Introduction to Economics

Assignment of Intro.To Economics

Topic: Major economic planning regimes in Pakistan

Contents
Introduction:...............................................................................................................................4
1. Period of Economic Coordination (1947-53):........................................................................4
1.1 Leaders:............................................................................................................................4
1.2Political Situation:.............................................................................................................4
1.3 International Relations:....................................................................................................4
1.4 Economic Growth:...........................................................................................................4
1.5 Industrial Growth:............................................................................................................5
1.6Agriculture Growth:..........................................................................................................5
1.7 Achievements:..................................................................................................................5
1.8 Key Problems:..................................................................................................................5
2. Period of Planning Board (1953-58): Launching the First Five-Year Plan...........................5
2.1 Leaders:............................................................................................................................5
2.2 Political Situation:............................................................................................................6
2.3 International Relations:....................................................................................................6
2.4 Annual Economic Growth:..............................................................................................6
2.5 Industrial Growth:............................................................................................................6
2.6 Agriculture Growth:.........................................................................................................6
2.7 Achievements:..................................................................................................................6
2.8 Key Problems:..................................................................................................................7

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 Major economic planning regimes in Pakistan

3. Period of Planning Commission (1958-68): Centralized Planning Under Ayub Khan.........7

3.1 Leaders:............................................................................................................................7
3.2 Political Situation:............................................................................................................7
3.2International Relations:.....................................................................................................7
3.3 Annual Economic Growth:..............................................................................................7
3.4 Industrial Growth:............................................................................................................8
3.5 Agriculture Growth:.........................................................................................................8
3.6 Achievements:..................................................................................................................8
3.7 Key Problems:..................................................................................................................8
4. Period of Decline of Planning Commission (1968-77):.........................................................8
4.1 Leaders:............................................................................................................................8
4.2 Political Situation:............................................................................................................9
4.3 International Relations:....................................................................................................9
4.3 Annual Economic Growth:..............................................................................................9
4.4 Industrial Growth:............................................................................................................9
4.5 Agriculture Growth:.........................................................................................................9
4.6 Achievements:..................................................................................................................9
4.7 Key Problems:................................................................................................................10
5. Period of Revival of Planning Commission (1978-88): Regaining Momentum under Zia-ul-
Haq...........................................................................................................................................10
5.1 Leader:............................................................................................................................10
5.2 Political Situation:..........................................................................................................10
5.3 International Relations:..................................................................................................10
5.4 Annual Economic Growth:............................................................................................10
5.5 Industrial Growth:..........................................................................................................11
5.6 Agriculture Growth:.......................................................................................................11
5.7 Achievements:................................................................................................................11
5.8 Key Problems:................................................................................................................11
6. Period of (1988-98) - A Decade of Shifting Tides...............................................................11
6.1Leaders:...........................................................................................................................11
6.2 Political Situation:..........................................................................................................12
6.3 International Relations:..................................................................................................12
6.4 Annual Economic Growth:............................................................................................12
6.5 Industrial Growth:..........................................................................................................12

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 Major economic planning regimes in Pakistan

6.6 Agriculture Growth:.......................................................................................................12

6.7 Achievements:................................................................................................................12
6.8 Key Problems:................................................................................................................13
7. Major Economic Planning in Pakistan: Period of Restructuring of Economy (1999-2007)13
7.1 Leaders:..........................................................................................................................13
7.2 Political Situation:..........................................................................................................13
7.3 International Relations:..................................................................................................13
7.4 Annual Economic Growth:............................................................................................14
7.5 Industrial Growth:..........................................................................................................14
7.6 Agriculture Growth:.......................................................................................................14
7.7 Achievements:................................................................................................................14
7.8 Key Problems:................................................................................................................14
Conclusion :.............................................................................................................................15
References :..............................................................................................................................15

Introduction:
Pakistan, a country at the crossroads of South Asia, is not only rich in cultural diversity but
also grapples with the complexities of economic governance. Over the years, Pakistan has
experienced a dynamic interplay of economic regimes, each leaving an indelible mark on the
nation's economic landscape. From the early years of planned economies to market-oriented
reforms, the evolution of economic policies in Pakistan reflects a constant quest for
sustainable development and prosperity. This journey through different economic regimes
encompasses periods of state intervention, privatization endeavors, and structural
adjustments, all of which have shaped the country's economic trajectory.

