DR. S. M. ALAM & M.A.KHAN
Apr 18 - 24, 2011
Pakistan is the 6th most populous country of the world, with more than 170 million tough, diligent and hardworking people. Flanked by Iran and landlocked Afghanistan in the west, the central Asian Republics and China in the north and India in the south-east, Pakistan can boast of having a significant location advantage with a vast, only partially tapped, potential consumer market.
With one of the highest peaks of the world in the north and vast plains in the south, it offers an unusual diversity of temperatures ranging from sub-zero level on the mountains in winter to scorching heat in the plains in summer. It provides friendly habitat to exquisite ranges of flora and fauna and a large variety of agricultural crops used for both food and raw material for industries and for exporting purposes.
The country's export income is more than $18 billion which comes through exporting cotton, textiles, rice, leather items, sports goods, carpets, fruits, handicraft and sea-food. Annual import expenditures are about US$32.50 billion on importing industrial equipment, vehicles, iron ore, petroleum, edible oil, tea etc. The country's per capita income is more than US$925.
The 48.05 million labor force includes highly trained and experienced professional managers, engineers, computer scientists, bankers and financiers, vital to the growth and development of the industrial and corporate environment.
Pakistan ranks amongst the top seven fastest growing economies of Asia in the recent year. The annual remittances have been increased to nearly nine billion dollars. The foreign direct investment has also been increased.
Agriculture is the largest sector of Pakistan's economy and accounts for 22 per cent of GDP. It provides employment to over 40 per cent of total employed workforce. Agricultural sector of Pakistan is usually divided into crops, livestock and fisheries. The crop sector accounts for about 65 per cent of agriculture share in the GDP. Blessed with abundantly available national resources and favorable climate, Pakistan stands as an ideal place for crop, animal, forestry and fish production. Crop sector banks on cotton, rice, fruits, vegetables etc. while livestock accounts for 30 per cent of agriculture GDP. Forestry and fisheries make up less than 2 per cent of the total. Pakistan agriculture and its related products comprise of major and minor crops, vegetables and spices, fruits, edible oils, livestock, milk, poultry, fisheries etc. Pakistan's major and minor food crops are wheat, rice, maize, jowar, bajra, barley; cash crops are sugarcane, cotton, sugar beet and guar seed; pulses are gram, mung, and masoor; edible oilseeds are sesamum, groundnut, soybean, sunflower, canola, safflower, and cotton seed.
The average production of some important crops are (in 000 tons): wheat (22,109), rice (4,991), bajra (193), jawar (186), maize (2,275), barley (96), gram (582), sugarcane (45,316), cotton (2,486), tobacco (84), rapeseed and mustard (227), and sesamum (30).
Pakistan is ranked fourth in worldwide sugarcane production and 12th in sugarcane production. The production of sugar is about 4.35 million tons from 77 mills. Fruits, vegetables and floriculture have important impact on agricultural economy. The yearly production of fruits, vegetables and spices is 12 million tons. The production of important fruits include (in 000 tons): citrus (1,948), mango (1,074), dates (622), apples (380), banana (158), apricot (206), almonds (23), grapes (49), guava (571), peach (70), pears (31), plums (61), and pomegranate (50). The production of all fruits come to 622. The horticulture product holds huge market for exports. The relative importance of this sector can be gauged with high growth rate of exports of fruits and vegetables from Pakistan due to ever increasing demand in the existing and international markets. Some of fruits grown have great potential for exports, which are available in volumes, varieties and are of rich flavor. These are mangoes, citrus, grapes, dates, apples, peaches, and cherries. Other prominent fruits having enormous export potential are plums, pears, guava, etc. Among vegetables, potatoes, garlic, ginger, and onions are vastly grown in Pakistan and hold a large global market share because of competitive advantage due to superior variety, volume and price.
The edible oil production stands at 740,000 tons, which is 30 per cent of local demand. The imported quantity of the oil is 1,360 (about 70 per cent) and consumption is 2,100. Pakistan spends a huge amount on oil import bill. The production of vegetables (in 000 tons) are: tomato (426), potato (2025), onion (1,817), garlic (56), chilies (91), turmeric ( 38), and ginger( 41).
