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| 99 Names of Allah | AR-RAHMÂN : The Most Compassionate, The Beneficent, The Gracious | AR-RAHÎM : The Merciful | AL-MALIK : The King | AL-QUDDÛS : The Most Holy | AS-SALÂM : The All-Peaceful, The Bestower of peace | AL-MU'MIN : The Granter of security | AL-MUHAYMIN : The Protector | AL-'AZÎZ : The Mighty | AL-JABBÂR : The Compeller | AL-MUTAKABBIR :Supreme in Greatness, The Majestic | AL-KHÂLIQ : The Creator | AL-BÂRI' : The Maker | AL-MUSAWWIR : The Bestower of form, The Shaper | AL-GAFFÂR : The Forgiver | AL-QAHHÂR : The Subduer | AL-WAHHÂB : The Bestower | AR-RAZZÂQ : The Provider | AL-FATTÂH : The Opener, The Judge | AL-'ALÎM : The All-Knowing | AL-QÂBID : The Withholder | AL-BÂSIT : The Expander | AL-KHÂFID : The Abaser | AR-RÂFI' : The Exalter | AL-MU'IZZ : The Bestower of honour | AL-MUDHILL : The Humiliator | AS-SAMÎ' : The All-Hearing | AL-BASÎR : The All-Seeing | AL-HAKAM : The Judge | AL-'ADL : The Just, The Equitable | AL-LATÎF : The Gentle, The Knower of subtleties | AL-KHABÎR : The All-Aware | AL-HALÎM : The Forbearing | AL-'AZÎM : The Incomparably Great | AL-GAFÛR : The Forgiving | ASH-SHAKÛR : The Appreciative | AL-'ALIYY : The Most High | AL-KABÎR : The Most Great | AL-HAFÎZ : The Preserver | AL-MUGHÎTH : The Sustainer | AL-HASÎB : The Reckoner | AL-JALÎL : The Majestic, The Revered, The Sublime | AL-KARÎM : The Generous | AR-RAQÎB : The Watchful | AL-MUJÎB : The Responsive | AL-WÂSI' : The All-Encompassing, The All-Embracing | AL-HAKÎM : The Wise | AL-WADÛD : The Loving One | AL-MAJÎD : The Most Glorious | AL-BÂ'ITH : The Resurrector | ASH-SHAHÎD : The Witness | AL-HAQQ : The Truth | AL-WAKÎL : The Ultimate Trustee, The Disposer of Affairs | AL-QAWIYY : The Most Strong | AL-MATÎN : The Firm One, The Authoritative | AL-WALIYY : The Protector | AL-HAMÎD : The All-Praised, The Praiseworthy | AL-MUHSÎ : The Reckoner | AL-MUBDI' : The Originator | AL-MU'ÎD : The Restorer to life | AL-MUHYÎ : The Giver of life | AL-MUMÎT : The Causer of death | AL-HAYY : The Ever-Living | AL-QAYYÛM : The Self-Existing by Whom all subsist | AL-WÂJID : The Self-Sufficient, The All-Perceiving | AL-MÂJID : The Glorified | AL-WÂHID : The One | AS-SAMAD : The Eternally Besought | AL-QÂDIR : The Omnipotent, The Able | AL-MUQTADIR : The Powerful | AL-MUQADDIM : The Expediter | AL- MU'AKHKHIR : The Delayer | AL-AWWAL : The First | AL-ÂKHIR : The Last | AZ-ZÂHIR : The Manifest | AL-BÂTIN : The Hidden | AL-WÂLÎ : The Governor, The Protector | AL-MUTA'ÂLÎ : The Most Exalted | AL-BARR : The Benign, The Source of All-Goodness | AT-TAWWÂB : The Granter and Accepter of repentence | AL- MUNTAQIM : The Lord of Retribution, The Avenger | AL-'AFUWW : The Pardoner | AR-RA'ÛF : The Most Kind, The Clement | MÂLIK-UL-MULK Owner of the Kingdom | DHUL JALÂL WAL IKRÂM Possessor of Majesty and Honour | AL-MUQSIT : The Just, The Equitable | AL-JÂME' : The Gatherer | AL-GHANIYY : The All-Sufficient | AL-MUGHNÎ : The Enricher | AL-MÂNI' : The Preventer of harm | AD-DÂRR : The Afflicter | AN-NÂFI' : The Benefiter | AN-NÛR : The Light | AL-HÂDÎ : The Guide | AL-BADÎ' : The Originator | AL-BÂQÎ : The Everlasting | AL-WÂRITH : The Ultimate Inheritor | AR-RASHÎD : The Guide | AS-SABÛR : The Patient One

Quran in Roman Urdu

Sunday, July 24, 2011

Pakistan's Annual Economic Survey 2006-07

Economic Survey 2006 – 07

  • Overall performance: strong;
  • Real GDP growth rate: 7%.  Whereas the World Economy expanded by 5.4% in 2006.  The Euro Zone shown a growth of 2.6% in 2006.  While advanced economies grew by 3.1% and developing economies show an astonishing figure of 7.9%.  China grew by 10.7%, India grew by 9.2%, Vietnam grew by 7.4% and CIS grew by 7.7% including Russia’s growth rate of 6.7%. ASEAN (Indonesia, Thailand, Malaysia and Philippines) grew by 5% – 5.5%.  Saudi Arabia and Kuwait grew by 6.3% and 6.2% respectively;
  • Per capita income in current dollar term was up by 11% to $925;
  • Agricultural growth rate: 5%;
  • Large-scale manufacturing growth rate: 8.8%;
