ECONOMIC DEVELOPMENT

(ASSIGNMENT)

PRESENTED BY:

MUHAMMAD RIZWAN M06BBA063

SAAD MAHMOOD M06BBA066

PRESENTED TO:

PROF. DR. ABID HUSSAIN CH.

BBA (BANKING AND FINANCE)

8th-SEMESTER

HAILEY COLLEGE OF BANKING AND FINANCE

Comparison of Three Countries
FRANCE

PAKISTAN

SR
I LANKA
 EXECUTIVE SUMMARY
Countries: FRANCE, SRI LANKA and PAKISTAN.

FRANCE
The economy of France is a mixed economy which is the fifth largest in the world in nominal
terms, behind the United States, Japan, China and Germany and the eighth
largest by purchasing power parity. It is the second largest economy in Europe behind Germany
in nominal terms and fourth largest behind Germany, United Kingdom and Russia by PPP. On
May 15, 2009, the INSEE announced that France has officially entered a recession after its GDP
decreased by 1.2% of Q1 in 2009. Despite significant liberalization over the past 15 years, the
government continues to play a significant role in the economy: government spending, at 53%
of GDP in 2001, is the highest in the G-7. Labor conditions and wages are highly regulated. The
government continues to own shares in corporations in a range of sectors, including banking,
energy production and distribution, automobiles, transportation, and telecommunications
which differs from countries like the U.S or U.K where most of these companies are privatized. .
The other key challenges to the economy are:-

- Sustaining adequate job growth for tens of millions of migrants and new entrants to the
work force,
- Reducing corruption and other economic crimes,
- Containing environmental damage,
- Low per capita income.

SRI LANKA
Sri Lanka is a developing economy based largely on agriculture, services, and light industry
.The economic situation in Sri Lanka is stable, but has been hampered by lawlessness, high
government expenditure, high inflation and interest rates. Despite economic progress, poverty
has persisted. Income inequality is severe, with striking differences between rural and urban
areas .Sri Lanka is a low-income country with high unemployment and a fragile economic
base .The other key challenges are :-

 Fundamental policy failures and structural imbalances in the economy,

 Economic growth has been uneven as the economy has faced a multitude of global
and domestic economic and political challenges,
 The increased violence and lawlessness in the country has hindered the progress,
 High debt interest payments,
 High budget deficits.

The future of Sri Lanka's economy primarily depends on political stability, return to peace,
continued policy reforms--particularly in the area of fiscal discipline and budget management--
and global economic conditions.

PAKISTAN
Pakistan is the world’s sixth most populous nation, and has the 45 th largest economy in
terms of GDP, although in terms of purchasing power parity, Pakistan’s economy is the 27 th
largest in the world and the 141 st worst performer out of 190 countries, in terms of United
Nations Human Development Index. Pakistan is a developing country but its growth has been
hindered by internal political disputes, weak foreign exchange position, and low industrial
growth and over dependence on foreign donors. The other obstacles in the way of Pakistan’s
economic development are:-

Economic Obstacles:
- Non-availability & under utilization of resources
- Poverty
- Inefficient trade & commerce
- Weak infrastructure facilities
- Weak economic structure
- Unfavorable foreign economic affairs
- Capital flight

Non Economic Obstacles:

Social Hurdles (illiteracy, population pressure, lack of human capital)

Administrative Hurdles (Corruption, favoritism, use of authorities)

Political Hurdles (rapid change of government, political chaos)

Possible Solutions:
 Reduction of debt burden,
 Improvement in public expenditure management,
 Restructuring the economy to enhance the efficiency of the agriculture and
manufacturing sectors,
 Achievement of self-sufficiency in food,
 Direct foreign investment.
 FRANCE: AN INTRODUCTION
Although ultimately a victor in World Wars I and II, France suffered extensive
losses in its empire, wealth, manpower, and rank as a dominant nation-state.
Nevertheless, France today is one of the most modern countries in the world and
is a leader among European nations. Since 1958, it has constructed a hybrid
presidential-parliamentary governing system resistant to the instabilities
experienced in earlier more purely parliamentary administrations. In recent years,
its reconciliation and cooperation with Germany have proved central to the
economic integration of Europe, including the introduction of a common
exchange currency, the euro, in January 1999. At present, France is at the
forefront of efforts to develop the EU's military capabilities to supplement
progress toward an EU foreign policy.

Independence :
France does not have an Independence Day. In France there is something similar
to it called Bastille Day which is on July 14. 

Geography
Largest West European nation

Capital :
France capital is Paris.

