Economy of Pakistan
2008/9 Schools Wikipedia Selection. Related subjects: Economics
| Economy Of Pakistan | ||
|---|---|---|
| Currency | 100 Pakistani Rupee (PKR) = 1.64908 US dollar = 1.23810 Euro |
|
| Fiscal year | July 1— June 30 | |
| Current fiscal year | (2007—2008) | |
| Central bank | The State Bank of Pakistan (SBP) | |
| Trade organizations and treaties | ECO, SAFTA, ASEAN, WIPO and WTO | |
| Fiscal Budget | $24.5 billion (revenue) $31.07 billion (expenditure) |
|
| Inflation | 7.9% (2006 est.) | |
| People | ||
| President | Pervez Musharraf | |
| Prime Minister | Mohammadmian Soomro | |
| Commerce Minister | Shahzada Alam Monnoo | |
| SBP Governor | Dr. Shamshad Akhtar | |
| SECP | Razi ur Rehman Khan | |
| Gross Domestic Product (GDP) | ||
| GDP at PPP | $475.5 billion (2007) | |
| GDP at current exchange rates | ||
| GDP real growth rate (at PPP) | 6.9% (2006 est.) | |
| GDP growth rate | 7% (2007 est.) | |
| GDP per capita | $3,004 (2007) | |
| GDP by sector | agriculture: 21.6% industry: 25.1% services: 53.3% (2006 est.) | |
| Demographics | ||
| Population | 165,803,560 (2006 est.) | |
| Population below poverty line | 23% (2007) | |
| Labor force | 48.29 million | |
| Unemployment rate | 6.6% (2006 est.) | |
| Production | ||
| Agricultural products | cotton, wheat, rice, sugarcane, fruits, vegetables; milk, beef, mutton, eggs, shrimp, poultry, tea | |
| Main industries | textiles, chemicals, food processing, steel, transport equipment, machinery, beverages, construction, materials, clothing, paper products. | |
| International trade | ||
| Imports (2006 est.) | $32.14 billion f.o.b (57th) (2006 est.) |
|
| Major imported commodities | Petroleum, Petroleum products, Machinery, Plastics, Transportation equipment, Edible oils, Paper and paperboard, Iron and steel, Tea | |
| Main import partners (2006) | China 14.7%, Saudi Arabia 10.1%, UAE 8.7%, Japan 6.5%, United States 5.3%, Germany 5%, Kuwait 4.9% (2006 est.) | |
| Exports | $17.56 billion (2006 est.) (67th) (2006 est. ) |
|
| Major exported commodities | textile goods (garments, bed linen, cotton cloths, and yarn), rice, leather goods, sports goods, chemicals manufactures, carpets and rugs. | |
| Main export partners | United States 22.4%, UAE 8.3%,UK 6%, China 5.4%, Germany 4.7% (2006 est.) | |
| Overall balance of payments (2006) | -$1.753 billion | |
Note:
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Pakistan, a rapidly developing nation, has a diverse economy that include textiles, chemicals, food processing, agriculture and other industries.
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, ongoing confrontation with neighboring India. However, IMF-approved government policies, bolstered by foreign investment and renewed access to global markets, have generated solid macroeconomic recovery the last decade. Substantial macroeconomic reforms since 2000, most notably at privatizing the banking sector have helped the economy. Pakistan has seen a growing middle class population since then and poverty levels have decreased by 10% since 2001.
GDP growth, spurred by gains in the industrial and service sectors, remained in the 6-8% range in 2004-06. In 2005, the World Bank named Pakistan the top reformer in its region and in the top 10 reformers globally.
Islamabad has steadily raised development spending in recent years, including a 52% real increase in the budget allocation for development in FY07, a necessary step toward reversing the broad underdevelopment of its social sector. The fiscal deficit - the result of chronically low tax collection and increased spending, including reconstruction costs from the Great Pakistan earthquake in 2005 was manageable. Development in urban areas of Pakistan has remained high but is low in rural areas.
Inflation remains the biggest threat to the economy, jumping to more than 9% in 2005 before easing to 7.9% in 2006. The central bank is pursuing tighter monetary policy while trying to preserve growth. Foreign exchange reserves are bolstered by steady worker remittances, but a growing current account deficit - driven by a widening trade gap as import growth outstrips export expansion - could draw down reserves and dampen GDP growth in the medium term.
