Pakistan country brief

Political overview

National government

Imran Khan was sworn-in as prime minister of Pakistan on 18 August 2018 following his party's victory in national elections on 25 July. The Electoral Commission of Pakistan has declared Imran Khan's Pakistan Tehreek-e-Insaf (PTI) as winner in 149 of the 342 seats in the National Assembly, short of the 172 seats required to rule in its own right. With the support of minor parties, PTI controls 180 votes on the floor, more than the outgoing Pakistan Muslim League-Nawaz (PML-N) or Pakistan People's Party (PPP). PM Khan won the election on an anti-corruption platform and promising to reduce poverty among Pakistan's 208 million Muslim-majority population.

Other key figures in the new administration include:

  • Foreign Minister – HE Mr Shah Mehmood Qureshi
  • Defence minister – HE Mr Pervez Khattak 
  • Finance Minister – HE Mr Asad Umer

Pakistan’s electoral college – comprising the senate, national and provincial assemblies – elected Dr Arif Alvi as the new President of Pakistan on 4 September 2018. The Presidency is primarily a ceremonial position. The Prime Minister heads the Cabinet and the President chairs the National Security Council, which comprises military chiefs and cabinet members. Dr Alvi was a founding member of Imran Khan’s PTI party.

National legislature

Pakistan has a federal system of government with a bicameral legislature: the National Assembly and the Senate.

The National Assembly (the lower house) has 342 seats. The majority of lower house seats are elected on a first-past-the-post basis, with 60 seats reserved for women and 10 for non-Muslim minorities. The reserved seats are allocated on the basis of proportional representation to parties that win more than 5 per cent of the directly elected seats.

The current Senate (the upper house) consists of 104 senators. In the Senate, 23 senators are elected by each of the four provincial assemblies, eight are FATA representatives and four are Federal Capital Territory (Islamabad) representatives from the lower house. Under the 18th Constitutional Amendment (passed in February 2010) four seats are allocated to non-Muslim minorities. An election for one half of the seats in the Senate was held in March 2018. The next Senate elections are due to be held in 2021.

Provincial and other sub-national governments

The Islamic Republic of Pakistan includes four provinces — Sindh (capital, Karachi), Punjab (capital, Lahore), Khyber Pakhtunkhwa (formerly the North-West Frontier Province) (capital, Peshawar) and Balochistan (capital, Quetta).  Islamabad is a special 'Federal Capital Territory'.

All four provinces have their own elected provincial assemblies and governments. A Chief Minister heads each provincial government. Each province has a Governor, who is appointed by the President of Pakistan. Following the July 2018 elections, PTI politicians were Chief Ministers of Punjab and Khyber Pakhtunkhwa and PTI was a member of the governing coalition in Balochistan. A PPP politician is Chief Minister of Sindh.

Pakistan also administers approximately one-third of the area of the former princely states of Jammu and Kashmir and Gilgit-Baltistan — also known as the 'Northern Areas' of Pakistan — which have a quasi-provincial status and are not represented in the national parliament (legislature). They have their own elected parliaments and governments.

Economic overview

Pakistan's economy

Pakistan has the second largest economy in South Asia, after India. Pakistan’s GDP grew by 5.8 per cent in 2017-18, the highest in 13 years, underpinned by improved energy supply, infrastructure investment from China, strong credit growth and persistent consumer confidence.

Pakistan's economy is made up of the services sector (60%), industry/manufacturing (21%) and agriculture (19%). While declining as a proportion of GDP, agriculture still contributes one-fifth of Pakistan’s wealth and almost half the population depends directly or indirectly on agriculture for their livelihoods. Manufacturing is concentrated around the Karachi-Hyderabad region and Lahore.

But Pakistan faces immediate economic challenges including a large current-account deficit – USD18 billion in 2017-18, up from USD12.6 billion in the previous period. High imports driven by high oil prices and infrastructure spending have reduced the State Bank’s foreign currency reserves (USD9.9 billion at end-August 2018). Trade imbalances, foreign debt, budget deficits and low reserves have carried Pakistan to the IMF on 21 occasions.

China is Pakistan’s main economic partner, accounting for 55 per cent of FDI inflows. The flagship USD64 billion China Pakistan Economic Corridor (CPEC) promises to transform Pakistan’s infrastructure and should result in the establishment of nine special economic zones by 2030. The United States remains Pakistan’s top destination for exports, followed by Britain, China, Afghanistan, the UAE and Germany. The top import countries are China, the UAE, Singapore, Saudi Arabia and the United States. 

In 2017-18, imports of USD55.8 billion were led by machinery, petroleum, chemicals, transport equipment and electrical goods. Exports of USD18.45 billion were led by cotton yarn, textiles, rice and fruit. Remittances of USD19.3 billion (2017-18) from overseas Pakistanis helped reduce the current account deficit.

Trade

Pakistan’s position between China, Central Asia, India and the Persian Gulf places it at an important cross-roads for trading goods.  In 2017-18, Pakistan’s exports totaled US$24.8 billion, less than half the value of its imports (US$55.8 billion). Pakistan’s major commodity exports in 2017-18 were textiles, leather and sporting goods, rice and chemicals. Pakistan’s major imports were petroleum and related products, machinery and transport equipment, agricultural and other chemicals and food. Pakistan’s principal import sources were China (21%), UAE (16%) and Singapore (8%), while its principal export destinations were the United States (16%), UK (7%), China (7%) and Afghanistan (6%).

