Saturday, 15 September 2012

Pakistan's Economy

Pakistan's Economy

By Raja Imran Khan

Pakistan is a South Asian country of 180 million people with $164 billion GDP, contributing 19.6%, 26.8% and 53.7% respectively by agriculture, industry and services. Per Capita income is around $1022 and Human development index (HDI) is 0.52, Pakistan is the 6th populated country having 5th biggest army in the world; acquired area is about 803,940 km2, the external debts are around $50.1 billion.

This country has exceptional potential for growth, as it has achieved a growth rate of 6.8% in 2006-7 currently it is at 2%. Pakistan's Economy is based on agriculture, textile, cottage industry, and foreign remittances. Service industry has grown up rapidly in last two decades particularly telecommunication industry got tremendous boom.

Different sectors are supporting Pakistan's economy with a pivotal role of agriculture sector as depicted by its national emblem; this country has marvels treasures of natural resources, having four seasons, fertile lands, best irrigation system, some of largest natural resources mines, highest mountain ranges, 1050 mile coastline, vast deserts and the best fertile lands; surely is one of the most blessed countries on the earth. Despite having all these qualities the political and economic conditions are worse.

This country has 70% population linked with rural sector but the area is neglected and underdeveloped and performing well below its capacity. Proper planning, organizing, management and monitoring is needed.

Major issues are easy to understand, here is a glimpse of some common problems. The annual budget for 2009-2010 is approximately $33.1 billion for whole country; the big portion is consumed by defense and forging debt services which is $13.09 billion divided $9.2 billion and $4.07billion respectively; remaining amount is left for all other sectors.

On the other side some $2.02 billion is looted by politicians, and around $2.2 billion is on record written offs as bad debts in last 13 years, beneficiaries are the elite class of the country. This influential class is not willing to transfer the basic right of the people to the common men especially in the rural areas. Particularly they don't want common man to be educated.

Without going deep into the figures, in general, it's an open secret that conditions are not favorable, but still not that much worse as perceived and depicted on different platforms. Here we come directly to the some directive measures which can help to guide the things in right track.

First of all Pakistan needs:

o To understand that agriculture is the strength of Pakistan's economy and need to be taken seriously by government and public sector.

o To give farmers easy excess to the market

o To train and manage human capital

o To its media play its role to boost the economy

o To give considerable attention to the management and utilization of resources.

Education sector is the most neglected and badly managed area and one of the root causes of corruption, incapability, inactivity. This sector should be:

o Reformed in terms of education syllabus and system

o Adopted a fair and long term policy managed by a transparent system

o Change the dual education standards to one equal syllabus for everyone.

Energy crises is the current biggest problem for country and badly affecting the manufacturing sector, the solution is:

o To hire capable efficient and honest people (Management Staff)

o To add new power generation plants

o To manage existing power housed effectively

o To make timely payments to the rental power plants.

Many issues have direct and indirect effects on the economy and need an immediate consideration which can be studied in their subjective domain.

Thank you.

Raja Imran Khan
MBA (Finance)

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