Historical Background of Economic Planning in Pakistan
Five Year Economic Plan’s in Pakistan Use the resources of a country for the Nation is known as Economic planning. Economic strategies are plan to economic stability and development. The first strategy of Pakistan economic development was made in 1955-1960. In this article we will discuss historical economic policies and their output. First economic plan (1955-1960) In 1955 first economic policy was made. The key points of that plan were: Increase in the GDP of a country to 15%. Target to achieve 7% increment in GDP Per Capita. Provides the two million’s new job opportunities for the people 15-percent increase in export of the country. Increases in the agricultural productivity to 9%. Industrialize the country and promote its productivity to 60%. Establish the energy generating plants to boost industries. Focus on earlier Education and provide a good leaning environment. Construct the 1.5 lac new houses. Second Economic Plan (1960-1965) Second economic plan was started at early 1960. The major targets of that plan are: In that plan the GDP nominal was set to 24%. Expected to GDP per Capita 10%. Target to produce 2.5 million’s new jobs. Increase in the production of mega industries to 14%. Bosted the Exports to 3%. Encourage to the small industries and uplifting the local products. Third Economic plan (1965-1970). Third economic strategy also focused on increasing GDP, providing the new opportunities of jobs, agricultural development and overcome the dependency on imports. The key points of that plan were: Industrialized the country on major scales and achieve to 7.2 percent increment. Improving the basic industries and engineering. Overcome the power shortage and provides the energy to the industries at appropriate price. To better the life style of villages by providing standard health necessaries, modern education and other imports facilities. Expected to GDP per Capita 9.2%. Increase in the GDP of a country to 7%. Increase the export volume to 11 percent. Agricultural improvement to 6%. Fourth Economic plan (1970-1975) This plan was part of a series of five-year economic plans that Pakistan adopted after independence to structure its economic development. The plan aimed to achieve an annual growth rate of 6.5%. It sought to address regional disparities between East Pakistan (now Bangladesh) and West Pakistan by focusing on balanced economic development. This plan emphasized on industrial growth to overcome the dependency on imports and target to achieve 6.5% increment in overall economic production. Social development also included in that plan by improving the living standard. One of the major goals was to reduce economic disparities between East and West Pakistan by ensuring more equitable distribution of resources. Expand the manufacturer sector and improve the exports to 8.5%. Fifth Economic plan (1978-1983) Fifth economic plan presented in 1978 which was part of the country’s series of economic development plans. Pak-India war’s and separation of East Pakistan badly effected the economy and overall growth in different sectors. The key points of this plan were: Pakistan spent the billions of dollars to import petroleum products, to minimize it a target was set to produce 33% oil from home land. Become as a self-dependent on agricultural product and daily life groceries. 9-percent increase in industrial productivity. Special focus on the development of Balochistan including construct basic infrastructure for road network, provide the good health facilitation and other daily life necessaries. Unlike the previous government, which focused heavily on state intervention and nationalization, the Fifth Plan under General Zia’s regime sought to revive the private sector. The plan emphasized deregulation, de-nationalization of some industries, and creating a more favorable environment for private investment. To overcome the balance of payment deficit in the context of trade, initiated to improve exports to 7%. 6% boost in agricultural development. Encourage the small and large enterprises to contribute industrial productivity. Conclusion The Five-Year Plans of Pakistan, while ambitious in their goals, faced significant challenges in implementation due to political instability, war’s, shifting economic policies, and external dependencies. The plans reflected the priorities of their respective regimes. SF K
Discover Pakistan Economy Crises in 2024
Pakistan has been facing an economic crisis since gaining independence. Partition-related issues, a lack of an industrial environment, the need for basic infrastructure, and the influx of millions of migrants from India have all contributed to these economic problems. In the British era, the British government primarily focused on Indian infrastructure. The current ruler prioritized the installation of technical machinery, textile industries, basic road networks, and other facilities in India, but the British government was unable to offer these same facilities to Pakistan. This was also a major contributing factor to Pakistan’s economic crisis, which in turn led to further economic challenges in the future. Due to a shortage of education and technical skills, Pakistan was unable to effectively address these issues at the time. Despite these difficulties, Pakistan managed to resolve some issues during this period, but they had an impact on the country’s economy. We will use various factors such as GDP per capita or annual, inflation, unemployment, and