Title:

Economic problems of Pakistan

Introduction:

“Economy is a type of system which is considered by institution which play significant role in

the production of goods and services in a country. It’s emphasize the distribution of resources

among its members in society and also define the value of goods and services and even explore

what type of thing should be traded for those services and goods”[ CITATION Joh18 \l 1033 ].

As we go back and study the past heritage of the green land (Pakistan). It has become an

independent state on 14th Aug, 1947, the country was gripped 31 million people with a little per

capita income of 100$. There were no as such industries in Pakistan but only agriculture

provided 50% of output in that time. While, it was so difficult to provide feed to 31 million

people and depending only an import with the United State of America (USA). Pakistan is

having a very little economic structure in that time and facing many such economic problems in

the past and even still facing the issues because of many factors and obstacles to growth and

economic development. According to the study, in the present time Pakistan is capturing more

than 170 million people with per capita income in the year of 2008 was 1001$ which was more

than to the past. Now, Pakistan is exporting 3 million ton rice to many countries of the world and

it has got 3rd position in exporting of rice in the global ranking. The trend has changed the

agriculture percentage down to 50% to 20% in the country because of many factors in decreasing

agricultural percentage. Now, Pakistan has got 24th position in the world ranking in terms of

purchasing power parity and 39th in terms of Gross Domestic Product (GDP). The economy of
Pakistan is suffering from the past few decades and still suffering because of internal political

clashes, increasing a high number of population, lack of as such foreign investment, increase in

import, low saving, lack of policy implementation, and lack of as such tax collection policy are

the main factors and challenges to the economy of Pakistan[ CITATION Yas18 \l 1033 ]. Let’s

mention Gross Domestic Product growth from 1950s to 2019.

Real Gross Domestic Product percentage (%):

Annually GDP Growth Percentage

1950s 2.5%
1960s 6.8%
1970s 4.8%
1980s 6.5%
1990s 4.6%
2000-01 2.0%
2001-02 3.1%
2002-03 4.7%
2003-04 7.5%
2004-05 9.0%
2005-06 5.8%
2006-07 6.8%
2007-08 5.0%
2008-09 0.4%
2009-10 2.6%
2010-11 3.7%
2012-13 4.4%
2013-14 3.6%
2014-15 4.5%
2015-16 4.0%
2016-17 4.7%
2017-18 5.4%
2018-19 5.2%
2019 3.9%
[ CITATION Saj18 \l 1033 ].

Obstacles to Economic Growth in Pakistan:

Economy plays an important role in achieving stability in the state. “The more you invest the

more you get”. When the government involves to make sure the more investments on their

institutions in this way, they will get a stable environment in case of achieving success in their

institutions. Pakistan is facing many internal and external difficulties in the economy of the state

which is affecting the development and stability of the state. There is a very shocked condition in

which we learn to the worst of circumstances but still increasing 5.2 percent per year during the

past some decades. The situation is not good since the independence but, getting growth in the

economy of Pakistan. From the last 65 years, Pakistan has faced many challenges related to

economic institution but not standing now for somehow. While, it has done well on the economic

forward-facing. The economy of Pakistan is growing in a normal way and increasing 5.2% per

year from the earlier 65 years[ CITATION Haf13 \l 1033 ].

Pakistan counts in those globally rich countries which is having a high young labor force which

may help in building the economy of state and even can also contribute in the global economy

but unfortunately, they are having less knowledge and unskilled labor force in the country. The

responsibility of the government or stakeholders should provide knowledge and technical skills

to them, in this situation they can more contribute in the growth of the economy of Pakistan. The

government should also be able to provide economic opportunities to their young people and if

the government fails in providing such opportunities it will create social disturbances or social

issues in the form of unemployment etc.[ CITATION Muh17 \l 1033 ].

