Table of Contents
Q1. Four possible options are given for each statement. Mark (✓) on the correct option.
- Economic development means:
- Increase in national income ✓
- Increase in agricultural income
- Increase in personal income
- Increase in factual national income
- Pakistan government established “Pakistan Industrial Development”:
- 1952 ✓
- Pakistan’s economy is:
- Underdeveloped ✓
- Extremely developed
- Extremely poor
- 5 years development plan stated in Pakistan in:
- 1955 ✓
- The first dry port was built in Pakistan in:
- Lahore ✓
- Pakistan imports edible oil from America, Sri Lanka and:
- Saudi Arabia
- Hong Kong
- Malaysia ✓
- The Largest scheme of producing hydro-electric power in Pakistan is:
- Ghazi Brotha Project
- Mangla Dam
- Tarbela Dam ✓
- Warsak Dam
- With the cooperation of the World Bank, the Indus Water Treaty between Pakistan and India was settled in:
- 1960 ✓
- The largest sector of Pakistan’s economy is:
- Agriculture ✓
- Who came into power in Pakistan in 1958?
- General Sikander Mirza
- General Muhammad Ayub Khan ✓
- General Yahya Khan
- General Zia ul Haq
Q4. Give short answers
Write the definition of economic progress as given by Prof. Arthur Lewis
According to Professor Arthur Lewis
“The increase in the production of goods and services is called economic development.”
“To speed a better life, fundamental changes are brought about in the economy which results in economic development. In short, the movement of a backward economy towards becoming a developed economy is called economic development.
Which organization was developed in1975 for the development of economic resources?
In 1975 the government of Pakistan established an organization called Pakistan industrial development corporation.
What is meant by small industry?
Small industry means that industry which employs 2 to 9 workers and manufacturers different items. A few of our small industries are:
- Dairy farming industry
- Bee-keeping industry
- Poultry farm
- Carpet weaving etc
Make three suggestions to solve agricultural problems in Pakistan.
- All cultivable land should be used. Barren and desolate land should be made cultivable.
- To protect farmers from the harms of fragmentation of land holdings, better legislation should be done for consolidation of land holdings.
- Tube wells and wells should be established where stream water is not available to encourage farmers. Electricity should be made available for tube wells at cheaper rates.
What is meant by export and imports?
To bring or carry in from an outside source, especially to bring in goods or sale is called imports. To send or transport abroad, especially for sale trade is called exports.
Narrate the uses of gypsum?
In the preparation of phosphate fertilizer, gypsum is used as a raw material. It is also used in cement industry, paper manufacturing, plaster of Paris, sulphuric acid, paint and polish industry and also in the rubber industry.
Write the names of five cities of Pakistan where dry-ports are established?
Lahore, Multan, Peshawar, Hyderabad and Sialkot.
To which countries does Pakistan export sports good?
Holland, Belgium, France, Italy, Britain, Germany and America etc. are important buyers of Pakistani sports goods.
Narrate four important problems being faced by the agricultural sector of Pakistan.
- Natural disasters
Natural disasters like floods, earthquakes, storms and drought cause problems for farmers. These cause seven damage to the crops.
- Lack of intensive cultivation
In Pakistan, the use of advanced seeds chemical fertilizers and agricultural machinery is not very popular. Less attention is paid towards cultivating more and more crops on agricultural land.
- Lack of agricultural credit
Due to the scarcity of organizations giving agricultural credit, farmers take these loans from money lenders. The percentage of interest is huge. These people exploit the formers and worry them.
- Backwardness of farmers
Illiteracy is a major reason for the backwardness of farmers. This makes the farmers enable to learns new methods or plan for better production.
Q1. Explain the important problems being faced by our agricultural sector.
Problems of agriculture in Pakistan and their remedies
Agriculture is the major occupation of the people of Pakistan. Even today agriculture is a major sector and occupies a very important place in the economy of Pakistan. It not only provides food for our growing population but is a source of raw materials for our principal industries as well as a source of foreign exchange for our government.
24% of our gross domestic products belong to this sector. It engages 53 % of our employed labour. About 75 % of our people are engaged directly or indirectly with this profession. A large part (about 10%) of Pakistan’s exports is made up of primary commodities, including the major cash crops. In addition to this major large-scale industry like cotton textile and sugar etc. as well as medium and small scale, agro-based and cottage industries are directly dependent on this sector for their raw materials.
Following are the causes of our backwardness in agriculture:
- The farmers of our country are mostly un-educated and lack technical knowledge. They are unable to understand the modern scientific methods of agriculture and often remain ignorant of good means to protect and increase their yield. Their production is therefore low.
- The majority of our farmers are poor and they often live in a hand to mouth position. Most of them are always under heavy burdens of debt. Hence, they cannot attain the required standards.
- Most of our farmers are still stuck to the old traditions of their forefathers. The circumstances have compelled them to use the crude implements because due to small holdings of land and poverty they are unable to acquire and use modern scientific methods. That is why their standard is lower than that of cultivators in developed countries.