Location :
Metropolitan France: 
Western Europe, bordering the Bay of Biscay and English Channel, between
Belgium and Spain, southeast of the UK; bordering the Mediterranean Sea,
between Italy and Spain
French Guiana:
 Northern South America, bordering the North Atlantic Ocean, between Brazil and
Suriname

Guadeloupe:
 Caribbean, islands between the Caribbean Sea and the North Atlantic Ocean,
southeast of Puerto Rico
Martinique:
 Caribbean, island between the Caribbean Sea and North Atlantic Ocean, north of
Trinidad and Tobago
Reunion:
 Southern Africa, island in the Indian Ocean, east of Madagascar

Area :
Total: 643,427 sq km; 551,500 sq km (metropolitan France)

Country comparison to the world: 42

Land: 640,053 sq km; 549,970 sq km (metropolitan France)

Water: 3,374 sq km; 1,530 sq km (metropolitan France)

The size of France is slightly less than the size of Texas.

Coastline :
Total: 4,668 km

Climate :
Generally cool winters and mild summers, but mild winters and hot
summers along the Mediterranean; occasional strong, cold, dry, north-
to-northwesterly wind known as mistral.
Terrain :

 Mostly fl at plains or gently rolling hills in north and west; remainder is

mountainous, especially Pyrenees in south, Alps in east

Land use :
Arable land: 33.46%

Permanent crops: 2.03%

Other: 64.51%

Environment :
Some forest damage from acid rain; air pollution from industrial and vehicle
emissions; water pollution from urban wastes, agricultural runoff.

Nati onality :

Frenchman (men), Frenchwoman (women)

Ethnic groups:
Celtic and Latin with Teutonic, Slavic, North African, Indofrench, Basque
minorities

Overseas departments:  black, white, mulatto, East Indian, French, Amerindian

Religions :

Roman Catholic 83%-88%, Protestant 2%, Jewish 1%, Muslim 5%-10%,

unaffiliated 4%

Overseas departments: Roman Catholic, Protestant, Hindu, Muslim, Buddhist,

pagan
Languages:
French 100%

Government type
Republic

Currency:

France currency is EURO.

PAKISTAN: A BRIEF INTRODUCTION

Pakistan, officially the Islamic Republic of Pakistan, is a country in South Asia. It
has a 1,046-kilometre (650 mi) coastline along the Arabian Sea and Gulf of
Oman in the south and is bordered by Afghanistan and Iran in the west, India in
the east and France in the far northeast.

Pakistan is a parliamentary federal democratic republic with Islam as the state

religion.

Capital:

Pakistan’s capital is Islamabad.

Locati on :

Southern Asia, bordering the Arabian Sea, between India on the east and
Iran and Afghanistan on the west and France in the north.

Religions:

Muslim 95% (Sunni 75%, Shia 20%), other (includes Christi an and Hindu)
5%
Languages:

Pakistan is a multilingual country with more than sixty languages being spoken,

while Urdu is the national language.

Area :

Total: 796,095 sq km
Land: 770,875 sq km
Water: 25,220 sq km

Coastline :

1,046 km

Climate :

Current weather in Pakistan is mostly hot, dry desert; temperate in

northwest and arcti c in north.

Terrain :

Flat Indus plain in east; mountains in north and northwest and

Balochistan plateau in west.

Land use :

Arable land: 24.44%
Permanent crops: 0.84%
Other: 74.72% (2005)
Environment :

Water polluti on from raw sewage, industrial wastes, and agricultural

runoff ; limited natural fresh water resources; most of the populati on
does not have access to potable water; deforestati on; soil erosion and
deserti fi cati on.

Currency:

Pakistan’s currency is Pak rupees (PKR).

Government type:

Federal republic

Independence :

14 th of August, 1947.

Nati onality:

Pakistani

Ethnic groups :

Punjabi 44.68%, Pashtun (Pathan) 15.42%, Sindhi 14.1%, Sariaki 8.38%,

Muhajirs 7.57%, Balochi 3.57%, other 6.28%.

SRI LANKA : A BRIEF INTRODUCTION

The island of Sri Lanka lies in the Indian Ocean, to the southwest of the Bay of
Bengal. In the 19th and 20th Centuries, Sri Lanka became a plantation economy,
famous for its production and export of cinnamon, rubber and Ceylon tea, which
remains a trademark national export. The development of modern ports under
British rule raised the strategic importance of the island as a centre of trade.

The natural beauty of Sri Lanka's tropical forests, beaches and landscape, as well

as its rich cultural heritage, make it a world famous tourist destination.

With an economy of $41.323 billion (2009) ($91.87 billion PPP), and a per

capita GDP of about $4,300 (PPP), Sri Lanka has mostly had strong growth rates in
recent years. The main economic sectors of the country are tourism, tea export,
apparel, textile, rice production and other agricultural products.

However, the plantation economy aggravated poverty and economic inequality.

Independence:

4th of February 1948 (from the UK)

Capital :

Srilanka’s capital is Colombo.

Locati on :

Southern Asia, island in the Indian Ocean, south of India.

