Economy of Pakistan
The economy of Pakistan is the 26th largest economy in the world in terms of purchasing power, and the 41st largest in terms of GDP Per Real Growth Rate in US dollars. Pakistan has a semi-industrialized economy, and it mainly includes agriculture, manufacturing, and services. Manufacturing includes textiles, chemicals, and food processing, among others. Other industries like mining, quarrying, and construction are also important. Growth poles of Pakistan’s economy are situated along the Indus River.
The Gross Domestic Production of Pakistan (GDP) by various economic sectors according to the Pakistan Economic Survey 2020-21
- Agriculture (22.7%)
- Manufacturing Sector (12.4%)
- Services (58.0%)
The main economic activities of the population of Pakistan are:
- Agriculture, Forestry, Fishing & Hunting (37-4%)
- Manufacturing (14.9%)
- Construction (9.5%)
- Wholesale & Retail Trade (14.4%)
- Transport/Storage and Communication (6.2%)
- Community/Social/Personal (16.1%)
- Others (1.5%)
 Pakistan Labour Force Survey 20-20-21.
Pakistan’s principal natural resources are arable land and water. About 25% of Pakistan’s total land area is under cultivation, and is watered by one of the largest irrigation systems in the world as discussed already. Pakistan irrigates three times more acres than Russia. Agriculture accounts for about 21.2% of the GDP and employs about 44% of the total labor force. Zarai Taraqiati Bank Limited is the largest financial institution geared towards the development of the agriculture sector through the provision of both financial services and technical knowledge.
Pakistan ranks 5th in the Muslim world and 20th worldwide in farm output. It is the world’s second largest milk producer.
According to the Food & Agriculture Organization Statistics (FAOSTAT) 2020, Pakistan World Rankings in terms of net production values (Top 20 Countries Only) are being shown in the following table:
 This table was compiled using the values published on the FAOStat 2020 website (see: http://www.fao.org/faostat/en/#rankings/countries_by_commodity). The website allows users to search by country and commodity, so each commodity’s name was chosen from the dropdown menu, and then recorded in the table. Pakistani commodities not ranked by FAOStat have not been included in this table.
|Chilies & peppers (Dry)||6||Maize||15|
|Okra||5||Mangoes, mangosteens, guavas||5|
|Onions dry||6||Tangerines, mandarins, clementines||10|
|Fruit (tropical, fresh), nes||11||Tobacco, unmanufactured||7|
|Cauliflowers and broccoli||14||Castor Oil Seed||17|
|Fresh Goat Milk||4||Almonds, with shell||18|
|Rice, paddy||13||Bastfibers, others||20|
|Pumpkins, squash, and gourds||14||Meat Cattle||10|
Table 1.9 Pakistan World rankings in Net Commodity Production Values
Pakistan’s principal natural resources are arable land, water, and extensive natural gas and oil reserves. About 28% of Pakistan’s total land area is under cultivation and is watered by one of the largest irrigation systems in the world. The most important crops for Pakistan’s economy include cotton, wheat, rice, sugarcane, maize, sorghum, millets, pulses, oil seeds, barley, fruits, and vegetables. These, together, account for more than 75% of the value of total crop output of Pakistan.
Following are the major land use statistics of Pakistan:
|Total Area||79.61 million HA|
|Reported Area||58.03 million HA|
|Total Cultivated Area||22.74 million HA|
|Current Fallow||6.97 million HA|
|Total uncultivated Area||23.18 million HA|
|Culturable waste||8.19 million HA|
|Forest area||3.92 million HA|
|Net Sown||15.77 million HA|
Table 1.8 Pakistan Land Use Statistics
Livestock breeding is an integral part of agriculture in Pakistan and provides one of the main sources of protein and energy for Pakistan’s rural population. It is widely recognized as the main source of cash income for the landless. There is an important interrelationship between livestock and farms engaged in crop production, in addition to the value of livestock as a food source and as a household asset Livestock breeding also provides both manure and draught power for farming; dried animal dung is used extensively as a heat source in domestic cooking in rural areas. Demand is growing for milk, dairy products, and other livestock products in the urban centers, helping fuel livestock breeding in rural areas.