Livestock is an important sector of agriculture in Pakistan, which accounts for 51 per cent of agricultural value addition and about 11.3 per cent of the GDP. The livestock population is (in million): Buffalo (27.3), cattle (24.2), goat (66.7), sheep (36), poultry (366), camels (0.8), asses (4.2), and horses (0.3). mules (0.3).
In the similar manner the livestock products are (in 000 tons): milk (43,562), beef (1,115), mutton (740) and fat (136.3). The livestock and poultry sectors generate employment for over 1.5 million people.
Leather goods play an important role in the economy of Pakistan. Pakistan enjoys an excellent position in the quality of the skins and hides because of its natural qualities. The skins and hides of the cattle are thicker and shinning in character and processed in tannery factory. The factories have been established in Karachi, Lahore, Faisalabad, Peshawar, Multan, Hyderabad, Gujranwala, Rawalpindi, Quetta, Kasur and even in many small towns and villages. These factories have facilities to tan the raw hides and skins using different chemicals. In this way, leather is obtained and through these leather, many different items are made from the leather. Kasur a small city in the province of the Punjab has the largest numbers of tannery factory. Similarly, the city of Karachi in Sindh has also large number of tannery factories and these are located in SITE and Korangi areas, Hyderabad, Sukkur etc.
The finished leather goods obtained in the tannery factory are used in the preparation of leather goods such as leather jacket, sport shoes (boots, shoes, joggers), wallet, purse, leather gloves, sports goods, leather football, boxes, small and big ladies hand bags, lady belts, brief case, leather garments, buttons, zips, rivets, fashion gloves etc.
Fishery plays an important role in the national economy and towards the food security of the country. This sector reduces the existing pressure on demand for mutton, beef and poultry. Seafood includes tuna, shrimp, prawn, mollisca, lobsters, crabs, barnacles and mackerel.
Forestry is also an important sector of agriculture, which provides timber and different types of wood to the people. It also provides millions of jobs to the population.
Eight per cent assets of commercial banks are held by domestic banks and the rest by foreign banks. Besides providing working capital and loan term-financing to the consumers and investors, these banks offer a range of vital services such as remittances handling and managing of dividends and foreign currency accounts.
The specialized institutions provide credit in form of loans to invest in various sectors for betterment of the users and finally to the country. Banking sectors are also providing credit cards and ATM systems for the easiness of the consumers.
Engineering industry is one of the most dynamic industries in the world having great potential for growth. The main strategic focus in the engineering sector is on bridging technological gap by providing conducive environment including the required technological, financial and physical infrastructure and creating a seamless integration with emerging trends in the global market. The most important step for the promotion of engineering sector is to allocate more resources to technical education.
At present, according to a report, there are 216,490 educational institutions and out of which 106,435 are in Punjab, 46,862 in Sindh, 36,029 in Khyber Pukhtunkhwa and 10381 in Balochistan. Pakistan is producing nearly 50 Ph.D. scholars in science subjects every year, while neighboring country is producing nearly 3000. Recently, a report was published stating that only 3000 out of 11000 teachers of 57 public sector universities are Ph.D.
Information technology has assumed great importance in the knowledge-based economy. The government has accorded high priority to the IT sector. The main initiatives include the addition of facilities for computer education and training at affordable rates while ensuring quality of education, enhancement of internet infrastructure and provision of efficient internet services at reasonable rates, establishment of software technology parks and data networks, incentives for software exports and computer hardware manufacturing, enhancing arrangements for marketing of software overseas and provision of a legal cover to the electronic transactions enabling implementation of e-commerce. Pakistan in recent years has made remarkable progress by ways of reform and the resulting growth of information and communication technology sectors. Over 40,000 students graduate in the country every year, which include 20,000 with IT related degrees. Of 1,082 active information technology companies in Pakistan some 110 are certified by International Standards Organization (ISO). In banking sector, the ATM (Automatic Teller Machine) transactions are about 50 per cent of the total e-banking transactions.
