Pakistan
Webpages concerning "Pakistan"
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Wikipedia-Article "Pakistan"
- See 2005 Kashmir earthquake for the 8 October 2005 earthquake in Pakistan-administered Kashmir.
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| Motto: Yaqeen-e-muhkam, ittihād, nazm (Urdu: Faith (self confidence), Unity, Discipline) |
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| Anthem: Pak sarzamin shad bad (Blessed Be The Sacred Land) |
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| Capital | Islamabad |
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| Largest city | Karachi (also financial capital) | ||||
| Official languages | Urdu, English | ||||
| Government | Federal republic Pervez Musharraf Shaukat Aziz |
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| Independence - Declared - Republic |
From the United Kingdom 1947-08-14 1956-03-23 |
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| Area • Total • Water (%) |
803,940 km² (34th) 3.1 |
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| Population • 2005 est. • [[As of |]] census • Density |
162,419,946 (6th) 202/km² (38th) |
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| GDP (PPP) • Total • Per capita |
2004 estimate $360.8 billion (26th) $2567 (135th) |
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| HDI (2003) | 0.527 (135th) – medium | ||||
| Currency | Rupee (Rs.) (PKR) |
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| Time zone • Summer (DST) |
PST (UTC+5:00) not observed (UTC+5:00) |
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| Internet TLD | .pk | ||||
| Calling code | +92 |
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The Islamic Republic of Pakistan (Urdu: اسلامی جمہوریۂ پاکستان, islāmī jamhūriya i pākistān), or Pakistan (Urdu: پاکستان, pākistān) is a country located in South Asia that overlaps onto the Greater Middle East and Central Asia. The country borders India, Afghanistan, Iran (Persia), China and the Arabian Sea. The name of the country "Pakistan" in Urdu and Persian means Land of the Pure. With around 163 million inhabitants, it is the sixth most populous country with the second largest Muslim population. It is a member of the UN, the Commonwealth of Nations, the South Asian Association for Regional Cooperation, the Organization of the Islamic Conference, and the World Trade Organization.
History
See main article for detailed information: History of Pakistan (Including pre-history, civilizations of the region, and modern events to date)
Related articles: History of South Asia, History of Iran, History of India, History of Afghanistan
Pakistan is the birthplace of some of the most ancient civilizations and a strategic center of historic trade routes, including the Silk Road. It exists in a region whose history has overlapped that of many empires (e.g Mughals) and also of countries including India, Afghanistan and Persia (Iran). As one of the cradles of human civilization, the Pakistani region has long been at the crossroads of history. Pakistan was the site of the Indus Valley civilization and was subsequently conquered by many groups, including Aryans, Persians, Greeks, Greco-Bactrians, Kushans, White Huns, and Scythians. This period saw the country advance in trade and culture to a level where the Gandhara region and the great city of Taxila (Takshashila) became a great center of learning and development.
Ancient History
Nearly all of ancient Pakistan was ruled by the Persian Achaemenid dynasty for over two hundred years beginning in 540 BCE. In 326 BCE, Alexander the Great defeated the Punjabi king Porus (Paurava) at the Hydaspes near Jhelum. After Alexander's death and brief Seleucid control, Chandragupta Maurya gained control of the territory. His grandson Ashoka is known as one of the greatest proselytizers of Buddhism, which spread in the region. After the overthrow of last ruler of the Mauryan dynasty in 185 BCE,
Demetrius of Bactria conquered Gandhara and Punjab in 184 BCE, establishing an Indo-Greek kingdom that lasted nearly two centuries, until around 10 BCE. To the south, this kingdom captured Sindh and extended to the coast of the Arabian Sea. One of the most prominent Greco-Bactrian kings was Menander, who ruled from 155 to 130 BCE and is believed to have been a convert to Buddhism. His territories covered the eastern dominions of the divided Greek empire of Bactria (from the areas of the Panjshir and Kapisa, now in Afghanistan) and extended to the Pakistani province of Punjab with diffuse tributaries to the south and east, possibly even as far as Mathura in modern India. Sagala (modern Sialkot) became his capital and propered greatly under Menander's rule. The last Greek king to rule independently was probably Strato II, whose reign ended about 10 CE. Various Greek kings ruled into the beginning of the 1st century CE, as petty rulers (such as Theodamas) and as administrators, after the area was conquered by various Central Asian groups, most notably the Tocharian Kushans.