In Pakistan, farmers do not earmark any separate land for animal grazing, so herds generally graze on fallow or uncultivated lands. Most livestock is raised to meet local needs but there are some areas that specialize in breeding of animals for commercial purposes.
The last livestock census conducted in Pakistan was in 2006. The following table lists the livestock statistics of Pakistan as per this 2006 census:
Table 1.10 Pakistan Livestock Statistics
Important livestock breeds of Pakistan are:
- Cattle breeds: Sahiwal & Red Sindhi (Milch Breeds), Bhagnari, Dajal, Dhanni, Lohani, Rojhan, Tharparkar
- Buffalo breeds: Nili, Ravi, and Kundi
- Sheep Breeds: Bakkarwal, Buchi, Cholistan, Damani, Kacchi, Kaghani, Kail, Kali, Koka, Lohi, Poonchi, Sipli, Thalli, Balkhi, Bibrik, Dumbi, Gojal, Harnai, Hashtnagri, Kohai Ghizar, Michni, Pahari, Rakhshani, Salt Range, Tirahi, and Waziri
- Goat breeds: Beetal, Dera Din Panah and Kamori (Milch breeds), Barbary, Chapper, Teddy, Nachi (meat breeds), Pak Angora, Bilkaneri, Kaghani, and Khurassani (mohair breeds)
- Camel Breeds: Mareecha or Mehra, Bagri or Booja, Brella (Thalochi), Mountainous (Cambelpuri), Kala Chitta, and Brahvi
Horse and Cattle Shows are held between February and March in different agricultural centers of Pakistan. The famous ones are those held in Sahiwal, Dera Ismail Khan, Sibi, and Lahore. Different performances like cattle races, cattle dances, tent-pegging, tattoo show, folk music, dances, bands, cultural floats, and folk games are the main tourist attractions in these shows.
Most of the poultry farms in British India were located in areas that were portioned over to India at Partition, leaving Pakistan with farms that bred exotic stock of breeds like White Leg Horn, Rhode Island Red, and New Hampshire, among others. These were reared in limited numbers at government poultry farms located at Lahore, Peshawar, Karachi, and Quetta.
Initially, thus, Pakistan met its entire demand for eggs and poultry meat from rural poultry breeding till 1962, as poultry farming was not treated as a commercial industry, and most of the poultry farming was limited to local, individual farmers and treated as a “backyard business” to meet household needs. In the early 1960s, the need for commercial poultry was officially recognized, which resulted in the national campaign to commercialize the industry by enhancing the production of feed products in the country in 1963. Under this campaign, the Pakistani government also announced a tax exemption on the income derived from poultry farming which encouraged the establishment of commercial poultry farms in Pakistan. Pakistan International Airlines (PIA), in collaboration with Shaver Poultry Breeding Farms of Canada, established the first commercial hatchery in Karachi. Simultaneously, a commercial poultry feed mill was established by Lever Brothers (Pvt.), Pakistan Ltd., at Rahim Yar Khan, Punjab, the success of which was followed by other developers like Arbor Acres Ltd.
There are now 33,146 poultry farms in the country (Table 17: Number of Commercial Poultry Farms and Number of Birds by Size of Flock; 2017)
Bee keeping is another industry which is relatively new in Pakistan, as it was non-existent prior to Partition. Honeybee colonies were introduced in the 1980s, and since then, more than 300,000 honeybee colonies have been successfully established in Pakistan. The research in apiculture at the federal level was initiated by Pakistan Agricultural Research Council (PARC) in July 1976 under a coordinated program of “Honeybee Management”. After the termination of this program, the project was transferred to the non-development budget of PARC as its core activity in 1987. A full-fledged Honeybee Research Institute was established with its own building, including laboratories, in 1989. The Institute was merged into the Institute of Natural Resources & Environmental Sciences (INRES) in August 2002 and renamed as Honeybee Research Program (HBRP). The HBRP was disassociated from INRES on November 1, 2006 and merged into Institute of Plant & Environment Protection (IPEP).
Since its initiation in 1976, beekeeping is a profitable business in Pakistan. About 7,000 beekeepers are now rearing exotic species, like Apis mellifera, in modern beehives. There are about 300,000 bee colonies producing 7,500 metric ton honey annually. The share of honeybees in crop pollination is 80%. It improves the quality of fruits and vegetables as well as the yield of seed crops.
