Pakistan Studies Notes for class 12 Chapter 9 Economic Planning and Development of the Islamic Republic of Pakistan.
Pakistan studies notes for class 12 Chapter 9 Economic Planning and Development of the Islamic Republic Short Questions/Answers
1) Give Prof. Lewis’s definition of fiscal planning.
Prof. Lewis Lorwin has defined planning in the following words:
“Economic planning is a scheme of an economic organization… For the purpose of utilizing all available resources to achieve maximum satisfaction of people’s needs within a given time.”
2) What was Pakistan’s condition at the time of Partition in respect of industrial development?
Pakistan started with an extremely weak industrial base after independence. At the time of partition, there were 921 big industrial units in India. Out of these only 34 came to the share of Pakistan and this was unfair because 20 percent of the total Indian population lived in Pakistan. The employment capacity of the industries, which came to the share of Pakistan, was even poorer. Indian industrial units had a total capacity of employing 11, 37,150 persons daily while Pakistan’s 34 units had the capacity of employing only 26,400 persons daily, i.e. only 2.32 percent of the total.
3) Define ‘Trade’ and ‘Commerce’.
The development of trade and commerce is a precondition for overall progress and development of a country. The term ‘trade’ is applied to “the process in which countries buy and sell goods to each other.” The term is also applied to some special business like cotton trade etc. While ‘Commerce’ literally means ‘buying and selling of goods and services’.
4) Write a short note on E -Commerce.
E-commerce is a comparatively new concept in trading which is shaping the future of business around the globe. It is the latest innovation in traditional commerce techniques.
E-Commerce is generally taken as “the buying and selling of goods and services through networks, i.e. Internet and Email etc.” With the passage of time, plastic money (i.e. credit cards) is replacing currency notes. Internet and Credit Cards are the instruments through which cross-border-trade has become possible and the barriers that interposed between the business transactions have been removed.
5) Define IT.
Information technology is a growing and rising industry that has a lot of potential. Information technology (IT) is defined as “the application of computers and telecommunications equipment to store, retrieve, transmit, and manipulate data, often in the context of a business or other enterprise.” It has become a very familiar term for the people working in the field of computers as well as the information and education professionals. Therefore, during the last two decades of the 20th century, computers have developed into a powerful medium for processing, accessing, information, and manipulation.
6) Enumerate the kinds of natural resources.
Natural resources play a key role in the development of a country. There are different kinds of natural resources such as Energy, minerals, land, wood, livestock, forests, coal, petroleum, etc.
7) What is meant by HDI? What is Pakistan’s status according to HDI?
HDI is a new concept, it was created to emphasize that people and their capabilities should be the ultimate criteria for assessing the development of a country. HDI stands for “Human Development Index.” HDI covered 189 countries of the world during the reporting year 2003. Pakistan falls on 144th position according to this report. In the preceding year, Pakistan was 138th in order, which means that more than 76 percent of countries of the world are placed in better standards of education, health, and general quality of life as compared to Pakistan.
8) What impact the policy of nationalization had on our national economy?
The Nationalization process in Pakistan was a Policy Measure Programme in the economic history of Pakistan. The policy of nationalization had disastrous effects on the national economy of Pakistan, e.g.:
- It caused an alarm to the investors, investment came to a standstill.
- The industrial machinery was devastated which decreased production.
- The labourers took to protests due to low industrial output dependence on foreign aid increased.
- Moreover, the feeble economy of the country kept crumbling under the colossal burden of amounts to be spent on debt servicing and the payment of heavy amounts as interest.
9) What is HRD? What is its importance?
HRD stands for “Human Resource Development,” which is the framework for helping employees to develop their personal and organizational skills, knowledge, and abilities. In other words, the policymakers started realizing that the objectives of increasing prosperous society cannot be achieved unless human resources are developed on a top priority basis. However, education is the paramount factor in the development of human resources.
10) Signify the importance of the conservation of resources by quoting an example of the Prophet Muhammad.
