Dedication

I dedicate this thesis to my parents especially my father “Abu” , my Mother “Ami”, My

Brothers, friends and my Teachers. This cadre of persons supported me at every eve of my life.
Thier support wasn’t just materially but thay supported me emotionally and encouraged me after
every of my success.

1
 Acknowledgment
I would like to express my special thanks of gratitude to my supervisor SANA ULLAH as well
as internal committee member Sir Ayaz Ali Shah and Azmat Ali Khan both of them gave me the
golden opportunity to do this research on the topic “ ANALYSIS OF GENERAL AYUB KHAN
ECONOMIC REFORMS DURING 1958-1968” which also helped me in doing a lot of
Research and i came to know about so many new things. I am really thankful to them.
My completion of this research could not have been accomplished without the support of my
classmate, Afnan shah. I owe them a debt of gratitude.
Finally i would also like to thank my parents and brothers who helped me a lot in doing this
research within the limited time frame.

2
Table of the content

Chapter 1
1.1 Introduction
1.2 Statement of the problem
1.3 Research Questions
1.4 Research Objectives
1.5 Researchn Methodology
1.6 Significance of the study
1.7 Literature review

Chapter 2
2.1 General Ayub Khan economic reforms during 1958 to 1968
2.1.1 Economic progress reforms in General Ayub Khan era
2.1.2 General Ayub Khan era from 1958 to 1969 economic and political record
2.1.3 Economic freedom of General Ayub Khan regime
2.1.4 Socio eoconomic reforms of General Ayub Khan
2.2 Positive impacts of General Ayub Khan economic reform
2.2.1 Growth and Investment in General Ayub Khan era
2.2.2 Investment in economic reforms in General Ayub Khan era
2.2. 3 Economic reforms in defence and development
2.2.4 Economic stability in General Ayub Khan regime
2.2.5 General Ayub Khan development decade
2.3 Negative impacts of General Ayub Khan economic reforms
2.3.1 Failure in socio economic policy of General Ayub Khan regime
2.3.2 Issues in the distribution of growth benefits
2.3.3 Neglect human resources development
2.3.4 Concentration of economic power
2.3.5 Failed provincial imbalance
2. 3.6 General Ayub Khan policises as assessment

3
Chapter 3
3.1 Findings about the General Ayub Khan economic reforms during 1958 to 1968

4
 Abstract

This research study is about the analysis of General Ayub khan economic reforms during 1958 to
1968.The research objective of this study is to find out To find out the economic reforms of Ayub
khan regime, positive impacts of General Ayub khan economic reforms in Pakistan and the
negative impacts of General Ayub khan economic reforms in Pakistan. The research
methodology is descriptive, qualitative, and analytical. After research study it has been find
thatGeneral Ayub khan have various reforms for the economic development in Pakistan such as
investment development, trade development etc. But there are some failures in the economic
development in the last years of General Ayub khan regime because trade policies and economic
development polices become concentrated.

5
 Chapter: 1

Analysis of General Ayub Khan Economic Reforms During 1958-1968

1.1 Introduction:

General Ayub khan came in to power in 7th October 1958. He first became the chief marshal l
law administrator in Pakistan. He introduced basic democracy (BD) system in 1959 in Pakistan
he was elected as president of Pakistan in 1960. He introduced a number of reforms in Pakistan
such as political, economic, social, land and agriculture and industrial for development of the
country and reforms the administrative system in Pakistan.

The National Assembly become dissolved and the martial law became in forced. Ayub
khan recognised the system of government which he called the “Basic Democracy” and
which providing a safe democratic system for the president. It was proposed to engage
some of the agriculture and industrial privileged into the construction of military rules.
His eleven year law was a leading alliance made up of the revolutionising, municipal
based nationalists and the tradition certain rural upper classes. Originally General Ayub
khan originate himself in disagreement to the bureaucratic elites but lastly became
completely reliant on them. The bureaucrats became strong minded to share power and
the participation of both rural and the bureaucratic elites in the basic democracy system
(BD)complete a network of partners for the government and assisted the bureaucrat’s
progress relations from the initial level. With stable hold on power and comparative
political strength, General Ayub Khan became Pakistan’s first military ruler take the
economic and social developmental high level due to his plan. His obligation that the
economic development must strong and clear and his method to economic matters was
fundamentally practical. The basic model of growth under General Ayub was founded
high dependence on the key association with the united states(US) for military and
economic support, strong impulse for public segment savings particularly in water and
power simplified by the Indus basin treaty with India, reduction of foreign conversation
and savings controls, and much better obtain ability of long term industrial recognition for

6
the private sector. Agricultural growth and long-time water and power speculation were
on importance of General Ayyub’s government.

1.2 Statement of the Problem:

General Muhammad Ayyub khan established military rule and remained in power from 1958 to
1969. He introduced several reforms in Pakistan for the welfare of the people. These reforms
includes legal, political and economic etc. But this research project focuses on the economic
reforms in special reference to its impacts upon the people of Pakistan.

1.3 Research Questions:

(i) What were the economic reforms of General Ayub khan?

(ii) What were the positive and negative impacts of General Ayub khan economic reforms in
Pakistan?

1.4 Research Objectives:

There are three main objectives of this research project which are given below.

(i)To find out the economic reforms of General Ayub khan.

(ii) To know about the positive and negative impacts of General Ayub khan economic reforms in
Pakistan.

1.5 Research Methodology:

The research design of this research project is descriptive while the research method is
qualitative. The descriptive research is about to know the concepts and to take in depth analysis
the source of data collection is secondary.

The procedure of data collection is that the researcher has visited various libraries, studied
different published reports about the project, read various newspaper article, studied relevant
research papers and visited internet web sites for pdf material relevant to the study. Then the
collected data has been analysed to answer the research questions.

7
1.6 Significance of the Study:

This study will explore the General Ayub khan economic reform during 1958 to 1968.this
research will give valuable and important information of General Ayub khan economic reforms.
This study will be help full for all those who are interested to know about the General Ayub khan
economic reforms.

In Pakistan a lot researcher have been done on different topics and sectors but unfortunately on
the General Ayub khan economic reforms few research studies has done so for fulfilling the gap
this study has been dedicated to the General Ayub khan reforms .this research study will also
helpful for the general public and a stakeholder who’s their business is linked with the
government.

