经济学论文代写 巴基斯坦经济变化史

At the time of partition Pakistan had thirty million people with per capita income of nearly $100, where agriculture contributed almost 50 % to the economic output. At the time of partition the land that came under Pakistan was industrially backward and so the contribution of industrial output was negligible, as all industries were located in territories that came under India.

According to economic survey, In 2008 it is claimed with population over 170 million people, the country's per capita income was $1000 which is almost ten times more than it was at the time of partition where agriculture accounts for only 20% of our national income with 40 % of the country's labor force engaged in agriculture. Industrial and manufacturing contributes almost 25 % of the income. Services sector has been the most dynamic sector that generates 50 % of national income and employs nearly the same proportion of the labor force.

The root cause of our failure is that we did not utilize our potential at the to maximum level. A survey of Pakistan's economy depicts the country has achieved 5 % increase in the average annual growth rate in the last 60 years of its existence, with much higher growth in the 1960s, 1980s and early 2000.

In the period from 2002-07 Pakistan's economy grew at 7 % annual and the rate of poverty and unemployment reduced, external debt levels lowered, international financial markets were easily reachable thus Pakistan attracted sizeable foreign direct investment.

Pakistan's economy suffered severely during the last three years, mainly due to the oil and commodity price hike of 2007, then the handover to a democratic government from dictatorship. To curtail the situation, the administration took some tough decisions such as limiting many of the untargeted subsidies and introduced cash transfer scheme for the poor. However in this process the country has accumulated external debt that has raised the Public Debt - GDP ratio, sacrificed public sector investment for infrastructure and human development and raised overall interest rate structure. In order to get a hold of the situation the challenges include trade deficits, mounting internal and external debts, unemployment, inflation, inefficient tax collection and deteriorating social indicators.

Key indicators of economic performance in 11 months show a slow recovery in the running fiscal year from a record slow down in FY09 keeping despite the global financial crisis and Great Recession of 2008-09. Inflation declined but a spike in international fuel and food prices, excessive government borrowings from the central bank and unchecked business malpractices like hoarding and cartel-making kept inflationary pressures alive. Tax revenue grew in FY10 but is likely to fall short of the target of $1.38 trillion. The total national debt to GDP and external debt to GDP ratio remained high thus increasing the government expenses on debt servicing.

 经济学论文代写  巴基斯坦经济变化史

Legacy of the 1990s

The period of 1990s was a stagnant decade in terms of economic growth, with lash back in the increase of poverty, overall debt, large fiscal and current deficits all pointing towards poor social indicators, leading the higher rate of inflation. But in all fairness the entire blame for this particular outcome cannot be laid on the economic managers and policy makers of that time for there are other factors too.

After an impressive record of economic growth and poverty alleviation during the 1980s Pakistan suffered serious setbacks in the 1990s in terms of most economic and social indicators. During the 1990 the economic growth rates declined, inflation rose to peak, debt load escalated substantially, macroeconomic deficit widened and worst of all the incidence of poverty almost doubled. Pakistan's credibility in the international financial community was at its lowest level. Confidence of the local investors was seriously injured when the hard earned foreign currency deposits of resident and non-resident Pakistanis, accumulated over a long period of time, were suddenly frozen by the then new government.

The annual growth rate during the 1980s was 6.3 %, which declined to 4.9 % during the first half of the 1990s, and further plunged down to 4 % during the second half. As compared to an average record of 8.2 % the sectoral growth witnessed a sharp fall to almost 4 % in the late 1990s.

The Investment ratio moving in a downward direction since 1995 reached its lowest of 13.9% in 1998-9. This short fall of investment made it even more difficult for the economy to resume a higher growth rate.

The persistence of fiscal and external deficits led to accumulation of large domestic and external debt throughout the decade. Total debt consequently rose from $20 billion in June 1990 to a peak of $43 billion in May 1998. Pakistan's external debt reached 47.6 % of GDP, having grown at an average annual rate of 8.1 % throughout the 1990s. Domestic debt accounted for 49.1 % of GDP. Public debt service claimed as much as 61 % of total revenues in mid-1999 compared to 35.7 % in 1990 thus leaving very little fiscal space for development expenditure.

