Pakistan Country: Demographics, Geography and Economics

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Table of Contents

Basic population demographics
The State of Infrastructure and Industrial Plants
Socio-Economics factors
Access to foreign intermediaries
A stable local currency
Relative crime and pollution factors
Economic development prediction
Works Cited

Basic population demographics

Number of people

The total population of the country is 182.1 million people as of 2013, and the school enrollment for primary education in the country was 93% in the same year. In addition, the poverty ratio in the country is about 22.3 percent. This figure has been reduced marginally in recent years. Pakistan has a per capita income of 1,260 US dollars, and this figure is slightly lower than the average for South Asia. However, it is still enough to place the country in a lower-middle-income position.

Demographic features

About 55 million people live in urban areas, and the countrys highest growing segment is the middle class. The standard language for doing business in English. The country is the ninth largest English-speaking nation, and it has a well-educated workforce (Guidance: Doing Business in Pakistan: Pakistan Trade and Export Guide 2). More than 30 percent of the population of the country lives below the poverty line, and the median age of the population is 19.58 years (Report on The System of Education in Pakistan 4).

The total fertility rate for women is 3.8, indicating that women give birth to this number of children throughout their reproductive years. The prime age for giving birth to the majority of women is between 25-29 years. The use of contraceptives for family planning among women in the country stands at 35 percent as of 2013 and has been increasing compared to previous population survey results that placed the figure at 30 percent (National Institute of Population Studies 15). Meanwhile, child mortality rates, as an indication of the socioeconomic status of the country, have declined from 78 deaths per 1000 births in 2007. They were last reported as 52 deaths per 1000 births in 2013. However, the figure is still higher than the 40 deaths per 1000 births that are required by the Millennium Development Goals target (National Institute of Population Studies 19).

Family structure

Women marry an early age compared to men, and their later years of marriage are between 25 and 29, while that of men is between 30-34 years. Marriage separation rates are low, given that 98 percent of ever-married men and 95 percent of ever-married women are still enjoying the same status. Pakistani culture allows women to remarry after being divorced or widowed. Another country characteristic is that the number of men living in urban areas is higher than that of women.

Principal geographic features and climate

The total area size of Pakistan makes it the 36th largest nation in the world. It has a coastline that covers the Arabian Sea and the Gulf of Oman, with the rest of the border being with Iran, Afghanistan, India, and China with proximity to Tajikistan. The country enjoys a strategic economic regional location, given that it provides a link between South Asia and Central Asia. It also connects the area to the Middle East (Pakistans Geography, Climate, and Environment par. 1).

The administrative regions of Pakistan are divided into four provinces. All the providences have a parliamentary system. There are federally administered tribal areas in the country and the Islamabad capital territory that is the main administration center. Four provinces are Punjab, Sindh, Baluchistan, and Northwest Frontier Province (Report on The System of Education in Pakistan 4).

Pakistan has some geological structures. It is a blend of landscapes with deserts, plains, plateaus, and hills. The country has coal mines with coastal area characteristics, and it has mountainous environments in the northern parts of the Karakoram Range. Some mountainous areas are green with vegetation, while others are dry without any trace of land suitable for cultivation and no water sources or waterfalls. The position of Pakistan places it along the Eurasian, Iranian, and Indian tectonic plates that are overlapping as they end or begin in the country (Pakistans Geography, Climate, and Environment par. 3-4). Three main geographic parts of Pakistan exist, namely, the northern highlands, the Indus River, and the Baluchistan Plateau.

Weather

There are both tropical and temperate climates in Pakistan. Coast sides of the country have arid-like climatic conditions. The country enjoys two main seasons. There is a monsoon season with sufficient rainfall and a dry season that enjoys trace amounts of rain. In addition to that, a dry winter covers the entire country from December to February, while spring conditions emerge in March and last up until May. The summer period of June to September coincides with the rainfall season and rains only subside in the October and November period.

