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Agriculture and industry sectors of pakistan

Over the past seven years, the average growth rate of Agriculture is 3.7 percent per annum. However, instability in the sector is high, due to which the range of growth varies between 6.5 percent and 1.0 percent. The variation in overall agriculture has been largely dependent on the contribution of major crops. The trend in agriculture growth since 2003‐04 is reported in Table1.1.

Major crops:

The major crops accounting for 32.8 percent of agricultural value added, registered a negative growth of 0.2 percent as against the growth of 7.3 percent last year. In 2004-05 the growth rate was increased at large scale. After that the major crops decreases in 2005-06, 2007-08 and in 2009-10. But in 2006-07 and 2008-09 the rates was increased.

Minor crops:

Minor crops contributing 11.1 percent to overall agriculture posted negative growth of 1.2 percent. Production of Minor crops has declined for the three years since 2004‐05, a worrying trend which is partially contributing to food price inflation.

Livestock:

The Livestock is the single largest donor to overall agriculture (53.2 percent) which grew by 4.1 percent in 2009‐10 as against 3.5 percent last year. The rates of Livestock are not good in the last years.

Fishery:

The Fishery sector expanded by 1.4 percent, against its previous years growth of 2.3 percent. The Fishery rate in 2005-06 and 2006-07 was good but in the last years again decreased.

Forestry:

Forestry which has experienced negative growth for the last six years exhibited positive growth of 2.2 percent this year. Nonetheless, over the past several years, the forest sector has contracted, underscoring the scale of the environment challenge facing a country that already has amongst the highest rates of deforestation in the world.

The overall performance of agriculture sector in outgoing year 2009‐10 has been weaker than target. Against a target of 3.8 percent, and previous year’s performance of 4.0 percent, agriculture is estimated to have grown by 2.0 percent due to these facts improper supply of water, low level pesticides, seed qualities, fertilizers and the impact of bad seasons.” (1)

B: Industry:

“Pakistan’s economy is semi-industrialized. The country’s industrial sector constitutes 24.3% of the country’s gross domestic product. Pakistan has a total labor force of 55.88 million (as of 2009). The largest industries of the country are textile, cement, agriculture, fertilizer, steel, tobacco, edible oil, pharmaceuticals, construction materials, shrimp, sugar, food processing, chemicals and machinery. Pakistan’s industrial sector experienced great growth between 2004 and 2006 regardless of the shortage of electricity. However, it is worth noting that net foreign investment in industries of Pakistan constitutes only 2.5% of the country’s GDP.

The major industry sectors of Pakistan are as follows:

Textiles: As Pakistan is one of the major producers of cotton, the country has a sound textile industry. It is clear from the fact that the textile exports doubled to $10.5 billion in 2007 from $5.2 in 1999. Pakistan accounts for 3% of the United States textile imports. The country’s textile exports are expected to reach $14 billion while employing approximately 6.2 million people indirectly as well as directly. Pakistan’s textile and apparel manufacturing industry provides employment to 40% of the country’s labor force.

Mining: Pakistan has an abundance of mineral resources and an area of over 6,00,000 km² that is projected to have a variety of metallic and non-metallic mineral deposits. In 1995, Pakistan set its first National Mineral Policy that resulted in the expansion of its mining sector. In response to the policy, four international mining companies have already set up their operations in the country. Coal, rock salt, construction material, gold, gemstones and duddar zinc are other major natural products of the mining sector.

IT industry: The second half of the first decade of 21st century has seen steady growth in the IT industry of Pakistan. Software exports grew considerably in 2007. That year, the industry’s worth was estimated at $2.8 billion with an increase in the number of IT companies to 1306. The country also featured in the Global Services Location Index for the first time in 2007.

Further, Pakistan ranked as the 30th best off shoring location in the world and as of 2009, its rank improved to the 20th position.” (2)

2. Manufacturing:

“In FY 2002-03, real growth in manufacturing was 7.7%. In the twelve months ending 30 June 2004, large-scale manufacturing grew by more than 18% compared to the previous twelve-month period. The Federal Bureau of Statistics provisionally valued large-scale manufacturing at Rs.981,518 million in 2005 thus registering over 138% growth since 2000, while small-scale manufacturing was valued at Rs.356,835 million in 2005 thus registering over 80% growth since 2000.

There are the names of industries that plays role in the total GDP of Pakistan. These are:

Automobile Industry: The last 3 years have witnessed phenomenal growth in the industry in terms of technological advancements and production/sale volumes with the local contents rising as high as 90%. The industry is already employing some 120,000 people, contributing more than Rs. 12 billion to GDP, contributing more than Rs. 30 billion to the national exchequer in terms of duties and taxes, attracted investment worth Rs. 52 billion including a substantial foreign investment.

