Sep 26 - Oct 02, 2005 
ISSUE # 39 

Pakistan has an agrarian economy. Despite a massive growth of the manufacturing sector, agriculture remains the driving engine of economy. Two of the sub-sectors of large-scale manufacturing, i.e. textiles and sugar, are agro-based. Agriculture contributes nearly 25% to the total GDP, employs the largest percentage of workforce and remains the major source of income for the rural population. One of the serious threats faced is the pressure on the government for the withdrawal of subsidies on agriculture. The other major problems are declining availability of water, lack of modern farming techniques and fragmentation of

landholding. All these factors have a direct bearing on yield, which is also very low compared to other countries in the region.

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Pakistan's import bill for petroleum products is bound to touch the highest level of $6 billion this year; the country has so far spent on oil purchases since its inception. However, the rising cost of oil import is beyond control of any government on the back of unprecedented and unabated demand for fuel around the world, especially in China which has launched developmental projects at a massive scale.
It is, however, a funny situation that while the unrealistic increase in oil prices has become a major concern for the developing economies, the oil marketing companies are enjoying windfall profits out of the booming oil business.