The Perennial Flaws In Economic Growth
The embryonic state of Pakistan faced multiple challenges shortly after its inception. The regime was preoccupied with key issues of unjust distribution of financial resources and rehabilitation of refugees that halted the process of economic growth. When Pakistan joined the capitalist bloc and became a member of CENTO in 1955, its economy stabilized up to some extent due to influx of foreign aid especially the American assistance. Then followed the military coup, the debacle of East Pakistan and political turmoil, and nationalization of private sector – each factor had its impact on the process of growth. As opposed to what was anticipated, nationalization proved to be futile in revamping the economy.
Furthermore, the Afghan jihad, Zia’s Islamization, and the War on Terror post 9/11 further pushed the country into chaos and adverse impact on economy and well being. The overall volatile and inequitable downtrend of economy is attributed to poor policies and inconsistency in implementation, the garrison state syndrome, lack of institutional development due to the periodic disruptions, foreign aid dependence, and the rise of terrorism. Consequently, the country has fallen behind the neighbouring rival India and Bangladesh in the Human Development Index, Corruption Perception Index and per capita income growth.
Secondly, the country is entangled in debt and deficit as the expenditures outweigh the revenues and tax regime is in dismal state. The economy of Pakistan is down to the knees before the IMF because of the incompetent, fragile and callous policies of the incumbent government. Currently, the inflation is on the rise and the value of Rupee has been depreciating and unemployment is on the rise.
Undoubtedly, other factors such as security threats, terrorism, and poor governance are the main determinants of the poor economic growth. However, to fathom out the riddles of governance deficit and institutional weakness, the government should embark upon the policy of strengthening and empowering the institutions. Rule of law and political stability are pertinent determinants of GDP growth and per capita income. Several economic studies have explicitly linked good governance with economic growth. Furthermore, in order to have more employment opportunities, incentives for investment should be provided. Last but not the least, the unprivileged segment of society should be given access to the institutions of governance and the uneven distribution of public resources should be kept under check.