Role of Trade and IndustryRole of Trade and Industry In Economic Development of In Economic Development of

Pakistan. Pakistan.

Presented byPresented by Afshan Jamil (BBC-08-03)Afshan Jamil (BBC-08-03) Ammar Hassan (BBC-08-15)Ammar Hassan (BBC-08-15)

Types of EconomiesTypes of Economies

Raw Material Exporting Economy. Raw Material Exporting Economy. ( Saudi Arabia Oil)( Saudi Arabia Oil)

Subsistence Economy. ( Few Subsistence Economy. ( Few opportunities)opportunities)

Industrializing Economy. Industrializing Economy. ( Developing Countries)( Developing Countries)

Industrial Economy. ( Developed Industrial Economy. ( Developed Countries)Countries)

Innovation PhasesInnovation Phases The factors of production, usually summarized in the The factors of production, usually summarized in the

categories of labor, capital and nature in economic categories of labor, capital and nature in economic theory constitute the productive resources of the theory constitute the productive resources of the country.country.

First Wave First Wave 1785-1845 60 Years Water 1785-1845 60 Years Water Power; Textiles; IronPower; Textiles; Iron

Second Wave Second Wave 1845-1900 55 Years Steam 1845-1900 55 Years Steam Rail, Steel.Rail, Steel.

Third Wave Third Wave 1900-1950 50 years 1900-1950 50 years Electricity, Chemicals, Internal-combustion EngineElectricity, Chemicals, Internal-combustion Engine

Fourth Wave Fourth Wave 1950-1990 40 Years 1950-1990 40 Years Petrochemicals, Electronics, Aviation.Petrochemicals, Electronics, Aviation.

Fifth Wave Fifth Wave 1990-2020 30 years Digital 1990-2020 30 years Digital Networks, Software, New Media.Networks, Software, New Media.

INDUSTRIAL SECTORINDUSTRIAL SECTOR

Pakistan rank Pakistan rank 4141stst in in the world and the world and 5555thth worldwide in the worldwide in the factory output.factory output.

Industries contribute Industries contribute 24% 24% of the GDP.of the GDP.

Industrial production Industrial production growth rate growth rate 6%.6%.

Major Industries in Major Industries in PakistanPakistan

Textile Textile FertilizerFertilizerCementCementOil refineriesOil refineriesBeveragesBeveragesClothingClothingFood processingFood processing

Types of Industries In Types of Industries In PakistanPakistan

Large Scale Manufacturing Large Scale Manufacturing Industries.Industries.

Small Scale Manufacturing Industries.Small Scale Manufacturing Industries.

Large Scale Manufacturing Large Scale Manufacturing IndustriesIndustries

67.1% of total manufacturing sector.67.1% of total manufacturing sector. 17.1% growth rate.17.1% growth rate. 18% contribution to GDP.18% contribution to GDP.

Major Large Scale Major Large Scale Manufacturing Industries In Manufacturing Industries In

PakistanPakistan Fertilizer IndustryFertilizer Industry

11 industries total11 industries total 6 in Punjab6 in Punjab 3 in Sindh3 in Sindh 2 in N.W.F.P2 in N.W.F.P Producing Nitrogenous & Phosphatic Producing Nitrogenous & Phosphatic

fertilizers.fertilizers.

Textile IndustryTextile Industry 8.5%8.5% contribution to GDP. contribution to GDP. Covers Covers 46%46% of total Industrial Sector. of total Industrial Sector. Providing Hosiery, Cloth, Ready-Made Providing Hosiery, Cloth, Ready-Made

garments.garments. 3% 3% of United States imports regarding of United States imports regarding

clothing and other form of textiles are clothing and other form of textiles are covered by Pakistan.covered by Pakistan.

Textile exports share in total export of Textile exports share in total export of Pakistan has Pakistan has declineddeclined from from 67% in 1997 to 67% in 1997 to 55% in 200855% in 2008

Vegetable & Ghee IndustryVegetable & Ghee Industry

Major share by Private Sector.Major share by Private Sector. 155 units.155 units.

Sugar IndustrySugar Industry

77 Large Sugar Plants.77 Large Sugar Plants. The productivity is very much in-The productivity is very much in-

efficient ( 2003-04 a decline from efficient ( 2003-04 a decline from 5.5 5.5 to4 million tons to4 million tons production)production)

38 sugar plants in Punjab.38 sugar plants in Punjab. 32 in Sindh.32 in Sindh. 6 in NWFP6 in NWFP 1 in Azad Jammu and Kashmir1 in Azad Jammu and Kashmir

Cement IndustryCement Industry

27 large Cement Plants.27 large Cement Plants. Productive Capacity of 17.6 million Productive Capacity of 17.6 million

tons.tons. An increase in demand from 7.7 million An increase in demand from 7.7 million

tons to 9.8 million tons during the last tons to 9.8 million tons during the last 6-7 years.6-7 years.