Economic history
First five decades
This is a chart of trend of gross domestic product of Pakistan at market prices estimated by the International Monetary Fund with figures in millions of Pakistani Rupees. See also
| Year | Gross Domestic Product | US Dollar Exchange | Inflation Index (2000=100) |
|---|---|---|---|
| 1960 | 20,058 | 4.76 Pakistani Rupees | |
| 1980 | 283,460 | 9.90 Pakistani Rupees | 21 |
| 1985 | 569,114 | 16.28 Pakistani Rupees | 30 |
| 1990 | 1,029,093 | 21.41 Pakistani Rupees | 41 |
| 1995 | 2,268,461 | 30.62 Pakistani Rupees | 68 |
| 2000 | 3,826,111 | 51.64 Pakistani Rupees | 100 |
| 2005 | 6,581,103 | 60.40 Pakistani Rupees | 126 |
Pakistan was a very poor and predominantly agricultural country when it gained independence in 1947. Pakistan's average economic growth rate since independence has been higher than the average growth rate of the world economy during the period. Average annual real GDP growth rates were 6.8% in the 1960s, 4.8% in the 1970s, and 6.5% in the 1980s. Average annual growth fell to 4.6% in the 1990s with significantly lower growth in the second half of that decade.
Industrial-sector growth, including manufacturing, was also above average. In the late 1960s Pakistan was seen as a model of economic development around the world, and there was much praise for its economic progression. Later, economic mismanagement in general, and fiscally imprudent economic policies in particular, caused a large increase in the country's public debt and led to slower growth in the 1990s. Two wars with India in 1965 and 1971 adversely affected economic growth. In particular, the latter war brought the economy close to recession, although economic rebounded sharply until the nationalizations of the mid-1970s.
Economic resilience
Historically, Pakistan's overall economic output (GDP) has grown every year since a 1951 recession. Despite this record of sustained growth, Pakistan's economy had, until a few years ago, been characterized as unstable and highly vulnerable to external and internal shocks. However, the economy proved to be unexpectedly resilient in the face of multiple adverse events concentrated into a four-year period —
- the Asian financial crisis;
- economic sanctions — according to Colin Powell, Pakistan was "sanctioned to the eyeballs";
- global recession;
- severe rioting in the port city of Karachi;
- a severe drought — the worst in Pakistan's history, lasting four years;
- heightened perceptions of risk as a result of military tensions with India — with as many as a million troops on the border, and predictions of impending (potentially nuclear) war;
- the post-9/11 military action in neighboring Afghanistan, with a massive influx of refugees from that country;
- the 2005 Pakistan earthquake
Despite these adverse events, Pakistan's economy kept growing, and economic growth accelerated towards the end of this period. This resilience has led to a change in perceptions of the economy, with leading international institutions such as the IMF, World Bank, and the ADB praising Pakistan's performance in the face of adversity.
Recent economic history
Pakistan's economic outlook has brightened in recent years in conjunction with rapid economic growth and a dramatic improvement in its foreign exchange position as a result of its current account surplus and a consequent rapid growth in hard currency reserves.
The state-owned firm in early 2002 signed agreements with five international telecom companies for terminating additional international incoming traffic to capture the grey market by using voice over Internet protocol (VoIP) technology from the US and Europe into Pakistan.
The conditionality of the IMF program, which was suspended in July 1999 and resumed later during the administration of Pervez Musharraf. Having improved its finances, Pakistan's government announced in 2004 that it would no longer require IMF assistance, and the assistance program ended in that year.
With accelerating economic growth, economists are now emphasizing a different range of problems. According to Ahmed Rashid, the World Bank Country Director for Pakistan,
- Now Pakistan faces higher quality problems—the problems of success. Demand has risen faster than supply. This has shown up in high inflation and a zooming trade deficit. The “tight fiscal, easy money” formula to get growth going needs to be “tight fiscal, tight money and credit” to sustain rapid growth. Idle domestic production capacity allowed the rising demand to be accommodated by rising capacity utilization in cement, steel, fertilizer, textiles, automobiles and motorcycles. Now that capacity is more than fully utilized, resulting in backlogs and imports.
Musharraf's economic agenda continues to include measures to widen the tax net, privatize public sector assets, and improve its balance of trade. Pakistan has made governance reforms, privatization, and deregulation the cornerstones of its economic revival .
