Economy of Pakistan

According to cheeroutdoor, Pakistan belongs to the category of relatively underdeveloped countries of the agro-industrial type. In the 1990s The economy developed at a slow pace, barely exceeding the rate of population growth. With the coming to power of the military government of Musharraf in 1999, there has been a trend towards macroeconomic stabilization. At the same time, growth, especially in the agricultural sector, was slowed down by unfavorable weather conditions — a drought that lasted for three years. Support for efforts to combat international terrorism allowed the Pakistani government to receive significant foreign assistance after the events of September 11, 2001, including a $1.3 billion concessional IMF loan and $12.5 billion debt restructuring to Paris Club member countries.

GDP $70 billion; taking into account the purchasing power parity of currencies – $ 310 billion; GDP per capita $490; taking into account PPP – 2140 dollars (2002).

The share in the global economy barely exceeds 0.2%; taking into account PPP is 0.8%.

The labor force is approaching 41 million people, characterized by high levels of migration, mainly to the Gulf countries, and widespread use of child labor. The level of open unemployment rises, in 2002 – 9%. Inflation has decreased in recent years and, according to official data, is 5% per year.

The share of agriculture in the structure of GDP is 26%, industrial sectors – 24%, services – 50%. 44% of the economically active population is employed in the agricultural sector, 17% in the industrial sector, and 39% in the tertiary sector.

The industry consists of three segments – energy, mining and manufacturing. The basis of the first of them is the production of electricity at thermal, hydropower and nuclear power plants. Electricity production is 62.7 billion kWh per year, consumption – 58.3 billion; there are no exports and imports. The primary sources are oil and natural gas (64%), hydro resources (35%), nuclear energy (1%).

The mining industry is underdeveloped. Natural gas production is of the greatest importance – 25.7 billion m3 per year. Significantly less importance is oil production – 3.9 million tons and hard coal – 3.3 million tons. Coking coal is imported. Iron ore, chromites, bauxites are mined in small quantities from metal ores. Limestone mining is large (10 million tons). Rock and table salt, marble, dolomite, clay, magnesite are also mined.

The main branch of the manufacturing industry is textile. The industry employs more than ¼ of factory workers. There is St. 300 fairly large textile factories, of which approx. 1/2 – spinning. The factories produce 1.8 billion tons of cotton yarn and 560 million m of fabric per year. In addition to cotton, synthetic fiber fabrics are produced, as well as knitwear and finished products. The second most value-added industry is the food industry. The highest contribution was made by enterprises producing refined sugar (3 million tons), vegetable oil (780 thousand tons), cigarettes and soft drinks. The complex of metallurgical and machine-building industries is of great importance. The metallurgical plant built with the help of the USSR near Karachi remains the only enterprise of its kind, producing 1.2 million tons of steel and pig iron per year. It is planned to expand the plant, taking into account the fact that metal consumption is 6 million tons. Heavy engineering enterprises (the largest is the heavy engineering plant built with the assistance of the PRC in Taxila, Punjab) produce a variety of engineering products, incl. complete equipment for sugar and cement plants, road equipment, cranes, masts for power lines, etc. There are large tractor-assembly enterprises, factories for telephone and telegraph equipment, and heavy electrical engineering. A number of car assembly enterprises, set up mainly in cooperation with Japanese firms, produce trucks and cars, buses and minibuses, motorcycles and motor scooters (scooters). The contribution of the oil refining and chemical industries is significant. Basically, two refineries in Karachi (their total capacity is about 5 million tons) operate on imported raw materials, and partly a third plant in Multan (Punjab) with a capacity of 2.5 million tons of oil per year. Chemical enterprises produce mainly mineral fertilizers, primarily urea (urea). Natural gas is widely used as a raw material for the production of nitrogen fertilizers. A significant role as an auxiliary is played by the industry for the production of tires and tubes for wheeled vehicles. There are large enterprises for the repair and modernization of rolling stock and railway equipment (the main one in Lahore), as well as a shipyard and a ship repair plant in Karachi. An increased role is played by the building materials industry, where the main place is occupied by cement plants (cement production is 9.7 million tons per year). The main export value is the industry for the manufacture of sports goods (tennis rackets, cricket bats, balls, etc.) and surgical instruments. The export value of these and other labor-intensive products (carpets, handicrafts, souvenirs made of green marble, onyx, etc.) exceeds $0.5 billion.

Agriculture remains the first important sphere of material production. Agriculture accounts for 2/3 of the value added in it, about 1/3 comes from animal husbandry, and less than 5% from fisheries and forestry. The total land fund is 80 million hectares, and the sown area is 20 million hectares. The world’s largest irrigation system has been created in the Indus basin, which includes 43 main canals 65,000 km long, dozens of dams, dams, and reservoirs. The most significant hydrotechnical complexes are the Tarbela dams in the upper Indus, Mangla (on Jelama), Sukkur and Kotri in the lower Indus. The total irrigated area exceeds 75% of the sown area. The grain economy is based on the production of wheat – 20 million tons (2002). The second grain crop is rice (4.4 million tons), followed by corn (2 million tons), cereals and millet (706 thousand tons) and legumes (562 thousand tons). In addition, potatoes (1.7 million tons) and onions (1.6 million tons) are grown in significant quantities. Production of other vegetables reaches 2.8 million tons, and fruits (apples, mangoes, dates, citrus fruits, bananas) – 4.1 million tons.

