OVERVIEW OF ECONOMYGHANA Well endowed with natural resources, Ghana has roughly twice the per capita output of the poorest countries in West Africa. Even so, Ghana remains heavily dependent on international financial and technical assistance. Gold and cocoa production, and individual remittances, is major sources of foreign exchange. The domestic economy continues to revolve around agriculture, which accounts for about 35% of GDP and employs about 55% of the work force, mainly small landholders. Ghana signed a Millennium Challenge Corporation (MCC) Compact in 2006, which aims to assist in transforming Ghana's agricultural sector. Ghana opted for debt relief under the Heavily Indebted Poor Country (HIPC) program in 2002, and is also benefiting from the Multilateral Debt Relief Initiative that took effect in 2006. Thematic priorities under its current Growth and Poverty Reduction Strategy, which also provides the framework for development partner assistance, are: macroeconomic stability; private sector competitiveness; human resource development; and good governance and civic responsibility. Sound macroeconomic management along with high prices for gold and cocoa helped sustain GDP growth in 2008. SOUTH KOREA Since the 1960s, South Korea has achieved an incredible record of growth and integration into the high-tech modern world economy. Four decades ago, GDP per capita was comparable with levels in the poorer countries of Africa and Asia. In 2004, South Korea joined the trillion dollar club of world economies. In 2008, its GDP per capita was roughly the same as that of the Czech Republic and New Zealand. Initially, this success was achieved by a system of close government/business ties including directed credit, import restrictions, sponsorship of specific industries, and a strong labor effort. The government promoted the import of raw materials and technology at the expense of consumer goods and encouraged savings and investment over consumption. The Asian financial crisis of 1997-98 exposed longstanding weaknesses in South Korea's development model including high debt/equity ratios, massive foreign borrowing, and an undisciplined financial sector. GDP plunged by 6.9% in 1998, then recovered by 9% in 19992000. Korea adopted numerous economic reforms following the crisis, including greater openness to foreign investment and imports. Growth fell back to 3.3% in 2001 because of the slowing global economy, falling exports, and the perception that much-needed corporate and financial reforms had stalled. Led by consumer spending and exports, growth in 2002 was an impressive 7% despite anemic global growth. Between 2003 and 2007, growth moderated to about 4-5% annually. A downturn in consumer spending was offset by rapid export growth. In 2008, inflation increased in the face of rising oil and food prices before easing in the fourth quarter. Korea was hit hard by the global financial turmoil that began in September 2008. Stock prices fell by more than 40% for the year and the value of the won fell by approximately 26%. Korean GDP shrank in the fourth quarter and GDP growth for the year was just 2.5%. The Korean government adopted several measures to combat the credit crunch and stimulate the economy.

PAKISTAN Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal political disputes, low levels of foreign investment, and declining exports of manufactures. Faced with untenable budgetary deficits, high inflation, and hemorrhaging foreign exchange reserves, the government agreed to an International Monetary Fund Standby Arrangement in November 2008. Between 2004-07, GDP growth in the 6-8% range was spurred by gains in the industrial and service sectors, despite severe electricity shortfalls. Poverty levels decreased by 10% since 2001, and Islamabad steadily raised development spending in recent years. In 2008 the fiscal deficit - a result of chronically low tax collection and increased spending - exceeded Islamabad's target of 4% of GDP. Inflation remains the top concern among the public, jumping from 7.7% in 2007 to 20.8% in 2008, primarily because of rising world fuel and commodity prices. In addition, the Pakistani rupee has depreciated significantly as a result of political and economic instability. Economic Development in Pakistan After the founding of Pakistani State in 1947, the Governments economic policy concentrated attention on developing an economic infrastructure, achieving self-sufficiency in food, and developing export industries. However, an intrusive and over sized public sector, an over regulated economy, excessive discretionary powers often incompatible with the level of the official, and an absolute lack of transparency, provide the optimal environment for opportunities of corruption restricting the economic development in the country. Combination of these factors with weak accountability ensures that economic backwardness get entrenched into the entire fabric of society. Despite the pervasive pessimism that is undoubtedly felt, we have come across many who would willingly embrace new practices if only the scourge of corruption could be lifted from their lives. The countries that have surged ahead, on the other hand, are characterized by high level of human capital accumulation where the educated labour force has raised the level of output and the rate of growth over a sustained period of time. Inefficient public expenditure process, higher cost of basic input, lack of skilled human resources, corruption and nepotism restrict Pakistan far behind in development according to recently announced World Bank report. Pakistan is suffering from shortage of infrastructure in the water, irrigation, power, and transport sectors. Infrastructure is essential for sustained growth and competitiveness both in the local and international markets. The gaps between demand and supply in these sectors are alarming. The plans needs to put in place urgently, these critical shortages would continue to undermine the efforts to improve socio-economic indicators and to reduce poverty. Without adequate irrigation resources, power and transport infrastructure, the very sustainability of Pakistan as an independent nation may be at stake as shortages could lead to increased social discontent and disharmony amongst the federation and the provinces. Pakistan is on the list of the most water stressed countries in the world, and forecasts indicate that available resources are depleting rapidly, possibly leading to a state of water scarcity in the next two decades. Much of the water infrastructure is in poor repair and Pakistan has to invest almost Rs 60 billion per year in new large dams and related infrastructure over the next five year. In the energy sector, Pakistan will face severe power shortages of approximately 6,000 megawatts by the year 2010 (equivalent to about three Tarbela dams) and 30,700 MW by the year 2020.

The per capita energy consumption in Pakistan is amongst the lowest in the world and a lack of adequate energy resources precludes industrial growth affecting all sectors of the economy. Similarly, the transport sector inefficiencies are costing the economy between 4 to 5 percent of GDP each year indicating the need for massive investment in roads, rail, air and ports as indicated in the World Bank report. Delays in project implementation reflect poor planning, programming and weak implementation capacity. Public agencies take on too many projects in their development programs and end up delivering little, and what they do deliver is often determined by political priorities. The delays in payment, imbalanced contracts, inefficiencies and corruption in the system force contractors to incur additional financial and economic costs resulting in squeezing the already poor margins in the industry. Pakistan should lesson from international case studies on the development of the construction industry and the literature reviews clearly show that a holistic long-term planning and a detailed strategy must be evolved with a clear vision and commitment towards developing the industry, and this process may take as long as a decade or more of sustained effort. The Government needs to make serious efforts to strengthen revenue mobilization, contain its unproductive expenditure, and utilize scarce external assistance more efficiently. -------------------------------------------------------------------------