Often looked over, the major part of Pakistani economy comprises of the undocumented or informal section. It has been a culture to do dealings through the spoken words / verbal promises and thus rarely involving any kind of receipts. Receipts are only involved by big companies / dealers for assisting in the auditing purposes. Thus a large part of economy remains informal and thus undocumented. Many experts are of the view that the actual amount of the Pakistan`s GDP triples if one takes the undocumented economy into consideration, taking the figures to near about a trillion dollars, which is the size of top emerging economies of Thailand, Malaysia and Singapore combined.
The saving pattern of the country is whole lot different from that of any Western country. People prefer to keep a major part of their earnings at home for ready use. Banks are avoided by many because of the belief that the “interest” is prohibited in Islam, the religion of the masses. Also large amount of gold is held by many females in their houses or safes, to be bequeathed to their daughters on wedding ceremony.
Tax to GDP ratio is at the lower sides because of poor tax collection system and unwillingness of people to pay taxes yet collection of the charity remains incomparable. The existence of charity organizations like Edhi Foundation, Chippa Foundation and Sylani Welfare Trust remains an awe for many, as it is clear that they definitely requires millions and millions to operate daily. The continuation and ever increasing scale of operations of these types of trust is a bigger food for thought for many economists, as one do not expect such donations from people of a feeble economy.
If the Pakistani economy is so disturbing, why doesn`t the multinationals, the scrutinizers and forecasters of the economic trends, consider shifting their resources away from Pakistan! Or more importantly why aren`t they getting losses. It is a wonder that little or no multinational firm consider leaving Pakistan, once it starts its operations in the country. Take the Capital markets, take the banking sector, take the hotel chains, take the auto industry, take the FMCGs, multinationals are all over, taking large sums away as profits, each year.
And then they complain that Pakistan has an unstable economic system!!
Ever noticed the budget distribution of the country?
Around 60% of the budget is allocated to the Defense sector, the smaller half is being used in every other sector of the economy. Wouldn`t the development be unimaginable if we shift our focus and resources away from the defence sector?
Forget not the fact that many of the advance economies allocate as less as 1% of their budget to the defence sector.
The inflation of the country has been stagnant over the years unlike the economies of many other developing countries. This also proves that the Pakistani economy is not over-immune to the movement of the developed economies. The brilliant example of the adaptability of the country`s economy is the steady growth rate of the economy even during the Oil Price War between OPEC and Russians (2013 onwards).
Pakistan is considered so important globally, that it won`t be wrong to say that Businesses throughout the world secretly admire operating in Pakistan. The “China Pakistan Economic Corridor” (CPEC) is a most recent example of it. The Chinese firms will be investing on projects of more than 46 Billion Dollars within Pakistan, which will surely give a sharp push to the so called lethargic economy. Not only this, but employment would get a go as well. Local industry would also boost without doubt. And most importantly the CPEC would set an example for the whole world by unveiling the true potential and scope of Pakistan`s economy.
About the economic factors within, Pakistan is enriched in Gas, Coal and other natural resources that need to be explored and bring to use.
Perhaps the are being sustained for the future, so they may get the best price of it, once the whole world gets depleted in their resources.