- Due to excessive use of canal water, most of our cultivated lands have become victims of these two dangerous diseases. Waterlogging is no less injurious. On the other hand, the measures taken so far are quite inadequate for such issues.
- Due to our law of inheritance, our farmers command very small pieces of hands which prove to be costly. A farmer cannot afford tractors and other machinery for a small piece of land and those incomes are low. Hence his interest is converted to some other sector.
- Our farmers have to face many problems due to scarcity of water which is one of our major problems. Rainfall is uncertain and the existing irrigational facilities in our country are quite insufficient and need to be extended.
- The land tenure system of Pakistan has created a chain of intermediaries between the state and the tenants. The system, instead of being conducive to agricultural development, stands in the way of its progress.
- In some areas of our country, especially in hilly regions, the upper fertile soil is being eroded by different natural agents of change. Thus, fertility is poor and soils are becoming less productive.
- The marketing facilities for agricultural products in Pakistan are still far from a satisfactory level. Our cultivator cannot get just prices for their produce due to defective marketing organization. Thus, the cultivator does not take much real interest in increasing their product too.
- Due to the lack of agricultural education and methods of modern research, our farmers cannot control the various diseases of crops and attacks of pests and insects. The result is low yields.
- The agricultural activities in our country are performed in rural areas, but most of our villages have no road or railway links with our markets. So, farmers have to face innumerable hardships to sell their products. Hence the farmers take very little interest in their profession and production suffers.
- The resources required for agricultural operation are land, layout, livestock, farm equipment, fertilizers, irrigation, transport etc. Zarai tarqiatti and commercial banks provide loans to the farmers which are insufficient because our farmers are very poor.
- Due to the above-mentioned facts, it is clear that the yield per acre of various crops in our country is comparatively low than of the other countries. Hence, we are backwards agriculturally.
Q2. Explain the remedies to overcome the agricultural problems.
Remedies to overcome the Problems:
- The land which has been declared useless due to salinity and water-logging should be reclaimed. Tube-wells should be installed in the affected areas to decrease the salinity. These measures should be taken on priority basis to avoid further deterioration of land.
- The major problem of agriculture in Pakistan is a scarcity of water. Most of the land is lying unused due to this problem. Therefore, the irrigation facilities must be extended for increasing agricultural output.
- The agricultural yield can also be increased to a great extent by using fertilizers. The use of artificial manure should be introduced throughout the country. Due to poverty and illiteracy, our farmers hesitate to purchase the fertilizers.
- The use of better seeds, fertilizers and modern implements is not possible without adequate credit facilities for the farmers. The government has extended the existing credit facilities to a large extent.
- The farmers should be provided better quality seeds at the lowest price and at the right time. Better seeds will ultimately give better yield.
- Various plant diseases damage a large part of our crops. But our farmers have no effective control over them. Therefore, preventive and narrative measures should be taken throughout the country.
- Mechanization of agriculture refers to the use of various equipment the different stages of cultivation. By the use of modern equipment better results can be achieved in the shortest time.
- Co-operative farming refers to the farming done based on mutual help and co-operation. Under this method, the small holdings are consolidated. After harvesting, the yield can be distributed among the owners according to their ownership.
- Increase of literacy ratio in rural areas especially in agree-education is the need of the day. The more educated the farmers will be better will be the results achieved.
- Marketing procedures should be simplified and various marketing facilities should be provided to the cultivators.
- The rural areas of the country must be provided with road and railway links with marketing centres and better means of transport and communication should be provided.
Q3. Explain the cottage and small industry of Pakistan.
Cottage and a small industry of Pakistan
In Pakistan cottage or household hold an important position in the rural set-up. Most villages are self-sufficient in the necessities of life. They have their carpenters, blacksmiths, potters, craftsmen and cotton weavers. Many families depend on cottage industries for income.
Cottage industries have also gained immense importance in cities and towns. There is a great demand for hand-woven carpets, embroidered work, brassware and traditional bangles. These are also considered important export items and are in good demand in international markets.
- Cottage and small-scale industries are ulabour-intensive and employemploy 80% of the industrial labour force. This reduces unemployment and offers opportunities for self-employment.
- Traditionally, women are not encouraged to work outside their homes. Cottage or small-scale industries like carpet-weaving and handicrafts can be established in houses and women can be gainfully employed. This increases the active labour force.
- These industries also meet the local demands for industrial good and save foreign exchange spent in imports.
- There is a demand for rugs, carpets, brassware and handicrafts work in the international market. These goods provide 30 % of the export receipts of the manufacturing sector.
- The acute problems of housing, sanitation, education, transport and health will be reduced in urban areas.
- Many districts are under-developed. With the expansion of such industries, the regional disparity in the income can be reduced.
- These industries make effective use of local raw materials which also promotes primary industries like agriculture and mining.
- The small-scale industry does not require much capital and high technology. I.T. is situated to the traditional economic set-up.
- Cottage and small-scale industries do not use much-imported material or equipment.
