Contemporary
Pakistan
Subtitle
Economic Institutes
3 07/31/2024 Add a footer
Economic Issues
A country where the average income of the people is
much lower than that of developed countries, the
economy depends upon a few export crops and where
farming is conducted by primary methods is called
developing country. Rapid population growth is
causing the shortage of food in many developing
countries. Criteria to an Under-developed Nation:
5 07/31/2024 Add a footer
General Poverty and Low Living Standard.
Poverty cannot be described, it can only be felt. The
most of the less developed countries (LDC) are facing
the major problem of general as well as absolute
poverty and low standard of living. Most of the people
in developing nations are ill-fed, ill-housed, ill-clothed
and ill-literate. In LDCs almost 1/3 population is much
poor. But in Pakistan, 21.0 % population is living below
poverty.
6 07/31/2024 Add a footer
Burden of Internal and External Debts
Under developed countries (UDC) are loans and grants
receiving nations. Most of the developing countries of the
world are depending on foreign economic loans. An amount of
foreign loans is increasing as the years pass. Their foreign trade
and political structure is also dependent on the guidance of
foreigners. The outstanding total public debts are Rs. 12024
billion (58.2% of GDP) and the value of external debts and
liabilities is $ 60.3 billion and services charges on all types of
debts are Rs. 730.733 billion during 2011-12, in Pakistan.
7 07/31/2024 Add a footer
Low Per Capita Income
Due to low national income and huge population
growth rate, per capita income in developing countries
is very low. At constant prices (Base Year 1959-60) per
capita income of Pakistan was Rs. 985 and according
to the Economic Survey of Pakistan 2011-12 per capita
income of Pakistan is $ 1372.
8 07/31/2024 Add a footer
Over Dependence on Agriculture
61% Population of Pakistan is living in more than
50,000 villages. Backward agriculture is the major
occupation of the population. Agriculture sector is
backward due to old and traditional methods of
cultivation, in-efficient farmers, lack of credit facilities;
un-organized agriculture market etc. 66.7% population
is directly or indirectly depending on agriculture sector
in Pakistan. It contributes to GDP 21.0% while in
advanced nations it is less than 5 %. It employed 45.0
% of labour force while it is less than 5 % in developed
countries.
9 07/31/2024 Add a footer
Backward Industrial Sector
Backward industrial sector is an additional feature of
under developed countries. Industrial sector of
Pakistani economy is backward since independence.
Pakistan got only 34 (3.7 % of total industrial units)
industrial units out of 921 units in sub-continent in
1947. Small and backward industrial sector is based on
low level of capital formation, technology, training and
education and over dependence on agriculture sector.
13.7% labour force is attached with industrial sector in
Pakistan. Its share to GDP is 25.4 % and to exports is
more than 60 %.
10 07/31/2024 Add a footer
Unemployment
An outstanding problem of developing countries is their high
rate of un-employment, under-employment and disguised-
unemployment. More than 3.5 million people are unemployed
in Pakistan. There is 16 % underemployed and 20% disguised
unemployed of total labour force. Unemployment rate is 6.0%;
it is mainly due to high population growth rate, which is 2.03%
11 07/31/2024 Add a footer
Low level of Productivity
The productivity level is very low in under developed
countries as compared to developed countries. Low
level of productivity is due to economic backwardness
of people, lack of skill, illiteracy and ill-training. Value
of annual productivity of labour is about $ 100 while it
is more than $ 2500 in advanced nations in Pakistan.
Minimum wages are Rs.8000/- per month against the
average gross salary of $3,950 (Rs.3,79,200) per month
in United States.
12 07/31/2024 Add a footer
Deficit Balance of Payment
Third world countries have to import some finished
and capital goods to make economic development, on
the other hand they have no products to export but
raw material. During July-April, its exports were $
20.474 billion and imports were $ 33.15 billion in case
of Pakistan. So, its deficit balance of payment was $
12.68 billion in 2011-12.
13 07/31/2024 Add a footer
Dualistic Economy
Dualistic economy refers to the existence of advanced
& modern sectors with traditional & backward sectors.
Pakistani economy is also a dualistic economy as other
developing countries on the following grounds: Co-
existence of modern and traditional methods of
production in urban and rural areas, Co-existence of
wealthy, highly educated class with a large number of
illiterate poor classes and Co-existence of very high
living standard with very low living standard.