Natural resources are the common heritage of humanity and economic experts of the modern age predict that the Third Great War will be fought for water. The Holy Prophet Muhammad S.A.W explained the importance of the conservation of resources and said that one should not waste water even if he is making ablution (wuzoo) from a canal full of water. The Prophet Peace Be Upon Him actually wanted to impress us that the natural resources are nobody’s personal property; nobody has the right to misuse them. The only course open for a grateful man is to take the bare minimum share for him or herself from the dainties of Allah and leave the rest for the rest of humanity.
Long Question/ Answers
1) Why is planning essential for development?
Planning is a technique for achieving certain predetermined goals laid down by a central planning authority. Prof. Lewis Lorwin has defined planning as:
“Economic Planning is a scheme of an economic organization…… for the purpose of utilizing all available resources to achieve maximum satisfaction of people’s needs within a given time.”
Requirement of Economic Planning for Development:
Economic Planning is essential for the development of the economy in any state. The purpose of economic planning is that the people of a country should be provided with many opportunities to lead a happy, prosperous, and contented life. The reasons for economic planning are:
1. The increase of National Income:
Economic planning is required to enhance the national income of a country.
2. Better Standards of Living:
Economic planning is required in order to improve the better standards of living by increasing per capita income level.
3. Provision of New Job Opportunities:
Planning is required to meet the issue of unemployment and to create new job opportunities.
4. Stabilization of Prices:
Planning in developing countries is more necessary to check the inadequacies of the market in order to stabilize the prices of the goods.
5. Self-sufficiency of Food:
Planning is demanded in order to achieve the self-sufficiency of food items.
6. Reduction of Economic Disparities:
Economic inequality has always been an important issue for economic growth. Economic planning should be prescribed in order to prevent the growing social and political disparities among different classes of the people.
7. Reduction of Poverty:
In order to break the vicious circle of poverty in underdevelopment countries and to speed up the process of their economic development, planning is required. Therefore, the Government should plan for accelerated economic growth.
8. Check of Foreign Exchange Earning:
The excessive foreign exchange reserves have a positive impact on increasing output. Economic planning is important to acquire a better balance of payment by improving foreign exchange earning capacity.
9. Investment Behaviour:
Planning is essential to reorient the investment behaviour and to bring in conformity with the national interests instead of the narrow personal interests of the investors.
10. Protection of Labour Rights:
The economic planning is essential for the protection of the fundamental rights of the labour force. The policymakers should make plans for the improvement of their working conditions and wages.
Economic planning plays an important role in maintaining the growth and quality of life for both commercial ventures and residents. The organizational structure in which the planning Process operates is important because it makes possible the utilization of all available resources and helps to reduce the wastage of valuable resources. Thus, it can be concluded that Economic planning increases the overall efficiency.
2) Signify the importance of agriculture in our national economy.
Pakistan is an agrarian economy. In agriculture, Pakistan has a strong comparative advantage in the production and exports of a number of agricultural products because of its climate and location. Pakistan is one of the world’s top five producers of cotton, rice, and milk and one of the top ten for wheat and sugar cane. Its production of fruits and vegetables is also significant.
Importance of Agriculture in Pakistan’s Economy:
The importance of agriculture in Pakistan’s economic structure is:
1. Increasing GNP of the Economy:
The agricultural sector of Pakistan has made a significant contribution to its GNP as thirty-two percent of Pakistan’s GNP comes from the agriculture sector.
2. Foreign Exchange Earner:
The agricultural area is the major source of foreign exchange incomes in Pakistan. Pakistan fulfills 70-80 percent foreign exchange requirements from the earnings generated from the agriculture sector.
3. Labour Force:
About 61% of the population is living in more than 50,000 villages in Pakistan. This sector is the major source for supply of labour force to the industrial sector due to farm mechanization and disguised unemployment. Thirty-nine percent of Pakistan’s total population is employed as a labour force in the agriculture sector. In this way, an increase in the income of the people leads to an improved living standard.
4. Major Source of Employment:
Agriculture sector provides employment to a major portion of our labour force because about seventy-nine percent of our total population depends directly or indirectly upon agriculture. Likewise, about 30 percent of the population which depends on agriculture is semi-employed.
