09-06-2005, 11:28 PM
aoa
might be the following article help you out.....
<u>Economic performance</u>
Economic growth The new Government (which assumed power in October 1999) introduced several measures to stabilize the economy. As a result, Pakistanâs economic performance during FY2000 (ending 30 June) showed signs of recovery, compared with FY1999.
In FY2000, the economy grew by 4.5 percent, the highest rate since 1996, largely because of the strong performance of the agriculture sector. Bumper crops of otton and wheat, coupled with increased rice production, led agriculture to grow by 7.0 percent. The cotton crop especially gave a boost to the textile industry after three years of lackluster activity. Strong growth in agriculture also helped contain imports of edible oil and wheat. Large-scale manufacturing, however, declined marginally by 0.7 percent in FY2000, compared with an increase of 3.7 percent during FY1999. This occurred mainly because of a sharp fall in sugar production. During FY2000, the services sector grew by 4.5 percent against the target of 5.2 percent.
<u>Employment</u> The Government estimated that 2.4 million people were unemployed in FY2000, compared with 2.3 million in FY1999. The overall unemployment rate was about 6.1 percent, with higher rates in the urban areas.
<u>Inflation</u> During FY2000, consumer price inflation was 3.6 percent, the lowest in three decades, mainly because of improved availability of agricultural and food products. Despite a sharp increase in international oil prices, the price subindexes for fuel and electricity, and transport and communications, posted less-than-expected increases of 6.0 percent and 8.7 percent, respectively, in FY2000, compared with 1.7 percent and 8.2 percent in FY1999. However, because of a rise in domestic interest rates and sharp depreciation of the Pakistan rupee, price indexes are likely to increase in FY2001.
<u>Fiscal balance</u> The fiscal deficit for FY2000 was 6.5 percent of GDP, higher than for FY1999. Delays in passing on the cost of higher international oil prices to domestic consumers, the settlement of accumulated tax returns, and an overrun in defense expenditure were major factors in the higher-than-planned fiscal deficit. Under the agreement with International Monetary Fund (IMF), the Government is committed to reducing the fiscal deficit to 5.2 percent of GDP in FY2001.
<u>External sector</u> In FY2000, Pakistan reduced its current account deficit to about $1.0 billion from $2.4 billion in FY1999. This was made possible by a reduced trade deficit. Exports recorded an 8.4 percent increase in FY2000, led by an increase in textile exports. Although the value of oil imports increased because of higher oil prices, overall imports remained relatively flat in value terms because of lower levels of food, defense, and other non-oil imports.
Following the advice of IMF, the Government moved to a floating exchange rate regime in September 2000. The Pakistan rupee was allowed to depreciate 12 percent against the US dollar and remained relatively stable. Foreign exchange reserves continued to decline to about $1.0 billion as of October 2000, down from $1.4 billion at the close of FY2000. This vulnerable foreign exchange position is a major concern of the Government. An IMF arrangement with the Government in November 2000 enabled other multilateral development banks to resume lending to Pakistan. Under the arrangement, $1.5 billion is to be provided to Pakistan from ADB, IMF, and World Bank. Since Pakistanâs foreign exchange requirement for the current fiscal year is estimated at $3.5 billion, the balance of $2.0 billion is expected to be met by a second round of debt rescheduling with the Paris and London clubs in early 2001.
<u>Domestic policies</u> Sustained implementation of political structural reformsâfiscal reforms, financial sector restructuring, and privatizationâis key if Pakistan is to achieve its long-term development objectives, which include faster economic growth and poverty reduction. Improving the quality of governance is a precondition for success of the reforms, and for sustainable development.
Poverty reduction is another area of concern. Using the caloric definition, poverty is estimated by the Government at 30 percent.
In 2000, the main focus of the Governmentâs fiscal reforms was improving revenue collection by broadening the tax base and strengthening tax administration. The Government introduced several measures for this an agricultural income tax; a more integrated, client-based, and functional tax administration system; a tax amnesty scheme; and a comprehensive tax survey and documentation drive.
In the financial sector, detailed privatization plans have been drafted, and disposal of the remaining shares of national commercial banks and other state-owned financial institutions is proceeding. With help mainly from ADB, the Government has introduced major capital market reforms, including establishing a national clearing and settlement system, automating stock exchange transactions, and establishing credit rating agencies for strengthened information flows and market efficiency.
The pace of privatization has accelerated recently. Initial measures included the passing of a privatization law and forthcoming listing on the stock exchange of two national commercial banks and a partially privatized bank.
