Waqas Ali Tunio (07ME34)

Quaid-e-Awam University of Engineering,

Science & Technology, Nawabshah - Pakistan

INDUSTRIAL ECONOMICS
AND MANAGEMENT ASSIGNMENT
SUBMITTED TO D R. ABDUS SATTAR JAMALI
BY: WAQAS ALI TUNIO
STUDENT OF 3RD YEAR, DEPARTMENT OF MECHANICAL ENGINEERING

Contents Page
no.
GNP 2
GDP 3
Pakistan GDP charts 4
World Economic System 5
Countries with their Economic Systems 6
Economy of Pakistan 8

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GNP (gross national product)

Definition:

Gross national product (GNP) is the sum of gross value added by all resident producers plus any taxes (less subsidies)
that are not included in the valuation of output plus net receipts of primary income (employee compensation and
property income) from nonresident sources. GNP, calculated in national currency, is usually converted to United States
dollars at official exchange rates for comparisons across economies, although an alternative rate is used when the
official exchange rate is judged to diverge by an exceptionally large margin from the rate actually applied in international
transactions. To smooth fluctuations in prices and exchange rates, a special Atlas method of conversion is used. This
applies a conversion factor that averages the exchange rate for a given year and the two preceding years, adjusted for
differences in rates of inflation between the country and the highly developed economies of France, Germany, Japan,
the United Kingdom, and the United States. Pakistan is ranked 43rd on world level, scoring 90,663.

Source: World Bank (www.worldbank.org) database and Organization for Economic Co-operation and Development (OECD) (www.oecd.org)

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GDP (gross domestic product)

Definition:

Gross domestic product (GDP) measures the value of all economic activity within a nation’s borders. It is equal to the
market value of all goods and services that are exchanged for money or traded in a market system. Gross domestic
product at purchaser values (market prices) is the sum of gross value added by all resident and nonresident producers in
the economy, plus any taxes and minus any subsidies not included in the value of the products. It is calculated without
making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources. The GDP
is an important economic indicator because it measures the value of everything produced in a given country.

Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal political disputes, low
levels of foreign investment, and a costly, ongoing confrontation with neighboring India. However, since 2001, IMF-
approved reforms - most notably, privatization of the banking sector - bolstered by generous foreign assistance and
renewed access to global markets, have generated macroeconomic recovery. Pakistan experienced GDP growth in the 6-
8% range in 2004-07, spurred by gains in the industrial and service sectors. Poverty levels decreased by 10% since 2001,
and Islamabad steadily raised development spending in recent years. In 2008 the fiscal deficit - a result of chronically low
tax collection and increased spending - exceeded Islamabad's target of 4% of GDP. Inflation remains the top concern
among the public, jumping from 7.7% in 2007 to 20.8% during 2008, primarily because of rising world fuel and
commodity prices. In addition, the Pakistani rupee has depreciated significantly as a result of political and economic
instability. A balance of payment crisis forced the Pakistani government to turn to the IMF for a conditional loan
program in late November 2008. Pakistan is ranked 43rd world level, scoring 126,836.

GDP (purchasing power parity):

$454.2 billion (2008 est.)

GDP (official exchange rate):

$160.9 billion (2008 est.)

GDP - real growth rate: 4.7% (2008 est.)

GDP - per capita (PPP): $2,600 (2008 est.)

GDP - composition by sector:

Agriculture: 20.4%
industry: 26.6%
services: 53% (2008 est.)

Investment (gross Fixed):

20% of GDP (2008 est.)

Public debt: 49.8% of GDP (2008 est.)

Pakistan GDP charts

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Source: World Bank (www.worldbank.org) database and Organization for Economic Co-operation and Development (OECD) (www.oecd.org)

World Economic System

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Economic system
An economic system is a system that involves the production, distribution and consumption of goods and services
between the entities in a particular society. It is the method used by society to produce and distribute goods and
services. The economic system is composed of people and institutions, including their relationships to productive
resources, such as through the convention of property.

 Capitalism:
Capitalism is an economic system in which wealth, and the means of producing wealth, are privately owned and
controlled rather than commonly, publicly, or state-owned and controlled.
 Socialism: refers to a broad set of economic theories of social organization advocating state or collective
ownership and administration of the means of production and distribution of goods, and a society characterized by
equal opportunities for all individuals with a fair or egalitarian method of compensation.
 A mixed economy:
It is an economic system that incorporates a mixture of private and government ownership and/or control. A mixed
economy thus combines the characteristics of capitalism and state socialism.

 Communism:
It is a socioeconomic structure and political ideology that promotes the establishment of an egalitarian, classless,
stateless society based on common ownership and control of the means of production and property in general

Countries with their Economic Systems

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Communism:

o China

o N. Korea

o Cuba

o Vietnam

o Burma

Socialism:

o Bangladesh

o Egypt

o Libya

o India

o Portugal

o Sri Lanka

o Tanzania

o Syria

o Venezuela

o Nicaragua.
Capitalism:

o Germany

o France

o Norway

o Sweden

o Switzerland

o Poland

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o Italy

o Spain

o Greece

o Australia

o South Korea

o Singapore

o Malaysi

o Russia.

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Economy of Pakistan
Pakistan has a developing mixed economy based largely on agriculture, light industries, and services. The Government
has placed special emphasis on the liberalization and privatization of the economy since 1990. The Gross National
Product (GNP) is increasing more rapidly than the population, but the GNP per capita is among the lowest in Asia, albeit
the highest in South Asia. Agriculture accounts for approximately one-fourth of the GDP and employs about 46 per cent
of the labor force. Wheat is the chief staple, and sugarcane is widely grown. Cotton and rice are major export crops.
Manufacturing accounts for approximately one-fifth of the GDP and employs one-eighth of the labor force. Textiles,
particularly cotton textiles, are the chief manufacture and are a leading export. Mining, which is largely controlled by
the government, accounts for about 0.4 percent of the GDP. Coal and iron ore (both of which are mostly low-grade),
some petroleum, and substantial quantities of natural gas are extracted. Limestone, chromites, and gypsum are widely
mined.

Imports: Total value: 24647 million US $ (2006)

Major Items: Industrial equipment, vehicles, iron ore, wheat, tea, fertilizer, non electrical machinery, petroleum &
products, chemicals, edible oil, transport equipment, steel & products, grains, electrical goods.