The burgeoning burden of debt service was reflected in the persistently high level of fiscal deficit, above 7 % of GDP, Tax-GDP ratio had moved up to 14.4 % by 1994-5 but since then it had consistently eroded and was down to 12.8 % by 1999-2000.

External sector deficit also jumped from 2.6 % of GDP in the 1980s to 4 % in 1990s. A major factor responsible for this trend was stagnation of exports and the loss of market share in world exports. Incidence of poverty also doubled during this decade, from 18 to 34 %, primarily due to lower growth, higher inflation and limited access by the poor to basic social services.

1999-00 to 2001-02 - Stabilizing Economy

The period from 1999-2002 the economy was able to achieve the following results:

Fiscal deficit was reduced from 5.4 to 4.3 % of the GDP.

Trade gap reduced from $ 1.6 billion to $ 1.2 billion.

Current account balance turned surplus to $ 2.7 billion from a deficit of $ 1.9 billion.

Foreign remittances increased 2.5 times from $ 1,060 million to about $ 2,400 million.

FDI flows averaged $ 400 million annually.

Re-profiling of bilateral debt stock resulted in a saving of debt servicing of $ 1 billion annually.

Repayment of $ 4.5 billion private, commercial and short term debt and liabilities reduced the amount of debt and thus reducing future debt servicing obligations.

IMF, World Bank, ADB and other donors provided concessional assistance of about $ 2.5-3 billion annually while their hard term loans were repaid.

Foreign currency reserves held by State Bank of Pakistan rose from $ 991 million FY 1999-2000 to $ 1.677 billion in FY 2000-01 and $ 4.333 billion by FY 2001-02.

New foreign currency deposits of $ 2.1 billion by resident and non-resident Pakistanis were deposited in to Pakistani banks.

Pakistan's exports increased from $ 7.8 billion to $ 9.2 billion by June 2001.

Table given below draws a comparison between macroeconomic indicators of FY99 and FY2002. The fourth column shows f the change was positive or negative.

2002-03 to 2006-07 - The Economic Take-off

Pakistan's economic performance during the above period has been very impressive in terms of income per capita growth, new employment opportunities and poverty reduction. As a result high GDP growth rate of about 6.3 % a year, for five years, the per capita income in current dollar terms had risen to $ 1000. GDP growth that was 3.1 % in 2001/02 rose to 7 % in 2006/07. Unemployment rate also declined from 8.4 % to 6.5 % and about 11.8 million new jobs were created in FY99-08 period. The significant outcomes recorded during 2002/03 to 2006/07 were:

The amount of External debt and liabilities as %age of foreign exchange earnings was reduced to 28 % from 46 % of the GDP.

Foreign exchange reserves rose to US $14 billion covering six months' imports from $ 6.4 billion in FY02.

Exports rose from $ 13.6 billion to $ 21.2 billion recording 55% increase.

Tax Revenues rose 14 % annually doubling in five years.

The Fiscal deficit remained close to 4 % of GDP.

Low interest bank rates on loans touched as low as 4 to 5 % this encouraged investment and fuelled growth.

Manufacturing sector share of GDP rose from 14.7% to 19.1% by FY07.

Investment rate grew to 23% in FY07 from 16.8 % in FY02 reflecting about six %age point growth in investment/GDP ratio.

Significant growth in foreign capital inflows of $13.5 billion over this period.

The foreign remittances increased 6 times and reached $6.5 billion for FY08. The foreign exchange companies under a new policy were brought under the regulatory framework of the State Bank of Pakistan which contributed another $ 3-4 billion of foreign exchange inflow.

The Tariffs on imports of plant, machinery and equipment for industrial sector has been reduced to 5% and for agriculture sector the tariff is reduced to 0 %.

Inflationary pressure that remained quite low in FY02-04 began to intensify since FY05 and food inflation touched double digits.

