Economic History of PakistanFrom 1950s to 1960s

Presentation Structure

What is Economic growth?

Economic History of Pakistan

Economic History since Independence Day

Initial Decades: The 1950s and 60s

Economy of East Bengal in Pakistan

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Economic Growth

Economic Growth is an increase in the output that an economy produces over a period of time.

Factors of economic growth are:

New Technology, New production methods, Increasing labour force etc.

ImportanceLiving standard of people improves

Unemployment decreases

Poverty reduces

Reduces crimes and corruptions etc

Economic History of Pakistan

The economic history of pakistan has experienced growth and economic downtown.

Since independence day its economy has emerged as a semi industrialized one based heavily on textiles, agriculture and food production.

Recent years have seen a surge towards technological diversification.

As of 2014, agriculture accounts for more than one-fifth of output and two-fifths of employment.

Textiles account for most of Pakistan's export earnings, and inflation has increased rapidly, climbing from 7.7% in 2007 to almost 12% for 2011, before declining to 10% in 2012 and to 2.11 percent in April 2015.

Inflation Rate in Pakistan averaged 7.99 percent from 1957 until 2015, reaching an all-time high of 37.81 percent in December 1973 and a record low of -10.32 percent in February 1959.

Pakistan suffered its only economic decline in its GDP only once in her entire history between 1951-52.

GNP growth rate during 1985–95 was only 1.2 percent per annum, substantially lower than India (3.2), Bangladesh (2.1), and Sri Lanka (2.6).

Growth was slow during the 1950s averaging 3.1 percent per annum but accelerated to 6.7 percent during the sixties and remained generally close to 6 percent per annum till the early 1990s.

Economic History Since Independence Day

Pakistan’s population has grown rapidly from around 30 million in 1947 to over 130 million in 1996.The rate of annual growth has averaged 3 percent since 1960.

Pakistan's average economic growth rate since independence has been higher than the average growth rate of the world economy during the same period.

Average annual real GDP growth rates were 6.8% in the 1960s, 4.8% in the 1970s, and 6.5% in the 1980s.

Average annual growth fell to 4.6% in the 1990s with significantly lower growth in the second half of that decade.

During the 1960s, Pakistan was seen as a model of economic development around the world, and there was much praise for its economic progression.

Many countries sought to emulate Pakistan's economic planning strategy and one of them, South Korea, copied the city's second "Five-Year Plan"; the World Financial Centre in Seoul is modeled after Karachi.

Initial Decades

The 1950s and 60s

Between 27 October 1958 and 25 March 1969 under Ayub Khan Pakistan economic growth averaged 5.82% growth during his eleven years in office.

Manufacturing growth in Pakistan during this time was 8.51%, far outpacing any other time in Pakistani history.

It was the time when Pakistan first got an automobile industry, a cement industry and few other heavy manufacturing industries.

However tax collection was low averaging less than 10% of GDP.

The Export Bonus Vouchers Scheme (1959) and tax incentives stimulated new industrial entrepreneurs and exporters. Bonus vouchers facilitated access to foreign exchange for imports of industrial machinery and raw materials.

Mahbubul Haq blamed the concentration of economic power to 22 families which were dominating the financial and economic life of the country controlling 66% of the industrial assets and 87% of the banking.

During the same period there were construction of several infrastructure projects (notably Tarbela Dam and Mangla Dam), including canals, dams and power stations, began Pakistan's space programme.

In 1959 the country began the construction of its new capital city.

The capital was not moved directly from Karachi to Islamabad; it was first shifted temporarily to Rawalpindi in the early sixties and then to Islamabad when the essential development works was completed in 1966.

Economy of East Bengal in Pakistan

The partition of British India in 1947 severely disrupted the economic system.

The united government of Pakistan expanded the cultivated area and some irrigation facilities, but the rural population generally became poorer between 1947 and 1971.

Pakistan's five-year plans opted for a development strategy based on industrialization, but the major share of the development budget went to West Pakistan.

The economy of East Pakistan steadily declined.

Blame was placed by various observers, but especially those in East Pakistan, on the West Pakistani leaders who not only dominated the government but also most of the fledgling industries in East Pakistan.

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