There are numerous reforms of General Ayub khan such as economic, agriculture, social and
industrial and all these reforms are have great significance for the people of Pakistan but as well
as it has also numerous negative aspects .

This study is very much significance as it will helpful for all those who are desires to know the
about the General Ayub khan economic reforms during 1958 to 1968.

1.7 Literature Review:

Akhtar Hussain(2018) has discussed about the Joint Opposition Parties the democratic
association which face up by General Ayub Khan in the 1965 Presidential election. The
association not only confronted but it provided a hard time over and done with its actual mass
deployment in the rural and urban areas to one of the solidet martial ruler in the Pakistan. The
association played a vigorous role in starting serious discussion and debate in place of departed
conventionality, in regeneration and redecorating the debilitated and disappearing flare of social
equality in Pakistan and thus location the nation a new in the direction of an independent
purpose. Additionally this association prepared a female as its applicant for President Ship
which is a controversial issue between the orthodox Muslim scholars and religion-political
parties of the state.

8
Musarrat (2012 ) has discussed that subsequently individuality centralised organisational
arrangement concept of central power of government had been the subject for Pakistan. This
organisation was neither receptive not participative to the individuals of Pakistan. As a result the
bitterness for this organisation enlarged with the passageway of time. To discourse the issue,
many new were knowledgeable both at central and local heights, but the complaints of the public
might not be diminished. The organisation of local government was mistreated in the first period
after individuality mainly because of the political uncertainty. General Ayub Khan Basic
Democracies (BD) system was the first phase that was taken in the direction of reorganization.
This system finished with the government himself. In Zia government, the Local Government
Regulation of 1979 was presented. General Ayub Khan Basic Democracies system was
invigorated and applied with a new construction. Military leadership for the sake to improvement
political legality, deliberate, fortified and established local government organisation. Possession
all this in interpretation this article offerings comprehensive historic analysis of reorganization
from the political history of Pakistan. The two major periods General Ayub Khan and General
Zia-ul-Haq are examined in the background of the reorganization and decentralisation
improvements and their suggestions in excess of the political system of Pakistan.

Ansari (2008)has discussed that in the period of 60s in Pakistan observed reconstruction under
General Ayub Khan Government who fervently believed in the progressive-liberal and modern
version of Islam. His open-mindedness and liberalism towards Islam was explicitly manifested in
the authorized Islamic policy followed throughout the first half of his government from 1958-68
when he administered the country in a demanding method. For the period of these centuries, the
transformation program was applied over and done with public policies expected at bringing
about a broadminded change in the legitimate, legal and social scopes of the state. It was though
the forced as well as extremely discriminating and controlling in nature. The military
government pushed its transformation programme despite disagreement and bitterness from
many segments of the society. However, the second half of the government 1965-69 which was
quasi-authoritarian in nature saw a problem of his authorised policy in the direction of Islam,
since his approval was destabilised, and he looked-for general support for his government. The
present object see the sights the transformation measures commenced during the government of
General Ayub Khan, and analyses the shift in the authorised Islamic policy in the state.

9
Cheema (2002) has examines that the current regionalization improvements in Pakistan under
General Musharraf. We high point foremost features of this reform and analyse its development
in a chronological perspective to better appreciate potential reasons behind this present
regionalisation. Analysing the development of local government improvements in Pakistan is
exciting because separately of the three major improvement experimentations has been
introduced at the directive of a non-representative hub using a top down method. Each of these
improvement experimentations is a harmonising change to a widespread legitimate reengineering
policy planned to further concentration of political influence in the hands of the unrepresentative
centre. We discuss that the project of the local government improvements in these backgrounds
becomes endogenous to the concentration objectives of the unrepresentative centre. It is expected
that analysing the Pakistani participation will help shed light on the optimistic political economy
interrogation of why unrepresentative governments have been enthusiastic proponents of
regionalisation to the local level.

Rubina (2003) has discussed that the fundamentals of nation education in Pakistan were placed
throughout the early historical of the initial military rule obligatory by General Ayub Khan from
1958 to 1968. Previous to the appropriation by General Ayub Khan, numerous commendations
had been placed frontward in discussions, conferences and consultations, but inclusive national
education strategy was not communicated. Though, far-reaching propositions were put onward
at the conferences of the Pakistan Educational Consultation in 1947 and 1951. In 1952, there
was evaluation of the condition of education in Pakistan and a National Plan for Education
Expansion was planned, but the application continued fragile. Likewise, the Educational
Improvements Instruction for East Pakistan made a sequence of commendations in 1957, some
of which were combined later, but a complete series remained indefinable. There were
commendations for educational improvement by the Consultative Board of Education, the
Council of Technical Education and Inter University Board, along with abundant foreign
assignments which obtainable their own suggestions. Furthermore, international meetings and
discussions produced concepts about how education would be prepared. Many of these
propositions were combined into the substantial report organised by the Sharif Commission,

10
established by General Ayub Khan’s regime in 1958 and commended the task of regrouping and
reorienting the educational system of Pakistan. The approvals of the Sharif Instruction report of
1959 come to be the basis of Pakistan’s educational system in the subsequentperiod.

Husain (2009) has examines that the economic and social consequences in Pakistan in excess of
the last sixty years are a combination of inconsistencies. The economic development rate has be
an average of 5 % annually since 1947 a feat attained by very insufficient states. Politically, on
the other hand, the interaction of religious sectarianism, fundamentalism, and ethnicand regional
economic differences has made the state instable and unbalanced. Numerous East Asian states
that were behind schedule Pakistan in the 60s have rushed forward in greatest economic and
social indicators. Pakistan has thus been immobilised to comprehendit’s conceivable.

It is frequently supposed that economic development can take residence only in the attendance of
political permanency, but the Pakistani case opposes conservative understanding. In order to
illuminate these paradoxes and inconsistencies.

Rafi (2011) has discussed that Civilian supremacy in Pakistan, which is nowadays and is
probable to continue is approvingly significant for the predictable future, necessitates the
consolidation and re-structuring of autonomous organisations. The military institution in
Pakistan has for the greatest part subjugated a zero sum willing of accruing power. Though
political leaders have at periods cooperated with the armed for temporary compensations, this
collaboration has been disadvantageous to democracy in the extended period because they have
approved additional and more economic power to the martial. This power has full-grown not
only throughout military overthrows that have assumed the military official control of all organs
of the government, but also by means of the weight the martial has do exercises throughout the
rule of private citizen administrations in influencing economical allocations. More imperative,
military power has fully-fledged due to the military’s growing economic independence so that its
dependency on selected administration has reduced in excess of time.