Unemployment decreased from 8.3 % in 2001-02 to 5.27 % in 2006-07 mainly because of a steep decline in women's unemployment from 13 % to 9 %.

Profitability of banking sector surged reaching $1.7 billion in FY07.

Capital market capitalization reached $65.9 billion by end FY07.

Pakistan's total foreign exchange earnings almost tripled from $16.8 billion in FY00 to $46 billion.

Table given below presents a summary of the changes in key macroeconomic indicators over the period 2001/02 - 2006/07.

2007-08; Economic Meltdown

The year 2007-08 has been a bad year for Pakistan's economy. This can be assessed in the the following facts:

GDP growth rate was below the target, i.e. 5.8 % but was still quite respectable in view of the severe political and economic difficulties faced by the country.

Fiscal deficit widened to 7.4 %

There was drastic increase in the Government borrowing from the State Bank of Pakistan to a record high of Rs.688 million compared to Rs. 112 billion in the previous year.

In agricultural sector, cotton, wheat and rice crops did not perform well and together with increased prices of imported commodities, contributed to food inflation.

Large scale manufacturing growth slowed down to 4.8 % - almost one half of the rate recorded in FY07.

A worsening trade imbalance fuelled external current account deficit to exceed 8.4 % of GDP.

The drawdown of foreign exchange reserves to meet the balance of payments deficit created pressures on Rupee-dollar exchange rates leading to a depreciation of about 25 %.

Inflation crossed 12 %.

61 state projects that were in the pipeline remained untouched. On the other hand, the subsidies claimed by WAPDA, and PIA escalated substantially.

Important Macroeconomic Indicators

Following select macroeconomic indicators attempt to depict the difficulty Pakistan face today to attain desired level of growth.

Low Domestic Savings

Pakistan save only 15% of its national income whereas India save 35% and china 50% and the minimum saving percentage for national development must be above 25% and so Pakistan needs to go a long way to increase its national saving otherwise Pakistan will have to depend upon external sources which will intensify our debt and growth rates will remain low.

Balance of Payments

Due to inflation and economic recession globally, Pakistan's economy also face a state of Balance of Payment crisis. IMF bailed out package for Pakistan in November 2008 to turn away a balance of payments crisis and in July last year increased the loan to $11.3 billion from an initial $7.6 billion.

By October 2007, Pakistan raised back its Foreign Reserves to a handsome $16.4 billion. These Outstanding policies kept Pakistan's trade deficit controlled at $13 billion, exports boomed to $18 billion, revenue generation increased to become $13 billion and attracted foreign investment of $8.4 billion.

The political instability has forced massive capital flight from Pakistan to the Gulf. Combined with high global commodity prices, the dual impact has shocked Pakistan's economy, with gaping trade deficits, high inflation and a crash in the value of the Rupee.

Pakistan's Current Account Deficit narrowed down by 65.9 % as a result CAD declined to $3.06 billion in July‐April 2009‐10 as against $ 8.98 billion last year. This decline in CAD during July‐April 2010 was contributed by the improvement in trade, services, income & current transfers during the period. Specifically, decline in imports and a strong increase in current transfers played a fundamental role in bringing down the current account deficit.  Fall in payments on account of repatriation of dividends, interest on debt, freight on merchandise imports and lower outflows from foreign exchange companies were other contributory factors behind the contraction in the current account balance during the period.Â

Decline in trade deficit is due mainly to a fall in imports complimented by overall improvement in exports during July‐April 2009‐10. The trade deficit improved by 18.3 % during this period. The deficit in services trade shrank by 39.9 % during July‐April 2009‐10 over the corresponding period last on the back of 15.3 % growth in services exports and 12.2 % decline in services imports. The increase in services exports is mainly led by communication, financial, government and other business services.Â

The table given below shows five major components of BoP and their contribution to overall GDP in past years. As evident from the table, trade deficit, having widened significantly, have started to shorten in the current period. Worker's remittances have gone high over the period and current account deficit, after widening for long, have started to shrink as the IMF assistance came in to action.

