Bharat Rakshak

ISLAMABAD: Pakistan has planned to set real GDP growth target at 4.2 percent, which seems a great challence in the backdrop of the prevalent situation.

Economic experts single out war on terror, which is being fought for the entire world, a great hindrance in the economic development, but Pakistan alone is paying its heavy price.

The government had set 4.2 percent growth rate for the current fiscal year, but the target could not be achieved due to the poor security situation, last year’s flood, energy crisis and lack of foreign investment.

The government under these circumstances has set the economic growth rate at 4.2 percent for upcoming fiscal year, which would be a challenge for the government.

The government has envisaged contribution of agriculture, manufacturing and services sectors at 3.8 percent, 3.1 percent and 5 percent, respectively, while the increase in investment at 13.5 percent in 2011-12.

The average growth rate has declined from six per cent in 1985-95 to 4.4 per cent in the 15-year period from 1996–2001 (madrassa math?) and only 2.9 per cent in 2007-2011. The factors that have contributed to this slowdown are varied and complex, but the forthcoming budget must prioritise revival of growth in the following sub-sectors.

One, accelerated growth in small-scale industrial and commercial sectors.

Two, a bold programme of incentives and policies for an export-led growth strategy.

Three, attracting foreign investment from the Middle East in agriculture and livestock sectors.

the decline in the investment-to-GDP ratio is due to the deteriorating security situation but also due to the shortage and high cost of energy, growing incidence of corruption and the rising cost of doing business in Pakistan. These negative factors must be addressed on a war footing to improve investment climate in the country.

its September payment was made almost three months late and only after Pakistan received the first tranche of its IMF Standby Agreement payment.

ramana wrote:SSridhar and others.
What about a two month all India boycott of Multinational company goods that do business in TSP? Can we organize a facebook/twitter campaign if it can cause some serious hurt?

We need to identify a list of products in TSP made by MNC that have businesses in India. And then organize a campaign to boycott the purchase of goods made by those MNCs in India over a specific period to give them a kick in the fundamentals. For sake of market dynamics we also need to id alternate products for the Indian consumer.

MSCI, a leading provider of investment decision tools worldwide, is widely used by top global fund managers to track a stock exchange’s position and make fund allocations accordingly. In the annual market review 2011, MSCI did not see any development in the Pakistani equity market and termed it ‘similar to the situation last year’. One of the key reasons for not considering Pakistan for an upgrade is the lack of investor interest in the market, said KASB Securities analyst Imtiaz Gadar. “The market continued to be characterised by a very limited number of sizable securities,” said the MSCI statement.

Only three companies in the local market meet the MSCI Emerging Markets minimum size requirements, adds the statement. Oil and Gas Development Company, MCB Bank and Fauji Fertiliser Company are the only companies that meet the size criteria, according to KASB Securities. Pakistan, after remaining part of the MSCI Emerging Market Index for 14 years from 1994 till 2008, was classified down a level to the Frontier Market Index.

Pakistan was an "emerging market" till 2008! Emerging in which sectors?

By Shabbir Sarwar

LAHORE: Pakistan Industrial and Traders Association Front (PIAF) has urged all the political parties to show harmony on the national issues like deteriorating law and order situation and energy crisis as blame-game is pushing the country’s economy toward disaster.

This was the crux of speeches at PIAF committee’s meeting held on Thursday. PIAF Chairman Sohail Lashari presided over the meeting while PIAF Senior Vice-Chairman Nadar Kamal Osman, Vice-Chairman Junaid Iqbal Sheikh, Lahore Chamber of Commerce and Industry former presidents Mian Anjum Nisar and Mian Shafqat Ali were also present on the occasion.

PIAF chairman speaking on the occasion said that Pakistan is far behind from even the many countries of the region like Bangladesh, India and Sri Lanka. He said that a bigger difference between Pakistan and other countries was that they are facing economic difficulties due to lack of resources or geographical location while Pakistan was in deep trouble because of the unrealistic policies of the present regime.

