Pakistan’s Growth Record || Current Affairs || CSS/PCS/PMS

Pakistan’s Growth Record || Current Affairs || CSS/PCS/PMS

Pakistan’s Growth Record || Current Affairs || CSS/PCS/PMS

Pakistan’s Growth Record:

Pakistan's overall growth record was impressive; medium the economy has grown at an annual rate of just above 5 percent over the past six years decade. Calculated per capita, the growth rate was 2.5 percent per year. trends in sectoral GDP growth indicators show that industry, including manufacturing, was the most dynamic sector of the economy. In a regional context, Pakistan developed on average faster than South Asia 2 percent for most of the 1960s and '70s and at similar rates in 2006 The 1980s. However, since 1993, Pakistan's growth has been below the regional average. In the first 20 years after regaining independence in 1947, Pakistan had the highest level growth rate in South Asia. According to the World Bank (2002), Pakistan exported more producers than Indonesia, Malaysia, the Philippines, Thailand and Turkey combined in 1965. By the 1990s, Pakistan became the slowest-growing country in South Asia, a thorough reversal of the previous role. However, the incidence poverty fell from 46 percent in the mid-1960s to 18 percent. However, interpersonal, regional and gender differences appear to be increasing. Man development rates have not kept pace with per capita income growth. What factors are responsible for this reversal?

The main factor explaining this reversal is the change in the basic paradigm development model developed by Zulfiqar Ali Bhutto shortly after its foundation power in 1971 The Bhutto regime nationalized all major production facilities industry, banking, insurance, education etc. and caused serious disturbances the economy and the erosion of private investor confidence that has survived in
next 20 years. This experiment with socialism had a negative impact on industry development, export expansion, and quality education has given priority role of bureaucracy in making economic decisions. Substitution of culture entrepreneurship, risk taking and innovation by seeking rentals and patronage suppressed the dynamics of the private sector. The appearance of bureaucrats as business leaders have strengthened the new culture. Bureaucratic harassment, problems law and order, incredible and costly power, and inadequate infrastructure also discouraged investment. This partly explains why it was a private sector reluctant to make long-term commitments. The collapse of the single economy East and West Pakistan and the resulting formation of Bangladesh as an independent country cut off from Pakistan also caused shocks during this period.

The opportunity was to reverse most of the damage caused by nationalization omitted by the Zia-ul-Haq regime (1977–1988). Instead of taking proactive measures Zia's regime maintained to reverse the country's dominant economy status quo. Although the path followed by Bhutto was not followed and nationalization process has been abandoned, preferential orientation toward the public sector has not decreased in any noticeable way. Economic results he was impressive during this period not because of any fundamental policy or institution reform. The regime took advantage of the results that appeared in large streams the most significant among public investments made in the 1970s it is the Tarbel Dam, which significantly increased the availability of water for irrigation and power of hydropower plants, as well as fertilizer, steel and cement factories. Macroeconomic imbalances in the form of large budget and current deficits from the 1980s had an impact on the economy in the next period of the form of increased debt burden. Real defense spending increased on average by 9 percent a year during this period, while development spending increased to 3 percent per year. Expenditure on defense averaged 6.5% of GDP decades and contributed to large budget deficits and the rapid growth of public debt. Neglecting development spending was one of the slowing down factors
growth in the 90s.

Although the Nawaz Sharif regime introduced significant economic liberalization reforms in 1991, both private investment and exports tended to stagnate or decline in the 1990s. Macroeconomic stability was a serious problem. Inefficient state-owned banks and banks dominated the financial sector access to capital was limited. Policy environment with regard to rules and taxes and import tariffs were unstable. Any application of statutory regulatory orders (SRO) negatively affected equal opportunities. It was needed by investors compete on the basis of business, not their ability secure special offers. Frequent changes in the government in the 1990s and resulting from them political instability has ravaged the economy. Uncertainty and discontinuity economic policies, patronage-based economic management benefits the small elites excluding most populations and exogenous shocks derailed the economy.

The investment rate dived south and was sustainable The deficit in the fiscal and current account led to the accumulation of large unbalanced amounts domestic and external debt over the decade. Debt service indicator payment for currency exchange income amounted to almost 40 percent. freeze foreign currency accounts of residents and non-residents after Nuclear tests of 1998 Undermined investor and business confidence in the economy. Sanctions from leading bilateral donors have drained the flow of official assistance to the country. International capital has fluctuated because the risk profile has increased significantly. The incidence of poverty has doubled from 18 to 34 percent in this decade. Withdrawal of US aid after the war in Afghanistan and imposition sanctions by Western governments after the nuclear tests in 1998 on stressed economic difficulties.

The military government, which came to power in October 1999, was economical recovery as one of the goals pursued. Despite all kinds of sanctions new the government has assembled a team of technocrats as part of its cabinet and began operations after a series of structural reforms in 2000 and 2007. Nevertheless September 11, 2001. It also changed the geostrategic significance of Pakistan in significant way. Pakistan's alliance with the US and the North Atlantic The Treaty Organization (NATO) forces in the war on terror have not only been restored international financial assistance, but also increased the volume of flows. It was during that period during which Pakistan successfully implemented the nine-month standby mode and a three-year program for reducing poverty and growth at International Monetary Fund (IMF) in 2000–2004.

The Paris Club reprogrammed wrestling Official Development Assistance (ODA) and non-ODA bilateral debt. USA canceled its bilateral debt by USD 1 billion. Investments increased to 24 percent from GDP and foreign direct investment (FDI) amounted to USD 5 billion in 2007. As a result economic reforms, boosting investment, external aid and debt relief, the economy rebounded and recorded a high average GDP growth rate of 6.3 percent year. Decentralization for local governments and strengthening of the position of selected officials in poviat level improved the provision of basic public services. Poverty has been reduced by 10 percentage points. The unemployment rate fell from 8.4 to 6.5 percent and in the years 1999–2008 approximately 11.8 million new jobs were created. Gross and net entry at primary level also reported some improvement with the children immunization, diarrhea and infant mortality.

Reforms and improved management during these seven years have not been maintained and some of them were withdrawn, suspended or modified after 2008 Dot. Constitutional amendments delegating federal and provincial powers governments and increasing the allocation of a divisible taxable pool for the provinces were welcome steps. However, local governments were abolished access to basic services and quality of management has been affected. Internal securityresulting from increased terrorist attacks on key installations and personalities and a bad law and order situation created a waiting situation among potential investors.

The IMF 2009 program was aimed at macroeconomic purposes stabilization was interrupted and then resumed in 2013. The analysis discussed shows that initially a change in the economic paradigm at Bhutto initiated a drift, but later inconsistency, discontinuity and lack of coherence of economic policies, political instability, poor internal security and law and order, bad management, reluctance to accept hard but unpopular decisions on determining the correct course of the economy and difficult implementation capacity of government agencies led to the secular fall of Pakistan growth rates. Pakistan performed worse - compared to other countries where it occurs similar income per capita - in almost all social indicators - a phenomenon called the "social gap". The discrepancies are particularly large for women, that is to say The "gender gap" has reinforced the social gap. These double gaps slowed down growth because no country can count on significant progress in a globalized global economy without an educated and healthy workforce.

Post a comment