Econpmic Challenges Ang Their Solution

8/11/2019 Econpmic Challenges Ang Their Solution

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Executive Summary

Let us give you a brief overview in simple terms as to what the structure of this economy is? In1947, Pakistan had 30 million people with per capita income of 100$.

Agriculture accounted for almost 50% of economic output with hardly any manufacturing, as allindustries were located in India. Therefore, it was unable to feed 30 million people and wasdependent on PL-480 imports from the USA. From thereon, Pakistan has come a long way.Today with 170 million people, our per capita income in 2008 was 1000$ which was ten timesmore.Pakistan is the third largest exporter of rice in the world and producing enough food grains tofeed its people. 3 million tons of rice is exported every year by Pakistan which is surplus to ourrequirements. Pakistan is also one of the five major textile producing countries in the world. So ifwe measure in relation to where we were vis--vis structure of economy, agriculture has comedown from 50% to 20%. Therefore, out of total national income, agriculturescontribution is just20%, but instead of being deficient in food production, we are actually surplus and that is what

productivity means i.e. by using the same land you produce more from the same inputs, that ishow economic growth takes place. Agriculture is not only crops, within agriculture there hasbeen a significant change. Livestock, dairy, mutton, beef, poultry and similar other products is50% of agriculture output in Pakistan. Pakistan also produces third largest quantity of milk in theworld. So within agriculture sector, there is a change i.e. major crops are only 36% of agriculturevalue added and 14% are minor crops, fisheries, orchards, fruits and vegetables.Thus, we are moving in a direction where the same land and same resources are being usedmore efficiently in order to produce more. As a contrast, agriculture is only 2.5% in the UShaving a population of 300 million, out of which they not only feed the entire population, butalso export to the rest of the world. Therefore, it is important to understand that when it is saidthat agriculture is producing/contributing more, it is the productivity of agriculture rather than

the share of agriculture in GDP. Manufacturing and industry now account for 25% of theincome; when we recall there was not even a single industry worth its name at the time ofpartition. So if we look where we were and where we are, I think the justification for Pakistan interms of betterment of economic conditions of Muslims in this part is very strong. But where wehave failed is that we have not lived up to our potential.In 1969, Pakistan exports of manufactured goods were higher than the combined exports ofIndonesia, Malaysia, Philippines and Thailand. In 1960s Korea emulated Pakistan in its fiveyears planning process. The tragedy is that even a country such as Vietnam which wascompletely devastated by the war has now overtaken Pakistan. Ten years ago, India which wasway behind Pakistan (till 1990s) is now way ahead. As an economist and student ofglobalization, the biggest challenge is: how can we organize ourselves to reach that position

where at least we can be running not at the nine second a mile but at least ten second a mile racewhich is going on in the global economy. Some of the problems and their reforms are discussedin this report.


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Introduction

Economy

The wealth and resources of a country or region in terms of the production and consumption of

goods and services.The large set of inter-related economic production and consumptionactivities which aid in determining how scarce resources are allocated.

The economic problem

All societies face the economic problem, which is the problem of how to make the best use of

limited, or scarce resources. The economic problem exists because, although the needs and wants

of people are endless, the resources available to satisfy needs and wants are limited.

List of International Economic Problems

Economic bubbles and mass business failure Child labour and improper child welfare development Corporate crime and planned economic turmoil

Corporate scandals Corruption Uncontrolled debt Economic disasters Mass economic inequality Energy crises Ethically disputed business practices Financial crises (restricted to the financial sector)


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Uneven income distribution Inflation Market failure (component failure) Monopoly Offshoring and outsourcing

Poverty Economic recessions Social inequality Stock market crashes Unemployment Credit crunch crisis Currency crisis Cycle of poverty Deflation Demographic trap Economic collapse

Economic stagnation Hyperinflation Income deficit Liquidity crisis Middle class squeeze Monetary inflation Crude oil depletion Overpopulation Stagflation State monopoly capitalism Stock market bubble

Current economic problem

Unemployment

Poverty

Terrorism

Increase in cost of production

Lack of confidence of investors due to political instability

Revolts against government in many countries

Energy crises

Inflation

Economic problem due to political instability with in nation and some relationshipproblems with others nations

Technological problems

Poor taxation system

High illiteracy rate

Balance of payment deficit

High intrest rates


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xi) Sectarianism, Extremism, And Target Killingxii) Absence Of Rule Of Law

NOW WE WILL DISCUSS SOME OF THESE POINTS IN DETAIL:

Pakistan is a developing country with limited development in every era due to the problems itface. The major problems faced today by Pakistan as a country are as follow.

