ECONOMIC RESOURCES OF PAKISTAN
S.KAMAL HAYDER KAZMI,
Research Analyst, PAGE
Apr 18 - 24, 2011
DEFICIT FINANCING (RS BN)
|Total financing of budget||276.2||214.2||403.3||490.4||100||100|
|External resources (net)||56.9||-9.9||110.3||47.0||27.3||9.6|
|Internal resources (net)||219.3||224.1||293.0||443.4||72.7||90.4|
|*Others include non-bank borrowing through MTBs, PIBs, Prize bonds, etc.|
Economic resources play an important role to spur the economic growth and to accelerate the pace of development in an economy.
Pakistan is situated in a region where bulk of economic resources is found in its surroundings. Pakistan is one of those countries, which are endowed with the natural resources.
Pakistan has coal resources estimated at over 185 billion tonnes including 175 billion tonnes identified at Thar coalfields in Sindh. Pakistan's coal generally ranks from lignite to sub-bituminous. After witnessing a decline of 17 per cent in 2008-09, the total production of coal was increased by 10 per cent during July-March 2009-10 over the corresponding period last year. The share of coal imports in overall availability of coal increased from 62.2 per cent in July-March 2008-09 to 67.9 per cent during fiscal year.
About 58.9 per cent of total coal was consumed by the brick kilns industry whereas 39.6 per cent consumed by cement industry during the period of July-March 2009-10.
During 2010, the balance recoverable natural gas reserves were estimated at 28.33 trillion cubic feet. The average production of natural gas during July-March 2009-10 was 4,048.76 million cubic feet per day (mmcfd) as against 3,986.53 (mmcfd) during the corresponding period of last year, showing an increase of 1.56 per cent. Natural gas is used in general industry to prepare consumer items, to produce cement and to generate electricity in the country. In the form of CNG, it is used in transport sector and most importantly to manufacture fertilizer to boost the agricultural sector.
AGRICULTURE & WATER
Pakistan is blessed with vast agricultural resources on account of its fertile land, well-irrigated plains, extremes of weather, and centuries old tradition of farming. Agricultural performance during Rabi FY11 is likely to compensate for some of the flood related losses sustained during Kharif. The country is likely to see a record wheat crop of 25 million tons barring unfavorable weather at the time of harvest. The government's decision to provide seeds free of cost in the areas worst hit by the flood, further supports the positive outlook for wheat.
Agri-credit disbursement fell 4.4 per cent in H1-FY11 compared with a 6.9 per cent increase in the same period last year. Canal headwater availability for the rabi season increased to its highest level since FY11 due to heavy monsoon rains in Pakistan. This improvement in water availability was instrumental in increasing the area sown under wheat in the canal-fed areas that account for approximately 87 per cent of the total area under wheat cultivation.
The wheat cultivation also increased in non-irrigated (barani) areas due to enhanced soil moisture from heavy monsoon rains. Wheat yields are also likely to have benefited from winter rains throughout the country. During January 2011, water storage at major reservoirs was around 3.6 MAF as compared to only 1.4 MAF last year.
EDUCATION & HUMAN CAPITAL
A good education system may be the flower of economic development, but it is also the seed. The stock of capital can be divided into three components: natural, human, and manmade physical capital.
It is now increasingly recognized that education affects attitudes, motivation and other personal characteristics, as well as providing knowledge and skills. Human capital development is a continuous, lifelong and lifetime process. Education system of any country is influenced by economic, political, and social imperatives. Investment in education is wasted unless people have the will to prepare for and engage in those activities, which are needed for accelerated economic growth. The education sector absorbs more public resources than any other human development activity in developing countries. Same is true for Pakistan.
In Pakistan, governments never set in right priorities before resource allocation and the result is very much clear that we are on the receiving end. Formal education is only one way people acquire knowledge. Parents, other relatives, and friends pass on much knowledge and information to children, informally. Much is learned through experience, trial and error, and experimentation. Too many resources are devoted to physical capital and as a result, insufficient resources are left to produce quality teachers.
The goal of developing human capital is to help people realize their own potential, to develop their intellectual, technical, and organizational capabilities.
FOREIGN EXCHANGE RESERVES
The improvement in the country's external accounts was reflected in the buildup of foreign exchange reserves, which reached a new peak of US$18.1 billion by end Feb - FY11. The rise in the overall reserves improved the reserves adequacy ratio measured in weeks of imports from 28.2 weeks as at end-June 2010 to 28.6 weeks as at end February 2011. However, foreign exchange reserves received a boost in December and January due to inflow of coalition support fund.
Pakistan is in the powerful jaws of the dragon of overpopulation that is guzzling resources. This spree has given rise to multidimensional problems. At present, our land is full of economic resources and it has become difficult for the government to meet the rapidly growing needs of the huge population.