With a per capita GDP of about PPP $2,200, the World Bank considers Pakistan a low-income country. No more than 45.7% of adults are literate, and life expectancy is about 63 years. The population, currently about 162.4 million, is growing at 2.0% annually.
In 2000, the government made significant macroeconomic reforms. Privatizing Pakistan's state-subsidized utilities, instituting a world-class anti-money laundering law, cracking down on piracy of intellectual property, and quickly resolving investor disputes would aid Pakistan's efforts to improve its investment climate. After September 11, 2001, and Pakistan's proclaimed commitment to fighting terror, many international sanctions, particularly those imposed by the United States, were lifted. Pakistan's economic prospects began to increase significantly due to unprecedented inflows of foreign assistance at the end of 2001. This trend is expected to continue through 2009. Foreign exchange reserves and exports grew to record levels after a sharp decline. The International Monetary Fund recently lauded Pakistan for its commitment in meeting lender requirements for a $1.3 billion IMF Poverty Reduction and Growth Facility loan, which it completed in 2004, forgoing the final permitted tranche. The Government of Pakistan has been successful in issuing sovereign bonds, and has issued $600 million in Islamic bonds, putting Pakistan back on the investment map. Pakistan's search for additional foreign direct investment has been hampered by concerns about the security situation, domestic and regional political uncertainties, and questions about judicial transparency.
U.S. assistance has played a key role in moving Pakistan's economy from the brink of collapse to setting record high levels of foreign reserves and exports, dramatically lowering levels of solid debt. This encouraged a 6.1% GDP growth in fiscal year 2003-2004 and a reported GDP increase of over 8% in fiscal year 2004-2005. In 2002, the United States led Paris Club efforts to reschedule Pakistan's debt on generous terms, and in April 2003 the United States reduced Pakistan's bilateral official debt by $1 billion. In 2004, approximately $500 million more in bilateral debt was granted. In the second half of 2004 and first half of 2005 inflation has been a concern, rising above the historic lows for inflation in 2004.
Low levels of spending in the social services and high population growth have contributed to persistent poverty and unequal income distribution. The trends of resources being devoted to socioeconomic development and infrastructure projects have been improving since 2002, although expenditures remain below global averages. Pakistan's extreme poverty and underdevelopment are key concerns. The government has reined in the fiscal mismanagement that produced massive foreign debt, and officials have committed to using international assistance--including a major part of the $3 billion five-year U.S. assistance package--to address Pakistan's long-term needs in the health and education sectors.
The government started pursuing market-based economic reform policies in the early 1980s. These reforms began to take hold in 1988, when the government launched an ambitious IMF-assisted structural adjustment program in response to chronic and unsustainable fiscal and external account deficits. The government began to remove barriers to foreign trade and investment, reform the financial system, ease foreign exchange controls, and privatize dozens of state-owned enterprises.
Although the economy became more structurally sound, it remained vulnerable to external and internal shocks, such as in 1992-93, when devastating floods and political uncertainty combined to depress economic growth sharply. The Asian financial crisis seriously affected Pakistan's major markets for its textile exports. During the 1980s and early 1990s, the economy averaged a growth rate of 6% per year, but afterwards growth dwindled until 2002. For example, average real GDP growth from 1992 to 1998 dipped to 4.1% annually. Economic reform also was set back by Pakistan's nuclear tests in May 1998, and the subsequent economic sanctions imposed by the G-7. International default was narrowly averted by the partial waiver of sanctions and the subsequent reinstatement of Pakistan's IMF enhanced structural adjustment facility/extended fund facility in early 1999, followed by Paris Club and London Club re-scheduling. After taking power in late 1999, President Musharraf instituted policies to stabilize Pakistan's macroeconomic situation. Pakistan continues to struggle with these reforms, having mixed success, especially in reducing its budget and current account deficits.
The Karachi Stock Exchange (KSE) enjoyed strong growth from 2003 to early 2005, before undergoing a market correction of close to 20% of market capitalization in early 2005. KSE’s market capitalization rebounded to all time highs in mid-2005. Regulations have been implemented targeted at the speculative margins-purchasing that was blamed for volatility in early 2005.


Regards,
Sardarzada

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God is dead! God remains dead! And we have killed him! How shall we console ourselves, the most murderous of all murderers? The holiest and the mightiest that the world has hitherto possessed, has bled to death under our knife....