Business context

Can Pakistan be an Asian tiger?

6/1/2014
Nazeer Hussain University
Prepared by: Rabia Siddiqui
 INTRODUCTION OF ASIAN TIGERS
The four Asian tigers or an Asian dragon is a term used in reference to the highly
developed economies of Hong Kong, Singapore, South Korea and Taiwan after
1970. These regions were the first newly industrialized countries, noted for
maintaining exceptionally high growth rates and rapid industrialization between
the early 1960 and 1990’s. by the 21st century, all four regions have since
graduated into advanced economies and high income economies. Now people say
that all four countries are rich countries. All four Asian tigers have a lot of people
who are very educated and good at their jobs. They also did different things, and
tried to do them better than other countries. For example Hong Kong and
Singapore became very good at international finance, while South Korea and
Taiwan became very good at information technology. However attention has
increasingly shifted to other Asian economies which are now experiencing faster
economic transformation. A country is known as tiger of its continent of its
economy is strongest among all other countries of same continent.

How Pakistan will be an Asian tiger?

To make a country a tiger of its continent, betterments or improvements in many
fields are required. Pakistan is the next country having the same vision; Pakistan
has a semi industrialized economy, which mainly encompasses textiles, chemicals,
food processing, agriculture and other industries. Growth poles of Pakistan’s
economy are situated along the Indus River: diversified economies of Karachi and
Punjab’s urban centers coexist with lesser developed areas in other parts of
country. The economy has suffered in the past from decades of internal political
disputes, a fast going population, mixed levels of foreign investment and high
defense spending. Foreign exchange reserves are bolstered by steady worker
remittances, but a growing current account deficit- driven by a widening trade gap
as import growth outstrips export expansion- could draw down reserves and
dampen GDP growth in the medium term. But if we want to make Pakistan an
Asian tiger, we need to tie up all the broken ends and we will have to struggle each
and every day, day and night to achieve our goal.
Following sectors still needs improvements if we want to make our country an
Asian tiger.

Education:
Education is the most important factor which plays a leading role in human
resource development. It promotes productive and informed populace and creates
opportunities for the socially and economically deprived sections of society.

Age Literacy rate %

Age b/w 55-64 30%
Age b/w 45-54 40%
Age b/w 25-34 50%
Age b/w 15-24 60%
It indicates that with every passing generation literacy rate is increased by
10%

Ultimate objective of Pakistan

60% Literacy rate 90%

2014 2018

Is it possible ????????
University World Ranking: During 1947-2003 not a single university of
Pakistan could be ranked among the top 600 universities of the world…. !!!!!!!!!
But today 5 to 6 Pakistani universities belong to the prestigious group of world
best universities….. !!!!!!!!!!
Pakistani University in World Ranking:
 National university of science & technology, Islamabad
 University of engineering & technology, Lahore
 Mehran university of engineering & technology, Jamshoro
 Karachi university, Karachi
 Quaid-e-Azam university, Islamabad

Lack of Government in Education:

Country World Ranking Educational Budget
st
Cuba 1 18.7%
Malaysia 10th 8.1%
Iran 58th 4.9%
India 81st 4.1%
Bangladesh 119th 2.4%
Pakistan 126th 1.8%
Indonesia 130th 1.2%

Factors cause for Pakistan’s poor performance in education:

 Low level of public investment
 Lack of government funds to educational institutes
 Administrative lacks of government institutions
 “Choudhry” and “Wadera” culture of Pakistan
 Low income level of people

Reforms undertaken:
 Free education up to matriculation
 Grant of scholarships
 English language compulsory
 Budgetary allocations for education increased
 Encourage private sector
 Improved examination system
  Curriculum upgraded to ensure latest developments / ideas in science &
technology
 Format of the question papers for the board examinations revised
 Teachers’ training & knowledge
 Technical / vocational education
 Career counseling at higher secondary level
 Pre-service & in-service teacher training