Pakistan is endowed with rich fishery potential. It is located in the northern part of the Arabian Sea and has a coastline of about 1,120 km with a broad continental shelf and its Exclusive Economic Zone extends up to 200 n. miles from the coast. There are about 16,000 fishing boats operating in the Coastal Area of Pakistan; these operate in shallow coastal waters as well as in offshore areas. These fishing boats undertake fishing trips lasting anywhere from a few hours to about 25 days, depending on the type of fishing being undertaken. Total production from inland and marine waters is approximately 0.60 M. tons. Fishery Industry of Pakistan provides employment to about 300,000 fishermen directly. In addition, another 400,000 people are employed in its ancillary industries. Fishery is also a major source of export earnings.
The major fish harbors of Pakistan are:
- Karachi Fisheries Harbor: This is operated by the Provincial Government of Sindh. Karachi Fish Harbor handles about 90% of the fish and seafood catch in Pakistan and 95% of fish and seafood exports from Pakistan
- Korangi Fish Harbor: This harbor is located in Chashma Goth, Bin Qasim Town, Deh Rehri, Malir District, Karachi, Sindh. It is managed by the Federal Ministry of Ports & Shipping
- Pasni Fish Harbor: This harbor is operated by the Provincial Government of Balochistan
- Gwadar Fish Harbor: This is operated by the Federal Ministry of Communication
Fish and fishery products are processed and exported to over 50 countries. About 30 to 35% of the fish and fishery products are exported to European Union countries. Japan, USA China, Saudi Arabia, United Arab Emirates (UAE), Malaysia, S. Korea, Hong Kong, Sri Lanka, and Singapore are other major countries that import Pakistan’s fishery products. There are 29 fish processing units in Pakistan with a total storage capacity of 10,000 tons, out of which 25 units are located in Karachi. The federal government provides intelligentsia and technical assistance to seafood establishments for improving their processing conditions to keep them in line with various EU/ International standards. Through this process, 8 establishments have already improved enough to export seafood to countries in the European Union. In addition, another 5 plants have upgraded, and others are also undertaking changes in their facilities to comply with EU/International standards and improve the export of fishery products.
Pakistan has the world’s largest interconnected and continuous irrigation system. In 2017-18, the total irrigated area in Pakistan was 19.67 Million HA. Pakistan has one of the world’s largest irrigation systems, with
- 3 Large dams
- 86 small and mediums dams
- 19 barrages
- 12 river interlinking canals and
- 59,200 km of distribution canals
More than 160,000 watercourses comprise the distribution network that takes water directly to farms from rivers and streams.
Following are the major dams in Pakistan. For details, please refer to specific chapters on province/ district)
- Tarbela Dam: Tarbela dam is the largest earth-fill dam in the world. It has been constructed on River Indus about 50 km Northwest of Islamabad
- Mangla Dam: Mangla dam has been constructed about 100 miles Southeast of Islamabad. It is the 12th largest dam of the world and has been constructed across the Jhelum River
- Hub Dam: Located on the Hub River, North of Karachi, this dam is a major source of domestic-use water for Karachi
- Warsak Dam: It is located on River Kabul in Peshawar
- Khanpur Dam: This has been constructed in a narrow gorge on Haro River in Potohar Plateau, near Village of Khanpur, Khyber Pakhtunkhwa
- Ghazi Barotha Dam: This dam is located on Indus River, downstream of Tarbela Dam in Attock, Punjab
- Misriot Dam: This dam is located 12 km Southwest of Rawalpindi, Punjab
- Tanaza Dam: It is located about 35 km Southwest of Rawalpindi, near Dhamial Road on a small river
- Mirani Dam: Constructed on Dasht River, Balochistan
- Bijiri Tangi: It is located near Tiriman in Balochistan and was built for water storage on a small stream