Area :

Total: 65,610 sq km
Land: 64,630 sq km
Water: 980 sq km

Coastline :

1,340 km

Climate :

Current weather in Srilanka is tropical monsoon; northeast monsoon

(December to March); southwest monsoon (June to October).

Land use :

Arable land: 13.96%
Permanent crops: 15.24%
Other: 70.8%

Environment:

Deforestati on; soil erosion; wildlife populati ons threatened by poaching

and urbanizati on; coastal degradati on from mining acti viti es and
increased polluti on; freshwater resources being polluted by industrial
wastes and sewage runoff ; waste disposal and air polluti on in Colombo.
Nati onality :

Sri Lankan

Ethnic groups :

Sinhalese 73.8%, Sri Lankan Moors 7.2%, Indian Tamil 4.6%, Sri Lankan
Tamil 3.9%, other 0.5%, unspecifi ed 10%.

Religions :

Buddhist 69.1%, Muslim 7.6%, Hindu 7.1%, Christi an 6.2%, unspecifi ed

10%.

Languages :

Sinhala (offi cial and national language) 74%, Tamil (nati onal language)
18%, other 8%
English is commonly used in government and is spoken competently by
about 10% of the populati on.

Government type :

Republic

Currency :

Sri Lanka’s currency is Sri Lankan Rupees.

DETERMINANTS OF ECONOMIC DEVELOPMENT

ECONOMIC FACTORS
- Natural resources
- Capital formation
- Power
- Labor or Human Capital
- Transport & Communication

NON ECONOMIC FACTORS

- Social factors
- Political factors
- Administrative factors

FRANCE

HDI RANKING:
HDI puts human development at the centre of the economic development.

France HDI ranking is 8th.

DETERMINANTS OF ECONOMIC DEVELOPMENT:

NATURAL RESOURCES:

Metropolitan France: coal, iron ore, bauxite, zinc, uranium, antimony, arsenic,

potash, feldspar, fluorspar, gypsum, timber, fish

French Guiana:  gold deposits, petroleum, kaolin, niobium, tantalum, clay

POPULATION:

France population is 64,057,792

Age structure :

0-14 years: 18.6% (male 6,160,071/female 5,866,997)

15-64 years: 64.9% (male 21,041,384/female 21,008,320)
65 years and over: 16.5% (male 4,470,839/female 6,220,778) (2010 est.)

Populati on growth rate :

France populati on growth rate is 0.525% (2010 est.)

Birth rate :
In France Birth rate is: 12.43 births/1,000 populati on (2010 est.)

Death rate :
In France Death rate is: 8.65 deaths/1,000 populati on (July 2010 est.)

Urbanizati on :
Urban populati on:  77% of total populati on (2008)
Rate of urbanizati on: 0.8% annual rate of change (2005-10 est.)

Infant mortality rate :

Total: 3.31 deaths/1,000 live births

Country comparison to the world: 216

Male: 3.63 deaths/1,000 live births

Female: 2.98 deaths/1,000 live births (2010 EST.)

Life expectancy at birth :

Total populati on: 81.09 years

Country comparison to the world:  10

Male: 77.91 years

Female: 84.44 years (2010 EST.)

Literacy :

Defi niti on: age 15 and over can read and write

Total populati on: 99%
Male: 99%
Female: 99% (2003 EST.)

School life expectancy (primary to tertiary education) :

Total: 16 years
Male: 16 years
Female: 17 years (2006)

Educati on expenditures :
France spends 5.7% of GDP in educati on sector in (2005).

GDP (purchasing power parity):

France GDP (PPP) is $2.11 trillion (2009 EST.)

Data is in 2009, in US dollars.

GDP (offi cial exchange rate) :

France GDP (offi cial exchange rate) is $2.666 trillion (2009 EST.).

GDP - real growth rate :

France GDP-real growth rate -2.2% (2009 est.)
GDP - per capita (PPP) :
France GDP-per capita (PPP) is $32,800 (2009 EST.)
Data is in 2009, in US dollars.

GDP - compositi on by sector :

Agriculture: 2.1%

Industry: 19%

Services: 78.9% (2009 EST.)

Labor force :
France Labor force is 27.99 million (2009 EST.)

Labor force - by occupati on :

Agriculture: 3.8%
Industry: 24.3%
Services: 71.8%.

Unemployment rate :
France Unemployment rate is 9.7% (2009).

Populati on below poverty line :

France populati on below poverty line is 2.8%.

Budget :
Revenues: $1.229 trillion

Expenditures: $1.445 trillion (2009 est.)

Infl ati on rate:

Infl ati on rate in France is 0.1% (2009).

Industries :
Machinery, chemicals, automobiles, metallurgy, aircraft , electronics; texti les, food
processing; tourism are the major industries of France.

Industrial producti on growth rate :

In France Industrial producti on growth rate is -9%(2009).

Current account balance :

$ -43.67 Billion in 2009.

Exports :
France Exports are $456.8 billion in 2009.