<u>ADB operations</u>
Operational strategy ADBâs new operational strategy for Pakistan will be formulated in 2001, and is expected to focus more directly on poverty reduction. ADBâs current operations are guided by the operational framework of March 1999. The framework reflects the changed economic circumstances faced by Pakistan following the nuclear tests in 1998, and focuses on improving economic efficiency and export competitiveness, ensuring human and social development, and strengthening governance. It provides the basis for ADBâs sector focus, intersectoral linkages, and goals to reduce poverty and improve environmental management.
<u>Policy dialogue<u> Policy dialogue with the Government continued to focus on policy and institutional reforms to reduce poverty, improve public sector governance and efficiency, and promote private sector growth. Weak governance was recognized as a main factor contributing to the poor delivery of government services; decentralization and incentivesâsuch as increased transparency in decision making and more effective legal systems and tax reformsâare needed. Policy dialogue also focused on structural reforms in the export, energy, and microfinance sectors.
[u]Loans and technical assistance</u> In 2000, ADB approved seven loans totaling $707.0 million for the rural development, industry, financial, and energy sectors, including one technical assistance loan for $5.0 million to expedite energy sector restructuring. ADB also approved eight technical assistance grants totaling $7.9 million.
[u]Project implementation</u> Since joining ADB in 1966, Pakistan has received 192 loans including 20 private sector loans without government guarantee, of which 51 were active at the end of 2000. Contract awards totaled $384.8 million, bringing the cumulative figure to $7.5 billion. The contract award ratio was 24.9 percent, higher than the ADB-wide average of 21 percent. Disbursements during the year totaled $522.6 million, bringing cumulative disbursements to $7.8 billion. The disbursement ratio was 27.5 percent, higher than the ADB-wide average of 20.5 percent.
Although Pakistan has a good disbursement record, project implementation continued to be delayed. The Government and ADB agreed on a comprehensive action planâupdated at each country portfolio reviewâthat addresses policy- and governance-related covenants in loan agreements. Difficulties in complying with covenants were attributed to a lack of ownership, an unclear definition of responsibilities, inadequate follow-up, and resource and capacity constraints. The action plan identifies tasks to help improve capacity for complying with these covenants.
As a result of slowed project implementation, some loan closing dates had to be extended. The Government and ADB agreed to address problems with decision making, procurement delays, project management skills and coordination, conflicts between government regulations and ADB guidelines, and public expenditure management.
visit following link
http//www.adb.org/Countries/Highlights/PAK.asp
http//www.embassyofpakistan.org/pb2.php
http//www.traveldocs.com/pk/economy.htm
might be the following article help you out.....
<u>Economic performance</u>
Economic growth The new Government (which assumed power in October 1999) introduced several measures to stabilize the economy. As a result, Pakistanâs economic performance during FY2000 (ending 30 June) showed signs of recovery, compared with FY1999.
In FY2000, the economy grew by 4.5 percent, the highest rate since 1996, largely because of the strong performance of the agriculture sector. Bumper crops of otton and wheat, coupled with increased rice production, led agriculture to grow by 7.0 percent. The cotton crop especially gave a boost to the textile industry after three years of lackluster activity. Strong growth in agriculture also helped contain imports of edible oil and wheat. Large-scale manufacturing, however, declined marginally by 0.7 percent in FY2000, compared with an increase of 3.7 percent during FY1999. This occurred mainly because of a sharp fall in sugar production. During FY2000, the services sector grew by 4.5 percent against the target of 5.2 percent.
<u>Employment</u> The Government estimated that 2.4 million people were unemployed in FY2000, compared with 2.3 million in FY1999. The overall unemployment rate was about 6.1 percent, with higher rates in the urban areas.
<u>Inflation</u> During FY2000, consumer price inflation was 3.6 percent, the lowest in three decades, mainly because of improved availability of agricultural and food products. Despite a sharp increase in international oil prices, the price subindexes for fuel and electricity, and transport and communications, posted less-than-expected increases of 6.0 percent and 8.7 percent, respectively, in FY2000, compared with 1.7 percent and 8.2 percent in FY1999. However, because of a rise in domestic interest rates and sharp depreciation of the Pakistan rupee, price indexes are likely to increase in FY2001.
<u>Fiscal balance</u> The fiscal deficit for FY2000 was 6.5 percent of GDP, higher than for FY1999. Delays in passing on the cost of higher international oil prices to domestic consumers, the settlement of accumulated tax returns, and an overrun in defense expenditure were major factors in the higher-than-planned fiscal deficit. Under the agreement with International Monetary Fund (IMF), the Government is committed to reducing the fiscal deficit to 5.2 percent of GDP in FY2001.
<u>External sector</u> In FY2000, Pakistan reduced its current account deficit to about $1.0 billion from $2.4 billion in FY1999. This was made possible by a reduced trade deficit. Exports recorded an 8.4 percent increase in FY2000, led by an increase in textile exports. Although the value of oil imports increased because of higher oil prices, overall imports remained relatively flat in value terms because of lower levels of food, defense, and other non-oil imports.