The foundation of this power has incompletely been founded on permitting the numerous arms
of the military to shape occupational empires and yielding large territories of actual plantation to
their control. Our foundation is that the more economic independence the military
improvements, the less responsible it is to civilian misunderstanding, a key requirement to
maintainable social equality in Pakistan. Additionally, the more economic control it

11
improvements, the more possible danger democratic misunderstanding characterises since the
element of danger are developed. Thus the superior economic power of the military produces a
vicious cycle as overthrows become more probable if citizen misunderstanding and policies
impulsion for more limpidity in economical distributions.

12
 Chapter: 2

2.1 General Ayub Khan Economic Reforms During 1958 to 1968.

Innovation had pretentious the numerous of civilisations all around the world. In many
occurrences transformations processes bring together by the government in many states have
fairly fast and forced. Amongst the Muslim countries, Turkey, Egypt and Iran, and to some
degree, Pakistan are noticeable instances of forced transformation by non-democratic and
suppressive governments. Egypt Muhammad Ali Pasha 1805 to 1848 introduced a program of
compulsory transformation in the first half of the 19th century. In the time of 1920s Turkey
experienced reconstruction in period of Mustafa Kamal Ataturk 1881 to 1938. In the years of
1930, Iran observed reconstruction in the period of King Mohammad Reza Shah 1919 to
1980(Kamali, 2006).
In the period of 1960 Pakistan started the route of transformation in the period of field marshal
General Ayub Khan. These examples of innovation were extremely discriminating and
dictatorial in nature. In circumstance of most of these states, transformation schemes were
propelled by undemocratic governments, in the meantime such governments have no need of
general provision for the public policies. For that reason, reconstruction programs remained
forced in spite of disagreement and anger from numerous segments of the society.

In many states, military is careful to become the most modern and follow the western state
organisation. Number of educations has conserved the business of military as instrument of
transformation in many outdated and modern states all across the globe, predominantly when
military come in political ground. (Bienen, 2008).

Pakistan is not exclusion in this respect. Pakistan’s military is also measured to be a

contemporary and West-oriented organisation, and it has also detained power in the state fairly
an amount of periods. With the exclusion of the administration of General Zia-ul-Haq. which
observed a program of involuntary Islamization in the state other martial governments like those

13
of General Ayub Khan and General Pervez Musharraf have boarded on the development of
enforced transformation.

General Ayub Khan’s government can be separated into two different stages the first stage
establishment from 1958 to 1965, which can additional be sub distributed into two eras. From
1958 to 1962General Ayub Khan administrated the state as the Chief Martial Law Administrator
from 1962 to 1965 as President after the extraction of Martial Law in 1962. The first period of
General Ayub Khan Government was regarded as by controlling design of supremacy assisted by
the Martial Law establishments. In this period, General Ayub Khan frustrated to announce the
modern form of Islam over and done with communal policies. His exertions to update the
Pakistan civilization led him to announce some legitimate, lawful and social variations in the
state. The conservatives controlled by the religious scholars fervently struggled the
transformation programme of the administration.

The additional support elections stage of his government from 1965 to 1969, symbolises self-
governing form of administration, however called as measured democracy. It saying a problem in
the communal rules expected at transformation, as the modernization programme was
uncontrolled by the government. An army of influences were accountable for this problem. By
and great, it was owed to the compression of numerous militaries, mainly the spiritual leaders,
who modelled a danger to the legality of General Ayub Khan’s government that controlled the
government to inverse his polices.

The present study is significant unresolved to the feature that General Ayub Khan’s dated, being
the primary military government in the state, seems to be different in rapports of the government
policies. It suggestions an stimulating study as one may associate and difference two completely
opposite designs of supremacy in the same government controlled by the same head of the state-
run.. Though responsibility so, it likewise attempts to discover the influences that were
accountable for the supposed change in the communal policy in another stage of the government.

14
2.1.1 Economic Progress Reforms in General Ayub Khan Era

The economic development was documented at rate of 6.5 percent on regular per annual
and per capita income also amplified at the degree of 3.5 percent per annum throughout
General Ayub government. Huge scale industrial produced at nearly 17%percent yearly,
and by 1968 to 90 percent of all carry across the other countries had remained unfettered
from organizational regulator and the administration trusted only on pricelists to confine
request. The farming subdivision also donated adequately the economic development of
the Pakistan budget the green revolution belongings. The fast economic development
shaped local and class disparities and was attended with a reduction in living values for
considerable segments of the people. At that in attendance were insufficient peoples who
possessed the main segment of agricultural and manufacturing subdivision of Pakistan.
Only 22 families obligated ownership of 66 percent of manufacturing, 97percent of
assurance subdivision and 80percent of investment. There were only one percent of
landowners possessed 500 or supplementary estates each, until now they possessed
15percent of the state’s entire land. Thus landowner’s elite, the manufacturing elite, the
administrative elite, and the martial elite developed actual strong. The consequence was
cultural and class resistance, particularly because Bengali peoples in East Pakistan
remained not very well signified in the elite collections. National resource organisation,
economic liberalization and excellence of supremacy were reasonable throughout General
Ayyub’s period (Hassan, 2006).

2.1.2 General Ayub Khan Era From 1958 to 1969 Economic and Political
Record.

Economic 6.50% GDP growth rate per annum on normal,first aid incident, long

Record period water and power speculation, green revolution, reasonable

degree of economic liberalization and reserve mobilization, slight
better superiority of supremacy. Little equal of social justice.

Social Unsatisfactory delivery of revenue and Class difference.

15
 Outcomes

Political Military dictatorship.

Regime

(Hussain, 2006).