1. Period of Economic Coordination (1947-53):

1.1 Leaders:
Prime Minister Liaquat Ali Khan: Focused on establishing infrastructure and institutions,
negotiated favorable trade agreements.

Ghulam Mohammed: Architected economic policies emphasized fiscal discipline and import
substitution.

1.2Political Situation:
● Newly independent nation, grappling with the aftermath of partition and refugee
crisis.

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 Major economic planning regimes in Pakistan

● Focus on nation-building, consolidating power, and establishing political stability.

● Early years plagued by political assassinations and instability, hindering long-term

pla8nning.

1.3 International Relations:

● Received aid and reconstruction assistance from Commonwealth nations and World
Bank.
● Cold War context limited options, US aid mostly limited to military assistance.

● Trade relations established with neighboring countries and Commonwealth markets.

1.4 Economic Growth:

● Modest, averaging around 2-3% per year, hampered by refugee crisis and war with
India.
● Infrastructure development laid the groundwork for future growth, with investments
in power, irrigation, and transportation.
● Early signs of industrialization, with a focus on basic necessities like textiles, food
processing, and cement.

1.5 Industrial Growth:

● Slow, around 4-5% per year, primarily driven by import substitution policies.

● Government established public sector enterprises in strategic sectors like steel and
heavy machinery.
● Private sector remained hesitant due to political uncertainty and resource constraints.

1.6Agriculture Growth:
● Steady, around 2-3% per year, despite land reforms and lack of investment.

● Introduction of new technologies and improved irrigation infrastructure aided

productivity.
● Food security remained a challenge due to population growth and resource
limitations.

1.7 Achievements:
● Establishment of key institutions like State Bank of Pakistan, Karachi Port Trust, and
Planning Board.

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● Initial development of infrastructure, laying the foundation for future economic

expansion.
● Diversification of the economy beyond reliance on agriculture, with nascent industrial
growth.
● Maintenance of macroeconomic stability despite challenging circumstances.

1.8 Key Problems:

● Refugee crisis placed immense strain on resources and infrastructure.

● War with India disrupted trade and diverted resources from development.

● Political instability created an uncertain environment for investment and long-term

planning.
● Lack of foreign investment and reliance on aid limited capital for development.

● Resource constraints hampered investment in crucial sectors like education and

healthcare.

2. Period of Planning Board (1953-58): Launching the First

Five-Year Plan

2.1 Leaders:
Prime Minister Mohammed Ali Bogra: Advocated for economic development and social
welfare initiatives.

Finance Minister Amjad Ali: Steered the implementation of the First Five-Year Plan,
emphasizing fiscal discipline and infrastructure investment.

2.2 Political Situation:

● Relative stability compared to the previous period, focus on consolidating power and
implementing development plans.
● Rise of political parties and increased public participation in democratic processes.

● Challenge of integrating East and West Pakistan into a unified economic framework.

2.3 International Relations:

● Increased aid and collaboration with the United States through the Eisenhower
Doctrine.

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● Participation in Colombo Plan for cooperative economic development in Asia.

● Growing trade ties with neighboring countries and regional markets.

2.4 Annual Economic Growth:

● Moderate, averaging around 5% per year, marking an improvement from the previous
period.
● Public sector investment in infrastructure projects boosted economic activity.

● Increased agricultural production and nascent industrial growth contributed to overall

growth.