Significant natural resources

Pakistan is home to Mount Godwin Austen, which has a peak height of 8,611 meters and is the second-highest in the world. Together with K2, the areas form a tourist attraction, especially for people who love mountain trekking or biking expeditions. With many seasons and landforms, high plant species diversity exists in Pakistan. Forests in the country have coniferous alpine, subalpine, and deciduous trees (Pakistans Geography, Climate, and Environment par. 5).

These include spruce, pine, cedar, and mulberry. There are also palms, juniper, and tamarisk trees. In addition to that, the forest floors have abrasive grasses and scrub vegetation. There are crocodiles, porcupines, deer, and typical rodents in the southern parts, and they serve as tourist attractions. The Marco Polo sheep is a characteristic of the north, and other notable animals in the north are the Urial sheep, Ibex goats, Himalayan bears, and snow leopards (Pakistans Geography, Climate, and Environment par 6-7).

Pakistan is endowed with a couple of wildlife protection sanctuaries and game reserves whose purpose is to limit too much poaching. In addition, they are contributing to tourism, which is considered a viable economic activity. In addition to animals, Pakistan is also a temporary home to many birds that are migratory. They include crows, sparrows, myna, hawks, eagles, and falcons.

Soil (agriculture)

Soil distribution in Pakistan follows the distribution of geographic landforms. Six landforms existing in Pakistan are mountains in the northern and western parts of the country, weathered rock plains, loess plains, sandy deserts, and piedmont plains, river plains, including old river terraces, sub-recent floodplains, and recent floodplains (Khan 4).

Minerals (extraction & industry)

Pakistan is endowed with oil and gas resources, but it has not fully exploited them. As a result, the country continues to rely on imports to fill its energy demands. Its energy imports were expected to reach USD 13.221 billion in the year 2011 (Pakistan Exports, Imports & Trade par. 4-5).

Energy (industry)

The Oil and Gas Development Company Limited (OGDCL) is the main driver for the oil industry of the country and operates as a public corporation because the government is a majority shareholder. The country relies mainly on natural gas for its energy supply, with this source accounting for about 49 percent of the total energy supply (Pakistan: Country Analysis Note par. 4). The country faces a crisis as its natural gas reserves continue to decline amid increased demand. Also, its reserves for shale gas amount to about 105 trillion cubic feet. The government is making investment incentives that should see the sectors development extract the mineral in the coming years.

Electricity net generation was 90 billion kWh in 2011, with available capacity being 85 percent of the installed capacity in 2012 and utilization rates being lower than 60 percent in the same year. Challenges for the industry include power theft and line losses as well as high natural gas subsidies by the government. Businesses have to cope with load shedding practices that can cause blackouts that last up to 16 hours (Pakistan: Country Analysis Note par. 6). Electricity comes from oil at 36 percent, natural gas at 29 percent, hydroelectric sources at 29 percent, and nuclear at 5 percent.

Location (on trade routes)

Pakistans proximity to emerging markets in Asia makes it a lucrative location for trade routes. Currently, the country is working closely with the Chinese government to open up the region. This will include the development of the port of Gwadar that should serve as an important entry point for the Middle East (Shah par. 1). The development will happen under the China-Pakistan Economic Corridor project. Pakistan can link East Asian countries in Central Asia and South Asia markets. The project will include roads, rail, and pipelines that will be developed in one and a half-decade.

The State of Infrastructure and Industrial Plants

Physical capital Farm, mines, factories

A majority of the population is engaged in agriculture as the country is endowed with large tracts of farmland under private owners. Farming happens in subsistence and commercial scales. In addition, there are factories located in industrial sectors of the urban areas. Besides that, extract industries of oil and gas have mines located in areas that have significant natural resource deposits.

Trucks, trains, boats, planes

Road transport is the backbone of the countrys transport sector, and it faces growth in demand that is higher than the growth of Pakistans GDP. There is more than 9600 km of National Highway and Motorway network, and this represents 3.7 percent of the total road network. It serves about 80 percent of the countrys traffic. About 91 percent of passengers use road transport while 96 percent of freight uses road transport.