- The waste of large-scale industries, particularly the cotton, sugar and steel industries can be used to make by-products.
Types of the cottage and small industries of Pakistan
There are a web cottage and books industries. In almost every village, there is a number of such industries depending upon the size of the village and the demand for the products. The establishment of such industry is closely related to the availability of raw material traditional skills, climatic conditions and in several cases, the local specialization in the organized factory sector.
There is a large variety of handicrafts available in Pakistan. They are not aesthetically pleasing items, but they also serve the needs of local people.
Some of these industries produce important export items. Recently exports of non-cotton products have faced increasing trade barriers as public opinion in industrialized countries has expressed growing concern about child labour, environmental and health standards. These concerns are being addressed now.
In the small-scale industries, the most important is the Carpet weaving and its centre are located almost all over Pakistan. It is also significant in economic terms and they make a valuable contribution to exports. They employ women and children for the production of fine hand-woven carpets and made of wool silk or a mixture of the two.
Textiles are found throughout the country with a variety of design and techniques. The most famous among them as Khaddar, Susi, Khes, Chunri, Boski and Ajrak. The designs are invariably brightly coloured with a traditional emphasis on blue and red.
Embroidery has developed to fine art with distinctive regional designs and patterns.
Gold and silversmiths are one of the largest communities of craftsmen. Much of the jewellery made and sold in the cities of intricately fashioned and delicate.
Clay and terracotta pottery and utensils continue to be of great practical importance. Many of the designs of urns, pitchers, bowls, jugs, plates and pots seen today are almost identical to that uncovered at archaeological sites around the country. Distinctive glazed blue tiles are used to decorate many of the great mosques in Pakistan.
Wazirabad is the city of cutlery in Pakistan. This industry is growing day by day and has a share of 65 million US dollars in Export for 2010. High-Quality Damascus Steel is manufactured in this city and 95 % of world needs are produced here.
The Swat Valley is perhaps the most famous for its intricately carved architectural woodwork and furniture, although wood-carving is common throughout the northern mountains.
Sports goods earn about 3.7% of our total exports. The main raw materials for the sports goods industry are leather and mulberry wood that are available in Punjab but also imported PVC, Football, hockey ball, hockey sticks, cricket bats and rackets are mostly manufactured by hand. The skilled workers are available in Sialkot and Lahore. In the industry large and medium-size factories contact work out to small-scale and cottage concerns. The local sports goods manufacturing industry is one of the major sources of foreign exchange earnings of Pakistan. It is centralized in and around the city of Sialkot, where it has flourished as a cottage industry with most of its production by generations of skilled craftsmen. At the time of independence, this industry was in an infant stage with a nominal export of Rs. 0.82 million. The Government took immediate steps to develop this industry by providing loans and subsidies to the manufacturers and arrangements were made to market the manufactured goods. Since then, the industry has flourished locally and enjoys a good reputation in the international markets as well.
Q4. Discuss the problems of the cottage and small-scale industries in Pakistan.
Problems of the cottage and small-scale industries in Pakistan
Cottage and small-scale industries contribution to the GDP is only 5 %. There are certain problems associated with these industries that are mentioned below:
- Profits are limited and they are mostly spent on the daily expenses of the owners. They do not have extra capital for the expansion of these industrial units.
- Economies of scale are not available so the production cost is higher. Goods produced in small-scale industries cannot compete in the open market if the same goods are manufactured on a large scale.
- The wholesaler who takes most of the profits exploits the owners of the small-scale industry. In some cases, goods are sold to wholesalers at cost price, which discourages the owners and they reduce the quality and quantity the produced.
- In rural areas, where the electricity is not provided, small-scale industries are difficult to set up. The commercial rates of electricity have also increased significantly which hinders the growth.
- The craftsman and artisans learn their skills and production methods from their elders. The provision of technical advice and further training is limited.
Government policy towards small industry
The government is fully aware of the potential cottage and small-scale industries for industrial development. The following organizations have been established to develop this sector of the economy.
- Pakistan Small Industries Corporation (PSIC)
- Punjab Small Industries Corporation (PSIC)
- Sindh Small Industries Corporation (SSIC)
- The Small Industries Development Board NWFP (SIDB)
- The Directorate of Small Industries Baluchistan (DSIB)
The above organizations are taking the following measures:
- Establishment of industrial estates
- Providing marketing facilities
- Setting up of technical service centers.
- Establishing handicraft development centers and carpet centers.
- Providing per-investment counselling and guidance to newcomers
Q5. Give a brief account on major industries of Pakistan
A brief introduction about the major/large scale industries of Pakistan is given along the following lines.
- Textile Industry
The Textile Industry is the largest industry in Pakistan. At the time of partition, Pakistan received only 17 textile units in its share. The production of textile was very low and a large quantity had to be imported to meet the domestic requirements. Now, Pakistan is a prominent country for the production of textile. The textile industry accounts for 17.3 % of value-added, 32.2% of industrial employment accounts for 17.3% of the value, added 32.2% of industrial employment and 60% of total exports. 354 miles were operating in the textile industry in 2001-02. The production of cloth was 558 million square meters by the organized mill’s sector. Various step has been taken by the Government for the growth of the textile industry e.g. the provision of incentives, freedom to acquire technical assistance from abroad, directly financing institutions and improvements in management and labour efficiency etc.