  • Services sector growth rate: 8%;
  • Real per capita GDP grew by 5.2%;
  • Aggressive tight monetary policy by SBP;
  • Rate of inflation averaged 7.9% in the first ten months of the fiscal year;
  • Public debt declined from 56.9% to 53.4% of GDP, and external debt and liabilities declined from 29.4% to 27.1%;
  • Highest ever workers’ remittances at around $5.5 billion;
  • Highest ever foreign investment at around $6.5 billion, emerging as the single largest source of external finance after exports;
  • Stable exchange rate;
  • Successful launch of a new $750 million 10-year 144 A sovereign bond in international debt capital market;
  • Major health indicators improved.
Pakistan's economy continues to maintain solid pace of expansion since the fiscal year 2002-03 recovery in the economy has been strong, rapid and sustained. During the fiscal year 2006-07, Pakistan's economic fundamentals have gained further strength. The most important achievements of this year include:
Growth and Investment:
Pakistan’s economy continues to maintain its strong growth momentum for the fifth year in a row in the fiscal year 2006-07.  With economic growth at 7% in the current fiscal year, Pakistan’s economy has grown at an average rate of almost 7% p.a. during the last five years.  This brisk pace of expansion on sustained basis has enabled Pakistan to position itself as one of the fastest growing economies of the Asian region.
The real GDP grew strongly at 7% in 2006-07 as against the revised estimates of 6.6% for the last year and 7% budgeted growth rate for the year.
Annual GDP Growth Rate in % (1997-2007)
GDP Growth Rate (%)
2004-05 (revised)
2005-06 (revised)
2006-07 (10 months)
Growth of value addition in Commodity Producing Sector (CPS) is estimated to increase by 6% in 2006-07 as against 3.4% in 2005-06.  Within the CPS, agriculture and manufacturing grew by 5% and 8.4%, respectively.  Large-scale manufacturing (LSM) registered a growth of 8.8% in 2006-07 as against the target of 12.5% and last year’s achievement of 10.7%.  As a result of structural transformation, the share of agriculture in GDP has declined by 3.2% points in the last 6 years alone and the share of the manufacturing sector has increased by 3.1% points in the same period.
Major crops witnessed an impressive growth of 7.6% as against a negative growth of 4.1% last year.  Livestock, a major component of agriculture, exhibited signs of moderation from its buoyant growth of 7.5% last year to 4.3% in 2006-07.
The services sector grew by 8.5% in 2004-05, by 9.6% in 2005-06 and by 8% in 2006-07.  Finance and insurance sector spearheaded the growth in the services sector and registered stellar growth of 18.2% during the current fiscal year.  Value added in the wholesale and retail trade sector increased by 7.1% in 2006-07 compared to 8.6% growth in 2005-06.
Value added in the transport, storage and communications sector grew by 5.7% as compared to 6.9% growth in the previous fiscal year.  Public administration and defence posted a growth of 7% while ownership of dwellings grew by 3.5% and social services sector improved the growth performance to 8.5% from 6.3% last year.
Pakistan’s per capita real GDP has shown fast pace growth in the last years averaging at 5.5%.  Whereas, the per capita income in dollar term has grown at an average rate of 13% p.a. during the last 5 years, rising from $586 in 2002-03 to $925 in 2006-07.  The main factors responsible for the sharp rise in per capita income include acceleration in real GDP growth, stable exchange rate and four fold increase in the inflows of workers’ remittances.
The investment has reached record level of 23% of GDP.  This is the highest investment rate ever in recent economic history.  This year’s economic growth is largely investment-driven but ably supported which provides source of optimism that a growth of 6-8% in the next 5 years is quite achievable.  National savings are financing a large part of this investment boom.  The national savings rate is now at 18% of GDP.