Although it received a positive endorsement from international financial institutions such as the World Bank, the International Monetary Fund and the Asian Development Bank, as well as improved credit ratings from Standard & Poor's and Moody's.
Pakistan's current account surplus had put upward pressure on the Pakistani rupee, which rose from 64 rupees per dollar to 57 rupees per dollar. The State Bank of Pakistan (the central bank) stabilized the rise by lowering interest rates and buying dollars. After short-term Pakistani T-bond rates fell below 2%, with government borrowing having declined, banks greatly expanded their lending to businesses and consumers. Construction activity, sales of durable goods such as trucks and automobiles, and housing purchases have all jumped to record levels. Private sector credit expanded by 28.5% in 2003, and continues to expand despite monetary restraints — the SBP imposed interest-rate increases to moderate money supply and prevent "overheating".
Pakistan's nominal gross domestic product (GDP) in 1997 was US$ 75.3 billion. Five years later in 2002, the country's nominal GDP came down to US$ 71.5 billion. During this five-year period, the real GDP grew by a meagre 3.0 per cent on an average. Pakistan government's debt was 82 per cent of its GDP in 2002. Over one-third of the government's revenue was being used up in making interest payments on the national debt. The near stagnant economy suddenly started showing miraculous growth in 2002 after lifting of economic sanctions imposed after Pakistan's 1998 nuclear tests. The economy grew at 5.1 per cent in 2003, 6.4 per cent in 2004 and 7.0 per cent in 2005. The US$ 72 billions economy of 2002 has swelled into a US$ 108 billion economy in 2005. During 1997-2002 Pakistan's average export growth has been 1.2 per cent per year and increased to 13 per cent per year during 2003-05. Pakistan's debt as a percentage of the GDP came down to 59 per cent in 2005 from 82 per cent in 2002. Pakistan government's interest payment as a percentage of revenue collection came down to 23 per cent in 2005 as compared to 35 per cent in 2002.
According to the Asian Development Bank, the first half of FY2006 was marked by a slowdown in both industry and agriculture in Pakistan. Output of cotton declined by an estimated 10.9 per cent from an all-time high of 14.6 million bales harvested in FY2005. Production of sugarcane, another major summer crop, is also estimated lower than last year. The growth of large-scale manufacturing slowed to 8.7 per cent in the first quarter of FY2006 from 24.9 per cent in the same period of last year, primarily due to capacity constraints and the high-base effect. Among individual industries in the first quarter, growth of textiles tumbled to 7.2 per cent from 29.6 per cent year on year. Automobile assembly and electronics, which have shown the fastest expansion among sub-sectors in the last 2-3 years, also decelerated. Inflation accelerated in FY2005 after five years of price stability. Annual inflation, based on the consumer price index, more than doubled to 9.3 per cent from 4.6 per cent, mainly because of higher food prices and rising house rents. Due to a sharp increase in domestic oil prices, transport costs also jumped. Core -- nonfood, non-oil -- inflation also doubled, from 3.7 per cent to 7.4 per cent.
Pakistan is a middle income country. It's economy is among the fastest growing in the world as its economy has reached the size of $140 billion from a mere $70 billion a few years earlier, Federal Advisor on Finance Dr Salman Shah informed the media. Per capita income now stands at $808.
The Economic Survey of Pakistan for 2006-2007 has concluded the country's economy recorded 7.3 percent growth, . Former Prime Minister Shaukat Aziz said that Pakistan's economy should continue to grow every year at about seven percent and he also assured that many measures will be taken to give the economy a further boost. He promised privitization of companies and he also invested in the economy by allowing free education for under 16's and also came up with a scheme to pay girls two hundred rupees a month as an incentive to attend school. Also in the next five years many foreign universities from different European nations have announced they will be opening campuses in Pakistan.
Macroeconomic reform and prospects
According to many sources, the Pakistani government has made substantial economic reforms since 2000, and medium-term prospects for job creation and poverty reduction are the best in nearly a decade.
Government revenues have greatly improved in recent years, as a result of economic growth, tax reforms - with a broadening of the tax base, and more efficient tax collection as a result of self-assessment schemes and corruption controls in the Central Board of Revenue - and the privatization of public utilities and telecommunications. Pakistan is aggressively cutting tariffs and assisting exports by improving ports, roads, electricity supplies and irrigation projects. Islamabad has doubled development spending from about 2% of GDP in the 1990s to 4% in 2003, a necessary step towards reversing the broad underdevelopment of its social sector.