2.1.3 Economic Freedom of General Ayub Khan Regime.

As far away the core perception of the foremost Economic Freedom and Democracy of
this education is worried, a clear sympathetic of these would simplify the landscape of
their relations. Economic Freedom means economic collaboration, predominantly security
of possessions privileges, rivalry in marketplaces, minor size of administration,
instruction of law, autonomy of appearance and honesty to world marketplaces. Economic
freedom means establishment of a permitted isolated market place which is accredited
with willingly business among personalities for their own economic welfares. Economic
autonomy may also be well-defined as, a setting of free economic contract among people
for expansion of their own gratification. These communications are willingly and on their
individual but not as a go-between of any community group. Economic freedom is

16
typically preserved as the replacement of public excellent with isolated special (Friedman,
1991).

A secluded marketplace is one in which the persons making contracts are creation them
moreover on their individual behalf or as go-betweens for recognisable persons somewhat
than as managers of administrations. An isolated market is very dissimilar from
administration market. In a severely private marketplace, all the contracts are between
persons temporary in their own attention or as representatives for other recognizable
distinct.(Friedman 1991)
Human freedom is additional period which is usually used by investigators in works but
the period human freedom is near to the idea of allowed isolated market any where
persons make conclusions on their individual behalves. They do not performance as
legislatures of public subdivision organisations. They do could you repeat that they want
and for expansion of their individual gratification.

The spirit of human freedom as of an allowed private marketplace is freedom of persons

to mark their own pronouncements so extended as they do not check anybody different
from responsibility the similar thing. That brands strong, I deliberate, why free secluded
marketplaces are so carefully connected to human freedom.
As for the substance of causes of economic freedom, it is actual contentious. The aim is
that economic freedom is an actual personal term. Each investigator has his own
understanding as to whatever is economic freedom and then chooses what changes should
be comprised in dimension of economic freedom. Because any alteration in the nature and
dimension of causes of economic freedom will certainly affect the relations of economic
freedom with additional variables, (Hanke and Walters 1997).
So assortment, considering and quantity of causes and lastly indexation of economic
freedom equal have exclusive and vital significance. In the similar symbolic studies
showed change in quantity of economic freedom in a dissimilar way disturb the pace of
economic wealth diagonally diverse economies (Dawson 1998).

17
2.1.4 Socio Economic Reforms of General Ayyub Khan.
General Ayub Khan Government also intended at improving some social organisations. Some of
the key zones of social improvement imitating his moderation.

The Ayub khan administration set the Ulema Academy in Lahore. It was the effort by the
government to revolutionize the ulamaand religious leadership in the nation. Furthermore,
religious leaders related with the Academy were select by the administration, who can spread
help to and provision the government in the time of essential.

Population preparation package began in Pakistan in the early 50s. In General Ayub Khan
Regime it was prolonged into developed organization (Syed, 1985). To check the excessive
development of population in 1965 in the Third Five Year Plan, a sum of 284 million was owed
for personal preparation. It was one of the greatest determined family development programs in
the unindustrialized world. General Ayub Khan’s individual attention gave an additional
motivation to the determination. In accumulation to Family Development Boarding at provincial
and district levels a system of salaried family development officers was also recognised.
Widespread well directed publicity was also approved out (Wiliams, 1975). Family Development
Command was recognized and Ever Adil was selected as the head. General Ayub Khan also
recognized a National Research Organisation of Family Development as well.

General Ayub Khan selected the General Burki the Minister of Health, Social Well-being and
Employment who gave a first-hand motivation to the social welfare part. Women administrations
like All Pakistan Women Association (APWA) touched existence helped, referred, used and
heartened. The lasting program of nation-wide rebuilding also intended at the development of the
position of women in Pakistani culture.

2.2 Positive Impacts of General Ayub Khan Economic Reforms.

General Ayub Khan, the first armed dictator of Pakistan, expected comprehensive control on the
state in October 1958 and ruled over the wonderful period of Pakistan economic history. With
the help of Harvard consultants, General Ayub Khan dynamically applied the Planning
Command on Economic Organisation and Improvements with imposing results (G.F. Papanek).

18
Gross domestic product (GDP) development in this period hopped to a regular annual report
rate of 6 % from 3 % in the 1950s. The industrial sector prolonged by 9% annually and
numerous new businesses remained set up. Farming produced at a suitable rate of 4 % with the
outline of Green Revolution knowledge. Supremacy enhanced with a major development in the
administration’s volume for policy examination, project and application, as well as the far
attainment process of organisation structure. The Pakistan association altered from what party-
political researchers called a soft stat to a developing one that had acquired the appearance of
political legality. By 1969, Pakistan’s industrial trades were developed than the trades of
Thailand, Malaysia and Indonesia collective. Though hypothetical, it is imaginable that, had the
financial strategies and agendas of the General Ayub khan government sustained ended the
succeeding two decades, Pakistan would have arose as another wonder economy.

Though, the awareness that income disparities among the East and West had amplified
considerably and that prosperity was focussed in the indicators of 22 families powered dislike
amongst Bengalis who suspect General Ayub khan government of plummeting the East to an
interior society (Raunaq Jahan).

Demanding governments empty of appropriate politically aware power use the apparatuses of
state power to success or preserve alliances, shape up new associations or take powerful actions
against intractable personalities and groups. Ayub khan is effort to win legality, presenting the
Basic Democracies system (BD) in detail produced his government damage of admiration and
reliability. This disillusionment with the martial government was subjugated by the Sheikh
Mujibur Rahman and the Awami League Party. The capture and experimental of Mujibur
underneath the Agartalatreachery case twisted him into a standard leader in East Pakistan. His 6
point agenda of independence developed the platform of the Awami League which brushed the
1970 elections in East Pakistan with an unqualified popular. The reposition of military these
welfares were apparent as an indulgence from a quasi-imposing military government to its
gathering East Pakistan showed to be poisonous. Central Establishing decided on a trade-
offamong autonomy and progress but the manoeuvre failed in East Pakistan and it is suspect to
succeed in Baluchistan and the urban zones. The example is no confederating unit will
submission its privileges to autonomy in conversation for any improvement works however vast
their decrease out.

19
(Rahman 2009.)

The revolution of General Ayub khan political system also overturned the economic system that
had helped the state so fine. To foreigners, Pakistan was a perfect emerging economy to compete
with, but nationally there was a total refusal of the economic model.

