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Pakistan was founded in 1947 after the collapse of British rule. Muhammad Ali Jinnah, who died in 1948, was its first president while its first Prime Minister was Liaqat Ali Khan who was assassinated in 1951. These two deaths is the primary reason why Pakistan has experienced a seemingly never-ending political instability and slow economic growth. Pakistan covers an area of about 803,943 square kilometers. Its most important economic cities are Islamabad and Rawalpindi with a combined population of around 4 million. Other cities are Karachi, Lahore, Faisalabad and Hyderabad. For starters, the people of Pakistan are referred to as Pakistani. As of 2008, the total population was about 167,762,040. It has seven main ethnicities: Sindhi, Hazara, Muhajir, Balochi, Punjabi, Saraiki and Pashtun. Pakistan is dominantly Muslim, accounting for about 97% of the total population. The national and official language of Pakistan is Urdu (US Department of State). This paper will give a brief country profile of Pakistan.
We can define globalization as the unification and the interconnection of the world cultures and especially the economies. This is achieved via international investments and the dynamic changes in the information technology sector. Globalization has been made possible by the introduction of free markets to not only the local people and companies but also to regional and foreigners and international companies. Nowadays, information about people, geography, goods and services, cultures, politics and economic development of a country is readily available (Xenia, 2009). Globalization is a phenomenon that many countries have come to embrace. However, globalization elicits three different opinions; there are those that cite the declining involvement of governments in running of markets (hyperglobalists) as economies are effectively being run by global finance and forces like corporate capital leading to a global economy, there are skeptics who believe that, in essence, the world is being divided into different politico-economic clusters under which many kinds of capitalism still exist. The transformationalists believe that there’s no logic, either in terms of markets or economies, that causes globalization and that the outcomes arising from globalization are not yet determined (Held et al). As a member of WTO, IMF and World Bank, it’s clear that Pakistan takes a hyperglobalist view on globalization as it tends towards a more integrated world economy.
As it is common with many 3rd world countries, women in the past have taken a back seat when it comes to running the economy. This is because most of them take on house hold chores. But with globalization, cultures are also being integrated. Therefore, women from Pakistan have started to take up activities that will boost their economic well being, just as their counterparts in the developed countries. As a result, globalization is held in high esteem among people clamoring for more feminist economies.
Pakistan’s economy has been dynamic and is mostly dominated by the public. Due to its membership to The World Trade Organization (WTO), which advocates for free markets, the government involvement in the running of markets has been limited to some extent. Therefore, Pakistani institutions are playing a major role in driving the economy. However, the economic growth has been very slow. This can be attributed in part to the 1998 economic sanctions it had to endure, the never ending political instability, its fractious relationship to its neighbor India and it has also suffered from terrorism activities. On a good note, the overall inflation rate has been checked (Xenia, 2009).
Pakistan’s economy has suffered heavily due to its political instability. Additionally, its export revenues have been declining and its perceived reluctance to deal with terrorism has greatly reduced foreign investments. It goes without saying that many foreign companies would be reluctant to invest in a country with weak policies and credibility. When compared to its neighbors, Pakistan recorded the lowest economic growth rate in the 1990’s. The literacy levels are appallingly low, especially for women. On the other hand, the mortality and reproduction rates are sill high. The poverty level is also high. Therefore, majority of its citizens have not enjoyed the benefits derived from globalization yet the country liberalized its markets and economy. Additionally, the country’s trade sector has not expanded vastly as a result of this liberalization. As I had mentioned, its exports activities are lagging behind the rest of the world (Xenia, 2009).
Pakistan’s slow growth can be attributed to its rather ‘tighter’ markets, when compared to other countries that have freer markets. Yes, it liberalized its markets, but the markets are not free enough which is a major stumbling block to globalization. In the latest rankings of countries with free markets, Pakistan is ranked the 123rd in the world. It was classified as ‘mostly unfree’ (Index of Economic Freedom, 2011). This clearly indicates that the country has not fully liberalized its economy in some sectors which in turn has stagnated globalization. This score is also below the world average. This was partly due to high level of corruption and political instability. The country also has restricted foreign investments and its government actively involves itself in the driving economy further hindering free markets and globalization. However, the report also lauds Pakistan for the improved investment freedom which rose by 10 points. Foreign banks are now allowed to open their branches in Pakistan and also foreigners can fully own an insurance company although foreign investments were dragged down by civil unrests, insecurity and weak contractual policies (Index of Economic Freedom, 2011).
The 2008 global financial crisis was felt all over the world. Pakistan was also hit hard by this economic and financial meltdown. Its foreign reserves fell below $5 and its credit rating was downgraded to the second worst in the world. There was a shortage of such necessities as energy and fuel. The value of its currency (the rupee) also fell to about 30% against the United States dollar and foreign investments and capital was greatly reduced. The economic crisis affecting the people was not helped by the increased terrorist activities. It was estimated that more than $ 1 billion of foreign capital was being lost per month. The share prices fell to almost half in the stock market. Equities owned by foreigners dropped by more than half. On top of all this, the inflation rate went up leading to serious food insecurity. This led to civil unrests in the country. The transportation costs also shot up resulting from the escalating prices of fuel (Peiris, 2008).
