Major issue in Pakistan economy
Economy
• The large set of inter-related production and consumption activities that aid in determining how scarce resources are allocated
• All activities related to production, consumption,and trade goods and services in an area
Types of Economy
• Market based: allows goods to flow through in market. This type has a tendency to naturally balance itself as price of one sector for an industry rise due to demand
Command based: political agent, which controls the price and distribution of goods
Assessing Pakistan's development
• How to evaluate the performance for almost more than six decades ?
• How we can claim that Pakistan today is far better than it was in 1947 ?
• What should be criteria of a country to evaluate it's growth ?
• Look at its history and than evaluate ?
Structural changes
• Pakistan in 1947 and now in 21st century
• Pakistan after 1971
• Changes in Pakistan's key economic structure
Five Decades
• Pakistan's economy in five decades
Laying the foundation (1947-58)
• In 1947 , Pakistan was agrarian, undeveloped newly independent country with little industry, few services and no infrastructure
• Main concern was one of survival, where adverse international condition and domestic situation.
• Million of refugees
• The bureaucracy tried to keep Pakistan on its feet
• The primary task was to build an economy
• Private sector had no capital to lead an industrial revolution
The Decade of Development (1958-68)
• If we examine Pakistan's economy growth, 1960's stands out as the Decade with best performance
• The rate of growth in 60's and 80's seems to be close in most of the categories
• Significant leaps were made in industrial and agricultural production
• In large scale manufacturing 20% growth rate was seen
• Critics point out agriculture sector in central Punjab and industry in Karachi
• Social sectors were neglected
• There was no increase in real wages and social equity was of little concern
• Private sector was strengthened and controlled bureaucratically
The bad luck years (1971-88)
• Nationalization was major cause for downward
• The devaluation of Pakistani rupees by 120% in 1972
• However Bhutto's policies laid the foundation for future growth and benefitted the economy
The Second Military Govt. (1977-88)
• Civil-military bureaucracy played important role
• High industrial growth came in by Bhutto's policies under public sector investments
• The Soviet invasion and Pakistan role for USA also helped to grow economy
The era of structural adjustments (1988-onwards)
• After the death of General Zia, democratic Govt. Came in power
• Policies of Benazir Bhutto and Sharif's Govt.
• In 1999, General Musharraf came in power and process of liberalization, openness, privatization and market friendliness
• World after September 11
👱