2.2.1 Growth and Investment in General Ayub Khan Era.

Stately by grass domestic product (GDP) growth, economic presentation in Pakistan in the 1960
clearly topped initial prospects.
The Second Five Year Plan from 1960 to 1965 had initially set the target of GDP development of
20percent over five years likened with the diffident goal of the 15percent at First Five Year Plan.
The Third Plan from 1965 to 1970preparation was assumed in a disposition of great confidence
and the yearly growth objective was customary at 6.5 percent in each year.
The severe speeding up growth in West Pakistan throughout the1960 destined that even though
the development amount in East Pakistan also augmented meaningfully, the local inequality in
incomes broadened. In 70s West Pakistan has per capita GDP was at likely 60 percent higher
from the East Pakistan.
GDP growth in Pakistan of approximately 7percent in each year during the 60’s was higher
amongst large nation state only by Thailand, Korea, and Mexico.
The alteration in economic presentation compared to the preceding decade was the consequence
of both huge escalations in speculation, technological innovations in agriculture, and improved
and more organize economic policy.

1950’s 1960’s

East Pakistan
Overall
1.9 4.0

Agriculture 1.9 2.7

Non-agriculture 2.9 5.0

West Pakistan

20
Overall 3.1 6.7

Agriculture 1.4 5.0

Non-agriculture 5.0 7.9

Sources: Economic Surveys, Government of Pakistan; Haq, The Strategy of Economic Planning; Papanek,
Pakistan’s Development; Economists’ Advisory Panel.

2.2.2 Investment in Economic Reforms in General Ayub Khan Era.

For the duration of 1960 to1965 actual investment raised very fast, attainment a top of 21.5
percent of GDP during 1964 to 1965 before hand decreasing somewhat suddenly to 14.6 percent
from 1969 to1970.
Private investment development in West Pakistan at the period from 1960 to 1965 was short-
tempered as it enlarged over three pleats in little period of only five years.
It weakened over by 20 percent in following five years but still throughout the 60’sactual private
secure asset more than doubled over, produced earlier than public investment, and account for
closely half of the total static investment in 1969 to 1970.
Political constancy, liberalization in investment panels and sufficient obtain ability of foreign
conversation were key issues manipulating a marked speeding up in the step of private
investment. The strategies were completing less severe for the private investment.
By the growth in investment donated to a growth in economic development naturally.
Growth impetus in West Pakistan continuous from 1965 to 1970 in the expression of a sharp
discount in the rate of speculation largely due to extraordinary development in agricultural
growing underneath the Green Revolution, great scale industrial growth released rather suddenly
reproducing investment inactivity.
Agricultural growth rate in Pakistan design to a peak of 6.3percent yearly rate during 1965 to
1970 as greatest upsurges were recorded in the manufacture of wheat and rice.

East Pakistan West Pakistan

21
 Private Public Total Private Public Total

1959-1960 2.0 4.0 6.0 4.3 7.2 11.5

1964-1965 4.5 8.1 12.6 11.6 9.2 20.8

1969-1970 4.0 8.4 12.4 7.0 7.3 14.3

2.2.3 Economic Reforms in Defence and Development.

At the end of 1960 the speculation proportion in West Pakistan was significantly advanced than
it decades previous but considerably below the highest in 1964 to 1965.
The embrace on West Pakistan speculation from two resources severe increase in protection
expenditure and the aware struggle to increase expansion expenditures and foreign aid
distributions in East Pakistan.
Actual protection expenditure had elevated little over 3 percent annually the five years earlier the
1965 war with India, considerably less than degree of development of the economy.
Following the war with India in 1965protectiondistributions were assumed high importance and
phasing out of United States (US) military support afterward 1965 put extra liability on national
resources. It became solid for Pakistan to use the uncommon national resources professionally.
Actual protection disbursement almost gathered among 1960 to 1965 and 1965 to 1970.
Expansion spending continued at 7.1 percent of gross domestic product (GDP) while security
expenses representation from 2.8 percent of GDP in 1960 to 1965 to 4 percent in 1965 to 1970.
The quick build-up of public subdivision expansion expenditure in East Pakistan also
importantly forced West Pakistan speculation in the half of the 1960, particularly in the public
area.
Through 1969 to 1970, public area speculation in East Pakistan was impending of West Pakistan
if distinct expenses for Indus Basin Replacement.
Defence and Development.

1960-1965 1965-1970 1965-1970

22
 Actual Planned Actual

Development Spending 13.95 30.00 21.75

(7.1) (9.8) (7.1)

Defence Spending 5.50 6.89 12.38

(2.8) (2.2) (4.0)

(Mahmood, 2011).

2.2.4 Economic Stability in General Ayub Khan Regime.

Though the development is higher in the 1960s, price increases continued in checked the regular
yearly rate of development of values was only 3.3percentfurthermore.
The first instinct of the Ayub regime has been to levy and severely impose comprehensive price
controls.
The part of the platform of actions to contest with inflation, administration appropriating from
the banking organisation for supporting economic shortages was condensed suddenly.
The 1960 were the merely dated in Pakistan economic past when important community
investments the additional of regime incomes receiving over income expenses appeared.
Labours to extend the direct assessment system reserved the incidental taxation to smallest and
henceforth values of goods continued steady.
Requirements of additional protection expenditure were encountered by supplementary taxation.
Considerable added taxation, assumed especially throughout the Third Plan aided to growth the
ratio of assessments from 6.1 percent of gross domestic product(GDP) in 195 to 1960 to
7.6percent in 1969 to 1970.

