bifurcated in two parts, Sindh Coast (270 km) and Makran Coast (720 km). Pakistan is undoubtedly one of the most strategically significant countries in the region and the world. On one side it is next to India, on other it is sharing border with China, Iran, Afghanistan and Central Asia countries (which is Russia) and its sea side is touching Middle East, where US has largest presence. All the world’s significant events are currently happening in the countries around Pakistan,…
There are a number of economic concerns with regard to sports in Pakistan, almost most issues have remained unresolved since long. The most important thing is the correlation between the level of economic development and sporting performance in major events such as the Olympics. A banner was posted on a Mexico stadium during the 1986 football World Cup which said, we don’t want goals, we want beans. This shows the issues developing countries like Pakistan is facing in the sports sector. Sports is one specific sector which badly affects when economic condition of a country deteriorates. Sporting events and sports…
Pakistan is celebrating 72nd Independence Day this month. Politically Pakistan got independence in 1947 yet it has to achieve economic independence though it got many opportunities to improve its financial health. Pakistan first made its 5 years plans in early fifties, which were successfully developed and implemented but in later years it was become more of an exercise than an economic activity. Agriculture was 60 percent at the time of independence and in later years a lot of incentives were given to locals’business community to promote industrialization. It is said that in fifties and sixties, average growth was over 6…
Pakistan’s economy is characterized by low levels of household savings which play a very crucial role in stimulating sustained economic growth. At the same time consumers borrow in order to consume. Households are the backbone of any economy. This is not different in Pakistan because their consumption account for about 60-70 percent of the gross domestic product (GDP). However, the recent past has been characterized by significant economic impacts on households. In particular, the financial health of households have been affected in many ways, including a decrease in household savings, increase in household debt through massive financing in the form…
The Pakistan’s economy is facing numerous challenges, which has impacted the overall economic activity. The economy is still and essentially bedeviled by large size and inefficient public sector, low rate of savings and investment, persistent large budget deficits, and inconsistent macroeconomic environment. All these factors have hampered the growth of the economy; yet country still remains hopeful to brighter days ahead that improvements in the exchange rate and interest rate management could make a difference to the economic growth efforts. One of the key elements which will impact the economy negatively is high interest rate with devastating impacts on the…
As a result of globalization, today the world is changing rapidly. This is not limited to any particular country. Therefore, Pakistan also has to adapt to the changes in the global environment. Vocational training can play a vital role in connection with the employment. Although, in Pakistan we have seen a lot of unemployed in recent years, which gradually decreased in last few years and is on rise again. Maintaining consistency in any field is the main issue in Pakistan and is a cause of virtually every problem. Traditional educational system has been a major reason for unemployment as well…
June 11th was the lucky day for Hammad Azhar, Minister of State for Finance and Economic Affairs as he presented federal budget in the National Assembly of Pakistan for the first time in his public life. This budget is in fact the second budget of current federal government but first budget of this government for a full year. There are a number of areas which the government has tried to address in the 2019-20 budget but there are many areas which are either not addressed directly or are completely ignored. Big challenges country is presently facing are low growth, current…
Like other countries, role of manufacturing sector in Pakistan’s economy is of paramount significance. Enhanced exports are believed to benefit the country. Pakistan needs to strengthen this sector in order to enhance its exports which are concentrated largely in textile and semi-manufactures. Exports are dominated in foreign currency thus any change in the currency parities change the foreign exchange export earnings. Keeping this in view and in order to increase the export proceeds, Pakistan needs to enhance its exports of manufactured goods. Pakistan can enhance its external cost competitiveness in any sub-sector, including manufacturing sector, by reducing its unit cost…
Remittances have been playing a very significant role for the overall economic development of Pakistan. Therefore, it is important to explore the actual remittance income and its impact on overall economy of Pakistan. Recently, the Middle East has suffered job crisis, the job opportunities are shrinking for the last few years and there are chances that remittances from the Middle East will reduce. As a result, the Government of Pakistan is now facing tremendous challenges to send people abroad for employment. Remittances have already been emerged as a prime driving force to the economic growth and poverty alleviation in Pakistan.…
Corporate Social Responsibility (CSR) carried out by the organizations involve handling the relationship between their business operations and the communities and surrounding environment within which they operate. These activities similarly assist to fulfill employees and shareholders’ demand by reporting social related activities which help companies to achieve better economic impacts. In addition, CSR also give good perception and image to public which may result in better public recognition and acceptance, thus avoiding negative projection of a company. CSR-related activities are used to tackle consumers’ social anxieties, build a favorable corporate image as well as develop better relationship with consumers plus…