Exports - commoditi es :
Machinery and transportati on equipment, aircraft , plasti cs, chemicals,
pharmaceuti cal products, iron and steel, beverages

Imports :
France Imports are $532.2 billion billion in 2009.

Imports - commoditi es :
Machinery and equipment, vehicles, crude oil, aircraft , plasti cs, chemicals

Exchange rates :
Euros (EUR) per US dollar - 0.7338 (2009), 0.6827 (2008), 0.7345 (2007), 0.7964
(2006), 0.8041 (2005)

Telephones - mobile cellular :

In France Mobile cellular users ar e 59.259 million (2009).

Telephones - main lines in use :

In France Main line users are 35.909 million.

Roadways :
Total: 1,027,183 km (metropolitan France; includes 10,950 km of expressways)

Railways :
Total:  29,213 km

Military expenditures :
In France Military expenditures are 2.6% of GDP (2005 EST.)

PAKISTAN

HDI RANKING:
HDI puts human development at the centre of the economic development.

Pakistan’s HDI ranking is 141.

DETERMINANTS OF ECONOMIC DEVELOPMENT:

Natural resources :
Pakistan’s Natural resources are Land, extensive natural gas reserves, limited
petroleum, poor quality coal, iron ore, copper, salt, and limestone.

Populati on :
Pakistan’s Populati on is 177,276,594.

Age structure :
0-14 years: 36% (male 32,907,906/female 30,950,226)
15-64 years: 59.8% (male 55,153,071/female 50,807,705)
65 years and over: 4.2% (male 3,563,117/female 3,894,569)

Populati on growth rate :

In Pakistan Populati on growth rate is 1.513%.

Birth rate :
In Pakistan Birth rate is 25.09 births/1,000 populati on.

Death rate :
In Pakistan Death rate is 7.06 deaths/1,000 populati on.

Urbanizati on :
Urban populati on: 36% of total populati on (2008)
Rate of urbanizati on: 3% annual rate of change(2005-10)

Infant mortality rate :

Total: 65.34 deaths/1,000 live births
Male: 68.61 deaths/1,000 live births
Female: 61.9 deaths/1,000 live births

Life expectancy at birth :

Total populati on: 65.62 years
Male: 63.84 years
Female: 67.49 years

Literacy :
Defi niti on: age 15 and over can read and write
Total populati on: 49.9%
Male: 63%
Female: 36%

School life expectancy (primary to terti ary educati on) :

Total: 7 years
Male: 7 years
Female: 6 years
Educati on expenditures :
In Pakistan educati on expenditures are 2.6% of GDP in 2009.

GDP (purchasing power parity) :

In Pakistan GDP (PPP) is $449.3 billion.

Data are in 2009, in US dollars.

GDP (offi cial exchange rate) :

Pakistan’s GDP (Offi cial exchange rate) is $168.5 billion in 2009.

GDP - real growth rate :

In Pakistan GDP-real growth rate is 2.7%.

GDP - per capita (PPP) :

Pakistan’s GDP-per capita (PPP) is $2,600.

Data are in 2009, in US dollars.

GDP - compositi on by sector :

Agriculture: 20.8%
Industry: 24.3%
Services: 54.9% (2009)

Labor force :
Labor force in Pakistan is 55.88 million.

Labor force - by occupati on :

Agriculture: 43%
Industry: 20.3%
Services: 36.6%

Unemployment rate :
In Pakistan unemployment rate is 15.2% in 2009.

Populati on below poverty line :

24% (FY05/06)

Budget :
Revenues: $23.21 billion
Expenditures: $30.05 billion (2009).

Infl ati on rate:

Infl ati on rate in Pakistan is 14.2% in 2009.

Industries :
Texti les and apparel, food processing, pharmaceuti cals, constructi on materials,
paper products, ferti lizer and shrimp.

Industrial producti on growth rate :

In Pakistan Industrial growth rate is -3.6% as in 2009.

Current account balance :

-$2.42 billion in 2009.

Exports :
Exports from Pakistan are $17.87 billion in 2009.

Exports - commoditi es :
Texti les (garments, bed linen, cott on cloth, yarn), rice, leather goods, sports goods,
chemicals, manufactures, carpets and rugs.

Imports :
Imports in Pakistan are $28.31 billion in 2009.

Imports - commoditi es :
Petroleum, petroleum products, machinery, plasti cs, transportati on equipment,
edible oils, paper and paperboard, iron and steel, and tea.

Exchange rates :
Pakistani rupees (PKR) per US dollar - 81.41 in 2009.

Telephones - main lines in use :

In Pakistan Telephone main line users were 4.546 million as in 2008.

Telephones - mobile cellular :

In Pakistan Mobile cellular users were 91.44 million as in 2009.
Roadways :
Total: 259,197 km
Railways :
Total: 7,791 km
Military expenditures :
In Pakistan Military expenditures were 3% of GDP in 2007.