Following the advice of IMF, the Government moved to a floating exchange rate regime in September 2000. The Pakistan rupee was allowed to depreciate 12 percent against the US dollar and remained relatively stable. Foreign exchange reserves continued to decline to about $1.0 billion as of October 2000, down from $1.4 billion at the close of FY2000. This vulnerable foreign exchange position is a major concern of the Government. An IMF arrangement with the Government in November 2000 enabled other multilateral development banks to resume lending to Pakistan. Under the arrangement, $1.5 billion is to be provided to Pakistan from ADB, IMF, and World Bank. Since Pakistanâs foreign exchange requirement for the current fiscal year is estimated at $3.5 billion, the balance of $2.0 billion is expected to be met by a second round of debt rescheduling with the Paris and London clubs in early 2001.
<u>Domestic policies</u> Sustained implementation of political structural reformsâfiscal reforms, financial sector restructuring, and privatizationâis key if Pakistan is to achieve its long-term development objectives, which include faster economic growth and poverty reduction. Improving the quality of governance is a precondition for success of the reforms, and for sustainable development.
Poverty reduction is another area of concern. Using the caloric definition, poverty is estimated by the Government at 30 percent.
In 2000, the main focus of the Governmentâs fiscal reforms was improving revenue collection by broadening the tax base and strengthening tax administration. The Government introduced several measures for this an agricultural income tax; a more integrated, client-based, and functional tax administration system; a tax amnesty scheme; and a comprehensive tax survey and documentation drive.
In the financial sector, detailed privatization plans have been drafted, and disposal of the remaining shares of national commercial banks and other state-owned financial institutions is proceeding. With help mainly from ADB, the Government has introduced major capital market reforms, including establishing a national clearing and settlement system, automating stock exchange transactions, and establishing credit rating agencies for strengthened information flows and market efficiency.
The pace of privatization has accelerated recently. Initial measures included the passing of a privatization law and forthcoming listing on the stock exchange of two national commercial banks and a partially privatized bank.
<u>ADB operations</u>
Operational strategy ADBâs new operational strategy for Pakistan will be formulated in 2001, and is expected to focus more directly on poverty reduction. ADBâs current operations are guided by the operational framework of March 1999. The framework reflects the changed economic circumstances faced by Pakistan following the nuclear tests in 1998, and focuses on improving economic efficiency and export competitiveness, ensuring human and social development, and strengthening governance. It provides the basis for ADBâs sector focus, intersectoral linkages, and goals to reduce poverty and improve environmental management.
<u>Policy dialogue<u> Policy dialogue with the Government continued to focus on policy and institutional reforms to reduce poverty, improve public sector governance and efficiency, and promote private sector growth. Weak governance was recognized as a main factor contributing to the poor delivery of government services; decentralization and incentivesâsuch as increased transparency in decision making and more effective legal systems and tax reformsâare needed. Policy dialogue also focused on structural reforms in the export, energy, and microfinance sectors.
[u]Loans and technical assistance</u> In 2000, ADB approved seven loans totaling $707.0 million for the rural development, industry, financial, and energy sectors, including one technical assistance loan for $5.0 million to expedite energy sector restructuring. ADB also approved eight technical assistance grants totaling $7.9 million.
[u]Project implementation</u> Since joining ADB in 1966, Pakistan has received 192 loans including 20 private sector loans without government guarantee, of which 51 were active at the end of 2000. Contract awards totaled $384.8 million, bringing the cumulative figure to $7.5 billion. The contract award ratio was 24.9 percent, higher than the ADB-wide average of 21 percent. Disbursements during the year totaled $522.6 million, bringing cumulative disbursements to $7.8 billion. The disbursement ratio was 27.5 percent, higher than the ADB-wide average of 20.5 percent.
Although Pakistan has a good disbursement record, project implementation continued to be delayed. The Government and ADB agreed on a comprehensive action planâupdated at each country portfolio reviewâthat addresses policy- and governance-related covenants in loan agreements. Difficulties in complying with covenants were attributed to a lack of ownership, an unclear definition of responsibilities, inadequate follow-up, and resource and capacity constraints. The action plan identifies tasks to help improve capacity for complying with these covenants.
As a result of slowed project implementation, some loan closing dates had to be extended. The Government and ADB agreed to address problems with decision making, procurement delays, project management skills and coordination, conflicts between government regulations and ADB guidelines, and public expenditure management.
visit following link
http//www.adb.org/Countries/Highlights/PAK.asp
http//www.embassyofpakistan.org/pb2.php
http//www.traveldocs.com/pk/economy.htm
