Five-Year Plans of Pakistan

The Five-Year Plans for the National Economy of

Pakistan (otherwise publicly known as Five-Year Economic Plans for the National Economy), were the series of nationwide centralised economic plans and targets
as part of the economic development initiatives, in the
Pakistan.[1] The plan was conceived by the Ministry of
Finance (MoF), and were studied and developed by the
Economic Coordination Committee (ECC) based on the
theory of Cost-of-production value, and also covered the
areas of Trickle-down system. Supervision and fulllment of this programme became the watchword of Pakistans civil bureaucracy since early 1950s.[2]

standard of living of the people, with little opportunity for

education, or economic advancement in the country.[6]
The industries and nancial services were non-existed in
the country and agriculture development was among the
lowest in the world.[6] The vast majority of the population was still habitated in villages and were untouched
with the scientic and technological development in past
two centuries.[6] The partition had the major eect on
countrys existing economic infrastructure that disrupted
the wholesale transfers of population, trade and business,
channels of communication, industrial and commercial
organisation, and the pressing need to establish new pro[6]
Inspired by the Five-Year Plans of Soviet Union, the pro- visional governments.
gramme was visioned and proposed by the Finance Min- The economic development planning began in 1948 when
ister Malick Ghoulam[3] to Prime minister Liaquat Ali Prime minister Liaquat Ali Khan presented the rst FiveKhan who initially backed the programme, in 1948.[4] Year plans at the parliament of Pakistan on 8 July 1948.
The rst ve-year plans were approved by the prime min- The rst plan was conceived by the Ministry of Finance
ister Ali Khan in 1950 for the period of 1950-55; it (MoF), and were studied and developed by the Economic
was accepted in a view to serve in the rapid and inten- Coordination Committee (ECC) based on the theory of
sied industrialisation, expansion of banking and nan- Cost-of-production value, and also covered the areas of
cial services, with a major focus on heavy industry.[5] Trickle-down system.[6] As part of this programme, the
Although not ve-year plans did not take up the full pe- State Bank of Pakistan was established to give a kick start
riod of time assigned to them, some of the plans were to banking services in the country.[6] Quickly, the major
failed and abandoned whilst some completed success- economical infrastructure was expanded and the gap was
fully. Altogether, there were eight ve-year plans (start- lled by hiring as the government revenue began to rise.[6]
ing 1950 till 1999)[1] and were replaced with the more The currency war with India, following the devaluation of
eective programme, the Medium Term Development Pound Sterling the currency of United Kingdom, led
Framework (MTDF) under Prime Minister Shaukat Aziz the deadlock of India-Pakistan trade which was caused
(oce: 2004-2007).[1]
by Indian refusal to recognition of countrys currency, in
1949.[6]

In the middle of 1950, the relations were restored

when India and Pakistan began export trade once again,
and in February 1951, India formally accepted to give
recognition of Pakistans currency after entering in new
trade agreement, but the older trade relations were not
restored.[6] The Korean War led the boom of countrys
economy but the growth declined after the assassination
of Liaqat Ali Khan in October 1951. More ever, the efforts were failed to continuing the programme which was
initially unsystematic, partially due to inadequate sta ofcers and lack of ambitions.[4][6] In 1953, the programme
collapsed when the shortages of clothes, medicines and
other essential consumer goods arose; there was also a
serious food shortage as a result of a sharp fall in the
production of foodgrains in 1951-52 and 1952-53 due to
monsoon oods.[6] Prime minister Khawaja Nazimuddin
was forced to end the programme after sending his request to provide economical assistance from the United
States and other friendly counties.[6]

History

Main articles: PakistanSoviet Union relations, Partition

of India, Indo-Pakistani War of 1947, Pakistan-United
States relations, Pakistan-United Kingdom relations, and
History of Pakistan

1.1

First Five-Year Plans (1955-60)

Main article: Government of Liaquat Ali Khan

At the time of partition of British India by the United
Kingdom, Pakistan was an under-developed country, relatively standing with Asian countries with distressful economic situations.[6] The countrys systems of production,
transportation, trade and consumption yielded a very low
1

2
1.1.1

1
Reassessment and collectivisation

The new studies were again conducted in 1955 after the

collapse of rst programme. According to the census,
over 90% of the population was living in rural areas
whilst only 10% was living in urban areas.[6] In EastPakistan, the urban proportion was low as 4.0% as compared to 18.1% in West-Pakistan, although the urbanisation had been increased at an accelerated level.[6] In 1955,
Prime minister Muhammad Ali Bogra again revived the
plan and published in 1956.[7] After reassessing, the programme was again launched with focusing (as highest priority) on agricultural development, and the strong emphasis placed on rapidly increasing the developmental
eort in East-Pakistan and in the less-developed areas
of West Pakistan.[7] Prime minister Huseyn Suhrawardy
of Awami League gave much priority to food development, agriculture and social development in both states.
The concept of Collective farming was introduced by
Suhrawardy as part of his agricultural policies and around
27.0Mn rupees were spent in order to organised the agricultural in the country.[7] However, this programme was
built entirely in the absence of much essential information
and basic statistics.[6]