Fixed investment has increased to 21.4% of GDP from 20.1% last year.  Total investment has increased to 23% from last year’s 16.9% of GDP.  Private sector investment grew by 20.4% this year as against 37.5% increase in last year in nominal terms.  Public sector investment has also increased by 25.7% during the current fiscal year in nominal terms.  Major nominal growth in private sector investment is witnessed in manufacturing (27%), mining & quarrying (93.6%), construction (10.7%), transport and communication (20.8%), and wholesale and retail trade (25.4%).  The overall foreign investment during the fist ten months of the current fiscal year has touched $6 billion – highest ever in the country’s history.  The overall foreign investment grew by 47.7%.
Almost 78% of FDI has come from five countries, namely, the UAE, US, China, UK and Netherlands.  Total FDI has reached $4160.2 million as against $3038.2 million of last year, showing an increase of 36.9%.  The major sectors of FDI are financial business (20.9%), energy (14.1%), and food, beverages and tobacco (11.8%).
Agriculture is still the largest sector of Pakistan.  It accounts for 20.9% of GDP and directly employs 43.4% of the total workforce.  This year, the agriculture growth has shown a mixed trend.  Pakistan’s agriculture has faced two droughts in the last seven years, i.e., in 2000-01 and 2001-02.  Hence agriculture registered negative growth in these two years.  With positive growth during 2002-03, 2003-04 and 2004-05, the performance of agriculture remained weak during the year 2005-06, because its crops sector particularly major crops could not perform up to the expectations.  Growth in the agriculture sector registered a sharp recovery in 2006-07 and grew by 5% as against the preceding year’s growth of 1.6%.  Major crops posted strong recovery from negative 4.1% last year to positive 7.6% mainly due to higher production of wheat and sugarcane.
Wheat production of 23.5 million tons is highest ever in the country’s history, registered an increase of 10.5% over last year.  Sugarcane production likewise improved by 22.6% over last year to 54.8 million tons, both being record high production.  Cotton production at 13 million bales remained mostly unchanged in comparison to 13.02 million bales of last year.  Rice production at 5.4 million tons was marginally less than 5.5 million tons produced last year.  Despite the lower yield, higher demand abroad for Pakistan Basmati Rice and high international prices are expected to surpass the last year’s export earning from Basmati Rice.
Minor crops registered a weak growth of 1.1% while it was 0.4% last year.  However, amongst the minor crops, production of potato increased by 67.2%, mung and masoor pulses improved by 21.5% and 17.9% respectively.  Livestock registered a strong growth of 4.3% over the last year’s impressive growth of 7.5% due to increase in the livestock and poultry products.  Fishery performed positively at 4.2% as against 20.5% of last year.  Forestry has shown a negative growth of 3.8% as against the negative growth of 43.7% last year.
Manufacturing and Mining:
The overall manufacturing sector continued on its strong positive trend during the current fiscal year.  Overall manufacturing recorded an impressive and broad based growth of 8.45%, as against last year’s growth of 9.9%.  LSM, accounting for 69.5% of overall manufacturing registered an impressive growth of 8.75% in the current fiscal year as against the last year’s 10.68%.
The main contributors of this impressive 8.75% during the first ten months of current fiscal year (2006-07) are cotton cloth (7%) and cotton yarn (11.9%) in textile group; cooking oil (6.8%), sugar (19.6%) and cigarette (4.14%) in the food, beverages and tobacco group; cement (21.11); jeeps and cars (3%), LCVs (17.04%), motorcycles (12.3%) and tractors (11.4%) in the automobile group.  Nitrogenous and phosphatic fertilizers shown negative growths of 0.08% and 3.1% respectively.  Similarly, petroleum products and galenicals also shown negative growths of 5.59% and 24.49% respectively.
The Government is fully committed to make the mineral sector as one of the most profitable sector in Pakistan.  During the current fiscal year, the mining and quarrying sector has registered a growth rate of 5.6% as against 4.58% of last year, which was mainly due to positive growths in magnetite, dolomite, limestone and chromites.
Poverty and Income Distribution:
With Government’s dynamic economic policies, the poverty has reduced from 1/3rd to 1/4th, which is quite phenomenal, but still, with 23.9% of poverty level, Pakistan is facing its horrendous social, political and economic effects.  Government of Pakistan is still trying her best.  Since fiscal year 2002, the economy has created 10.62 million jobs, thereby reducing the open unemployment rate to 6.2% by fiscal year 2005-06.  Foreign inflows in the form of remittances also have salutary impact on poverty.  Development expenditure as a ratio of GDP, increase in human capital base, and openness of the economy are some of the other important factors that reduce the absolute poverty levels in Pakistan.  On the debit side, food inflation increases poverty levels.  The economy has witnessed a gradual increase in all the former set of determinants, while food inflation remained benign till 2004-05.