Fading Export and Rising Imports

Pakistan's major merchandise goods are stuck at US $20 billion for past several years. Services exports are even more insignificant. Exports is concentrated in five items i.e. cotton manufacturers, leather, rice, synthetic textile and sports goods. These five categories accounts for 71 % share in the total exports. Out of this 71%, 50%+ is from cotton related items. Although, Pakistan have free trade agreement with China but we are yet to mark our presence in Chinese supply chain globally. Other Asian countries have integrated themselves in this cycle and are benefiting from the outstanding demand for goods by the world's largest exporting nation. Pakistan struggle to capture at least 1 % of Chinese market.

Table and graph, appended below, depicts the sectors which have shown significant performance in exports sector. It is worth mentioning here that textile sector is prone to fall if stringent WTO clauses come in action in years to come. This requires textile sector to take timely measures to render it efficient and globally competitive.

During 2007-2008, 80% of our imports were financed by our export revenue. 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 exists.

The biggest import of all is Petroleum products which amount to about 30% of the imports and in food group tea and oil accounts for about 5% of imports. If these two items are curtailed this would result in tremendous saving and improving our BOP.

Trade Deficits

During the period of 1990, Pakistan's share was 0.2% of the global trade. After 20 years it has come down to 0.12% in a very buoyant world economy. World trade has been growing faster as compared to the world output. India in the same period had doubled its share from 0.7% to 1.4%. Pakistan is stuck with only a few merchandise - textiles, leather, rice, sports, goods and the surgical goods. We have unable to entered the markets with more dynamic products. All our exports are to a few markets - the USA, EU and the Middle East. So this narrow export base and very limited geographical spread are not allowing us to expand our share. Unless we improve the quality of our products, go out and do the marketing abroad, invest in research and development, the prospects do not look promising.

The graph given below depicts how imports and exports have recovered from economic turmoil of 2008-09.

It is clear from the table below that Trade Deficit started with -USD 294 Million & reached to - approx more than USD 10 billion in just 9 years.

Decreasing FDI

The global inflows of foreign direct investment declined by close to 40.0 % in year 2009 due to global financial and economic crises. Pakistan also witnessed the declining FDI according to global FDIs trend during the period under review. As after growing at an average rate of 61.0 % per annum for four years, Pakistan's FDI declined abruptly by 31.2 % in 2008‐09. This situation further deteriorated in the current fiscal year owing to a combination of internal factors like energy crises and law & order situation along with external factors of global economic slowdown. FDI in the country declined by 44.7 % during the period of July‐April 2009‐10.

It is clear from the graph that it soared in 2008 - 09 and now it is declining due to unstable political environment & terrorism. Oil & Gas is the major sector which attracts about 34% of the FDI currently.

High Fiscal Deficits

Pakistan's government takes away 20% of national income while 80% is left in the private sector and 20% in the hands of the government is spent on defence, debt servicing, development on education, health, general administration etc. The revenue generated is only 15% of the GDP at best, and in the worst days it is 12 to 13%. Out of the every rupee of income received by a Pakistani, on average, tax paid is only 9 paisa and 91 paisa remains with the individual. In 2007-2008, Pakistan's fiscal deficit was more than 7% which means its income or revenues were only 13% of GDP whereas, expenditures were 20%. To bridge the gap between revenues and expenditures, external donors or the central bank is looked at. The financing provided by the SBP leaves a higher inflationary effect, which is injurious to the middle class, those earning fixed wages and salaries and the poor. Debt to GDP ratio has moved from 50% in last two yrs to 58%, and with all the borrowings it may go to 60%. The reason the widening fiscal deficit is low revenue collection. How can you expect that only nine paisa out of every rupee of income generated by Pakistani population suffices to meet the expenditures. In India, tax GDP ratio is 15% and still they have fiscal deficit. Many people say that defence takes away a lot of government expenditure. Whereas, the fact is that defence expenditure is only 20% of government expenditure. It is only 4% of GDP, and is not such a large expenditure as compared to debt servicing which is 7-8% of GDP and almost 30% to 35% in last two years. Therefore, government has to contain its fiscal deficit by raising revenues. Agriculture incomes are exempt, professionals, retailers and wholesalers, transport owners and many other service providers evade taxes by paying a small fraction of what is due.