5. Supply of Raw Material:
Agricultural sector provides not only food but also provides cotton, sugarcane, tobacco, rice, oil-seed, meat and milk to various agro-based, small scale and large-scale industries as a raw material.
6. Development of Industrial Sector
Pakistan is an agriculture country but even agriculture has to depend upon industries for its development in many ways such as the supply of fertilizers, pesticides, herbicides, implements and other machinery to process agriculture production.
Agriculture has contributed to Pakistan’s development in various ways. It contributes significantly to other sectors and is the main source of growth of the economy. Importance of this sector is manifold as it feeds people, provides the raw material for industry and is the base of our foreign trade. The government should announce policies, which raise the productivity of agriculture in order to increase economic development.
3) Give the background of industrial development in Pakistan and signify the importance of industries in the development of the national economy.
Industrialization is essential for rapid development of the country. The Pakistan industry sector was very weak at the time of partition. The industrial production was very low because the British had concentrated their entire industrial establishment in the cities, which were the part of India. Therefore, Pakistan faced many problems in the development of the industrial sector. These difficulties were mainly due to the wrong and biased policy of the British government in the subcontinent. The British government deliberately ignored the industrial development of Muslim majority areas. Thus at the time of partition, Pakistan received only 34 industrial units out of 921 units. The outcome of this partition was that Pakistan had to take a fresh start to build up its industries on stable foundations. The British and India tried hard to destroy the economy of the newly born state of Pakistan but could not succeed. The industrial sector received a little boost from 1960 to 1984 and reached 20% in the national products, which was the second largest sector after agriculture, in the national economy.
The importance of Industries in National Development:
Since the Industrial Revolution, industrialization has been regarded as essential for a country’s rapid economic development. The countries that solely rely on agriculture have remained poor and underdeveloped, whereas the nations that gave priority to rapid industry growth to industry achieved high rates of development. Pakistan is an agricultural country but on the other hand, we must pay due consideration to our industrial sector. Industrial development is very significant for Pakistan on the following grounds:
1. Agriculture Development:
The Industrial Sector is also important and helpful in agricultural development because modern agriculture cannot be carried out without the help of mechanical equipment. Modernization of agriculture demands abundant supply of agriculture implements, pesticides, insecticides and fertilizers, which needs strong industrial support.
2. Agro-based Industry:
Agro-based Industry has two dimensions, i.e. industry based on agriculture produce and industry, which provides basic infrastructure for the agriculture sector, i.e. tractor, tube well and other agriculture equipment. In order to earn more foreign exchange, it is necessary that our agricultural produce is not exported in raw form but in processed form. Processing requires an agro-based industrial setup.
3. Opportunities for Employment:
Establishment of industries means the massive chances for employment. If more industries would develop in the country, it will be able to provide more chances to a greater number of people. Thus, industries are the source of elimination of unemployment from the country.
4. Import of Raw and Processed Goods:
Pakistan imports large quantities of raw and processed goods in order to meet the demands of the ever-expanding population as well as for keeping a balance between exports and imports. Therefore, it is necessary to establish factories to increase exports and decrease imports.
5. Better standards of life:
Unemployment brings many troubles for the people of a country. When the number of industries would increase, it would eliminate unemployment and poverty from the country and ultimately raise the standards of people’s life.
6. Establishment of Cottage Industries:
It is not necessary that we should establish high-cost heavy industries but we can also develop our industrial sector by establishing cottage industries. Cottage industries would help us to consume millions of unemployed people especially women.
It can be concluded that the industry of the country is essential for economic development because Pakistan cannot totally depend on agriculture. The industry provides more jobs in a small area. It fulfills our needs by producing various industrial goods and industrial raw material, and supplying new products for marketing. Therefore, the establishment of industries should be the top priority of the government of Pakistan.
4) What is meant by ‘Trade’ and ‘Commerce’? Also, signifies the importance of E-Commerce.