He said that energy crisis has ruined the economic activities in the country but government has not taken a single step to enhance the cheap power generation and is busy in making repeated increase in electricity tariff. He said that electricity rate for India is 9 cents per unit, in Bangladesh 9.5 cents per unit while in Pakistan 13 cents per unit for the industry. Likewise mark-up rate in India is 11.5 percent, Bangladesh 12.5 percent, Sri Lanka 9.75 percent while in Pakistan it’s almost 17 percent. He said that tax-to-gross domestic product (GDP) ratio in Pakistan is far less than in other countries. Tax-to-GDP ratio in Pakistan is 8.8 percent, India 15 percent, Bangladesh 14.5 percent and Sri Lanka 16 percent.

He said agriculture is the largest sector of Pakistan as 43 percent labour is dependent upon agriculture. He said that this largest sector needs revolutionary reforms on war footing but is being rudely ignored by the government. He said that country’s population is growing by the rate of 2.05 every year and if this growth continues for next two decades, population would cross the mark of 24 million. He said that Pakistan needs to increase the yield per acre on steady pace but instead of taking measures to provide some relief to the agriculture sector, the government is trying to add to the woes of the people attached with the agriculture sector. He mentioned that about nine million hectares fertile land is uncultivated due to shortage of water. He said that Pakistan was enriched with mineral resources worth trillions of dollars that could, not only easily get rid of all economic issues, but could also make the dream of prosperity come true. He said that all mineral resources were the property of the Pakistani nation, but the government had allowed foreign companies to loot this treasure.

rajanb wrote:That is an easy question. In the terrorism and hawala sectors.

November 29, 1999: UN Says ISI Makes Billions from Drugs The United Nations Drug Control Program determines that the ISI makes around $2.5 billion annually from the sale of illegal drugs. [Times of India, 11/29/1999]

March 1, 2002: ISI Maintains Huge Drug Economy Vanity Fair suggests the ISI is still deeply involved in the drug trade in Central Asia. It estimates that Pakistan has a parallel drug economy worth $15 billion a year. Pakistan’s official economy is worth about $60 billion. The article notes that the US has not tied its billions of dollars in aid to Pakistan to assurances that Pakistan will stop its involvement in drugs. [Vanity Fair, 3/1/2002]

Thus, the involvement particularly of the ISI in the drug trade further complicates the adequacy of a category such as “narco-terrorism” and would require comparing how different actors like resistance guerrillas, intelligence agencies, and terrorist organizations use the drug economy.

official statistics tell a grim story. According to the Faisalabad Chamber of Commerce and Industry (FCCI), the city's industrial sector has seen a 50 percent reduction in its production capacity. The district office of the Enterprise and Investment Department estimates that the energy crisis has forced more than 300 textile factories to shut down. Industrialists and labor leaders, however, believe the department is underreporting the number of closed-down factories. Sheikh Abdul Qayyum, a former FCCI president, said that at least 600 textile factories in the city shut down for at least three days every week due to the disruption in the natural gas supply. ndustrialists, however, are loath to go on the record to discuss how Faisalabad's deteriorating economic conditions are helping extremist and sectarian groups. "I will only speak about street crimes and the negative impact they are having on the business environment," said Ahmed. The city's businessmen enjoy seeing their names placed next to those of religious and sect leaders on the banners that adorn the city's main markets. Any kind of relationship with sect leaders, who sometimes appear more powerful than the state itself, is seen as a source of security in Faisalabad's unstable social environment.

Arjun wrote:Someone, either Somnath or Cosmo, had made a reference sometime back on these pages to South Korea having regarded Pakistan as an economic model in the sixties.

Here's a detailed article that demolishes this popular Pakistani urban myth. Apologies if this has already been posted earlier.

Learning from Korea

Faisalabad, the backbone of Pakistan's textile industry, is home to hundreds of large-scale and medium-sized businesses, as well as a cottage industry of 60,000 power looms. Conservative estimates from labor organizations and industrialists suggest that the industry provides jobs to more than 2 million skilled and unskilled people. But over the past three years, the city's businesses have suffered at least a 20 to 25 percent increase in the cost of production.

