Pakistan has a democratically elected government where the ruling party is Pakistan People's Party.
Common perception is that it is a weak government, nevertheless backed by the western powers. It is not considered to be a stable government which could change anytime.
Law & Order and the corruption situation in the country are at its worst. However, the press is quite free where the industry as a whole has seen tremendous growth over the past few years.
Several key organizations, like PSO and PIA, are nationalized or partially nationalized. This is viewed as a positive approach because of the unstable political and economic situation in the country. Complete or partial ownership by ...view middle of the document...
This is due to low lending levels for the overall purchasing power of the consumer is weak.
PSO handles more than 80% of the oil products imports of the country, thereby, notably exposed to foreign exchange risk. That said, due to the significant devaluation of Pak rupees against other major currencies during the year, the company reported huge foreign exchange loss of PRs3.5bn as against PRs1.5bn in the previous year. In addition, PSO's financial expense was 4.5 times higher at PRs6.23bn on the back of heavy bank borrowing in order to meet its working capital requirement. This liquidity crunch is mainly ensued from the receivables from the IPPs and PIA who defaulted in paying their bills to PSO. As on June 30, 2009, the receivable build-ups from the above mentioned entities have now reached around PRs80bn. 
PSO booked heavy inventory loss of PRs18.9bn during FY09 in the wake of steep decline of around 50% in international oil prices. After remaining stable for past many years, the international oil prices began its northward movement from the mid of FY08 where it reached to the all time high level of US$140/bbl. As OMCs value their inventories on ongoing product prices, which normally move in tandem with crude oil prices, the increase in oil price is beneficial for OMCs in the sense that it results in inventory gains and vise versa. In FY09, this trend was reversed and the international oil prices witnessed a sharp fall with prices touching the low of US$33.36/bbl. This resulted in heavy inventory losses for the company mainly incurred in the 1HFY09. The second half of FY09 remained relatively profitable for PSO as oil prices after remaining stable for 3-4 months started increasing in the fourth quarter of the fiscal. 
Unemployment is rising regardless of the fact that labor supply is high and available at low costs.
Distribution of wealth system continues to worsen year after year because the gap between the rich and the poor continues to widen. Furthermore, the percentage of poor in the country continues to rise while the percentage of the rich is gradually falling. Therefore, the disposable income of the general public has decreased.
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