Production and Operations Management: Manufacturing and Services

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STUDY MEETING ON EXPANSION AND DEVELOPMENT OF THE
SERVICE INDUSTRY IN ASIA COUNTRY PAPER AN
OVERVIEW OF SERVICE INDUSTRY OF PAKISTAN
Presentation by Asad Farooq Siddiqi
Ejaz Ahmed Minhas Senior Management Counselor
Head Communications Pakistan Institute of
Management Technology Up-gradation
Karachi, Pakistan Skill
Development Company Lahore,
Pakistan
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PAKISTANS ECONOMY

• Growth rate of 7 for four consecutive years
• GDP estimated to be 475.4 billion
• Agriculture 20
• Service sector 53
• Per capita income stands at 2,942
• Poverty rate estimated between 23 to 28
• Major industries
• Telecommunications, software, automotive,
  textile, cement, fertilizer, steel, ship
  building, aerospace, arms.

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GOVERNMENT RECENT FOCUS

• AGRICULTURE
• ENERGY
• SERVICE SECTOR

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DEFINITION AND COMPOSITION OF SERVICE SECTOR IN
PAKISTAN
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• In the last decade service sector in Pakistan
  has emerged as a growth powerhouse
• Reaching 9.6 growth in 2006 and 8 in 2007
• Services sector continues to be the major driving
  force in its contribution to economic growth.
• The commodity producing sectors (Agriculture
  Industry) has contributed two-fifth and service
  sector contributed the remaining three-fifth
• Service sector collectively absorb approximately
  one third of workforce in Pakistan

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Service Sector 2006-07
Transport and Storage 10.3
Wholesale and Retail Trade 19.1
Finance and Insurance 5.6
Ownership of Dwellings 2.7
Public Admn. Defense 6.0
Other Services 9.6
Total 53.3
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STATUS OF SERVICE SECTOR

• Finance insurance sector spearheaded the growth
  in the service sector and registered a stellar
  growth of 18.2 percent during the fiscal year
  2006-07.
• Value added in the wholesale and retail trade
  sector is based on the margins taken by traders
  on the transaction of commodities traded in the
  whole sale and retail market. In 2006-07, the
  gross value added in the wholesale and retail
  trade increased by 7.1 over the previous year,
  compared to 8.6 growth in 2005-06.

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STATUS OF SERVICE SECTOR

• Value added in the transport, storage
  communications sector is based primarily on the
  profits losses of Pakistan Railways, Pakistan
  International Airlines and other airlines,
  Pakistan Postal Courier services, Pak Telecom
  and motor vehicle of different kinds on the road.
  In 2006-07 this sector grew by 5.7

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STATUS OF SERVICE SECTOR

• Public Administration Defense posted a growth
  of 7.0 while ownership of dwellings grew by 3.5
  percent and social services sector improved its
  growth performance to 8.5 percent from 6.3
  percent last year.

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KEY ISSUES IN PAKISTANS SERVICE SECTOR

• Pakistans share in the world services sector
  could not grow beyond 0.06 per cent due to a
  number of impediments and obstacles. While the
  total world trade in services stood at 1.7
  trillion.
• The trade deficit in the services sector stood at
  almost 1 billion in 2006-07 Pakistan government
  services and communication services were the only
  sector which stood in surplus, while the rest
  remained in the deficit.

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KEY ISSUES IN PAKISTANS SERVICE SECTOR

• Exports of services are particularly important to
  developing and transition countries such as
  Pakistan since these exports contribute directly
  to job creation and development.
• Pakistan has potential to export financial
  services to both developed and developing
  countries. However, many Pakistani banks had
  closed its branches in various countries due to
  restrictions of high pre-paid capital,
  non-recognition of the credentials of Pakistani
  banks and some other home regulations.

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KEY ISSUES IN PAKISTANS SERVICE SECTOR

• Retail, Banking and Stock Market has experienced
  increase in volume but through speculation, in
  terms of price hike , increase in overheads
  without adding any real value into product.
• Pakistan has potential to export financial
  services to both developed and developing
  countries. However, many Pakistani banks had
  closed its branches in various countries due to
  restrictions of high pre-paid capital,
  non-recognition of the credentials of Pakistani
  banks

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Barriers

• Lack of credibility in the foreign market
• Difficulties in gaining temporarily business
  entry to the market
• Apparent lack of convenient access
• Lack of skilled labor
• Lack of basic infrastructure
• Lack of standardization and piracy

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GOVERNMENT POLICIES, PLANS AND REGULATIONS
RELATED TO SERVICE SECTOR
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• Foreign Direct Investment
• National IT Policy
• Intellectual Property Rights' (IRP) Protection In
  Pakistan

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THANK YOU
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