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How to Improve the Economy of Pakistan?

Pakistan is an agrarian country.70% of its economy is based on agriculture.but only agriculture is not enough for stable economy.Industrialization and mineral resources also play a vital role in building country"s economy,so they also need our special attention and they are in immense need of improvement.

The agriculture sector"s production can be improved by introducing mechanization and making it common for farmers.Most of the farmers in Pakistan are poor and unable to adopt modern techniques.So they should be provided with (easy to return ) loans.The farmer should be educated that they must only use the seeds of good quality,they must use appropriate fertilizers in right quantities.The farmer should be made aware that they should practice collective farming instead of farming on small fragments of land,by doing this they would be able to set up tube wells and buy tractors (of their own)collectively.



The government should calculate the requirements of the people and then export the rest of rice,cotton,sugar etc.so that it does not have to import the same things at double costs later.



The biggest worrying factor is the exponential growth of domestic and external debt which has risen to Rs 14.8 trillion. The IMF has estimated a budget deficit between 7 and 7.5% of the the GDP in the upcoming fiscal year. That is 3 % higher than the target deficit and does not include the ‘quasi fiscal’ deficit caused by losses in public enterprises, nor the ‘floating debt’ that creates government liabilities. Both of which are relatively high for Pakistan.

Future Expectation

Pakistan is still a low income country and it would require at least next 14 years of 7 percent average annual GDP growth to double its per-capita income to around $ 2000 (official exchange rate conversion). This growth rate should also be able to reduce the incidence of poverty by half and meet the Millennium Development Goal.

The caretaker setup can only serve to delay policy amends. We are looking at inaction or misaction, to channel funds in short term projects that can earn political parties votes with the election just around the corner. Projects that can actually help Pakistan out of the economic crisis like the IP pipeline and Gwadar port have been deemed controversial because of the precarious balance we need to maintain with the West and our homeland security dilemma. But still in vulnerable stages, if pursued these projects can push us onto the path of recovery.

With the exchange rate spiraling downwards, we are looking at a situation with Capital flight, inflows are drying up and external liabilities setting in.

Leaving that aside my own reckoning is that if we are able to fulfill some critical preconditions it is possible to reach this goal of doubling the per-capita income by 2020 and reducing the poverty by half by 2015. What are these preconditions? In my view the main preconditions are:

  • favorable global economic conditions
  • successful integration of Pakistan into the global economy.
  • Pursuit of sound, credible and consistent economic policies.
  • strong institutional delivery and governance framework.
  • investment in physical infrastructure and human development.
  • Continued political stability and peaceful security conditions.

It is usually believed that economic growth can take place only in the presence of political stability, but the Pakistani case contradicts conventional wisdom. In order to explain these paradoxes and contradictions, this article attempts to address the following questions:

  • How can a country that has suffered from political volatility and instability for such a long period achieve high economic growth?
  • Have external influences, particularly the United States, played a constructive role?
  • Have periods characterized by stable authoritarian regimes in Pakistan provided the means for long term economic performance?