PAKISTAN ECONOMY ASSIGNMENT ECOMOMIC ERAS

SUBMITTED BY

NAME ABDUL UR REHMAN SYED IRTIZA HAIDER AMMAD UD DIN AWAIS TAHIR
ROLL NO 2181022 2181021 2171048 2181123

SUBMITTED TO MS. AMNA KHATTAK

CLASS BBA 6TH A (MORNING)

 ECONOMIC ERA 2000-2010

2000-2010

GENERAL PERVEZ
PAKISTAN PEOPLES PARTY
MUSHARRAF

1. GENERAL PERVEZ MUSHARRAF (1999-2007):

General Pervez Musharraf took over on 12th October, 1999 by dismissing Pakistan Muslim
League’s government and imposed martial law. Musharraf’s time prove to be growing era for
economy of the country for short time. Musharraf government inherited the legacy from previous
government:

o Serious external payments crisis threatening imminent default.

o Declining economic growth.
o Stagnant exports.
o Falling revenues.
o Growing debt burden
o Rising poverty
o Poor state of social indicators
o Deterioration in governance

 DEBT REDUCTION MANAGEMENT

Several committees, task forces and working groups were constituted with experts drawn from
both within and outside Pakistan to make recommendations on the content, phasing and
implementation timelines of various reforms. The most important committee was on Debt
Reduction Management headed by an ex-Chief Economist of the World Bank and this
committee’s recommendations formed the basis of subsequent actions in this area. Another
committee, under the leadership of a former Senior Vice President of the World Bank, and
assisted by consultants from the Lahore University of Management Sciences submitted a blue
print for the reform of the Central Board of Revenue.
 AGRICULTURE TAXATION COMMITTEE

An Agriculture Taxation Committee, headed by a former planning secretary, produced a

consensus view on the introduction of agriculture tax by provincial governments.

 INTERIM POVERTY STRATEGY PAPER

An Interim Poverty Strategy Paper was developed in consultation with stakeholders from both
within the government as well as from civil society, laying out the broad contours of the road map
for economic policies and reforms. Once it was agreed among the policy makers that the
immediate problem facing the country was loss of credibility and a crisis of confidence, the next
logical step was to bring about macroeconomic stability, the restoration of confidence among
domestic economic actors and overseas Pakistanis and reestablishing credibility among
international financial institutions. The strategy adopted to put these objectives was:

o To effect a sustainable reduction in debt ratios.

o To reduce fiscal deficit through revenue mobilization.
o To restructure key public sector institutions and plugging their losses.
o To pursue a prudent monetary policy and hold inflation down.
o To liberalize the foreign exchange regime and allow market forces
o To determine the level of exchange rate.
o To create a level playing field for all economic actors.

 STRUCTURAL POLICY CHANGES

Restructuring, reform and privatization of the banking and financial sector, promoting
competition. Tariff reduction, removal of non-tariff barriers, deregulation of imports, end of
the monopoly of government purchases of POL, the rationalization of tariffs. Separation of
regulatory functions from policy making and setting up of independent regulatory agencies.
Tax reforms including self-assessment of income tax and the reduction in tax rate on banks.

 PROPERTY RIGHT ARRANGEMENTS:

o Privatization of public sector enterprises including banks.

o Sale of shares to public through stock exchanges.

 PRICING POLICIES:

o Removal of subsidies and administered prices on agriculture commodities and lifting of

restrictions on agriculture exports and imports.
o Output and input marketing in the hands of the private sector.
 o Decontrol of essential prices that are determined by market forces.