Imports & Exports of Pakistan:

Imports Exports overview:
 Last five years inflation has increased currently 25%
 5 years average growth 6-7
 Cotton products, rice, toys, bicycles, and other sporting goods, etc
 Computer accessories, civilian aircraft, scientific, medical & hospital
equipment, telecommunication equipment, tanks, artillery, missiles, rockets,
guns etc

Major exports of Pakistan:

Over 80% of Pakistani exports are cotton products

 Cotton apparel & household furnishings

 Cotton cloth & fabrics (threads, cordage)
 Other textiles apparel & household furnishings
 Textile floor coverings including rugs
 Non-textile apparel & household furnishings
 Toys, bicycles and other sporting goods
 Synthetic cloth & fabrics ( threads, cordage)
 Cookware, cutlery, house & garden wares including tools.

Reasons for trade deficit in Pakistan:

 Electricity shortfall
 Business opportunities
  Political instability
 Rising oil prices
 Country crop smuggling LOE return on capital
 Labor force

Improve export keys:

 Short term financing
 Export finance scheme
 Long term financing
 Long term financing export oriented projects
 Locally manufactured machinery

Agriculture Sector
Agriculture sector is the backbone of our economy. But the growth of agriculture
in Pakistan is facing a lot of problems. Due to various causes, per acre yield is very
low in Pakistan as compare to other developed countries.

Agriculture is central to economic growth and development in Pakistan. Being the

dominant sector it contributes 21.4% to GDP, employs 45% of the country’s labor
force and contributes in the growth of other sectors of the economy.

The agriculture growth this year stood at 3.3% as compared to 3.5% during the last
year.

Conclusion:
Being an agrarian country, agricultural sector of Pakistan’s economy is still
backward. Use of modern techniques, provision of credit facilities, basic
infrastructure, research facilities are needed to remove all the problems of
agricultural sector.

Energy sector:
Energy plays an important role in the economic development of country. In
Pakistan supply of energy is 46.8 million tons & per capita availability is 0.28
million tons per year while consumption per year is 48.3 million tons.
Energy Consumption By Sector Vise:

Energy Generating Firms In Pakistan:

1. WAPDA: it generates 11399MW energy, in which 57% is Hydel & 43% of
thermal energy includes.
2. IPP: it only generates 6374MW energy.
3. Nuclear Power Plants: there are two nuclear plants in Pakistan which
generates 462MW energy.
4. KESC: it generates 1955MW energy.

Industrial Sector Of Pakistan:

Industry refers to that sector of economy which is related with manufacturing and
production of different products.

Industrial sector functions:

 Industrial sector is of great importance for economic development of
country.
 It is historical fact that countries with strong industrial sector have showed
more economic growth and development industrial sector have shows
improvement in national income and promoting living standard of
population.
  Industries in Pakistan:

Textile Industry
Defense Industry
Sports Industry
Auto Mobile Industry
Telecom Industry
Fashion Industry
Cement Industry
Fertilizer Industry
Surgical Industry
Oil & Gas Industry
Sugar Industry
Chemical Industry
Textile industry:
Historically, Pakistan’s textile industry and clothing sector has always been a
major contributor to the foreign exchange earner and still contributes.

Achievements:
 4th largest grower of cotton after USA, China and India.
 3rd largest consumer of cotton
 3rd largest exporter of cotton textiles
 2nd largest supplier of cotton yarn with 26% share of the international market

Products:
 Power loom products
 Scarf
 Wool fabrics

 Blanket  Textile products

 Winter shawls  Handicrafts
 Hand embroider shawls
Statistics:
 Over 1.3 million farmers, out of total of 5 million are involved in cultivation
of this crop.
 Industrial Sector is the second largest individual sector of the economy
accounting for 24% of the GDP.

Exports:

Fertilizer Industry:
Fertilizer is any organic or inorganic material of natural or synthetic origin (other
than liming materials) that is added to a soil to supply one or more plant nutrients
essential to the growth of plants.

