2. Understanding Pakistan’s Structural
Transformation
Geography has Changed
• Pakistan in 2020 is less than half of the country it was in 1947 after
the separation of East Pakistan (Bangladesh) from West Pakistan
(Pakistan).
• In 1947 total population was 75 million in which 42 million lived in
East Pakistan and 33 million lived in West Pakistan.
• Thus, 56% of the total population lived in East Pakistan and (44%) of
the population lived in west Pakistan at the time of independence in
1947.
3. Sectors of Pakistan’s Economy
• The primary sector
• The secondary sector
• The tertiary sector
4. Shift from Agriculture to Services Sector
• In 1947, Pakistan was an agriculture country as agriculture
contributed to 53 % in GDP of Pakistan. Manufacturing sector had
7.8% share while retail trade had 11.9% share.
• More than 65% labor worked in agriculture and almost all exports
(99.2%) were primary agriculture products like jute and tea, which
were produced from (East) Pakistan.
5.
6. Urbanization
• According to 1951 census, only 17% population in Pakistan lived in urban
areas.
• Now 61.1% of population lives in urban areas and towns. In Punjab 70%
population lives in urban areas.
• This shift has major repercussions for economy, society and political
process in the country.
Source: Pakistan Bureau of Statistics, 2023
13. years
Domestic general government health
expenditure (% of GDP)
Government expenditure on
education, total (% of GDP)
2000 0.96825689 1.837820053
2001 0.91270649 ..
2002 1.01486242 ..
2003 0.57917517 ..
2004 0.61747396 1.767590046
2005 0.57205623 2.049720049
2006 0.48642762 2.395509958
2007 0.48821454 2.635270119
2008 0.42355876 2.746229887
2009 0.50744211 2.59078002
2010 0.52213751 2.286870003
2011 0.43720981 2.221750021
2012 0.61004923 2.13628006
2013 0.62996411 2.493439913
2014 0.59680567 2.465929985
2015 0.67638048 2.650019884
2016 0.70145196 2.417211771
2017 0.91277039 2.136656761
2018 0.93591465 2.332169533
2019 0.94301245 2.21491766
2020 1.03996059 2.057182312
2021 .. 1.687461257
2022 .. 1.974449039
Source: World Development Indicators
14. Foreign aid and domestic saving rate
• Too much concentration on foreign aid mobilization led to relative
neglect of domestic savings effort.
• Led to problem of debt an our economy is still facing.
15. Continued...
Widening regional disparities
• The sharp acceleration of growth in West Pakistan during the
60s causes the regional disparity in incomes with East Pakistan.
• In 1970, West Pakistan’s per capita GDP was at least 60 %
higher than that of East Pakistan
• Increase in income inequality and functional inequality
16. The bad luck year 1971-77
Major issues
• Nationalization
• The process of land redistribution was criticized for being slow and for not
adequately benefiting those it was intended to help.
• Bhutto's government introduced measures such as price controls and
subsidies on essential goods. While intended to address inflation and
benefit consumers, these measures often led to shortages, and a lack of
incentives for producers.
• Decline in the growth rate, balance of payments issues, and a rising public
debt.
• Political instability
17. Continued...
• The economic loss of east Pakistan
• The devaluation of currency was 120 percent in 1972
• 1973 recession worldwide affected Pakistan's exports
• Flood in 1973, 74 and 76 along with attack of pest affected exports of
Pakistan
18. The Second Military Government 1977-88
• Economic growth averaged 6.6 per annum. During 1977-83,
• GNP growth rate reached an annual record of 7.6 per annum.
• Largely driven by a rapid rise in worker remittances reached its peak
in FY83 reaching up to 10 of GDP
• Between1983-8 GNP growth rate fell sharply to 4.9 per annum
• Interest payments on external debt gathered
momentum,
• Worker remittances started declining
• Most of the remittances were directed to
consumption ?
19. Continued...
• The agricultural growth increased to 4 in 1977-88 from 2 in
1972-77.
• Wheat and cotton production rose
• Domestic fertilizer production of nitrogenous fertilizer nearly
tripled during the first half of 80s.
• Expansion was mainly due to the past investment and
exogenous technical change.
• Agricultural growth also benefited from strong growth in live
stock grew annually by 5.5 in the 80s
• Introduction of a flexible exchange rate policy after 1982
20. • Between 1988 and 1997 Pakistan has four general elections, and
none of the government completed their full term.
21. Lifestyle, liberalism, Dictatorship, War and
Subjugation: 1999-2007
Savings and investments
• Gross domestic product Increased from $60billion to $170 billion
• Domestic and foreign investments
• Increased from $60 billion to $170billion 3.Exports
• Tripled form $7billion to $22 billion 4.International trade
• Increased from $20 billion to $60 billion
22. Continued..
Human capital Development
• Pakistan's HDI grew at an average rate of 2.7% per year
• Education
• The budget increased from 500 million to 28 billion Number of
universities increased
• Health, Life expectancy increased
• Poverty declined