- Darwazai Dam: In Kohat, Khyber Pakhtunkhwa, this dam was built for water storage on Sodal Algada Stream
- Dhurnal Dam: In Chakwal district, Punjab
- Gurabh Dam: Punjab (no data available)
- Hauz Rangila: Khyber Pakhtunkhwa
- Jhanda Mini Dam: Punjab
- Kach Dam: Balochistan
- Khasala Dam: Punjab
- Khokhar Dam: Punjab
- Khushdil Khan Bund: Balochistan
- Khanpur Dam: on Haro River, Haripur, Khyber Pakhtunkhwa
- Nammal Dam: Nammal Valley, Mianwali, Punjab
- Nari Bolan Dam: Balochistan
- Phalki Dam: Balochistan
- Shahpur Dam: Punjab
- Tanda Dam: Kohat, Khyber Pakhtunkhwa
- Wasta Bund: Balochistan
- Chashma Barrage: River Jhelum Punjab
- Guddu Barrage: River Indus Sindh
- Jinnah Barrage: Kalabagh Dam site
- Khanki Headworks: Punjab
- Kotri Barrage: River Indus, Sindh
- Lloyd Barrage (Sukkur Barrage): River Indus, Sindh
- Marala Headworks: River Ravi, Punjab
- Munda Headworks: Khyber Pakhtunkhwa
- Panjnad Headworks: Punjab
- Qadirabad Barrage: Punjab
- Rasul Headworks: River Jhelum Punjab
- Shebo Headworks: Balochistan
- Sidhnai Barrage: Punjab
- Sulaimanki Headworks: Punjab
- Surkhab Headworks: Balochistan
- Tuansa Barrage: Punjab
- Trimmu Headworks: Punjab
The irrigation is also taken up through tube wells, dug wells and spate (Rod Kohi) system of irrigation. Pakistan’s use of the spate irrigation system irrigates one of the largest areas in the world.
Figure 1.19 Indus Basin Irrigation System
The following table shows the type of irrigation system and area irrigated by each as per Pakistan Agricultural Statistics 2017-18:
|Source of Irrigation||Area|
|Canals (both Private and Public)||33.77 million HA|
|Canal Tube wells||8.19 million HA|
|Canal wells||0.28 million HA|
|Spate irrigation||1.5 million HA|
|Tube wells||3.57 million HA|
|Wells||0.43 million HA|
|Others||0.22 million HA|
|Total Irrigated Area||47.68 million HA|
Table 1.30 Pakistan Irrigation Statistics
The major export commodities of Pakistan include textiles (garments, bed linen, cotton cloth, and yarn), leather goods, sports goods, chemicals, carpets and rugs, timber, cement, tiles, marbles, cotton textiles, surgical instruments, electrical appliances, and unprocessed hides & skins.
The major import commodities of Pakistan are petroleum, petroleum products, machinery, plastics, transportation equipment, edible oils, paper and paperboard, iron and steel, and tea, among others.
A large percentage of the commercial activities include the sale of handicraft items such as hand-woven and machine-woven carpets for which Pakistan is well known.
Pakistan’s industrial sector accounts for about 25.5% of its GDP. Cotton textile production and apparel manufacturing are Pakistan’s largest industries, accounting for about 66% of the merchandise exports and almost 40% of the employed labor force. Other major industries include cement, fertilizer, edible oil, sugar, steel, tobacco, chemicals, machinery, food processing, electric goods, and ship building.
Major trade partners include the United States, Hong Kong, Japan, Germany, the United Kingdom, and the UAE.
The major manufacturing industries of Pakistan include food and beverages, textiles (which include cloth and wearing apparel), iron and steel products, industrial chemicals, non-electrical machinery, surgical instruments, sporting goods, and leather products, and other goods. According to the Census of Manufacturing Industries 2005-06, the total number of Industrial Units in Pakistan was 6,417. No other census has been conducted since. Details of industry have been included in relevant chapters by province and district.
Pakistan has deposits of several minerals including coal, copper, gold, chromite, mineral salt, and bauxite. A variety of precious and semi-precious minerals like peridot, aquamarine, topaz, ruby, emerald, as well as rare-earth minerals like bastnaesite and xenotime, sphene, tourmaline, and many varieties and types of quartz are also being mined in Pakistan. Currently, around 52 minerals are mined and processed in Pakistan.