Liberalization in the international textile trade has already yielded benefits for Pakistan's exports, and the country also expects to profit from freer trade in agriculture. As a large country, Pakistan hopes to take advantage of significant economies of scale, and to replace China as the largest textile manufacturer as the latter China moves up the value-added chain. These industries play to Pakistan's relative strengths in low labor costs.
Growing stability in the nation's monetary policies has contributed to a reduction in money-market interest rates, and a great expansion in the quantity of credit, changing consumption and investment patterns in the nation. Pakistan's domestic natural gas production, and its significant use of CNG in automobiles, has cushioned the effect of the oil-price shock of 2004-2005. Pakistan is also moving away from the doctrine of import substitution which some developing countries (such as Iran) dogmatically pursued in the twentieth century. The Pakistani government is now pursuing an export-driven model of economic growth successfully implemented by South East Asia and now highly successful in China.
In 2005, the World Bank reported that
- "Pakistan was the top reformer in the region and the number 10 reformer globally — making it easier to start a business, reducing the cost to register property, increasing penalties for violating corporate governance rules, and replacing a requirement to license every shipment with two-year duration licenses for traders."
In addition, reduced tensions with India and the ongoing peace process raise new hopes for a prosperous and stable South Asia, with more intra-regional trade.
Shahid Javed Burki, former vice president of World Bank and who was in charge of the bank’s Latin American division when Mexico was hit by the crisis in 1994, said Pakistan is facing symptoms that preceded the Mexican financial crisis more than 10 years ago. He points to the nation’s current account deficit, ‘excessive’ speculative business activity and weak banking system.
The economy today
Stock market
In the first four years of the twenty-first century, Pakistan's KSE 100 Index was the best-performing stock market index in the world as declared by the international magazine “Business Week”.
The stock market capitalisation of listed companies in Pakistan was valued at $45,937 million in 2005 by the World Bank. As a result, the corporate sector of Pakistan has grown dramatically in significance in recent times.
Manufacturing and finance
Pakistan's manufacturing sector has experienced double-digit growth in recent years, with large-scale manufacturing growing by 18% in 2003. A reduction in the fiscal deficit has resulted in less government borrowing in the domestic money market, lower interest rates, and an expansion in private sector lending to businesses and consumers. Foreign exchange reserves continued to reach new levels in 2003, supported by robust export growth and steady worker remittances.
Growing middle class
Measured by purchasing power, Pakistan has a 30 million strong middle class, according to Dr. Ishrat Husain, Ex-Governor ( 2 December 1999 - 1 December 2005) of the State Bank of Pakistan. It is a figure that correlates with research by Standard Chartered Bank which estimates that Pakistan possesses a "a middle class of 30 million people that Standard Chartered estimates now earn an average of about $10,000 a year." In addition, Pakistan has a growing upper class with relatively high per capita incomes.
On measures of income inequality, the country ranks slightly better than the median. In late 2006, the Central Board of Revenue estimated that there were almost 2.8 million income-tax payers in the country.
Poverty alleviation expenditures
Pakistan government spent over 1 trillion Rupees (about $16.7 billion) on poverty alleviation programs during the past four years, cutting poverty from 35 percent in 2000-01 to 24 percent in 2006. Rural poverty remains a pressing issue, as development there has been far slower then in the major urban areas.
Demographics
With a per capita GDP of over $3000 ( PPP, 2006) compared with $2600 ( PPP, 2005) in 2005 the World Bank considers Pakistan a medium-income country, although it is recorded as a "Medium Development Country" on the Human Development Index 2005. Pakistan has a large informal economy, which the government is trying to document and assess. Approximately 41% of adults are literate, and life expectancy is about 62 years. The population, about 165 million in 2006, is growing at about 1.96%.
Relatively few resources in the past had been devoted to socio-economic development or infrastructure projects. Inadequate provision of social services, high birth rates and immigration from nearby countries in the past have contributed to a persistence of poverty. An influential recent study concluded that the fertility rate peaked in the 1980s, and has since fallen sharply. Pakistan has a family-income Gini index of 41, close to the world average of 39.
