Group: A

Topic: Economic Problems of Pakistan

Submitted to: Sir Muhammad Farooq

Submitted By: Rida Riaz Roll no: 20 Ishfaq Bhatti Roll no: 57 Niaz Shigri Roll no: 33 Misbah Siddique Roll no: 53 Anam Naz Roll no: 04 Marhaba Rana Roll no: 05 Mohsin Khan Roll no: 48 Saba Rauf Roll no: 13 Fauzia Rani Roll no: 02

Institute of Social & Cultural Studies

Content
Introduction Problems in Agricultural Sector Problems in Industrial Sector Import & Export Sector Problems in Administration Sector Tax Generation Problems War on Terror & Lack of tourism Foreign Debts & loans impact Energy Crises Suggestions & conclusion

Major Economic Problems of Pakistan

Economic Loss Due To War On Terrorism Energy Crisis Low FDI And Huge Debt Trap Poorly Managed Tax System Low Export And High Import Inflation Lack Of Tourism Misuse of funds adds to the burden Corruption and bribery of the government officials hinder smooth functioning. Poor literacy rate and lack of skilled workers are also the major economic problems of Pakistan.

Problems in Agricultural Sector of Pakistan

Irrigation Issues Water Issues Disuse of Fertile Lands Lack of R&D and neglect in education & training of farmers Infrastructural problems Inconsistent government policies. There is a great downfall has seen in agricultural sector due to these problems as the agricultural growth rate was 6.5 in 2005-06 and in recent year of 2011-12 it has reduced to half as 3.1 only.

IMPORT OR EXPORT
IMPORTING OR EXPORTING It is the act of producing goods and services in one country and selling or trading in another country. The term export originates from Latin ex and portare meaning to carry out. How ever import or export level maybe highly influenced by Govt. policies such as offering subsides that either restricts or encourage the sale of particulars goods and services abroad. IMPORT OR EXPORT TRADE IN PAKISTAN Pakistan is international trade is suffering from huge amount of deficit due to low demand for its export. Domestic political insatiability also currant for trade deficit. The trade deficit is stood at US $ 3.946 billion in 2010. Pakistan is a number of several international organization such as ECO (Economic corporation org) SAFTA (south Asian Trade area) WIPO ( world intellectual property org) WTO (world trade org) LIST OF IMPORT IN PAKISTAN Textile machinery Electrical machinery Agriculture Fiber Silk yarm Plastic Medical products Rubber EXPORT IN PAKISTAN Textile Cotton Leather

 Carpet Vegetable Fish Sports Sugar Raw Material PRIMARY EXPORT Textile, Garments, Bed linnen, Cotton and Leather goods. PRIMARY IMPORT Petroleum, machinery, plastic, oils and paper etc. Contribution of exports in the GDP of Pakistan According to reports 2010 13.55%

2009 12.86% 2008 12.56 %

Crisis/problem regarding exports Number of things exported are less then no things imported. As a result economy face trade deficit. GOVT need to buy more products example spending more amount on imports. Loans and debts increases due to larger amount of imports Stagnant economic growth.

Foreign Debts & loans impact

Foreign Debt & Its Types o Foreign grants o Foreign loans ROLES OF MAJOR DONOR AGENCIES o International Monetary Fund (IMF):

o Asian Development Bank o International Bank for Reconstruction & Development ( IBRD) or World Bank o U.S Assistance to Pak External Debt & Liabilities (EDL) increased from US $ 37.9 billion at end-June 2000, to $55.9 billion by the end of June 2010, and stood at $ 59.5 at end-March, 2011. Every Pakistani man, woman and child owes over Rs57,000 to foreign and domestic lenders. Pakistans vulnerability due to the debt which is almost 64.9% of total Foreign Exchange of the Country that decreases the value of Rupee. (source: ECONOMIC SURVERY OF PAKISTAN 2011)

Effect of energy crises on the economy of Pakistan

Energy Crisis has, more or less, plagued all sectors of Pakistans machinery ranging from economy to industry, agriculture to social life, inflation to poverty and it is hampering national progress in a drastic manner. Energy plays a pivotal role in the socio-economic development of any country. Energy runs machinery in factories, lights our cities and powers our vehicles. There has been an enormous increase in the demand for energy. Supply of energy is, therefore far less than the actual demand. Pakistan exports and its all economic activities are dependent on uninterrupted energy supplies for its energy requirement. An increase of energy cost will affect the production cost and will force the manufacturers to reduce the labor cost and the prices of products.

Energy mix comparison

Other countries like India and China are using coal rather than oil for power generation as the former is a much cheaper source of electric energy. Nature has

blessed Pakistan with cheap sources of energy like coal and hydel but It is not using them power generation. Energy crisis in Pakistan is a management and not a capacity issue. The demand of energy is increasing day by day

Tax Problems in Pakistan

1) Taxation in Pakistan is a complex system of more than 70

unique taxes administered by at least 37 agencies of the Government of Pakistan. 2) The government is seriously indebted -- and only 1.9 million people in a country of 170 million filed tax returns at all in 2010. An estimated 10 million people are registered to pay taxes in Pakistan; the great majority doesnt pay a rupee. 3) The Tax payments (number) in Pakistan were last reported at 47.00 in 2011, according to a World Bank report released in 2011. 4) Pakistans taxto-GDP ratio stands today at just below 10 percent and it have been falling steadily. 5) Government reduced the development expenditure to make the total expenditure on a sustainable level and meet the commitments with IFIs. As a result development expenditure squeezed from an average of 7.4% of GDP during to mere 2.3 % of GDP. 6) Pakistan GDP growth was recorded 9.0 in 2004-2005 which reduced badly because of not paying tax and now last it was recorded 2.4 in 2010-2011.

Solutions / Suggestions i. Reforms in agricultural sector should be brought. Farmers should be educated by media for scientific approach to cultivation. Water losses

should be minimized and Bio-technology and genetic engineering should be given boost. ii. Dependence on foreign loans should be minimized and strategy of self reliance should be followed for financing development projects. Export led growth must be encouraged iii. iv. Energy crisis- alternate sources etc Declining foreign direct investment- improving law n order, curbing corruption v. vi. vii. Poor management - Good governance Corruption Accountability Natural disaster - (decreases yield, destroys infrastructure)-curbing impacts of climate change viii. Technological development ix. x. Circular debt - Improving taxation system Political instability -hampers industrial growth, re-appointments, industry and economy are overshadowed by political dilemmas xi. Inconsistent policies - well planned, consistent policies. backwardnessimproving education and tech