Pakistan Economic Trends

1947 1958: Pakistan tried to model itself on the post-World War II social welfare state. However, due to inappropriate political and administrative institutions, absence of civil society organisations, finances and a deeply entrenched feudal system, the state was not able to deliver. The demand-supply gap in housing, health, education and employment continued to increase as a result. 1958 1968: During this decade, Pakistan was ruled by the military. Industrialization was promoted aggressively along with Green Revolution technologies. As a result, a cash economy replaced barter in the rural areas. Middlemen emerged to service the needs of small producers in the agricultural sector and this weakened the feudal system. In the urban areas, an informal sector developed to service the demand-supply gap in housing and physical and social infrastructure. 1968 1977: Nationalization of industry and health and education was carried out by the elected government which replaced military rule. The state invested heavily in industry. The rights of squatters on government land were recognized and a process of regularization of informal settlements was introduced. 1977 1987: Another period of military dictatorship, ad-hoc policy making, Islamisation and repression. This gave birth to a number of civil society organizations for human rights, womens movements, community organizations and informal sector interest groups whose main function was to present their claims and guard their gains. All this has led to the weakening of feudal institutions and the emergence of a capitalist economy. It has also led to greater openness and transparency in public affairs in spite of the repressive nature of the state. This period also saw the break up of large feudal holdings and the gradual replacement of crop-sharing by cash transactions between peasants and landlords. 1987 2002: Structural adjustment and globalization and the failure of Pakistan to respond to them positively has resulted in inflation, recession and increasing unemployment. It has also resulted in the emergence of a First World economy with a Third World wage structure. This has increased poverty and aspirations as well. It has led to privatization and or the removal of subsidies in education, health and urban services (increasing the rich-poor divide) and an increase in the migration of educated people from Pakistan to the First World.