The Kushan kingdom stretched from modern-day Uzbekistan to northwestern India. The kingdom was founded by King Heraios, and greatly expanded by his successor, Kujula Kadphises. Kadphises' son Vima Takto conquered territory now in India, but lost much of the western parts of the kingdom, including Gandhara, to the Parthian king Gondophares.
Later invaders included the Scythians, and White Huns. While the Punjab remained under the Huns and Scythians, the Sassanian Persian Empire then came to control most of western Pakistan and parts of Sind came under the rule of Hindu rajas.
Arrival of Islam
In the eighth century CE, the arrival of the Arab Muslims to the provinces of Sindh and Punjab set the stage for the geographic boundaries of the modern state of Pakistan and formed the foundation for Islamic rule which quickly spread across much of South Asia. Following the rule of various Islamic empires, including the Ghaznavid Empire, the Ghorid kingdom, and the Delhi Sultanate, the region was controlled by the Mughals from 1526 until 1739. From 1739 until the early 19th century the entire area was ruled briefly by Nadir Shah and then by the Afghans and then later the Baluchis and Sikhs came to control Sind and the Punjab.
British rule
The British arrived in the east of Sub-Continent under the false pretenses of trade in Tea, Tobacco, and Poppy, and formed the British East India Company which would eventually spearhead a colonial domination over South Asia. The shrinking Mughal Empire fell prey to East India Company's conspiracies and the eventual collapse of the freedom struggle against the British by the Muslim leader Tipu Sultan from 1749 to 1799 left the remnants of the Mughal Empire completely vulnerable. The British did not gain strong footholds in the Pakistani region until the early 19th century and annexed the entire area during the Great Game rivalry with the Russian empire.
While the Anglo-Afghan wars for freedom continued well into the 20th century, the Indian War of Independence, dubbed "Sepoy Mutiny" by the British, in 1857 was the region's last major armed struggle against the British. Since the Indian war of Independence was organized under the rule of the last Mughal Emperor Bahadur Shah Zafar, the British decided to oust the Emperor and exiled him to Rangoon, Burma (now Yangon, Myanmar). Bhadur Shah Zaffar, known as the Poet King, contributed some of Urdu's most beautiful poetry, with the underlying theme of the freedom struggle. The Emperor was never allowed to return to India and died in solitary confinement in 1862. The Emperor's three sons, also involved in the War of Independence, were arrested and beheaded at the Khooni Derwaza (Blood Gate) in Delhi by Major Hudson of the British Army, and their Heads were then put up for display at the Delhi Court.
Even though the War of Independence was a joint Muslim-Hindu struggle to oust the British, the brunt of British retaliation was directed at the Muslim population of the empire, employing the infamous "Divide and rule" policy. This suppression and subjugation helped set the stage for the creation of Pakistan - an Islamic state for the Muslims of British India. Muhammad Ali Jinnah a British-educated Indian Muslim leader, adopted the cause, and later earned the title of Quaid-e-Azam (Urdu: قائد اعظم) meaning "great leader" and founder of Pakistan.
Independence and After
After a 60 year formal and generally unarmed struggle for independence, Pakistan came into existence on 14th August 1947 from the British Empire. The British divided up the Indian empire into three parts: the central part, with a Hindu majority, became modern-day India, the western part along with parts of the Punjab became West Pakistan, while East Bengal (the Muslim majority part of Bengal) became East Pakistan. The Partition of India was so mishandled by the British, that it resulted in the worst ever recorded communal riots in the region and perhaps one of the worst in modern history. An estimated 1 to 5 million Muslims, Sikhs, Hindus and others lost their lives as a direct consequence and millions more became refugee migrants to the newly formed Islamic Republic of Pakistan.