HISTORY

was hailed as a model that other developing countries

could follow. The second ve-year plans oversaw the development of water and power utilities in East and West
Pakistan and had energy sector was built with the help
from private-sector.[11] The nancial services heavily depended on the foreign investment and aid from the United
States that bolstered the economy.[12] The second veyear plans were a quiet a big success but it was partially
due to generous infusions of foreign aid, particularly from
the United States.

1.3 Third Five Year Plans (1965-1970)

After the 1965 Indo-Pakistani War over Kashmir, the

level of foreign assistance declined and economic constraints were imposed on Pakistan. The third ve-year
plan was designed along the lines of its immediate predecessor, produced only modest growth.[13] The country
had become urbanised by 1970 and only 10% population
lived in rural areas as compared to 1950.[14] The third
ve-year plans promoted the activities of private sector
investment and tend to increase the directly productive inIn practice, this plan was not implemented because of its
vestment for the stable Financial sector development.[15]
enormous size that lacked the physical and personnel assistance. The shortage of technical knowledge also dev- The third programme focused on Gross national prodastated the programme.[8] The Awami Leagues govern- uct (GNP) growth which was increased at 122% and
ment also had shortage of foreign exchange to execute the had focused on the enhancing the capabilities of pri[16]
The size of the
plan, and was unable to nd outside assistance to fulll its vate sector to operate in the country.
[8]
third
programme
was
determined
in
the
light of a carecommitment to the rst ve-year plans.
ful evaluation of the recent experience under the second
programme.[17] Although the third programme success1.2 Second Five-Year Plans (1960-1965)
fully ran for the rst three years of the Third Five-Year
Plan, but at the end, the third programme proved to be
1 Despite the failure of rst ve-year plans, the pro- even more of a disappointment in terms of proclaimed
grammes were revived and restated by the military gov- production goals.[17] The performance of the third proernment of President Ayub Khan.[9][10] The second ve- gramme was undeniable that led the economical disaster
year plans gave highest priority to heavy industrial de- in the country.[17] Dramatically, the agriculture growth
velopment, advancement in literature and science, and sharply declined and desperately devastated the farming
had single underlying purpose: to advance the coun- class of the country.[17]
try as far as possible, within the next ve years, along
the road of these long-range objectives..[10] Further improvements were made in railways, communications, and
transportation.[10] More attention was given to privatesector industrial development and agricultural industries; 1.4 Fourth Five Year Plans (1970-1975)
the second give-year plans aimed to increase the national
income by 20%.[10] The unemployment was tackled with The fourth ve-year plans were abandoned after the fall
the industrialisation of the country, and overall major in- of Dhaka East-Pakistan. Virtually, all fourth ve-year
dustrial development was carried out in West Pakistan planning was bypassed by the government of Prime minwhile few in East.[10] The Second Five-Year Plan sur- ister Zulkar Ali Bhutto. Under Bhutto, only annual plans
passed its major goals when all sectors showed substan- were prepared, and they were largely ignored.
tial growth which also encouraged private entrepreneurs The fourth ve-year plan was replaced with the
to participate in those activities in which a great deal of nationalisation programme which featured an intense
prot could be made, while the government acted in those level of government-ownership management on private
sectors of the economy where private business was reluc- entities. Only scientic aspects of fourth ve-year plans
tant to operate.[10]
were adopted in a view to turn Pakistan into a major sciThis mix of private enterprise and social responsibility entic superpower in the world.[18]

1.5

Fifth Five-Year Plans (1978-1983)

1994, the eighth plan had not yet been announced, mainly
because the successive changes of government in 1993
The Zia government accorded more importance to plan- forced ministers to focus on short-term issues. Instead,
ning. The Fifth Five-Year Plan (197883) was an at- economic policy for FY 1994 was being guided by an antempt to stabilise the economy and improve the standard nual plan.
of living of the poorest segment of the population. InFrom June 2004, the Planning Commission gave a new
creased defense expenditures and a ood of refugees to
name to the Five Year Plan - Medium Term Development
Pakistan after the Soviet invasion of Afghanistan in DeFramework (MTDF). Thirty two Working Groups then
cember 1979, as well as the sharp increase in internaproduced the MTDF 2005-2010.
tional oil prices in 1979-80, drew resources away from
planned investments (see Pakistan Becomes a Frontline
State, ch. 5). Nevertheless, some of the plans goals were
attained. Many of the controls on industry were liber- 2 Sources
alised or abolished, the balance of payments decit was
kept under control, and Pakistan became self-sucient in This article incorporates public domain material from
all basic foodstus with the exception of edible oils. Yet websites or documents of the Library of Congress Counthe plan failed to stimulate substantial private industrial try Studies.
investment and to raise signicantly the expenditure on
rural infrastructure development.
"Development Planning" (April 1994) A Country
Study: Pakistan. Library of Congress.