The country has 36 operational airports, with Karachi being the primary airport. Islamabad and Lahore airports handle significant domestic and international cargo, and the national carrier, Pakistan International Airlines, which faces stiff competition from a number of private airline companies, serves them. The national carrier serves 70 percent of the domestic passenger market (Pakistan Economic Survey 2007-083 224). The National Highway Authority is in charge of maintaining road networks in the country. Meanwhile, the principal players in the shipping sector of Pakistan include Karachi Port Trust, Port Qasim, Pakistan National Shipping Corporation (PNSC), and Gwadar Port. Most boats and ships using Pakistan ports are foreign-owned.

In the telecom sector, Pakistan had a telecom-density of 57 percent in 2008 with a fast-growing mobile phone market. A consumer can enjoy international calls for a low as Rs. 1, and Pakistan has more than 80 million phone subscribers. There are more than 70 companies providing internet services (Pakistan Economic Survey 2007-083 238).

Storage facilities

Retail sector businesses have adequate access to warehousing. Ports also provide sufficient warehousing services for traders. Cold storage facilities for agricultural produce are limited in their availability. Efforts by non-governmental organizations continue to help meet the deficit in cold and dry storage facilities for agricultural produce. Cities serve as main administration and trade center for provinces or states.

Cities infrastructure

The country has a fair development of infrastructure. When ranked globally, its transport infrastructure is number 82 out of 144. Meanwhile, its electricity and telephony infrastructure is 130 out of 144. Overall, the infrastructure is considered weak compared to that of developed countries. There are also power shortage problems in some parts of Pakistan, and they can have a negative effect on businesses (Guidance: Doing Business in Pakistan: Pakistan Trade and Export Guide 2).

Socio-Economics factors

Human capital

The main occupation of most people is within the agricultural sector, and the rest of the labor force, about 38 percent are employed in services while about 20 percent is employed in manufacturing industries.

Health

The private sector is the main contributor to health care in Pakistan as it serves more than 80 percent of the outpatient cases in the country. The country has a multi-tiered health care delivery system that continues to grow to meet the demands of a growing population and changes in demographic characteristics (WHO 1). There are the state and non-state actions, with some offering services for profit, while many agencies provide health care as a non-profit activity.

There is no single federal department in charge of the entire health sector of Pakistan. The Ministry of Health holds some responsibility while the rest is handled by specific regional or provincial Departments of Health (WHO 1). There are vertically managed disease-specific mechanisms that encompass the work of district and provincial health departments. The same mechanisms also incorporate social security services and non-governmental institutions.

The main challenges facing the countrys health care are communicable diseases and non-communicable diseases. The country has a high fertility rate and a low life expectancy; at the same time, most of its population is young. The health sector is characterized by high mortality rates and high incidences of infections for communicable diseases. There is also a high rate of malnutrition in children and women.

By 2008, doctors attended to only 28 percent of births in the country. About 30 percent of women use contraceptives for family planning. The country faces a high risk of endemic polio disease, and it is suffering from a high prevalence of tuberculosis. Many diseases that are causing child mortality are preventable by vaccination, but the country lacks elaborate and well-funded programs for meeting its health care needs (WHO 2).

As the middle-class population rises, the country is also facing cardiovascular problems and increases in rates of diabetes, cancer, and mental disorders. The country is also prone to disasters. Earthquakes, floods are some of the natural disasters, while fires, bombings, and accidents are man-made disasters that affect the countrys health care sector. Disasters have destroyed critical health care infrastructure in the past, and lack of sufficient funding has further crippled the recovery of the sector (WHO 2). The health care sector relies on donor funds from the World Health Organization, Asian Development Bank (ADB), Canadian International Development Agency (CIDA), Government of China, World Food Program (WFP) among other country and multinational donor agencies. The sector needs a strengthened health care system and improved access to immunization, disease control, and surveillance of health care conditions (WHO 3).

