Edited by Léo-Paul Dana, Mary Han, Vanessa Ratten and Isabell M. Welpe
M. Khurrum S. Bhutta and Adnan Omar Introduction Pakistan is a vital crossroads between Central and South Asia. With a population of 165 million and a gross domestic product (GDP) of US$437.5 billion (CIA, 2006), it has a significant role to play in the global economy. Pakistan is better placed than ever before for a significant boost in its economic outlook. Several economic development programs have been launched in the past few years and, equally importantly, have been complemented by external support including debt rescheduling and financial incentives at a concessional rate. These measures if allowed to continue unhindered could well see a GDP growth increase not seen in Pakistan’s history. This of course is not a foregone conclusion; to realize this progress Pakistan will have to continue on its recent road of fiscal and monetary policies and build on this business-friendly environment. However, there seems to be a realization that Pakistan has performed far below its potential in the 1990s and needs to play catch-up with its neighbours who are doing a lot better. Research has often likened Pakistan’s economy to its small and medium enterprise (SME) sector. The significant role played by SMEs in Pakistan’s economy is clear from research and statistics (Bhutta et al. 2007; Khawaja 2006). According to the 2005 Economic Census of Pakistan, there are 3.2 million business enterprises nation-wide and SMEs constitute over 99 percent of them. They employ 78 percent of the industrial employment and by value contribute nearly 35 percent. Pakistan...
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