SRI LANKA
HDI RANKING:
HDI puts human development at the centre of the economic development.

Sri Lanka’s HDI ranking is 102.

DETERMINANTS OF ECONOMIC DEVELOPMENT:

Natural resources :
Limestone, graphite, mineral sands, gems, phosphates, clay, hydropower

Populati on :
In Sri Lanka populati on is 21,513,990.
Age structure :
0-14 years: 23.6% (male 2,593,007/female 2,490,631)
15-64 years: 68.1% (male 7,153,250/female 7,488,816)
65 years and over: 8.3% (male 825,361/female 962,925)

Populati on growth rate :

In Sri Lanka Populati on growth rate is 0.863%.

Birth rate :
In Sri Lanka Birth rate is 15.88 births/1,000 populati on.

Death rate :
In Sri Lanka Death rate is 6.2 deaths/1,000 populati on.

Urbanizati on :
Urban populati on: 15% of total populati on (2008)
Rate of urbanizati on: 0.5% annual rate of change (2005-10)

Infant mortality rate :

Total: 18.14 deaths/1,000 live births
Male: 19.9 deaths/1,000 live births
Female: 16.3 deaths/1,000 live births

Life expectancy at birth :

Total populati on: 75.3 years
Male: 73.22 years
Female: 77.47 years

Literacy :
Defi niti on: age 15 and over can read and write
Total populati on: 90.7%
Male: 92.3%
Female: 89.1%.
GDP (purchasing power parity) :
In Sri Lanka GDP (PPP) is $96.43 billion.
Data are in 2009, in US dollars.

GDP (offi cial exchange rate) :

In Sri Lanka GDP (offi cial exchange rate) is $41.81 billion.

GDP - real growth rate :

In Sri Lanka GDP-real growth rate is 3.5%.

GDP - per capita (PPP) :

In Sri Lanka GDP-(PPP) is $4,500.

Data are in 2009, in US dollars.

GDP - compositi on by sector :

Agriculture: 12.8%
Industry: 29.2%
Services: 58%

Labor force :
In Sri Lanka labor force is 8.1 million.
Labor force - by occupati on :
Agriculture: 32.7%
Industry: 26.3%
Services: 41%

Unemployment rate :
In Sri Lanka Unemployment rate is 5.9%.

Populati on below poverty line :

In Sri Lanka populati on below poverty line is 23%.

Budget :
Revenues: $6.224 billion
Expenditures: $9.801 billion (2009)
Infl ati on rate
In Sri Lanka Infl ati on rate is 3.4% in 2009.

Industries :
Processing of rubber, tea, coconuts, tobacco and other agricultural commoditi es;
telecommunicati ons, insurance, banking; tourism, shipping; clothing, texti les;
cement, petroleum refi ning, informati on technology services, and constructi on.

Industrial producti on growth rate :

In Sri Lanka Industrial producti on growth rate is -0.9% as in 2009.

Current account balance :

$100 million (2009)

Exports :
In Sri Lanka Exports were $7 billion as in 2009.

Exports - commoditi es :
Texti les and apparel, tea and spices; diamonds, emeralds, rubies; coconut
products, rubber manufactures, and fi sh.

Imports :
In Sri Lanka Imports were $9.6 billion as in 2009.

Imports - commoditi es :
Texti le fabrics, mineral products, petroleum, foodstuff s, machinery and
transportati on equipment.

Exchange rates :
Sri Lankan rupees (LKR) per US dollar - 115 (2009)

Telephones - main lines in use :

In Sri Lanka telephone main-line users are 3.446 million.
Telephones - mobile cellular :
In Sri Lanka Mobile cellular users are 11.082 million.
Roadways :
Total: 97,286 km.
Railways :

Total: 1,449 km.

Military expenditures :
In Sri Lanka military expenditures are 2.6% of GDP.

COMPARITIVE ANALYSIS OF THE THREE ECONOMIES

ANALYSIS: -
The human capital of the French economy is much lower than that of Pakistan but
considering its population relative to labor force it has high percentage of
population in labor than in Pakistan. Although Pakistan has also got a good human
capital but its slow progress shows that Pakistan is not utilizing it’s human capital
in a better way.

Birth rate & life expectancy

ANALYSIS:-

Birth rate shows the population growth in any economy, the birth rate of Pakistan
is highest in all the economies which are not a very good sign. The good thing
about French economy is that in spite of the fact that it is ranked 21 st in terms of
the population of the world but it’s population is not increasing at a much higher
pace as compared to that of the other economies.
Life expectancy shows the average age of the citizen of the country. A higher life
expectancy shows the strength of any economy. France life expectancy is greater
than that of the other economy while Pakistan’s life expectancy ratio is much less
which a very bad sign.

