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STUDY MEETING ON EXPANSION AND DEVELOPMENT OF THE SERVICE INDUSTRY IN ASIA COUNTRY PAPER

STUDY MEETING ON EXPANSION AND DEVELOPMENT OF THE SERVICE INDUSTRY IN ASIA COUNTRY PAPER AN OVERVIEW OF SERVICE INDUSTRY OF PAKISTAN Presentation by: Asad Farooq Siddiqi Ejaz Ahmed Minhas Senior Management Counselor Head Communications

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STUDY MEETING ON EXPANSION AND DEVELOPMENT OF THE SERVICE INDUSTRY IN ASIA COUNTRY PAPER

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  1. STUDY MEETING ON EXPANSION AND DEVELOPMENT OF THE SERVICE INDUSTRY IN ASIA COUNTRY PAPER AN OVERVIEWOF SERVICE INDUSTRY OF PAKISTAN Presentation by: Asad Farooq Siddiqi Ejaz Ahmed Minhas Senior Management Counselor Head Communications Pakistan Institute of Management Technology Up-gradation Karachi, Pakistan & Skill Development Company Lahore, Pakistan

  2. PAKISTAN’S ECONOMY • Growth rate of 7% for four consecutive years • GDP estimated to be $475.4 billion • Agriculture: 20% • Service sector: 53% • Per capita income stands at $2,942 • Poverty rate estimated between 23% to 28% • Major industries: • Telecommunications, software, automotive, textile, cement, fertilizer, steel, ship building, aerospace, arms.

  3. GOVERNMENT RECENT FOCUS • AGRICULTURE • ENERGY • SERVICE SECTOR

  4. DEFINITION AND COMPOSITION OF SERVICE SECTOR IN PAKISTAN

  5. In the last decade service sector in Pakistan has emerged as a growth powerhouse • Reaching 9.6% growth in 2006 and 8% in 2007 • Services sector continues to be the major driving force in its contribution to economic growth. • The commodity producing sectors (Agriculture & Industry) has contributed two-fifth and service sector contributed the remaining three-fifth • Service sector collectively absorb approximately one third of workforce in Pakistan

  6. STATUS OF SERVICE SECTOR: • Finance & insurance sector spearheaded the growth in the service sector and registered a stellar growth of 18.2 percent during the fiscal year 2006-07. • Value added in the wholesale and retail trade sector is based on the margins taken by traders on the transaction of commodities traded in the whole sale and retail market. In 2006-07, the gross value added in the wholesale and retail trade increased by 7.1% over the previous year, compared to 8.6% growth in 2005-06.

  7. STATUS OF SERVICE SECTOR: • Value added in the transport, storage & communications sector is based primarily on the profits & losses of Pakistan Railways, Pakistan International Airlines and other airlines, Pakistan Postal & Courier services, Pak Telecom and motor vehicle of different kinds on the road. In 2006-07 this sector grew by 5.7%

  8. STATUS OF SERVICE SECTOR: • Public Administration & Defense posted a growth of 7.0% while ownership of dwellings grew by 3.5 percent and social services sector improved its growth performance to 8.5 percent from 6.3 percent last year.

  9. KEY ISSUES IN PAKISTAN’S SERVICE SECTOR: • Pakistan’s share in the world services sector could not grow beyond 0.06 per cent due to a number of impediments and obstacles. While the total world trade in services stood at $1.7 trillion. • The trade deficit in the services sector stood at almost $1 billion; in 2006-07 Pakistan government services and communication services were the only sector which stood in surplus, while the rest remained in the deficit.

  10. KEY ISSUES IN PAKISTAN’S SERVICE SECTOR: • Exports of services are particularly important to developing and transition countries such as Pakistan since these exports contribute directly to job creation and development. • Pakistan has potential to export financial services to both developed and developing countries. However, many Pakistani banks had closed its branches in various countries due to restrictions of high pre-paid capital, non-recognition of the credentials of Pakistani banks and some other home regulations.

  11. KEY ISSUES IN PAKISTAN’S SERVICE SECTOR: • Retail, Banking and Stock Market has experienced increase in volume but through speculation, in terms of price hike , increase in overheads without adding any real value into product. • Pakistan has potential to export financial services to both developed and developing countries. However, many Pakistani banks had closed its branches in various countries due to restrictions of high pre-paid capital, non-recognition of the credentials of Pakistani banks

  12. Barriers • Lack of credibility in the foreign market • Difficulties in gaining temporarily business entry to the market • Apparent lack of convenient access • Lack of skilled labor • Lack of basic infrastructure • Lack of standardization and piracy

  13. GOVERNMENT POLICIES, PLANS AND REGULATIONS RELATED TO SERVICE SECTOR

  14. Foreign Direct Investment • National IT Policy • Intellectual Property Rights' (IRP) Protection In Pakistan

  15. THANK YOU

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