- Vegetable Ghee and Cooking Oil Industry
At the time of independence, oil industry was very poor. Now there are 150 vegetable ghee and cooking oil factories in Pakistan. Out of these 26 are in the public sector with an installed capacity of 500 thousand tones of ghee and cooking oil. Total production of ghee and cooking oil was 774 thousand tones in 2001-02. A large quantity of cooking oil is imported to meet domestic needs. The decline in the production of vegetable ghee is due to lower scale turnover and operational difficulties & closing down of two units in N.W.F.P.
- Sugar Industry
In 1947, there were only 2 sugar factories in Pakistan, but at present, there are 77 sugar factories in the industry. During the year 2001-02 total production of sugar was 3247 thousand tones. Revolutionary steps are required to expand the working capacity of this industry, which must be expanded and facilities should be provided to farmers for the production of better crops.
- Fertilizer Industry
There are10 fertilizer units in the country, having an installed capacity of 42, 98,000N. Total production of fertilizers in 2001-02 was 5012 thousand tones. The low production of fertilizers in 2001-02 was 5012 thousand tones. The low production was caused, by operational difficulties, the decline in working hours and power failure/load shedding. Several concessions are provided for the growth of this industry.
- Cement Industry
At present 24 cement factories are operating in the country, out of these 4 factories are in the public sector and 20 are in the private sector. The installed capacity of cement is 16,300 thousand tones out of which 9935 thousand tons of cement was produced in 2001-02. This industry has been allowed duty-free import of plant and machinery.
- Chemical Industry
There are 12 chemical factories in the country producing soda ash, sulphuric acid, caustic soda, chlorine gas and other chemicals. The contribution of the chemical industry towards GNP Is only 3 %. This industry is not fulfilling domestic requirements, so a large amount of foreign exchange is spent on the import of different chemicals every year.
- Jute industry
At the time of independence, there was not a single jute factory in Pakistan. By the cooperation of PIDC, 32 factories were setup In East Pakistan and one in West Pakistan by the time of separation of East Pakistan in 1971. At present, there are 12 Jute mills in the country. Total production of Jute goods was 81.7 thousand tones during 2001-02. Now a large quantity of Raw Jute is imported from China and Bangladesh every year to meet the domestic requirement.
- Engineering Goods Industry
The engineering goods and capital goods produced domestically are very helpful for the economic development of a country. This industry was given importance in the 3rd five-year plan. Now we have 4 heavy engineering industries. There are:
- Heavy Mechanical Complex, Taxila
- Heavy Foundry Project, Taxila
- Pakistan Machine Tools Factory, Landhi
- Pakistan Steel Mills, Karachi
All these are in the public sector. There are also a number of light and medium engineering goods industries producing a lot of items.
- Ship Building Industry
Ships are constructed at Karachi. Several small and large ships are made by Karachi yard and Engineering works. This factory was established by PIDC. Now Pakistan is selling ships and boats abroad. In all the five-year plans, this industry is given much importance.
- Woolen and Worsted Textile Industry
There are 16 woollen mills in Pakistan. These are located at Karachi, Nowshera, Lawrencepur, Quaidabad and Hamai. This industry is not only meeting the worsted and woollen yarn requirements of the country, but it is also exporting a large quantity of worsted cloth and carpets to foreign countries.
- Cigarette Industry
At present, 22 factories are producing cigarettes and Biri. Our country is self-sufficient in the production of cigarettes. This raw tobacco used in the manufacturing of cigarettes is produced domestically. During the year 2001-02, 55,318 million cigarettes were produced in the country.
Q6. Narrate the importance of resources of energy for development.
The importance of energy
Energy growth is directly linked to well-being and prosperity across the globe. Meeting the growing demand for energy in a safe and environmentally responsible manner is a key challenge.
Modern energy enriches life. There are seven billion people on earth who use energy each day to make their lives richer, more productive, safer and healthier. It is perhaps the biggest driver of energy demands: the human desire to sustain and improve the well-being of ourselves, our families and our communities. Through 2040, population and economic growth will drive demand higher, but the world will use energy more efficiently and shift toward lower-carbon fuels.
Q7. Discuss the production of important energy resources in Pakistan and y’reits usage.
Energy sources of Pakistan
An energy source is a system which makes energy in a certain way for instance a hydroelectric station. A hydroelectric station uses the current of the river for the making of electricity. We use many different energy sources to do work for us.
Energy sources are classified into the following two groups:
In our world, most of our energy comes from non-renewable energy sources like coal, petroleum, natural gas, propane and uranium are non-renewable energy sources. They are used to make electricity, to heat our homes, to move our cars, and to manufacture all kinds of products.