Employment
The high population growth in the past few decades has ensured that a very large number of young people are now entering the labor market. Even though it is among the seven most populous Asian nations, Pakistan has a lower population density than Bangladesh, Japan, India, and the Philippines. In the past, excessive red tape made firing from jobs, and consequently hiring, difficult. Significant progress in taxation and business reforms has ensured that many firms now are not compelled to operate in the underground economy.
In late 2006, the government launched an ambitious nationwide service employment scheme aimed at disbursing almost $2 billion over five years.
Tourism
Tourism in Pakistan in Pakistan is a growing industry. Attractions range from ruins of ancient civilizations to the Himalayas, which are the highest mountain range in the world. These areas attract adventurers and mountaineers from around the world, especially K2, the second highest mountain in the world. Pakistan's Kaghan Valley is one of the most beautiful landscapes in the world.
Revenue
The Board of Revenue has collected nearly Rs. 700 billion ($11.6 billion) in taxes in the 2005-2006 financial year.
Currency system
Rupee
The basic unit of currency is the Rupee, which is divided into 100 paisas. Since the turn of the century, a strengthening economy and large current-account surplus has caused the rupee's exchange rate to rise in value. In response, Pakistan's central bank has prevented the rupee from rising too much, by lowering interest rates and buying dollars, in order to preserve the country's export competitiveness. As of 2005, one US dollar is approximately equal to 60 rupees. Currently the newly printed 5,000 rupee note is the largest denomination in circulation. Recently the SBP has introduced all new design notes of Rs.10, 20, 100, 500, 1000, 5000 denomination, while the work of Rs.10,000 note is in progress which will help the banking industry in keeping few notes in saving accounts.
The new notes have been designed using the Euro technology and are made in good bright colors.
Foreign exchange rate
- 1 Pakistani Rupee (PKR) = 100 Paise
The Pakistani rupee depreciated against the US dollar until the turn of the century, when Pakistan's large current-account surplus pushed the value of the rupee up versus the dollar. Pakistan's central bank then stabilized by lowering interest rates and buying dollars, in order to preserve the country's export competitiveness
- Exchange rates: Pakistani rupee (PKR) per US$1
- 60.50 (01/11/07)
- 60.75 (05/08/2007)
- 58 (2004)
- 57.752 (2003)
- 59.7238 (2002)
- 61.9272 (2001)
- 53.6482 (2000)
- 51.90 (1999)
- 44.550 (1998)
- 40.185 (1997)
- 35.266 (1996)
- 30.930 (1995)
Foreign exchange reserves
In 2007 Pakistan's foreign exchange reserves were over $16 billion - a twelvefold rise since 2001.
Structure of economy
From modest beginnings, Pakistani economy has moved successfully to a low-inflation high-growth trajectory since 2000. The central bank has controlled inflation at around 3% per annum in recent years - a record since 1980.
Over 1,081 patent applications were filed by non-resident Pakistanis in 2004 revealing a new-found confidence.
Agriculture accounted for about 53% of GDP in 1947. While per-capita agricultural output has grown since then, it has been outpaced by the growth of the non-agricultural sectors, and the share of agriculture has dropped to roughly one-fifth of Pakistan's economy.
In recent years, the country has seen rapid growth in industries (such as apparel, textiles, and cement) and services (such as telecommunications, transportation, advertising, and finance).
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Commodity producing sector
Agriculture
Pakistan is one of the world's largest producers and suppliers of the following according to the 2005 Food and Agriculture Organization of The United Nations and FAOSTAT given here with ranking:
- Chickpea (2nd)
- Apricot (4th)
- Cotton (4th)
- Sugarcane (4th)
- Milk (5th)
- Onion (5th)
- Date Palm (6th)
- Mango (7th)
- Tangerines, mandarin orange, clementine (8th)
- Rice (8th)
- Wheat (9th)
- Oranges (10th)
Pakistan ranks fifth in the Muslim world and twentieth worldwide in farm output. It is the world's fifth largest milk producer.
Pakistan's principal natural resources are arable land and water. About 25% of Pakistan's total land area is under cultivation and is watered by one of the largest irrigation systems in the world. Pakistan irrigates three times more acres than Russia. Agriculture accounts for about 23% of GDP and employs about 44% of the labor force.
Crops
The most important crops are wheat, sugarcane, cotton, and rice, which together account for more than 75% of the value of total crop output.