"I don't think I will be able to sustain the production process at the present cost until coming December," said Sheikh Saeed, a leading producer of cotton cloth. He says his factory is on the brink of closure while at least five other factories located next to his have already closed down. "We are thinking of shifting to trading."

Pakistan: a future in questionIn Pakistan, socio-political difficulties and the military campaign, with US support, against the Taliban have dominated the life of the country since 2007 and there is no prospect of improvement in the short to medium term. The sharp decline in economic growth since 2008 and the disastrous flooding in August 2010 represent additional sources of concern. Growth fell to 2% in the 2008-2009 financial year before rallying to 4.1% in 2009-2010, compared to an average of nearly 7% in the five previous years under the presidency of General Musharraf. The political context has worsened since the run-up to the presidential elections in 2007. General Musharraf could easily have renewed his mandate but for the return from exile of two political rivals, Benazir Bhutto and Nawaz Sharif. The election battle took place against a background of renewed religious militancy and an Sharif Bhutto Sharif Musharraf Zardari upsurge in terrorist attacks, one of which, according to the official version of events, took the life of Benazir Bhutto. In the end it was Ms Bhutto’s husband, who replaced her as a candidate, who won the presidency. However, lacking charisma and under the shadow of past allegations of corruption, he heads an executive that is severely weakened. The army looks like the only solution in the event of a serious Taliban threat to the nuclear arsenal. Without a strong central government, the economy lacks direction and has not recovered from the commodity price shock and the financial crisis which did considerable damage to the balance of trade and government budgets. At the end of 2008, the IMF provided $11.3bn in emergency support to help stave off a default on the country’s debt. However the first steps towards an adjustment in imbalances and the slight improvement in growth in 2009-2010 have been undermined by the worst flooding of the Indus River in living memory. Growth is unlikely to be more than 2% in 2010-2011 due to the scale of the recession in the
November 2010. Inflation, which has remained high due to the monetary financing of the budget deficit and the increase in commodity prices, is likely to rise further due to food shortages. Pakistan thus seems to be lastingly weakened by the economic difficulties of three years of a major crisis with a dysfunctional government and spreading Jihadism. The consequences of the flooding on the country’s population is likely to lead to social upheaval in rural Pakistan. The country will, however, benefit from increased international aid, particularly as, despite a number of disagreements, it remains the USA’s leading
ally in Afghanistan. The World Bank has recently approved a project to expand the port of Karachi, and China is also building port and energy facilities.

EFFORTS should be made to make Pakistan financially stable as it will help curtail unnecessary foreign interventions in its affairs due to less dependence on foreign loans and aid.

Economist Dr Niaz Ahmed Khan during his address at Fikri Nishist at TECH Club on the topic of “How to save Pakistan within 30 days? here on Sunday” made a comprehensive presentation with the help of 69 slides. Engineers, doctors, professors and scientists of the City participated in the moot. It was presided over by Prof Dr Khawaja Amjad Saeed, Principal Hailey College of Commerce.

Dr Niaz said incentive based, interest free bonds system could bring Pakistan out of financial crisis within 30 days. Pakistan can become wealthiest country of the world in a month,” he claimed. Terrorism and suicides will end by implementing this bond system. As many as five million people can get employment under bond system with no expense to the government, he said adding this would also result in elimination of all taxes and duties. He added that bond system could introduce interest free banking. Eventually, this will end capitalism.

He said in this Pakistan could introduce bonds amounting to Rs 100,000 with 100 per cent profit. This system is in line with the principles of Quran and Sunnah , he said adding telecommunication companies have already adopted this system and are offering 100 per cent profit on the purchase of a Rs 100 scratch cards with Rs 100 extra minutes.

On the occasion, Khawaja Amjad Saeed said that actually there was a deficit of Rs 750 billion in Pakistan’s budget, one trillion is spend on payment of foreign debts besides 21 per cent expense on defence. Therefore, he said, no amount is available to the Annual Development Programme (ADP). Change from the grassroots level is required in Pakistan, he added. According to the resources available in Pakistan, it is one of the top countries of the world. Our leadership is not focused, he said.

