MUHAMMAD MUSTAFA

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Title: "Economic Progress of Pakistan: 1947-2018" by Sajjad Shaukat

Summary:

Sajjad Shaukat's research paper provides a comprehensive analysis of

Pakistan's economic development from its independence in 1947 to the
year 2018. The paper outlines the challenges faced by the newly-formed
country, its initial economic conditions, and subsequent periods of
growth and crisis.

1947-1950s: Early Challenges and Rapid Industrialization

Upon its independence, Pakistan faced economic challenges with a

population share of 20% of the subcontinent and an industrial
contribution of less than 7%. The country lacked large-scale industries,
banks, and even ordnance factories. The paper highlights the significant
challenge of rapid industrialization and the role played by patriotic
economic experts, engineers, and capitalists in achieving high growth
rates in manufacturing during 1950-55.

1950s-1960s: Planning and Growth

The 1950s marked the first decade of planning for Pakistan. The
Colombo Plan in 1951 and subsequent Five-Year Plans from 1955-1998
aimed at accelerating industrialization. The Korean War (1950-1953)
contributed to Pakistan's economic growth, leading to self-sufficiency in
cotton textiles by the late 1950s. Agriculture and manufacturing
experienced growth rates of 1.6% and 7.7% per annum, respectively, in
the 1950s. The 1960s saw sustained high rates of growth, with
agricultural growth reaching 5% per annum.

1970s-1980s: Political Instability and Economic Revival

The 1970s brought socialism, economic challenges, and political
instability. East Pakistan's revolt led to its independence in 1971. The
Pakistan People’s Party came to power, facing macroeconomic
difficulties such as a rising import bill, global recession, and natural
disasters. A military coup in 1977 resulted in denationalization,
deregulation, and privatization. The 1980s, marked as an era of
economic revival, reversed the nationalization policies, leading to high
growth rates. Poverty incidence declined, and an Islamic interest-free
banking system was introduced.

1990s: Debt Crisis and Challenges

The 1990s witnessed a debt crisis, with increasing external debt, trade
imbalances, and the likelihood of default due to nuclear tests. Sanctions
triggered massive capital flight. Pakistan faced challenges with the
external debt/GDP ratio, exports, and public debt.

2000s: Economic Growth, Urbanization, and Challenges

The post-1999 era, under General Pervez Musharraf's leadership, saw

accelerated economic growth, poverty reduction, and urbanization.
Pakistan became one of the fastest-growing economies in Asia,
averaging 7.0% growth from 2000-07. The US war on terror had
significant impacts on Pakistan. Despite challenges, the economy
demonstrated positive indicators.

2010s: Structural Transition and Positive Indicators

In the 2010s, Pakistan experienced a development-oriented structural

transition, with an increasing GDP share in the services sector. Positive
indicators included growth in exports, declining poverty rates, and
increased foreign exchange reserves.

2018: World Bank Report and Current Economic Scenario

A 2018 World Bank report highlighted Pakistan's accelerating economic

growth, improved services, and agriculture sectors. Challenges included
a low tax-to-GDP ratio and the need for better service quality at the
provincial level.

Conclusion: Present Conditions and Future Potential

The paper concludes by acknowledging the pessimistic economic picture

in 1947 and contrasting it with the present conditions. While corruption is
identified as a factor hindering economic progress, the paper
emphasizes Pakistan's potential in various sectors. It calls for a return to
the national spirit of dedication and hard work, coupled with modern
technologies and a strategic approach similar to the initial years of
planning in 1947.
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Evaluation of Macro Economic Policies of Pakistan

Evaluation of Macro Economic Policies of Pakistan
(1950 -2008) Tahir Mahmood, Hafeez ur Rehman and
Shahnaz A. Rauf1
The paper evaluates Pakistan's macroeconomic policies from 1950 to
2008, highlighting shifts from a private-sector-led economy in the 1960s
to nationalization in the 1970s and liberalization in the 1980s. Despite
impressive growth until the 1980s, marked by external capital inflows,
the 1990s saw the lowest GDP growth among SAARC countries due to a
decline in capital inflows, fiscal deficits, and unsustainable public debt.
Deregulation, liberalization, and privatization policies initiated in the
1990s lacked accompanying demand-side adjustments, contributing to
serious macroeconomic imbalances. The 1990s is termed a "lost
decade," and the 2000s faced challenges of poverty, unemployment,
fiscal and external imbalances, and war on terrorism shocks. The paper
emphasizes the need for sustainable public finance and external sector
balances in policymaking.
The period from the 1950s to the 1970s in Pakistan witnessed shifts in
economic policies and sectoral growth. In the 1950s, the economy
struggled, with heavy reliance on agriculture. However, in the 1960s and
1970s, there was a substantial change in the composition of the Gross
National Product (GNP), with a decline in the share of agriculture and a
doubling of the share of industry. The industrial sector, predominantly
agri-based, saw significant growth, facilitated by public sector institutions
and foreign exchange reserves from the Korean War.

The 1960s marked a balanced growth in both agriculture and industry,

supported by the green revolution. However, the mid-1960s brought
challenges due to the war with India, leading to a revision of
development strategy, a shift in resource allocation, and a focus on
agriculture. The third plan period faced resource shortages, resulting in a
slowdown of industrial growth.

The 1970s brought political disturbances, economic challenges after the

separation of East Pakistan, and structural reforms by the new
government. The emphasis shifted toward manufacturing as the engine
of growth, with key reforms such as land reforms, labor reforms, and
nationalization of key industries. However, these reforms led to a decline
in the percentage share of both manufacturing and agriculture in GDP.
The GDP growth rate dropped to 3.6% per annum, reflecting the impact
of structural changes.

In the 1990s, Pakistan underwent economic changes marked by mixed

outcomes. Structural reforms in agriculture included liberalization of
prices, but attracting foreign capital faced challenges due to issues like
poor law and order and inconsistent policies. Fiscal deficits remained
high, leading to rapid growth in public debt. Monetary management
reforms introduced a market-based system. Social sector challenges
persisted, and despite initiatives, indicators deteriorated. Fundamental
structural reforms were initiated, but the external environment became
less favorable. The decade was characterized by economic challenges,
significant reforms, and a complex landscape.
The economic history of Pakistan reflects a complex pattern of
challenges and policy responses. In the 1950s and 1960s, the focus was
on industrial and agricultural growth, but challenges arose in the 1970s
due to political disturbances. The 1980s saw structural adjustments and
denationalization. The 1990s brought about economic challenges,
significant reforms, and increased reliance on external financing.

In the 2000s, a liberal outward-oriented economic strategy continued,

with ongoing structural reforms. The events of 9/11 and Pakistan's
alliance against terrorism had economic implications. The decade
witnessed a mix of improvements and challenges, such as GDP growth,
fiscal deficits, and external debt dynamics. Inflation and trade deficits
became concerns.

Despite economic reforms, challenges persisted, including fiscal

imbalances, low domestic savings, and a reliance on less sustainable
external financing. The privatization process and financial sector reforms
showed positive impacts, leading to a vibrant banking sector.