Wajahat Abbas
Pakistan was amongst one of the fastest growing economies in the past decades that had achieved the average growth rate of over 5 percent in late 80s which resulted in the decline of poverty from 40 to 18 percent. The economy still continues to grow by maintaining gradual pace with growing GDP at 4.7 percent which is the highest in last couple of years. However, Pakistan is an agrarian based economy where approximately half of the population is directly or indirectly dependent on the agricultural sector for their livelihoods. Moreover, through the inclusion of China Pakistan Economic Corridor in 2015, new doors of economic ventures opened to boost Pakistan’s emerging economy due to the multidimensional diversity of the project which interconnects the economy via imports/exports not only nationally but regionally as well. Pakistan is directed towards achieving new heights of modernizing the economy by effectively utilizing the immense opportunities and resources to become a leading emerging market in the South Asian region.
CPEC project is for regional connectivity, which is promoting bilateral relations as well as enhancing the trade, investment, economic development and people to people contact; improving the economy of Pakistan along with the infrastructural development of the country by swiftly modernizing the roads and communication projects. CPEC related investments have become one of the major contributor to the perennially growing economy of Pakistan, where the development in new energy projects, hydropower projects and Special Economic Zones (SEZs) will highlight the areas of mutual cooperation between China and Pakistan and various other countries in different sectors including agriculture, tourism, science and technology, anti-narcotic mechanism, climate change, banking and television corporation.
Furthermore, the present stable environment has mainly contributed in the revival of the confidence of investors, on the account of successful operation ‘Zarb-e-Azb’; played a decisive role in maintaining peace and stability in the country. Similarly, with the implementation of National Action Plan (NAP) has played significant role by eliminating terrorism and its financiers. Besides this, the elimination of terror base camps in tribal areas, joint actions by civilian and security agencies in the urban areas, particularly in Karachi and Peshawar has improved the overall law and order situation in the country and has attracted the confidence of national and international investors towards Pakistan’s growing market. Whereas, the international rating agencies also upgraded the rating of Pakistan by completing eleven successful reviews with International Monetary Fund (IMF) which has further strengthen the environment for international investors for future investment destination.
Following are some of the salient features of Pakistan’s economic history;
i. Pakistan has emerged as one of the leading producer of cotton and cotton textiles
ii. Pakistan has highly diversified base for manufactured products for domestic and world markets
iii. With the successful inclusion of China Pakistan Economic Corridor (CPEC) project the existed Physical infrastructural network has expanded with a vast network of gas, power, roads, highways, ports and telecommunications facilities
iv. Pakistan is amongst the self-sufficient countries with a large food production
v. Pakistan is the world’s 4th largest producer of mangoes and milk
vi. Pakistan ranks 8th worldwide in farm output
vii. Pakistan has the 25th largest economy in terms of purchasing power parity and is directed towards leading path
viii. Pakistan’s per capita income have been expanded to more than six-folds in accordance with U.S. dollars
Next-11 Emerging Economies
The Next Eleven refers to the group of N-11 countries identified by the Goldman Sachs investment bank and economist Jim O’Neill in the year 2005, specifically, South Korea, Mexico, Bangladesh, Egypt, Iran, Indonesia, Nigeria, Pakistan, Philippines, Vietnam and Turkey, will probably become some of the world’s largest economies in the 21st century together with BRICS countries (Brazil, Russia, India, China and South Africa). The economies of N-11 countries are growing in perspective of economy and standing on global scale due to rapid rise in GDP and seen as actively participated in world trade and investments. However, it is projected that these countries will experience higher degree of economic growth and surpasses many major markets in the coming years, but still there are certain challenges and obstacles pertaining in the way of growth, which could be overcome to achieve the sustainable economic development. Such as, Pakistan has worked to reform banking, taxes system and corporate laws. Simultaneously, Nigeria has worked to minimize the corruption while Turkey has struggled with efforts to become integrated into the European Union.
Key Driven Aspects of Pakistan Economy
Pakistan’s principal natural resources are based on arable land and water resources but mainly based on agricultural sector. Following are the key driven aspects;
– Agricultural sector
– Population
– Health sector
– Education sector
– Industry/Service industry
– Defense Sector
– Trade
– Infrastructure
– Monetary policy
– Fiscal policy
– Banking Sector
– Inflation
– Labor force
– GDP
– Capital market
Why to invest in Pakistan
Pakistan’s geostrategic location captures the spotlight in the Asian region, whereas, Pakistan is emerging as second biggest market of the region with the benefits of low competition and rapidly growing economy are the main attractions for foreign investments. Surrounding neighbor countries including, Iran, India, China and Afghanistan make Pakistan as a strategic key player in the region with ample of business opportunities mainly in agricultural and trade sector.
Pakistan economy is rapidly emerging in the world market with witnessing GDP growth of 5.82 percent in the year 2017, with the main contributing industries for instance, textile, garments, and agriculture and construction material. According to the census 2017, Pakistan has a population of over 200 million making it 6th most populous country in the world with diversified market rapidly attracting foreign direct investment and expected to grow by 17 percent in the years 2018-2020, due to offering various incentives to foreign investors for instance, tax concessions, low interest loans, research & development and double tax treaties.
Conclusion
Since independence, Pakistan’s economy has seen rise and fall due to hikes in global fuel and food prices causing macroeconomic complexities and inflations resulting slow economic growth. In Pakistan the global financial crisis affected the already recovering financial system, making conditions more badly and posing serious challenges to the Pakistani economy. Today, Pakistan is meeting the maximum requirements for foreign and domestic investors with on going deep rooted structural reforms, high standard of economic governance, liberalizing the trade and investment system, low production costs and most importantly the geo-strategic location in the region and becoming the central point by providing the transit trade route to Central Asian Republics and other countries in the region. The direction of the economy is on the right path towards consistent growth with improved security, law and order situation and improved environment which making it as a highly attractive destination for local and international business investments.
– The author is a Research Associate at the Center for Global & Strategic Studies (CGSS), a think tank based in Islamabad. He holds a Master’s degree in Development Studies.
