Author Tahira Butt
According to IMF Estimates Pakistan’s economy will have grown at a rate of 5.8 percent in 2018 and is projected to reach 6 percent this year. The country Pakistan has a young population and a growing middle class actively seeking western goods. English is the main business language, and the highly developed services sector contributes two thirds of GDP.
A post-Brexit focus on developing global trade relationships means that exploring opportunities in Pakistan makes sense for UK businesses. Pakistan and British Governments are actively looking to increase their bilateral trade from £3.5bn a year to £5bn this year. Recent years have also seen $64bn of investments from China into key Pakistani infrastructure as part of CPEC. This opportunity is not restricted to Pakistan and China. With the presence of Gwadar Port, CPEC provides a route of connectivity for major players including Central Asia states and Russia. UK is poised to be a key partner of CPEC, with big opportunities for British businesses to benefit from this investment. Pakistan has taken great strides to liberalise its trade and investment framework as part of commitments made to the WTO, IMF and the World Bank.
Trade and Investment Opportunities in Pakistan
American firms that have a strong presence in Pakistan are Coca-Cola, Procter and Gamble, Microsoft and McDonald’s. Unilever and Shell are showing what UK companies can achieve in Pakistan’s growing market of 200 million customers, and the UK government is ready to help. The transitions of government power in 2013 and in July 2018 have contributed to Pakistan’s macroeconomic and microeconomic stability. Economic growth has shown a gradual recovery since 2013 in connection with the USD $6.2 billion credit facility agreement signed with the IMF. The growing balance of payments problem will require Pakistan to return to the IMF for a new program that may force the government to make hard choices regarding spending, revenue collection and other structural reforms to strengthen long-term economic performance. The debt-to-GDP ratio has increased to 72 percent in 2018. The budget deficit for 2017-18 stood at 6.6 percent.
Key Industry sectors
The agricultural sector is the main pillar of the Pakistani economy. It contributes to a quarter of the GDP and employs over 40 percent of the active population. Wheat, rice, cotton, sugarcane, fruits, vegetables and tobacco are the major crops. Cattle livestock farming is also very important. Pakistan is the fourth largest cotton producer in the world and has abundant natural resources, mainly copper, oil and gas. The industrial sector has contributed to nearly a fifth of the GDP and employs over 22.6 percent of the population. The major industries are textile production (the largest source of foreign exchange revenue), oil refining, metal processing, and the production of cement and fertilisers. Maritime transport is also a significant activity. The tertiary sector contributes to over half of the GDP and employs almost one-third of the workforce. Remittances from Pakistanis working abroad represent a considerable financial income for the country. Pakistan’s rich culture, geographical and biological diversity, has developed tourism into creating considerable economic gains. Tourist destinations such as at Swat, Murree, Chitral, Gilgit, and Neelam valleys, offer diverse opportunities, such as paragliding, rock climbing, trekking, jeep and camel safari. Spark Pakistan has made significant economic progress though there is still much to do.
The Urdu poet, philosopher and politician, Sir Muhammad ‘Allama’ Iqbal, said:
“Be aware of your own worth,
use all of your power to achieve it.
Create an ocean from a dewdrop.
Do not beg for light from the moon,
obtain it from the spark within you.”
This is a moment of opportunity for Pakistan. The spark to continue transforming Pakistan’s economy into a dynamic, vibrant, and integrated emerging market that is able to create sustainable jobs and prosperity, for all- exists among Pakistan’s people.
Tahira Butt, Director, UKPCCI
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