Economic woes of Pakistan


It was in late 18th century, when Adam Smith, a Scotsman, wrote in his famous book titled “Inquiry into the nature and causes of the wealth of nations” that those nations are politically sovereign which are economically reign or economically strong. In Pakistan’s context specially from the perspective of the current socio-economic scenario, it has proved to be a perfect and ideologically correct philosophy.The principle was primarily concerned with the factors which led to increased wealth in a community which can be translated into higher and rising incomes, lager production, higher per capita consumption, reduction in poverty, knowledge based economies and the most crucial and vital of them all an enhancement in productivities which directly boost the economics potential of a nation.

Smith has realised the parallel contribution of manufacturing industry vis-a-vis the pre-eminent position of the agriculture sector. Unfortunately as a nation it seems we have missed the road map, so beautifully designed, so far back by the “Father of Economics”. After 60 odd years, we are still in the first stage of growth though normally the potentially rich countries have entered the third stage in the same span of time.

Coincidentally, agriculture sector, which contributes less than services sector in Pakistan’s GDP, still plays a dominant role in the economy. Poverty level, which was 17.5 percent in 1987, has gone up to roughly 24% in 2007, amazingly population was 100 million in 87 which now stands at 160 million.

If there was growth in the economy in this period, it can only be labelled as a “Sham Growth” as growth is progress and prosperity, not retardation as we have experienced. The trail of woes does not end here. Our exchange reserves are in single digit, imports in 2008-09 have been estimated to be approximately double of exports.

The rupee has depreciated against the dollar, per capital income is stagnant, inflation is moving like a wild creeper, unemployment level is rising. Bourses are showing undesirable swings, remittance and foreign direct investment are not giving any positive signals and as a last resort, we have to rely on external sources in the shape of loans, grants and aids and these come with harsh conditions as a nation is forced to mortgage its political sovereignty.

Political history of Pakistan has remained chequered, we have more instability, uncertainties and upheavals than political stability. For us it is now a game of puppet and puppeteer and our strings are held by developed nations like USA and UK and we will never get tired of dancing to their tunes.

A couple of decades back Pakistan was the front runner with regard to growth and development against countries like Brazil, Vietnam, Malaysia, even China. Sadly enough they are all emerging and rising from the depth of poverty, isolation and economic deprivation.

Not for the first time, but it is really the last chance. We should stand as a unified and progressive nation, keep aside all sorts of squabbles to break the shackles of poverty and reliance on foreigners to make a mark on the globe. The road is bumpy, treacherous and difficult, but this was the same for all emerging economies. We, as a nation, should develop a sense, that is, if they can do it, so can we!



Source: Business recorder, 28/8/2008

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