23
2.2.5General Ayub Khan Development Decade

Military takeover by field marshal General Ayub Khan in October 1958 transported around a
new age for growth in Pakistan. The flagging in the economic complaint and political
inconsistency had completed them suspicious of politicians.
Economic and social reforms remained high on Ayub khan programme. These reforms
encompassed economic planning and as extended as basic requirements such as food to the
complete community of Pakistan.
A number of commands, counting land improvements and education remained set up to appraisal
policies and make endorsement. However, in the conclusion, only imperfect progress was
attained the issues like education and agriculture reform, economic policy-making was at the
middle stage in Ayub khan era.
Part of The Planning Command Even however the Planning Command was recognized in the
public attention mostly with the groundwork and intensive care of the Five Year Tactics, under
Ayub khan it had abundant comprehensive role in the economic policy coordination. The
Planning Commission’s basic task was however the approving of the five year plans.
Planning Board upgraded to planning commission with the President as the aforementioned
chairman in 1959.
Gross permanent investment ended the ten years programme under General Ayub Khan Rule
enlarged approximately three folds in actual term increasing from 8.5 percent of gross domestic
product (GDP) in 1958 to1959 to 14percent in 1968-1969.
Isolated Speculation was fortified through releasing of straight economic controls on trade
investment, values and allocating of distant credit capitals for the secluded sector through long
term recognition activities. As an importance of these expansions and the savings made more
from double from 2.5percentbe obliged in the 1950 to 5.6 percent in the 1960s the development
rate of gross domestic product (GDP) in West Pakistan design up to 6.7percent from 3.1 percent
and faster in East Pakistan from 1.7percent to 4 percent.
Though, nevertheless rapid economic development of the economic and the political pressures in
the society and among the two extensions produced, particularly afterward the war with India in
September 1965 which controlled to congestion on capitals shimmering both a flattening off
foreign support and enlarged distribution to protection. Indeed the 1965 war was a turning point
in Pakistan history. It extremely intermittent the expansion impetus of the first half of the 1960s.
24
2.3 Negative Impacts of General Ayub Khan Economic Reforms.
The General Ayub khan and Musharraf Administrations did commence some thoughtful
economic improvements which permitted to continue and withstand over a long time prospect,
would have transported about important structural variations. On the other hand, these reforms
were inverted or blemished or made unimportant by the following regimes. This opinion
recommends that financial activities empty of political lawfulness, though imposing they
perhaps, demonstrate to be short lived in our national background. Deprived of the participation
and contribution of the public’s, graceful and theoretically sound economic answers
industrialised by demanding governments have a small mantelpiece life as they are rapidly
substituted once the governments variations, instigating permanent damage to the economy
(Husain, 2009).

The internal subtleties of political parties also deceives some understandings as to why economic
improvements are not assumed by democratically designated governments and if they are do not
continue for extended. Personality trend, demanding style of management, central decision
creating, request by the leader for complete faithfulness, narrowness of opposition, dependence
on a small of flatterers and associates and proposals somewhat than elections of the gathering
posts at the all level have developed some insalubrious propensities in the political parties.
Ministers of Economics could be the usual title holder for economic reforms. But they terror
offensive their generations and leaders and misplacing their jobs if they energetically follow
disliked policies, the electorate for these reforms inside the ruling party, consequently, remnants
weak or absent. In absence of a supporter, there is barely any possibility for these threatening
reforms to make any progress.

The predominant social and cultural norms in Pakistan societies also position a influential
discouraging force to improvements chiefly in the area of economic supremacy. The Pakistani
civilisation is considered by strong bonds of relationship, birder, class, and family relations. The
working social performance is administered by deliberations of ‘Lihaz, Sharam and Murawat’,
deep-seated and cultivated right from the childhood. Formal groups are on the other hand,
ambitious by proclamations, indication, due procedures, impartiality and neutrality. This natural
tension among the suitable social performance obligatory as a member of the civilisation and
administrative rules compulsory as part of specialised everyday jobs constrains practice of good

25
supremacy. Favouritism and nepotism are the predictable consequences of request placed by
social and cultural standards while value and neutrality are predictable to reign highest under the
official structural rules of commercial. Electorate government and alliances strengthen these
social standards. It is only with the feast of development, nuclear-powered families, increasing
middle class, competence and flagging of out-of-date and ethnic grip on the society that the
equilibrium will change in favour of the official structural rules. No rapid injections are
obtainable as even approximately of the extremely educated persons approaching from family
and primitive families do not diverge meaningfully from these standards.

2.3.1 Failure in Socio Economic Policy of General Ayub Khan Regime.

The major policy failure in the General Ayub khan era was in the social area. The fragile
economic policies, overestimated altercation rate, incompetent taxation and profligate
recognition and inducement polices were main reasons of the social issues.

2.3.2 Issues in the Distribution of Growth Benefits.

General Ayub khan saying land reforms are main economic and political issue. But since of
political and managerial restraints, the reforms that he was in due course talented to familiarise
occasioned in only diffident quantities of land being transported to small agriculturalists and
those labours which have no land.
Upper limit of landlords at 500 acres of irrigated land and 1000 acres of non-irrigated land
remained reserved too from top to bottom and the government and the property-owners joined
militaries to make supreme use of the ambiguities and exceptions.

There remained an exception of 150 acres for plantations and an exception for boss and cattle
farms.
The delivery of land promoted mostly about 200,000 occupants who conventional and normal of
3.85 acres. Around 8 percent of 2.5 m existence farm families promoted from land-dwelling
reforms.

26
The amount of agricultural employment families showed an intensification of around 20 percent
over 1961 to 1972 while the amount of farmhouse households really cut down to 4 million
representative an growth in the dispossessed labour.
Agricultural rebellion in 1960 was controlled by internal class agriculturalists. They made
widespread use of aquatic and quickly accepted the knowledge if high yielding variety (HYV)
seeds. In agricultural they remained shrill regional differences with improvements in
manufacture in the watered areas and deteriorations in the rainy areas.
Noteworthy development in the revenue during Ayub khan regime was carefully linked to the
range of the Green Revolution. Salaries started to rise afterward 1966 as there was an rise in the
request for labour subsequent the outline of new technology. The occurrence of deficiency in
rural areas let fall in 1960s and urban poverty also weakened meaningfully.
But here was a growing disparity in urban profits as long-established by a learning of relative
income stocks in Pakistan major scale industrialised. The portion of grosses and incomes in net
production fell signifying growth in the portion of incomes. As the stated profits remained
undervalued so real share of incomes and wages was greatly subordinate.
Incomes did not growth notwithstanding development in labour production which was
outstanding to thoughtful limits on the powers of labour amalgamation. The detail that profits
continued high a result of trade and interchange proportion policies and high blockades to
admittance.

2.3.3 Neglect Human Resource Development.

Negligence of education sector is a foremost disparagement of the General Ayub khan era.
The Commission of the National Education selected by the Government in 1985, commended
require dedication for youngsters among six and eleven inside the age of ten years.
The Second Plan customary goal of growing primary school employment proportion in West
Pakistan to 56percent in 1965 but the ratio enhanced only to 36percentsince the inhabitant’s
development rate had remained extremely undervalued.
The Third Plan once more set a board of floating employment to 70 percent but the definite
expenses on education were abundant lower for the reason that of lower incomes. This cut in
enlightening expenses diminished the share of primary instruction by a disproportionate expanse.

