Economic system of Pakistan.pptx

Economic System of Pakistan

1. Economic system of Pakistan

2. What Is Economy? An  economy consists of the economic system of a country or other area, the labor, capital and land-resources, and the economic agents that socially participate in the  production, exchange, distribution, and consumption of goods and services of that area .

3. Socialism An economic system in which the factors of production are owned and operated either by the government itself or by the private sector under strong government control. It is called as planned or command economy. Ex. China, New Zealand, Canada

4. Communism All the factors of production and enterprises concerned with the production and distribution of goods and services, is owned and operated by the government and whole national income is taken and distributed by the government according to ability and need of individuals. Karl Marx is the founder of Communism philosophy. Example: Russia.

5. Mixed Economies Economies that combine several systems; for example, an economy where the government owns certain industries but others are owned by the private sector. Examples: France, UK, Pakistan

6. Why is economy important? • The economy is an indicator of development and sustainability. • A good economy ensures better chances of survival and development or a state. • If we understand the cycles and system in Economics, we can better understand how to manage our money and society!

7. Difference between Economic Development and Economic Growth Economic Development Economic development is a qualitative term as it indicates continuous increase in the real national income and structural changes in the economy of a country. It means increase in output of goods and services in an economy. Economic development is more important than economic growth because economic development is wider and more comprehensive process than economic growth. Economic development is a process of economic transition involving structural transformation of an economy through industrialization, raising GNP and per capital income.

8. Economic Growth Economic growth is a quantitative term as it represents quantitative increase in production of goods and services in an economy. Economic growth is a steady process by which the productive capacity of an economy increase overtime to bring about rising levels of national output and income. Economic growth is the name of more production. Growth is measured in terms of an increase in real gross national product (GNP/GDP) over time or an increase in per capital income.

9. Economy of Pakistan Pakistan has a semi-industrialized economy, which mainly encompasses textiles, chemicals, food processing, agriculture and other industries

10. An overview of Pakistan’s economy The economy of Pakistan is the 26th largest in the world in terms of purchasing power parity (PPP), and 44th largest in terms of nominal GDP In 1947, Pakistan had 30 million people with per capita income of 100$. Agriculture accounted for almost 50% of economic output with hardly any manufacturing, as all industries were located in India. Therefore , it was unable to feed 30 million people and was dependent on imports from the USA. From thereon, Pakistan has come a long way. Today with 170 million people, our per capita income in 2008 was 1000$ which is ten times more than it was in the beginning.

11. National Development What is National Development? National development is the ability of a county or countries to improve the social welfare of the people e.g by providing social amenities like quality education, potable water, transportation infrastructure, medical care, etc. National development refers to the ability of a nation to improve the lives of its citizens.  Measures of improvement may be material, such as an increase in the gross domestic product, or social, such as literacy rates and availability of healthcare.

12. How can we measure Development? In a number of ways but the main one you need to know about is the UN HDI- the Human Development Index. HDI is an aggregate index of living standards with 3 main components Mean Educational attainment Income (measured by real GDP per capita PPP) Life expectancy at birth Highest HDI possible is 1.0

13. Economic Factors to Measure Development Gross Domestic Product (GDP) is the total value of goods and services produced by a country in a year. Gross National Product(GNP) measures the total economic output of a country, including earnings from foreign investments.  GNP Per Capita is a country's GNP divided by its population. It reflects the average income of a country's citizens. It is a useful way to assess each country's relative wealth or poverty (Per capita means per person.)

14. Cont …….. Economic growth measures the annual increase in GDP, GNP, GDP per capita, or GNP per capita. Inequality of wealth is the gap in income between a country's richest and poorest people. It can be measured in many ways, ( eg the proportion of a country's wealth owned by the richest 10 per cent of the population, compared with the proportion owned by the remaining 90 per cent).

15. Cont ……… Inflation measures how much the prices of goods, services and wages increase each year. High inflation (above a few percent) can be a bad thing, and suggests a government lacks control over the economy.  Unemployment is the number of people who cannot find work. Economic structure shows the division of a country's economy between primary, secondary and tertiary industries.

16. Cont ……… Demographics study population growth and structure. It compares birth rates to death rates, life expectancy and urban and rural ratios. The birth rate in the UK is 11 per 1,000, whereas in Kenya it is 40.

17. Economic Indicators of Development GDP GNP PPP Economic structure (types of job) Inflation Unemployment Economic growth Educational profile (qualification of labour )

18. Taxes 1.Tax is imposes by the Government on citizen of the State . 2.It is a compulsory payment to be made be the citizens to the State. 3. Tax is levied on income as well as on expenditure of the individual. 4. There are two kind of taxes Viz direct and indirect tax. 5. The rate of tax varies. It may be progressive proportionate and regressive in character. 6. Tax collected by the Government is spent to meet administrative and defence expenditures. Small amount of tax is spent for the welfare of tax-payer. 7. This imposed on a person is subject to revision. It can be waived by the government.

