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Presented by:
Hasan Mehfooz
14648
HIGHLIGHTS
Introduction
Political
Instability
Economic Instability
Structural Adjustment Program
Privatization and Liberalization
Fiscal Performance
Monetary Policy
Exchange Rate
Agriculture Sector
Manufacturing and Industry
Trade and Balance of Payments
Adverse affects of SAP
Conclusion
INTRODUCTION
Democracy returns to Pakistan.
Period of Political and Economic Instability.
B/w !988-99 Four General Elections with both
once.
Post 1988 period is called Era of Structural
Adjustments
Since 1988 to date IMF and WB has been
POLITICAL INSTABILITY
Year
Prime Minister
President
Actions
1988
Benazir
Bhutto
None
Ghulam Mustafa
Jatoi
1990
Nawaz Sharif
1993
Benazir
Bhutto
1996
Dissolved
1997
Nawaz Sharif
Resigned
None
13th Amendment
Nawaz Sharif
Muhammad Rafiq
Tarrar
None
Nuclear State
Dissolved
Muhammad Rafiq
Tarrar
Millitary
Musharraf Scene
1998
1999
Economic In-stability
IMF Loans
BOP Deficit borrow from abroad to finance it
Prices (Inflation)
Investment fell
Unemployment Increased
Poverty Rises
Economic Growth didnt take place
Fiscal Deficit (very few tax payers)
Debt Rise Service Debt budget deficit
StructuralAdjustment
Adjustment Program
Structural
Program
Even
Export led-growth
Privatisation
Liberalisation
Efficiency of free market
the dollar
Lift import and export restrictions
Balance their budgets and not overspend
Remove price controls and state subsidies
During
policy
Fiscal policy
Public enterprises
Financial sector
Industrial policy
Agriculture
PRIVATIZATION&LIBERALIZATION
PRIVATIZATION&LIBERALIZATION
PRIVATIZATION&LIBERALIZATION
PRIVATIZATION&LIBERALIZATION
FISCAL PERFORMANCE
FISCAL PERFORMANCE
Since
MONETARY POLICY
EXCHANGE RATE
Pak rupee reviewed daily with reference to a tradeweighted basket of currencies of the countrys major
trading partners/competitors.
This flexibility in exchange rate boost exports and
curtailing imports
February 1991 extensive exchange & payment reforms
to facilitate industrialization
1995-96 BOP came under severe pressure US dollar
strengthened Pak rupee adjusted downward by 7% in
terms of US dollar in Oct 1995
1996-97 To alleviate the pressure of BOP devaluation of
rupee/dollar exchange rate by 7.85% on October 22, 1996.
AGRICULTURE
The agricultural sector showed average
growth of28.9% in 1980-85 , faced a decline
at 26.3% in 1985-90,further declined to 25%
in 1990-95 and 25.8% in 1995-2000.
The annualgrowth rate ofmajor crops have
fallen since 1980 . In the decade1980-90 the
average annual growth of major crops was 3.3
% which fell to 2.4% in 1990s.
Both production of wheat and rice fell sharply
in 1990-00.
In the SAP, the industrial policy outlined: Limiting thelist of specific industries,
deregulating business decisions, raising investment sanctioning limit annually,
divesting the shares of public sector, considering a realistic trade regime,
enhancing export incentives, reducing the list of restricted import items, phasing
out all tariff exemptions by 1990-1.
This IMF macro economic recipe had adirect impact on industrial development in
Pakistan. It lead to:
The WB and IMF concluded that SAPs in the industrial sector went well in late 198090s but after 1991 the utility prices increased and had animpact on industrial costs
and competitiveness.
Tariff rates have fallen from 225% in 1988-9 to 25 % in 2003-4 making imports
cheaper and declaring4000 industrial units as sick
TRADE DEFICIT
If
CONCLUSION