2.5 Industrial Growth:

● Strong, exceeding 8% per year, fueled by government incentives and import
substitution policies.
● Establishment of industrial estates and public sector enterprises in key sectors like
textiles, chemicals, and sugar.
● Private sector participation grew, particularly in light industries and consumer goods
production.

2.6 Agriculture Growth:

● Slow, lagging behind industrial growth at around 2-3% per year.

● Limited investment in rural infrastructure and technology hampered productivity

gains.
● Land reforms aimed at equitable distribution faced implementation challenges.

2.7 Achievements:
● Successful implementation of the First Five-Year Plan, laying the groundwork for
further development.
● Significant expansion of infrastructure, including irrigation canals, power plants, and
transportation networks.
● Diversification of the economy with rapid industrial growth and expanding private
sector participation.
● Improvement in social indicators like literacy rates and healthcare access.

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2.8 Key Problems:

● Income disparity between agricultural and non-agricultural sectors widened.

● Regional disparities persisted, with East Pakistan lagging behind West Pakistan in
development.
● Dependence on foreign aid and limited export diversification made the economy
vulnerable to external shocks.
● Resource constraints continued to limit public investment in crucial sectors like
education and healthcare.

3. Period of Planning Commission (1958-68): Centralized

Planning Under Ayub Khan
3.1 Leaders:
President Ayub Khan: Military dictator who emphasized centralized planning and rapid
economic development.

Finance Minister Shoaib Sultan Khan: Architect of the Second Five-Year Plan, focused on
export-oriented growth and private sector participation.

3.2 Political Situation:

● Military regime led by Ayub Khan, suppressing political dissent and promoting
technocratic governance.
● Focus on national stability and unity, promoting integration of East and West
Pakistan.
● One-party system limited democratic participation and civil liberties.

3.2International Relations:
● Close ally of the United States during the Cold War, receiving significant military and
economic assistance.
● Increased trade ties with Western nations and participation in regional economic
cooperation initiatives.
● Deterioration of relations with India, leading to the 1965 war and increased military
spending.

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3.3 Annual Economic Growth:

● High, averaging over 6% per year, marking a significant increase from previous
periods.
● Public and private sector investments fueled rapid economic expansion.

● Infrastructure development, industrial growth, and increased agricultural productivity

contributed to overall growth.

3.4 Industrial Growth:

● Rapid, exceeding 10% per year on average, driven by government incentives, export
promotion policies, and foreign investment.
● Expansion of heavy industries like steel, chemicals, and machinery alongside light
industries like textiles and food processing.
● Growth focused on import substitution, reducing dependence on foreign imports.

3.5 Agriculture Growth:

● Improved, reaching around 4% per year, benefiting from investments in irrigation,
land reforms, and technology adoption.
● Introduction of high-yielding varieties and improved access to fertilizers boosted
agricultural productivity.
● Green Revolution initiatives led to self-sufficiency in food production for some staple
crops.

3.6 Achievements:
● Significant expansion and modernization of infrastructure, including dams, power
plants, and highways.
● Diversification and rapid growth of the industrial sector, creating jobs and reducing
dependence on imports.
● Improvement in agricultural productivity and self-sufficiency in food production.

● Increased foreign investment and trade diversification, boosting economic activity.

3.7 Key Problems:

● Widening income inequality between urban and rural populations, and between
industrial and agricultural sectors.

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● Growing regional disparities, with East Pakistan lagging behind West Pakistan in
terms of development.
● Political repression and lack of democratic participation led to increasing resentment
and political dissent.
● Overemphasis on import substitution limited export competitiveness and
diversification.
● Dependence on foreign aid and external support remained a vulnerability.

4. Period of Decline of Planning Commission (1968-77):

4.1 Leaders:
President Yahya Khan: Military dictator who inherited the Ayub Khan regime facing
increasing political dissent.

Prime Minister Zulfiqar Ali Bhutto: Populist leader elected in 1970 elections, focusing on
nationalization and social welfare programs.