14 07/31/2024 Add a footer
Deficiency of Capital
Shortage of capital is another serious problem of poor
nations. Lack of capital leads to low per capita income,
less saving and short investment. National saving is
10.7% of GDP and total investment is 12.5% of GDP in
Pakistan. Rate of capital accumulation is very low as
5%. On the other hand, capital output ratio (COR) is
very high which is not desirable for economic
development.
15 07/31/2024 Add a footer
In-appropriate Use of Natural Resources
Mostly there is shortage of natural resources in
developing nations and this is also a cause of their
economic backwardness. Natural resources are
available in various poor countries but they remain un-
utilized, under-utilized or mis-utilized due to capital
shortage, less efficiency of labour, lack of skill and
knowledge, backward state of technology, improper
government actions and limited home market. Natural
resources contribute to the GDP about 1%.
16 07/31/2024 Add a footer
Limited Foreign Trade
Due to backwardness, developing countries have to
export raw material because the quality of their
products is not according to international standard ISO
etc. Lower developing nations have to import finished
and capital goods. Imports of Pakistan are $ 33.15
billion and exports are $ 20.474 billion that cause into
unfavourable balance of payment of $ 12.676 billion.
17 07/31/2024 Add a footer
Inflation
High rate of inflation causes economic
backwardness in poor nations. Due to high level
of price, purchasing power, value of money and
saving of the consumers tend to decrease. Rate
of inflation (CPI) is 10.8% in 2011-12 in Pakistan.
18 07/31/2024 Add a footer
Poor Health and Diseases
M. P. Todaro in his “Economic Development” states,
“Many people in developing countries fight a constant
battle against malnutrition, diseases and ill health”.
Average life expectancy in Pakistan is 65.2 year against
75 years in developed countries. One Doctor is for 1206
persons and one Nurse is for 2369 persons, one Dentist
for 16420 persons, number of hospitals is 972 and one
hospital bed is available for 1665 persons. The total
expenditure on health sector is just 0.27 % (Rs. 55.12
billion) of the GDP.
19 07/31/2024 Add a footer
Inadequate Infrastructure
Adequate infrastructure is needed which is not
available in poor economies to enhance the process of
economic development. Roads, transport,
telecommunications, sanitation, health and education
facilities are not at their best level in these nations.
Government has reserved an amount of Rs.133 billion
to develop the infrastructure. C. Cultural and political
characteristics: Following are the cultural and political
characteristics of LDC’s:
20 07/31/2024 Add a footer
High Degree of Illiteracy
Illiteracy rate is very high in poor countries while it is
almost zero in rich countries. There is lack of technical
education and training centers, which is necessary for
economic growth and development. Literacy rate in
Pakistan is 58% during 2011-12. Expenditure on
education sector is just 1.8 % of GDP during last year.
21 07/31/2024 Add a footer
Un-productive Expenditures
Population mostly copies the styles of population of developed nations due to
demonstration action in poor economies. Their consumption activities not only
move around their income but also depend upon the relatives, friends and
locality. They spend more on birth, death, marriages and various other
ceremonies etc. which reduces their savings and investment
22 07/31/2024 Add a footer
Political Instability
There is political instability in the most of the
developing countries. There are a lot of clashes
between government and the opposition that is a
cause to reduction in domestic as well as foreign
investment. Political instability keeps low the level of
economic development.
23 07/31/2024 Add a footer
Social Structure of
Pakistan
Pakistan social structure
• A social class is a homogenous group of people in a society formed on the
combined basis of
1. Education
2. Occupation
3. Income
4. Place of residence
• And who have similar social values similar interest in life The social classes of
Pakistan
1. Upper social class
2. middle social class
3. working social class
25 07/31/2024 Add a footer
Upper social class
• High level of income
• High paying profession
• Living in most cleanest place of country
• Their size is 2% of total society
• Approx. 3.7 million they have 60% to 65 % of money of country.
• Examples:
1. High leader ship
2. Big Business Man
3. Top Management of the country
26 07/31/2024 Add a footer
Middle social class
• Their income is not so high
• They are hard workers for their goals
• Their level of wishes is not so much top class
• Their population is 28% out of total population
• Their population is 53% to 54% of total population
• Examples:
1. They are small to medium size business man.
2. Middle management
3. Low ranking govternment office
27 07/31/2024 Add a footer
Working Social Class
• They not much educated
• They are not in accusative profession
• Their income is low
• They build their homes hardly 2 rooms
• Their size is 20% of out of the total population
• Examples:
1. They are few and far between in any society.
2. They exploit poor
3. They have common notion to make profit at the expense of teeming poor.
28 07/31/2024 Add a footer