Earlier Zubair Sheikh, President TECH Club in his welcome note said that TECH Club Fikri Nishists were creating awareness among people on various national issues. Unfortunately, the corrupt political leaders were able to get support of foreign powers and they should be removed to bring prosperity to the country, he added. Founder of Jaago Tehrik Qayyum Nizami, Engineers Abdul Majeed Khan and Mahmudur Rahman Chughtai also participated in this session.

But the prospect of respite is so remote the Water and Power Development Authority acknowledged last week that power cuts would continue for at least another seven years.

KARACHI: Fiscal year 2010-11 proved to be a nightmare for cement sector as 80 percent of its manufacturers suffered huge losses on back of stagnant local consumption.



APCMA said continuous losses were unbearable and might jeopardise servicing of Rs 132 billion in loans industry owes to banks.

Cement industry has been incurring massive losses due to high cost of production, declining exports, slack local demand and government provided no support.

Gaurav_S wrote:Energy crisis leaves Pakistan textiles in tatters

But the prospect of respite is so remote the Water and Power Development Authority acknowledged last week that power cuts would continue for at least another seven years.

Dunno how they arrived at 7 years?

tejas wrote:Nothing cheers me up when I'm down like a visit to this thread. Can an economics guru explain the difference between "profit" and interest?

ISLAMABAD - The government has set a new record by obtaining $12 billion in foreign loans in the last three years and the country’s overall foreign debt has swelled to over $52 billion, the NA Standing Committee on Economic Affairs was told on Friday.

The meeting, which was held under the chairmanship of Malik Azmat Khan, was informed by Economic Affairs Secretary Wajid Rana that foreign debt had swelled from $40 billion in 2008 to $52 billion in 2011.

The massive increase in foreign loans also included the $7 billion received through the International Monetary Fund standby arrangement facility. Asked about the size of foreign loans since 1947, he said it was around $74 billion. Rana said other than the foreign debt, the government had liabilities of over Rs 6 trillion in domestic debt.

Sources said that exchange of harsh words between Petroleum Ministry and All Pakistan CNG Association (APCNGA) erupted after the talks ended in stalemate as the ministry officials refused to honour the commitment made with the CNG association on 4th July by Petroleum Minister Dr Asim Hussain. They said persisting deadlock would ultimately add to the woes and worries of the consumers of CNG in the country, who are already in deep trouble due to energy crisis and inflation

Chinmayanand wrote:

tejas wrote:Nothing cheers me up when I'm down like a visit to this thread. Can an economics guru explain the difference between "profit" and interest?

Qafirs charge "interest" while believers take "profit" .

Arjun wrote:Here's a detailed article that demolishes this popular Pakistani urban myth. Apologies if this has already been posted earlier. Learning from Korea

anupmisra wrote:

Arjun wrote:Here's a detailed article that demolishes this popular Pakistani urban myth. Apologies if this has already been posted earlier. Learning from Korea

Please don't take this folklore way from the pakis. They have so little to cling on to nowdays. Secondly, don't even bring up their national airline's past glory days and burst that bubble. Drives the average paki into raptures just thinking how great their nation was (is).

The United States is holding back $800 million in aid to Pakistan, President Barack Obama's chief of staff said Sunday.

While Pakistan has "been an important ally in the fight on terrorism," Daley said, "now they've taken some steps that have given us reason to pause on some of the aid which we're giving to the military, and we're trying to work through that."

The rift seemed to deepen last week when the top U.S. military officer, Chairman of the Joint Chiefs of Staff Adm.Mike Mullen, said he believes the Pakistani government "sanctioned" the killing of a prominent Islamabad reporter, Syed Saleem Shahzad, who was murdered in May.

abhishek_sharma wrote:Pakistan's demographic dilemma

Pakistan is experiencing rapid urbanization; while a third of the country's people have long been rurally based, at least 50 percent of the population is expected to live in cities by the 2020s....

