Today, almost every 2nd person in Pakistan owns a cell phone. Should this be taken as an indicator of development? Absolute No!
When Pakistan was created, 55% of the economic output was agro generated. Today, economy of Pakistan can be compared with countries having similar development history i.e. India, Bangladesh and Sri Lanka. Apart from this, Pakistan can be compared with Islamic countries like Indonesia (biggest) and Malaysia (best developed Islamic country).
When compared from HDI viewpoint, India is better off though half of its population lives on $1 a day and male/female discrimination is quite rampant. A report revealed that a male child had 16 time greater chances to be taken to clinic during illness than a female child. According to Zaidi, however, the country expected to have strongest economy be 2050 is China followed by India.
The period of General Musharraf (1999 to 2007) can be analyzed on various grounds. At the time, when he took over the country Pakistan’s economy was on a collapsing condition with GDP growth rate as low as 1.2%! That went through a decent 7% figure in 2004-2005.
However, though Pakistan foreign reserves did increase to around $16 billion, trade deficit increased too. The reserves should be on the level that at least a full year import bill could be settled. However, around $700 million current account deficit and 15 billion trade deficit showed a shadow of doubt over the strength of Pakistan’s foreign reserves and GDP figures. The capital account, which was surplus before the government’s military takeover, returned to the deficit status.
Although the $200 to $1000 increase in Pakistan’s per capita income during Musharaff;s government indicated a developing condition but at the same time trade deficit has reached worst heights. On the contrary, the Times Magazine viewed Pakistan’s development to reach great heights be 2050.
The 1965 war and the 1971 partition of Pakistan has given serious blows to the economy. In earlier years India and Pakistan had good terms as Pakistan supplied raw materials to India and India supplied industrial goods to Pakistan. In 1951, however, India devalued its currency, and it was after this that Pakistan’s economy started facing troubles. The 1952-1953 Korean War provided opportunity to Pakistan’s Textile industry and it helped Pakistan to quadruple its exports.
The Bhutto’s 1970s nationalization of Pakistan’s big industries led to the creation of several capital problems.
It is reported that China’s last 30 years economic history is brighter than the economic history of all civilizations that ever existed.
The 1964 five-year plan written by Dr. Mehbub ul Haq impressed Koreans and so they adopted it. The implementation of the same plan in Pakistan led to a miserable failure. This was partly due to the poor labor efficiency in Pakistan.
Corporate Governance is a core issue of Pakistan’s economy. The upsets of democratic institutions is another important issue to be given attention to when studying Pakistan’s economy.
It can be concluded that Pakistan’s economy has not grown in its potentials. Good plans of corporate governance have been chalked out, but all such plans and policies have died in policy papers and no proper executioning has been so far made.
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