Monstrous Debt

Pakistan's chief problem is a monstrous debt. Without monetary resources with which to fight the numerous problems of the nation, Pakistan remains overpopulated and poor. Sources of debt include:

Large military spending

Trade imbalance

Power/Fossil fuel issues

Primarily this debt has accumulated due to the continuing conflict with India over the Kashmir region. This border conflict has been raging for the last half of the twentieth century. GoP spends roughly one fifth of its budget on its military, further limiting potential spending on social improvements and programs. Another factor is Pakistan's dependence on imported fossil fuels. Pakistan uses 350,000 barrels of oil per day of which 293,000 barrels per day are imported. Also, 1.1 million short tons of coal are imported each year. The combination of these two alone make up a huge part of the over one billion dollar trade deficit. These resources are used primarily for the generation of power.

Due to all of these sources of debt, half of government expenditures are dedicated to fulfilling debt repayment obligations. In order to finance these payments, additional grants and loans are required each year totaling approximately 25% of revenues. This prevents Pakistan from devoting significant resources to economic development and/or social improvements. Escalating public debt does not bode well for macroeconomic stability and growth as it exerts upward pressure on interest rates and crowds‐out domestic private investment.

Based on projections for the end of FY10, Pakistan has one of the highest public debt‐to‐GDP ratios amongst emerging economies as shown in figure.

Total Public Debt (TPD) posted a growth of 12.2 % during the first nine months of the current fiscal year and reached Rs. 8,160 billion at the end of March 2010.

The total debt is 55.6 % of our GDP which is every high.

4.4 % of GDP is used for debt servicing and 46% of Government revenues which is very high. After defense serving which is also 3-4% of our GDP 75 -80% of our government revenues which leaves very little money for running the govt. and doing development projects.

The drying up of External Inflows increased reliance of govt. to borrow internally and since in the absence of efficient capital market the govt. borrows it from Central & commercial bank which extensive government induces inflation through the expansion of money supply.

Sky Rocketing Unemployment

The unemployment currently stands at staggering 20% or more and it has significantly also as 1/5th of the agricultural land came under water affecting nearly 20 million people. Due to this agricultural sector labor force which is nearly 50% of the work force 1/6th got affected though for short terms.

The power shortages have also severely affected the manufacturing sector and factories are running half the time affecting production as well as contributing towards high unemployment.

Also the unstable political environment, law and order situation, global financial crisis impact, high illiteracy rate and low investor confidence is adding fuel to the already high un-employment situation.

Inflation

Pakistan faces high double-digit inflation. The month on month increase in food and nonfood inflation has been especially disappointing. The core inflation which represents the rate of increase in cost of goods and services excluding food and energy prices also is above approximately 20.0 %. Since external cash flows are dried up due to global financial crises and because of political law and order situation FDI has also reduced sharply therefore Govt. does not have any option but to borrow internally from Central and Commercial Banks thus making the inflation go up. Also due to flood 1/5th of the agricultural crops have been affected due to which the food inflation has jumped tremendously up to 40-50% this year. This inflation has further increased due to increase in prices of fuel, gas and electricity tariff which pretty much affects all the prices in all the sectors.

Low Tax Net and Collection of revenue

Pakistan has one of the lowest taxes net among the developing nations and we only collect tax equivalent to about 9-10% GDP.

Our tax revenues are approximately 10% of our GDP and this revenue doesn't even fully cover our defense and debt servicing which amounts to around 10% of our GDP. There is only the salaried class of this country which amount to less than 5% of the total labor force that gives tax. Agriculture incomes are exempt from taxes and professionals, retailers, wholesale, transport owners and many other service providers evade taxes by paying a small fraction of what is due. Also it is estimated that nearly 300-500 billion rupees worth of tax revenue is leaked due to corruption.