Cement Industry: Pakistan has one of the highest population growth rates in the world, touching almost 3%. This has prompted a sizable demand for housing facilities in the country. According to estimates of construction industry, there is a huge backlog of about 6.25 million housing units in the country. Currently in Pakistan, there are more than 25 small and large scale cement manufacturers operating which produce ordinary Grey Portland, White, Slag, and Sulphate resistant varieties of cement. This industry has an oligopolistic structure because the product is homogenous

Engineering Industry: Pakistan currently has 8 large-scale, 50 medium-scale and around 450 small-scale fan manufacturing units. The large-scale manufacturing unit provides employment opportunities for some 200 to 300 skilled workers; while a medium-scale manufacturing unit provides employment opportunities for some 60 to 80 skilled workers, and a small-scale manufacturing unit provides employment opportunities for some 20 to 25 skilled workers. There are a total of 1000 vendors doing business in this industry.

Pharmaceutical Industry: Pakistan has about 400 pharmaceutical manufacturing units including those operated by 25 multinationals present in the country. The Pakistan Pharmaceutical Industry meets around 70% of the country's demand of Finished Medicine.

Textile Industry: The textile industry of Pakistan employs 50% of the total industrial labor force and earns 65% foreign exchange of the total exports of the country. Pakistan’s textile industry experts feel that Pakistan has a fairly large size textile industry and now 60-70% of its machinery needs replacement for the economic and quality production of products for a highly competitive market.

Oil and Gas Industry: Pakistan had proven oil reserves of 300 million barrels in January 2006. Pakistan produced an average of 58,000 barrels per day of crude oil, but has ambitious plans to increase its current output to 100,000 barrels per day by 2010. According to the 2008 British Petroleum (BP) Statistical Energy Survey, Pakistan consumed an average of 362.38 thousand barrels a day.

Chemical Industry: The world Chemical industry is one of the most basic and important manufacturing business globally. Its total turnover approaches $1,000 billion, giving it a size comparable to that of other large international industries such as the automobile and engineering industries.

Fashion Industry: The Fashion Industry of Pakistan has made a considerable progress in the recent years. The fashion industry too, is influenced by external forces be they social, political, economic, technological or even competitive, which serve as a main driver for this industry. Moreover, relations with stakeholders - mainly suppliers, distributors and customers, and the strength and width of its competitors also define activities in the business.” (3)

“Food and Beverages Industry: The growth rate in the food industry has been estimated at 7.46 per cent per annum. The most rapidly growing items are dairy products, processed fish, bakery items, sugar, biscuits and confectioneries, fruit juices and other soft beverages. Rapid export growth has been made in fish preparation, fruit preserves, dry fruits, some beverages and sugar, and honey preparation.

Energy Industry: Pakistan is gifted with all types of minerals and natural deposits that have either been or are yet to be discovered. However, the production from these reserves or natural deposits is very low. Therefore to meet the energy demands, the county imports major types of energy products to supply in the market.

Construction Industry: The performance of the construction industry was domestic cement dispatches, which fell from 22.4 million tons in Financial Year 2008 to 19.4 million tons in Financial Year 2009. Iron and steel production declined from 8.238 million tons in Financial Year 2008 to 5.975 million tons in Financial Year 2009. Import of iron and steel dropped from 2.22 million tons to 2.04 million tons. Foreign direct investment in this sector took a deep plunge, going down from $193.2 million to $130.4 million.

Sugar Industry in Pakistan:

The total production of over 3.65 MMT during the year 2009-10. Pakistan’s 2009-10 sugar production is forecast at 3.65 million tons up about three per cent from the current year estimate of 3.56 million tons, according to the USDA Foreign Agricultural Service. Consumption is forecast at 4.35 million tons and imports at 730,000 tons.” (4)

C: Services Sector:

“Pakistan service sector accounts for about 53.3% of GDP. Transport, storage, communications, finance, and insurance account for 24% of this sector, and wholesale and retail trade about 30%. Pakistan is trying to promote the information industry and other modern service industries through inducement such as long-term tax holidays. The government is acutely conscious of the massive job growth opportunities in service sector and has launched aggressive privatization of telecommunications, utilities and banking despite union unrest.

Some of the Services sectors of Pakistan are as:

Telecommunication:

The contribution of the telecom sector to the national level increased to Rs 110 billion in the year-end 2007-08 on account of the general sales tax, activation charges and other steps as compared to Rs 100 billion in the year-end 2006-07.

Pakistan Telecommunication Company Ltd has emerged as a successful Forbes 2000 conglomerate with over US $1 billion in sales in 2005. The mobile telephone market has exploded fourteen-fold since 2000 to reach a subscriber base of 91 million users in 2008, one of the highest mobile teledensities in the entire world. In addition, there are over 6 million landlines in the country with 100% fibre-optic network and coverage via WLL in even the remotest areas. As a result, Pakistan won the impressive Government Leadership award of GSM Association in 2006. The Federal Bureau of Statistics provisionally valued this sector at Rs.185,376 million in 2005 thus registering over 49% growth since 2000.