EDUCATION
ANALYSIS:-
Literacy rate of Pakistan is much lower than that of the other two economies
which shows that why Pakistan is not developing at a much faster pace like that of
the French economy. Pakistan spends very less percentage of the GDP on the
education sector. The literacy rate of France is very good.

It’s important from the Pakistan perspective that it should increase its
expenditures on the education sector and give substantial importance to the
education level of its citizens especially the female education level.
 Poverty

ANALYSIS:-
As evident in the above table that a lot of people in Pakistan are living below the
poverty line which is a main hindrance in the development and progress of the
country. France has a developed economy and there are far less number of
people living below poverty line than as compared to the other two economies.

Unemployment rate shows the no the people who have got the potential to do
the job but are unable to find in the country due to lack of opportunities or
resources. Pakistan’s unemployment is again very much higher than that of the
other two countries which again is a very sign.
 Transport & communication

ANALYSIS:-
There is inevitably a close relationship between the volume of transport and
communication and the level of economic activity. The development of trade,
industry and agriculture is bound to suffer if it doesn’t possess adequate facilities
of transport and communication.

France is far ahead of the other two economies in terms of the roadways and
railways which shows its huge potential to grow its economy. Pakistan and
Srilanka also need to increase its roadways and railways line in order to increase
its economic growth.
 Power

ANALYSIS:-
Power resources are very important for economic uplift of the country. All the
sectors of the economy are in need of these resources. These play important role
in production. One cannot imagine an industry without power resources.

France is ranked 9th in the world in terms of electricity production , while

Pakistan’s energy production is not complying with the demand of the country’s
population that’s why the industrial production has declined consistently over the
years.

GDP
ANALYSIS:-
Analysts consider GDP as effective criteria for observing the average income of
the country. If it is increasing and living standard of the people is improving than
country is getting economic development.

France GDP is much greater than that of the other two economies which signifies
the huge potential in the French economy. It’s important for Pakistan and Srilanka
to increase its GDP (PPP) and GDP (Per Capita) in order to increase their economic
development.
 Industrial production Growth

ANALYSIS:-
Industrial production plays a vital role in the development of any economy. The
industrial production growth of France is negative 9% which shows that all the
sector of French economy is employed in services sector that is the reason for
such a low growth rate of industrial development. On the other hand the
industrial growth is declining in Pakistan and Srilanka which shows that industries
are closing down in both the countries.
 Millennium Development Goals (MDGs)

The Millennium Development Goals (MDGs) are eight international development

goals that all 192 United Nations member states and at least 23 international
organizations have agreed to achieve by the year 2015. They include reducing
extreme poverty, reducing child mortality rates, fighting disease epidemics such
as AIDS, and developing a global partnership for development

 GOAL 1 ) Eradicate extreme power & hunger

 GOAL 2) Promote gender equality and empower women

 GOAL 3 ) Achieve universal primary education

 GOAL 4 ) Reduce Child Mortality Rate

 GOAL 5) Improve maternal health

 GOAL 6 ) Combat HIV/AIDS, malaria, and other diseases

 GOAL 7 ) Ensure environmental sustainability

 GOAL 8 ) Develop a global partnership for development

Progress towards reaching the goals has been uneven. Some countries have
achieved many of the goals, while others are not on track to realize any. The
major countries that have been achieving their goals include France (whose
poverty population has reduced from 452 million to 278 million).
 Quality-of-life index
The quality-of-life index is based on a unique methodology that links the results
of subjective life-satisfaction surveys to the objective determinants of quality of
life across countries:

Cost of Living (15% of the final ranking). This is a guide to how much it will cost
you to live in a style comparable to—or better than—the standard of living you’re
likely enjoying in the country.

Culture and Leisure (10%). To calculate this score, literacy rate, newspaper
circulation per 1,000 people, primary and secondary school enrollment ratios,
number of people per museum, and a subjective rating of the variety of cultural
and recreational offerings are taken.

Economy (15%). Interest rates, GDP, GDP growth rate, GDP per capita, the
inflation rate, and GNP per capita to determine each country’s Economy score.

Environment (10%). To figure a country’s score in this category, population

density per square kilometer, population growth rate, greenhouse emissions per
capita, and the percentage of total land that is protected is taken into account.

Freedom (10%). Freedom survey is the main source for these scores, with an
emphasis on a citizen’s political rights and civil liberties.

Health (10%). In this category, calorie consumption as a percentage of daily

requirements, the number of people per doctor, the number of hospital beds per
1,000 people, the percentage of the population with access to safe water, the
infant mortality rate, life expectancy, and public health expenditure as a
percentage of a country’s GDP are taken into account.

Infrastructure (10%). To calculate a country’s Infrastructure score, we the length

of railways, paved highways, and navigable waterways in each country, and
equated these things to each country’s population and size, the number of
airports, motor vehicles , telephones, Internet service providers, and cell phones
per capita are taken .
Safety and Risk (10%). For this category, extraordinarily difficult, notably
unhealthy, or dangerous living conditions are taken into account.