Among the commercial crops, cotton is the most important. Cotton production amounted to 1.6 million tons in 2002, having decreased compared to a number of previous years, when it reached 1.8-2.0 million tons. Sugarcane (52 million tons) is in second place in terms of value. The production of oilseeds (291,000 tons) is not enough to meet the needs of the dairy industry; raw materials for it have to be regularly imported.

Forage production is estimated at 56 million tons. Cattle predominate, buffaloes, goats and sheep, camels and horses are also bred. Nomadic pastoralism is carried out in arid regions. Fishing is mainly export-oriented, but fish stocks are far from being fully studied and are used very poorly. Forests occupy a small part of the area – approx. 4%. Commercial wood is provided by coniferous mountain forests in the north-west of the country.

The oldest transport industry is the railroad. The length of railways is 8163 km; 293 km of track are electrified. In terms of traffic, road transport ranks first. The length of roads is 248 thousand km, of which 141 thousand are paved; expressways – 339 km. Pipeline transport includes gas and oil pipelines with a length of 4 and 1.1 thousand km, respectively. Air traffic is of increasing importance. There are 87 airports, and 14 of them have runways with a length of St. 3 km. The aviation park has St. 50 aircraft, incl. Boeing 747 and Airbus A-300. The merchant fleet includes 17 vessels with a displacement of St. 1 thousand tons, including 1 tanker and 3 container ships; the total tonnage of large vessels is 242 thousand tons.

Communication means consist of a telephone network with a length of 2.9 thousand km of main lines and short-wave radio communications. International communication is carried out with the help of 6 stations receiving signals from satellites. The number of radio and television stations is 49 and 22, respectively, radio receivers 13.5 million, television sets 3.1 million. In 2000 there were 30 providers and 1.2 million Internet users.

Domestic trade accounts for 16% of GDP. Wholesale trade is carried out by an extensive network of large and medium-sized companies selling agricultural and industrial goods of intermediate and final demand. Retail trade, along with a few modern-style supermarkets in large cities, is carried out by small shops (dukans) and owners of outlets in traditional urban and rural bazaars. Part of the retail trade is controlled by wholesalers and creditors. Widespread street trading. In the streets and within the boundaries of urban and rural areas (makhalla), there are also establishments for the provision of personal services.

The central sector of the service sector is the provision of services by public institutions, incl. courts of various types and levels, security and law enforcement services. The state is in charge of the most significant part of the education and health care system. Public services in these and a number of other areas are supplemented by private and public ones.

The tourism industry is underdeveloped. Foreign tourists are attracted mainly by archaeological sites (Mohenjo-Daro, etc.) and high-mountainous regions in the north of the country and in the Pakistan-controlled part of Kashmir.

The policy of the current government in the economic and social field is characterized by the desire to continue the course towards the liberalization of the conditions for private entrepreneurship and the formation of a modern market for capital, goods and services. Much attention is paid to privatization programs and attraction of private foreign capital. Among the priorities of social policy is the fight against poverty and poverty, illiteracy, uneven development of regions, discrimination based on gender and confession.

The policy of the State Bank is to maintain the conditions of macroeconomic stability, curb inflation, increase gold and foreign exchange reserves, which in 2003 reached a record level of 10 billion US dollars. The Bank exercises control over the activities of private commercial banks and the stock exchange.

Government spending is estimated at $11.6 billion, revenues at $8.9 billion. The deficit is covered by domestic and foreign loans. The basis of the revenue side of the budget is taxes, mainly indirect. External debt is $31.5 billion. The external debt service ratio is high – 41.2%.

Minimum wage $600 per year. Below the poverty line (less than $2 a day), according to special surveys, taking into account the purchasing power of the local currency, 85% of the population is living, and 31% are in poverty (less than $1 a day).

The level of gross domestic investment is low (15.2% of GDP), the bulk of income is consumed during the year. A significant share of investment is provided by the transfer of funds by persons working abroad.

The foreign economic sphere is essential for the economy. Exports $8.8 billion, imports $9.2 billion. Main export commodities: textiles (clothes, cotton fabrics and yarn), rice and other crops. Goods are exported mainly to the USA (25%), Great Britain (7%), UAE (6%), Hong Kong (6%), Germany (5%). Imports consist mainly of engineering products, oil and oil products, chemicals, transport equipment, vegetable oil, oilseeds, grains and flour. Goods come primarily from Kuwait (12%), UAE (11%), Saudi Arabia (11%), USA (6%), Japan (6%).

The volume of foreign investment is small (383 million dollars), although in the middle. 1990s reached 1.3-1.5 billion dollars, and over the past 10 years in the amount of 7.2 billion dollars.

Economy of Pakistan