1) POVERTY:

According to an analysis conducted by the government of Pakistan. The higher educationcommission of Pakistan shows that the poverty has increased roughly from 30% to 40% duringthe past decade. Consider that if 40%of a countrys population is earning their life below the

poverty-line in which the people are deprived of basic necessities of life such as clothing, shelter,food, education and medication, such families and their children will be forced to think of theirsurvival only.

2) ILLITERACY:

Literacy is defined as persons aged 15 or above who can read and write. According to this

definition, Pakistanis officially reported to have 50% literacy rate. Which means half of itspopulation is illiterate. With such family backgrounds, inflation, poverty and child labor this rateis expected to increase in future. Even for those who are termed as Literate are only able to read and write, which in todays technology oriented world is still considered as illiteracy.

Majority of the people forming the top controlling tier is almost unaware of technologies andtechnical mindset. Thus, causing the country to adopt the new technologies at a snails speed.

3) CORRUPTION AND POLITICAL INSTABILITY:

Pakistan is suffering from a fatal problem known as Establishment. Every vital department in

Pakistan is controlled by the so called Establishment. Establishment is a network of keypositions in almost all the departments in the country. This network provides support and safebacking to their touts to ensure that they remain in control. The roots of this establishment may

very well be deep inside underworld and secret agencies of the dominating nations.It is interesting to note that due to the international interference and manipulation the very samepeople that we label as corrupt just some time ago, blame and rebuke, come back to govern usafter a couple of years again and people welcome them with open arms. A common Englishsaying goes as fool me once, shame on you, and fool me twice, shame on me.This is probably also the main reason why the political process in Pakistan is not let to prosper.Soon after its inception the sincere and loyal politicians were removed from the main stream andonly dummy agents and rubber stamps are put in place, while all the decisions are made outsidethe country.


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4) TERRORISM AND RELIGIOUS EXTREMISM:

The whole world looks at Pakistan, as a land of terrorists. Main reason being an exploitationthrough the religious leaders and reaction of the military operations both internally as well asexternally. China is getting 13 billion dollars as foreign investment because of its stable and

investor-friendly environment where as even tourists are afraid to visit Pakistan due to thesecurity concerns.

Even smaller countries like Romania and Philippines are getting a lot of foreign investments.There needs to be a big shift in the mind set. Pakistani people should move away from theclutches of the religious fanatics and must realize what is best for them and their country.

5) OVERPOPULATION,According to official Pakistani sites (actual figures may be well above the officially reportedfacts), the country has an estimated 2% growth rate which for a country of official population of

160 Million turns out to be roughly around3.2 Million every year.This alarming growth rate is causing immense pressure on head of the families who are tosupport them.

Pakistan is facing the dragon of overpopulation. The growth rate of Pakistan is very high and isamong the highest in the world. Since 1947, the population has become more than triple.Pakistan is almost touching 180 million mark. Population expansion has been a real issue ofconcern for all governments. With limited resources it is very difficult to cater to the needs ofgrowing population. There is a great economic disparity among the people. Poor are committingsuicides out of hunger while rich are busy in amassing more and more wealth. These socialproblems directly affect the masses. The massively increasing population has almost outstrippedthe resources in production, facilities and in job opportunities.

6) UNEMPLOYMENT:

Unemployment is also regarded as a major social problem. Major portion of Pakistans

population consists of youth and a large number of young people who have the ability and arewilling to work are unemployed. Currently rate of unemployment as per official resources is7.4% but according to some private estimates the arte of unemployment is 12%. There are manyreasons of unemployment like influx of machinery that has replaced manpower, lack of newindustries and defective education system. But the impacts of unemployment are more seriousand dangerous. People who dont find work here migrate to other countries with better prospects.Also, people tired of making both ends meet due to unemployment indulge in nefarious activitiesand ratio of crimes increases.