War on Terror or War against Terrorism:

Terrorism is not only the issue of Pakistan. It is a global issue in the world. We still remember a

big incident in the America on the world trade center where many people had been killed and

injured. After the terrorists attack on world trade center (9/11), this incident greatly affected the
country Pakistan by terrorist Group Al-Qaida. It was the time of General Pervez Musharraf,

while his weak governance and bad policies of war on terror greatly affected the country in a

negative way. Both Afghanistan and Pakistan are geographically linked with each other, if there

is war in Afghanistan, it will affect Pakistan seriously. It was the time, when America were

facing threats by many terrorist groups in Afghanistan especially, Al-Qaida. In this way she

became a big supporter in war on terror. The war can really affect the budget of the state because

the high budget is spending on war and other security reasons can decrease the economy of the

state. The war environment makes destabilize the world’s economy and produce many problems

such as shortage of fuel, lack of funds, and also rising health problems and so on[ CITATION Abu14

\l 1033 ].

Weak educational step-up:

Educational institution play vital role in the economic growth of the state. Unfortunately,

Pakistan has not having as such good educational system. The government is spending only 2-3

percent on education that is not enough for running and improvement of education institution.

Education is necessary for every single individual who live in society or country and even the

constitution supports the statement but laws are not practically implemented in Pakistan.

Somehow, the government gives the opportunity to the students to get primary education but

there is no as such opportunities when they reach to the university level and even no

opportunities for those students who completed their degrees. In this way how these students can

contribute in the economy of the state if there is no as such opportunities to them. Poor academic

setup is another challenge in the economic growth of the country.

Government consumes more and save less:

The bad trend of the Pakistani government from the past and still having that the government is

spending the budget mostly on non-development activities in a country. It spends money on

surplus or unnecessary things and activities which can led the state to corrupt economic

condition. The government should not waste the money which cannot fulfill the need of the

people in society. Government should understand the need of the masses in society by proper

planning. They have to know that where we have to spend the money according to the need of

the people. It is also another challenge in the economic growth.

Energy crises:

Energy crises is another serious problem which affects the economy of the state. Pakistan is

facing this issue from the past few decades like, load shedding of electricity, petroleum, natural

gas, and CNG which created many problems. The government has failed in providing electricity

to industries and factories which results in increasing unemployment and producing lack of

goods. As a nation we have to suggest that the government should take this serious issue and to

be able to resolve it that will be more contributing in the economic growth.

Poor Export:

Export can play very significant role in economic growth. Pakistan is an agricultural state where

75% of the total economy of the state is based on agriculture production. Unfortunately, the

natural environment of the country comes under the threats of natural disasters like, heavy flood,

and earthquake. These incidents sometime decrease production level and can also destroy the

large amount of cultivation lands. The government should increase export level and should
provide subsidies to the farmers that will create positive environment in the contribution of

economic development. People should also change the trend of imported materials or products

like, in Pakistan most of the people use imported materials especially our elite and middle class

families so they have to change this trend and use our own products that will contribute in

economic change. The government should also promote the trend of industrialization in the

country. According to the study, for the development of economy, Pakistan should seriously

work on political stability and its law and order situation that will contribute in an economic

growth[ CITATION Lia14 \l 1033 ].

Pakistan’s Core Export Partners Percentage

United States 15.6%
United Kingdom 7.1%
China 7.0%
Afghanistan 6%
United Arab Emirates 5.6%
Germany 5.5%
Bangladesh 2.9%

Corruption:

Corruption counts in a major issue of Pakistan. The ratio of corruption is very high in Pakistani

society which is a big obstacle to economic growth or development. Corruption is existing in

every institution in Pakistan whether a political, economic, and other institutions. Corrupt people

has got higher ranks in a country. They are not interested to do the jobs honestly that is the

condition which build or increase problem in a country. Corrupt people want to achieve their

own interest rather than to do something for the betterment of society. They also involved in a

bad activities which is very harmful for the masses and also promote less energetic persons in

society. According to the 2018 corruption perceptions index Pakistan ranks 117 in least corrupt
nation out of 175 countries but previously it was on 139 out of 174 countries [ CITATION Haf18 \l

1033 ].