The term “Trade” means “the process of buying and selling or exchanging goods within a country or between countries.” In other words, trade is applied to the process in which countries buy and sell goods to each other. The term is also applied to some special business like ‘cotton trade.’
Commerce is a broad term, which literally means “buying and selling of goods and services.” It can also be defined as a component of the business, which includes all activities, functions, and institutions involved in transferring goods from producers to consumers. International trade is the exchange of goods and services across national borders. In most countries, it represents a significant part of GDP. While international trade has been present throughout much of history, its economic, social, and political importance have increased in recent centuries, mainly because of Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing. By rating a level of economic progress, a particular county has achieved in the field of trade and commerce.
The Internet continues to change every aspect of our lives and changes the way consumers make their purchase decisions. E-Commerce is comparatively a new concept in trading which is shaping the future of business around the globe. E-Commerce implies the system of “online trading, buying, and selling of goods and services through different networks, i.e. email, internet etc.”
Importance of E-Commerce:
Business trading is achieving popularity through the Internet around the globe since the mid-90s. However, things have taken a strong momentum in the recent few years. Local and global entrepreneurs from every field have diverted a large part of their focus on building E-Commerce portals. Electronic means of commerce has many advantages i.e.
1. Wider choice:
With the help of a well-developed computer networking system, business units can operate at the national as well as global level. The customers thus have a wider choice of products and services. The executives also get a wider market for their products and services.
E-commerce is one of the cheapest means of doing business, as it has made it possible to reduce the cost of promotion of products and services. There is no time barrier in selling the products. One can log on to the internet even at midnight and can sell the products at a single click of a mouse.
3. Fast in Speed:
E-commerce is faster in speed as compared to usual trade. People can manage big business deals in just a matter of minutes. In E-commerce, business transactions take far less time as compared to the normal process of buying and selling. This is because the producers cut short the distribution channel and supply products and services directly to consumers.
4. Low Chance of Error:
E-commerce is mainly through the internet. It depends on machines, not on human memory. That is why there are fewer chances of human error in E-Commerce.
5. Cheaper means of Trading:
E-Commerce is more effective, active, and efficient than usual means of trading. It is unusual for customers to travel long distances to reach their preferred physical store. E-Commerce allows them to visit the same store virtually, with a few clicks.
6. Diversified means of trading:
Interesting and modern methods of trading can be adopted in E-Commerce.
7. Online retailing:
Online shopping or online retailing is a form of electronic commerce, which allows consumers to buy goods or services from a seller over the Internet, and to the whole world using a web browser. Alternative names are e-shop, e-store, Internet shop, web-shop, web-store, online store, and virtual store.
8. Access to the international market:
Through E-Commerce the businessperson can access the international market without being entangled in the process of visa obtaining etc. it is more convenient and easy for a businessperson to access the international market.
It is essential for organizations to understand E-Commerce from a broad perspective. They have to learn the basics of the underlying technology, to assess the impact of the technology on business processes, to foresee how the Internet may shape the course of the future in our everyday life and business word, and to enjoy the benefits of electronic E-Commerce in their business practices.
5. What is the importance of information technology in the modern world?
Information technology is a growing and rising industry that has a lot of potential. It has become a very familiar term for the people working in the field of computers as well as the information and education professionals. During the last two decades of the 20th century, personal computers have developed into a powerful medium for processing, accessing, information, and manipulation. It is an industry, which gathers the procedure of computer hardware, software, and networking. Thus, Information Technology (IT) is defined as, “the application of computers and telecommunications equipment to retrieve, transmit, store, and manipulate data, often in the context of a business or other enterprise.”
Importance of Information Technology:
The impact of Information Technology has been enormous on various domains like business, education, medicine etc. Computers and the information they process and store have transformed every aspect of society. With the introduction of computers, the business world was changed forever. Using computers and software, businesses use information technology to ensure that their departments run smoothly. They use information technology in a number of different departments including human resources, finance, manufacturing, and security. Information technology has many advantages, which shows its importance in the modern world. Some of these advantages are:
1. New Vision:
Information Technology has given us a new vision about the future.