7) INFLATION,Pakistan has a fast developing economy which is making its middle class grow swiftly. This iscreating more need for energy, food and homes and the prices of these things are giganticnowadays.Also with the internationally growing oil prices are causing every item in the country to doubled


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(and in some cases tripled) every year.Rate of inflation was never a two-digit figure in Pakistan, but in recent years it has seen anunprecedented increase. Prices of all consumer products in general and food products inparticular are rocket high. Core inflation soared to 18.85% in first quarter of year 2009 until SBPtook steps to curb inflation through tight monetary policy. Cost of production increased due to

various factors. International increase in oil prices and Pakistans internal unfavourable businessconditions are two important factors responsible for high rates of inflation. Consumer PriceIndex (CPI) as well as Wholesale Price Index (WPI) is at all-time high. In contrast, purchasingpower of masses is at an all-time low

8) Electricity load shedding;Now a days the very big problem face by Pakistan economy is electricity load shedding, Due toshort fall of electricity the industries are in very bad position and almost many of the industriesare shifted in Bangladesh and other countries and on the other hand the people do not ready toinvest in the economy.

9)

Water issues;Water issue with India is also a big problem in the economic development of Pakistan. This issueis since from the independence and not solve till now. Pakistan want to establish new dams butindia stop the water due to this Pakistan facing load shedding problem

10) Export issues;

On the other hand there has been a decline in the unit value of Pakistani exports. WhileFavourable domestic policies and aggressive entrepreneurs can bring about increaseIn the quantity and quality of exportable goods, they have no control on the pricesThey can fetch. These prices are determined in the international markets. TheNarrow export structure under which two-thirds of our exports are cotton andTextile based, does not allow new and non-traditional exports to offset theDeterioration in the unit value of textile exports. While the cynics and pessimistsMay keep on moaning about the lack of an exportable surpluses in the country theFact is that the exportable surplus has been generated by the farmers andBusinessmen of this country, but depressed world prices have not allowed this to beTranslated into higher export earnings.

11) Disinvestments;Another factor that has not so far helped us, is the non-resumption ofForeign Direct Investment inflows at the levels we had envisaged. The HubcoDispute has only recently been resolved, removing a long standing irritant to foreignInvestors. Oil and gas and I.T. investments have just begun to be finalized and willTake some time to materialize. In the meanwhile there have been someDisinvestments for global strategic non-economic reasons which were beyond the Control ofPakistans economic managers.


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12) Political instabilityUnfortunately, over the last 65 years our successive governments have failed to consistentlyfulfill these objectives, resulting in our country missing the economic prosperity which manyother countries have been able to achieve. Whereas, much can be said about the failure of thestate to provide security, transparency and an equitable environment for the private enterprise to

flourish; the economic and social sector performance of Pakistan has also been severelyimpacted by the following:

a) Inability of the successive governments to balance their budgets by increasing tax to GDPratio, reducing non-development expenses and losses of the Public sector enterprises.

b) Negligible expenditures on education and health sectors to develop our most important asseti.e. human resource.

c) Creating a competitive environment of high economic growth by focusing on the productivesectors of our economy such as agriculture and manufacturing, and

d) Focusing on infrastructure and energy sectors to facilitate the economic growth.

Whereas, we have seen efforts in the past to address these weaknesses they have been at bestweak and far between.

The present economic scenario is again infected by the same weaknesses i.e. large fiscal deficits,low expenditure on education and health, chronic electricity and energy shortages, lack of focuson the productive sectors resulting in high inflation, high unemployment and low economicgrowth. We all want a Pakistan which is economically prosperous, institutionally resilient andstrategically oriented. In essence, we want to make Pakistan an economic welfare state. In our

view, a key pre-requisite for an Economic Welfare State is to ensure that a country experiencesequitable and sustainable growth for a prolonged period of time. Look at the examples of Indiaand China where uninterrupted economic growth has changed the whole value proposition ofthese countries.

13) Unfavorable Balance of payment

When the value of exports incease than the value of imports,then bop is said to be unfavorable ordeficit.

REASON FOR BOP DEFICIT

1)

Non value added exports2) Huge expenditure on imports3) Unfavourable terms of trade4) Devaluation5) Consumption oriented society6) Domestic problems7) Import of oil and machinery


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14 ) Adverse terms of trade

The quantities of domestic goods that a country must give up to obtain a unit o importedgoods

Reasons of adverse TOT

1) Production of primary products2) High demand for finished goods3) Rise in prices of imports4) Rise in defense needs5) Reduction in foreign aids6) Rise in forigh debt

15) Poor infrastructure

Many obstacles in economic growth center upon deficiencies of public goods andservices , or, in other words, an inadequate infrastaructure.

