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ECONOMY OF PAKISTAN
CHALLENGES TO ECONOMY OF PAKISTAN:
Economy of any state is very critical and it governs that how stable and how
strengthen the state. So it is very much significant for ever country to make sure
that the economy of the state is stable and is strong enough to go through the
ups and downs in the country internally and externally . Pakistan is sole of the
countries which have seen so many variations in the economy of the state
because of so many internal and external circumstances which have eventually
affected and delayed the growth and the stability of the state.
The head office of only one Pakistani owned bank was located in Pakistani
territory. After a long battle India released a much smaller amount than the
legitimate share of Pakistan. (StudyFind,2013).
I was pleasantly surprised to learn that even in the worst of circumstances the
Pakistani economy had been raising at 5.2 percent annually during 1960-2010.
The condition is bad since then but there are some impressive growths. Pakistan
is performing better than ever Bangladesh when it comes to microfinance while
private initiative is helping education go forward significantly (Ahmed,2013).
Not with standing numerous challenges that we faced finished the last 65 years,
Pakistan has done reasonably well on economic forward-facing. Pakistan’s
economy has grown at a normal rate of 5.0% per annum over the previous 65
years (StudyFind,2013).
1. WAR ON TERROR:
After the incidence of 9/11, Pakistan is the country which was greatly
affected by the terrorism. Pervaiz Musharraf’s poor governance and bad
policies of war on terror lead Pakistan towards great disaster. As Pakistan
is connected to Afghanistan geographically and is an ally of America in war
on terror, therefore facing great threats and terrorism. A huge part of
budget is spent on war on terror and other security measures.
4. ENERGY CRISIS:
Energy crisis is the most important and critical economic problem which
has affected the growth of the state unfavorably, the load shedding of
Electricity, petroleum, CNG and Natural Gas has produced various
problems and has resulted in the conclusion of several and many
industries which has increased unemployment (StudyFind, 2013).
5. INADEQUATE EXPORTS:
Check-out 2007-2008, 80% of our imports were financed by our export
earnings. This ratio has come down to only 50%, it may go up to 60% but a
gap of 40% of financing needs in order to keep with the import level still
occurs. As a nation we desire to use even the basic commodities of foreign
countries rather than nearby manufactured goods. Except we do not
change this boldness of favoring the imported goods we have to keep on
trusting on outsiders to fill in this gap b/w our imports and exports.
Relaying on outsiders’ means that there are sequences, ups, and downs
i.e. when things are upright, one gets financing, and when things are bad
one starves for financing. No nation which strikes to preserve its honor
must go through this specific route. The lesser is this gap between our
export earnings and expenditure on imports and that can be achieved only
by expending our exports; our reliance on external sources would be
reduced.
6. INFLATION:
Inflation rate in Pakistan is very high and it is one of the most adverse
problems of Pakistan these days. The average inflation rate of Pakistan is
8.03. .In January of 2014 the inflation rate was 7.90. The devaluation of
Rupee is creating problems for our country.
The imports have increased in a significant manner and the exports are
falling daily this major reason why the country like Pakistan is unable to
keep the inflation rate down.
7. LACK OF TOURISM:
Terrorism is on the top of the slant, as Pakistan is facing problems of
terrorism for such a long time now and fronting the religious radicalism
and the ruthless activities of Taliban and other agencies. This factor has
totally eradicated the international investment in the country, so the
exchange of external currency is being stationary. This has exaggerated in
adverse manner that the economy is completely based on what the
country is producing the moment because no foreign help in exchange is
being done (Liaqat, 2014).
9. INVESTMENT FAILING:
Investment has fallen drearily. Consequently, the investment climate and
the constraints imposed by a woefully bad energy crisis have to be tackled
with determination in order to attract foreign and internal investment.
The article on energy is severe and informative, nut the need to tap
alternative renewable energy sources is not adequately emphasized.
Pakistan should be preferably suitable for solar energy technology.
Unnecessary to say, familiar corruption and mismanagement of our
meager resources are a great disgrace. Defense expenditure has to be
condensed. It is a huge gutter on national resources. A very strong
emphasis is laid by the specialists on the rule of law, clearness and
institution building. Equally, a very powerful disagreement is developed in
favor of inclusive growth by Kamal Husain (Ahmed, 2013).
The political instability is also playing its role in making the conditions of
economy even worse, as such variation in political and governing bodies,
corruption, and continuous and so vigorous change and amendments in
the policy of trading and producing has been continuously creating hurdles
in the way of progress and success of the economy (Liaqat, 2014).