Pakistan's largest food crop is wheat. In 2005, Pakistan produced 21,591,400 metric tons of wheat, more than all of Africa (20,304,585 metric tons) and nearly as much as all of South America (24,557,784 metric tons), according to the FAO
Pakistan has also cut the use of dangerous pesticides dramatically.
Pakistan is a net food exporter, except in occasional years when its harvest is adversely affected by droughts. Pakistan exports rice, cotton, fish, fruits, and vegetables and imports vegetable oil, wheat, cotton, pulses and consumer foods. The country is Asia's largest camel market, second-largest apricot and ghee market and third-largest cotton, onion and milk market.
The economic importance of agriculture has declined since independence, when its share of GDP was around 53%. Following the poor harvest of 1993, the government introduced agriculture assistance policies, including increased support prices for many agricultural commodities and expanded availability of agricultural credit. From 1993 to 1997, real growth in the agricultural sector averaged 5.7% but has since declined to about 4%. Agricultural reforms, including increased wheat and oilseed production, play a central role in the government's economic reform package.
Much of the Pakistan's agriculture output is utilized by the country's growing processed-food industry. The value of processed retail food sales has grown 12 percent annually during the Nineties and was estimated at over $1 billion in 2000, although supermarkets accounted for just over 10% of the outlets.
The Federal Bureau of Statistics provisionally valued major crop yields at Rs.504,868 million in 2005 thus registering over 55% growth since 2000 while minor crop yields were valued at Rs.184,707 million in 2005 thus registering over 41% growth since 2000.
Livestock
According to the Economic Survey of Pakistan, the livestock sector contributes about half of the value added in the agriculture sector, amounting to nearly 11 per cent of Pakistan's GDP, which is more than the crop sector.
The leading daily newspaper Jang reports that the national herd consists of 24.2 million cattle, 26.3 million buffaloes, 24.9 million sheep, 56.7 million goats and 0.8 million camels. In addition to these there is a vibrant poultry sector in the country with more than 530 million birds produced annually. These animals produce 29.472 million tons of milk (making Pakistan the 5th largest producer of milk in the world), 1.115 million tons of beef, 0.740 million tons of mutton, 0.416 million tons of poultry meat, 8.528 billion eggs, 40.2 thousand tons of wool, 21.5 thousand tons of hair and 51.2 million skins and hides.
The Food and Agriculture Organization reported in June 2006 that in Pakistan, the world's fifth largest milk producing country, government initiatives are being undertaken to modernize milk collection and to improve milk and milk product storage capacity.
The Federal Bureau of Statistics provisionally valued this sector at Rs.758,470 million in 2005 thus registering over 70% growth since 2000.
Fishery
Fishery plays an important role in the national economy. It provides employment to about 400,000 fishermen directly. In addition, another 500,000 people are employed in ancillary industries. It is also a major source of export earning. In July-May 2002-03 fish and fishery products valued at US $ 117 million were exported from Pakistan. Federal Government is responsible for fishery of Exclusive Economic Zone of Pakistan.
The major fish harbours of Pakistan are:
- Karachi Fisheries Harbour is being operated by Provincial Government of Sindh.
- Karachi Fish Harbour handles about 90% of fish and seafood catch in Pakistan and 95% of fish and seafood exports from Pakistan.
- Korangi Fish Harbour is being managed by Federal Ministry of Food, Agriculture and Livestock.
- Pasni Fish Harbour being operated by Provincial Government of Balochistan.
- Gwadar Fish Harbour being operated by Federal Ministry of Communication.
The Federal Bureau of Statistics provisionally valued this sector at Rs.18,290 million in 2005 thus registering over 10% growth since 2000.
Forestry
The Federal Bureau of Statistics provisionally valued this sector at Rs.25,637 million in 2005 thus registering over 3% decline since 2000.
Industry
Pakistan ranks forty-first in the world and fifty-fifth worldwide in factory output.
Pakistan's industrial sector accounts for about 24% of 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. Other major industries include cement, fertilizer, edible oil, sugar, steel, tobacco, chemicals, machinery, and food processing.