Fiscal Development:
Pakistan has succeeded in reducing fiscal deficit from an average of 7% of GDP in the 1990s to an average of 3.5% during the last seven years.  The associated public debt accumulation also declined sharply from over 100% of GDP to 53% this year.  Pakistan’s hard earned macroeconomic stability is therefore, underpinned by fiscal discipline.
The underlying fiscal deficit is targeted at 3.7% of GDP (excluding earthquake spending) for the current fiscal year 2006-07 which is slightly higher than the deficit level of the previous year (3.4% of GDP).
Total revenues are budgeted at Rs. 1163.1 billion in 2006-07 compared to Rs. 1087 billion in 2005-06, showing an increase of 7%.  This was primarily due to a rise of 15.5% in tax revenue on the back of increase in federal tax revenues are projected to rise by 17.5%.  Provincial tax revenue is projected to decline by 12.6%.  Non-tax revenue is targeted to decline by 13.3% by moving to Rs. 277.3 billion in 2006-07 as against Rs. 320 billion last year.
During the last seven years, tax collection by CBR has increased by 112.8%.  During the current fiscal year, CBR has exceeded the revenue target of Rs. 645.2 billion fixed for the first 10 months of current fiscal year by Rs. 11.3 billion.  The net collection stood at Rs. 656.5 billion as against Rs. 547 billion of last year, thereby showing an increase of 20%.  The direct taxes contributed most of the increase they have surpassed the target by Rs. 52.4 billion and recorded massive growth of 50.9%.
The share of direct taxes in total taxes has increased from 18% to over 38.5% in first 10 months of the current fiscal year 2006-07.  Whereas, the share of indirect taxes in total taxes has declined from 82% to 61.5 during the same period, which will give a relief to final consumers.  The share of sales tax increased at a tremendous pace from 14.4% to 41% of total taxes and from 17.6% to 60.3% of indirect taxes during the same period.  The collection from custom duty account for 18.6% of total tax collection and 32.3% of indirect taxes in the current fiscal year.
Total expenditure, during the first 9 months of the current fiscal year, is estimated at Rs. 1168.5 billion.  Current expenditure is estimated at Rs. 925.3 billion for the first 9 months of the current fiscal year.  The higher increase in current expenditures during the last two years is mainly on account of earthquake-related spending amounting to 0.5% to 0.8% of GDP.  Interest payments are estimated at Rs. 241.2 billion as against the target of Rs. 239.5 for the first 9 months of current fiscal year.
Development expenditure is estimated at Rs. 241.8 billion for the first 9 months of the current fiscal year as against the target of Rs. 435 billion and revised estimate of Rs. 313.7 billion in 2005-06.  This expenditure may likely to pick-up in the last quarter of the year.  The size of PSDP was budgeted at Rs. 270 billion and provincial PSDP was estimated at Rs. 115 billion; totalling Rs. 385 billion.  An amount of Rs. 50 billion was budgeted for earthquake related spending; therefore, the total size of the PSDP was budgeted at Rs. 435 billion.  However, an operational shortfall of Rs. 20 billion in PSDP was anticipated in 2006-07.  During the last seven years, the developed expenditure improved from 2.2% of GDP in 2000-01 to 4.9% of GDP in 2006-07.
The overall fiscal deficit is targeted at Rs. 373 billion or 4.2% of GDP for 2006-07.  The Government is well placed to meet this target as fiscal deficit during the first nine months remained at 3.1% of GDP or 73% of the yearly target.  On the basis of the developments on revenue and expenditure front, the overall fiscal deficit during the first 9 months of the current fiscal year stood at Rs. 272.8 billion or 3.1% of GDP.  Earthquake accounted for sizeable amount of fiscal deficit and underlying fiscal deficit excluding earthquake expenditure is targeted at 3.7% of GDP for 2006-07.  Revenue balance (revenue minus current expenditure) – a measure of government’s savings or dis-savings was targeted to be in surplus to the extent of 0.6% of GDP.  During the fist 9 months of the current fiscal year, the revenue balance has remained in deficit to the extent of Rs. 29.6 billion or 0.3% of GDP.   The primary balance (total revenue minus non-interest total expenditure) remained in surplus for the last 7 years.  However, primary balance turned negative for the first time in 2005-06.
The public debt-to-GDP ratio, which stood at almost 85% on June 30, 2000, declined substantially to 56.9% by the end of June 2006, and by the end of March 2007, it further declined to 53.4%.  Public debt was 562.5% of revenue by the end of 1990s.  With effective debt reduction strategy, the public debt burden in relation to total revenue has declined substantially to 401% by end of June 2006 and further to 400% by end of March 2007.