Due to a hasty British retreat and mishandling of the independence of its former colonies, various disputes would remain between India and Pakistan involving Kashmir and the Rann of Kutch (Sir Creek) regions. Both nations have fought three all out wars due to these unsettled issues. Other inherited legacies of British rule included the Durand Line debate regarding the border with Afghanistan.
In 1971, economic and political discontent in East Pakistan – geographically separated from West Pakistan by India – and violent political repression escalated into a civil war (see Bangladesh Liberation War) in East Pakistan and the Indo-Pakistani War of 1971, resulting in the secession of East Pakistan, which formed the independent state of Bangladesh.
The Soviet invasion of Afghanistan in 1979 resulted in a large influx of refugees fleeing from Afghanistan to Pakistan, creating the largest refugee population in the world. In the largest covert operation in history, Pakistan and the United States supported anti-Soviet freedom fighters (called Mujahideen) in Afghanistan, and the Soviets withdrew in the late 1980s. (See Charlie Wilson's War: The Extraordinary Story of the Largest Covert Operation in History, ISBN 0871138549)
Politically since its formation, Pakistan has oscillated between democratic and military rule, while making some impressive recent economic strides.
Origin of the name
The name is believed to have been coined by Cambridge student and Muslim nationalist Choudhary Rahmat Ali. He devised the word and first published it on January 28, 1933 in the pamphlet Now or Never [1]. He saw it as an acronym formed from the names of the "homelands" of Muslims in South Asia. (P for Punjab, A for the Afghan areas of the region, K for Kashmir, S for Sindh and tan for Baluchistan, thus forming 'Pakstan.' An 'i' was later added to the English rendition of the name to ease pronunciation, producing Pakistan.) The word also captured in the Persian language the concepts of "Pak" meaning "Pure" and "stan" for "land" or "home" (as in the names of Central Asian countries in the region; Afghanistan, Turkmenistan, etc), thus giving it the meaning Land of the Pure.
All Arabic-speaking countries refer to Pakistan as باکستان (Bakstaan), as the Arabic alphabet lacks the letter "P."
Politics
Domestic Politics
Main article: Politics of Pakistan
Form of Government
Constitutionally a federal republic, with considerable autonomy to the four Provinces – Sindh, Balochistan, Punjab, and NWFP (North West Frontier Province) (Sarhad) and the state of Azad Kashmir (Azad meaning Free in Urdu).
The upper house is called the Senate, which has 100 seats equally distributed among the four provinces of Pakistan, with reserved seats for women and religious minorities, who may also contest the general seats.
The lower house is called the National Assembly of Pakistan and has 342 seats including reserved seats for religio-ethnic minorities and women.
Members of the National Assembly are elected for five-year terms. The National Assembly elects the Prime Minister of Pakistan, who then appoints selected members of the National Assembly and Senate as federal ministers in the cabinet - the executive branch.
The Electoral College of Pakistan – consisting of the Senate, National Assembly, and the provincial assemblies – elects the President of Pakistan, who is the Head of State and Commander in Chief of the Armed Forces. The President’s appointment and term are constitutionally independent of the Prime Minister’s term.
Each province has a Provincial Assembly which is elected for five year terms through competitive multi-party elections, and which in turn elects a Chief Minister – the executive head of the province. Constitutionally the Chief Minister should nominate the governor and the provincial assembly should ratify the nominee for a five year term.
The last National Assembly elections were held in October 2002, and Senate elections in February 2003. One notable outcome was the election of 91 women to Parliament – the largest number (and the largest percentage) of women in the parliament of any Muslim-majority country, according to data from the Inter-Parliamentary Union. [2]
Political Parties
Before and during the creation of Pakistan in 1947, the secular and centrist Pakistan Muslim league supported the creation of Pakistan while the far-right religious parties such as the Shia Conference , Jamiat-e-Ulema-e-Hind and leaders such as Maulana Azad opposed the creation of Pakistan and supported a united India. The liberal, leftist Pakistan Peoples Party (PPP) emerged as a major political player during the 1970s. During 80s, a new political anti-feudal movement started by unorthodox and educated urban dwellers of Sindh, specially Karachi, now known as MQM.