Inflation:

Inflation is another serious challenge in our society. Now a days, inflation rate has reached on

peek which is creating a number of issues in society of Pakistan. Inflation is a persistent change

in the prices of products or it simply defines, a rise in prices. When the value of a nation’s

currency is going down creates many problems for the nation or in other words, the devaluation

of rupee is creating problems. As an increasing in imports and decreasing in export level is

another factor which is falling economic growth. Same the case of Pakistani society where the

import level is increasing day by day.

Pakistan Import Partners Percentage %

China 20.5
United Arab Emirate 15.9
Indonesia 8.0
Saudi Arabia 5.5
United States 3.7
Japan 3.4

Inflation rate in Pakistan:

Annually Inflation rate in Pakistan Percentage (%)

1999-2000 3.6%
2000-01 4.4%
2001-02 3.5%
 2002-03 3.1%
2003-04 4.6%
2004-05 9.3%
2005-06 7.9%
2006-07 7.8%
2007-08 12%
2008-09 20.8%
2009-10 11.7%
2010-11 13.9%
2011-12 11%
2012-13 8.79%
2013-14 10.9%
2014-15 8.62%
2015-16 2.86%
2016-17 4.15%
2017-18 3.93%
2018-19 7.64%

Poor use of natural resources:

Pakistan has full of natural resources in the form of coal, copper, gold, and silver but

unfortunately, it has a weak administrative system by which it is facing many problems

regarding to improper utilizing the natural resources. Coal is available in many regions of

Pakistan but not exploring them. Baluchistan is the province of Pakistan where these resources

are in reserve but there is conflict between the Army and local masses of the area which is not

paying attention to positive and sustainable change in Baluchistan. The establishment institution

has created a war environment or form of critical situation in Baluchistan where the government

cannot utilize these natural resources for the betterment of the province and even for the state. So

suggesting that the federal government should take the issue of Baluchistan seriously and resolve

it shortly. These natural resources can push the economy of the state, while we have to use

properly in exploring them. The political leaders are interested to achieve their own interest

rather to focus on these natural resources which is available in our country. The good leadership
qualities are missing in exploring these natural resources. The government of Pakistan has failed

in exploring these natural resources so that’s the reason, it is creating a major issue in the

country.

Conclusion:

As mentioned, some of the main factors behind the falling of Pakistan’s economy from the past

few decades and still facing the same situations. I personally guess, that all these obstacles are

because of the bad policies in Pakistani society. The responsibility of the government is to

address public issues for growth and development through policies but the situation is different

in Pakistan, the elected government always achieve their own interest rather to address social or

public issues. They also have to focus on the strong bureaucratic organization in Pakistan and do

not interfere for their own interests. Because bureaucracy can play vital role in policy making

process so that it should become an autonomous institution in Pakistan that will be more

beneficial for the economic growth in our country. The government should make a strong

economic team for the economic change in Pakistan and the politician should also support them

in this mission. In this situation, economic experts will work to improve tax system in Pakistan

and the masses should also cooperate with government and pay the tax according to the law.

Pakistan should concentrate on political stability, law and order that will provide a type of

support in improving the economy. As suggesting that every institution should do their own

work, they should not interfere in other institutions like, the military institution is interpreting in

bureaucracy or even in the foreign policy which results in falling the economy of the state. The

responsibility of the establishment is to protect the people not to interfere in every institution in

Pakistan. Bureaucracy should also focus on the process of formulation and implementation of the

policy that will be beneficial for the people and will improve living standard of the masses in
Pakistani society. The government should promote the trend of industrialization in our country

which will provide help in economic opportunities and will also contribute in economic growth.

Finally, suggesting that we have to make our institutions strong and autonomous in Pakistan.

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