Education

The country has the worlds second-highest number of children who are not attending school. In 2010, the number was 5.1 million, and this implies that for every 12 children in the country, one is not in school. The majority of them, about two-thirds, are girls. However, the country has been experiencing an overall increase in primary school enrolment between 1999 and 2010. Their enrolment figures jumped from 58 percent to 74 percent. However, girls are remaining behind in enrolment numbers compared to boys. For adults, 49.5 million of them are illiterate, which two-thirds of this number is made up of women. This also makes country number three when comparing the population of illiterate adults in the world. According to the UNESCO Education Development Index, Pakistan ranks 113 out of 120 (UNESCO 1).

The country spends a small portion of its Gross National Product (GNP) on education, and it has not increased the expenditure on education in the last decade. Its current spending amounts to about 2.3 percent of the GNP (UNESCO 1). The country experiences a very high inequality in education because of the low enrolment numbers and the low budgetary support for the education sector. In Punjab province, only 17 percent of the 7 to 16-year-olds have had an education. The other provinces of Baluchistan and Khyber Pakhtunkhwa have 37 percent and 25 percent, respectively.

Young people who are from disadvantaged backgrounds are least likely to have the required skills for getting decent jobs and, as a result, they are most prone to be poor. Besides, the lack of education for many women is severely influencing their earning ability. In Pakistan, highly literate women can earn about 95 percent more money in a general employment position in the country as compared to their counterparts. Mostly, those earning less are women who are lacking any literacy skills. They can also be those with poor literacy skills (UNESCO 2).

Each province has a Department of Education that oversees the development of the education sector in collaboration with the Federal Ministry of Education of Pakistan. The goals of state education policy are to remove illiteracy and provide free compulsory education for the formative years. It also aims to make technical and professional education available and accessible based on merit (Report on The System of Education in Pakistan 6). Urban middle and upper-income families prefer private schools. In fact, private schools play an important part in ensuring universal access to education as, in some cases, there are no government schools, and locals have to rely on low-cost private schools that can be religious schools too (Report on The System of Education in Pakistan 8).

For higher education, army public schools, divisional public schools, and some private sector intuitions provide prestigious education compared to availed government schools. They teach subjects determined by regional educational boards (Report on The System of Education in Pakistan 9). Degrees in arts, science, and commerce take 2 or 3 years. Students complete ten years of schooling and two years of secondary study before joining degree programs. This structure was adopted from India (Report on The System of Education in Pakistan 18). There are four-year bachelor degrees as well as advanced postgraduate degrees that last one or two years for masters and 3 to 4 years for Ph.D. research degrees. Students also have opportunities to engage in distance learning provided by Allama Iqbal Open University in addition to the available institutions (Report on The System of Education in Pakistan 22).

Entrepreneurship

The country ranks 129 out of 144 countries in the world in global competitiveness. The country does not have a favorable regime for fostering property rights, intellectual property protection. It also scores lowly on ethics and corruption. Its main ethical issues include the diversion of public funds, loss of public trust in politicians, and irregular payments of bribes for public utilities, and annual tax payment avoidance.

Financial Capital

Pakistan has a GDP of USD 238.7 billion, with a GDP per capita of USD 1307.51. The per capita income increased from less than USD 400 in 1980 to the present figure as of 2013 (World Economic Forum Pakistan par. 1). Investors, both local and international, invest in the Karachi Stock Exchange, which plays a significant role in developing the countrys capital markets.

Foreign currency

The international trade in Pakistan is facing a huge deficit as the country experience a low demand for exports while it continues to increase its demand for imports. In 2010, the country had a trade deficit of USD 3.946 billion despite the fact that the country is a member of an international organization that works to promote its access to international markets. These organizations include the Economic Cooperation Organization (ECO) and the South Asian Free Trade Area (SAFTA), as well as the World Trade Organization (WTO).