Currently, the largest party in Parliament is the Pakistan Muslim League (Q) (PML-Q) and the second largest is the Pakistan Peoples Party Parliamentarians (PPPP). The PML-Q obtained a plurality in the October 2002 elections. Besides these major players, there are several other political parties active in Pakistan.
See also: List of political parties in Pakistan
Foreign Relations
Main article: Foreign relations of Pakistan
Pakistan was an ally of the United States for much of its early history as a modern nation-state, from the 1950s and as a member of CENTO (Central Treaty Organisation) and SEATO (Southeast Asia Treaty Organisation). At the time, its relationship with the USA was so close and friendly that it was called the United States's most-allied ally in Asia. However, this changed after the war with India, when, during the height of the Cold War, the US placed heavy military sanctions on Pakistan, forcing Pakistan to agree to a cease-fire, ending a war that was heading for a stalemate. Pakistanis felt betrayed and ill-compensated for the risks incurred in supporting the USA – after the U-2 Crisis of 1960, Soviet leader Nikita Krushchev had threatened the nuclear annihilation of Pakistani cities.
In 1964, Pakistan signed the RCD Pact with Turkey and Iran, when all three countries were closely allied with the USA – and as neighbors of the Soviet Union, wary of perceived Soviet expansionism. To this day, Pakistan has a close relationship with Turkey. RCD became defunct after the Iranian revolution, and a Pakistani-Turkish initiative led to the founding of the ECO in 1985, an organization that now also includes Afghanistan, Azerbaijan, Iran, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.
After the 1965 war, Pakistan had somewhat distanced itself from the US, and its relations with China became stronger and soon both nations declared their close friendship, causing concern in the Western powers. Despite US opposition, Pakistan dropped out of CENTO and SEATO – both organizations eventually collapsed after Pakistan's departure. It established better relations with China and supported the resolution to move official recognition for the Chinese seat from the Taiwan-based Republic of China to the Beijing government.
The United States maintained a lukewarm relationship until the Nixon administration. In 1971, Pakistan was involved in a civil war which led the secession of East Pakistan, now Bangladesh. Many Pakistanis believed that the August 1971 Indo-Soviet Treaty of Friendship, Peace and Cooperation encouraged Indian belligerency during this crisis. China supported Pakistan and did not accept the new nation of Bangladesh for over 3 years, even though in 1973 Pakistan itself had. The US also did not accept Bangladesh in favor of Pakistan until after the Shimla Accord. Pakistan used its friendship with both China and the USA to bring the two countries together, arranging the visit of US Secretary of State Henry Kissinger to Beijing.
The Soviet involvement in the war and the Chinese influence on Pakistan prompted USA to bolster ties with its distanced ally, but the alliance would not approach its former strength until the Afghan war. In the 1980s, Pakistan was supplied by the US with necessary arms and helped in training and supporting anti-Soviet freedom fighters in Afghanistan. The US promised to provide Pakistan with F-16 fighter jets, although (because of the Pressler amendment) only a few were eventually supplied. However, China chose to remain out of this alliance, providing moral support instead.
After the Afghan war, which ended in favor of the anti-Soviet alliance, the relationship with the US deteriorated when sanctions were imposed on Pakistan along with India for their nuclear programs. All military aid was again barred. China came to Pakistan's aid, helping it further develop its military and air force and infrastructures – notably, Pakistan and China jointly funded the development of the JF-17 fighter jet.
After September 11th, 2001, and in support of the subsequent American-led assault on Afghanistan, current Pakistani president Pervez Musharraf aligned his government again with the US and attempted to seal borders with Afghanistan and silence Islamic radicals along the border. Since this strategic re-alignment towards US policy, economic and military assistance has been flowing from the US to Pakistan.
Besides the above-mentioned countries, Pakistan enjoys alliances with many Middle Eastern countries, such as Saudi Arabia and the United Arab Emirates. PAF pilots fly fighters for these two countries. Among former Soviet allies, Libya and Syria are the only two middle eastern countries with whom Pakistan enjoys excellent relations.