1) Sanitation2) Basic medical program3) Education4) Irrigation5) Soil conservation projects6) Construction of highways7) Transportation- communication facilities

Are all essentially nonmarketable goods and sevices yielding widespread spilloverbenefits.

16) Economy Crisis:

In 1947, Pakistan had 30 million people with per capita income of 100$. Agriculture accountedfor almost 50% of economic output with hardly any manufacturing, as all industries were locatedin India. Therefore, it was unable to feed 30 million people and was dependent on PL-480imports from the USA. From thereon, Pakistan has come a long way.

Today with 170 million people, our per capita income in 2008 was 1000$ which was ten times

more. Out of every hundred rupees of our national income, we consume 85 rupees and saveonly 15 rupees, which means that the amount of money which is available to invest foreconomic growth and advancement is too little. Because to grow by 6%, you need at least 24-25% investment rate. In 1990, Pakistans share was 0.2% of the world trade. After 20 years ithas come down to 0.12% in a very buoyant world economy.


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17) INTERNATIONAL INTERFERENCE

India is typically termed as a conventional enemy to Pakistan. As mentioned before the people ofPakistan need to be trained to think positively about their surroundings. We should learn a lessonfrom US and Canadas cross border collaboration to improve their affairs and provide backing,

why cant Pakistan and India enter into such strengthening relationship?

Pakistan can never move forward with its proxy war politics with India and its involvement inthe so-called US War on terrorism. It has to strike peace with India and other neighboringcountries soon so that it can use its resources for its own peoples welfare and focus on its

collective objectives.

Pakistan has more potential to be a developed country earlier than India. It has the resources andtalent.yet it seems to sink lower by the day. India with a billion plus population has a millionproblems to handle. Yet the focus of India has been right and it shows in its 8% economicgrowth. Its time Pakistan learns this lesson and corrects its focus.

18) Stock Exchanges

Stock exchange also depicts a true picture of economic meltdown. Instable political system,dictatorship in its worse form and non-effective democracy badly affect the rates of stocks listedon the three stock exchanges of Pakistan. During this year, many times Karachi Stock Exchangehas plunged to its lowest point in the history of Pakistan. Local as well as foreign investors arehesitant of investing large sums of money in stock exchange in fear of incurring unexpected loss.Stock exchanges showed very poor performance throughout 2008. Situation was so precariousthat government had to freeze the market during last quarter of 2008. Also, recovery state ofstocks is alarming. Earlier when stock market used to plunge, it would recover in few days or

weeks. Now share prices take a nose-dive and take considerable time to generate profits.

19) Tourism

Northern areas of Pakistan have been a place of great tourist attraction. The beautiful hills, thelush green valleys, shimmering lakes and flowing waterfalls brought many a tourist form all overthe world to Pakistan. This contributed to foreign exchange. Tourism Industry was one of thebooming industries of Pakistan. Besides attracting foreign exchange, it also providedemployment to local people. Also, tourist industry was a source of friendly relations with othercountries. Nevertheless, war on terrorism has served as a serious blow to the tourism industry ofPakistan. Local as well as foreign media has projected Pakistan as a dangerous and unsafecountry. Its poor law and order situation has alarmed the tourist and thus Northern areas no morereceive many tourists.

Due to war on terror, local people of war-ridden areas are migrating to other areas of Pakistan.Country has seen the largest migration since independence in 1947. These people have left theirhomes, businesses, possessions and property back home. This large influx of people and theirrehabilitation is an economic burden for Pakistan. Unemployment is already prevalent and now


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the question of providing employment to these migrants has also become a serious concern. Thisportion of population is contributing nothing worthwhile to the national income yet they have tobe benefited from it. This unproductive lot of people is a growing economic problem of Pakistan.

20) P00r tax system in Pakistan

Moreover, tax system in Pakistan is also inefficient and unsatisfactory. Ratio of direct taxes ismore than indirect taxes. Tax evasion is common. The rich are reluctant to pay tax, while thepoor are paying tax even on the purchase of a match box.