2. Tools for Literate and Civilized Society:
It has equipped us with the tools and techniques, which can be applied to make the society literate and civilized and can expand the frontiers of knowledge.
With the help of information technology, communication has also become cheaper, quicker, and more efficient. The internet has also opened up face-to-face direct communication from different parts of the world.
Information technology has helped to computerize the business process to make them extremely cost-effective money making machines. This, in turn, increases productivity, which ultimately gives rise to profits that mean better pay and less strenuous working conditions.
5. Creation of new jobs:
Probably the best advantage of information technology is the creation of new and interesting jobs. Computer programmers, Systems analyzers, Hardware and Software developers, and Web designers are just some of the many new employment opportunities created with the help of IT.
6. Reduction of the cultural gap:
Information technology has helped to bridge the cultural gap by helping people from different cultures to communicate with one another and allow for the exchange of views and ideas, thus increasing awareness and reducing prejudice.
Information technology today permits us to gather, handle, and interconnect a gigantic volume of information. Moreover, its sustainable development improves its competence, capability swiftness, and precisions of any components it provides. Information technology has achieved a lot in this present era and will continue to evolve. It is more than a combination of computers and communication technology. It is indeed true to say that information technology has successfully infiltrated human existence, occupying the biggest part of every lifestyle.
6. Highlight the strategies indicated in Pakistan 1st five-year plan, its targets achievement and failures.
Planning is considered an essential means of guiding and developing the process of economic development. Pakistan has started its planning for economic development soon after its independence. The Five-Year Plans for the National Economy of Pakistan were the series of nationwide centralized economic plans and targets as part of the economic development initiatives in Pakistan. Prof. Lewis Lorwin has defined planning in the following words:
“Economic planning is a scheme of an economic organization… For the purpose of utilizing all available resources to achieve maximum satisfaction of people’s needs within a given time.”
First Five Year Plan:
After the division of the subcontinent, Pakistan’s first Prime Minister Liaquat Ali Khan approved the first five-year plans in 1950 for the period of 1950-55. The plan was conceived by the Ministry of Finance and was studied and developed by the Economic Coordination Committee (ECC). At the time of partition of India, Pakistan’s systems of production, transportation, trade, and consumption faced a very low standard of living of the people, with little opportunity for education, or economic advancement in the country. The industries and agriculture development were among the lowest in the world. The strategies, targets, achievements, and failures of this plan were:
The development of the rural and agriculture sectors was placed on top priority and a balanced approach between the agriculture and industrial sector was stressed. Twenty-nine percent of the total expenditure during the plan was earmarked for the development of water and power resources. The major part of the expenditure required for the development schemes was to be generated from indigenous resources.
The development targets set for the First Five Year Plan were:
- To improve the standard of living of the people.
- To improve the balance of payments of the country by increasing exports and by the production of substitutes for imports.
- To increase the job opportunities and reduce unemployment in the country.
- To make steady progress in providing social services, housing, education, health, and social welfare.
- To increase rapidly the rate of development, especially in East Pakistan and other relatively less developed areas.
Failures and Successes:
This programme was built entirely in the absence of much essential information and basic statistics. In practice, this plan was not implemented because of its enormous size that lacked the physical and personal assistance. The shortage of technical knowledge also devastated the programme. The Awami League’s government also had a shortage of foreign exchange to execute the plan and was unable to find outside assistance to fulfill its commitment to the first five-year plans. The failures of the First Five Year Plan were as follows:
- The national income was increased by 11 percent while the target was set at 15 percent.
- Increase in annual per capita income was recorded at 1.6 as against the anticipated target of 7 percent.
- One million acres of barren land was reclaimed for cultivation against the target set at 1.5 million acres.
- No mentionable success was achieved in the field of mineral development except in the field of natural gas.
- The most disappointing feature of the plan was the failure in the key agriculture sector. No definite weight age was given to the objective of the plan.
- Financial resources available for development fell short of expectations.
- Planning machinery was not effective.