Major Fertilizers Co’s & GDP Contribution:

 Fauji fertilizer limited

 Engro chemical limited
 Sitara chemicals limited

GDP contribution Employments

14%
4.7 million
Cement Industry:
Cement industry is one of most prominent and energetic organization having
operations and interactions with cement industry.

Achievements:
 Pakistan is ranked 5th in the world cement exports.
 Pakistan exports increased by 47% in last fiscal year.
 5th position leaving Germany behind
 2008-09 (20.28 Mt)
 Exported $700m in past year

Cement Companies In Pakistan:

 23 cement companies
 4 foreign companies
 3 controlled by the armed force
 19 companies are listed on the stock exchange.

GDP: - 3.5% Contribution

Sugar Industry:
 At the time of independence in 1947, there were only two sugar factories
in Pakistan.
 At present there are 106 sugar mills operating in Pakistan.
 It is the 2nd Largest industry in Pakistan after Textile Industry.

Sugar Mills:
 Total of 106 sugar mills in the country
 Sugarcane acreage in Pakistan is 5th in the World and it is grown on over 1
million hectares
 Pakistan ranks 15th in the World for sugarcane production
  GDP contribution (0.7%)Employment Employment
 PER CAPITA CONSUMPTION (26kg)

Sugar by products:
 Alcohol (used by pharmaceutical industry)
 Ethanol (used as a fuel)

Sports Industry:
“Sports' are all forms of physical activity which, through casual or organized
participation, aim at expressing or improving physical fitness and mental well-
being, forming social relationships or obtaining results in competition at all levels”

Sports goods:
 Football
 Cricket bats
 Hockey sticks
 Boxing gloves
 Volley balls
 Swimming suits
 Golf balls
 Badminton rackets
 Basketballs

Statistics:
 The export of sports goods, increased by 7.85% from US$39.180m
→US$42.257m last year
 Sialkot export 70% of total world demand for hand-stitched inflatable soccer
balls (footballs).
 40 million balls annually worth US$210 million.
 Companies of various sizes 2,400
 Employments more than 200,000
 Exporting goods worth US$450 million
 Large exporters (more than 250 employees)
  Medium exporters (100–250 employees)
 Small exporters (10–100 employees).
 Commercial exporters (1–9 employees).

Telecom industry:
Telecommunication is the transmission of information over significant distances to
communicate.

Main Categories

 Telephone
 Mobiles
 Internet
Achievements:
 In 2008 Pakistan was the world’s third fastest growing telecommunications
market
 Fixed-line subscriptions declined from a peak of 5.2 million in 2005-06 to
3.4 million in 2009-10
 Pakistan traffic volume grew by 253 percent compared to last year during
the same period

Contributions:
 5% of its Gross Domestic Product
 Has created 220,000 high-paying jobs in Pakistan
 Pakistan is now a leader in mobile usage in south Asia

Major telecom companies in Pakistan:

Glass Industry:
The glass industry in Pakistan, though developed, still has space for improvement.

 There are about 37 glassworks in the organized sector, with the production
capacity ranging between 10 tones capacity ranging between 10 tons and
200 tons per day.
 The major ceramics industries are Karam Ceramics, Swat Ceramics, Master
Tiles, Shabbir Tiles and Emco Industries.

Punjab Balochistan GDP

73% 3% contribution

Sindh 5% NWFP

Imports & Exports:

Glass industry in Pakistan comprises sixteen manufacturers in the organized
sector which produces over 90 per cent of the indigenous production within the
country.

 (PAGMA) Pakistan exported glass products worth Rs 60 million to Rs

120 million per annum during 2005-2010
 Imports of various glasses from Rs 975 million to Rs 1,782 million,
during last five years 83%. Increase

Leather Industry:
 The leather made ups and finishing industries symbolize an important
division in Pakistan,
  Earning approximately more than 8 million $ as a foreign exchange
earnings to the country.

