"Which policy to adopt for a sustained growth of Pakistan's economy''

Abstract

Pakistan survived the experience of the sanctions imposed on it m 1998. Economic growth remained positive, in a year when other Asian countries were recording negative growth. Inflation did not accelerate significantly, as was anticipated by most external interpreters. The current deficits declined further, so that Pakistan's short-run balance of payments position remained viable once lending by the IMF and World Bank was resumed and debt had been rescheduled by the London and Paris Clubs. Over the period of time Pakistan's economy has been on the decline due to various political and administrative reasons. This trend has badly affected all walks of life due to its impact on the socio economic aspects of the society. Therefore it has become one of the most widely discussed topics which involved a deep study on the various fields affecting the economy. Exports have been declining through out the fiscal year 1998-99, normal capital inflows have most dried up, and the country's weak credibility and policy uncertainties have discouraged foreign direct investment in particular and productive investment in general. Pakistan is the only country in south Asia that has recorded a lower rate of growth on the l 990's than in the preceding decades. Suspension of the convertibility of the foreign currency deposits, and the London and Paris Club rescheduling, were essential in the short run, but they will tend nevertheless to compromise Pakistan's ability to barrow internationally for years to come. The social indicators - literacy, humanity, productiveness, and poverty - remain poor, even for a country with Pakistan's per capita iv income, and the squeeze on the budgets of the provincial governments suggests that this is unlikely to improve much in the short run. The country clearly faces a difficult challenge in reviving its economy and in achieving a level of social standards in which it can begin to take pride. This focus on external issues should not be interpreted as casting doubt on the proposition that profound domestic reforms are essential if Pakistan is to restore the economic progress that it recorded in the first decades after independence, and begin to realize the social gains that have so far avoided it, let alone if it is to realize its potential of becoming a miracle economy. That is possible only if universal education is at last achieved, if population growth is rapidly brought down, if the encouraging reports of less corruption are confirmed and proved to be the first step in a systematic transformation of the standards of public life. There fore books written by renowned personalities of the country, articles from the newspapers and internet have been consulted. The economic survey of Pakistan 2000- 2001, helped in better analyzing the current situation.