Economic Problem of Pakistan

Topics: Inflation, Economics, Deflation Pages: 4 (1059 words) Published: May 26, 2013
Economic problem of Pakistan
As we know Pakistan in an underdeveloping country. The following are some characteritics of under developing economy.. 1. Under utilization of natural resources:
* The natural resources in poor economies are sufficeient but they don’t have sufficicent money to exploit these resources. A large part of the land is under or unicultivate. Huge water resources are wasted. Sea and mineral resources are not properly tapped. * In Pakistan 23% of the total land is uncultivated, 40% of the ater resources are destroyed. Other mineral resources such as coal and gases are in sufficient quality but they are not properly exploited due to which our economy is categorized as poor economy. 2. Low per capita:

* Per capita income, which is calculated by dividing income to population, is very low in underdeveloping country economies of the world. These economies are poor in the world of Nurkse, because they are poor. Low capita means low capacity to save. Low saving results in low capital formation. Low capital formation means low income and low per capita. This completes vicious circle of poverty. 3. Foreign debt burden:

* The under developing economies have insufficient domestic resources to meet fiscal requirements, therefore they have to rely on foreign resources for their growth. The inflow of foreign debt from foreign countries and international agencies have increased their debt burden. The repayment of debt with interest has become a major problem for these economies. Most of their resources are now being utilized for the debt servicing. 4. High population growth:

* On the one hand the underdeveloped economies have sufficient resources while on the other hand the population growth rate is reasonably high which is aggrevating the situation. The increase in output is being consumed by the increasing population. This keep these economies in the state of poverty. 5. Lack of capital:...
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