State Bank of Pakistan (SBP) is in a monetary tightening phase raising discount rates continuously for the last few months but persistent demand pressure in the economy is forcing it to add certain basis points in this quarter as well. Central bank is taking certain corrective measures to prevent the economy from high inflation, growing circulation of money and probable decline in the growth rate in fiscal year 2018-19. Recent Monetary Policy Statement recognizes that it has missed the current fiscal year’s target of money supply growth due to current account deficit and various other foreign exchange challenges. The State…
Prime Minister Imran Khan during his maiden visit to the Ministry of Foreign Affairs emphasized the need to project positive image of the country. In view of the prevailing global environment Pakistan unfortunately does not have an enviable image among the fraternity of nations, mainly attributable to the phenomenon of terrorism and religious extremism which also pose an existentialist threat to the country. Diplomacy is no longer traditional, it is now a multi-track process and branding and image building too has become multidimensional and cannot be expected to happen automatically, nor in isolation from what is transpiring at the global level. It…
Maritime transport, which plays a vital role in the development of the country, comprises ports, shipping, shipbuilding and ship repair, and inland water transport systems. The growth in international trade and removal of trade barriers have made the developing countries to concentrate more on the improvement of their infrastructure, like roads, airports, seaports, which play a vital role in the development of the economy. Product storage, along with the capacity to move large shipments, have placed the shipping industry in a very advantageous position these days. However, the development of shipping industry in a country also depends on its population…
Ties between Pakistan and Gulf Corporation Council (GCC) have been strong for decades. Much of Pakistan’s interaction with these GCC counties revolves around its multidimensional ties with the GCC’s core state, Saudi Arabia. Pakistan-Saudi ties have a much deeper basis, people-to-people ties are strong and there are numerous Pakistani expatriates – around 2 million — working in Saudi Arabia. They send remittances back to Pakistan to support their families. And for many Pakistanis, whether poor or rich, a common last wish is to perform Hajj in the kingdom after retirement. Saudi Arabia hosts the two holiest cities of Islam, and…
Good governance is perhaps the single most important factor in eradicating poverty and promoting development in Pakistan. The present condition of governance in Pakistan is not satisfactory. There are many problems stimulate as barriers for good governance. To ensure sound local development, action should be taken to work towards achieving good governance. Considering Pakistan’s history of politics, the country is still struggling to improve in terms of political stability and governance. Unfortunately, development has not been stable, mainly due to political will and commitment. Democracy and governance in Pakistan, still plagued by corruption, outdated laws, abuse of human rights, the…
Pakistan has been experiencing rapid population growth together with rising levels of urbanization for a long time. The rising importance of urban areas is impacting not only population but also on the economic growth. In the process of urbanization, the issue of housing of population and shortages were evident as early as in late 1990s, primarily attributed to the lack of construction technologies and methods that lead to advancement of supply. Housing shortage in Pakistan was existing throughout the period after independence, there has been a gradual shift in the housing problem in urban areas from the shortage of housing…
Emerging Asian markets have had a significant impact on the growth of the fast-moving consumer goods (FMCG) segment. The region’s FMCG consumers pack a powerful punch: around a third of Nestlé and Procter & Gamble’s global sales growth between 2014 and 2018 came from emerging Asia. According to a study, emerging market consumers make up less than one-third of global revenue for the 15 largest multinational FMCG manufacturers. However, consumer spending in these markets is expected to grow about three times as quickly as that in developed economies. By 2020 such spending will reach US$6 trillion and account for nearly…
The Pakistan Super League (PSL) has made the Pakistan Cricket Board(PCB) richer, the broadcasters are smiling, and the fans are not complaining either. As for the franchisees, some are still wondering when they are going to break even, but the others are happy with the eyeballs and the brand-building. The key attraction is the presence of big name and the format itself. Nobody wants to miss the PSL action and related mega bucks. The fourth season has just started, matches are being played in UAE, where stands are almost packed for almost every match so far; the prices of tickets…
Pakistan’s export performance has remained weak over the past few years. According to the World Bank, Pakistan’s export share in the world exports has declined over time, even less than 1 percent. In the same period, share of Pakistan’s competitors in the world exports have increased substantially. Given the limited size of Pakistan’s domestic market, targets set by the government on export growth cannot be met without a significant improvement in export performance and with some solid planning and actions. Both export product categories and destinations need to be diversified. A concerted effort to plug into Asian supply chains will…
