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THE ECONOMY OF PAKISTAN

- Some
Thoughts
Presentation by:
PROF. DR. KHAWAJA AMJAD
SAEED
Principal
HAILEY COLLEGE OF BANKING & FINANCE
University of the Punjab, Lahore.
Email: principal@hcbf.pu.edu.pk

WELCOME
TO OUR
PROGRAM
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PRESENTATION
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2
3
4
5
6
7
8
9
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Overall Framework PEST Formula

Constitution of Pakistan
Global Tributes to Pakistan
GDP
Federal Budget 2006-07
Growth in Federal Government Revenue
Corporate Income Tax Rates
Energy
China Factor
Pakistan-Economy Final Review
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1: OVERALL FRAMEWORK

P
E
S
T

Political
Economic
Sociological
Technological

2: CONSTITUTION OF PAKISTAN
Article Focus
03 Elimination of Exploitation
18
Freedom of Trade, Business or
Profession
37 Promotion of Social Justice and
Eradication of Social Justice
38 Promotion of Social and Economic
Well-being of the People

3: GLOBAL TRIBUTES TO PAKISTAN

1: World Bank - Managing Director
October 2006
1. Rich in Human Capital
2. Impressive Record
- Growth
- Development
- Poverty Alleviation
3. Continuous Economic Reforms
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4. Inflation-Down
5. Government: 5-10 Years Plans
- Water
- Energy
- Food Security
- Infrastructure
- HRD

6. Privatization Program
7. Gawadar-Corridor
- Trade
- Transportation
- Energy
- Central Asia & China.

2: IMF-September 2006
Tributes
1. Excellent Medium Term Planning
2. Strong FDI
3. Growing Domestic Investment

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3: Economic Freedom Index 2006

Pakistan
110 better than India
India
121
4: Opacity Index
Economist London Pakistan rated higher
than India

5: Moodys Investors Service-2006

Pakistans Rating Improving
B2 to B1
Foreign and Local Currency Bonds
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4: GDP
Pakistan
Average Four Years
2005-06 6.6%
Others
World
4.8%
Euro 1.3%
USA 3.5%
Japan
2.7%
Germany 0.9%

7.0%

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China
Asian South Asian
- India
- Pakistan
- Sri Lanka
- Bangladesh

9.9%
5.0%
8.0%
6.6%
5.9%
5.8%

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5: FEDERAL BUDGET 2006-07

Outstanding Features
1. Record ADP Rs 435b
2. Record Allocation to Provinces:
Revenue Budget Rs 378b
ADP Allocation Rs 115b
3. Record forecast for Rs 1,083b
Current Revenue
4. Special Allocations ADP
Programs Rs 34b
Areas Rs 17b
ERRA Rs 50b

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6: GROWTH IN FEDERAL
GOVERNMENT REVENUE
Year

Rs b

% Growth Index

2005-06
-05
-04
-03
-02
-01
1999-00

1,096
900
791
721
624
553
513

214
175
154
141
122
108
100

Source: Excerpted from Pakistan Economic Survey

2005-06, Statistical Appendix, Table 4.3.

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7: CORPORATE INCOME TAX RATES

Year

2004
2005
2006
2007

Public Company Private Company

%
%

35
35
35
35

41
39
37
35

Bank
%

44
41
38
35

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8: ENERGY

A: Needed
1. Cheap
2. Abundant
3. Environmental Friendly

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B: Electricity Use
1. Households
2. Industry
3. Agriculture
4. Commerce
5. Others

%
43
28
12
83
07
10
100
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C: Energy Perspective
Short Term
2007
Medium Term
2008-2010 45 Power Plants
Long Term
31 Projects (Hydel & Nuclear)

MW
1,000
8,600
19,150
28,750
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Impact
Job Creation
- Direct
- Indirect

08 Lac
16 Lac
24 Lac

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D: Installed Generation of Electricity

Capacity
%
1. Wapda
(Hydel 58% + Thermal 42%) 58
2. IPPs
30
3. KESC
09
4. Nuclear
83
100
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E: Issues
MW
1. Untapped Hydel Potential
50,000
2. Line Losses
3. Solar Energy
4. Wind Energy
5. Austerity/Consumption Planning

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9: CHINA FACTOR
1. Population
Currency
1.3b
Renminbi (Yaun)
2. Language
Mandrin
3. World Ranking & other Economic Data
Exports
4th
GNP
6th
Per Capita
$960
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3. World Ranking & other Economic Data

Inflation
0.8%
Unemployment
2%
4. Strengths
1. High Domestic Market
2. Food Self Sufficiency
3. Mineral Resources
4. Diversified Industrial Sector
5. Low Wages
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6.
7.
8.
9.

Rapid Sustained Growth

Growing Exports
Hong Kong as a Financial Sector
Heavy Investment in Communication
and in IT Sectors
5. Weaknesses
1. Corruption
2. Underemployment
3. Geographical Disparities
4. Poor transportation
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Export-Destination
1. USA
2. HK
3. Japan
4. Taiwan
5. South Korea
6. Germany
7. Others
Total

%
22
18
18
13
10
06
13
100
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6. Contributions to Pakistan
1. Karakrum Highway
2. Heavy Mechanical Complex
3. Chasma Nuclear Plant
4. Gawader

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7. Upcoming Investment
1. Five years Linkage
2. Private Sector Industrial
Estate in Punjab
- Gawader
Refinery
Other Investment
- 32 Point joint statement
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10: PAKISTAN-ECONOMY FINAL

REVIEW
Positive
1. GDP Growth
2. KSE
3. FDI
4. Consumer Credit from
5. Poverty Alleviation
Levels

7%
Bullish
Robust
Growing
10% down
since 2000

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Negative
1. Income Distribution
2. Trade Gap
3. Growth

Skewed
Widening
Non
Sustainable

Source: Edited from IBP Newsletter, November 2006.

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THANK YOU
FOR
JOINING US
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