Economic challanges to Pakistan

Topics: Economics, Inflation, Economy Pages: 16 (4175 words) Published: April 21, 2014
Assignment-Economical challenges to Pakistan
Submitted to:Ma’m Asiya
Submitted by: Syeda Zainab Kubra
Roll no:11021502-012
Course Title:Pak Studies
Discipline:B.S(hons)English
Semester:6th
Date:4/17/2014

GCW University,Sialkot.

A Historical Evaluation of Economic Condition of Pakistan

Laying the Foundations:1947-1958 Features
Predominantly agrarian, undeveloped and newly independent nation Little industry, few services and no infrastructure
Adverse international conditions and precarious domestic situation Attempts of bureaucracy to keep Pakistan on its feet
Lack of capital
Trade surplus
The Decade of Development:1958-1968
Achievements
Considerable economic growth and development
Significant leaps were made in industrial and agriculture production Model Capitalist Economy
High growth rate in manufacturing sector
Increase in exports
Progress in agriculture sector
Policy Failures
Increased disparities in incomes
Concentration of economic prosperity
Social sectors were neglected
Little or no increase in real wages
Trade was highly controlled and closed
Distortion of local markets because of overvaluation of exchange rate

The bad Luck Years:1971-1977
Achievements
Foundations for future growth and development
Basic industries were setup
Base for a capital goods industry
Middle East boom
Illiberal economic policies
Foreign exchange earnings doubled because of devaluation
Failures
Events beyond control affected economic program of this era Downward trend in growth
Nationalization
Cotton crops failure and floods affected Pakistan’s exports Crisis in balance of payments
Devaluation of Pakistani rupee
The second Military Government 1977-1988
Achievements
Liberal economic policies
Higher industrial growth
Second economic revolution because of remittances from the Middle East and aid from abroad Emergence of middle class
Policy Failures
Martial rule inflicted deep rooted damage to Pakistani society Drugs and arms culture in Pakistan
Confusion of policies
Underutilization of resources (foreign aid and remittances)

The Era of Structural Adjustment:1988-1998
Achievements
Return of democracy
Era of structural adjustment
Economic liberalization and stabilization
Privatization
Reduction in tariff rates to increase exports
Failure
Policy Failures
Macro economic crisis
High taxation
Low spending in social sectors
Trade reforms resulted in deindustrialization
Continuous devaluation in the Pakistani rupee
Increased in the administrated prices of utilities
High inflation rate
Unemployment
Privatization without proper policy
Loss of sovereignty for the Pakistani state and its people
Economic situation 1998-2004
Features
Acceleration in economic growth
Increase in industrial production
Rise in exports earnings
Strong upsurge in investment
Pre-payment of high cost external debt
Increase in foreign exchange reserve
Strategic re-entry into the international capital markets
Increase in spending on Education
Increase in FDI
2005-2007
The economy picked up further in 2005,
With GDP growth coming in at over 8.4% for the first time in 8 years. With sound macroeconomic fundamentals achieved and key sectors strengthened by reforms implemented in the 4-5 years, The economy was well positioned to sustain 7% or more growth in the medium term.

Today’s Economy
By October 2007, Pakistan raised back its Foreign Reserves to a handsome $16.4 billion. Exceptional policies kept Pakistan's trade deficit controlled at $13 billion, exports boomed to $18 billion, revenue generation increased to become $13 billion and attracted foreign investment of $8.4 billion. Since the beginning of 2008, Pakistan's economic outlook has stagnated. Security concerns stemming from the nation's role in the War on Terror. have created great instability and led to a...
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