PEST Analysis Political Factors Government not backing its words - Example Ishrat Hussain had allocated a budget

for R&D in textile firms. Sir: It is not true. Its all a scam. Nothing comes to us. We have three working laboratory in the company we havent got a single thing. They come and ask us to fulfill forms and stuff and then talk about their commissions. However government does pitch in 50% in the ISO certification fees. Economic Factors Structural reforms have accelerated economic growth with strong momentum of real GDP growth of 7.0% from FY03 to FY08, although this is unlikely to be attained over the next few years due to economic slowdown and political uncertainty.
Low level of foreign reserves, thereby enhanced vulnerability to external shocks. Heavily dependent on funding from multilateral institutions and bilateral partners. Balance of payments portrays a bleak picture in light of rising oil prices, with oil imports of more than 50 MN barrels per year for catering local demand for fuel Products.

the chronic issues of high financing cost, power and gas shortage coupled with their high charges domestically had devastating impact on textile goods when compared with China and India, which gave concessions and incentives in the shape of subsidies on power and financing. the textile sector being an export oriented industry of Pakistan and more prone to international demand shocks is under severe stress amid a global recession, however, textile production has declined slightly, by 0.7 per cent over the same period last year. Textile sector was badly hit by power shortage and weak external demand. Both cotton yarn and cotton cloth industries, which have the largest shares in the textile sector, posted negative growth of 0.3 per cent and 0.3 per cent respectively. Currently, the Eurozone crisis has also affected Textile sector greatly. Pakistan's exports are undiversified since its inception with only a few countries comprising a major share. The entire export base of Pakistan can be divided into nine major countries which include Saudi Arabia, UAE, USA, West Germany, Italy, France, U.K, Japan and Hong Kong. Higher costs - A recent study on Pakistans industrial competitiveness40 and firm-level

comparisons suggests that while wages in Pakistan are low by international standards, they are often significantly higher than those in Bangladesh and slightly higher than in India despite it being a low wage, labor surplus economy. The study further contends that allowing for the differences in labor and capital productivity, on average Pakistan is a higher cost location than the Peoples Republic of China (PRC), India or Bangladesh.

Social Factors Rising rates of urbanization with the UN forecasting the proportion of city dwellers climbing from 34.9% of the population in 2005 to more than 50% by 2035 should continue to serve as a key driver of economic growth as the organization currently faces dearth of educated employees. Technological Factors