Pakistan is also an important member of the OIC, which brings it closer to every Muslim country. Pakistan has used the OIC as a forum for Enlightened Moderation, its plan to promote a renaissance and enlightenment in the Islamic world. Besides the OIC, Pakistan is a member of the South Asian union of SAARC.
Pakistan is the second largest Muslim country in terms of population and its status as a declared nuclear power – the only Islamic nation to have that status – also plays a part in its international role.
Political History
Pakistan has been ruled by both democratic and military governments. General Ayub Khan was the president from 1958 to 1969, and General Yahya Khan from 1969 to 1971. Civilian rule continued from 1971 to 1977 under Zulfikar Ali Bhutto, but he was deposed by General Zia-Ul-Haq. General Zia was killed in a plane crash in 1988, after which Benazir Bhutto, daughter of Zulfikar Ali Bhutto, was elected as the Prime Minister of Pakistan. She was the youngest woman to ever be elected the Head of Government and the first woman to be elected as the Head of Government of a Muslim country. Her government was followed by that of Nawaz Sharif, and the two leaders alternated until the military coup by General Pervez Musharraf in 1999. Since the resignation of President Rafiq Tarar in 2001, Musharraf has been the President of Pakistan.
Pakistan's first decade was marred with political unrest and instability resulting in frequent collapses of civilian democratic governments. From 1947 to 1958 as many as seven Prime Ministers of Pakistan either resigned or were ousted. This political instability paved the way for Pakistan’s first military take over. On October 7th 1958 Pakistan’s civilian and first President Iskander Mirza in collaboration with General Mohammad Ayub Khan abrogated Pakistan’s constitution and declared Martial Law.
Nation-wide parliamentary elections were held in October 2002, with the PML-Q winning a plurality of seats in the National Assembly of Pakistan, and Zafarullah Khan Jamali of that party emerging as Prime Minister. Jamali resigned on June 26, 2004. PML-Q leader Chaudhry Shujaat Hussain became interim PM, and was succeeded by Finance Minister and former Citibank Vice President Shaukat Aziz, who was elected Prime Minister on August 27, 2004 by a National Assembly vote of 191 to 151.
Geography
- Main article: Geography of Pakistan
K2 - the second-tallest mountain in the world
Pakistan has a total area of 803,940 square kilometers, over three times the size of the United Kingdom. It has a land area of 778,720, slightly less than the combined land areas of France and the United Kingdom put together.
To the south is the Arabian Sea, with 1,046 km (650 mile) of Pakistani coastline. To Pakistan's east is India, which has a 2,912 km (1,809 mile) border with Pakistan. To its west is Iran, which has a 909 km (565 mile) border with Pakistan. To Pakistan's northwest lies Afghanistan, with a shared border of 2,430 km (1,510 miles.) China is towards the northeast and has a 523 km (325 mile) border with Pakistan.
The northern and western areas of Pakistan are mountainous. Pakistani administered areas of Kashmir contain some of the highest mountains in the world, including the second tallest, K2. Northern Pakistan has many areas of preserved moist temperate forest.
In the southeast, Pakistan's border with India passes through a flat desert, called the Cholistan or Thar Desert. West-central Balochistan has a high desert plateau, bordered by low mountain ranges. Most areas of the Punjab, and parts of Sindh, are fertile plains where agriculture is of great importance.
Pakistan is also the home of some of the world's most ancient civilizations. Places like Mohenjodaro, Harappa, Kot Diji, Thatta, Bhambore, Gandhara, Mehrgarh, Dir are all sites that came into existence near the dawn of civilization several thousand years ago.
Economy
Main article: Economy of Pakistan
Overview
Pakistan, a developing country, is the sixth most populous in the world and has faced a number of challenges on the political and economic fronts. Although a very poor country when it became independent in 1947, in the 1960s Harvard economists proclaimed it to be a model of economic development. In each of its first four decades, Pakistan's economic growth rate was better than the global average, but imprudent policies led to a slowdown in the late 1990s. Since then, the Pakistani government has instituted wide-ranging reforms, and economic growth has accelerated in the current century. Pakistan's economic outlook has brightened and its manufacturing and financial services sectors have experienced rapid expansion. The growth of the non-agricultural sectors has changed the structure of the economy, and agriculture now only accounts for roughly one-fifth of the GDP. There has been a great improvement in its foreign exchange position and a rapid growth in hard currency reserves in recent years.