- The performance was less encouraging in the transport sector.
Achievements of the First Five Year Plan:
The achievements of the First Five Year Plan were:
- Literacy rate declined from 18% to 15%.
- New industries were established.
- A commendable improvement was made in railway and transport sectors.
Liaquat Ali Khan devised the First Five Year Plan after the independence of Pakistan. However, the plan did not receive formal approval from the government until 1957 and never received full support from the government. It failed to highlight the importance of 5 years planning to the government as well as the public. Although the plan has many objectives for the betterment of the people of Pakistan but it could not achieve many of its objectives due to uncertain information and basic statistics.
7. Describe importance of preservation and development of natural resources.
Resources are the essential input to the economic process. It is defined as “means of comfort or help; something one turns to when one is in need or difficulty.” Natural resources are naturally occurring substances that are considered valuable in their relatively unmodified form, which include soil, timber, oil, minerals, air, water, wind energy, iron, and coal and other goods taken from the Earth. The natural resources of a nation often determine its wealth and status in the world economic system, by determining its political influence.
The natural resources are not the only factor in determining the level of its development rather the exploitation of natural resources and their usefulness also depends on the efforts of human beings. Thus, in this way, natural resources and human resources are interconnected, which play an important role in the progress of a country.
Importance of Natural Resources:
Natural resources play a key role in the development of a country. However, Pakistan is a backward country on the basis of evaluation on explored mineral resources, because due attention was not paid to the exploration of the natural resources in the past. There was only one percent of the national income, which was earmarked for mineral development and research. Pakistan has not yet been able to explore and exploit its mineral wealth properly.
Conservation of Resources:
Quaid-e-Azam once said that “Providence has endowed Pakistan with abundant resources; it was for the people now to explore and exploit these resources to their benefit. This was not an easy task; it demanded honesty and tireless labour.”
Economical and modest use of available resources and protecting these resources from going waste is a matter, which is less important than exploration itself. Therefore, the term “Conservation of Resources” is used for the preservation of resources, which aims at protecting natural resources from waste and loss.
Importance of Conservation of Natural resources:
Natural resources, both renewable and non-renewable are a part of the real wealth of nations. Human population is growing day by day, and with this, available resources are falling short of human needs. Natural resources are the common heritage of humanity and economic experts of the modern age predict that the Third Great War will be fought for water. Prophet Muhammad S.A.W said that one should not waste water even if he is making ablution (wuzoo) from a canal full of water. The Prophet Peace Be Upon Him actually wanted to impress us that the natural resources are nobody’s personal property; nobody has the right to misuse them. The only course open for a grateful man is to take the bare minimum share for him or herself from the dainties of Allah and leave the rest for the rest of humanity.
Natural resources play a significant role in the country’s economic development as they contribute towards fiscal revenue, income, and poverty reduction. The sectors related to natural resources provide jobs and are often the basis of livelihoods in poor communities. However, the growing population and increasing level of resources consumption are degrading and depleting the Natural Resources. Therefore, the government should put such policies, which ensures the contribution of resources and maximize the value of natural resources to the long-term economic development of nations.
8) Write a brief note on “Education and Health for all”.
Human development is a well-being concept within a field of international development. It involves studies of the human condition with its core being the capability approach. People are the real wealth of nations. The basic goal of development is to create an environment that enables people to enjoy a long, healthy, creative life. Human Development Report for the year 2000 has defined Human Development as “the process of improving human capabilities for enhancing the production of commodities, most desired by human beings.” The report stated that good health, education, comfortable environment and the freedom of thought and action are considered the basic factors of human development.
Importance of Education and Health for All:
Education for All (EFA) is a global movement led by UNESCO (United Nation Educational, Scientific and Cultural Organization), aiming to meet the learning needs of all children, youth and adults by 2015 whole Health for All means that health is to be brought within reach of everyone in a given country. In addition, “health” is a personal state of wellbeing that enables a person to lead a socially and economically productive life. In this regard, WHO and UNESCO have been mandated to lead the movement and coordinate the international efforts to reach Education and Health for All. The adoption of Health for All lays the foundations of a healthy nation of the future and by educating people, an action can be spur which expands the progress with the passage of time.
