Making Pakistan Bankable

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    MAKING PAKISTANBANKABLE

    SWOT Analysis

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    STRENGTH

    Large Market Size and attractive location forexports to South Asia, Central Asia andMiddle East.

    Per Capita Income of $ 736 and 40 yearsrecord of 5 - 6 percent GDP growth annually

    Abundance of Water Resources, Natural

    Gas. Easy Sea Port, Airport Connectionswith Europe, Asia and Middle East.

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    STRENGTH

    English speaking educated andtrainable manpower with aptitude forfast learning

    Self-sufficiency in food production anda buoyant agriculture.

    A liberal foreign exchange regimewhich allows un-restricted repatriationof profits, dividends and remittances.

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    STRENGTH

    Financial Sector is open to foreigninvestors is diversified and has beenstrengthened in the last three years.

    Capital markets offer a range ofinstruments for raising domestic finance.

    A fiber optic backbone infrastructure upand running for Information Technologyenabled services.

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    STRENGTH

    A large emerging middle class withgrowing demand for consumerdurables, autos, services

    Quantitative restrictions on importshave largely been removed and tariff

    rates being brought down to maximumrate of 25% with average incidence of14-15%.

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    WEAKNESSES

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    WEAKNESSES

    Poor governance record in the nineties with

    serious adverse consequences for efficiency andequitable distribution of growth.

    Failed democratic regimes with frequent changesin government in the last decade have nurturedpolitical uncertainty, discontinuity andinconsistency in policy implementation.

    Lingering dispute with the Hubco and freezing of

    foreign currency accounts in May 1998 haveshaken foreign investor confidence.

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    WEAKNESSES

    Key economic institutions have been in astate of financial and managementdisarray creating strains on public

    finances as well as banking system.

    Bureaucratic procedures and

    enforcement of contracts are slow, timeconsuming and cumbersomeencouraging lobbying and rent-seekingopportunities.

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    WEAKNESSES

    Public service delivery of essentialservices is poor and inefficient and underinvestment has led to congestion,

    shortages and access limited to theprivileged far.

    Non-governmental Organizations (NGOs)have not so far played a major role insocial development and Micro Creditallocation to the poor.

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    OPPORTUNITIES

    Oil and Gas resources: To be furtherexplored, developed and distributed.

    Investment in Physical Infrastructure

    Development: Open to private sector tomeet the growing demand in the areas ofpower, highways, ports, airports etc.

    Information Technology: Relatively lowcost manpower available with amplescope for investing in Information

    Technology Education.

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    OPPORTUNITIES

    Agriculture : Productivity still behind productionpossibility frontier and requires technical and financialinputs.

    Agro-based Processing and Industries : HighlyCompetitive and oriented towards Exports but still instate of infancy and need to be upscaled.

    Value added exports in textile sector: Has plans to

    modernize its textile industry for capturing world marketshare and positioning in post MFA period throughtechnology, marketing and design improvements andinvestment in machinery.

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    OPPORTUNITIES

    Financial Sector: Deepening to improve themobilizations and allocation of financial resources.

    Exports in non-traditional commodities: Fisheries,Gems and jewellery, Fruits and Vegetables, InformationTechnology, are still under utilized.

    Privatization : Public Sector assets worth $ 3-4 billionare available for sale to strategic investors including

    foreign investors. Non-Resident Pakistanis: Offer a large and rich

    reservation of talent, skills and capital for joint venturepartnerships.

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    THREATS

    External and Domestic Debt burden isquite high relative to the capacity toservice and need to be reduced to

    manageable levels. Tax-GDP ratio is one of the lowest among

    the developing countries and resource

    mobilization effort has to be stepped up.

    Fiscal deficits have been traditionally high.

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    THREATS

    Public Sector Corporations riddled withexcess manpower, poor managementand weak financial base have to be

    restructured and strengthened. Incidence of poverty has risen during

    the last decade and poverty targetedinterventions need to be accelerated.

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    THREATS

    Stagnation in Domestic and foreigninvestment during the last severalyears has increased and given rise to

    educated unemployment High degree of centralization had

    eroded provincial autonomy and localgovernment capacity both of whichneed to be enhanced and strengthened.