The government is privatizing large-scale parastatal units, and the public sector accounts for a shrinking proportion of industrial output, while growth in overall industrial output (including the private sector) has accelerated. Government policies aim to diversify the country's industrial base and bolster export industries.
| Global ranking |
Company Name |
|---|---|
| 1,284 | Oil & Gas Development |
| 1,316 | PTCL |
| Forbes Global 2000 |
Mining and quarrying
Important minerals found in Pakistan are gypsum, limestone, chromites, iron ore, rock salt, silver, gold, precious stones, gems, marble, copper, coal, graphite, sulphur, fire clay, silica. The salt range in Punjab Province has large deposits of pure salt. Balochistan province is a mineral rich area having substantial mineral, oil and gas reserves which have not been exploited to their full capacity. The province has significant quantities of copper, chromite and iron, and pockets of antimony and zinc in the south and gold in the far west. Natural gas was discovered near Sui in 1952, and the province has been gradually developing its oil and gas projects over the past fifty years.
Major reserves of copper and gold in Balochistan's Rekodiq area have been discovered in early 2006. The Rekodiq mining area has proven estimated reserves of 2 billion tons of copper and 20 million ounces of gold. According to the current market price, the value of the deposits has been estimated at about $65 billion, which would generate thousands of jobs.
The discovery has ranked Rekodiq among the world's top seven copper reserves. The Rekodiq project is estimated to produce 200,000 tons of copper and 400,000 ounces of gold per year, at an estimated value of $1.25 billion at current market prices. The copper and gold are currently traded at about $5,000 per ton and $600 per ounce respectively in the international market.
North West Frontier Province accounts for at least 78% of the marble production in Pakistan.
The Federal Bureau of Statistics provisionally valued this sector at Rs.211,851 million in 2005 thus registering over 99% growth since 2000.
Fuel extraction industry
Pakistan's first oil field was discovered in the late 1952 in Baluchistan near a giant gas field at Sui in Balochistan. The Toot oilfield was discovered in the early 1960's the Islamabad in the Punjab. Production has steadily increased since then.
Pakistan's first gas field was the giant gas field at Sui in Balochistan which was discovered in the late 1952.
Pakistan is also a major producer of Bituminous coal, Sub-bituminous coal and Lignite. Coal mining started in the British colonial era and has continued to be used by Pakistani industries after independence in 1947.
Pakistan produced about 45 tonnes of Uranium in 2006.
Manufacturing
In FY 2002-03, real growth in manufacturing was 7.7%. In the twelve months ending 30 June 2004, large-scale manufacturing grew by more than 18% compared to the previous twelve-month period. The textile and garment industry's share in the economy along with its contribution to exports, employment, foreign-exchange earnings, investment and value added make it Pakistan’s single largest manufacturing sector. The industry is comprised of 453 textile mills: 50 integrated units; and 403 spinning units, with 9.33 million spindles and 148,000 rotors, The capacity utilization was 83% for spindles and 47% for rotors during 2003.
The Federal Bureau of Statistics provisionally valued large-scale manufacturing at Rs.981,518 million in 2005 thus registering over 138% growth since 2000 while small-scale manufacturing was valued at Rs.356,835 million in 2005 thus registering over 80% growth since 2000.
Construction
After the devastating 2005 Kashmir earthquake Pakistan has instituted stricter building codes. The cost of construction in Pakistan will increase 30 to 50% due to implementation of a new building code which requires strengthening of structures to withstand earthquake of 8 to 8.5 magnitude. The demand for cement has increased due to reconstruction after the earthquake. The price of cement has increased by 50% and Pakistan government banned export of cement to lower the prices and the reconstruction costs.
Dubai Ports World, announced on June 1, 2006 that it will spend $10 billion to develop transport infrastructure and real estate in Pakistan. Dubai Ports World is also discussing the possibility of the company taking over operational management of Gwadar port in Balochistan.
Emaar Properties, announced on May 31, 2006 three real estate developments in the cities of Islamabad and Karachi in Pakistan. The projects, with a total investment of $2.4 billion, will include a series of master planned communities that will set new benchmarks in commercial, residential and retail property within Pakistan.
In addition the conglomerate signed a unprecedented $43 billion deal to develop two island resorts - Bundal Island and Buddo Island - over the next decade.
The Federal Bureau of Statistics provisionally valued this sector at Rs.178,819 million in 2005 thus registering over 88% growth since 2000.
Electricity, gas and water supply
Pakistan has extensive energy resources, including fairly sizable natural gas reserves,