4.2 Political Situation:

● Political unrest and instability marked the period, culminating in the Bangladesh
Liberation War in 1971.
● Frequent changes in leadership between military regimes and democratic
governments hampered policy continuity.
● Rise of populism and socialist ideologies, leading to nationalization of key industries
and land reforms.

4.3 International Relations:

● Deterioration of relations with India after the war, leading to economic sanctions and
isolation.
● Shift in Cold War alliances, reducing US aid and increasing ties with Soviet Union.

● Increased dependence on foreign loans and resource constraints due to war and
nationalization.

4.3 Annual Economic Growth:

● Slow and erratic, averaging around 3% per year, marking a significant decline from
the previous period.

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● Economic disruptions due to political instability, war, and nationalization policies

hampered growth.
● Infrastructure development stalled, and industrial performance faltered due to policy
uncertainties.

4.4 Industrial Growth:

● Declined, averaging around 2% per year, impacted by nationalization, labor unrest,
and lack of investment.
● Public sector enterprises struggled with inefficiencies and mismanagement, hindering
overall industrial output.
● Private sector confidence eroded due to political uncertainty and regulatory burdens.

4.5 Agriculture Growth:

● Stagnant, hovering around 2% per year, despite continued efforts to improve
irrigation and technology adoption.
● Uncertainty regarding land ownership and price controls dampened farmer incentives
and investment in agriculture.
● Resource allocation shifted towards social welfare programs, limiting investments in
essential agricultural infrastructure.

4.6 Achievements:
● Expansion of social welfare programs aimed at poverty alleviation and healthcare
access.
● Increased focus on education and literacy initiatives, particularly in rural areas.

● Nationalization of key industries brought strategic sectors under state control, aiming
for greater economic independence.

4.7 Key Problems:

● Political instability and frequent changes in government policies created an
unpredictable environment for businesses and investors.
● Nationalization policies led to inefficient management and decline in industrial
productivity.
● War with India and international isolation severely impacted trade and foreign
investment.

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● Widening budget deficits due to increased social spending and declining revenue from
state-owned enterprises.
● Growing public discontent and labor unrest further destabilized the economic and
political landscape.

5. Period of Revival of Planning Commission (1978-88):

Regaining Momentum under Zia-ul-Haq
5.1 Leader:
President Zia-ul-Haq: Military dictator who imposed martial law, focusing on economic
stability and Islamization.

5.2 Political Situation:

● Military regime led by Zia-ul-Haq, suppressing political dissent and enforcing
Islamization laws.
● Relative stability compared to the previous decade, fostering an environment
conducive to economic planning.
● Increased cooperation with Western nations due to Soviet occupation of Afghanistan
and Pakistan's role in the Cold War.

5.3 International Relations:

● Improved relations with the United States and Western nations, receiving significant
economic and military assistance.
● Participation in regional economic programs and increased trade ties with neighboring
countries.
● Continued tensions with India, although no major armed conflict during this period.

5.4 Annual Economic Growth:

● Rebounded, exceeding 5% per year on average in some years, marking a return to
growth after the previous stagnation.
● Public and private sector investments, along with foreign aid, spurred economic
activity.
● Increased agricultural production and diversification of industrial exports contributed
to overall growth.

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5.5 Industrial Growth:

● Moderate, averaging around 5% per year, recovering from the decline of the previous
period.
● Government reforms promoting deregulation and private sector participation
invigorated industrial activity.
● Expansion of light industries like textiles and food processing, along with renewed
focus on export-oriented manufacturing.

5.6 Agriculture Growth:

● Increased, reaching around 4% per year on average, benefiting from reforms and
investments in irrigation, research, and technology.
● Improved water management through development of canals and dams boosted
agricultural productivity.
● Introduction of high-yielding varieties and increased access to fertilizers further
enhanced agricultural output.