Mainly due to Mainly due to increaseincrease constructional constructional expenditures, expenditures, decreasedecrease in public in public sector development.sector development.

Automobile IndustryAutomobile Industry

The total contribution of Auto industry The total contribution of Auto industry to GDP in 2008 is 2.8% which is likely to GDP in 2008 is 2.8% which is likely to increase up to 5.6% in the next 5 to increase up to 5.6% in the next 5 years.years.

18 units working in country.18 units working in country. Major increase due to the rise in Major increase due to the rise in

demand of cars in the country demand of cars in the country probably due to leasing & car probably due to leasing & car financing.financing.

Paints and Varnish IndustryPaints and Varnish Industry

22 units in organized sector and 400 units in 22 units in organized sector and 400 units in unorganized sector.unorganized sector.

By organized sector it means that sector whose By organized sector it means that sector whose records are available and includes firms records are available and includes firms organized as companies, payments made via organized as companies, payments made via the banking system, incomes reported to the the banking system, incomes reported to the tax authorities, sales reported to the VAT tax authorities, sales reported to the VAT authorities, and employment reported to the authorities, and employment reported to the National Insurance authorities.National Insurance authorities.

Due to revival of housing sector a 50% demand Due to revival of housing sector a 50% demand is met by organized and 50% by unorganized.is met by organized and 50% by unorganized.

CNG IndustryCNG Industry Pakistan is one of the largest users of Pakistan is one of the largest users of

CNG (CNG (compressed natural gas) in the ) in the world.world.

More than More than 2,900 CNG stations2,900 CNG stations are are operating in the country in operating in the country in 85 cities85 cities and towns.and towns.

IT IndustryIT Industry

Total number of IT companies Total number of IT companies increased to 1306 and the total increased to 1306 and the total estimated size of IT industry is $2.8 estimated size of IT industry is $2.8 billion.billion.

2007, Pakistan was for the first time 2007, Pakistan was for the first time featured in the featured in the Global Services Global Services Location IndexLocation Index by by A.T. Kearney..

Communication IndustryCommunication Industry Pakistan Telecommunication Company Ltd has has

emerged as a successful emerged as a successful Forbes 2000 conglomerate with over US $1 billion in sales in conglomerate with over US $1 billion in sales in 2005.2005.

Mobile telephone market has exploded Mobile telephone market has exploded fourteen-fold since 2000 to reach a subscriber fourteen-fold since 2000 to reach a subscriber base of 91 million users in 2008.base of 91 million users in 2008.

Contribution of telecom sector to the national Contribution of telecom sector to the national exchequer increased to Rs 110 billion in the exchequer increased to Rs 110 billion in the year 2007-08 on account of general sales tax, year 2007-08 on account of general sales tax, activation charges and other steps as activation charges and other steps as compared to Rs 100 billion in the year 2006-07.compared to Rs 100 billion in the year 2006-07.

Problems of Large Scale Problems of Large Scale Manufacturing IndustriesManufacturing Industries

Provided consumers with lower quality Provided consumers with lower quality and higher prices.and higher prices.

All industrialization was capital intensive All industrialization was capital intensive & employment could not increase.& employment could not increase.

Industrialists earned abnormal profits and Industrialists earned abnormal profits and wasted them despite of re-ploughing wasted them despite of re-ploughing them.them.

Textile sector could not modernize itself.Textile sector could not modernize itself. More political influence on industries.More political influence on industries.

Small Scale Manufacturing Small Scale Manufacturing IndustriesIndustries

75% share in economy.75% share in economy. Provides Jobs to unskilled labor.Provides Jobs to unskilled labor. 80% labor force employed from the 80% labor force employed from the

rural sector.rural sector. Includes carpet making, cloth, Includes carpet making, cloth,

washing, shoe etc.washing, shoe etc. 6.5% of GDP6.5% of GDP

Importance of Small Scale Importance of Small Scale Manufacturing Sector.Manufacturing Sector.

Employment to Women.Employment to Women. Increase in Exports.Increase in Exports. Increase in GDP.Increase in GDP. Ease of establishment.Ease of establishment. Provide experience and skills.Provide experience and skills.

Problems/DrawbacksProblems/Drawbacks

Shortage of finance.Shortage of finance. High production cost.High production cost. Lack of standardization.Lack of standardization. Lack of marketing facilities.Lack of marketing facilities. Irregular supply of raw material.Irregular supply of raw material.