...Additionally, if Pakistanis are to be gainfully employed, the economy must be large enough to absorb them, no simple feat in a labor economy that at present creates only a million new jobs a year...

Pakistan
Population (thousands)
All Variants
1950-2100

Year   Medium      High          Low           Constant fertility
1950 	 37,542 	 37,542 	 37,542 	 37,542
1955 	 41,109 	 41 109 	 41 109 	 41 109
1960 	 45,920 	 45 920 	 45 920 	 45 920
1965 	 51,993 	 51 993 	 51 993 	 51 993
1970 	 59,383 	 59 383 	 59 383 	 59 383
1975 	 68,483 	 68 483 	 68 483 	 68 483
1980 	 80,493 	 80 493 	 80 493 	 80 493
1985 	 95,470 	 95 470 	 95 470 	 95 470
1990 	111 845 	111 845 	111 845 	111 845
1995 	127 347 	127 347 	127 347 	127 347
2000 	144 522 	144 522 	144 522 	144 522
2005 	158 645 	158 645 	158 645 	158 645
2010 	173 593 	173 593 	173 593 	173 593
2015 	189 648 	191 378 	187 919 	192 422
2020 	205 364 	210 189 	200 540 	213 758
2025 	220 609 	229 589 	211 629 	237 213
2030 	234 432 	247 779 	221 103 	261 599
2035 	246 789 	264 967 	228 766 	287 169
2040 	257 778 	281 781 	234 396 	314 904
2045 	267 240 	298 374 	237 695 	345 569
2050 	274 875 	314 272 	238 538 	379 242
2055 	280 486 	328 856 	237 045 	415 670
2060 	283 959 	341 769 	233 311 	454 747
2065 	285 455 	353 298 	227 493 	496 968
2070 	285 191 	363 895 	219 755 	543 245
2075 	283 420 	373 869 	210 376 	594 497
2080 	280 415 	383 325 	199 757 	651 358
2085 	276 466 	392 285 	188 372 	714 296
2090 	271 822 	400 837 	176 629 	783 759
2095 	266 703 	409 175 	164 873 	860 368
2100 	261 271 	417 464 	153 363 	944 843

To find out why African countries'experience with urbanization and sustained growth appeared to differ from that of other countries, the authors investigated the determinants of urbanization across countries over 40 years. Rather than studying individuals'decisions to migrate, they relied on macroeconomic data and cross-country comparisons. A central hypothesis of their study: that individuals move (with varying degrees of ease) in response to economic incentives and opportunities. If location incentives are distorted, so is growth.

The authors find that urbanization levels are closely correlated with levels of income. But urbanization continues even during periods of negative growth, carried by its own momentum, largely a function of the level of urbanization. From that viewpoint, Africa's urbanization without growth is not a puzzle.

Factors other than income that help predict differences in levels of urbanization across countries include: a) income structure; b) education; c) rural-urban wage differentials; d) ethnic tensions; and e) civil disturbances. In addition, the relationship between economic incentives and urbanization is weaker in countries with fewer civil or political liberties.

Factors other than initial urbanization level that help explain the speed of urbanization include: 1) The sector from which income growth is derived; 2) ethnic tensions; 3) civil disturbances and democracy (these two slow the pace of urbanization if all else is constant); 4) rural-urban wage differentials, whether they represent an urban bias or simply lower productivity in agriculture relative to other sectors.

The weak relationship that this study shows between urbanization and traditionally accepted migration factors suggests that in Africa economists are overlooking part of the urbanization story. The fact that the informal sector appears to provide a significant source of income for urban migrants, coupled with the overlap between rural and urban activities, may shed light on the nature of urbanization in Africa.

Each city/town has been divided into enumeration blocks consisting of 200-250 households identifiable through sketch map. Each enumeration block has been classified into three categories of income groups i.e. low, middle and high, keeping in view the living standard of the majority of the people. List of villages published by Population Census Organization obtained as a consequence of Population Census 1998 has been taken as rural frame.