By end of June 2006, total domestic debt stood at Rs. 2312 billion which was 30% of GDP.  The outstanding stock of domestic debt rose by Rs. 211.8 billion and domestic debt stock stood at Rs. 2523 billion by the end of March 2007 which is 28.4%,
Money and Credit:
There has been a remarkable improvement in Pakistan’s financial sector as it initiated a broad-based program of reforms in the early 1990s.  The pace of reforms, however, has increased manifold since 2000.  As a result of successful reforms in the financial sector the M2/GDP ratio, which is an indicator of financial deepening and development has been showing rising trend since 1990-91.  M2/GDP ratio has increased from 39.3% in 1990-91 to 45% in 2005-06.  Credit to private sector / GDP ratio is also rising from 21.7% in 1990-91 to 27.4% in 2005-06.
During the current fiscal year, the SBP took several additional policy measures in different phases as part of monetary policy tightening.  In the first phase, the SBP raised the Statutory Liquidity Ratio (SLR) from 15% to 18% and Cash Reserve Ratio (CRR) from commercial banks from 5 to 7%.
The money supply during the period July 1 to May 12, 2007 expanded by Rs. 477.9 billion or 14% as against an expansion of Rs. 358.2 billion or 12.1% in the same period last year.
Consistent with its objective of shaving off domestic demand with a view to reducing inflation, the SBP not only raised reserve requirements for banks w.e.f. July 22, 2006, but also increased the discount rate 50 bps to 9.5% from 9%.  In addition, SBP continued its frequent open market operations to drain excess liquidity from the inter-bank market.  SBP also raised the cut-off yield on 6-months and 12-months treasury bills which had increased gradually by 41 and 29 basis points to 8.9% and 9.07% respectively during July – April FY 07.  Interest rates of 3.5 and 10 years maturities of Pakistan Investment Bonds (PIBs) exhibit an increase in the range of the 14 basis points to 33 basis points during the FY 07 over the last year.  The weighted average lending rate has increased by 240 basis points in a period of 21 months from June 2005 to March 2007 from 8.2% in June 2005 to 10.6% in March 2007.
Capital Markets:
Pakistan’s capital and stock markets have witnessed impressive growth over the last several years on account of market friendly and investment friendly policies pursued by the government.  The KSE-100 index has increased from 1521 points in June 2000 to 12370 points in April 2007, i.e., an increase of 713%.  Similarly aggregate market capitalisation has increased from Rs. 392 billion ($7.6 billion) in June 2000 to Rs. 3604 billion ($53 billion) or an increase of 819%.  Aggregate market capitalisation also increased by 35% from Rs. 2801 billion in June 2006 to Rs. 3781 billion in May 2007.  Portfolio investment has increased from a negative $140 million in 2000-01 to positive $1819 during July-April 2006-07.
During the first 10 months of the current fiscal year, the average inflation rate as measured by the change in consumer price index (CPI) stood at 7.9% compared with 8% last year.  Food inflation during this period increased to 10.2% from 6.9% in the same period last year whereas the non-food inflation is estimated at 6.2% against 8.8% in the same period of last year.  The core inflation which represents the rate of increase in cost of goods and services excluding food and energy prices also subdued from 7.7% to 6%.  The major contributors to the high pick up in food inflation and there by overall CPI inflation include the rise in prices of vegetable ghee, various kinds of pulses, rice, poultry, meat, milk, fresh vegetables and fruits on account of imbalance in demand and supply of these commodities.  Besides, the soaring global price of key importable food items such as edible oil, milk powder, tea, medicine and food related components have boosted domestic inflation.  A number of measure were initiated by the Government to contain price hike in the country including easing of imports for commodities facing supply shortage, reforms geared towards increase in agricultural output and improvement in marketing mechanism.
Ratio of CPI Inflation (1998-2007)
Inflation (%)
2005-06 (for 10 months)
2006-07 (for 10 months)
Trade and Payments:
During the last several years, exports are growing at an average rate of almost 16% p.a.  Despite improvements in the international trading environment, Pakistan’s export growth witnessed abrupt and sharp deceleration to less than 4% in the first 10 months of the current fiscal year.
Exports were targeted at $18.6 billion or 12.9% growth rate.  But exports during the first 10 months of the current fiscal year are up by only 3.4% - rising from $13457 million to $13909 million in the same period last years.
After growing at an average rate of 29% p.a. during 2003-06, Pakistan’s import growth slowed to a moderate level in the current fiscal year.  Pakistan’s imports grew by 8.9% or $2047 million in the first 10 months of the current fiscal year.
Pakistan’s balance of payments shows a record increase in capital flows that has substantially offset a gradual widening of the current account deficit.  Pakistan’s current account deficit further widened to $6.2 (4.3% of GDP) in the first 9 months) of the current fiscal year from $4.6 billion (3.6% of GDP) in the same period last year.  A sticking feature of this year’s current account deficit is that it has widened even tough the import growth has slowed to 10.2% but the performance of exports has been lack luster at best, resulting in widening of trade deficit.  Deficit in services account also widened and as such even a robust growth of 7.8% in private transfers could not narrow the current account deficit.
