Prepared By Mufti Muhammad Omer Rafique Resources Of Pakistan Prepared By Mufti Muhammad Omer Rafique

Progress in Economy An economy is the system of human activities related to the production, distribution, exchange and consumption of goods and services of a country. Pakistan began its life as a very poor country and had to face the problems of poverty and inadequate(too little) infrastructure.

It was basically an agricultural country and with no industries. Main crops were Jute, raw cotton and rice which were exported. Since industries were very few, most of the things had to be imported.

In the regime of President Ayub Khan(1958-1969) the Govt made policies to encourage industries. Agro based industries like sugar mills, textile mills, Jute mills were setup by the private sector. Other type of industries were also setup.

The decade of 1960’s is therefore considered to be “the golden age”. However, heavy loans were borrowed from IMF(International Monetary Fund), World Bank and other agencies. The drawback was that with the full support of the Govt to the industrialists they became richer and richer while the general public remained poor.

In Prime Minister, Mr. Bhutto’s regime, he nationalised 43 large industrial units like cement, fertilizers, oil refining, oil marketing, chemicals, rice mills, cooking oil industry. Banks were also nationalised.

After the nationalisation the performance of all those units sharply declined and instead of giving huge profits they all ran into losses. The industrialists were discouraged and did not setup new industries.

New loans were taken which resulted in accumulation(increase) of borrowing. The budget deficiency(shortage) also began to increase. The expenditure on defence and administration increased sharply. This lead to a growing dissatisfaction of the people towards the Bhutto Govt which concluded on mass agitations مُظاہِرَے against Mr. Bhutto.

In the regime of Gen. Zia-ul-Haq the economic activities were low; less production, less exports, inadequate(insufficient) investments in social infrastructure. Defence and debt servicing were increased. However the US gave huge loans to Pakistan to finance war against Russia in Afghanistan.

Moreover the volume of forgein exchange remittance(transfer of funds) increased from US$0.5 bn in 1978 to US$3.2 bn in 1982.

These factors provided support to the country’s economy . Under the governance of Mian Nawaz sharif , Mauhtarma Benazir Bhutto and Mr. Asif Ali Zardari , huge loans from IMF, world Bank and US Govt were taken.

The heads of the state were mainly concerned with flourshing their private business and amassing (buildup) their wealth. This resulted in: Very high inflation. Very high corruption. Threat to life and property of citizens. Emergence(coming out) of armed groups engaged in killing and looting. Poverty rate increased

During the decade of 1990 political instability, unprecedented(extraordinary) corruption and worsening law and order situation had a significant adverse effect on private investment. Quite a number of indutrialist closed their factories in Pakistan and went to other South Asian countries and setup industries there.

Trying to reduce the burden instead of cutting down their own lavish expenses, the development expenses were cut down and a number of development projects were shut down. During the regime of Gen. Musharraf, some reforms were introduced and economy stopped its sharp decline.

The debt servicing burden became tolerable. During the history of Pakistan several “Five Year Development Plans” were made by the past govts and “Plan Commision” was setup to monitor those plans but they were not worth mentioning as none were taken seriously by the Govt and were not implemented seriously.