These energy sources are called non-renewable because their supplies are limited. Petroleum, for example, was formed millions of years ago from the remains of ancient sea plants and animals. We cannot make more petroleum in a short time.
Renewable energy sources include biomass, geothermal energy, hydropower, solar energy and wind energy. They are called renewable energy sources because they are replenished in a short time. Day after day the sun shines, the wind blows, and the rivers flow. We use renewable energy sources mainly to make electricity.
Nowadays we need energy-sources for electricity. Without electricity no computers, no television, no washers. A lot of apparatus would not work without electricity.
Sources of Energy
These are the most important sources of energy
Nuclear power is a form of energy which arise from a reaction between atomic nuclei. Mostly this form of energy comes out of nuclear fission.
Fossil energy is generated through the burning of fossil remains. This burning fossil fuel is used as a source of heat to make steam out of water. This steam is used for the working of a turbine. These plants and animals die over a million years ago and under the pressure of the earth’s surface and through the decay of this material there came a process of compression. Carbon is the main part of these fossil fuels, the more carbon, the heavier the fuel
Hydro energy is simply energy that is taken from the water and converted to electricity. Hydro energy can be obtained by using many methods of capture. The most common method of using energy from water is a hydroelectric dam, where water coming down through an area causes turbines to rotate and the energy is captured to run a generator. Power can also be generated from the energy of tidal forces or wave power, which uses the energy created by waves.
A hydropower source of energy is well known in Pakistan and there is ever-growing experience in this sector to develop the hydropower potential indigenously in the country. The total Hydropower resources are estimated at 50, 000 MV. Most of the resources lie in the North of the country which offers sites for large scale (100 MV to 7000 MW) power projects. Smaller (less than 50 MW) sites are available throughout the country. Also, canal system with a total of 58,450 km watercourses, farm channels and field ditchers running another 160,000 km in length has a huge hydropower potential at numerous sites/locations on each site, ranging from 1 MW to more than 10 MW hydel plants can be installed.
Geothermal in Pakistan
Most of the high enthalpy geothermal resources of the world are within the seismic volcanic activity. A global seismic belt passes through Pakistan and the country has a long geological history of geotectonic events. Pakistan possesses a good regime for geothermal energy. Many hot water springs, some generating surface water temperature up to 83 C lie in the North 0f Pakistan. It is estimated that over 5,000 MW of Geothermal resources can be commercially tapped in the short run.
The Pakistan Atomic Energy Commission (PAEC) Is responsible for all nuclear energy and research applications in the country.
Its first nuclear power reactor is a small 137 MWe (125 MWe net) Canadian pressurized heavy water reactor (PHWR) which started up in 1971 and which is under international safeguards- KANUPP at Paradise Point in Sindh province, about 25 km west of Karachi. It is operated at reduced power.
The second unit is Chashma 1 in Punjab province in the north, a 325 MWe two-loop pressurized water reactor supplied by China CNNC under safeguards. The main part of the plant was designed by Shanghai Nuclear Engineering Research and Design Institute, based on Qinshan. It is started up in May 2000 and is also known a CHASNUPP 1. Designed life span is 40 years 1t and the following 3 units were built using international design codes and standards.
Solar electric power
Pakistan lies in an area of one of the highest solar insulation in the world and has immense solar resources, suitable for both Photovoltaic (PV) and Thermal i.e. Concentrated Solar Power (CSP) applications. There are certain regions of the south, Quetta valley and Central Punjab that receive maximum solar radiation. The Annual Direct Normal Solar Radiation for CSP is in the range between 7-7.5 KWh/m2/day in many parts of Balochistan and between 6.5-7 KWh/m2/day in other parts of Balochistan. 5-5/5 KWh/m2/day in Southern Punjab and Northern Sindh and around 4.5-5 KWh/m2/day in rest of Pakistan.
According to the Pakistan Energy Book 2004-05, solar energy falling on 0.2% Balochistan province would be adequate to meet the current requirement of the country with 20% efficient devices.
Wind electric power
Wind energy is another important area where Pakistan can benefit by exploiting it efficiently. This sector is getting worldwide attention to the development and availability of inexpensive technology that allows its easy conversion to useful energy. Recognizing the vast potential that wind energy offers, several initiatives in Public and private sector have been taken. Pakistan has 1000 km long coastline which could be utilized for installation of wind farms. There are regions in the mountainous areas of Pakistan, which has the potential for wind energy generation.
Miraculous Pakistan is blessed with infinite natural resources by God and natural gas is the most precious one. The recoverable reserves of natural gas have been estimated at 29.671 trillion cubic feet. During July-Match 2008-09, the production was 3986.5 million cubic feet per day as compared to 3965.9 during the corresponding period last year showing an increase of 0.52%. Presently 26 private and public sector companies are engaged in oil and gas exploration and production activities.