The current account deficit for the year is likely to be around 5% of GDP as against 4.4% last year.  The strong inflows in capital account will more than offset the current account deficit and add to the stock of foreign exchange reserves.  The flow under long-term capital (net) has surged to $5.7 billion in first nine months of the current fiscal year as against $3.1 billion in the same period last year, showing an increase of 82%.
Exchange rate remained more or less stable during the current fiscal year.  However, rupee depreciated only marginally (0.7%) from Rs. 60.2138 per dollar as at end of June 2006 to Rs. 60.6684 as of end of April 2007.  In the open market, rupee traded at Rs. 60.655 to a dollar, that is, at a discount of 0.02% as at end of April 2007.
Pakistan’s total liquid foreign exchange reserves stood at $13738 million at the end of April 2007, considerably higher than the end of June 2006 level of $13137 million.
Exports and Imports (1998-2007)
(All figures in US $ Million)
2004-05 (11 months)
2005-06 (10 months)
2006-07 (10 months)
External Debt and Liabilities (EDL):
Due to a credible debt reduction strategy and successive high growth rates, Pakistan has reduced its public debt burden from 100.3% of GDP in the end of FY99 to 53.4% of GDP by the end of March 2007.  The external debt component of public debt (excluding private non-guaranteed) debt and liabilities) has decreased from 40.8 at end of FY02 to 24.6 at end of March FY07.
External debts and liabilities (EDL) at the end of March 2007 were $38.86 billion.  This is an increase of $1.6 billion in total with 4.3% increase.  There is much criticism about increase in EDL.  The debt burden of a country is measured in proportion to GDP and not in totality.  As stated earlier, public debt was 100.3% of GDP in the end of FY99 and now, with Government’s effective debt reduction and management policy, it is 53.4% of GDP.  Government has also ensured the growth in EDL lesser than the growth in GDP.  In brief, Pakistan has succeeded to decrease the debt burden in proportion to GDP.
The EDL declined from 50.9% of GDP at end of FY02 to 26.3% of GDP by end of March 2007.  Similarly, the EDL were 236.8% of foreign exchange earnings, declined to 119.7% in the same period.  The EDL were embarrassingly 5.8 times of foreign exchange reserves at the end of FY02 but effectively declined to 2.8 times by end of March 2007.  Interest payments on external debt were 7.8% of current account receipts but declined to 3.2% during the same period.
Continuing the credible debt policy, Pakistan successfully issued a $750 million 10 year note at a fixed rate of 6.875% on May 24, 2007 lead managed by Deutsche Bank, Citi Group and HSBC.  This was the largest 10-year deal to date, beating the previous deal of $500 million.  The transaction was announced and priced within 72 hours, an impressive feat and testament to investor confidence in Pakistan's economy.
In recent years, the literacy rate in Pakistan has, somehow, improved.  The overall literacy rate was 45% in 2001 which has increased to 54% in 2005-06.  The literacy rate for non-poor went up from 51% in 2001 to 59% in 2005, whereas for poor it improved from 30% to 40% in the same period.  Male literacy rate (10 years & above) increased from 58% in 2001 to 65% in 2005-06, whereas for female it improved from 32% to 42% during the same period.
The Government has taken several strong initiatives to improve and overhaul the existing system o education.  It has taken prudent step towards streamlining the education sector at the national level.  Education sector reform Action Plan 2001-2005 is one of the examples of this multi-pronged strategy which envisage in it the devolution of responsibility of the delivery of the education to local governments along with improving the overall literacy, enrolment and access to education.  Also, National Education Policy 1998-2010 is currently under review to include to participation of all the stakeholders and ensuring ownership of the policy by federating units and other stakeholders.
The current situation of education (including the education of privately owned institutions, Government-owned institutions and madrasas) and its quality are still horrifying.  Pakistan still needs revolutionary and radical education policies.
Health and Nutrition:
A healthy nation is very essential for the development of a country.  Supply of cheap medicine, best conditions of hospitals, higher supply of doctors and nurses, hygienic food, clean water, hygienic working environment, clean streets and roads, and health awareness in the people are some of the essentials of health and nutrition requirements of Pakistan.  And these requirements are recognised by the Government and fully committed to their fulfilment.
For the fiscal year 2006-07, there are 122,798 doctors, 7,388 dentists and 57,646 nurses which make the ratio of population per doctor as 1,254, population per dentist as 20,839 and population per nurse as 2,671.  The new health facilities added to overall health services include construction of 87 new facilities, upgrading of 65 existing facilities and addition of 5,000 new doctors, 2,300 new nurses and 14,000 lady-health workers.  To reduce incidence of disease and to alleviate people’s suffering and pain so as to improve their health status, various health programmes remained operative during the current fiscal year.  These include the national programs for the prevention and control of Tuberculosis, malaria, HIV/AIDS, hepatitis, blindness and program on maternal, neonatal and child health, etc.