5.7 Achievements:
● Reduction in budget deficit and stabilization of macroeconomic indicators.

● Completion of major infrastructure projects like Tarbela Dam and Karachi Steel
Mills.
● Diversification of industrial exports and increased international trade.

● Improvement in agricultural productivity and self-sufficiency in food staples.

● Eradication of polio and expansion of healthcare facilities in rural areas.

5.8 Key Problems:

● Continuation of military rule and limited democratic participation raised concerns
about long-term political stability.
● Inequality remained an issue, with benefits of growth not evenly distributed across all
segments of society.
● Rise of religious extremism and sectarian violence posed challenges to social
cohesion and economic progress.
● Dependence on foreign aid and external financing remained a vulnerability.

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● Environmental degradation due to rapid industrialization and resource exploitation

became a growing concern.

6. Period of (1988-98) - A Decade of Shifting Tides

6.1Leaders:
Prime Minister Benazir Bhutto (1988-1990, 1993-1996): First female Prime Minister,
focused on social welfare programs and poverty alleviation.

Prime Minister Nawaz Sharif (1990-1993, 1997-1999): Emphasized industrialization,

privatization, and infrastructure development.

6.2 Political Situation:

● Return to democracy after military rule, characterized by periods of instability and
coalition governments.
● Struggle between Bhutto's Pakistan People's Party (PPP) and Sharif's Pakistan Muslim
League (PML-N) led to political uncertainty.
● Growing influence of military in politics despite the formal return to democracy.

6.3 International Relations:

● Fluctuating relationships with major powers, dependence on foreign aid, and security
concerns amidst the Afghan Civil War.
● Trade ties expanded with regional partners, particularly Central Asian countries.

● Participation in international economic forums and initiatives aiming for global

integration.

6.4 Annual Economic Growth:

● Varied, ranging from high during Nawaz Sharif's term to low during Benazir Bhutto's
tenure, averaging around 4.5% per year.
● Economic performance closely linked to the political stability and policy priorities of
each government.
● External shocks like the Gulf War and Asian financial crisis also impacted growth
patterns.

6.5 Industrial Growth:

● Inconsistent, with periods of rapid expansion under Sharif's privatization and
deregulation policies, followed by setbacks due to political instability and corruption.

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 Major economic planning regimes in Pakistan

● Growth concentrated in textiles, food processing, and light industries, with limited
diversification into heavy industries.
● Foreign investment increased but remained modest compared to regional competitors.

6.6 Agriculture Growth:

● Improved, particularly during Benazir Bhutto's government with increased focus on
rural development and infrastructure projects.
● Investment in irrigation, technology adoption, and improved access to inputs boosted
agricultural productivity.
● However, challenges like land fragmentation and limited financial resources
continued to hinder full potential.

6.7 Achievements:
● Expansion of social safety nets under Benazir Bhutto's government, with programs
like Benazir Income Support Program.
● Progress in infrastructure development, with projects like Motorway network and Hub
River Power Complex.
● Privatization of state-owned enterprises under Nawaz Sharif's government, aimed at
improving efficiency and attracting investment.
● Increased regional trade and engagement with Central Asian countries.

6.8 Key Problems:

● Political instability and frequent changes in government hampered long-term planning
and policy implementation.
● Corruption and mismanagement hindered efficient resource allocation and economic
growth.
● High foreign debt and dependence on aid remained vulnerabilities to external shocks.

● Income inequality continued to widen, raising concerns about social unrest and
sustainability.
● Inadequate investment in education and human capital development limited long-term
growth potential.

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 Major economic planning regimes in Pakistan

7. Major Economic Planning in Pakistan: Period of

Restructuring of Economy (1999-2007)
7.1 Leaders:
President Pervez Musharraf: Military dictator who took power in a coup, emphasizing
economic reforms, liberalization, and cooperation with the West.

Minister Shaukat Aziz: Architect of economic reforms, focusing on fiscal discipline,

privatization, and attracting foreign investment.