A. Urban Domain: Islamabad, Lahore, Gujranwala, Faisalabad, Rawalpindi, Multan, Bahawalpur, Sargodha, Sialkot, Karachi, Hyderabad, Sukkur, Peshawar and Quetta, have been considered as large sized cities. Each of these cities constitutes a separate stratum and has further been sub-stratified according to low, middle and high-income groups. After excluding population of large sized cities, the remaining urban population in each defunct Division in all the provinces has been grouped together to form a stratum.
B. Rural Domain: Each district in Punjab, Sindh and NWFP provinces has been grouped together to constitute a stratum. Whereas defunct administrative Division has been treated as stratum in Balochistan province.
Sample Size and Its Allocation: Keeping in view the objectives of the National/Provincial Level survey the sample size has been fixed at approximately 17600 households comprising 1252 sample villages/ enumeration blocks, which is expected to produce reliable results at provincial level. For the District level survey the sample is fixed at approximately 79600 households comprising 5563 sample villages / enumeration blocks, which is expected to produce reliable results at district level.

Millions
Year      Urban   Rural        Urban/Rural
2001     47.73    85.91       0.556
2003     49.64    89.33       0.556
2006     51.87    95.22       0.545
2007     52.80    97.05       0.544

A_Gupta wrote:IMO, if the urbanization figures for Pakistan are correct, then it is only apparently in dire financial straits, the underlying economy must be healthy.

http://www.riazhaq.com/2009/09/urbaniza ... st-in.html

Urban dwellers living within 50 metres of a
hospital or 100 metres of a water pipe often have as little chance of using these as
rural dwellers who are 20 kilometres from hospitals or water mains; proximity does not
mean access.

Pakistan's unstable security, a Taliban insurgency in the country's northwest and chronic power shortages have put off long-term investors, analysts say.

gakakkad wrote:to pakilurkers
yes we INDIANS ARE GOING TO BASH U LEFT RIGHT AND CENTRE. if u thing u can retaliate I D see u try.

SBajwa wrote:What is urbanization? I visited Gujranwala, Lahore and Sheikhupura in 2005.

“If the situation persists, the economy will suffer even more,” said Saeed Shafiq, President Karachi Chamber of Commerce & Industry (KCCI). “We are forced to keep our shops and businesses shut every second or third day.”

Senator Haji Ghulam Ali, President Federation of Pakistan Chambers of Commerce and Industry (FPCCI), said that the worsening security scenario proves a second major blow to the economy following the prevailing energy crisis.

“Around Rs10 billion have been lost since the start of July only because of the violence in Karachi,” he said.

Traders and industrialists say that a business closure for a day in Karachi wipes out an estimated Rs4 billion.

La-Whore—The former Chairman of Pakistan Poultry Association (PPA) and former LCCI Senior Vice President Abdul Basit Friday expressed grave concern over eight percent decline in Foreign Direct Investment (FDI) and Portfolio Investment during the financial year 2011. Abdul Basit said that according to the State Bank of Pakistan, out of total investment, FDI stood at $1.573 billion at the end of FY11 as compared to $2.15 billion in FY10, depicting a decrease of $577 million.

He said that it was eye opener that even those countries are reluctant to invest in Pakistan who pushed Pakistan in to the fire of “War against terrorism”. He said that in the financial year 2009-10 the volume of US investment in Pakistan was $468.3 million but in the financial year 2010-11 it declined to $ 238.9. Likewise, in the same period UK investment has also declined from $294.6 million to $208.1. He said that many other countries are also squeezing their investment in Pakistan. While citing the example he said that Japan’s investment in Pakistan has reduced from $26.8 million to $3.2 million, Switzerland’s investment has reduced from $170.6 million to $47.2 and German investment has reduced from $53 to $21.2 in the period from FY2009-10 to FY2010-11. He said that overall 26.8% decrease in the Foreign Direct Investment (FDI) has been recorded including Privatization Proceeds as compared to FY 2009-10.

He said that ongoing energy crisis and worst law and order situation are the main factors spoiling the investment scenario but political blame-game, unstable economic policies, poor infrastructure situation and high input cost are equally responsible.