Population, Labour Force and Employment:
At the time of independence is 1947, 32.5 million people lived in West Pakistan, and by 2006-07, the population is estimated to have reached 156.77 million.  Thus in roughly three generations, Pakistan's population has increased by 124.27 million or has grown at an average rate of 2.6% p.a.  Pakistan’s population has a high proportion of young people with high motivation to work.  Therefore, Pakistan's high population represents a large potential market for production and consumption of goods and services.  With broad consumer-based economy, Pakistan has bigger opportunities to attract investment (esp. foreign investment).
In Pakistan, the labour force participation rate is measured on the basis of Crude Activity Rate (CAR) and Refined Activity Rate (RAR).  The CAR is the percentage of the labour force in the total population while RAR is the percentage of the labour force in the population of persons 10 years of age and above.  The labour market in Pakistan demonstrates a lower Labour Force Participation Rate (LFPR).  It has been in the range of 28.6% to 32.3% over a decade, even the RAR is low and hovered at 43% over a decade.  It is nevertheless important to point out that both these ratios are increasing in recent years.  This is mainly attributed to increasing economic activities that are fairly diversified and thus are not only generating employment opportunities but also motivating others to join workforce.  The CAR has stayed roughly constant since 1980, but has started to rise in the last few years; from 29.6% in 2001-02 to 32.3% in 2005-06.  Similarly, the RAR has also started to increase from past trend of 43.3% in 2001-02 to 46% in 2006-07.  Participation rates are highest in Punjab and lowest in NWFP.  These rising rates point towards an increasing optimism in the labour market.
Transport and Communication:
Government has given top priority to infrastructure development in Pakistan.  Major infrastructure projects completed during the last seven years include: Islamabad-Lahore Motorway (M2), Makran Costal Highway, Sibi Bypass, Kohat Tunnel and access roads, Karachi Northern Bypass, Pindi-Battian-Faisalabad Motorway (M3), Lahore-Sahiwal Section, Rahim Yar Khan-TMP Section, Torkham-Jalalabad Road, rehabilitation of Band Road, Lahore and inauguration of Gwadar Port, etc.  Major on-going projects include Islamabad-Peshawar Motorway (M1), Gwadar-Turbat-Hoshab (M8), Khuzdar-Shahdadkot Section, Kalat-Quetta-Chaman Section, Sibi-Dhadar Section, Lyari Expressway, D.I. Khan-Mughalkot Section, Islamabad-Murree Dual Carriageway and R.Y. Khan-Bahawalpur Section.
The total length of roads in Pakistan was 259,197 km, including 172,827 km of high type (67%) and 86,370 km of low type roads (33%) by the end of March 2007.  During the current fiscal year, the length of high type roads has increased by 3.2% over the last year but the length of low type roads has declined by 5.6%.
Pakistan Railways have carried 66 million passengers and 4.5 million tons freight.  Its gross earnings stood at Rs. 14.1 billion during the first nine months of the current fiscal year.
Pakistan International Airlines (PIA) carried 4.2 passengers during the first nine months of 2006-07 as against 4.3 million in the same period last year showing decrease of 2.3%.  Its fleet consists of 39 aircrafts of various types.
Karachi Port Trust (KPT) has handled 22,427 thousand tons of cargo during the first nine months of current fiscal year, as compared to 24,572 thousand tons during the same period last year, showing decrease of 8.7%.  The Port Qasim has handled 19.7 million ton of cargo during July-March 2006-07 as against 16.8 million ton cargo handled during the same period last year, registered a growth of 17%.  The Gwadar Port was inaugurated on March 20, 2007.
In 1999-2000, there were only 0.3 million cellular mobile subscribers in Pakistan which jumped to 2.4 million by 2002-03 as a result of introduction of cord pay phone (CPP) regime and addition of more mobile operator.  Mobile subscribers continued to rise at an unprecedented pace, reaching 34.5 million by 2005-06.  In a short period of 9 months in the outgoing fiscal year, more than 24 million new subscribers have been added to the list, reaching over 58.6 million by end of April 2007.  In other words, more than 70% increase in subscribers in just 9 months.  Accordingly, the total teledensity (Fixed + Cellular + WLL) has jumped from 3.7% in 2001-02 to 40.2% by end of March 2007.  For promotion of IT, 2,444 cities/towns/villages have been provided Internet facility up to March 2007.