7.2 Political Situation:

● Military regime led by Musharraf, suppressing political dissent and consolidating
power.
● Initial public approval due to promises of stability and improved economic
performance.
● Growing international support due to Pakistan's cooperation in the War on Terror,
leading to increased aid and debt relief.
● Gradual return to democratic processes with elections in 2002 and 2007, but limited
space for opposition politics.

7.3 International Relations:

● Improved relations with the United States and Western countries, receiving significant
economic and military assistance.
● Increased participation in global trade agreements and regional economic initiatives.

● Tensions with India remained, but no major armed conflict during this period.

7.4 Annual Economic Growth:

● High, exceeding 6% per year on average, marking a significant shift from the
previous decade.
● Public and private sector investments, along with foreign aid and debt relief, fueled
rapid economic expansion.
● Macroeconomic stability, fiscal reforms, and improved business environment boosted
investor confidence.

7.5 Industrial Growth:

● Strong, averaging over 8% per year, driven by privatization, deregulation, and foreign
investment.

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 Major economic planning regimes in Pakistan

● Expansion of light industries like textiles, food processing, and pharmaceuticals,

alongside growth in services like telecommunications and banking.
● Increased exports and diversification of industrial base, particularly within regional
markets.

7.6 Agriculture Growth:

● Moderate, around 3% per year, lagging behind industrial growth despite some
investment in irrigation and technology.
● Limited access to credit and market infrastructure remained challenges for small
farmers.
● Water scarcity and environmental degradation posed long-term threats to agricultural
sustainability.

7.7 Achievements:
● Significant reduction in budget deficit and public debt, achieving macroeconomic
stability.
● Privatization of major state-owned enterprises, attracting foreign investment and
improving efficiency.
● Expansion of infrastructure, including motorways, airports, and energy projects.

● Improvement in social indicators like poverty reduction, literacy rates, and healthcare
access.

7.8 Key Problems:

● Growing political discontent and criticism of Musharraf's authoritarian rule.

● Rising income inequality, with benefits of economic growth concentrated among

urban elites and large businesses.
● Corruption remained a concern, despite some reforms, hindering fair distribution of
resources and economic benefits.
● Environmental degradation due to rapid industrialization and resource exploitation
became a growing issue.
● External dependency on foreign aid and investments made the economy vulnerable to
global shocks.

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 Major economic planning regimes in Pakistan

Conclusion :
Looking back at how Pakistan has managed its money and resources over the years, we can
see some good things and some challenges.

Good things include Pakistan making more money, helping poor people, and building things
like roads and buildings. But there are still problems like not everyone having the same
amount of money, some things not working well, and the way taxes are set up being a bit
confusing.

Pakistan tried to fix some of these problems by selling off some businesses and trying to
make it easier for people to do business. But there's still work to do, especially when it comes
to making sure everyone has a fair chance to do well.

As we move ahead, it's important for Pakistan to find a balance between the government
helping out and letting businesses do their thing. Also, focusing on important areas like
farming and technology can make a big difference. By learning from the past, Pakistan can
make sure more people have a chance for a good life. The journey to economic success is still
going, and the lessons from before can help make Pakistan a better place for everyone.

(Hussain) (Haque) (bank) (GOVT.PK) (WIKIPEDIA)

References :
bank, w. (n.d.). planning in pakistan. docs.worldbank, 164.

GOVT.PK. (n.d.). FIVE YEAR PLAN. MINISTRY OF PLANNING.

Haque, A. (n.d.). Reflections on economic planning in pakistan. JSTOR.

Hussain, Z. (n.d.). The history of economic planning in pakistan. Wordpress.com.

WIKIPEDIA. (n.d.). FIVE YEARS PLAN AND ECONOMIC PLANNING IN PAKISTAN.

Retrieved from WIKI: https://en.wikipedia.org/wiki/First_Five-
Year_Plans_(Pakistan)

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