21) Health Issues:

Pakistan is facing a health crisis with rising rates of heart disease, diabetes, obesity, and other

non-communicable diseases (NCDs), which disproportionately affect poor families, withpossible side effects of disability and premature death, and worsening poverty as people pay formedical treatment out of their own pockets.

the World Health Organization (WHO) reported 4 million cases of diarrhea, pneumonia, malaria,and skin conditions that had largely resulted from the flood conditions. Cholera outbreaks havealso been reported from flood-affected areas. From Oct. 15 to 22, WHO reported about 258,000consultations for pneumonia, diarrhea, and suspected malaria. Furthermore, dreaded diseasessuch as dengue and Crimean Congo hemorrhagic fevers have been reported from the field, alongwith measles encephalitis and neonatal tetanus

Yousuf Raza Gilani was speaking during high-level talks aimed at preventing a mass healthcrisis. The UN says more than 17 million people have been affected by the floods, with about 1.2million homes destroyed.

22) Government Spends More than it Earns as Revenues.

Fiscal deficit is the difference between the revenues which are collected in a year and the totalexpenditure incurred by the Government. Pakistans government takes away20% of nationalincome as its own. 80% is left in the private sector and 20% in the hands of the government isspent on defence, debt servicing, development on education, health, general administration etc.The revenue generated is only 15% of the GDP at best, and in the worst days it is 12 to 13%. Outof the every rupee of income received by a Pakistani, on average, tax paid is only 9 paisasand 91 paisas remain with the individual. In 2007-2008, Pakistans fiscal deficitwas more than7% which means its income or revenues were only 13% of GDP whereas, expenditures were20%. Therefore, fiscal deficits have to be financed from somewhere, so how do you financethem; you either go again begging the external donors, or to the State bank of Pakistan. Thefinancing provided by the State bank of Pakistan is dangerous because it creates high inflation inthe economy, which is injurious to the middle class, those earning fixed wages and


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salaries, and the poor. Therefore, there is an uproar in the country if the inflation rate goes up. In1999, our Debt to GDP ratio was 100%, which means that the entire national income waspledged as debt. Every single penny was pledged to the creditors. This ratio was reducedgradually over next six to seven years and brought down to 50%, an average for all theeconomies. However, the way the things are going for the last two years, it has moved from 50%

in last two years to 58%, and with all the borrowings it may go to 60%, while the FiscalResponsibility Law 2005 says, that the government should not exceed the debt GDP ratio moreThan 60% and is required to reduce it by 2.5%; and that is not happening. The reason the fiscaldeficit is widening is low revenue collection. How can you expect that only ninepaisasout ofevery rupee of income generated by Pakistani population suffices to meet the requirements ofdefense, infrastructure, development, debt servicing etc. This is just not possible. In India, taxGDP ratio is 15% and still they have fiscal deficit. So Pakistan is way below the norm forDeveloping countries. Many people say that defense takes away a lot of government expenditure.Whereas, the fact is that defense expenditure is only 20% of government expenditure. It is only4% of GDP, and is not such a large expenditure as compared to debt servicing which is 7-8% ofGDP and almost 40% of government expenditure. Therefore, government has to contain its fiscal

Deficit by raising revenues. Agriculture incomes are exempt, professionals, retailers,wholesalers, transport owners and many other service providers evade taxes by paying a smallfraction of what is due. Continuing large fiscal deficits year after year may plunge the countryinto debt trap again.

23) Cost of Doing Business is high. Pakistan is ranked among the bottom halfOf the rankings of the countries where cost of doing business is quite high. It isnot high for any particular reason but because of our bureaucracy totally sittingon their seats without taking actions or decisions in time. Unless there is somepressure or incentive for them, the normal businesses particularly the small andmedium businesses have serious problems at the hands of bureaucracy. Even ifwe have investors who are welcomed by the federal government, when it comesdown to provincial and local governments there are given a run aroundthe landis not available, the water is not available, the gas is not available, electricity isnot available, road is not available. Lack of coordination among variousgovernment agencies, innumerable laws and regulations that are antiquated andoutdated have proved to be serious impediments. Labour laws, inspections bymultiple agencies, the delays in the court system, infringement of intellectualproperty rights and evasion of taxes by competing firms in the informal sectorhave renderedsome of the well established firms unprofitable, or the feasibility of starting near venturesquestionable.