trade (imports and exports) to thoroughly analyze the economy of Pakistan since its independence. Pakistan’s economy during 1947–1960 The Pakistani government concentrated on agricultural development, the textile industry, and other small-scale industries during this era, but due to limited resources, Pakistan was unable to successfully achieve its set goals. At that time, the GDP stood at 10 billion rupees annually, with a GDP per capita of $86 (172 pkr). The economy of Pakistan during 1960-1970 Known as the “Era of Rapid Growth,” Pakistan made significant strides in the agricultural field, textile industries, and small and large-scale industrial revolutions. This period also saw success in attracting foreign investment, which helped stabilize the country’s economy. Pakistan started to export major crops and embarked on big projects, including the largest earth-filled Tarbela dam. This era saw the establishment of most major dams and industries. This period witnessed an average GDP growth rate of 6.7%. At the end of this decade, the Pakistani economy fluctuated due to some political instability and the Pakistan-India War of 1965. The Indo-Pak War in 1965 had a significant impact on Pakistan’s economy According to economic experts, the war may have ended 59 years ago, but its effects are still felt today. It served as a speed breaker for Pakistan’s economy, which had a 6.7% average GDP. Foreign investment drastically slowed down, affecting large-scale production and Pakistani exports. These factors had a bad impact on the country’s economic progress. The separation of “East Pakistan” in 1971 led to economic crises East Pakistan was the backbone of the Pakistani economy; it contributed to a huge amount of trade and exports. Before the partition, east Pakistan’s textile industries and fishing exports drastically increased. When Pakistan separated into two nations, its economy fluctuated badly, and the current prime minister of that time, “Zulfikar Ali Bhutto,” introduced the policy of “nationalization.” It stabilized the economy of Pakistan after the war, but in the future, Pakistani foreign investment could not be received due to his policies. In short, Pakistan dropped the confidence of foreign investors, and now foreign investors think that before investing in Pakistan, they have concerns at any time over industries and institutions that could be nationalized. Foreign investment creates job opportunities, increases the exports of a country, and makes a huge contribution to the economy of that country. Due to the 1971 war, the Pakistani economy was destabilized, remarkably decreased, and exports were badly affected. Due to this situation, the “GDP“ directly fell from 7–10% growth to 0.47%. Using the data given below at the time, we can analyze Pakistan’s economy. YEAR GDP GDP PER CAPITA GROWTH RATE 1973 $ 6.38 B $ 99 76% 1972 $ 9.42 B $ 151 0.82% 1971 $10.67B $175 0.47% 1970 $10.03B $169 11.35% 1969 $8.68B $151 5.51% The declaration of nuclear power has led to economic sanctions. In 1999, Pakistan’s economy experienced a significant decline following its declaration as a nuclear power. Pakistan began developing nuclear weapons in response to India’s nuclear program and to protect national security. Due to regional instability, Pakistan has had to allocate a significant portion of its budget to its nuclear program for the past two decades, and continues to do so today. Due to the Indo-Pak conflict, billions of dollars have been used or have been used in defense. If there were peace, both countries could use money to industrialize the country and grow their economies better. In 1998, after conducting the nuclear tests, the international community, including America, imposed an economic sanction on Pakistan. The United States suspends economic and military support for Pakistan. The IMF and other financial institutions stopped providing loans and other economic support. Pakistan also faced trade restrictions, which created more economic instability. During that period, Pakistan had to face economic crises. The economic crises in Pakistan in the new century are a significant concern. Economic crises were temporarily resolved. After the 9/11 attack, Pakistan received substantial economic and military aid from the USA, and economic sanctions due to the declaration of nuclear weapons were removed after 9/11 attack, After that Pakistan implemented economic reforms that included privatization and financial sector reforms. These policies and reforms led to an economic growth of approximately 6-7% in Pakistan, an increase in direct foreign investment, and a record-breaking peak in the stock market. As a partner in the USA-Afghanistan war, Pakistan initially benefited from American assistance in the form of “USA-AID” and military support. However, due to the Afghan Taliban’s response, Pakistan faced a lengthy series of bomb blasts and suicide attacks. Ongoing terrorism and security challenges also affected economic progress. Economic and security experts estimate that the regular conflict cost Pakistan 160–200 billion US dollars and resulted in 80,000 deaths due to terror. In 2010, Pakistan also faced an energy crisis, a power shortage that reduced industrial production. Due to these problems, many industries shifted to neighboring countries, leading to inflation and economic crises in Pakistan. Corruption significantly impacts the economy of Pakistan; it directly affects foreign investment, public trust in the government,