Following are the natural gas fields in Pakistan:
- Bhit gas field
- Khasan gas field
- Kandanwari gas field
- Kandkhot field
- Khan field
- Mari field
- Maino gas field
- Mirza field
- Sawan gas field
- Sui gas field
- Toot gas field
- Ul Haq field
- Zamzama field
The Sui gas field is the biggest natural gas field in Pakistan. It is located near Sui in Baluchistan. The gas field was discovered in late 1952 and the commercial exploitation of the field began in 1955. The Sui gas field accounts for 26 % of Pakistan’s gas production. Remaining reserves are estimated to be at about 800 billion cubic feet and the daily production is around 660 million cubic feet of natural. The operator of the field is Pakistan petroleum limited.
Q8. Study the foreign trade of Pakistan, its composition, direction and balance changes.
Foreign Trade of Pakistan
When Pakistan came into being her economy was completely based on agriculture. The experts consisted of agricultural products only. For the economic development of the country, there was a need for diversification of her trade and a change in her pattern. The government of Pakistan decided to industrialize the country as rapidly as possible. The export promotion was regarded as one of the highest national commitments by the government. Various measures were adopted for export improvement. Pakistan participated in International Trade Conferences and Fairs. Despite the different measures taken by the government for boosting the export, still our imports are greater than the exports. The balance of trade in unfavourable and deficit.
The year 1991-92 was estimated to have closed with a balance of payment deficit of dollar 2.6 billion-plus. Indeed, as far as one may go back the balance of payment has been in the red, with the figure hovering over dollar 1 billion throughout the last ten years or so.
Chief Export Items of Pakistan
Following are the mains items which may be included in our export list:
Cotton ranks at the top of the export list of Pakistan. Pakistan occupies the first position in Asia and second position in the world as an exporter of cotton and cotton products. Export of Raw cotton, cotton cloth and cotton yarn together contribute approximately 40 to 42% to the total export earnings of Pakistan. Karachi with the cotton-growing hinterland has almost the monopoly of the trade.
Pakistan grows a surplus amount of best quality along with staple American Upland Cotton which is very much demanded all over the world. Our main customers of raw cotton are the UK, China, Japan, Hong Kong, Belgium, Indonesia, Italy, Singapore and Bangladesh.
Pakistan has emerged as one of the leading exporters of rice. In the previous year’s rice was at the top of our export list but due to fluctuation in the world market, its demand has decreased. Best qualities like Basmati and Irri-6 are exported. Pakistan exports rice to almost all the Gulf States and Middle Eastern, European, East Asian and some African countries.
- Carpets, Rugs and Mats:
Pakistan earns a large amount of foreign exchange by exporting very fine quality carpets rugs and mats. Due to heavy competition in the world’s market, their demand is increasing.
The U.S.A. is an important buyer of Pakistani carpets, rugs and mats. Other countries are mostly Europeans countries including France, U.K, Italy, Switzerland, Germany, Belgium etc.
- Fish and Fish Preparations
Fish is exported fresh canned and dried. Shrimps are exported to Japan and U.S.A. canned fish finds its market mostly in W. Europe, Middle Eastern and South Asian countries are also important customers of Pakistani fish and fish preparations.
- Leather and Hides:
Pakistan produces hides and skin worth approximately 2 crores every year of which 40 % are exported. Now, because of leather industries in our country export of hides and skin. Italy, Spain, Japan, France, China, Romania, W. Germany etc are important market in this regard.
- Synthetic Textile Products:
Pakistani Synthetic Textile Products are popular in various foreign countries. These are mainly exported to Middle Eastern, African and South American countries.
- Petroleum Products:
There are 3 oil refineries in Pakistan where crude petroleum is imported and several petroleum products are being produced. Some of the surplus products are exported to India, Turkey, Sri Lanka, Singapore etc.
- Sports Goods:
Pakistan has a worthy name in exporting sports goods to more than 100 countries, principally to 2 Germany, U.K., Italy, the U.S.A., France etc.
- Surgical Instruments:
Pakistan is also exporting surgical equipment to China, Japan, America and Canada. Besides the above-mentioned items, Pakistan exports several miscellaneous items like raw wool, Tobacco, Fruits, Vegetables etc to various countries.
Chief Import Items of Pakistan
Following are the main items in our country:
- Mineral Oil
Our country is not self-sufficient in our mineral oil requirements. The present oil production of our own country meets only about 24% of the country’s requirements. So, to meet the deficiency, we have to import a large amount of mineral oil from other countries. We import mineral oil from Saudi Arabia, Iran, U.A.E and other Middle East countries.
As our country is in its developing stage, we have to import different kinds of machinery to meet the demands of various industries. The machines are usually imported from Japan, U.S.A. and European countries.
- Edible Oil:
The production of edible oil is not sufficient to meet the demands of our Ghee industry. Although the government has taken various measures to boost up the production of oilseeds, despite those our country is still deficient in edible oil so we have to import enough amount of edible oil e.g. soya bean oil from the U.S.A. and Palm oil from Malaysia and Indonesia.
- Chemicals and Drugs:
The economy of our country mainly demands on agriculture, so to get a higher yield from different crops stray of various chemicals is essential. Thus to meet all these demands of our agricultural sector, we have to import various kinds of chemicals and drugs from other countries. The chemicals and drugs are mainly imported from Japan, Germany, the U.S.A., and other European countries.
