Economic History of Pakistan

From 1950s to 1960s

Presentation Structure

What is Economic growth?

Economic History of Pakistan

Economic History since Independence Day

Initial Decades: The 1950s and 60s

Economy of East Bengal in Pakistan

.
Economic Growth

Economic Growth is an increase in

the output that an economy produces
over a period of time.

Factors of economic growth are:

New Technology, New production

methods, Increasing labour force etc.
Importance
Living standard of people
improves

Unemployment
decreases

Poverty reduces

Reduces crimes and

corruptions etc
Economic History of
Pakistan
The economic history of pakistan has
experienced growth and economic
downtown.

Since independence day its economy has

emerged as a semi industrialized one
based heavily on textiles, agriculture and
food production.

Recent years have seen a surge towards

technological diversification.

As of 2014, agriculture accounts for more

than one-fifth of output and two-fifths of
employment.
Textiles account for most of Pakistan's export earnings, and inflation has increased
rapidly, climbing from 7.7% in 2007 to almost 12% for 2011, before declining to 10% in
2012 and to 2.11 percent in April 2015.

Inflation Rate in Pakistan averaged 7.99 percent from 1957 until 2015, reaching an all-
time high of 37.81 percent in December 1973 and a record low of -10.32 percent in
February 1959.

Pakistan suffered its only economic decline in its GDP only once in her entire history
between 1951-52.

GNP growth rate during 1985–95 was only 1.2 percent per annum, substantially lower
than India (3.2), Bangladesh (2.1), and Sri Lanka (2.6).

Growth was slow during the 1950s averaging 3.1 percent per annum but accelerated to
6.7 percent during the sixties and remained generally close to 6 percent per annum till
the early 1990s.
Economic History Since Independence Day
Pakistan’s population has grown rapidly from around 30 million in 1947 to over 130
million in 1996.The rate of annual growth has averaged 3 percent since 1960.

Pakistan's average economic growth rate since independence has been higher than
the average growth rate of the world economy during the same period.

Average annual real GDP growth rates were 6.8% in the 1960s, 4.8% in the 1970s,
and 6.5% in the 1980s.

Average annual growth fell to 4.6% in the 1990s with significantly lower growth in the
second half of that decade.

During the 1960s, Pakistan was seen as a model of economic development around
the world, and there was much praise for its economic progression.

Many countries sought to emulate Pakistan's economic planning strategy and one of
them, South Korea, copied the city's second "Five-Year Plan"; the World Financial
Centre in Seoul is modeled after Karachi.
 Initial Decades
The 1950s and 60s
Between 27 October 1958 and 25 March 1969 under Ayub Khan Pakistan economic
growth averaged 5.82% growth during his eleven years in office.

Manufacturing growth in Pakistan during this time was 8.51%, far outpacing any other
time in Pakistani history.

It was the time when Pakistan first got an automobile industry, a cement industry and
few other heavy manufacturing industries.

However tax collection was low averaging less than 10% of GDP.

The Export Bonus Vouchers Scheme (1959) and tax incentives stimulated new industrial
entrepreneurs and exporters. Bonus vouchers facilitated access to foreign exchange for
imports of industrial machinery and raw materials.

Mahbubul Haq blamed the concentration of economic power to 22 families which were
dominating the financial and economic life of the country controlling 66% of the industrial
assets and 87% of the banking.
During the same period there were construction of several infrastructure projects
(notably Tarbela Dam and Mangla Dam), including canals, dams and power stations,
began Pakistan's space programme.

In 1959 the country began the construction of its new capital city.

The capital was not moved directly from Karachi to Islamabad; it was first shifted
temporarily to Rawalpindi in the early sixties and then to Islamabad when the
essential development works was completed in 1966.
Economy of East Bengal
in Pakistan
The partition of British India in 1947 severely disrupted the economic system.

The united government of Pakistan expanded the cultivated area and some irrigation
facilities, but the rural population generally became poorer between 1947 and 1971.

Pakistan's five-year plans opted for a development strategy based on industrialization,

but the major share of the development budget went to West Pakistan.

The economy of East Pakistan steadily declined.

Blame was placed by various observers, but especially those in East Pakistan, on the
West Pakistani leaders who not only dominated the government but also most of the
fledgling industries in East Pakistan.
Thanks!