Human Development Index (HDI):
HDI is a new concept, which became popular through the efforts of the United Nations Organization. It stands for the Human Development Index (HDI). The United Nations Organization has been publishing HDI based on yearly progress made by all countries of the World on three grounds.
1. Level of health and average life expectancy.
2. Level of literacy (quality and quantity of the level of education acquired by the people)
3. Good standards of living (measured based on annual per capita income of the people.)
HDI covered 189 countries of the world during the reporting year 2003. Pakistan falls on 144th position according to this report. In the preceding year, Pakistan was 138th in order. This means that more than 76 percent of countries of the world are placed in better standards of education, health, and general quality of life, as compared to Pakistan. There is a desperate need to raise both health and education standards in Pakistan including its availability.
9) Give a brief account of the Planning of Economics in Pakistan.
Economic planning is being considered as a useful tool for alleviating the problems of unemployment, poverty, economic inequality, regional imbalances, and a number of socio-economic backwardness in the economy. Therefore, the process of economic planning in Pakistan started towards the beginning of the sixth decade of the twentieth century. First Five Year plan was published in May 1956. Seven other Plans were launched successively. The Five-Year Plans for the National Economy of Pakistan were the series of nationwide centralized economic plans and targets as part of the economic development initiatives in Pakistan.
Transformation in Economic Planning Strategies:
Pakistan’s development strategies have undergone a continuous process of transformation. In the six decades, industrial development was the top priority. This policy was successful in boosting the pace of industrial development but the gap between the incomes reached an alarming level. Another result of this policy was the neglect of the agriculture sector, which forms the backbone of our economy.
Change in Development Strategy:
During the seventh decade (after 1960), the strategy was changed. The agriculture sector was given due importance and foreign monetary support in the shape of aid and loans, which were considered essential for the development of the national economy. Apparently, this policy proved successful and the country was able to achieve a 7 percent annual growth rate, but it brought certain problems in its wake. The gap between the rich and the poor was further widened. The dependence on foreign aid was increased and industries set up during this period were only suitable for the production of consumer’s goods. The balance of payment was disturbed due to the increased imports bill and lower exports level. Thus, the disparities between East and West Pakistan reached an alarming level which ultimately resulted in the separation of East Pakistan.
Redefined Policy during the Eighth Decade:
During the eighth decade, the policy was again redefined with a view to make the process of development more equitable. To achieve this objective, 32 big industrial units were nationalized; other smaller industrial units were also nationalized gradually. The policy of nationalization caused an alarm to the investors, investment came to a standstill, industrial machinery was devastated, production decreased, and the labourers took to protests due to low industrial output. In the following years, the feeble economy of the country kept crumbling under the burden of debt servicing and the payment of heavy amounts as interest.
Nationalization to Denationalization:
The nation was badly taken into the vicious circle of poverty. During the last years of the eighth decade, the policy of nationalization was again given up and the process of denationalization started, new incentives were provided to private investors. The policymakers tried to hit a balance between industrial and agricultural growth.
New defining Policies of Economic Development:
The new fiscal policy aimed at enhancing dependence on internal savings instead of foreign aid. Social services were expanded and HRD (Human Resource Development) for the first time emerged as a guiding principle of economic policies. In other words, the policymakers started realizing that the objectives of increasing a prosperous society cannot be achieved unless human resources are developed on a top priority basis. Education is regarded as the paramount factor in the development of human resources.
Pakistan’s Economic Planning went through a continuous transforming process. The Five Year economic plans 1955-98 differed from each other in volume, strategy, and priority structure but they were directed towards achieving almost common objectives. However, practically, none of the objectives were achieved. The economic set up of the country was left to lip services like the other departments of the country. Therefore, it is needed to look at the economic strategies carefully to provide opportunities for learning, to increase the potential of communities by linking them in networks and to ensure the fair competition in trade and investment for the economic development of Pakistan.