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MGT604 - Management of Financial Institutions - Lecture Handout 13

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The Asian Development Bank will provide close to $ 6 billion development assistance to Pakistan during 2006-9. The World Bank unveiled a lending program of up to $6.5 billion for Pakistan under a new four-year, 2006-2009, aid strategy showing a significant increase in funding aimed largely at beefing up the country's infrastructure. Japan will provide $500
million annual economic aid to Pakistan.

The major causes of poverty in Pakistan

  • Lack of employment opportunities, which in the rural setting is caused by the absence of rural-urban linkages.
  • A slowdown in the pace of economic growth in the 1990s
  • With the burgeoning debt obligations, a decline in the public sector development program.

Key challenges facing the Government of Pakistan

  1. Restoring economic growth-constrained further by a drought-affected agriculture sector
  2. Managing the large debt burden with international financial institutions.
  3. Promoting domestic and foreign investors' confidence
  4. Increasing exports to generate foreign exchange,
  5. Maintaining a level of social development spending to stem the deteriorating social indicators.
  6. Law and Order, or Terrorism

Future Prospects for Pakistan's Economy

Pakistan's long term prospects will depend upon the interplay of evolution in political and social developments, economic policies to be pursued, the quality of governance and institutions, and most important investment in the human capital. It has become quite obvious from both Pakistan's own history and the experience of the developing countries that sustained economic growth and poverty reduction cannot take place merely on the strength of economic policies. Political stability, social cohesion, supporting institutions, and good governance are equally important ingredients coupled with both external environments for achieving economic success.

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MGT411 - Money & Banking - Lecture Handout 17

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  • Tax Effect
  • Term Structure of Interest Rate
  • Expectations Hypothesis
  • Liquidity Premium

Tax Effect

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