At present, identified mineral resources in the country are mainly confined to Balochistan, Sindh, and KPK provinces. These mineral resources consist of large resources of lignite coal, crude oil, natural gas, porphyry copper-gold, iron ore, lead, zinc, gypsum, rock salt, limestone, uranium, and precious/ semi-precious stones.
The most mined minerals of Pakistan are:
- Iron Ore
- Copper/ Gold
- Chromite Ore
- Zinc/ Lead
- Gypsum/ Anhydrite
- Rock Salt
- Solar Salt
- Limestone for lime
- Kaolin (China Clay)
- Natural Stones as building materials
- Marble and Onyx
The following table shows major minerals of Pakistan and the regions where they are found:
|Mineral||Major Region||Mineral||Major Region|
|Aluminum||Muzaffarabad (Azad Jammu Kashmir), Kalat and Ziarat (Balochistan), and Khushab (Punjab)||Iron Ore||Besham, Abbottabad, Goldanian, Langrial, Mazar Tang, Kohat Kalabagh Pezu Nizampur, Dilband, Kalat, Shekran, Khuzdar, Dammer Nisor, Mashkichah, Durban Chah, Amir Chah, Chilghazi, Chapar, Kundi Baluchap, Pachin Koh, Bandagan|
|Copper/ Gold||Shinkai, Boya, Waziristan, Bulashgah, Gilgit, Saindak, Chagai, Sasht-e-Kain, Ziarat, Pir Sultan, Kabul Koh, Missi, Bandegan, Reko Diq||Chromite Ore||
Harichand, (Dargai), Boya, (N.Waziristan), Naweoba, (Zhob), Muslim Bagh, (Kila Saifullah), Sonaro, (Khuzdar), Jijal, (Besham), Chilas, Raskoh (Chagai)
|Zinc/ Lead||Besham, Gunga, Khuzdar, Surmai, Khuzdar Duddar||Coal||Lakhra (Dadu), Sonda (Thatta), Jherruck, Badin, Thar, Metting (Thatta), Eastern & Central Salt Range, Makerwal, Khost-Sharig-Harnai, Sor Range/Degari,Duki, Mach-Kingri, Musakhel Abegum, Pir Ismail Ziarat, Chamalong|
|Gypsum/ Anhydrite||Rakhi-Munh, Safed Koh-Rodo area (Central Suleiman Range) Dadukhel (Mianwali area), Khewra, Saiduwali Near Drazinda and Mughalkot (D I Khan), Kohat, Near Spintangi, Mawand, Khattan, Barkhan, Chamalang||Phosphates||Khyber Pakhtunkhwa contains Cambrian sedimentary phosphates of marine origin, mainly in the upper clayey dolomite of Abbottoabad Formation (cherty phosphate) 0-0 and underlying cherty–silty–sandy beds of Hazara formation|
|Rock Salt||Rock salt is produced at Khewra, Warcha, Kalabagh, Bhadurkhel, Jatta, Karak, Chakwal, and Khusha||Solar Salt||Coastal areas of Karachi|
|Magnesite||Kumhar and Hazara (Abbottabad)||Limestone for Lime||All provinces and Gilgit-Baltistan (Northern Areas)|
|China Clay||Shah Deri, Swat||Granite, Marble, and Onyx||Granite is found in Gilgit-Baltistan (Northern Areas). Marble is abundantly found in Khyber Pakhtunkhwa and Balochistan|
In Khyber Pakhtunkwa:
Emerald (in Swat), Pink Topaz (Mardarn), Peridot (Hazara, Kohistan), Aquamarine, Tourmaline (Chitral), Garnet (Bajor)
In Gilgit-Baltistan (Northern Areas):
Ruby, Aquamarine, Tourmaline, Topaz, Garnet
In Azad Kashmir:
Kashmir Ruby, and Tourmaline pink beryl, Spessertine garnets and aquamarine
Table 1.11 Pakistan Minerals and Mining
Utilizing centuries-old techniques and traditions, the handicrafts of Pakistan are marked by their intricate embroidery, complicated production processes, and their use of natural materials like dyes, wood, clay, cotton, silk, and other various plant-based products as well as naturally occurring brass, silver, and marble.