In 2004 Pakistan's GDP growth rate was 8.4% which is (after China) the second-highest among the ten most populous countries in the world.[3]
Macroeconomic Reform and Prospects
According to many sources, the Pakistani government has made substantial economic reforms since 2000, and medium-term prospects for job creation and poverty reduction are the best in nearly a decade.
Government revenues have greatly improved in recent years, as a result of economic growth, tax reforms - with a broadening of the tax base, and more efficient tax collection as a result of self-assessment schemes and corruption controls in the Central Board of Revenue - and the privatisation of public utilities and telecomunications. Pakistan is aggressively cutting tariffs and assisting exports by improving ports, roads, electricity supplies and irrigation projects. Islamabad has raised development spending from about 2% of GDP in the 1990s to 4% in 2003, a necessary step towards reversing the broad underdevelopment of its social sector.
Liberalisation in the international textile trade has already yielded benefits for Pakistan's exports, and the country also expects to profit from freer trade in agriculture. As a large country, Pakistan hopes to take advantage of significant economies of scale, and to replace China as the largest textile manufacturer as the latter China moves up the value-added chain. These industries play to Pakistan's relative strengths in low labour costs.
A perception of stability in the nation's monetary policies has contributed to a reduction in money-market interest rates, and a great expansion in the quantity of credit, changing consumption and investment patterns in the nation. Pakistan's domestic natural gas production, and its significant use of CNG in automobiles, has cushioned the effect of the oil-price shock of 2004-2005. Pakistan is also moving away from the doctrine of import substitution which some developing countries (such as Iran and India) dogmatically pursued in the twentieth century. The Pakistani government is now pursuing a export-driven model of economic growth successfully implemented by South East Asia and now highly successful in China.
In 2005, the World Bank reported that
- "Pakistan was the top reformer in the region and the number 10 reformer globally — making it easier to start a business, reducing the cost to register property, increasing penalties for violating corporate governance rules, and replacing a requirement to license every shipment with two-year duration licenses for traders." [4]
In addition, reduced tensions with India and the ongoing peace process raise new hopes for a prosperous and stable South Asia, with more intra-regional trade.
Growing Middle Class
Measured by purchasing power, Pakistan has a 30 million strong middle class enjoying per capita incomes more than $8000-$10,000, according to Dr. Ishrat Husain, Governor of the State Bank of Pakistan [5]. In addition, Pakistan has a growing upper class with relatively high per capita incomes.
Economic History
First Five Decades
Economically, Pakistan was a very poor and predominantly agricultural country at the time of its independence in 1947 from British India. During its first four decades, Pakistan's economic growth rate was better than the global average. Industrial-sector growth, including manufacturing, was also above average. In the early 1960s, Pakistan was seen as a model of economic development around the world, and there was much praise for the way its economy was progressing. Many countries sought to emulate Pakistan's economic planning strategy and one of them, South Korea, copied its Second Five Year Plan, 1960-65. Not just that But World financial center in Seoul was modeled after Karachi. Later, economic mismanagement in general, and fiscally imprudent economic policies in particular, caused a large increase in the country's public debt and led to slower growth in the 1990s.
Economic Resilience
Historically, Pakistan's overall economic output (GDP) has grown every year since a 1951 recession. Despite this record of sustained growth, Pakistan's economy had, until a few years ago, been characterized as unstable and highly vulnerable to external and internal shocks. However, the economy proved to be unexpectedly resilient in the face of multiple adverse events concentrated into a four-year period —
- the Asian financial crisis;
- economic sanctions — according to Colin Powell, Pakistan was "sanctioned to the eyeballs";
- global recession;
- a severe drought — the worst in Pakistan's history, lasting four years;
- heightened perceptions of risk as a result of military tensions with India — with as many as a million troops on the border, and predictions of impending (potentially nuclear) war; and
- the post-9/11 military action in neighboring Afghanistan, with a massive influx of refugees from that country.