Automobile IndustryAutomobile Industry

Total contribution Total contribution of Auto industry to of Auto industry to GDP in 2007 is GDP in 2007 is 2.8% which is likely 2.8% which is likely to increase up to to increase up to 5.6% in the next 5.6% in the next five years.five years.

Cement IndustryCement Industry

In 1947, Pakistan had four cement In 1947, Pakistan had four cement plant with a total capacity of 0.5 plant with a total capacity of 0.5 million tons.million tons.

Now the cement sector comprising of Now the cement sector comprising of 27 plants is contributing above Rs. 27 plants is contributing above Rs. 30 billion to the national exchequer 30 billion to the national exchequer in the form of taxes.in the form of taxes.

IT IndustryIT Industry

The total number of IT companies The total number of IT companies increased to 1306 and the total increased to 1306 and the total estimated size of IT industry is $2.8 estimated size of IT industry is $2.8 billion.billion.

Pakistan was for the first time Pakistan was for the first time featured in the Global Services featured in the Global Services Location Index and was rated as 20Location Index and was rated as 20thth..

TextilesTextiles

Textile industry is dominated by Textile industry is dominated by Punjab.Punjab.

Textile exports are managed to Textile exports are managed to increased a very decent growth of increased a very decent growth of 16% in 2006.16% in 2006.

ServicesServices

Pakistan’s service Pakistan’s service sector accounts for sector accounts for about 53.3% of GDP.about 53.3% of GDP.

Transport, storage, Transport, storage, communication, communication, finance and insurance finance and insurance account for 24% of account for 24% of this sector.this sector.

Wholesale and retail Wholesale and retail trade account for 30%.trade account for 30%.

Agro-Processing industryAgro-Processing industry

This industry refers to This industry refers to subset of manufacturing subset of manufacturing that processes raw that processes raw material and material and intermediate products intermediate products derived from agricultural derived from agricultural sector.sector.

The role of agro The role of agro processing industry as a processing industry as a sector of economy has sector of economy has multiple facets and in multiple facets and in the course of the course of development. development.

Agro-Processing IndustryAgro-Processing Industry

Upstream industries- Upstream industries- initial initial processing processing

Downstream industries- Downstream industries- further further manufacturing operations on manufacturing operations on intermediate products.intermediate products.

TRADETRADE

Trade has contributed Trade has contributed much more to the much more to the development of the development of the world economies than world economies than any other factor.any other factor.

It is because different It is because different nations interact with nations interact with each other through each other through trade that it tends to trade that it tends to bring about the desired bring about the desired change through the change through the exchange of goods, exchange of goods, services, skills, services, skills, knowledge and knowledge and expertise.expertise.

Foreign tradeForeign trade

Pakistan is a Pakistan is a member of WTO member of WTO (world trade (world trade organization) and organization) and has bilateral and has bilateral and multilateral trade multilateral trade agreements with agreements with many nations and many nations and international international organizations.organizations.

According to World Trade and According to World Trade and Development report 2002 defines the Development report 2002 defines the market dynamism of the products as market dynamism of the products as the high average annual export value the high average annual export value growth.growth.

ExportsExports

Pakistan’s exports Pakistan’s exports increased more increased more than 100% from than 100% from $7.5 billion in 1999 $7.5 billion in 1999 to stand at $18 to stand at $18 billion in the billion in the financial year financial year 2007-2008.2007-2008.

ImportsImports

Pakistan’s imports stood at $30.54 Pakistan’s imports stood at $30.54 billion in the financial year 2006-billion in the financial year 2006-2007, up by 8.22% from last year’s 2007, up by 8.22% from last year’s imports of $28.58 billion.imports of $28.58 billion.

Important Facts About Our Important Facts About Our CountryCountry

Highest Railway Station of Asia.Highest Railway Station of Asia. Gawadar is world`s largest sea port.Gawadar is world`s largest sea port. Khewra is the world`s 2Khewra is the world`s 2ndnd largest salt mine. largest salt mine. Tarbela Dam 2Tarbela Dam 2ndnd largest dam in the world and the largest dam in the world and the

largest earth filled dam in the world.largest earth filled dam in the world. 55thth largest gold mine and largest coal reserves are in largest gold mine and largest coal reserves are in

Pakistan.Pakistan. Most connected country in South Asia with largest Most connected country in South Asia with largest

Tele-dentistry.Tele-dentistry. Largest 6Largest 6thth gas reserve of Asia is in Pakistan. gas reserve of Asia is in Pakistan. POF EYE new corner is the world`s best Gun POF EYE new corner is the world`s best Gun

Technology made in Pakistan.Technology made in Pakistan.