Pakistani economy has witnessed highest Gross Domestic Product (GDP) growth rate of 5.28 % since 2008-08 for the fiscal year 2016-17, taking the economy beyond USD300. Due to the much needed focus and undivided attention of the present government, Economic Survey of Pakistan has shown positive indications about the overall economy. Industrial sector growth rate has increased up to 5.05 percent this year. Furthermore, services sector share is 60 percent in GDP.
The government has taken many important steps in last few years to further enhance the compatibility of the industrial sector in Pakistan such as clearing the circular debt of more than US $4.8 billion which added additional electricity into the system. Another significant milestone for the Pakistani industry was the GSP plus status by the European Parliament which has been enabling more than 600 Pakistani export items into 28 European Union member countries at zero custom duty since January 2014. This hallmark achievement also shows confidence in Pakistani products and it has opened new avenues for the investment and improvement of existing infrastructure in Pakistan.
The overall business perception about Pakistan is positive and financial markets such as Pakistan Stock Exchange (PSE) is considered one of the most competitive markets in the region. In 2014, Pakistan also entered into global financial markets and raised $3 billion including $1 billion of dollar-denominated Sukuk bonds.
In 2013 general elections, first time in the history of Pakistan a smooth transition in power was completed from one politically elected government to the new government. The event reveals the political stability in Pakistan. The present government has continued the good economic policies of previous government. Therefore, confidence of international business community regarding investment within the country has increased.
Manufacturing Industry of Pakistan
The manufacturing industry, one of the promising industries, has a huge significance for the economic development and the foreign exchange revenue generation for the country. Although Pakistani economy is largely based on agriculture but in recent years the manufacturing industry has played vital role in the economic and social development of the country. Many sub-sectors such as textile and apparel, leather, football, cutlery and surgical instruments have performed well and reckoned as the backbone of the manufacturing industry.
Following are the salient features of the present government agenda to foster innovation and business development in Pakistan.
- Building new infrastructure such as China Pakistan Economic Corridor (CEPEC) between Pakistan and China to shape Pakistan as a trade route between the South East Asia and Central States
- Improving access to finance ability of the companies and budding entrepreneurs to foster innovation and development
- Measures to speed investment process for domestic and international investors by reducing the time required for business registration and other barriers
- Regulatory reforms such as contract enforcement and initiation of privatization of various government owned entities
- Facilitating and supporting new business ventures and start ups
- Initiatives for skill development in workforce to make them more efficient and effective through vocational training and internship
Pakistan has taken several steps to enhance the use of digital technologies to increase the industrial output. These technologies also present unprecedented investment opportunities in emerging international markets such as Pakistan. However, these technologies will have a disruptive impact not only on manufacturing industry but also on other industries and society. Now it is the responsibility of relevant authorities such as regulators, legislators and policy makers to take measures for creating a conducive investment environment where maximum benefits of advancement in the technology could be gained. For Pakistan, the most important first step to harness fruits of this opportunity is to draw a comprehensive manufacturing policy to pursue international investors. Without any doubt, Pakistan has tremendous natural resources, well-educated young population and internationally recognized products, for instance, in textile, leather and sports. Sectors such as automotive, pharmaceutical, electronics, energy, telecom, and IT and transportation will be the key areas for foreign investment.