Pakistani Studies/Economy

Economy


Pakistan is a rapidly developing country which has faced a number of challenges on both political and economic fronts. Despite being a very poor country in 1947, Pakistan's economic growth rate was better than the global average during the subsequent four decades, but imprudent policies led to a slowdown in the late 1990s. Recently, wide-ranging economic reforms have resulted in a stronger economic outlook and accelerated growth especially in the manufacturing and financial services sectors. There has been great improvement in the foreign exchange position and rapid growth in hard currency reserves in recent years. The 2005 estimate of foreign debt was close to US$50 billion. However, this has decreased in recent years with assistance from the International Monetary Fund (IMF) and significant debt-relief from the United States. Pakistan's gross domestic product (GDP) is estimated to be US$424.6 billion and its per capita GDP is US$2,706. Despite clear progress,one quarter of the Pakistani population is described as poor as per the Asian Development Bank, World Bank and UN Development Program reports which place the poverty rate between 23-28 percent. Pakistan's GDP growth rates have seen a steady increase over the last 5 years. However, inflationary pressures and a below par savings rate, among other economic factors, would make it difficult to sustain a high growth rate. The growth of non-agricultural sectors has changed the structure of the economy, and agriculture now only accounts for roughly 20% of the GDP. The service sector accounts for 53% of the country's GDP with wholesale and retail trade forming 30% of this sector. In recent times, the Karachi Stock Exchange has soared, along with most of the world's emerging markets. Large amounts of foreign investments have been made into several industries. The top industries in Pakistan are telecom, software, automotives, textiles, cement, fertilizer, steel, ship building, and more recently, aerospace.

Pakistan has accomplished many engineering feats such as construction of the worlds largest earth filled dam (the Tarbela Dam), the world's twelfth largest dam (Mangla dam), as well as the highest international road on earth: the Karakorum Highway. There are also half a dozen additional dams planned such as Kalabagh Dam, Diamer-Bhasha Dam, Munda, Akhori and Sakurdu Katzara. If built, these new dams will also be amongst the worlds largest and most technically challenging and will help cement Pakistan's position as becoming the World Leader in water management and hydroelectric power.