At no point in recent history have calls for Pakistan to industrialize been stronger than they have been now. Industrialization is arguably the most talked about subject among policymakers since years in Pakistan. Yet, action on the ground has so far failed. Better quality of life for people of Pakistan is an election campaign for every political party, this can only possible with the ability to bring prosperity, job creating and better incomes for all. Yet Pakistan is less industrialized today than it was few years ago. In fact, the contribution of Pakistan’s manufacturing sector to the gross domestic product…
Pakistan ranks 164th in the world in terms of its investment in education and health care as the measurement of its commitment to economic growth, according to the first-ever scientific study ranking countries for their levels of human capital. Pakistan is a country rich in human capital, mineral and other agricultural resources and yet its development history, poverty, debt and other social ills have once again become the focal agenda. It is a recognized fact that developed countries achieved high rates of sustained economic growth because of investment in human capital. Human resource development should be an integral part of…
The concept of privatization is not new in Pakistan. It may be traced as back as in 1950s, when Pakistan Industrial Development Corporation (PIDC) was established in 1952 to boost up the industrial development in the country. From mid 50s, the military government headed by General Ayub Khan encouraged domestic production of manufactured goods, primarily textiles. Government provided extensive incentives such as lucrative tariffs, favorable tax regime, foreign exchange licenses, and quotas to local entrepreneurs. With all these benefits, wealth started accumulating in the hands of few families, which later known as the twenty-two families of Pakistan. Pakistan economy was…
Quality improvement and the growth of science and technology based education should be the main focus of attention Pakistan faces a variety of challenges in reforming its education sector whereas a lack of capacity in the higher education segment is one of the main reasons for the poor standard of higher education in Pakistan. Pakistan’s higher education system is relatively small in size as a contrast to its requirement. As a matter of fact, higher education is considered a very significant area for any country’s socio, political and economic development. Throughout history, universities have played a very important role in…
Transportation plays a very important role in the development of a society as the demand for transportation increases along with development. It is one of the major industrial sectors of an economy. Over the years, Pakistan has achieved reasonable economic growth with the stable unemployment rate and a rise in foreign investments in recent years (though results of last one year is not so encouraging). As a result, the purchasing power of individuals has risen along with the demand for cars, motorbikes and commercial vehicles. The demand ranges from luxury buses to small carriers. To meet these demands, Pakistan depends…
Traditionally, Pakistan and China have cooperated closely at the strategic and political levels. Since 2014, the two countries are now making efforts to expand their bilateral collaboration economically as well. The construction of the China-Pakistan Economic Corridor (CPEC) is a milestone that clearly shows the shift. The CPEC is a large-scale initiative to build energy, highway, and port infrastructure in Pakistan by Chinese companies with the support of the Chinese government. China came forward at a time when no other country was willing to invest in Pakistan. In order to make the economic corridor a success, control on terrorism and…
Pakistan’s economy in 2018 faced many challenges like trade, current account and budget deficits, high inflation, depletion in foreign currency reserves, depreciation of Pakistan rupee against US dollar and political situation of the country. The trade deficit is continuously increasing; the government has announced to form a new policy for the textile sector but couldn’t finalize that in 2018. Federal Bureau of Revenue trying to meet its tax collection targets but looks difficult to achieve its target in current fiscal year. Post-election, it was viewed that new government has a full support from the powerful institutions but somehow federal government…
Pakistan contains vast renewable energy potential. As per last national plan, Pakistan can only have a 5 percent of total generation from renewable power (mainly wind, solar and bagasse only). It is being said that Pakistan should set the target of generating at least 30 percent of its electricity from renewable energy resources in the next five to ten years. The Alternative Energy Development Board (AEDB), a one-stop window for wind, solar, and biogas power should work with all the stakeholders in making it possible. The last government made certain changes in the renewable energy strategy, which has stuck the…
Natural gas plays a major role in the energy matrix of Pakistan. It accounts for almost 32 percent of the total primary energy supply mix in Pakistan and Pakistan is 20th largest gas consumer of the word, with an established natural gas industry. Pakistan’s gas consumption is nearly the same as in France, which is a developed and industrialized country. This shows how much gas Pakistan is misusing or wasting. There was a time when Pakistan was self-sufficient in gas, however, increased demand fostered by lack of alternative fuels and price subsidies coupled with diminishing production constrained by unattractive fiscal…