Intermediaries (banks, stock exchange)

The banking sector in Pakistan has undergone far-reaching reforms since the 1990s, and it has become efficient and competitive. Previously, most banks were state-owned. Currently, there are mainly privatized banks operating in the countrys financial sector. The government has enacted a sufficient legislative framework to govern the financial sector. The State Bank of Pakistan handles the supervisory duty on behalf of the public.

Its work contributes to the stability and predictability of the banking environment in the country. Currently, 80 percent of banking assets are in the private sector, belonging to individuals and institutions alike. Banks have become more efficient and are no longer losing money due to limited product ranges or inefficiencies. At the same time, no bank has bad loan burdens at present (Banking Survey 2013 30).

Pakistani banks in the past have been accused of financing speculative activities such as stock marketing trading or commodities and auto trading. However, based on their reports, the exposure of banks directly or indirectly to any form of speculative activity remains limited to less than 20 percent of their overall activities. In fact, only 2 percent of bank credit that is available for lending has gone to stock market trading in recent years. On the other hand, in real estate speculation, banks are only allowed to finance mortgages and, therefore, only have the capacity to influence demand for availing credit.

Pakistans large banks have a total asset exceeding Rs. 500 billion. At the same time, Medium size banks have total assets beyond Rs. 100 billion, while small banks have total assets less than Rs. 100 billion. In addition, a special category of Islamic banks only provides a specific range of banking services compliant with Islamic banking regulations (Banking Survey 2013 1). The total amount of loans advanced by banks in 2013 amounted to Rs. 4,059 billion (Banking Survey, 2013, 30).

In addition to the Karachi Stock Exchange, investors also have options of using Lahore, Islamabad, and Pakistan Stock Exchanges. They help businesses to raise capital and collect savings to make investments.

Access to foreign intermediaries

There are some foreign multinational banks operating in Pakistan, mainly as small or medium-sized banks. They include HSBC, Citibank, Deutsche Bank AG, and Barclays. The multinational companies play a leading role in linking foreign investors and traders with local markets and stock exchanges.

Rate of savings

Many people in Pakistan rely on informal saving circles that allow members to commit to saving daily or weekly. The country saves billions of Rupees through informal circles in different sectors. Shopkeepers, office workers, and students, as well as housewives, are some of the most common members of the saving circles. Most circles run in extended families, and they help to hedge members against sudden expenditures like school fees or medical expenses (Mangi par. 4-7). There are no official figures for money saved in the informal circles. However, All Karachi Traders Alliance presumes that from its data collected over many years, the approximate figure of 10 million rupees is ideal. This daily amount goes in circles. The key reason for the growth of the informal saving circles is as follows. Many people in the country are reluctant to take part in banking procedures because of cumbersomeness (Mangi par. 5).

Only 14 percent of the population uses financial products from formal financial institutions, while about 50 percent will opt for the financial information networks prevalent in the country when they are given an opportunity to save. The information systems are based on trust and have a very low rate of defaulting on savings.

Interest rates on savings hover above 10 percent, yet Pakistan still has one of the lowest savings rates in the region. Consumers in Pakistan allocated about 97 rupees of every 100 rupees to expenditure in the financial year 2011 to 2012, as reported by The State Bank (Aslam par. 4-5).

A stable local currency

Pakistan relies on the rupee as its currency. In 2014, Moody Investors Service revised the outlook of Pakistans foreign currency government bond rating such that it was not stable and favorable for investors from around the world; previously, it had a negative rating (Rating Action: Moody Changes Pakistans Rating Outlook to Stable par. 3). The countrys external liquidity position has been improving in recent years at a stable rate due to the governments reforms with the assistance of the International Monetary Fund. By the end of 2014, foreign reserves amounted to USD 9 billion, which causes the country to become less vulnerable to foreign currency fluctuations (Rating Action: Moody Changes Pakistans Rating Outlook to Stable par. 5).

