Contributed by Rabia Khaliq
LAHORE: The outcomes of the outgoing fiscal year indicate that Pakistan\'s upbeat economic momentum remains on track. The economic growth accelerates to 7.0 percent in 2006-07 at the back of robust growth in agriculture, manufacturing and services.
Pakistan\'s growth performance over the last five years has been striking. Average real GDP growth during 2003-07 was the best performance since many decades, and it now seems that Pakistan has decisively broken out of the low growth rut that it was in for more than one decade. Economic growth has been notably stable and resilient. With economic growth at 7.0 percent in 2006-07, Pakistan\'s real GDP has grown at an average rate of 7.0 percent per annum during the last five years (2003-07) and over 7.5 percent in the last four year (2004-07) in running. Compared with other emerging economies in Asia, this puts Pakistan as one of the fastest growing economies in the region along with China, India, and Vietnam.
With economic growth at 7.0 percent in the current fiscal year, Pakistan\'s economy has grown at an average rate of almost 7.0 percent per annum during the last five years. This brisk pace of expansion on sustained basis has enabled Pakistan to position itself as one of the fastest growing economies of the Asian region. Real GDP grew strongly at 7.0 percent in 2006-07.
Highest ever foreign investment flows at around $6.5 billion, emerging as the single largest source of external finance after exports was seen.
Large-Scale Manufacturing: This sector registered a growth of 8.8 percent in 2006-07 against the target of 12.5.0 percent and last year\'s achievement of 10.7 percent. As a result of structural transformation, the share of agriculture in GDP has declined by 3.2 percent in the last 6 years alone and the share of the manufacturing sector has increased by 3.1 percentage points in the same period.
Agriculture: The performance of all the sub-sector of agricultural remained robust with the exception of minor crops and fishing. Major crops witnessed an impressive growth of 7.6 percent as against a negative growth of 4.1 percent last year. Livestock, a major component of agriculture, exhibited signs of moderation from its buoyant growth of 7.5 percent last year to 4.3 percent in 2006-07.
Services Sector: The services sector grew by 8.5 percent in 2004-05, by 9.6 percent in 2005-06 and by 8.0 percent in 2006-07.
Finance and Insurance Sector: It spearheaded the growth in the services sector and registered stellar growth of 18.2 percent during the current fiscal year 2006-07 which is slightly lower than 33.0 percent of last year.
Per Capita Real GDP: Pakistan\'s per capita real GDP has risen at a faster pace during the last four years (5.5 percent per annum on average in rupee terms) leading to a rise in average income of the people. Such increases in real per capita income have led to a sharp increase in consumer spending during the last three years. As opposed to an average annual increase of 1.4 percent during 2000-2003, real private consumption expenditure grew by 12.1 percent in 2004-05 but declined in the subsequent two years to 3.3 percent in 2005-06 and 4.1 percent in 2006-07.
Poverty and Unemployment: This period contributed to approximately 13 million people moving out of poverty. Growth alone does not suffice to reduce poverty levels. It has to be reinforced by job creation, Since FY 02, the economy created 10.62 million jobs, thereby reducing the open unemployment rate to 6.2 percent by FY 05-06. Foreign inflows in the form of remittances also have salutary impact on poverty. An appreciable decline in poverty rates has occurred between 2000-01 and 2004-05. At the national level, headcount decreased from 34.46 percent in 2000-01 to 23.94 percent in 2004-05, depicting a substantial reduction of 10.52 percentage points over this period.
Literacy Rate: In the recent years, the literacy levels in Pakistan have improved over time albeit at a moderate pace. The overall literacy rate (10 years and above) was 45 percent in 2001 which has increased to 54 percent in 2005-06, indicating a 9.0 percentage points increase over a period of only five years. The literacy rate for non-poor went up from 51 percent in 2001 to 59 percent in 2005 whereas for poor it improved from 30 percent to 40 percent in the same period.
Health Sector: A considerable improvement in health sector facilities over the past year is reflected in the existing vast network of health care facilities which consist of 4712 dispensaries, 5,336 basic health units/sub health centres (BHUs/SHCs), 560 rural health centres (RHCs), 924 hospitals, 906 maternal and child health centres (MCHs), and 288 TB centres (TBCs). Available human resource for the fiscal year 2006-07 turns out to be 122798 doctors, 7388 dentist and 57646 nurses which make the ratio of population per doctor as 1254, population per dentist as 20839 and population per nurse as 2671.
Labour Force Participation Rate: In Pakistan, the labour force participation rate is measured on the basis of Crude Activity Rate (CAR) and Refined Activity Rate (RAR). The CAR is the percentage of the labor force in the total population while RAR is the percentage of the labour force in the population of persons 10 years of age and above. The labor market in Pakistan demonstrates a lower labor force participation rate (LFPR). It has been in the range of 28.6 percent to 32.3 percent over a decade; even the RAR is low and hovered at 43 percent over a decade. It is nevertheless important to point out that both these ratios are increasing in recent years.
Debt Burden: Across all measures of vulnerability to external shocks, Pakistan\'s debt profile has improved significantly over the past year. Public debt declined from 56.9 percent to 53.4 percent of GDP and external debt and liabilities declined from 29.4 percent to 27.1 percent.
Remittances: During the year highest ever workers remittances at around $5.5 billion were achieved.
Conclusion: Pakistan\'s performance with regard to social development has so far been disappointing. During the 1990s, Pakistan was faced with growing macroeconomic imbalances, declining economic growth, and rising poverty. The events following 11 September had a major adverse impact on Pakistan\'s fiscal and external balances that threatened to jeopardize the progress made in stabilisation and structural reform.
We have to care not only for Pakistan but for the whole world as it is the need of the hour that we all no matter from where we belong to, must care for the attainment of education by the children of this world. It is really sad to know that 115m children around the world are not in school. Poor kids often cannot go to school because they need to work (child labour) to help their families to survive.
Policy Recommendations: As literacy rate is very much influential in lowering the socio-economic differentials, so to improve the poor situation of economy of Pakistan following recommendations are given:
To improve the educational status of women, there is a need to open more schools and to change social attitudes about female education. In a traditional society such as Pakistan\'s, particularly in rural area, there are some reservations about co-education. There exist \"ghost\" schools and there is a shortage of girls\' schools.
As we know that our country is poor and so is its natives apart from the minute chunk of riches so the education which is to be provided to the children of Pakistan must be of free of cost. Free education does not mean to lack in the quality. So the government should take into account and must ensure good quality of education as it is the only way to development. Most important of all is that we must think ourselves as a nation and not as an individual. Every citizen should take and fulfill his responsibilities. Parliamentarians are also a part of the public.
Employment opportunities should also be created for women, particularly for illiterate women in rural areas, by making provision for skills training and \'soft credit\' facilities.
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