Railways:

A massive analysis plan attracts $1 billion over five years for Pakistan Railways has been announced by the government in 2005. A new rail link trial has been established from Islamabad-Pakistan via Tehran-Iran via Istanbul-Turkey. Furthermore it would promote trade, tourism, and would also serve as an effective link for the exports to Europe (as Turkey part of Europe and Asia).

Wholesale and retail trade:

The Federal Bureau of Statistics provisionally valued this sector at Rs.1,358,309 million in 2005 thus registering over 96% growth since 2000.

Finance and insurance:

Pakistan has been ranked 34 out of 52 countries in the World Economic Forum's first Financial Development Report, which was released in Pakistan through the Competitiveness Support Fund (CSF) in December, 2008. Under Factors, Policies and Institutions pillar, Pakistan ranks 49th in institutional environment, 50th in business environment and 37th in Financial Stability. In the Financial Intermediation Pillar Pakistan ranks 25th in banks, 42nd in non banks and 17th in Financial Markets. The Federal Bureau of Statistics provisionally valued this sector at Rs.311,741 million in 2005 thus registering over 166% growth since 2000.

Pakistan's banking sector:

Pakistan's banking sector has remained remarkably strong and resilient during the world financial crisis in 2008–09, a feature which has served to attract a substantial amount of FDI in the sector. Stress tests conducted on June 2008 data indicate that the large banks are relatively robust, with the medium and small-sized banks positioning themselves in niche markets. Banking sector turned profitable in 2002. Their profits continued to rise for the next five years and peaked to Rs 84.1 ($1.1 billion) billion in 2006.

Ownership of dwellings: The Karachi Chamber of Commerce and Industry estimated in late 2006 that the overall production of housing units in Pakistan has to be increased to 0.5 million units annually to address 6.1 million backlog of housing in Pakistan for meeting the housing shortfall in next 20 years. The Federal Bureau of Statistics provisionally valued this sector at Rs.185,376 million in 2005 thus registering over 49% growth since 2000.

Public administration and defense:

The Federal Bureau of Statistics provisionally valued this sector at Rs.389,545 million in 2005 thus registering over 65% growth since 2000.

Social, community and personal services:

The Federal Bureau of Statistics provisionally valued this sector at Rs.631,229 million in 2005 thus registering over 78% growth since 2000.” (5)

D: Pakistan Trade, Exports and Imports: Pakistan’s international trade is suffering from huge amount of deficit due to low demand for its exports. Domestic political instability also accounts for trade deficit. The trade deficit stood at $9.7 billion in FY 2007 and rose to $15 billion in FY 2008. Pakistan is a member of several international organizations such as ASEAN, ECO, SAFTA, WIPO and WTO. Steps have been taken to liberalize the trade and investment regimes of the country. Due to increasing current account deficit, the trade gap range of maximum tariffs was raised from 20%-25% to the 30%-35% on 300 luxury items by Pakistani government in the 2008-09 budget. However, the growth rate of GDP dropped to 5.8% in 2008 and public and external debt indicators worsened. The major export earnings come from textiles. The country has not been able to expand its exports in other sections due to which it has to suffered shifts in world demand. The government continues with its efforts to diversify the country’s industrial base so as to expand its exports. However, total exports fell from $21.09 billion in 2008 to $17.87 billion 2009. The total imports also reduced from $38.19 billion in 2008 to $28.31 billion in 2009.

The major import commodities of Pakistan are: Petroleum, Petroleum products, Machinery, Plastics, Transportation equipment, Edible oils, Paper and paperboard, Iron and steel and Tea.

The major export commodities of Pakistan are: Textiles (garments, bed linen, cotton cloth, and yarn), Rice, Leather goods, Sports goods, Chemicals, Manufactures and Carpets and rugs.” (6)

“Economic growth of Pakistan is seen through gross domestic product purchasing power parity, which was estimated to be $454.2 billion in 2008. Official exchange rate was approximately $160.9 billion, while real growth rate in 2008 GDP of Pakistan, as per statistical data was found to be 4.7 percent. GDP per capita income was $2,600 in 2008. For economic growth of Pakistan, each sector contributes individual amounts to economy and thereby adding to GDP. Agricultural sector contributes about 20.4 percent to Pakistan GDP. 26.6 percent is added by industrial sector as was estimated by 2008. 53 percent was received from service sectors during 2008. According to Pakistan economic data in fiscal 2008 foreign exchange and gold reserves of Pakistan amounted to $9.104 billion. It had external debt worth $43.23 billion at that same time. In 2008 foreign investment worth $25.31 billion was made in Pakistan.”

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