24) Child Labour:-Child labour is the most annoying thing that the children which deserve to be educated and

provided with all their needs are forced to do work especially physics work which is very painfulsite. Child labour is the most serious social economical problem. The circulation of money isrestrained to rich people only causing the poor to become more poor. Whether in bigger cities orin small villages, we find innocent children employed in various forms of labour. They areworking as welders,, plumbers, electricians and in industries like carpet-weaving, glass andfootball making. Insufficient salary is paid to these children and no facilities for education are


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provided. In past, some countries refused to import those goods from Pakistan in whose makingchildren were employed. But despite all these factors, due to growing inflation (rise) andpoverty, parents are bound to send their children to work to light their stoves.

25) Lack of technologyPakistan is facing economic challenges due to lack of command over technology. This is becauseof non availability of latest technology in our economy. Thats why we are lagging behind in

exports because we are producing raw materials due to lack of tehnology.other factor is that iftechnology is available that is mostly outdated on which depreciation cost is quite large. Anotherfactor is that people in pakistan are mostly illetrate,so they dont know the right use of

technology thats why we are lagging behind the other developed countries.

26) High intrest rateAnother economic challenge faced by pakistan is high intrest rate.this is because our governmentis instable and we are facing war against terrorism so there is a situation of high inflation in our

economy because of high dependency on foreign debt. Due to that high intrest rate charged bybanks investment is low which in return affect unemployment. So in this way our economy is soweak.

27) Exchange rate issueWhen the countries do trade with other countries then he pay the amount in the currency ofcountry from which he purchase the goods, so it change its currency to other country currencythis process called exchange rate.


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Solutions of current issues:

1) Solution for poverty:

Policies regarding poverty reduction Marshalled by different government could not calculate the

desire results.Crudely speaking,this is the gravest problem being faced by pakistani nation,if nothandled with diligent care and implicit faith,will swell and devour the entire mechanism of the

state.For a welfare state to get stronger,policies as regards development of poor strata should be

the top of the checklist.i behold a time when we shall be steadily hauling our downtrodden

economy towards heights,provided that we chalk out such policies that not only project the

welfare of effected spots but also transpose their outlook .I propose following measures for

extermination of this menace;

Promote industriallization

replacement of the orthodox agricultural implements with new scientific equipments in

order to increase the yield.

establishment of justice and equality

equal distribution of resources

merit should be the upshot strategy in all walks of life

elimination of discriminatory policies

controlling of inflation and other economic indicators and regulators.

developing investment friendly environment

Giving more feasibilities and concessions to the foreign investors

dumping extremism and feudalism

establishing more and more technical institute in order to get people well skilled.


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prevalence of education

provision of job opportunities

division of agricultural lands among tenants.

maintaining law and order situation in order to protect economic activities

smuggling and other illegal economic activities should be dealt with iron hand.

industrial zones should be established in the areas according to the local economic

preferences.

2) Solution for illiteracy:

The first step is to Increase in the budget of education is must. The medium of instructions

should be one. Gender discrimination to be discouraged and the concept of education for all

should be propagated.

Teacher training programs are also a requirement. Technical education is also must. Sir Syed

Ahmad Khan emphasized upon education to fight the masters and powerful of that time. The

students who understood the importance of education were the flag bearers of Pakistan. Today

the only hope to build Pakistan, fight all the evils and overcome problems depends on our

sincerity to prepare our younger generation to be physically and cognitively strong.

This cannot be accomplished without meaningful and an objective academic background. Such

rock solid foundations of today are the only investment for a secure future.

3) Soluation for unemployment:

Faster economic growth is viewed as a means of generating more jobs.

cuts in real wages -Cuts in real wages are a reaction to the view that through their demands for

higher wages, some groups of workers have priced themselves out of a job ==

Methods of accumulation and dissemination of information on available jobs and workers could

be improved -Swedish model, in which job centers have a nationwide, integrated database ofjobs, employers, and available employees. This type of database could reduce the time spent by

an average worker on the unemployment roll and thus reduce the unemployment rate ==

unemployment agencies could tighten their job search and job acceptance requirements

here could be improvements to the education and training provided to young people, with a

greater focus on vocational skills ==


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countries need to ensure that their welfare systems do not provide disincentives to work

policies affect the labor market by reducing the supply of labor - For example, work sharing,

early retirement, and reduced migration

4) Solution to control adverse BOP:

the following measure should be taken to control the advers BOP

Labour Intensive Industries

Reduction in Export Duties

Quality Products

Export Marketing

REDUCTION IN IMPORTS

Decrease in Consumption

Population Control

5) Solutions for Educational System:

Estimating the value of education, the Government should take solid steps on this

issue. Implementation instead of projecting policies, should be focused on. Allocation of

funds should be made easy from provinces to districts and then to educational institutes.