19. Budgets A government budget is an annual financial statement presenting the government's proposed revenues and spending for a financial year that is often passed by the legislature, approved by the chief executive or president and presented by the Finance Minister to the nation.

20. Agriculture Pakistan is the third largest exporter of rice in the world and producing enough food grains to feed its people Pakistan is also one of the five major textile producing countries in the world. Pakistan also produces third largest quantity of milk in the world.

21. Manufacturing and Industry Manufacturing and industry now account for 25% of the income; when we recall there was not even a single industry worth its name at the time of partition. So if we look where we were and where we are, I think the justification for Pakistan in terms of betterment of economic conditions of Muslims in this part is very strong. But , we have not lived up to our potential. We can do much better than this.

22. Quiz Time _____________ is the study of how a society uses scarce resources to produce and distribute goods and services. ________________ are the inputs available to supply goods and services in an economy. An ______________ is the method used by the society to produce and distributes goods and services by utilizing factors of production. An economic system in which the factors of production are owned and operated either by the government itself or by the private sector under strong government control. It is called as _________________ ____________________ is the founder of Communism philosophy. An economy where the government owns certain industries but others are owned by the private sector is called __________________________

23. Quiz Time The economy is an _________________ of development and sustainability. __________________ is a qualitative term as it indicates continuous increase in the real national income and structural changes in the economy of a country. ___________________ refers to the ability of a nation to improve the lives of its citizens.  __________________measures how much the prices of goods, services and wages increase each year. ______________is imposes by the Government on citizen of the State. _________________ is the third largest exporter of rice in the world and producing enough food grains to feed its people PCEC stands for ________________________

24. Challenges to Pakistan’s Economy We Import More and Export Less. We Consume More and Save Less. Government Spends More than it Earns as Revenues Our Share in the World Trade is Shrinking We Face Energy and Water Shortages Crisis of Governance and Implementation Weaknesses Political Stability, Law and Order/Security

25. ECONOMIC PROBLEMS OF PAKISTAN Poor Utilization Of Resources Unequal Distribution Of Wealth Poor Fiscal Policy Corruption Poverty Unstable Government Money Laundering Shortage Of Skilled Workers Wastage Of Economic Resources By Terrorism Activities

26. Solutions to improve the economy Change in National Psyche and Mindset. We as a nation are too much negative oriented and too much cynical where we find everything wrong in this country. Unless we change our mindset and unless everybody who is doing what he is supposed to do, carries out his or her task with sincerity and honesty, we are not going to go anywhere.

27. 2 . Building up of Human Capital. There is no substitute to building up human capital. Private sector, public sector, NGOs, local communities etc , all here to put their hands on deck and participate in making sure that every child goes to school. Every high school graduate has some technical and vocational skill or goes for higher education. Unless we build up human capital, we are just going to be left behind because the world economy is going to be a knowledge based economy. Pakistan lags behind other countries in the institutions, infrastructure and incentives for human capital formation. We have no choice but to accelerate the pace to catch up with others.

28. 3. Use of Technology. The technology is spreading like a wild fire. 95 million Pakistanis have mobile phones today. We can use this technology in order to provide them banking services, information on climate/weather, agriculture extension, health, education etc. It is a powerful tool which can leapfrog a lot of time which we have wasted. Using technology particularly the information/communication technology for the betterment of social and economic problems of Pakistan is something which needs to be done.

29. 4. Young Labour Force Pakistan is one of the few countries which has a young labour force which can be harnessed for its own and global economy., Japan , Europe, USA and after 2050 China are going to have aging population where the ratio of old to young people is going to increase. India and Pakistan are two countries where the ratio of younger people to the older ones is going to increase. If we tool these young men and women properly, we increase the female labour force participation, give them skills and knowledge, they can become the labour force for the rest of the world. This will give a big boost to Pakistan’s own economy.

30. 5. Governance, Devolution and Decentralization. As the population is increasing, one cannot govern Pakistan sitting in Islamabad, Karachi, Lahore, Peshawar or Quetta. One has to devolve powers, decentralize and delegate authority, provide resources to the local/district governments so that they can take decisions at their own. Sitting in Islamabad one cannot visualize what is needed in rural areas, but the people in rural areas know exactly whether they need water, fertilizers or fruit processing industry. Let us devolve powers to the people at the grassroots level and there would be much better allocation and utilization of resources. There must, however, be accountability of the local governments by the provincial governments and of provincial governments by the federal government but not interference or usurpation of powers.

31. Conclusion Pakistan and its people has a lot of potential and we are blessed with a whole lot of natural resources. If the government plans wisely, and the people work hard, the economy of Pakistan can be taken to a whole new level.

32. Cont ……. We need to provide employment opportunities for young people and to train them in the kind of the skills which are needed not only by the national economy but also by the international economy. The moral is, that the government and every individual in the system needs to play their part to help in the economical progress of the country

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