Bilateral relationship

Australia and Pakistan enjoy a long-standing strong and growing relationship underpinned by deepening people-to-people links. Australia established diplomatic relations with Pakistan after its 1947 partition from India and has had a resident mission in the country since 1948. Australia is committed to supporting Pakistan as a partner in its efforts to address security threats, build economic prosperity and enhance development.

Political relations

The Australian Government has strong engagement with Pakistan in the areas of security cooperation (including defence and law enforcement training), economic reform, development and democratic governance.

There continues to be a range of high-level engagement activities between Australia and Pakistan. The Foreign Minister, the Hon Julie Bishop MP, travelled to Islamabad and Lahore in May 2015. There is also an active program of official level dialogue and engagement.

People-to-people links

Australia and Pakistan enjoy a common heritage and shared interests. Both countries are members of the Commonwealth and are federations with bicameral legislatures. Our people share a passion for sports and the arts, and our strong people-to-people links centre on an active and successful Pakistani community in Australia.

The Pakistani community in Australia is significant. As of August 2017, there were more than 64,000 Pakistan-born people living in Australia. More than 13.000 Pakistanis are studying at Australian universities.  In September 2018, there were 72 Pakistanis studying in Australia on long-term scholarships under the Australia Awards program. These awards promote knowledge, education links and enduring ties between Australia and Pakistan.

Development cooperation

Australia is Pakistan’s sixth-largest bilateral donor and continues to make an important contribution to the country’s development.  The Australian aid program is engaging the public and private sectors to address constraints to sustainable and inclusive economic growth and job creation through increased trade and investment, agricultural productivity, water resources management and industry. Australia’s development investments provide business and innovation support to the private sector in ways that benefit the poor through expanding jobs and lifting incomes, particularly for women.

In 2017-18, key achievements of Australian’s aid program to Pakistan included:

  • Enabling 3,800 women survivors of domestic violence to access support services
  • Providing 42,500 women and children access to good nutrition and 300,000 children access to Vitamin A supplementation
  • Supporting the Government of Khyber Pakhtunkhwa Province to deliver quality education to over 43,800 children
  • Supporting 26,000 poor farmers through agribusiness and market opportunities
  • Helping Pakistan's Ministry of Commerce to strengthen its trade-related policies, institutions and regulations.

Economic and trade relations

Australia-Pakistan two-way trade in goods and services was worth $1.83 billion in 2017. Australia’s major goods exports to Pakistan are pulses and oilseed, along with fertilizer and scrap metals.  Around 13,400 Pakistanis studied in Australian higher education institutions in 2018, and education services exports formed the lion share of Australia’s $687 million services exports to Pakistan.  Major imports from Pakistan are textiles, petroleum and rice.

An Australia-Pakistan bilateral trade agreement has been in force since 12 July 1990. The agreement commits both parties to "facilitate, strengthen and diversify" trade. The Australia and Pakistan Joint Trade Committee (JTC), which met most recently in Canberra in December 2017, is the primary forum for discussing bilateral trade and investment. Australia and Pakistan continue to work together under an MOU on Strengthening Bilateral Trade and Economic Co-operation that itself was an outcome of the JTC.

Both countries are exploring avenues to expand trade and investment, particularly in education and agribusiness.  Austrade has three locally engaged Business Development Managers in Pakistan, one each in Islamabad, Lahore and Karachi.  Country management for Pakistan is the responsibility of Austrade's New Delhi-based Regional Senior Trade and Investment Commissioner.

There are good prospects for growth in trade and investment, particularly in:

  • education (tertiary, vocational and corporate training);
  • agribusiness (dairy, crop production, quality issues, storage and handling);
  • mining equipment, technology and services (METS)
  • processed foods; and
  • IT and communications products and services.

Future sectors that may provide opportunities for Australian trade and investment include:

  • clean energy technologies (including clean coal, wind and renewables);
  • medical technologies; and
  • infrastructure investment (including airport design and construction)

Security cooperation

The Pakistan Australia Joint Working Group on Border Management and Transnational Crime Cooperation is strengthening cooperation to combat transnational crime, such as terrorism financing and illegal migration. The Australian Federal Police has a 27 year relationship with Pakistan law enforcement. Working together, Australian and Pakistan agencies have successfully disrupted transnational crime, for example, through drug seizures. Through training programs and specialist training equipment, Australia is building Pakistan’s capacity to counter serious and sophisticated crime.

In 1907, the Australian Defence Force sent its first student to Quetta Command and Staff College. This unique and long-standing institutional relationship underpins the Australia-Pakistan defence relationship. In addition to the position at Quetta, the Australian Defence Force now sends a student to the National Defence University in Islamabad each year, conducts an annual counter-insurgency exchange between the Australian Command and Staff College and Quetta Command and Staff College, and Defence personnel periodically attend specialised courses in Pakistan.

Many of the Pakistan military's senior officers have visited Australia for Talks, and some for training earlier in their careers. Australia and Pakistan hold regular Chief-to-Chief dialogues. Since 2010, there have been regular 1.5 track dialogues that bring together senior leaders from respective militaries, government agencies and think tanks to discuss issues of mutual interest.

Human rights

The Australian Government remains concerned about the human rights situation in Pakistan, including the use of capital punishment and the treatment of ethnic and religious minorities. Australia has raised its universal opposition to the death penalty and urged the Pakistan Government to address human rights concerns.

Last Updated: 4 October 2018