Workshops must be arranged for teachers. Foreign states are using LSS system. This

should be inducted in Pakistani schools to improve the hidden qualities of children.

Technical education must be given to all the classes. The education board of Punjab have

projected a plan to give tech- education to the children of industrial workers. Promotion

of the primary education is the need of time. Teachers, professors and educationists

should be consulted while devising any plan, syllabus or policy. The state seems to give

up her responsibility and totally relying on private sector. The need of time is to bring

education in its original form to masses. Burdening a students with so much books will

not work as he will not understand what the world is going to do next moment. Education

is the only cure of the destability in the state and can bring revolution through evolution,by eradicating the social evils. This is how to remove illiteracy in Pakistan.

6) Solutions For Agricultural Problems In Pakistan:

Feudalism should be abolished and lands should be allotted to poor farmers. This will enhance

the productivity and per acre yield of all the crops in Pakistan. Taxes should be levied on

Agricultural income but not without devising limit of land holding. Other wise it would directly

effect poor farmers.


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Federal Seed Certification and Federal Seed Registration is approved but it should taken

responsible steps in approving seeds as it has already approved 36 new kinds of seeds. Specially,

those seeds should be banned which can create pest problem in near future. These seeds are of

cotton mainly. International seed makers are providing those seeds which are not successful in

our country as these seeds are not tested on our soil.

A new Agricultural policy must be framed in which following steps should be focussed on.

Small farmer must be focused. The major problems of small farmers should be solved first.

Consumer friendly policy must be projected.

Productivity enhancement programme must be constituted to adjust and support prices.

Different Agricultural zones should be introduced. As Multan in famous for its Mangoes and

citrus fruits so it must be made Mango, citrus zone by which Perishable products should be

exported. This would enhance agro based industry and increase foreign reserves. PakistanAgricultural storage & Services Corporation needs to take steps in this regard.

7) Solutions for inequality problems

The gap between the rich and the poor must be decreased by ensuring equal distribution ofwealth.

Dispensation of free and quick justice be ensured by strengthening judiciary. There is a sheer need to curb corruption at all levels. The institutions of NAB and FIA

should be made more powerful to curb corruption The curriculum of schools need be reviewed so that children can receive scientific and

secular education in their mother tongue. In addition, there is need to develop critical andcreative thinking.

Health care education and free health care needs be provided to all citizens. Provision of equal rights to all citizens especially women and minorities be ensured. Poverty alleviation programmers be initiated to reduce poverty and child labour. Population growth is controlled by spreading awareness about the advantages of small

families among the masses through media. Energy crisis must be resolved on priority basis to revitalize the dying economy. New dams should be built and new methods of producing electricity should be utilized. Youth be equipped with technical education and new industries be set up to

8) Solution of poor infrastructure

Government is the only sole institution in a position to provide the good infrastructure inrequired quantities. Because good infrastructure proves to be the back bone of an economy.

9)Building up of Human Capital. There is no substitute to building up humancapital. Private sector, public sector, NGOs, local communities, philanthropistsetc, all here to put their hands on deck and participate in making sure that every


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child goes to school. Every high school graduate has some technical andvocational skill or goes for higher education. Unless we build up human capital,we are just going to be left behind because the world economy is going to be aknowledge based economy. It is not an economy where you memorize materialor reproduce that in the exam and forget about it - that is no longer the case. One

has to acquire the knowledge and use it in order to apply to problem solving. Thisis a new paradigm where human capital is as important as machinery andequipment. Pakistan lags behind other countries in the institutions, infrastructure and incentivesfor human capital formation. We have no choice but to accelerate the pace to catch up withothers.

10)Use of Technology. The technology is spreading like a wild fire. How manypeople five years ago could have thought that even in a small towns and villagesof Pakistan, one would access to mobile telephones. 95 million Pakistanis havemobile phones today. You can use this technology in order to provide thembanking services, information on climate/weather, agriculture extension, health,education etc. It is a powerful tool which can leapfrog a lot of time which we have

wasted. Using technology particularly the information/communication technologyfor the betterment of social and economic problems of Pakistan is somethingwhich needs to be done but it cannot be done the way we havecompartmentalized this into different ministries. A more holistic and comprehensive approachthat deploys technology for poverty reduction has to be put in place.