The energy demand in Pakistan has been increased due to rapid growth of economy esp. during the last 4 years.  Production of crude oil per day has increased from 65,385 barrels per day to 66,485.  The overall production of crude oil has increased to 18.2 million barrels from 17.9 million barrels showing an increase of 1.7%.  On average, transport sector consumes 50.7% of the petroleum products, followed by power sector (32.1%), industry (11.4%), household (2.2%), other government (2.3%) and agriculture (1.3%) during the last 10 years.
The average production of natural gas per day stood at 3,876 million cubic feet during the first nine months of the current fiscal year, as compared to 3,825 million cubic feet over the same period last year, showing an increase of 1.3%.  The overall production of gas has increased to 1,062,124 million cubic feet during July-March 2006-07 as compared to 1,048,190 million cubic feet during the same period last year.  On average, power sector consumes 36.4% of gas, followed by fertilizer (21.6%), industrial sector (19.1%), household (17.8%), commercial sector (2.7%) and cement (1.1%) during the last 10 years.
The total installed generation capacity indicates no change.  By March 2007, it was 19,440 MW.  Total capacity of WAPDA stood at 11,363 MW during July-March 2006-07 of which, hydel accounts for 56.9%, thermal accounts for 43.1%.  During the first three quarters of current fiscal year 71,033 GWh electricity has been produced as against 66,110 GWh in the same period last year showing an increase of 7.4%.  The number of villages electrified increased to 113,605 by March 2007 from 103,231 up to 2005-06, showing an increase of 10%.
Presently, some 1,414 CNG stations are operating in 85 cities and towns.  By March 2007, about 1.35 million vehicles were converted to CNG as compared to 1 million vehicles during the same period last year, showing an increase of 35%.  On average 29,167 vehicles are being converted to CNG every month.  With these developments, Pakistan has become the leading country in Asia and the third largest user of CNG in the world after Argentina and Brazil.
The environmental threats have become the major concern for the leaders of the world.  Due to global warming, which is a cause of massive industrial and transport wastages, the earth’s stock of ice is melting at a very fast pace.  This can create horrifying environmental problems for humans, for e.g., droughts, cyclones, twisters, floods, etc.  On other hand, many rivers are drying and such countries are facing the threat of water shortages in near future. 
In Pakistan, environmental degradation is intrinsically linked to poverty because of the overwhelming dependence of the poor on natural resources for their livelihoods, whether agriculture, forestry, fishery, hunting, etc.  Poverty combined with a burgeoning population and rapid urbanisation, is leading to intense pressures on the environment.  Pakistani cities are facing problems of urban congestion, deteriorating air and water quality and waste management while the rural areas are witnessing rapid deforestation, biodiversity and habitat loss, crop failure, desertification and land degradation.
In Pakistan, the Government has initiated the National Environment Action Plan (NEAP) in 2001 as an umbrella programme to address these environmental concerns in a holistic manner.  The UNDP has been supporting the implementation of this initiative through the NEAP Support Programme (NEAP-SP).  Some of the key policies and programmes that have stemmed from NEAP are: Air and Water Quality Monitoring, Clean Drinking Water, Pakistan Wetlands Programme, National Sanitation Policy, Sustainable Land Management to Combat Desertification in Pakistan, Environmental Rehabilitation and Poverty Reduction through Participatory Watershed Management in Treble Reservoir and Energy Efficiency and Renewable Energy, etc.
The Government has also committed itself to achieving the Millennium Development Goals (MDGs) as adopted by the UN member states in the year 2000.  The MDG target for land area to be protected for the conservation of wildlife is 12% by the year 2015.  Pakistan already has 11.3% of its area under protection for conservation of wildlife.  Thus, it is very likely that this target can be met by 2015.  Government’s MDG target for number of vehicles using CNG (which previously used diesel and petrol) is 920,000, whereas, the current estimate for 2005-06 is 1.4 million vehicles.  Therefore, Pakistan has already met its MDG target well in advance.
Currently, only 54% of the population of Pakistan has access to safe sanitation and 66% to safe drinking water, whereas the targets for 2015 are 90% and 93% respectively.  Even though there has been an improvement in water supply coverage from 53% in 1990 to 66% in 2005, however, the MDG target of 93% poses a considerable challenge.  Pakistan has committed to increasing forest cover to 5.7% by 2011 and to 6% by the year 2015.  An increase of 1.2% implies that an additional 1.051 m.ha area has to be brought under forest cover within the next 10 years.  This will include all state lands, communal lands, farmlands, private lands, and municipal lands.
·          Prof. Dr. Kh. Amjad Saeed, Economy of Pakistan
·          A. Hamid Shahid, Economic Planning w.r.t. Pakistan


·          ICMAP, Management Accountant
·          ICAP, Pakistan Accountant


·          Business Recorder, 9 June, 2007
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