- Dyes and Colors:
Various industries of our country use several dyes and colours as a raw material in their products such as textile, printing etc, so to meet the demand of all these industries, various kind of colours and dyes are imported. These colours and dyes are mainly imported from Japan, the U.K., U.S.A. etc.
Our country produces a very small quantity of tea which is sufficient to meet the demand of our country. So various tea companies port huge amount of tea. Tea is mainly imported from Sri Lanka, Bangladesh, India and Kenya.
- Electric Goods:
Different kinds of electrical goods are needed in our country. The local industries are not in the position to meet the required demand so we have to import a large number of electric goods from Japan, U.S.A., U.K. and other European countries.
- Transport Equipment:
Our country needs different kinds of transport equipment e.g. buses, cars, rickshaws, motorcycles. So, the demand for these are high and hence they are imported from Japan, Italy and other countries.
- Paper and Paper products:
Before 1971, we had several papers mills our eastern wing and our requirements were fulfilled from the eastern. Although, after 1971 some paper mills were set up in the western wings, are still deficient in the paper especially in the paper for the newspaper industry. We have to import a large amount of newsprint and other kinds of paper from Canada, Japan, Sweden, U.S.A. etc.
Q9. Explain the importance of seaports and dry ports in Pakistan.
Importance of seaports and dry ports in Pakistan
Importance of Seaports
Many Western developed nations depend for their development on the Middle East Oil. This Oil is shipped through the Arabian Sea to all the Far East countries passing through the Karachi seaport. All the international trade of land tight countries of Central Asia and Afghanistan carry out their international trade through the seaport of Gwadar.
Further, all the food grains, wheat, wool, sheep of Australia are exported via Karachi sea port to the Middle East and Europe and North Africa through Karachi. All the Far East countries carry out their exports and imports with Europe and America through Karachi sea port.
In the East of Pakistan, there is another series of Muslim countries which comprises of Bangladesh, Malaysia and Indonesia and Maldives and their countries also carry out their exports and imports with Europe of America through the Pakistan Sea Port that’s why Quaid-e-Azam had rightly remarked. “Pakistan is the key of Unity of Islamic World”.
Importance of dry ports
A dry port provides services for the handling and temporary storage of containers, general and bulk cargoes that enters or leaves the dry port by any mode of transport such as road, railways, inland waterways or airports.
A dry port of international importance shall refer to a secure inland location for handling, temporary storage, inspection and customs clearance of freight moving in international trade.
Major Dry Ports of Pakistan
- Faisalabad Dry Port
- Lahore Dry Port
- Multan Dry Port
- Quetta Dry Port
- Peshawar Dry Port
- Rawalpindi Dry Port
Q10. Study the economic development of Pakistan from 1947 to 1970.
The economic history of Pakistan
The economic history of Pakistan beings with the country’s independence in 1947. The economy of Pakistan is a semi-industrialized one, based heavily on textiles, agriculture and food production, through recent years have seen a surge towards technological diversification. The land forming modern-day Pakistan was home to the ancient Indus Valley Civilization from 2800 BC to 1800 BC; historical evidence suggests that the civilization relied on and carried trade through the Indus River, and its inhabitants were some of the most resourceful traders.
First Five decades
Pakistan’s average economic growth rate since independence has been higher than the average growth rate of the world economy during the same period. Average annual real GDP growth rates were 6.8 % in the 1960s, 4.8 % in the 1970s and 6.5% in the 1980s. Average annual growth fell to 4.6 % in the 1990s with significantly lower growth in the second half of the decade.
During the 1960s, Pakistan was seen as a model of economic development around the world, and there was much praise for its economic progression. The capital Karachi was seen as an economic role model 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 the city’s second “Five Year Plan”, the World Financial Centre in Seoul is modelled 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. Two wars with India- the Second Kashmir War in 1965 and the Bangladesh Liberation War in 1971- and the resultant separation of Bangladesh from Pakistan also adversely affected economic growth. The economy recovered during the 1980s via a policy of deregulation, as well as an increased inflow of foreign aid and remittances from expatriate workers.
Review on Pakistan from Economic Watch Pakistan’s economy can be characterized as semi-industrialized. The country’s industrial sector constitutes 24.3 % of the country’s gross domestic product. Pakistan has a total labour force of 55.88 million. The largest industries of the country are textile, cement, agriculture, fertilizer, steel, tobacco, edible oil, pharmaceuticals, construction materials, shrimp, sugar, food processing, chemicals and machinery. Pakistan’s industrial sector experienced tremendous growth between 2004 and 2006 despite the shortage of electricity. However, it is worth noting that net foreign investment in industries of Pakistan constitutes only 2.5 % of the country’s GDP.