Despite these adverse events, Pakistan's economy kept growing, and economic growth accelerated towards the end of this period. This resilience has led to a change in perceptions of the economy, with leading international institutions such as the IMF, World Bank, and the ADB praising Pakistan's performance in the face of adversity.
Recent economic history and trends
| Sectoral contribution to GDP Growth (in % point) | ||||
|---|---|---|---|---|
| Sector | 2001-02 | 2002-03 | 2003-04 | 2004-05 |
| Agriculture | 0.03 | 1.01 | 0.53 | 1.74 |
| Industry -Manufacturing |
0.61 1.71 |
1.08 1.11 |
2.74 2.31 |
2.46 2.19 |
| Service | 2.47 | 2.75 | 3.16 | 4.16 |
| Real GDP (fc) | 3.1 % | 4.8 % | 6.4 % | 8.4 % |
| Source: Economic Survey of Pakistan 2005 [6] | ||||
Since about the turn of the century, the Pakistani government has instituted wide-ranging reforms, and economic growth has accelerated in the current century. Pakistan's economic outlook has brightened and its manufacturing and financial services sectors have experienced rapid expansion. The growth of the non-agricultural sectors has changed the structure of the economy, and agriculture now only accounts for roughly one-fifth of the GDP. There has been a great improvement in its foreign exchange position and a rapid growth in hard currency reserves as a result of its current account surplus.
In the fiscal year ending June 30, 2005, Pakistan's GDP growth rate was 8.4% which is (after China) the second-highest among the ten most populous countries in the world. Its exports grew by as much as 17% and the country also saw increasing foreign investments in the IT sector, thanks to cheap labor, a low tax rate and a large pool of English speakers.
Structure of production
| Sectoral Share of Various Sectors in GDP | |||||
|---|---|---|---|---|---|
| Sector | 2000-01 | 2001-02 | 2002-03 | 2003-04 | 2004-05 |
| A) Commodity Sector (1+2+3+4+5) |
48.2 | 47.3 | 47.1 | 47.4 | 47.6 |
| 1. Agriculture | 25.1 | 24.4 | 24.2 | 23.3 | 23.1 |
| 2. Mining | 1.3 | 1.4 | 1.5 | 1.5 | 1.4 |
| 3. Manufacturing | 15.9 | 16.1 | 16.4 | 17.6 | 18.3 |
| 4. Construction | 2.4 | 2.4 | 2.4 | 2.1 | 2.0 |
| 5. Energy Distribution | 3.4 | 3.0 | 2.5 | 2.9 | 2.7 |
| B) Services Sector (6+7+8+9+10+11) |
51.8 | 52.7 | 52.9 | 52.6 | 52.4 |
| 6. Transportation & Comm. | 11.7 | 11.5 | 11.5 | 11.4 | 11.1 |
| 7. Trade | 18.1 | 18.0 | 18.2 | 18.5 | 19.1 |
| 8. Finance & Insurance | 3.1 | 3.6 | 3.3 | 3.3 | 3.7 |
| 9. Ownership of Dwellings | 3.2 | 3.2 | 3.2 | 3.1 | 2.9 |
| 10. Public Admin. & Defence | 6.3 | 6.5 | 6.7 | 6.5 | 6.0 |
| 11. Other Services | 9.4 | 9.9 | 10.0 | 9.9 | 9.6 |
| Note: GDP is estimated at constant factor cost. Figures are in percentage. Source: Economic Survey of Pakistan 2005 [7] |
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Stock Market
In the first three years of the current century, Pakistan's KSE-100 stock market index (Karachi Stock Exchange) was the best-performing major market index in the world, driven in part by profit growth, high dividend yields and greater transparency in publicly traded companies as a result of reforms enacted by the Securities and Exchange Commission of Pakistan.
Currency
The basic unit of currency is the Rupee, which is divided into 100 paisas. Since the turn of the century, a strengthening economy and large current-account surplus has caused the rupee's exchange rate to rise in value. In response, Pakistan's central bank has prevented the rupee from rising too much, by lowering interest rates and buying dollars, in order to preserve the country's export competitiveness. As of 2005, one US dollar is approximately equal to 60 rupees.