Our tax net is very narrow and we have to widen it if this country plans to retire its debt, avoid more debt, spend on social programs like health, education, and human skill development, keep inflation to single digit and achieve GDP growth of 8% and more.

Slow GDP Growth Rate

The GDP growth was very good 2003 to 2007 averaging to about 7%. However after the government change and political instability in 2008 coupled with Global financial crises it went to 1.2 % in 2008-09 and currently expected to touch 4%. All the major sectors like agricultural, manufacturing and service sector has taken a hit in major years.

Agricultural sector which is a biggest sector is growing at snail's pace of 2% which needs to be further improved easily if government pays proper attention to this sector which is the bread & butter of Pakistan and employees the major work force of the country.

Manufacturing can be improved tremendously as well but because of critical energy shortages in the country in the last 3 years this sector growth is curbed as well.

Lagging Social Indicators

One of the most glaring weaknesses is that a country like Pakistan that should have had best indicators in literacy, infant mortality, fertility rates, in access to water supply, in primary enrolment ratios has social indicators which are comparable to Africa rather than to the countries of similar per capita income. It means that if we had literacy rate of 100% instead of 55%, then in 2009-2010 our per capita income would have been 2000$ rather than 1000$. Instead of 30 million middle class in Pakistan we would have 60-70 million middle class people; we would have poverty reduced to 15-20%. We have committed to achieve the millennium development goals by 2015 i.e. we will be able to reach

80-85% literacy rate, but it is doubtful that this will happen.

Energy and Water Shortages

In recent days we have faced most drastic problem which slowing down the overall economy due to energy and water shortages. The problem is not only related the generation capacity of existing power plants it also related to shortage of water resources which unable to produce energy. The inefficiencies of public utility companies, the exceptionally high Transmission and Distribution losses, the non-payment of electricity dues and the circular debt problem have exacerbated the situation. Government of Pakistan out of its own limited resources is paying 200 billion rupees ($2.5 billion) every year as subsidies to power companies. We have silting of our dams, but not a single new large storage reservoir has been constructed since Tarbela in 1974. Water course losses of about 20-25 % are depleting the water availability at farm level. Even after these losses, the water is inequitably distributed. As a result the productivity of the poor farmer is only one third of that of the large holders. If water was equitably distributed and the small farmer got his due share, the productivity gains will translate into additional income for the poor (in turn reducing the incidence of rural poverty) and generating surplus food grains, cotton and fruits and vegetables that can add to export earnings of Pakistan.

The impact of rising purchasing power in the rural areas would also be beneficial for domestic manufacturing industry which is facing deficiency in demand.

Cost of Doing Business is High

Pakistan is ranked among the bottom half of the rankings of the countries where cost of doing business is quite high. It is not high for any particular reason but because of our bureaucracy totally sitting on their seats without taking actions or decisions in time. Unless there is some pressure or incentive for them, the normal businesses particularly the small and medium businesses have serious problems at the hands of bureaucracy. Even if we have investors who are welcomed by the federal government, when it comes down to provincial and local governments there are given a run around - the land is not available, the water is not available, the gas is not available, electricity is not available, road is not available. Lack of coordination among various government agencies, innumerable laws and regulations that are antiquated and outdated have proved to be serious impediments. Labor laws, inspections by multiple agencies, the delays in the court system, infringement of intellectual property rights and evasion of taxes by competing firms in the informal sector have rendered some of the well established firms unprofitable, or the feasibility of starting near ventures questionable.

Political instability, Law and Order Situation

The overall arching theme is that for a robust economy we should have political stability, law and order and security. The sooner the country is gotten rid of this image of political instability, poor law and order situation and insecurity, whereby investors from all over the world hesitate in coming to Pakistan and invest, we will not be able to make any progress in this country.