1.6

Sixth Five-Year Plan (1983-88)

The sixth ve-year plans represented a signicant shift

toward the private sector. It was designed to tackle some
of the major problems of the economy: low investment
and savings ratios; low agricultural productivity; heavy
reliance on imported energy; and low spending on health
and education. The economy grew at the targeted average of 6.5% during the plan period and have exceeded
the target if it had not been for severe droughts in 1986
and 1987.

1.7

Seventh Five-Year Plan (1988-93)

The seventh plans provided for total public-sector spending of Rs350 billion. Of this total, 36.5% was designated
for energy, 18% for transportation and communications,
9% for water, 8% for physical infrastructure and housing,
7% for education, 5% for industry and minerals, 4% for
health, and 11% for other sectors. The plan gave much
greater emphasis than before to private investment in all
sectors of the economy. Total planned private investment
was Rs292 billion, and the private-to- public ratio of investment was expected to rise from 42:58 in FY 1988 to
48:52 in FY 1993. It was also intended that public-sector
corporations nance most of their own investment programmes through prots and borrowing.
In August 1991, the government established a working
group on private investment for the Eighth Five-Year Plan
(199398).

1.8

Eight Five Year Plans (1993-98)

2.1 Notes
[1] Govt. of Pakistan. List of Five-Year Plans for the National Economy of Pakistan. Planning Commission (Government of Pakistan. Planning Commission. Retrieved 25
June 2012.
[2] Govt. Outline of First Five-Year Plan (PDF). Outline
of First Five-Year Plan. Retrieved 25 June 2012.
[3] Scribd. Section 3: Economic History. Scribd. Scribd.
Retrieved 25 June 2012.
[4] FRD, Federal Research Division (April 1994). Development Planning. In Peter R. Blood. Pakistan: A Country
Study (google books). The United States of America: Library of Congress. pp. 158200. ISBN 0-7881-3631-3.
[5] MoF, Ministry of Finance. First Five-Year Plan of Pakistan (PDF). Ministry of Finance. Government of Pakistan. Retrieved 25 June 2012.
[6] MoF. Background of rst Five Year Plans for the National Economy of Pakistan. First Five-Year Plans of
Pakistan (PDF). Government of Pakistan (MoF). pp. 14,
6.
[7] Government of Pakistan. Outline of First Five Year
Plan (PDF). Outline of First Five Year Plan. Retrieved
26 June 2012.
[8] Government of Pakistan. The Problem of Economic Development and Planning (PDF). The Problem of Economic Development and Planning. Retrieved 26 June
2012.
[9] 2nd Five Year Plan 1960-65.

This group, which included leading industrialists, pres- [10] Planning Commission. Second Five-Year Plans (PDF).
idents of chambers of commerce, and senior civil serGovernment of Pakistan. Second Five-Year Plans (Part-I).
vants, submitted its report in late 1992. However, in early
Retrieved 26 June 2012.

[11] PC. Water and Power (PDF). Second Five Year Plans
(Chapter 8). Retrieved 26 June 2012.
[12] Resources and Fianncing (PDF). Government of Pakistan. Second Five Year Plans (Chapter 2). Retrieved 26
June 2012.
[13] Third Programme. Third programme.
[14] Review of Planned Development. Government of Pakistan. Third Five Year Plans (Chapter I).
[15] Govt. Pakistan. Private Investment (PDF). Govt. Pakistan. Third Five-Year Plan (Chapter 7). Retrieved 26
June 2012.
[16] Govt. Pakistan. Two Decades of Development (PDF).
Third Five-Year Plans (Chapter IA). Retrieved 26 June
2012.
[17] Govt. Pakistan. Resources and Finances (PDF). Third
Five-Year Plans (Chapter 5). Retrieved 26 June 2012.
[18] Govt. Pakistan. Science and Technological advancement
in Pakistan (PDF). Fourth Five Year Plans. Retrieved 26
June 2012.

External links
Five year plans Planning Commission of Pakistan.

EXTERNAL LINKS

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