Industry
Manufacturing and Finance
Pakistan's manufacturing sector has experienced double-digit growth in recent years, with large-scale manufacturing growing by 18% in 2003. A reduction in the fiscal deficit has resulted in less government borrowing in the domestic money market, lower interest rates, and an expansion in private sector lending to businesses and consumers. Foreign exchange reserves continued to reach new levels in 2003, supported by robust export growth and steady worker remittances.
Tax Incentives & IT Industry
The Government of Pakistan has, over the last few years, granted numerous incentives to technology companies wishing to do business in Pakistan. A combination of decade-plus tax holidays, zero duties on computer imports, government incentives for venture capital and a variety of programs for subsidizing technical education, are intended to give impetus to the nascent Information Technology industry. This in recent years has resulted in impressive growth in that sector. Pakistan saw an increase in IT exports of 50% from 2003-4 to 2004-5, with total exports standing at $48.5 million. This year the government has set an export goal of $72 million. Exports account for 11% of the total revenues of the IT sector in Pakistan. Compared to its neighbor, India, Pakistan's IT sector is still in the infantile stage, but recent trends have led economists to be optimistic about the IT industries future prospects in Pakistan.
Technology & Internet
Paging and mobile (cellular) telephone were adopted early and freely. Cellular phones and the Internet were adopted through a rather laissez-faire policy with a proliferation of private service providers that led to fast adoption. Both have taken off and in the last few years of the 1990s and first few years of the 2000s. With a rapid increase in the number of internet users and ISPs, and a large English-speaking population, Pakistani society has seen major changes.
- Pakistan has more than 20 million internet users as of 2005. The country is said to have a potential to absorb up to 50 million mobile phone Internet users in the next 5 years thus a potential of nearly 1 million connections per month.
- Almost all of the main government departments, organizations and institutions have their own websites.
- The use of search engines and instant messaging services is also booming. Pakistanis are some of the most ardent chatters on the Internet, communicating with users all over the world. Recent years have seen a huge increase in the use of online marriage services, for example, leading to a major re-alignment of the tradition of arranged marriages.
- As of 2005 there were 6 cell phone companies operating in the country with nearly 28 million mobile phone users in the country.
- Wireless local loop and the landline telephony sector has also been liberalized and private sector has entered thus increasing the teledensity from less than 3% to more than 10% in span of two years.
Agriculture, Energy and Natural Resources
Pakistan's principal natural resources are arable land, water, and extensive natural gas and petroleum reserves.
Agriculture
About 28% of Pakistan's total land area is under cultivation and is watered by the largest irrigation systems in the world. Water resources include several major rivers, fed by meltwater from snow and glaciers in some of the highest mountains ranges of the world — the Karakorams, Himalayas, and the Hindukush. Other important sources are tube-wells tapping into large aquifers. The most important crops are cotton, wheat, and rice. Other important crops are sugarcane, maize, sorghum, millets, pulses, oil seeds, barley, fish, fruits and vegetables. Pakistan also produces some of the world's best honey. Pakistan is a net exporter of foodgrains.
Energy
Pakistan has extensive energy resources, including fairly sizable natural gas reserves, oil reserves and coal. It also has a large potential for the further development of hydroelectric power. Domestic petroleum production totals only about half the country's oil needs. Pakistan is operating, constructing or planning to construct several nuclear reactors to meet its rapidly growing electricity requirements.
Minerals
Important minerals found in Pakistan are gypsum, limestone, chromites, iron ore, rock salt, silver, gold, precious stones, gems, marble, copper, coal, graphite, sulphur, fire clay, silica. The salt range in Punjab Province has large deposits of pure salt. Balochistan province is a mineral rich area having sub-stantial mineral, oil and gas reserves which have not been exploited to their full capacity. The province has significant quantities of copper, chromite and iron, and pockets of antimony and zinc in the south and gold in the far west. Natural gas was discovered near Sui in 1952, and the province has been gradually developing its oil and gas projects over the past fifty years. [8]