achieved through foreign investment and joint venture / merger and acquisition. this would enable the textile industry, currently accounting for one - fourth of pakistan ’ s output and 69 % of exports, to withstand aggressive regional competition ; and • developing backward and forward linkages of large scale industry with small and medium industry that will help in improving productivity and competitiveness. export growth has been quite impressive, more than doubling to $ 18 billion over fy01 - 07. export plan for 2006 - 2013 1 envisages a rise in export / gdp ratio from around 13 % to 15 % to generate almost $ 40 - 45 billion of export revenues. the principal thrust of this strategy will be to promote export diversification to reduce industry and exports vulnerability to textile sector. substantial exploration is underway to exploit pakistan ’ s potential to promote : • agriculture exports efforts are underway to promote growth of minor crops and noncrop sector particularly dairy sector where pakistan is now the world ’ s fifth largest producer. aside from developing innovative guidelines for credit flows to the sector, efforts are underway to improve agriculture marketing, grading and quality ; establishment of agriculture export processing zones with public - private partnership ; encouragement of livestock development through cross breeding, artificial insemination and embryo transfer technology. also, there is scope for expanding inland fish farms and developing in public : private partnership fish harbors etc. • pakistan, being the fourth largest cotton producer in the world after china, india and us, has strong raw material and experience - edge in textiles. to augment capacities, industry invested $ 5. 5 billion over the fy99 - fy05. there is further scope for a three to fourfold increase in spindle and looms capacity and to diversify product ( knitwear, bed ware and ready - made garments ) and market base and improve quality and design. • in view of the relocation of industry and changing production and subcontracting networks / hubs and alliances as newly industrialized economies move out of labor intensive industries, pakistan has an opportunity to serve as an alternate production center for electronic, electrical, and engineering industry. • pakistan has made some inroads into the medium and high - end technology products such as electronic goods and this area could be explored further. • mineral is another sector where pakistan has large potential given its copper, high quality granite and marble and gem reserves. • finally, information technology ( it ) and other services sectors which constitute 55 % of gdp have a role to play in enhancing exports and

in check by managing to lower core inflation ; slippages in inflation target were inevitable given the uptrend in the global commodity prices as well as structural complexities and inefficiencies of wholesale and retail markets. global and domestic cyclical events will undoubtedly pose frequent challenges for small and open economies, like pakistan. recognizing this, the new government will need to strengthen the medium - term macroeconomic stabilization program and front load it, while accelerating the implementation of structural reforms to realign deficits to sustainable levels. keeping this in perspective, the government ’ s broader economy strategy for the next few years will need to include : i. increasing domestic resource mobilization to raise revenue / gdp ratio by at least 5 percentage points of gdp. this is possible given the scope for enlargement of tax base : the existing tax regime collects almost 68 % of taxes from manufacturing and corporate sector, while agriculture and services sectors ( aside from banks ) are exempt and segments of economy are outside tax net ; ii. nation - wide campaign to raise saving levels through continued efforts to raising awareness and deepening financial markets ; iii. restricting large proportion of new resource mobilization for public investment, while prioritizing the recurrent expenditures through a major overhauling of the government machinery ; iv. restoring the momentum of privatization of state - owned enterprises, which has been one of the most successful in asia. the government has sold off cumulatively almost $ 7 billion of assets over fy00 - fy08 and there are around 61 state entities in the pipeline ; v. providing more autonomy to public sector organizations, with effective leadership and management, to improve their operational and financial efficiencies accompanied by a program to strengthen their balance sheets which should allow them to graduate from budgetary allocations to seeking funding from the market ; and vi. raising private investment / gdp from 23 % to at least 28 % which involves significant tapping additional resources both from domestic and international financial markets. although this is an ambitious macroeconomic framework, but launching and adhering to it is attainable and critical. to position itself, pakistan plans to further enhance its policy framework and tap its economic potential by mobilizing additional foreign capital that is likely to be attracted as the country offers lucrative investment opportunities across all sectors. deepening of liberal incentive and investment regime will help economic sustainability broad based deregulation and liberalization of investment and pricing regime, pakistan attracted cumulatively $ 13. 5 billion investment across all strategic sectors. this has been facilitated by