Challenges to pakistan’s economy
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Transcript of Challenges to pakistan’s economy
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PRESENTED BY :
SADIA NOOR
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CHALLENGES: Low domestic savings
Low export growth
Fiscal deficits are high
Lagging social indicators
Energy and water shortages
Governance and implementation weaknesses
Political stability, law and order/security
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LOW DOMESTIC SAVINGS
We Consume More and Save Less.
Invest for economic growth is too little. Because of our economic grow only 6% annually.
If we want to rely on domestic savings, we saving rate should be 25%.
India’s saving rate 34%.
China’s saving rate is 50%.
We have to at least double on savings rate otherwise we will remain dependent on foreign sources.
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LOW EXPORT GROWTH We Import More and Export Less.
Till 2007-2008, 80% of our imports.
Pakistan’s export of merchandise good are stuck at US
$20 billion for past several years.
The lower is this gap between our export earnings and expenditure on imports.
It can achieved only by expending our exports; our reliance on external sources would be reduced.
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FISCAL DEFICITS ARE HIGH Pakistan’s government captures only 15 percent of
national income leaving 85 percent in the hands of the private sector.
This meager amount is to be spent on defenses, debt servicing internal security, development on education, health, general administration.
In 2007-08, Pakistani’s fiscal deficit was more than 7% which means its income or revenues were only 13% of GDP whereas, expenditure were 20%.
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ENERGY AND WATER SHORTAGES The losses of KESC from the point it has generated to the
point they realize the billing is 45%, so 55% people are paying for those who are stealing the electricity.
Government of Pakistan out of its own limited resources is paying 200 billion rupees every year as subsidies for electricity.
If we want to reduce energy and water shortage then our government should be build dams indifferent parts of country.
With more water and cheap electricity, framer production would have been increases and more labor would have been employee.
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LAGGING SOCIAL INDICATORS We Badly Lag in Social Indicators
Tajikistan, which is a very poor country, has better literacy rate and primary enrolment ratios than Pakistan.
It means that if we had literacy rate of 100% instead of 55%, then in 2009-2010 our per capita income would have been 2000$ rather than 1000$.Then poverty reduced to 15-20%.
we will be able to reach 80-85% literacy rate, but it is doubtful that this will happen.
Why do we have regional inequalities? Why Baluchistan is lagging behind other provinces? It is because of literacy rates and primary enrolment ratios.
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POLITICAL STABILITY, LAW AND ORDER/SECURITY
In 2007, Pakistan was one of the most favorite countries among the international investor community
The country is gotten rid of this image of political instability, poor law and order situation and insecurity.
Investors from all over the world hesitate in coming to Pakistan and invest.
we will not be able to make any progress in this country.
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