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THE ECONOMY OF PAKISTAN

THE ECONOMY OF PAKISTAN. - Some Thoughts. Presentation by: PROF. DR. KHAWAJA AMJAD SAEED Principal HAILEY COLLEGE OF BANKING & FINANCE University of the Punjab, Lahore. Email: principal@hcbf.pu.edu.pk. WELCOME TO OUR PROGRAM. PRESENTATION. Overall Framework PEST Formula

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THE ECONOMY OF PAKISTAN

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  1. THE ECONOMY OF PAKISTAN - Some Thoughts Presentation by: PROF. DR. KHAWAJA AMJAD SAEED Principal HAILEY COLLEGE OF BANKING & FINANCE University of the Punjab, Lahore. Email: principal@hcbf.pu.edu.pk

  2. WELCOME TO OUR PROGRAM

  3. PRESENTATION • Overall Framework PEST Formula • Constitution of Pakistan • Global Tributes to Pakistan • GDP • Federal Budget 2006-07 • Growth in Federal Government Revenue • Corporate Income Tax Rates • Energy • China Factor • Pakistan-Economy Final Review

  4. 1: OVERALL FRAMEWORK P Political E Economic S Sociological T Technological

  5. 2: CONSTITUTION OF PAKISTAN ArticleFocus 03 Elimination of Exploitation 18 Freedom of Trade, Business or Profession 37 Promotion of Social Justice and Eradication of Social Justice 38 Promotion of Social and Economic Well-being of the People

  6. 3: GLOBAL TRIBUTES TO PAKISTAN 1: World Bank - Managing Director October 2006 • Rich in Human Capital • Impressive Record - Growth - Development - Poverty Alleviation 3. Continuous Economic Reforms

  7. 4. Inflation-Down 5. Government: 5-10 Years Plans - Water - Energy - Food Security - Infrastructure - HRD

  8. 6. Privatization Program 7. Gawadar-Corridor - Trade - Transportation - Energy - Central Asia & China.

  9. 2: IMF-September 2006 Tributes 1. Excellent Medium Term Planning 2. Strong FDI 3. Growing Domestic Investment

  10. 3: Economic Freedom Index 2006 Pakistan 110 better than India India 121 4: Opacity Index Economist London Pakistan rated higher than India 5: Moody’s Investors Service-2006 Pakistan’s Rating Improving B2 to B1 Foreign and Local Currency Bonds

  11. 4: GDP Pakistan Average Four Years 7.0% 2005-06 6.6% Others World 4.8% Euro 1.3% USA 3.5% Japan 2.7% Germany 0.9%

  12. China 9.9% Asian South Asian 5.0% - India 8.0% - Pakistan 6.6% - Sri Lanka 5.9% - Bangladesh 5.8%

  13. 5: FEDERAL BUDGET 2006-07 Outstanding Features 1. Record ADP Rs 435b 2. Record Allocation to Provinces: - Revenue Budget Rs 378b - ADP Allocation Rs 115b 3. Record forecast for Rs 1,083b Current Revenue 4. Special Allocations ADP - Programs Rs 34b - Areas Rs 17b - ERRA Rs 50b

  14. 6: GROWTH IN FEDERAL GOVERNMENT REVENUE Source: Excerpted from Pakistan Economic Survey 2005-06, Statistical Appendix, Table 4.3.

  15. 7: CORPORATE INCOME TAX RATES

  16. 8: ENERGY A: Needed 1. Cheap 2. Abundant 3. Environmental Friendly

  17. B: Electricity Use% 1. Households 43 2. Industry 28 3. Agriculture 12 83 4. Commerce 07 5. Others 10 100

  18. C: Energy PerspectiveMW Short Term 2007 1,000 Medium Term 2008-2010 45 Power Plants 8,600 Long Term 31 Projects (Hydel & Nuclear) 19,150 28,750

  19. Impact Job Creation - Direct 08 Lac - Indirect 16 Lac 24 Lac

  20. D: Installed Generation of Electricity Capacity% 1. Wapda (Hydel 58% + Thermal 42%) 58 2. IPPs 30 3. KESC 09 4. Nuclear 83 100

  21. E: IssuesMW 1. Untapped Hydel Potential 50,000 2. Line Losses 3. Solar Energy 4. Wind Energy 5. Austerity/Consumption Planning

  22. 9: CHINA FACTOR 1. PopulationCurrency 1.3b Renminbi (Yaun) 2. Language Mandrin 3. World Ranking & other Economic Data Exports 4th GNP 6th Per Capita $960

  23. 3. World Ranking & other Economic Data Inflation 0.8% Unemployment 2% 4. Strengths 1. High Domestic Market 2. Food Self Sufficiency 3. Mineral Resources 4. Diversified Industrial Sector 5. Low Wages

  24. 6. Rapid Sustained Growth 7. Growing Exports 8. Hong Kong as a Financial Sector 9. Heavy Investment in Communication and in IT Sectors 5. Weaknesses 1. Corruption 2. Underemployment 3. Geographical Disparities 4. Poor transportation

  25. Export-Destination % 1. USA 22 2. HK 18 3. Japan 18 4. Taiwan 13 5. South Korea 10 6. Germany 06 7. Others 13 Total 100

  26. 6. Contributions to Pakistan 1. Karakrum Highway 2. Heavy Mechanical Complex 3. Chasma Nuclear Plant 4. Gawader

  27. 7. Upcoming Investment 1. Five years Linkage 2. Private Sector Industrial Estate in Punjab - Gawader - Refinery - Other Investment - 32 Point joint statement

  28. 10: PAKISTAN-ECONOMY FINAL REVIEW Positive 1. GDP Growth 7% 2. KSE Bullish 3. FDI Robust 4. Consumer Credit from Growing 5. Poverty Alleviation 10% down Levels since 2000

  29. Negative 1. Income Distribution Skewed 2. Trade Gap Widening 3. Growth Non Sustainable Source: Edited from IBP Newsletter, November 2006.

  30. THANK YOU FOR JOINING US

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