Stable public finance

Pakistan has witnessed increased public debt in recent years as it increased subsidies to its industries and failed to enact appropriate policies to respond to rising oil prices in 2007. The country also suffers from a weak revenue collection infrastructure and high pressure on its budget resources to cover its high-risk security situation. The governments reforms to improve prospects for the energy section and eliminate inter-corporate debt led to further increases in public debt (Public Debt 110). By 2010, the countrys percentage of GDP servicing public debt stood at 4.4 percent. Meanwhile, the debt had accumulated interest payments of Rs. 428.5 billion.

The country is currently pursuing a medium-term debt management strategy for 2013-2014 to 2017-2018. It hopes to bring down public debt to GDP ratio. The current target is 55.2 percent in the current financial year. Overall, the debt ratio has to remain below 60 percent, as outlined in the Fiscal Responsibility and Debt Limitation Act. Meanwhile, external debt is at Rs. 7.202 trillion and is an increase of about 3 percent from 24.9 percent of GDP that is was in 2013 (Kiani par. 2-5).

Religious and political alignments

There are prevalent cases of sectarian violence and terrorism threats in the country, especially by foreign nationals. Also, there are bureaucratic hurdles that hinder international trade (Guidance: Doing Business in Pakistan: Pakistan Trade and Export Guide 2). Islam is the main religion in the country, and most of the Muslims in the country belong to the Sunni or Shia Islam sects. There are Christian minorities and Hindu minorities. The minority groups are about 9 million in number, and they include Buddhists. The country guarantees freedom of religion but does not enforce the provision (Kaleem par. 12-14).

Relative crime and pollution factors

Pakistan is under the international radar for the criminal advancement of nuclear technologies. Global political bodies do not view its nuclear program as a peaceful development. Instead, it is interpreted as a threat to neighboring countries of Pakistan, especially India and Israel (Coughlin and Stricker 3). United States companies face sanctions against doing business with Pakistan on sensitive goods that can lead to equipping Pakistan with sufficient military might. For example, they cannot deal with the Pakistani Atomic Energy Commission (PAEC) even through their supply chain partners (Coughlin and Stricker 3). At present, Pakistan has four nuclear reactor locations that may serve as plutonium sources for its nuclear weapon program. The country has made significant efforts to become a nuclear weapons producer. This comes after evidence showing the existence of more than one plutonium separation plant (Albright and Kelleher-Vergantini 3).

Pakistan ranks 127th out of 177 countries that form part of the corruption index maintained by Transparency International (Guidance: Doing Business in Pakistan: Pakistan Trade and Export Guide 2). The country has weak labor laws and is unable to enforce intellectual property rights fully. As a result, products manufactured in the country face the risk of being of poor service quality (Guidance: Doing Business in Pakistan: Pakistan Trade and Export Guide 2).

Economic development prediction

Pakistan is a lower-middle-income country that has the potential to grow if it can stay clear of economic sanctions rapidly. The average growth rate of South Asia was 5.5 percent in 2014, and this is one of the indications of the potential for the country to grow. The biggest condition for growth will be the reduction in political tension. This should allow most citizens to participate actively in economic activities that speed up increases in gross domestic product. Besides, there is a high Pakistani population in the diaspora that has been actively remitting money back home. Remittances will ensure that Pakistan is not very vulnerable to financial market volatility.

Since most economic risks are domestic and are created by the political situation in the country, they are also easy to handle. Thus, as long as the country is on a path of sustaining its pace of domestic reforms to sustain political stability, it will continue with its current growth rate momentum (Pakistan par. 1).

Pakistan has huge growth potential. It has not yet gone through the rapid expansion that many other Asian economies have passed. Besides that, it has one of the worlds largest populations of young people, and it is experiencing a stable growth of domestic demand for goods and services. Its proximity to emerging markets in Asia is also a beneficial factor as the country can access goods and services for advancing its industries at an affordable cost. Also, the natural resources awaiting exploitation provide the country with enough potential resources for growth (Guidance: Doing Business in Pakistan: Pakistan Trade and Export Guide 3).

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