Pakistan's 180 million people are divided into five main ethnic groups: Punjabi (44.7 percent), Pashtun (15.4 percent), Sindhi (14.1 percent), Muhajirs (7.6 percent), and Balochi (3.6 percent).The country is divided into four provinces: Punjab, Sindh, Balochistan, and Khyber Pakhtunkhwa (formerly known as North-West Frontier Province, or NWFP). In addition, there are the Federally Administered Tribal Areas (FATA), Pakistan-administered Kashmir, and Gilgit-Baltistan. Historically, the dominant role played by Punjab, which is home to over 55 percent of the population and provides the bulk of the army and bureaucracy, has caused much resentment among the other three provinces.
There had been little support for the independent state of Pakistan among Sindhis, Balochis, and Pashtuns; in fact NWFP and Balochistan had resisted incorporation into Pakistan. Ever since, Pakistan has battled secessionist movements in NWFP, Balochistan, and Sindh. In the early years, the deepest ethnic fault lines existed between the country's east and the west wings, which resulted in Pakistan's break-up in 1971. East Pakistan, predominantly ethnic Bengali, became the new independent state of Bangladesh. Grievances among and within provinces abound, especially over economic inequities and scarce resources. Pakistan's major political parties are also divided along regional or ethnic lines, resulting in a lack of parties that can respond to national concerns.
Monster of Economy
Pakistan's economy suffered serious setbacks from the floods in August 2010. The government forecasted economic growth would drop to 2.5 percent in 2010-2011 from 4.1 percent the previous year. Higher inflation is forecasted, and a growing fiscal deficit is expected to worsen as revenues remained low with a narrow tax base. Electricity shortages also cripple the economy and have often become the cause for violent protests in recent years. The electricity supply gap is projected to increase (see chart at left), and significant investments in the power sector are required. Pakistan's economy has failed to achieve sustainable growth because of political instability, deteriorating security, inadequate investment in physical infrastructure and human capital, and macroeconomic imbalances.
The economy is largely agrarian with two-thirds of the population living in rural areas. But the agricultural sector continues to decline in productivity relative to the manufacturing and service sectors. Farm output could fall further by 10 to 15 percent in fiscal year 2011 following the destruction of millions of acres of agricultural land by the floods. Pakistan's exports perennially lag imports, and the country's reliance on oil imports makes it vulnerable to volatility in international prices. Plus, the economy relies heavily on textiles, which account for two-thirds of export income.
The country averted a balance of payments crisis in 2008 with help from the International Monetary Fund, and in 2009 the current account deficit shrank with a pullback in imports and 18 percent growth in worker remittance inflows. The economy also suffers from low foreign direct investment due to increasing security problems. Pakistan's government has long prioritized defense expenditure over investment in education and healthcare, which impedes its global competitiveness. Remittances from Pakistanis abroad, most of them in the Gulf states and North America, provide vital support.
Population: 184.75 million (2010 est.)
Population growth rate: 2.1% (2010 est.)
GDP growth rate: 2.5% (2010-2011 est.)
GDP per capita: $2,509 (FY 2010 est.)
Recorded Unemployment: 15% (FY 2010 est.)
Foreign Direct Investment: $2.2 billion (FY 2010)
Remittances: $8.9 billion (FY 2010)
Fiscal Deficit: 6.3% of GDP (FY 2010 est.)
Trade Balance: $-12.4 billion (FY 2010 est.)
External Debt: $56.2 billion (FY 2010 est.)