Economic Growth of Pakistan

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  • Topic: Zulfikar Ali Bhutto, Pakistan, Benazir Bhutto
  • Pages : 22 (6293 words )
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  • Published : April 28, 2013
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Economic Growth Of Pakistan

Submitted to: Sir Ali Zaidi

Final Project

Agha Hashim 1011310

Owais Sadiq 1011291

Talha Adnan 1011210

Syed Ali Kamran 0911307

Saddam Abdullah 0811215

ECONOMIC GROWTH OF PAKISTAN

Introduction:

Pakistani economy grew at a fairly impressive rate of 6 percent per year through the first four decades of the nation's existence. In spite of rapid population growth during this period, per capita incomes doubled, inflation remained low and poverty declined from 46% down to 18% by late 1980s. This healthy economic performance was maintained through several wars and successive civilian and military governments in 1950s, 60s, 70s and 80s until the decade of 1990s, now appropriately remembered as the lost decade. Pakistan’s growth experience over the past sixty years is both impressive and disappointing. It is impressive because rapid growth rate has resulted in a quadrupling of per capita incomes and reduction in poverty levels by one half despite fairly high population growth. Structural changes have transformed a predominantly agrarian economy to a more diversified production structure. Manufactures account for 80 percent of the country’s exports. But there is a sense of disappointment too. Social indicators are worst in Pakistan. Pakistan rank is 146th among 177 countries in Human Development Index. Income Inequalities, Rural Urban disparities and Gender differentials have worsened over time.

Pakistan has lagged behind East Asian Countries and more recently India is so far as integration into the world economy is concerned. Global Competitiveness Report ranks Pakistan 92nd while India’s rank is 48th.

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General Ayub Khan Era – Decade of Development:
Time Period: 1958-1969
Ayub Khan initiated major policy programs and shaped the direction of Pakistan politics permanently. The most important of these policy programs was the development of alliances with the powerful neighboring countries of Pakistan and India; i.e., China and the Soviet Union. He also developed a political alliance with the United States. These alliances were primarily to offset the imbalance of the power between India and Pakistan. The Ayub Khan era is regarded as one of the best periods of stability in Pakistan’s history. His era is known as ‘Decade of Development’ and witnessed staggering growth rates. The country was at the top in Asia in terms of industrial production because industrial production grew by 72 per cent over the period as compared to an average of 55 per cent for Asian countries. Real investment touched as high as 21.5 per cent of GDP. Increase in investment accelerated the economic growth process. Through good economic management, inflation remained in checked and hovered around 3 per cent. GDP growth in this decade jumped to an average annual rate of 6 percent from 3 percent in the 1950s. The manufacturing sector expanded by 9 percent annually and various new industries were set up. Agriculture grew at a respectable rate of 4 percent with the introduction of Green Revolution technology. Governance improved with a major expansion in the government’s capacity for policy analysis, design and implementation, as well as the far-reaching process of institution building.7 The Pakistani polity evolved from what political scientists called a “soft state” to a “developmental” one that had acquired the semblance of political legitimacy.8 By 1969, Pakistan’s manufactured exports were higher than the exports of Thailand, Malaysia and Indonesia combined.9 Though speculative, it is possible that, had the economic policies and programs of the Ayub regime continued over the next two decades, Pakistan would have emerged as another miracle economy. Infrastructure of roads and communication networks were constructed. Hydroelectric dams were built to generate electricity. Secondary industries and...
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