Economy of Pakistan Overview

Economy of Pakistan

• Pakistan is a low-income developing economy.
• It is the 23rd largest economy globally in terms of GDP.
• In 2021, Pakistan had a population of 227 million people, making it the 5th largest globally.
• It has a semi-industrial economy.
• Primary exports include textiles, leather goods, sports equipment, chemicals, and carpets/rugs.

Major Sectors of Pakistan's Economy

• Agriculture: A majority of the population depends on this sector.
  • it contributes 19.2% to GDP.
  • Accounts for 37.4% of employed labour in 2021.
  • Key crops are wheat, sugarcane, cotton, and rice.
  • Pakistan is a net exporter of food, with wheat as its largest crop.
  • Exports include rice, cotton, fish, fruits, vegetables, vegetable oil, wheat, and pulses.
  • Natural resources include arable land and water. About 25% of the land is cultivated.
• Industry: Accounts for approximately 19.12% of GDP.
  • Major industries include textiles, fertilizer, cement, oil refineries, dairy products, food processing, beverages, construction materials, clothing, paper products, and shrimp.
  • Small and medium-scale businesses represent nearly 90% of enterprises and employ 80% of the non-agricultural workforce.
  • Sub-sectors include manufacturing, cement, fertilizer, defense, textiles, automobile, mining, and energy
• Services: Key sectors include telecommunication, transportation, finance, housing, and tourism.
  • Mobile phone market has exploded since 2003.
  • Banking system is diverse, with a mix of public and private banks.

Pakistan's Economic Crisis

• Corruption: A persistent issue in the government and lower levels of police forces.
  • Pakistan ranks poorly on the Transparency International Corruption Perceptions Index.
  • Ranked 34th most corrupt country globally.
    • National Accountability Bureau (NAB) was established in 1999 to recover looted money from corrupt elements.
• Debt: In 2017, Pakistan ranked 57th globally with respect to public external debt to international monetary authorities (CIA World Factbook).

The China-Pakistan Economic Corridor (CPEC)

• CPEC is a large development project connecting Gwadar Port (in Pakistan) to China's northwestern Xinjiang region.
• The project connects through a network of roads, railways and pipelines.
• CPEC aims to promote cooperation at a strategic and political level and expand bilateral collaboration economically.

Main Components of CPEC

• Gwadar port and city development, and socio-economic growth in the region
• Energy projects(Coal, Hydel, Wind, Solar, LNG, Transmission)
• Transport Infrastructure (Roads, Rail, Aviation)
• Investment opportunities and Industrial Cooperation (Gwadar Free Zone and other industrial parks)
• Other areas of mutual agreement

Diverse Investment Opportunities

• Areas with investment potential include industrial, financial, agricultural cooperation, education, human resource development, and health care.
• Opportunities for livelihood gains are expected to increase.
• Security and stability are key factors for investment growth.

Strategic Importance of Pakistan

• Pakistan holds strategic importance for China due to its location, acting as a crucial bridge between China and Central Asia, South Asia, and the Middle East.
• This strategic position attracts China's interest to invest heavily in resource development support for Pakistan.