The economy of Pakistan is the 47th largest in the world in nominal terms and 27th largest in the world in terms of purchasing power parity (PPP). Pakistan has a semi-industrialized economy, which mainly encompasses textiles, chemicals, food processing, agriculture and other industries. Growth poles of Pakistan's economy are situated along the Indus River, diversified economies of Karachi and Punjab's urban centres coexist with lesser developed areas in other parts of the country. The economy has suffered in the past from decades of internal political disputes, a fast growing population, mixed levels of foreign investment, and a costly, on-going confrontation with neighbouring India. However, IMF-approved government policies, bolstered by foreign investment and renewed access to global markets, have generated solid macroeconomic recovery the last decade.
Sectors that affect Pakistan Economy:
* Agriculture- About 25% of Pakistan’s total land is under cultivation and is watered by one of the largest irrigation system in the world. Agriculture in Pakistan accounts 23% of its GDP and employs about 44% of the labour force. * Industry- Pakistan’s industrial sector account for about 24% of its GDP. Cotton textile production and apparel manufacturing are Pakistan’s largest industries, accounting for about 66% of the merchandise exports and almost 40% of the employed labour force. A merchandised export means export of goods not services. Other major industries include cement, fertilizer, edible oil, sugar, steel, tobacco, chemicals. Machinery and food processing. * Automobile Industry- Pakistan is an emerging market for automobiles and automotive parts. The total contribution of auto industry to GDP in 2007 is 2.8%. Auto sector currently contributes 16% to the manufacturing sector which is expected to increase by 25% in the next 7 years. * CNG industry- Compressed natural gas (CNG) is a substitute for gasoline (petrol). It is environmentally clean. In 2009 Pakistan was one of the largest users of CNG. Over 2,900 are CNG stations are operating in the country employing many people jobs. * Cement Industry- Growth of a cement industry is rightly considered to be the barometer for economic activity. The industry comprises of 29 firms, with installed production capacity of 44.09 million tons. The cement is contributing above Rs. 30 billion to the national exchequer in the form of taxes. It is also serving the nation by providing job opportunities and presently more than 150,000 people are employed directly or indirectly to the cement industry.
Pakistan attained nationhood under difficult circumstances. At the partition of British India in 1947 resulting in the creation of the independent nations of India and Pakistan, Pakistan was an agrarian economy in which a small number of powerful landowners with large holdings dominated the countryside. The majority of the population consisted of tenant farmers who cultivated small plots for a meagre existence. Pakistan had almost no industry in 1947. Under British rule, the area that became Pakistan supplied agricultural products for processing to the territory that became the independent India. Energy sources were rudimentary, with wood and animal dung furnishing the bulk of the energy consumed. Ports, transportation, and other services, such as banking and government, were underdeveloped. Despite formidable problems, Pakistan achieved rapid economic expansion. From 1951 to 1986, the GDP growth rate measured at a constant average of 5.2 per cent. However, the GDP growth rate fell into 4.6 per cent in the 1990’s.
Year| Per capita income| Pakistan currency| U.s Dollar exchange rate| Inflation rate| 1990| 1,029,093| 21.41 Pakistani rupees| 41| 1.92|
1995| 2,268,461| 30.62 Pakistani rupees| 68| 2.16|
Economic period of 1988-1999
Nine different governments (four interim appointed, four elected and one following the...