27
A main problematic was female education was assumed low importance in West Pakistan by the
leading elite and social approaches who did not support educating women.
Secondary school employment produced at proportion same as main instruction with more
development in developed instruction and this was concerted mostly in private sector
organisations. The urban favouritism in teaching was strengthened.
The neglect of elementary education in 60’s has continued effort on the transformation of the
economy for it has predestined an increase in the quantity of ignorant persons. The policy
disappointment was compounded by fast and unexpected population increasing. This main
problematic was documented by President Ayub khan and in 1960 a Domestic Development
Programme was industrialised. It had imperfect impact on biological rate because the healthiness
workforces themselves were uneducated and the series became inclined to exploitation.

2.3.4 Concentration of Economic Power.

Public prevention within the insight of unsatisfactory sharing of development welfares began to
combine afterward 1965 as speculation and manufacturing growth decelerated depressed in West
Pakistan.
The attentiveness of wealth and economic power was malformed into a main political subject in
1968 as a consequence of MahbubulHaq’s now prominent speech of 22 relations. His speech was
not intended in contradiction of the business communal but was projected as a representative
disapproval of the whole system of delivery and social justice industrialized for the duration of
the Ayub khan regime.
The speech obligated an thrilling effect on public insolence as it supposed that the economy of
Pakistan had develop conquered by 22 families who measured 66 percent of total manufacturing
possessions, 70 percent of assurance and 80 percent of investment.
The highest four families remained Dawoods, Saigols, Adamjees and Amins. In the public mind
the difference among control and possession of advantage was not strong.
A legend was thus shaped that 22 families had learned most of the national prosperity and has
been a most important recipients of the Ayub khan government. This was damaging for the
isolated sector expansion in Pakistan and occasioned in great scale nationalization of production,
banks and insurance corporations in early 70s. It had two accidental special effects first, it

28
hard-bitten the East Pakistanis who remained disagreeing for superior resource transmissions to
the East for the reason that development in West Pakistan was not promoting insufficient only.
Next it additional to the problems of plummeting big tax exceptions and subventions
conventional by big property-owners.

2.3.5 Failed Provincial Imbalance.

It was ultimatum for full economic independence from East Pakistan.

Mujib Ur Rahman’s six point agenda called for harshly limiting the powers of the central
administration and incomplete them to protection, external affairs and exchange. . Taxation and
proceeds collection was to be conferred exclusively in the joining units lengthways with their full
regulator over external conversation investments.
A significant section was additional to the 1962 constitution which providing that the total
incomes of West Pakistan would be used to decrease regional differences among East & West
Pakistan. There was much developed speculation in West Pakistan at end of 1950s than in East
Pakistan. Green revolution also donated to the determination of this opening among the two
extensions.
Preparation and expansion efforts increase to a harsh rise in public speculation proportion in East
Pakistan. These labours prospered and public sector speculation rate in East Pakistan exited up
than the West Pakistan but isolated investment continuous to lag behind hand significantly.
Public region and foreign aid distributions for investment wastransported to near equivalence
among the two extensions of Pakistan, the provincial inequalities in proceeds continuous to
grow. The goalmouth of discount in regional disproportion among East and West Pakistan was
impracticable in a short time distance of 15 to 20 years. East Pakistan does not accept its
reasonable segment of resources.

29
2.3.6 General Ayub Khan’s Policies an Assessment

For Pakistan the era of 1960 to 1965 was of hastening the speed for development. There was a
melodramatic improvement in investment and development in together East and West Pakistan.
This was a result of General Ayub khan durable promise to expansion.

This expansion thrust was extremely disturbed by the 1965 war with India. Discount in foreign
aid obtain ability and amplified defence expenditure embraced investment.
Rural areas promoted from top to bottom agricultural development while urban areas feel pain
from the importance of slowdown in industrial and building and cuts in social expenditure.
Growth of gross domestic product (GDP) continued extraordinary both in East and West
Pakistan in the additional half of 1960s but this was focussed typically in farming in West
Pakistan.
The uneconomic significances of 1965 war remained more devastating for General Ayub khan.
East Pakistan was absent without satisfactory resistance expenditure for the duration of the war
with India, there was mounting economic discrepancy and lack of adequate political
contribution. In economic policy footings, main failures were the continuation of the
manufacturing and trade policies of 1950s and an extreme dependence on exterior support.
Notwithstanding these economic strategy failures Ayub khan regime was an extraordinarily
effective period of economic organisation.

30
 Chapter 03

3.1 Findings and Conclusion.

The finding of the research study is given below.

3.1.1 Findings about General Ayub Khan Economic Reforms During 1958 to
1968.

General Ayub Khan Government also intended at improving some social organisations. Some of
the key zones of social improvement imitating his moderation.

The General Ayub khan administration set the Ulema Academy in Lahore. It was the effort by
the government to revolutionize the ulamaand religious leadership in the nation. Furthermore,
religious leaders related with the Academy were select by the administration, which can spread
help to and provision the government in the time of essential. These all reforms by General
Ayub khan was for the economic improvement in Pakistan.

Population preparation package began in Pakistan in the early 50s .In Ayub Khan Regime it was
prolonged into developed organization .To check the excessive development of population in
1965 in the Third Five Year Plan, a sum of 284 million was owed for personal preparation. It
was one of the greatest determined family development programs in the unindustrialized world.
Ayub Khan’s individual attention gave an additional motivation to the determination. In
accumulation to Family Development Boarding at provincial and district levels a system of
salaried family development officers was also recognised. A widespread well directed publicity
was also approved out .Family Development Command was recognized and EnverAdil was
selected as the head. General Ayub Khan also recognized a National Research Organisation of
Family Development as well.

3.1.2 Findings about the Positive Impacts of General Ayub Khan Economic
Reforms.

General Ayub Khan, the first armed dictator of Pakistan, expected comprehensive control on the
state in October 1958 and ruled over the wonderful period of Pakistan economic history. With

31
the help of Harvard consultants, Ayub Khan dynamically applied the Planning Command on
Economic Organisation and Improvements with imposing results.