Leather Products:
 Leather Garments
 Leather Goods
 Footwear
 Leather Shoe
 Uppers
 Tanning
 Leather Gloves

Production Capacity:

Leather Exports Markets:

 Italy, Spain, Portugal, South Korea, Germany,
 France, UK, USA and UAE.
Statistics:
 More than 2300 leather processing units
 Provide employment to about 500,000 people

Surgical Industry:
PAKISTAN SURGICAL INDUSTRIES (PVT) LIMITED was established in 1974
and now has become one of the leading manufacturers of Surgical.

Surgical products:
 Dental Instruments
 Web application
 Beauty Instruments
Contribution In Economy:
Indicator value
 To GDP % 0.42%
 To direct employment (numbers) 400-5, 00,000
 To indirect employment (numbers) 600-7, 50,000
 To exports% 1.21%

Statistics:
 Over 99% production is done in Sialkot.
 2300 companies are working in this sector.
 Produces over 150m pieces/year worth Rs 22 billion.
 Out of the total production over 95% is exported.

Auto Mobile Industry:

The business of producing and selling self-powered vehicles, including passenger
cars, trucks, farm equipment, and other commercial vehicles
Automotive Industry Products:
 Light Vehicles
 Cars
 Jeeps
 Tractors
 Trucks
 Motor
 Cycles
 Buses

Contribution to GDP:

2012 2018

7.8% 18.8%
EXPECTED

Country Contribution:
Automotive engineering is a driving force of large scale manufacturing,
contributing US$ 3.6 billion to the national economy and engaging over 192,000
people in direct employment.

GDP contribution of different sectors of economy:

Agriculture 20.47%

 Crops 9.90%
 Livestock 9.97%
 Fishing 0.33%
 Forestry 0.25%
Industry 23.93%

 Manufacturing 17.53%
 Mining 2.39%
 Construction 2.19%
 Electricity & gas 1.80%

Services 55.60%

 Wholesale & trade 17.25%

 Transport 11.80%
 Finance & insurance 3.59%
 Ownership & dwelling 3.22%
 Public administration & defense 5.4%
 Community & social professional services 10.22%

Comparison Of Industrial Sector With Other Countries:

Asian countries

 Pakistan 23.93%
 India 26.3%
 Bangladesh 28.5%
 China 46.9%

GDP Growth:

10

0
Pakistan India Bangladesh Srilanka
GDP Per Capita:

6,000

5,000

4,000

3,000

2,000

1,000

0
Pakistan India Bangladesh Srilanka

Contribution Of Industrial Sector To Economy:

26%

25%

25%

24%

24%

23%

23%

22%

22%

21%

21%
Pakistan India Bangladesh Srilanka
Problems Of Industrial Sector:
 Power shortage
 Lack of trained manpower
 Import trend
 Inefficiency
 Changing political and economic policies
 Bad law and order situation
 resulting in lower investment
 Higher interest rate
 Labor Unrest
 Lack of products innovation resulting in concentration of industries in some
specific sectors.
 Corruption in related government agencies and so many govt. agencies
intervention

Suggested solutions:
 Foreign Investment
 Small & Medium Enterprises (SMEs)
 Micro Credit
 Privatization
 EPZs(Export Process Zone)
 Substitute of powers(coal, gas, windmills)
 Revival of Industrial policy
 Innovative technology
 Containment of skilled labor
 Theory of Comparative advantage
 Participation in international galas
 Research & Development
 Government projects
Conclusion:
To save the economy from instant collapse government has to
support our young generation so that they can use their creative
ideas into practical fields. They should give more infrastructures to
IT sector and give financial support in all fields. They should take
strong steps to stop terrorism in Pakistan so that the image of
Pakistan becoming better and build their relation with the
developed countries of the world.

“LET US UNITE AND FIGHT FOR

“OUR PAKISTAN”……….

BETTER PAKISTAN”