The handicrafts/ cottage industries of Pakistan hold an important place in most rural areas, and are now gaining importance in the urban areas as well. There is a great demand for hand-woven carpets (all sizes), embroidered work on different textiles, brassware, rugs and traditional bangles as well as other traditional handicrafts. These are also considered important export items and are in high demand in international markets. Encouraging the handicraft/ cottage industry has a significant economic impact, especially for women in Pakistan, as the production and sale of traditional handicrafts can help women earn a modest income without leaving the domestic space. Cottage or small scale industries like carpet-weaving, candle-making and embroidery can be established in houses and women can be gainfully employed. This increases the active labor force, and contributes to the overall economic well-being of the country.
Some of the traditional handicrafts of Pakistan include
- handloom fabrics
- lacquer work
- tile work
- terracotta pottery
- rilli-making (traditional quilts)
- leather products
- wood products
- traditional print-making on cotton known as the ajrak
The type of handicrafts associated with, and produced in, particular provinces is interwoven with the region’s culture, and thus, the regional handicrafts are considered to be indigenous to the areas of production. Each province produces handicrafts that are unique to the province in design, and technique. Some examples include:
- Kashmiri Shawls (pashmina and woolen shawls and wraps from Kashmir)
- Embroidery unique to Balochistan and Sindh. This includes mirror embroidery, in which small mirrors are stitched into the fabric to create a glittery effect
- Peshawari chappals (indigenous shoeware, embroidered, and produced in the Khyber Pakhtunkhwa area)
- Carpets (produced all over Pakistan, with each region employing specific weaving techniques unique to the province)
- Camelskin lamps (Multan, Punjab)
- Gujrati pottery
- Wood and brasswork produced in different parts of Pakistan. These include metal lanterns, mirror frames, decoration pieces and furniture, both with lacquer work, and intricate patterns crafted in wood
 CIA World Fact Book: https://www.cia.gov/library/publications/the-world-factbook/geos/pk.html
 Growth poles means that the growth of the economy is not uniform, over an entire region, but instead, takes place around a specific pole (or cluster).
 This table was compiled using the values published on the FAOStat 2016 website (see: http://www.fao.org/faostat/en/#rankings/countries_by_commodity). The website allows users to search by country and commodity, so each commodity’s name was chosen from the dropdown menu, and then recorded in the table. Pakistani commodities not ranked by FAOStat have not been included in this table.
 Not Elsewhere Specified
 Agricultural Statistics of Pakistan 2017-18
 Reported Area is Total Area. It includes cultivated area (net area sown + current fallow), culturable waste, unculturable land, and forest area.
 Culturable Waste means all cultivable land not actually cultivated. It includes all grazing and other land not included under forest.
 Net Sown means the area which has been sown at least once in a year. It includes area growing crops, fruit, vegetables etc.
 Animals that provide farm labor
 All figures in numbers/ heads
 This section draws heavily from PARC Official Website
 Technical term used for beekeeping
 Pakistan Agricultural Research Council, Honey Bee Research Program
 Exclusive Economic Zone is a sea zone prescribed by the United Nations Convention on the Law of the Sea over which a State has special rights regarding the exploration of, and use of, marine resources, including energy production from water and wind.
 Nautical miles
 Metric tons
 pakissan.com, a website developed by Pakistan Agricultural Research Council (PARC)
 A Study on Assessment of Fisheries Resources in Pakistan and its potential to Support Marine Economy by Khadim Hussain, Sally Kartika, Mohammad Mohsin, Kiran Nazir, and Mu Yongtong
 This paragraph draws heavily from Pakistan Poultry Association official website
 Federal Bureau of Statistics [table attached as appendix]
 A barrage is constructed such that it can store water on one side as needed and serve as a storage reservoir. Electricity can also be produced.
 Headworks is a regulator to control the flow of water and distribute it through canals for irrigation.
 The Spate Irrigation or Rod Kohi System of Irrigation is a type of water management unique to arid regions bordering highlands. It is common in South Asia, the Middle East, North Africa, and the Horn of Africa.
 Study on Hill Torrents Management for Increasing Agricultural Activity in Pakistan by Mohsin Nawaz and Moo Yong Han
 Economic Mineral Deposits of Pakistan (Board Of Investment Pakistan)
 Pakistan Board of Investment, Government of Pakistan, mining over view