Country also faces the problems of illiteracy, and charges of Fiscal ineptitude. But despite such decelerating factors, Pakistan is on the path of growth with the new government of President Musharraf continuing with a reformist economic agenda, assisted by support from multilateral institutions. Pakistan's economic performance appears to be improving gradually. A thaw in the relations with India is also helping the country in economic progress. In the 2007 country profile Country-Watch points out that Pakistan is a developing nation with agriculture accounting for about 25 percent of its GDP, employing about 45 percent of the people (101). In recent years agriculture is declining as a percentage of total output with other economic activities picking up as well, but still agriculture sector remains the primary economic activity in Pakistan. A high annual population growth rate of two percent not matched with equal rise in opportunities and resources for the country, is also proving to be a big drain on its economy. Growth of economy and business prospects in a country depend mainly on., macroeconomic factors, political stability, economic liberalization, human resource development index and levels of corruption in the country. A stable business environment requires normalization of the fiscal position, with an increased tax base and a more transparent allocation of resources. A stable government helps in infusing confidence amongst investors.
Recognizing the need for liberalization, Government of Pakistan is moving to increase the pace of privatization of state entities, and is removing a number of qualitative and quantitative import restrictions. Financial sector is also seeing a reduction in state involvement with the onset of more and more private banks (EIU, 31). Thanks to such efforts, after several years of declining economic growth, owing to political upheavals, Pakistan has registered good growth rate since 2002. GDP grew 5.5 percent in 2003, 7.1 percent in 2004, and 7 percent in 2005. Such sustained growth also resulted in developing the human resource index as well. Development in human resources is also critical factor in judging a country for investment purposes. Pakistan, a country with less than 50% literacy is still in the process of attaining the ratings that its neighbor India has already acquired. In fact lack of such development has prevented Pakistan from joining India in the lucrative software development, BPO and ITES sector (Country-Watch, 101). The human resources index suffers on account of high unemployment rate. A big percentage of Pakistan, especially women is unemployed because. EIU Statistics (40) point out that in 2000, the unemployment rate for young women was about twice that of the rate for young men. In 2005 the overall unemployment rate was 7.7 percent. The labor force grew at an annual average rate of 4.5% during the 1990s, but growth slowed to less than 3% in 2000-05. At end-December 2005 the labor force stood at 47.7m and the number of employed at 44m, leaving 3.7m (7.7% of the labor force) as unemployed. In addition there's substantial underemployment i.e. there are sectors like Agriculture which employ more people than are actually required. The agriculture sector has been the least tax paying one in this part of the subcontinent, due to couple of reasons ranging from lack of