Pakistan’s economy: 50 years ago

BR Research July 25, 2019

Who knew a trip to library could be a depressing affair? Yesterday morning, BR Research stumbled upon a dusty old copy of Economic Survey FY69 in our newspaper’s library. What follows is an itemised list of structural or fundamental problems faced by Pakistan back then, as described by the survey’s author Anwar Iqbal Qureshi, followed by a summarized assessment of the situation today.

Caught in a vicious cycle: ‘Continuing economic development is the foremost objective of developing countries including Pakistan, where “population is multiplying fast”, while low income levels coupled with high propensity to consume leaves little scope for saving and investment’. The vicious cycle is still alive and kicking in Pakistan.

Labour force: ‘There is a need to absorb annual addition in labour force and reduction in backlog of unemployment’. The issue of fast population growth rate and labour absorption continues to haunt Pakistan.

Factors impeding exports: One of the factors impeding exports has been the tendency to seek refuge behind a sheltered domestic market.…..offering goods at competitive prices, adherence to quality control, adopting to changing consumer preferences was also alluded to in the survey. These weaknesses still abound.

Brain drain: ‘National Research Fellowship scheme launched to attract outstanding Pakistani scholars abroad to work in Pakistan and to check brain-drain’. Brain drain continues to be Pakistan’s problem to date, and the country continues to import Pakistani technocrats from abroad.

Donor influence: Investment advisory centre of Pakistan set up in collaboration with the USAID with a view to pre-investment advisory services. Donor influenced policies continue to abound to this date.

Aid to Pakistan Consortium: ‘The delay in the consortium’s actual flow of assistance had led to revision in the phasing of third five-year plan’. This reminds us of the Friends of Democratic Pakistan forum earlier this decade, and the recent delay in the going to the IMF in hopes of seeking assistance from friendly countries.

Stock market: “Individual investors felt helpless against manipulation of the big investors”. “Instead of providing a competitive market for investments in shares the stock market had very often been the rendezvous of speculative dealers”. Rights of minority shareholders are better protected today, but the stock market still remains an uncompetitive market for raising finances.

Province own collection: “Serious efforts are being made by the provincial governments to raise its own resources for financing its own annual development programme”. Provinces are still trying to raise their own recourses, albeit partly due to questionable tax assignments.

Cost of living index: “There is no cost of living index for Pakistan as a whole but its approximation is provided by consumer price index for industrial workers and clerical wage earners”. There is no cost of living index even today, whereas CPI for industrial workers and clerical wage earners aren’t produced anymore.

Export market development fund: ‘Selling in foreign markets is becoming highly competitive and specialised. Foreign market surveys and dissemination of information among interested exporters is needed so that exporters can export goods of reliable standard at competitive prices. Since most exporters do not have the means for such preliminary work, an export market development fund was created’. Most exporters in Pakistan still capacity to such surveys, and the export promotion fund exists even now.

Direction of trade: “Efforts are being made to diversify the direction of trade…so far there is no significant change in the general pattern”. Trade is yet to be diversified!

The question for all and sundry to ponder upon is what specific measures are being taken today to ensure that Pakistan’s situation will not remain the same 50 years hence, and what role is the state and the society playing to turn the situation around.

Copyright Business Recorder, 2019

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