“Pakistan’s Macro Economy: Current Situation and the Way Forward”
December 26, 2019
Presentation by the Dr. Ishrat Husain,
Advisor to the Prime Minister on Institutional Reforms & Austerity
I would like to place the current economic situation in the historical context. For the first decades 1950-1990 Pakistan was among the fastest growing economies in the developing world. This achievement was remarkable because Pakistan had inherited an economy without any industrial base; had to rehabilitate and absorb 8 million refugees – almost one fourth of the total population; had to fight a war with a much bigger and stronger neighbour in 1965; lost the Eastern Wing and suffered a trauma in 1971. In the 1970s all major industries, banks, educational institutions were nationalized. In 1980s the country participated in afghan war against the Soviet Union which created some harsh social and geo political consequences. India in this same period was growing at 3 percent per annum – almost half of Pakistan’s growth rate. Per Capita income in Pakistan was much higher than that of India and incidence for poverty was much lower than that in India.
Since 1990, the tables have turned. India has surpassed Pakistan not only in per capita income, GDP growth, Human Development indicators but has become one of the fastest growing economy in the world. Bangladesh which was way behind us in all economic and social indicators in 1990 has forged ahead of us and is recording 6 to 7 percent growth rate with impressive gains in social and human development. Pakistan has become a laggard in South Asia.