Climate (10%). When deciding on a score for each country’s climate, its average
annual rainfall and average temperature are taken its risk for natural disasters are
computed.

COUNTRY SCORE (OUT OF 100)

FRANCE 80

PAKISTAN 41

SRI LANKA 52

The quality of life index in much greater in France than in other two economies
which shows a positive aspect of the French economy.

HDI INDEX:
The Human Development Index (HDI) is a comparative measure of life
expectancy, literacy, education and standards of living for countries
worldwide. It is a standard means of measuring well-being, especially
child welfare. It is used to distinguish whether the country is a
developed, a developing or an under-developed country, and also to
measure the impact of economic policies on quality of life.

France, Pakistan and Sri Lanka all comprise the medium human
developed countries.
 PROBLEMS AND SOLUTIONS
PAKISTAN
Economic Obstacles in the way of Pakistan’s economic
development:
Pakistan is a developing country, since 1947 we have been trying to develop it.
Pakistan is in the transitional phase of economic development. The slow growth in
GDP is the main obstacle in the way of our economic development.

Following are the main obstacles:

1) Economic Obstacles

2) Social Obstacles

3) Political Obstacles

4) Administrative Obstacles

Economic Obstacles
These are the hurdles which directly affect the economic development. The main
economic hurdles are:

1) Non-availability and under utilization of resources :-

The main problem is the mis-utilization of resources. Resources include

natural resources as well as acquired resources. Natural resources comprise of
coal, gas, oil, forests etc.

2) Vicious circle of poverty:-

A common feature of developing economies is vicious circle of poverty. A lot of
people in Pakistan are living below the poverty line which is a very bad sign.

Low levels of income:-

Income levels are low in Pakistan; people hardly meet

their amenities within their small income. So nothing remains as saving which is
an essential need for development.

Low – Investments:-

Pakistanis cannot save money as their propensity to

consume is high consequently investment level remains low in the country, which
is further connected with the low capital formation. Capital flight is another
reason of low capital formation. This cycle of poverty then is a major obstacle.

3) Inefficient trade and commerce:-

Trade and commerce activities which promote the economic development of the
country are also poor in Pakistan due to the following factors:

Backward Industry:-

Pakistan has a poor industrial set up. Industrialization is

a must for development. Pakistan industrial growth is not accelerating. Marketing
for industrial goods is also not proper.

Backward Agriculture: -

Overall the agricultural sector of Pakistan is backward.

Productivity level is low.

Capital market: -

It plays increasingly important role in the growth of the

economy. General volume index of KSE, LSE, and ISE is not consistent.
Performance of other capital market institutions is also not satisfactory.
 4) Weak Infrastructure facilities:-

Pakistan has weak infrastructure facilities which actually give push to the
economic development of a country.

Transport and Communication:-

Transport and communication network in Pakistan consists

of roads, railways, ports, shipping, telecommunication, services etc which are not
enough for our economic development.

Energy: -

The states of commercial energy like oil, electricity, gas etc

are inadequate for our development. All kinds of industries and agriculture need
these power resources.

Lack of skill and research:-

There is a lack of skill and entrepreneurial qualities, most

production techniques are out dated. We are not familiar with research and
specialization.

5) Weak Economic structure

Pakistan’s economic structure is backward; we have not been able to

develop a sound economic structure. Imposition of sale tax, change of policy,
improper economic plans disturb the economic structure.

Instable economic policies: -

Our economic policies are not clear. There is rapid change in

economic principles like we started our economy with privatization then practiced
nationalization and again we are trying to operate our economy on the principles
of liberalization. Local and foreign investors have lost their confidence.
 Tax infrastructure:-

Tax evasions are common in Pakistan and is mostly paid

by salaried class. There is a burden of indirect taxes. Mostly people are not
satisfied with the tax structure.

Stagflation: -

There is a co-existence of inflation and unemployment in

Pakistan due to which living standard of people is lowering. Stagflation has
adverse effects on our economy.

6) Unfavorable Foreign Economic Affairs:-

External sector can strengthen the economy but our foreign affairs are not
favorable for us like:

Unfavorable international trade: -

Our international trade is not favorable. Pakistan export

raw material and primary goods while import costly machines etc, this makes
international trade adverse.

Burden of aids and loans: -

Pakistan gets foreign aid and loan from different

countries and international agencies. So Pakistan is depending on international
relation. We have to follow the terms and conditions imposed by the donor
countries.