Pakistan Economic Review
Pakistan economic review projects that because of strong economic policies taken up by Pakistan government manufacturing and financial services sector have flourished since fiscal 2008. Export of good is a major concern for Pakistan economy. From 1999, exports of Pakistan have increased from dollar 7.5 billion to dollar 18 billion in the financial year 2007-09. Major items for exports include cotton, fibre, vegetables, furniture, cement, milk, marbles, textiles, clothing, wheat, powdered milk, carpets, defence equipment and engineering goods to mention a few. Some important import items of Pakistan are petroleum and petroleum products, automobiles, medicines, industrial machinery. Construction machinery, trucks, computers, food items, toys, computer parts, cdefence equipment, iron and steel. An economic review of Pakistan had been focusing in recent times on how to deal with economic recession. Economic indicator look positive in present situation. Discount rate of central bank has been improved to 1.5 percentage points. This will help in dealing with high inflation rate in Pakistan. Pakistan economic review projects that government encourages foreign investments in various fields of real estate, telecommunications, software, energy, fertilizer, aerospace, textiles, steel, ship building, arms manufacturing, cement and automotive.
Pakistan Economic Structure
Characterized as semi-industrialized, Pakistan’s economy has grown tremendously since its independence in 1947. Punjab and Karachi states constitute the major share in the economic growth of the country. The first decade of the 21st century has experienced wide-ranging economic reforms particularly in manufacturing and financial services sector, leading to improvement in the country’s economic outlook.
Pakistan Economic Structure: Primary Sector
Pakistan’s primary sector plays a major role in the country’s economy. Primarily an agrarian economy, Pakistan produces a range of agricultural products. Around 43 % of the country’s labour is engaged in the primary sector, which in turn 20.8% to the country’s economy in 2009. Pakistan Is the second largest producer of Chickpea and the third-largest producer of mango in the world according to the 2005 Food and Agricultural Organization of the United Nations. Some other major agricultural products of Pakistan include cotton, rice, oranges, apricot, sugarcane, date palm and wheat. Dairy farming is also a large industry in Pakistan. Pakistan is the fifth largest milk producer in the world. Although Pakistan has a considerable livestock population, it spends around dollar 40 million a year on formula milk support.
Pakistan Economic Structure: Secondary Sector
Pakistan’s manufacturing sector employs 20.3 % of the country’s labour force. Some major manufacturing industries include cotton textile and apparel manufacturing, carpets, rugs, rice, chemical, sports goods and leather goods. Some other popular industries are construction materials, mineral, paper products, food processing and beverages. Around 51.4 % of country’s exports include textile and apparel. The secondary sector experiences a growth of 5.4 % in 2007-08. However, electricity shortage remains the biggest challenge in ensuring the development of Pakistan’s secondary sector.
Pakistan Economic Structure: Tertiary Sector
The services sector of Pakistan mainly includes industries such as finance, insurance, transport, communications and storage that account for 24% of the country’s GDP. Wholesale and retail trade has a 30% share in the GDP. With the increase in the country’s software exports, the IT industry is emerging as a flourishing service industry. Despite union unrest, the Pakistani government is actively engaged in the privatization of banking, telecommunications and utilities to produce more jobs in the country.
Q10. What is the significance of the agricultural sector in the economy of Pakistan?
Significance of the agricultural sector in the economy
Agriculture is an important sector, providing food to the fast-growing population of the country. According to the 1198 census, the total population of Pakistan is 130 Million. With a population growth rate of 2.6 percent there is a net addition of 3.4 million people each year. In 1947 the population of Pakistan was 32.5 million; in 50 years it has increased fourfold. During this period the production of wheat, the major food crops has increased only 2.9-fold. During 1970/71 the amount of wheat imported was 0.3 million tones; it has increased to 4.1 million tons in 1997. Tremendous efforts have been carried out to narrow the gap between population growth and food production.
Agriculture contributes about 24 percent of the gross domestic product and employs 47 percent of the national employed labour force. The contribution of the agricultural sector to the GDP has declined gradually since Pakistan came into existence, from over 50 percent in 1949-50 to about 24 percent in 1996-96. Agriculture remains the major sector of the GDP composition. A major part of the economy depends on farming through production, processing and distribution of major agricultural commodities.
In foreign trade agriculture again dominates, through exports of raw products such as rice and cotton and semi-processed and processed products such as cotton yarn, cloth, carpets and leather production. Agriculture is essential for sustainable improvements in internal and external balances. Of the total export earnings, the share of primary commodities and processed and semi-processed products constituted almost 60 percent of the total exports. There have been products that have more or less sustained its position.
The average annual growth rates in the agricultural sector during the 1960s, 1970s and 1980s were 5.07, 2.37 and 5.4 percent, respectively. With the announcement of a new agriculture package by the government in April 1997, the growth rate during 1997/98 has improved to 5.9 percent.
More specifically; the agricultural sector plays an important part in Pakistan’s economy by:
- Contributing 24 percent towards GDP
- Providing food to about 130 million people
- Earning about 60 percent of the country’s total exporting earnings
- Employing 47 percent of the total workforce
- Providing the main source of livelihood for the rural population of Pakistan
- Providing raw materials for many industries and a market for many locally produced industrial products.