The economic state and businesses of Pakistan are drastically limited due to current conditions of the nationwide infrastructure. Created out of an identity split from India in 1947, the country is out of its infancy and currently experiencing growth, but has had many problematic transitions of power in its history (Zaidi, "A Short History of Pakistan," n.d.). Despite a short history and volatility, Pakistan has experienced economic success, indicated by having a domestic market size ranking 25th out of the 144 countries ranked on the Global Competitive Index; However, much of the country’s potential success is hindered by the lack of a comprehensive nationwide infrastructure, demonstrated by an infrastructure score of 2.7 out of 7, ranking 119th on the GCI (Schwab, 2018). Pakistan’s significant gaps in the infrastructures of communication, finance, and the government will be discussed with examples.
Communications
Telecommunication and broadband services are severely limited throughout the nation as consistent, uninterrupted electricity is not widely available. Greater than 50 million Pakistani citizens (roughly 27% of the population) live without daily use of electricity, and most of the country suffers from regular outages due to failing or inadequate equipment (“Pakistan Energy Situation”, 2018). On the GCI, electric infrastructure and quality received scores of 1.9 (ranking 130th) and 2.1 (ranking 133rd), respectively (Schwab, 2018). Experts conclude that wi-fi and broadband have accelerated the creation of global markets, unfortunately, Pakistan is unable to benefit from this infrastructure support, and in turn, has limited potential growth in the global marketplace (Besanko, et al.). As much of the nation does not have regular access to the internet, the financial industry is slow to develop using internet-based technologies and applications.
Finance
Religion plays a major role in Pakistan, where greater than 95% of citizens classify themselves as Muslim ("Population by Religion," n.d.). Islamic traditions are considered in business, government, and personal decisions on a daily basis. One example of such tradition that conflicts with business opportunities in finance presents itself in the Islamic teachings that forbid taking interest-based loans (“Has Islam Really,” 2017). Majority of the population is loan-averse, and this reduces the economy’s ability to achieve the potential growth opportunities associated with a credit-available economy.
Government
Central control of the country has changed between civilian and military hands and destabilized this critical infrastructure support needed for businesses to leverage government projects. Corruption, improper allocation of funds, and lack of consistent leadership have limited long-term government policies of labor or business regulations (Zaidi, "A Short History of Pakistan," n.d.).
Conclusion
These examples show how the pillars of infrastructure are quite weak in Pakistan, but strong hope is present in the high market size. Using these financial benefits, a country has the opportunity to improve other areas of infrastructure as they undergo modernization projects.
References
Besanko, David, et al. Economics of Strategy. 7th ed., vol. 16, John Wiley & Sons, Inc., 2016.
Has Islam Really Prohibited Interest? (2017, March 23). Retrieved from http://www.albaraka.co.za/Islamic_Banking/Prohibition_of_interest/Has_Islam_really_prohibited_interest.aspx
Pakistan Energy Situation. (2018, July 18). Retrieved January 09, 2019, from https://energypedia.info/wiki/Pakistan_Energy_Situation#Main_Problems_of_the_Energy_Sector
Population by Religion. (n.d.). Retrieved January 09, 2019, from http://www.pbs.gov.pk/content/population-religion
Schwab, K. (2018), The Global Competitiveness Report 2018, World Economic Forum, Geneva. Retrieved from http://www3.weforum.org/docs/GCR2018/05FullReport/TheGlobalCompetitivenessReport2018.pdf
Zaidi, S. A. (2011, January/February). A Short History of Pakistan. Retrieved January 09, 2019, from https://sai.columbia.edu/podcourse-short-history-pakistan
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