The government, to curb this meltdown, took some preliminary steps to prevent a total collapse and bankruptcy. It came up with a scheme dubbed the Benazir Income Support Program. It was launched in the financial year 2008–2009 as a consequence of the economic crisis. The escalating inflation rates greatly affected the people of Pakistan, especially the lee privileged. At the time, the government envisioned that this program would help to alleviate the solution. It was aimed at the more than three million families in this category. This figure has been raised to about 5 million in recent years. The scheme engages in giving cash assistance to families that are mired in poverty. These families constitute about a fifth of the total population. In totality the program was to cover around half of the population that lives well below the poverty line. Its activities include the paying of the targeted families Rs. 1000 in cash per family. This, they hope, would substantially raise the total income of the families. The program was implemented in all the provinces in Pakistan, there are four of them. Families headed by women were specifically targeted (Benazir Income Support Programme).
The government also took measures like outsourcing financial help from the IMF and World Bank. It also tried to promote the banking industry in the country. Additionally, the government tried to entice foreign investors by introducing tax cuts to foreign investments (Peiris, 2008).
Despite all these efforts, Pakistan still lags behind when it comes to international competitiveness. In the latest world ranking, it ranks the 118th in the world. This is very low, considering that there were only 142 countries ranked. Its respecttive ranking when it comes that basic requirements, institutions, infrastructure, macroeconomic environment, health and primary education are 130, 107, 115, 138 and 121(The Global Competitiveness Report 2011–2012). Its rankings in other sectors like higher education, market efficiency, and market size are also very low. The country lies so lowly yet it has the 30th biggest market in the world. This is attributed to its strict regulations in the markets and its reluctance to remove barriers for competition, both for domestic and foreign investments. In addition, the country has yet to encourage its firms to adopt technology that would increase its productivity (The Global Competitiveness Report). To improve its competitiveness, the country is through the privatization of state corporations like banks. Pakistan launched a scheme dubbed ‘New Productivity Vision’ with its main task to promote a production friendly environment. The main drivers of this scheme were drawn from different economic fields. Six divisions were established to foster this productivity; Training accompanied with consulting, proposing benchmarks, formation of an energy efficiency program, fostering innovations and quality of produce, doing research and improving the IT infrastructure (Bajwa)
Pakistan is endowed with an expansive natural gas supplies, mineral ores like iron, copper and limestone, salt resources. Its main agrarian products are wheat, cotton and the widely acclaimed rice. It’s among the countries with the largest deposits of coal, copper, salt and gold. The two regions with the most of these resources are Reko Diq and Thar (Marwat, 2011). Pakistan has greatly benefitted from the export of rice in terms of revenues and also since the rice sector employs a significant percentage of the population. This takes pressure off the government when it comes to job creation. The land is mostly arable. The export of gold and copper contributes substantially to the national kitty. The country is believed to have large deposits of both copper and gold which are not yet untapped. Hence, more exploration efforts should be done to tap these mineral resources. Pakistan is blessed with arable land and the country is mostly wet. This is a necessity for the planting of rice which the country has taken up so passionately. It’s one of the leading rice producing countries giving it a good portion of its export revenues, and foreign exchange. However, Pakistan is not blessed with a significant amount of oil deposits. Thus it spends a fortune in the import of oil which greatly increases its expenditure. This has greatly affected its citizens due to frequent rise in the oil prices, pushing the inflation up. In addition, the country has suffered numerous times as a result of floods. In fact, Pakistan is the 12th most vulnerable state due to environmental degradation (Khaliq, 2009). This has slowed down economic growth because a lot of property is destroyed. Many people are also displaced, depriving the country of manpower time and again.
Pakistan has many of its citizens staying in the Western countries. About a million of them are in the US. The government has been trying to tap this group by convincing them to channel some of their earnings back to Pakistan. These are some of the steps that it has taken to improve the economy, which is on the mend after the economic crisis. Since the country is systematically freeing up markets, it’s widely expected that institutions will take a leading role in running the economy. However, if the country cannot resolve its political situation, many citizens of Pakistan will not realize the benefit of this independence.
Pakistan is a majority Muslim state born out of the partition of the Indian subcontinent in 1947. It was created to meet demands of both the Indian Muslims and Pakistan origins. The country has been embroiled in three wars – In 1947, 1965 and in 1999. The last few decades have seen politics in Pakistan being dominated by military and civilian rules. The country’s world stage changed after September 11 attacks after it dropped its support for Taliban rule for western support of antiterrorism activities. The country has been embroiled in an off and on war with militants trying to flush them out of the country.