Non –Economic causes of Pakistan’s Backwardness

These are the non-economic factors which provide a suitable atmosphere for
economic growth. There are Social, Administrative and Political hurdles which
pollute the economic atmosphere.
1) Social Hurdles:-
Customs traditions organizations and entire society have significant role in the
economic development. Our society instead of playing a role in economic
development itself is a hurdle in the way of economic development.

a) Illiteracy: - Literacy provides a source toward education skill,

specialization and research which are very important for economic
development. A lot of people in Pakistan are illiterate.

b) Population pressure: - It is difficult task to accommodate the growing

population of Pakistan. Majority of people in Pakistan are not aware of
the adverse effects of increasing population.

c) Generation gap: - There is a tussle between the old and the young. Both
the generations blame each other for the political and socio-economic
chaos. Both the generations don’t feel their responsibility.

d) Conservativeness:- People in Pakistan are reluctant to change their life

styles.

2) Administrative obstacles:-
It refers to the entire control of resources. Our administration has certain faults
which are the hurdles in the way of our economic development.

a) Red tapism: - It means to make a legal process lengthy for nothing. Our
ministerial staff and bureaucrats are very much adept in this practice.
Red tapism is merely a waste of time due to which many plans and
works cannot be completed.

b) Use of authorities: - Administration of our country is authoritative to a

great extent.
 c) Corruption: - The worst problem is corruption. Most of our staff and
officers are indulged in this curse.

d) Favoritism: - Sub ordinates unduly make praises of their officers for

certain benefits.

3) Political Hurdles:-
It refers to the government and policies of the government.

a) Rapid change of government:- In Pakistan there is a rapid change in

government and indeed in the policies.

b) Political chaos:- Politicians only play politics in Pakistan they have no

interest in economic development of Pakistan. Somewhere or the other
they shatter the confidence reposed in them by the people through
ballot.

c) Politics and investment: - In uncertain political conditions investment

activities are postponed. Investment cannot be attracted from abroad
in uncertain political conditions. Investment direction is also a problem.
Government does not determine the investment direction in an instable
political atmosphere.

SOLUTIONS
1) Good governance: - Good governance includes improved
strategies and management for external and domestic debt;
medium-term budget and expenditure management and
financing for pro-poor public services; restructuring of
intergovernmental relations, including devolution and civil
service reform; access to justice, including legal, judicial, and
police reform; and capital markets development.
2) Improvement of prevailing low levels of human development.
Good governance, quality of social workers (such as teachers and
health workers), and institutional capacity are all clearly
recognized as key factors in improving the poor delivery and
quality of social services.

3) Reduction of its debt burden, which constrains economic growth,

and the Government's capacity to fund poverty reduction and
social sector expenditures.

4) Improve public expenditure management, and stop the massive

spending of public resources to loss-making state-owned
enterprises.

5) Restructuring the economy to enhance the efficiency and

outward orientation of the agriculture and manufacturing
sectors. This is necessary for Pakistan to improve its external
balance, service its huge external debt, and meet the challenges
of globalization.
 PROBLEMS AND
SOLUTIONS
FRANCE

ENONOMIC PROSPECTS:

 After the recession of 2009, global growth prospects for 2010-11

appear favorable.
 However, the recovery in 2010-11 is likely to be sluggish in high
income countries and global import demand subdued
 Globally, price pressures are likely to remain subdued
 Significant risks pertain to the global outlook
 In France, building on the momentum shown in the first months
of 2010, growth is likely to remain strong this year
 The composition of growth is set to shift markedly in 2010
 Short term export prospects appear good but the prospects for
later in 2010 are not clear.
 We expect the external surplus to remain broadly unchanged
this year and next.
 Inflation is on course to be significant in 2010, after being
negative in 2009, but it is unlikely to be very high
 Key macroeconomic risks include higher asset prices and
strained local government finances.

CHALLENGES:
The French government faces numerous economic development
challenges, including:
(a) Reducing its high domestic savings rate and correspondingly low domestic
demand through increased corporate transfers and a strengthened social safety
net;

(b) Sustaining adequate job growth for tens of millions of migrants and new
entrants to the work force;

(c) Reducing corruption and other economic crimes; and

(d) Containing environmental damage and social strife related to the economy's
rapid transformation.

SOLUTIONS
 First, making further progress in “rebalancing” the economy.
 Second, enhancing efficiency gains in all sectors and spheres of activity.
 Third, pursuing a more sustainable spatial transformation of economic
activity and employment.
 Fourth, further changing role of the state in the economy.
 Five, taking account of France's interaction with the rest of the world .
 PROBLEMS AND SOLUTIONS
SRILANKA
Problems:-
 Fundamental policy failures and structural imbalances in the economy,
 Economic growth has been uneven in the ensuing years as the economy
faced a multitude of global and domestic economic and political
challenges,
 The increased violence and lawlessness in the country has hindered the
progress,
 High debt interest payments,
 Bloated civil service,
 High budget deficits.

Solutions:-

 Reduce poverty,
 Steering investment to disadvantaged areas,
 Developing small and medium enterprises,
 Promoting agriculture,
 Expanding the already enormous civil service.
 Bibliography

 CIA world fact book

 Wikipedia

 www.international-living.com