Review on Pakistan from Economic Watch
Pakistan’s economy can be characterized as semi-industrialized. The country’s industrial sector constitutes 24.3% of the country’s gross domestic product. Pakistan has a total labor force of 55.88 million (as of 2009). The largest industries of the country are textile, cement, agriculture, fertilizer, steel, tobacco, edible oil, pharmaceuticals, construction materials, shrimp, sugar, food processing, chemicals and machinery. Pakistan’s industrial sector experienced tremendous growth between 2004 and 2006 despite the shortage of electricity. However, it is worth noting that net foreign investment in industries of Pakistan constitutes only 2.5% of the country’s GDP.
Pakistan Industry Sectors: Major Sectors
The major industry sectors of Pakistan are as follows:
As Pakistan is one of the major producers of cotton, the country has a sound textile industry. It is apparent from the fact that the textile exports doubled to $10.5 billion in 2007 from $5.2 in 1999. Pakistan accounts for 3% of the United States textile imports. The country’s textile exports are expected to reach $14 billion while employing approximately 6.2 million people indirectly as well as directly. Pakistan’s textile and apparel manufacturing industry provides employment to 40% of the country’s labor force.
Pakistan has an abundance of mineral resources and an area of over 6,00,000 km² that is projected to have a variety of metallic and non-metallic mineral deposits. In 1995, Pakistan stipulated its first National Mineral Policy that resulted in the expansion of its mining sector. In response to the policy, four international mining companies have already set up their operations in the country. Coal, rock salt, construction material, gold, gemstones and duddar zinc are other major natural products of the mining sector.
The second half of the first decade of 21st century has seen steady growth in the IT industry of Pakistan. Software exports grew considerably in 2007. That year, the industry’s worth was estimated at $2.8 billion with an increase in the number of IT companies to 1306. The country also featured in the Global Services Location Index for the first time in 2007, Further, Pakistan ranked as the 30th best offshoring location in the world and as of 2009, its rank improved to the 20th position.
Pakistan Economic Review
Pakistan economic review projects that because of strong economic policies taken up by Pakistan government manufacturing and financial services sectors have flourished since fiscal 2008. Export of goods is a major concern for Pakistan economy. From 1999, exports of Pakistan have increased from $7.5 billion to $18 billion in financial year 2007-2008. Major items for exports include cotton fiber, vegetables, rice, electrical appliances, furniture, cement, tiles, marble, textiles, clothing, sports goods, powdered milk, livestock meat, software, seafood, leather goods, surgical instruments, carpets, rugs, ice cream, chicken, wheat, processed food items, Pakistani assembled Suzuki cars, salt, defense equipment, onyx, marble and engineering goods to mention a few. Some important import items of Pakistan are petroleum and petroleum products, automobiles, medicines, industrial machinery, construction machinery, trucks, electronics, civilian aircraft, computers, pharmaceutical products, computer parts, food items, toys, defense equipment, iron and steel. Economic review of Pakistan has been focusing in recent times on how to deal with economic recession. Economic indicators look positive in present situation. Discount rate of central bank has been improved to 1.5 percentage points. This will help in dealing with high inflation rate in Pakistan. Pakistan economic review projects that government encourages foreign investments in various fields of real estate, telecommunications, software, energy, fertilizer, aerospace, textiles, steel, ship building, arms manufacturing, cement and automotives.
Pakistan Economic Structure
Characterized as semi-industrialized, Pakistan’s economy has grown tremendously since its independence in 1947. Punjab and Karachi states constitute the major share in the economic growth of the country. The first decade of the 21st century has experienced wide-ranging economic reforms particularly in manufacturing and financial services sector, leading to improvement in the country’s economic outlook.
Pakistan Economic Structure: Primary Sector
Pakistan’s primary sector plays a major role in the country’s economy. Primarily an agrarian economy, Pakistan produces a range of agricultural products. Around 43% of the country’s labor is engaged in the primary sector, which in turn contributes 20.8% to the country’s economy in 2009. Pakistan is the second largest producer of Chickpea and the third largest producer of mango in the world according to the 2005 Food and Agriculture Organization of the United Nations. Some other major agricultural products of Pakistan include onion, cotton, rice, tangerines, oranges, apricot, sugarcane, date palm, Clementine and wheat. Dairy farming is also a large industry in Pakistan. In fact, Pakistan is the fifth largest milk producer in the world. Although Pakistan has a considerable livestock population, it spends around $40 million a year on formula milk import.
Pakistan Economic Structure: Secondary Sector
Pakistan’s manufacturing sector provides employment to 20.3% of the country’s labor force (est. 2005). Some major manufacturing industries include cotton textile and apparel manufacturing, carpets, rugs, rice, chemicals, sports goods and leather goods. Some other popular industries are construction materials, mineral, paper products, food processing and beverages. Around 51.4% of country’s exports include textile and apparel. The secondary sector experienced a growth of 5.4% in 2007-08. However, electricity shortage remains the biggest challenge in ensuring development of Pakistan’s secondary sector.
Pakistan Economic Structure: Tertiary Sector
The services sector of Pakistan mainly includes industries such as finance, insurance, transport, communications and storage that account for 24% of the country’s GDP. Wholesale and retail trade has 30% share in the GDP. With increase in the country’s software exports, the IT industry is emerging as a flourishing service industry. Despite union unrest, the Pakistani government is actively engaged in privatization of banking, telecommunications and utilities to produce more jobs in the country.