Recommendations for Economic Recovery and Progress

Increase Domestic Resource Mobilization

The reason behind the fiscal deficit is extend to its low revenue collection. The share of Tax in overall GDP is only 9 % and therefore it is more room available to expand the tax net, improve tax collection and remove various exemptions and concessions. Along with plugging the holes in State owned corporations and making them efficient the public dis-savings can thus be reduced raising the national savings rate. Agriculture incomes are exempt, professionals, retailers, wholesale, transport owners and many other services providers evade taxes by paying not at all or a small fraction of what is due. Studies indicate that with the same tax rates the tax authorities should be able to raise as much as S8 billion of additional revenues (compared to $16 billion actual collection) by tightening enforcement and compliance, carrying out robust post assessment audits, better supervision of tax administration and plugging the loopholes .

Expand the Share in the World Trade

In the period of 1990, Pakistan's share was 0.2 % of the global trade. After 20 years it has come down to 0.12 % in a very buoyant world economy. Global trade has been growing much faster as compared to the world output. Asian countries have captured a major chunk of world exports and the best example is that of China that has increased its share to an impressive 8 %. Pakistan has failed to take advantage of these opportunities and is stuck with only a few commodities - textiles, leather, rice, sports, goods and the surgical goods. We have not entered the markets for more dynamic products. All our exports are to a few markets - the U.S.A., EU and the Middle East. So this narrow export base and very limited geographical spread are not allowing us to expand our share. By improving the quality of our products, fitting in the global supply chain, investing in research and development, and diversifying towards Asian markets the prospects can improve.

Building of Human Capital

It is now well documented that for the countries to prosper and progress on a sustained basis there is no substitute other than building up human capital. Private Sector, Public Sector, NGOs, local communities, philanthropists, etc., all here to put their hands on deck and participate in making sure that every child goes to school, every high school graduate has some technical and vocational skill and every eligible person goes for higher or professional education. We need to invest massively in human capital to catch up with the rest of the world because the world economy is going to be a knowledge based economy. One has to acquire and assimilate the knowledge and apply in order to solve problems. Under the new paradigm of development human capital formation is more important than machinery and equipment. Pakistan can leap frog by building up the institutions, infrastructure and incentives for human capital formation that other countries have successfully demonstrated.

Privatization is Indispensible

The oversight, monitoring and guidance capabilities of public enterprises are ridden with the aggravated problems of principal - agent relationship. As the Board Members, however able and honest they may be, have no direct personal stakes in the well-functioning of a public enterprise, they cannot be expected to devote as much time or energy to the Board's affairs as the private strategic investors would. Thus, the governance structure of a public sector enterprise would always remain second best to its private sector competitors and put it at a comparative disadvantage. If a more callous person unfortunately appointed to chair the Board, the appointments, award of contracts and transfers and postings will do further damage to the performance of the company. At the moment, 61 public corporations await privatization as assessed by privatization commission of Pakistan and once done proceeds would help bridge the looming fiscal deficits. Similarly, entities like steel mills, PIA and WAPDA are eating into the governmental expenditures. The following broad objectives are sought to be achieved by privatization:

Reduction in Fiscal Deficit

Fiscal deficit can be reduced by:

Increase in the efficiency levels

Foster competition

Broad basing of equity capital

Releasing resources for physical and social infrastructure

Global Competitiveness

Pakistan ranks quite low on all the indices of international competitiveness. Export-GDP ratio remains low, the composition of exports is heavily skewed towards low-tech goods for which world demand is either stagnant or declining and the productivity levels in all sectors of the economy fare poorly in relation to other competing countries. Improving this competitiveness should occupy the center stage of public policy.

Use of Technology

Technology is spreading like a wild fire. It was impossible to imagine even five years ago that more than half of the inhabitants of small towns and villages of Pakistan would have access to mobile telephones or internet. 95 million Pakistanis out of 170 million have mobile phones today and are using them for banking services, information on climate/weather, agriculture extension, health, education, etc. It is a powerful tool which can improve the lot of those who have remained disadvantaged due to geographical distance and lack of physical access to services and information. Use of information / communication technology for the betterment of social and economic problems of Pakistan provides a huge untapped potential that can be exploited. A more holistic and comprehensive approach that deploys technology for poverty reduction can to be put in place.