UAE Vision 2021 was launched by H. H. Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the United Arab Emirates (UAE) and Ruler of Dubai in 2010. The Vision aims to make the UAE among the best countries in the world by the Golden Jubilee of the Union. In order to translate the Vision into reality, its pillars have been mapped into six national priorities, which represent the key focus sectors of government action in the coming years. Under UAE Vision 2021, government is putting its maximum efforts on drawing a road map for the empowerment program…
The current government has completed hundred days milestone with mixed performance. Most of the economic indicators are not very encouraging and no significant improvement in any area in the macro-economy was witnessed despite sincere efforts by the new government. Pakistan’s economy is passing through a very critical situation. Foreign debt has nearly reached USD 95 billion; debt-servicing costs are crippling; foreign-exchange reserves are at almost the lowest level in the nation’s recent history; exports have dropped and foreign remittances have also suffered. Devaluation of the Pakistani currency has increased inflation domestically. The poor system of tax collection is a major…
Pakistan’s education sector is being identified as poor quality by independent analysts since long. The education sector is getting the least importance when it comes to the allocation of development expenditures from both the federal and provincial governments. The situation further aggravates when allocated resources are distributed to districts, which in turns cause variations in the literacy levels among various districts countrywide. It is encouraging that one of the goals of the new government is to work on human development, which is not possible without spending on education. As a routine, the government announces aggressive educational improvement plans but it…
Pakistan’s accumulated current account deficit has reached US$19 billion and it faces payments worth US$9 billion for previously taken loans. However, the fiscal steps taken by the government and monetary policy actions announced by the State Bank of Pakistan have shrunk the current account deficit by US$6 billion thus the current account deficit may total US$12-13 billion in the current fiscal year. Similarly, the deficit in trade in goods and services has also increased to US$32.6 billion, up from US$27.3 billion a year ago. The external sector deficit is not new for Pakistan and we have witnessed this since the…
Education is critical to the social and economic development and has a profound impact on population health. Education and health projects in the public sector are considered to be the biggest initiatives any government can undertake. Undoubtedly spending on these two sectors is a measure of social and economic value in a developed world. Pakistan’s present government is putting a lot of focus on these two sectors, it has promised to increase the spending on education and health sectors as well and will also improve the quality of service in both the sectors. World Bank has been asking the Government…
Women’s empowerment in Pakistan is heavily dependent on many different variables that include geographical location (urban/rural), educational status, social status, and age. Working women of Pakistan have always tried to improve the financial stability of their respective households but sadly their work is always undervalued. Empowering socially, economically, educationally, politically and legally has always been a difficult task to achieve in an underdeveloped country. Therefore, Pakistani policymakers should specifically make the policies on women’s empowerment at the national level for health, education, economic opportunities, gender-based violence, and political participation. Pakistan’s women development model is very much a work in progress…
Pakistan has a huge advantage of its geographical location yet it could not avail the full advantage of its resources. Low foreign direct investment, the high cost of doing business, poor infrastructure, and political instability have impeded the economic growth of Pakistan. In these circumstances, the establishment of special industrial zones is a must to attract foreign direct investment (FDI) and generate economic activities in the country. We have seen that worldwide special economic zones have played a vital role in the creation of jobs, enhancement of exports, and development of the economy. Various governments in the past have established…
Like other developing countries, foreign investment in Pakistan is widely considered an important vehicle for its economic growth. Pakistan provides numerous opportunities with attractive returns for multinational companies (MNCs); fully protects foreign investment under the law and has also signed double taxation treaties with various countries to give benefits to foreign investors. The legal framework for foreign investment is provided through “Foreign Private Investment (promotion and protection) Act, 1976”, and the “Protection of Economic Reform Act, 1992”. Most of the existing MNCs are satisfied with the concessions and regulations especially related to the repatriation of dividends, whereas such benefits are…
Five years back, there was severe load shedding in Pakistan and foreign investors were reluctant in investing in the infrastructure sector especially in the power sector of Pakistan. Despite having vast energy resources especially coal reserves and water yet Pakistan couldn’t utilize these indigenous resources due to lack of policy framework and lack of funds. Due to load shedding, economic activities in the country were slowed down and caused a public unrest. As per analysis, capacity utilization in some of the key industries was fallen to nearly 50 percent, worst affected sectors were fertilizer, textile and agriculture. In 2013, China’s President, Xi Jinping, proposed establishing economic…