Give reasons for the slow growth and re-emergence of poverty in Pakistan.
Answers
Reforms were initiated in Pakistan in 1988.
1. Pre-Reform Period : Failure
(a) The proportion of poor in 1960s was more than 40 per cent.
(b) The economy started to stagnate, suffering from the drop in remittances from the Middle East.
(c) A growth rate of over 5% in the 1980s could not be sustained and the budget deficit increased steadily.
(d) At times foreign exchange reserves were as low as 2 weeks of imports.
2. Post-Reform Period (after 1988): Failure
The reform process led to worsening of all the economic indicators.
(a) The growth rate of GDP and its sectoral constituents have fallen in the 1990s.
(b) The proportion of poor declined to 25 per cent in 1980s and started rising again in 1990s. The reasons for the slow-down of growth and re-emergence of poverty in Pakistan's economy are:
(i) Agricultural growth and food supply situation were based not on an institutionalised process of technical change but on good harvest. When there was a good harvest, the economy was in a good condition; when it was not, the economic indicators showed stagnation or negative trends.
(ii) Fall in foreign exchange earnings coming from remittances from Pakistani workers in the Middle East and the exports of highly volatile agricultural products.
(iii) There was also growing dependence on foreign loans on the one hand and increasing difficulty in paying back the loans on the other.
Answer:
Reforms were initiated in Pakistan in 1988.
1. Pre-Reform Period : Failure
(a) The proportion of poor in 1960s was more than 40 per cent.
(b) The economy started to stagnate, suffering from the drop in remittances from the Middle East.
(c) A growth rate of over 5% in the 1980s could not be sustained and the budget deficit increased steadily.
(d) At times foreign exchange reserves were as low as 2 weeks of imports.
2. Post-Reform Period (after 1988): Failure
The reform process led to worsening of all the economic indicators.
(a) The growth rate of GDP and its sectoral constituents have fallen in the 1990s.
(b) The proportion of poor declined to 25 per cent in 1980s and started rising again in 1990s. The reasons for the slow-down of growth and re-emergence of poverty in Pakistan's economy are:
(i) Agricultural growth and food supply situation were based not on an institutionalised process of technical change but on good harvest. When there was a good harvest, the economy was in a good condition; when it was not, the economic indicators showed stagnation or negative trends.
(ii) Fall in foreign exchange earnings coming from remittances from Pakistani workers in the Middle East and the exports of highly volatile agricultural products.
(iii) There was also growing dependence on foreign loans on the one hand and increasing difficulty in paying back the loans on the other.