Young Labor Force

Pakistan is one of the few countries which has a young labor force which can be harnessed for its own and global economy. Japan, Europe, U.S.A. and after 2050 China are going to have aging population where the ratio of old to young people is going to increase. India and Pakistan are two countries where the ratio of younger people to the older ones is going to rise. If these young men and women are equipped properly, the female labor force participation is increased and skills and knowledge are imparted to the youth, they can become the labor force for the rest of the world. In 2001, worker remittances were less than a billion dollars; today they have reached almost 7-8 billion dollars. Now this can be multiplied by three or four times if more of the workers going for overseas employment are educated and skilled. If the domestic economy is unable to create adequate number of employment opportunities for those young men and women there could be social upheaval. Therefore, it is imperative to create such educational opportunities and avenues for them that train them in the kind of skills which are needed not only by the national economy but also by the international economy.

Devolution and Decentralization

As the population is increasing, one cannot govern Pakistan from Islamabad, Karachi, Lahore, Peshawar or Quetta. One has to devolve powers, decentralize and delegate authority, provide resources to the local / district governments so that they can take decisions at their own. Those decisions would be very much in accordance with the requirements and the needs of those communities. Decision making powers, financial resources and administrative authority should therefore be devolved to the people at the grassroots level as it would lead to much efficient allocation and utilization of resources. There must, however, be accountability of the Local Governments by the Provincial Governments and of Provincial Governments by the Federal Government but not interference or usurpation of powers. Under this scenario the same amount of resources can yield much higher growth rate. For example, if under the present centralized structure, investment rate of 24-25 % generates 6-7 % GDP growth under the devolution model the growth rate can rise to 8-9 % with the same resources.

Income Distribution

Pakistan has income inequalities across households, rural / urban divide, gender and regions. Two of the provinces - Baluchistan and NWFP - along with the Federally Administered Tribal Areas have lagged behind Punjab - the most populated province and urban Sind. The recent successful award of the National Finance Commission (NFC) has tilted the distribution of divisible pool towards the poorer provinces. The Parliament is debating some significant constitutional amendments that will transfer power to the Provincial and local government and give greater autonomy to them. These measures will provide an excellent opportunity to invest resources in these backward areas and improve income distribution in the country. The impact on social cohesion and national integration from these measures is likely to be favorable and the trust deficit between the Federal and the Provincial Governments would be overcome. The overall impact would be enhanced productivity from less frustrated labor force of the nation.

Continuity of Policies

The continuation of political stability and a predictable, orderly and constitutional transition of power from one regime to the other would add a lot of strength to Pakistan's economic prospects. The risks associated with an uncertain political transition process would be mitigated if different political parties take over the reins of the government at predetermined regular intervals of time through fair and transparent electoral process. Fortunately, the thrust of economic policies of all leading political parties in the country is much the same but this positive aspect has been lost in the loud noise of political bickering, venomous rivalries and unwarranted accusations against each other. The links between political stability, economic growth and social cohesion are mutually reinforcing and need to be further nurtured and developed in Pakistan. The lessons of the 1990s should clearly teach us that the gains achieved so far can be reversed if we do not manage our political governance with tolerance, a healthy respect for dissent and differences of opinion, and reliance on institutions rather than personalities.

Conclusion

The basic thrust of this paper is that Pakistani economy has made a substantial progress during the last sixty years but it has lagged behind other Asian countries in realizing its full potential. The current economic difficulties starting from 2007 have arisen due to a variety of internal factors and policy and management lapses. The stabilization program introduced in November 2008 with the assistance of the IMF is on track. But the main challenge facing the country is how to resume the high growth trajectory that Pakistan had achieved between 2002 and 2007. The constraints are formidable but the opportunities do exist both domestically as well as externally whereby this goal can be attained .But this would require some tough political decisions, better governance, peace and security in the country, and shift from dependence on foreign aid to external trade and investment. Pakistan has to shift its orientation from the West to the East in its foreign economic relations to align and benefit from the changes in the global economic balance of Power.

 经济学论文代写  巴基斯坦经济变化史