Gross domestic product (GDP) development in this period hopped to a regular annual report rate
of 6 % from 3 % in the 1950s. The industrial sector prolonged by 9% annually and numerous
new businesses remained set up. Farming produced at a suitable rate of 4 % with the outline of
Green Revolution knowledge. Supremacy enhanced with a major development in the
administration’s volume for policy examination, project and application, as well as the far
attainment process of organisation structure. The Pakistan association altered from what party-
political researchers called a soft stat to a developing one that had acquired the appearance of
political legality. By 1969, Pakistan’s industrial trades were developed than the trades of
Thailand, Malaysia and Indonesia collective. Though hypothetical, it is imaginable that, had the
financial strategies and agendas of the Ayub government sustained ended the succeeding two
decades, Pakistan would have arose as another wonder economy.

3.1.3 Findings about the Negative Impacts General of Ayub Khan Economic
Reforms.

Public prevention within the insight of unsatisfactory sharing of development welfares began to
combine afterward 1965 as speculation and manufacturing growth decelerated depressed in West
Pakistan.
The attentiveness of wealth and economic power was malformed into a main political subject in
1968 as a consequence of now prominent speech of 22 relations. His speech was not intended in
contradiction of the business communal but was projected as a representative disapproval of the
whole system of delivery and social justice industrialized for the duration of the GeneralAyub
khan regime.
The speech obligated an thrilling effect on public insolence as it supposed that the economy of
Pakistan had develop conquered by 22 families who measured 66percent of total manufacturing
possessions, 70percent of assurance and 80 percent of investment.
A legend was thus shaped that 22 families had learned most of the national prosperity and has
been a most important recipients of the Ayub khan government. This was damaging for the
isolated sector expansion in Pakistan and occasioned in great scale nationalization of production,
banks and insurance corporations in early 70s. It had two accidental special effects first, it hard-

32
bitten the East Pakistanis who remained disagreeing for superior resource transmissions to the
East for the reason that development in West Pakistan was not promoting an insufficient only.
Next it additional to the problems of plummeting big tax exceptions and subventions
conventional by big property-owners. But in last the government concentrated the economic
development and thus the economy of Pakistan became fall up to certain level.

3.2 conclusion.

General Ayub khan came in to power in 7 th October 1958.he first became the chief marshal l law
administrator in Pakistan. He introduced basic democracy (BD) system in 1959 in Pakistan he
was elected as president of Pakistan in1960.He introduced a number of reforms in Pakistan such
as political, economic, social, land and agriculture and industrial for development of the country
and reforms the administrative system in Pakistan.

The National Assembly become dissolved and the martial law became in forced. Ayub khan
recognised the system of government which he called the “Basic Democracy” and which
providing a safe democratic system for the president. It was proposed to engage some of the
agriculture and industrial privileged into the construction of military rules. His eleven year law
was a leading alliance made up of the revolutionising, municipal based nationalists and the
tradition certain rural upper classes

Ayub khan make reforms for the progress of the economy of Pakistan and thus the gross
domestic product (GDP) rate became increase up to 6.5 % in one year. Ayub khan gives freedom
to the economy of Pakistan to become free economic contacts among the people for expansion of
their own gratification.

It is the positive impacts of Ayub khan regime to give growth to the investments and economy in
1960 t0 1965 the economic investment grow very fast.

On other hand minsters of economy could be the use of title hold for economic reforms. But by
the terror offensive their generation and misplacing their jobs. Therefore they make fragile
economic policies, incompetent taxation .the main failure were the trade policies are extremely
dependent on foreign support.

33
3.3 References.

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York, Columbia University).

Bienen,& Henry. (2008). ‘‘the Military and Modernization, New Brunswick’’; NJ:
Aldine Transaction.

Dawson, J. (1998). “Institutions, Investment, and Growth: New Cross-Country and Panel
Data Evidence” Economic Inquiry, 36:4, pp.603-619.

Friedman, M. (1991). Economic Freedom, Human Freedom, Political Freedom, The

Smith Centre Milton Friedman’s lecture.

Hanke, S. & Walters, S.J. (1997). “Economic Freedom, Prosperity, and Equality: A
Survey” Cato Journal, 17:2, pp.117-147.

Hasan, P. (2006). “State and Pakistan Economy: Where we come from? Where do we
go?” paper in 22nd Annual General Meeting and Conference of Pakistan Society of
Development Economists 19th -21st December.

Rehman,I. A. (2009). Editorial, International News (Pakistan).

Kamali,&Masoud. (2006). Multiple Modernities, Civil Society and Islam: The Case of
Iran and Turkey. Liverpool: Liverpool University Press. (a detailed discussion).

Jahan,R.(1972).Pakistan: Failure in National IntegrationNew York: Columbia

University Press.

Aslam,S,M. (1985). Modernism, Traditionalism and Islamization in Pakistan. Journal of

South Asian and Middle Eastern Studies. Vol. VIII, No. 4, summer, p. 81

Papanek,G,F.(1967).The two books produced by the Harvard advisors,Pakistan’s

Development: Social Goals and Private Incentives (Cambridge, Mass.: Harvard
University Press, 1967);

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International, p. 175.

Hussain,A.(2018). ‘‘Journal of the Punjab University Historical society’’

volume No.31, issue No.1.

Cheema,A.,Khwaja,A,I & Adnan.(2002). ‘‘Local Government in Pakistan:

context, contents and causes.

Musarrat,R.(2011). ‘‘Decentralization reforms in Pakistan during Ayub and

Zia era’’ islamia university of Bahawalpur.

Rubina, S. (2003). ‘‘Becoming a Modern Nation: Educational Discourse in the

Early Years of Ayub Khan (1958-64)’’. Council of Social Sciences Pakistan [COSS]
Islamabad.

Ansari,S,H.(2008) ‘‘Forced Modernization and Public Policy: A Case Study

of Ayub khan era (1958-69) journal political studies.Vol 18, issue-1, 45-60.

Khan,S,R.(2011) ‘‘Copeland fellow, Amberst college’’

Sources: Economic Surveys, Government of Pakistan; Haq, The Strategy of Economic

Planning; Papanek, Pakistan’s Development; Economists’ Advisory Panel.

Hussain, A. (2006). ‘‘economic policy, growth and poverty in historical perspective’ ’

Encyclopaedia of Pakistan oxford university press

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BhaudinZakriya university Multan.

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