 ECONOMICAL REFORMS

o Savings and Investments

o Human capital development
o Agriculture
o Dams
o Women Empowerment

 SAVINGS AND INVESTMENTS

o Gross Domestic Product

Increased from $60billion to $170 billion

o Domestic and Foreign Investments

Increased from $60 billion to $170billion

o Exports

Tripled form $7billion to $22 billion

o International Trade

Increased from $20 billion to $60 billion

o Human capital Development

Human developmental index, Pakistan's HDI grew at an average rate of 2.7% per year

o Education

The budget increased from 500 million to 28 billion

Number of universities increased

o Health

Life expectancy increased

Poverty halved
 ANTI-CORRUPTION COURTS AND NAB

The NAB is empowered to undertake any necessary prevention and awareness, in all means,
in addition to enforce its operations against the economic terrorism and financial crimes. It was
established on 16 November 1999 and its sphere of operation has been expanded and extended
since. The constitution grants to launch investigations, conduct inquiries, and issues arrests
warrants against the individuals suspected in the financial mismanagement, terrorism, corruptions
(all in private-sector, state-sector, defense sector, and corporate-sector), and directs cases
to accountability courts.

2. PAKISTAN PEOPLES PARTY (2008-2013):

18th February, 2002 general elections were held in Pakistan, PPP won 119 seats (reserve and
elected). PPP remain in power till 2013. After the demise of Benazir Bhutto, Bilawal Bhutto
became chairman of the party but due to young age his father led the campaign as co-chairman of
the party and became 11th president of Islamic Republic of Pakistan.

Initial problems faced by the government:

o Terrorism
o Poverty
o Youth Unemployment
o Inflation
o Energy Crisis

 AMENDMENTS

The constitutional reforms, particularly the 18th, 19th and 20th amendments which provided
provincial autonomy, transfer of presidential powers to parliament, smooth installation of
caretaker governments and striking down of president’s power to dissolve the assemblies.

 INCOME SUPPORT PROGRAMS

Increase in salaries of Government officials up to 158 percent, disbursement of RS 70 billion

among 7.5 million deserving families through the Benazir Income Support Programmed and
financial help to 135,000 deserving people by Pakistan Bait ul Maal.
 KEY ACHIEVEMENTS

Pak-Iran agreement on the gas pipeline, agreement with China on Gwadar Port, increase in
foreign exchange reserves from $6 billion in 2008 to $16 billion in 2013, increase in export from
$18 billion in 2008 to $29 billion in 2012, boost in stock market from 5,220 points in 2008 to
18,185 points in 2013. Got $3.5 billion for Basha Dam, initiated Neelum-Jhelum, Gomal and
Satpara dams and Thar Coal project to get electricity from coal besides Jamphar project to get
electricity out of air.

 REDUCTION IN INTEREST RATE

Government reduced interest rate from 17 percent in 2008 to 9 percent in 2013.

 AGRICULTURE AND INDUSTRIAL DEVELOPMENT

Government resumed of trade union activities, distribution of shares among 500,000 industrial
workers, cheap tractors to farmers through Benazir Tractor Scheme, increase rural economy from
50 billion in 2008 to 800 billion rupees in 2013.

CRITICAL ANALYSIS:

During Musharraf era country’s per capita income has risen dramatically in those years from
about out $450 in 1999 to about $ 1,000 in 2007. The government ignored the fact that a falling
dollar price required that the per capita income scaled down which showed real pictures of the
actual figure.

Within a few years, rate of borrowing begin to rise steeply from a lower rate of about 5 percent
per annum in 2002-03 to work 15 percent. For economic recovery, the Government pursued a
strategy of ensuring macro-economic stability and introducing structural reforms for self-
sustainable growth. As a result, the economy had expanded at an average rate of 7% per annum
during the last four years. Its growth touched a record level of 9% in 2004-05.

During Zardari’s era GDP of the country felled from 8 percent to 4 percent due to terrorism and
law and order situation. Another factor was 2008 recession in shrinkage of GDP of Pakistan.

Inflation remained at the level in 2007 at 7.7 percent during Musharraf’s time and jumped to 12
percent during PPP era. Pakistani rupee has been depreciated because of political and economic
instability during 2000-10 eras. External debt topped steadily as Pakistan lost billions of dollar
against war on terror during initial years.
Both the Governments Musharraf and PPP didn’t work for long term. They formed policies for
short run, which gave benefits for shorter time and the effects of these policies in long run were
worse than expeted.