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,