The automobile and allied products sector in Pakistan has attained a pivotal position aided by an unprecedented growth in the country's industrialization and urbanization. The government's continued support to the automobile and auto parts manufacturing sector has been the key source of encouragement to the manufactures as well as aftermarket vendors to move in and reap entrenched benefits that Pakistan has to offer. At present more than 25 automobile units are engaged in the assembly/manufacturing of cars, trucks, buses, motorcycles, and tractors. The increasing number of banks and financial institutions has greatly led to affordability, consequently turning out advantageous for automobile and allied parts manufactures. Recent survey has revealed that more than 65 per cent of all new automobiles are paid for through financing and leasing options. At present, 10 persons out of 1,000 have cars in the country. After every ten minutes one new car is coming on the road of Karachi. According to the latest economic survey, there are 60 automobile manufacturing units in the country which are involved in the assembling and manufacturing business with the support of downstream industry, which comprises approximately 1,250 units of auto parts manufactures. Pakistan has registered a record 58 per cent growth in auto sector, which speaks for the country's tremendous industrial growth and its investment-friendly environment.
Pakistan has gained recognition among others textile manufacturing countries of the region. Considered as one of the top 10 textile exporting countries of the world, Pakistan is the 4th largest producer of cotton yarn and cloth and 3rd largest player in Asia with a spinning capacity of 5 per cent of total world production. It also ranks 2nd in the export of yarn, 3rd in the export of cloth and contributes 3 per cent to the total textile trade of the world. The domestic textile industry has shown phenomenal growth during the past several years, contributing 8.5 per cent to the GDP, 61.4 per cent of the total exports, 38 per cent of the manufacturing labor force, and 3 per cent of the total textile trade in 2005-06. The textile and garments are the largest industry and prestigious foreign exchange earner of the country. Its performance is directly dependent on cotton lint availability and its prices in the local and international markets. The share of textile industry in the country's economy along with its contribution to exports, in terms of GDP, employment, foreign exchange earnings, investment and value added and revenue generation altogether placed the textile industry as the single largest manufacturing sector in the economic growth of the country.
Pakistan's exports are heavily dependent on the textile sector and this is clearly evident from the fact that 68 per cent of our exports are textile related products. Pakistan's share in world textile exports is observed to have been increased from 2.58 per cent in 1990 to 3.46 per cent in 2006.
Pakistan is a country with rich human resources, which constitute the foundation for any major information technology and telecommunication initiative. Its population of more than 175 million includes highly talented people, who have made their mark in various fields including IT and Telecom. The information technology and telecom sector remains a major area of focus for the government , as it plays a key role in the growth of the economy. The world is shaping up to be a better place with new and exiting opportunities for everyone. Today, Pakistan is credited to be one of the fastest growing regions in telecommunications throughout the world.
Currently there are over 430 local companies and 30 multinational engaged in manufacturing a large number of medicines to look after the millions of people. There are about 630 pharmacies selling medicines to patients in the urban as well as rural areas of the country. Pakistan's per capita spending on medicine is Rs500, which amounts to about 1 per cent of per capita income. As a larger provider of jobs to over 70,000 personnel and twice as many in the marketing, distribution, and allied fields, it can become a major player in the national economic development. Pharmaceutical industry plays a vital role and is doing well in addressing the health issues of the masses of the country. On one hand, it serves the cause of human health and on the other it contributes significantly towards the economy of the country. Role of pharmaceutical industry cannot be negated in any country especially in Pakistan where health issues are often affected by diverse cultural requirements, preconceived notions, home remedies etc. In terms of revenue collection and employment it is preceded by none other than textile sector in Pakistan and as far as health issues are concerned, about 90 per cent of medicine consumed in Pakistan is being processed or manufactured in the country.
The insurance company in Pakistan has performed exceptionally well during the last few years as a result of liberal policies and incentives provided by the government. Actually the performance of an insurance company is linked with the national economy which has taken a turn around during recent years and so the trickledown effect on the health of insurance industry is significantly visible. Insurance penetration as percentage of GDP is 0.6 per cent for life and non-life business. According to official estimates, less than 2 per cent of the population is covered by any form of insurance in Pakistan.
There are roughly 50 insurance companies (46 non-life, 4 life and general takaful) operating in the country and providing all sorts of benefits to the policy holders who are engaged in office works both government and private companies. Such policies are share of group life insurance policy for the employees benefits, share of group provident fund, share of group house finance insurance, group of life insurance policy for all agri-business, group insurance policy for consumer finance, children education, marriage, loan for purchasing cars, ornaments, plots, flats, agricultural lands, for health, group accidental policy for the fishermen of the society. Life insurance and health insurance policies are the two most important segments of the insurance policy.