World Country Guide

Business Profile

Economy
About half of the Pakistani labour force works in agriculture, where wheat, rice, sugar cane and cotton are the main products. Cotton is by far the country’s most important export, accounting for almost 60 per cent of revenues. Textiles and leather goods are significant export earners. Pakistan has some reserves of graphite and limestone, as well as gypsum, silica, coal, copper and manganese. It also has a small oil industry, but most of its needs must be imported: together with chemicals and machinery, this accounts for nearly three-quarters of Pakistan’s import expenditure. Established manufacturing industries include textiles, food processing and building materials.
The overriding economic problem for the Pakistani economy is its huge foreign debt burden, which is over 90 per cent of GDP and consumes over half of government revenue to meet interest payments. The situation has been made more difficult by the history of poor relations between Pakistan and the international financial community generally. Sanctions were imposed following Pakistani nuclear tests in 1998, coinciding with the fall-out from the 1997 financial crisis that engulfed the major economies of East Asia. Yet despite these factors, the regional crisis centred on Afghanistan and Iraq, and domestic political instability, the Pakistani economy has performed steadily in the last five years. Both annual economic growth and inflation have been in low single figures for the last few years: the 2004 figures are 5.5 and 5.9 per cent respectively; unemployment is a record 7.7 per cent, but there is a high level of underemployment amongst the workforce. In general, economic policy has been determined by the need to comply with conditions laid down by the IMF. An economic reform programme has gradually been implemented, with several major privatisations in recent years. Pakistan’s main trading partners are the USA, Saudi Arabia, Kuwait, Hong Kong (SAR) and the UK.

Business
Ties should be worn for important business appointments. English is commonly used. Appointments should be made, remembering that businesses are usually closed on Muslim holidays. Visiting cards should be used. Office hours: Mon-Thurs and Sat 0900-1700, Fri 0900-1230.

Commercial Information
The following organisation can offer advice: Overseas Investors’ Chamber of Commerce and Industry, PO Box 4833, Talpur Road, Karachi (tel: (21) 241 0814; fax: (21) 242 7315; e-mail: info@oicci.org; website: www.oicci.org); or Federation of Pakistan Chambers of Commerce (FPCCI), PO Box 13875, Federation House, Sharea Firdousi, Main Clifton, Karachi 75600, Pakistan (tel: (21) 587 3691/93-4; fax: (21) 587 4332; e-mail: fpcci@cyber.net.pk or info@fpcci.com.pk or fpcci@digicom.net.pk; website: www.fpcci.com.pk).