11)Young Labour Force. Pakistan is one of the few countries which has a younglabour force which can be harnessed for its own and global economy. Japan,Europe, USA and after 2050 China are going to have aging population where theratio of old to young people is going to increase. India and Pakistan are twocountries where the ratio of younger people to the older ones is going to

increase. If we tool these young men and women properly, we increase thefemale labour force participation, give them skills and knowledge, they canbecome the labour force for the rest of the world. This will give a big boost toPakistans own economy. In 2001, worker remittances were less than a billiondollars; today we have almost 7-8 billion dollars. Now this can be multiplied bythree or four times if we have educated labour force i.e. skilled labour force goingfor overseas employment. This is also a way to create employment opportunitiesbecause if you have large number of younger people coming to labour force andyou dont have job opportunities for them you can have social upheaval. Therefore, it isimperative to create employment opportunities for them and one of the avenues is to train themin the kind of the skills which are needed not only by the national economy but also by the

international economy.

Opinion

Thanks a lot to ALLAH ALMIGHTY Our country is full of natural beauty.There must not be inflation in our country due to falling prices we are facing a lot of problems.Listen if we trade something some goods to RUSSIA if we directly send goods to them within 50days but if we deal first with IRAN than within 7 days we can send goods to them. So we are in


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need of good relation to other countries in this way we can get benefit from trade with othercountry.As a matter of foreign loan we are in need of 10 billion and it is also a fact that we are notdeveloped country.So it is need of time that we must believe in self _dependence and if we depend upon others we

can never get what we desire and need.If we put a glance on our history we come to know that our Govt. and person who come inauthorities take loan and never pay back.

Then it create burden on us and under this burden. We have to pay what our Govt. took and thatis main point that we are under the influence of others. International origination are not listing usbecause we have to pay and alas! Ah alas our coming generation also.As we come to another aspect Smuggling, black marketing, hoarding, adulteration have caused aserious setback to our economy.Literacy rate is very low in our country people are generally illiterate they dont know about

modern trade and means. Unemployment is acute in our country and it is our misfortune that

some percentage of our country is literate but unemployed.Poverty is the mother of evils and social evilsIn order to overcome these problems and make our economy strong and strong political systemshould be established in our country.Democrat setup must be in our country there should be investment in our country and local &foreign investors must be attracted by our terms and conditions which we offered and it is needof time to expand small local network of industries and we are proud that our handmade goodsare liked by the four corner of the world.It is also necessary to check funds and aid which we take from foreign countries.We want to suggest that accountability process should be active, transparent and quick for thesake of economic development. If we take into account about the needs of basic infrastructureand by taking all these necessary steps we can develop our Park-economically, politically &socially.We are proud of our PakistanProblems are everywhere, if we see and observed America which is a developed country in theconcept of people it is also facing problem of unemployment.

Following are the policy which govt. has to implement

The most important govt. impose a low amount of tax on every people in the country ,in

result govt. revenue increase like govt. impose tax of 20 Rs. On all people. Our countrypopulation is 18 crore if we calculate the amount of tax of a single day its a good

increase in govt. revenue Develop the habit of forced saving through increasing the interest rate

Revise the monetary policy

Increase the budget for education

Increase the excise duty on luxuries goods

Reduce the excise duty on capital goods

Locate a place for industry which is tax free zone

Govt. invest in the area where private sector is fail to perform


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Sign tax free trade agreement with other countries to enhance trade

Increase the prices of goods with in the country to remove the smuggling in the country

Motivate the foreign investor to invest in country

Improve the small industry like blue painting which has a high demand in westerncountries

Exchange rate effect when the countries do trade with eachother they require to changetheir currency in other countrys currency. The exchange rate change quite rapidly and

mostly the currency of developing countries is devaluated so the developing contries beara loss.

But we have spirit, hard work, faith in ALLAH AND NABI PAK (PBUH) and In Sha ALLAH.

Very soon we will change our Pak fate. With the help of ALLAH ALMIGHTY.

Proud of being Pakistanis

Documents

Econpmic Challenges Ang Their Solution