Economic History of Pakistan from 1947 to 2020

Economic History of Pakistan in Details:

In this article we will discuss the economic history of Pakistan from 1947. I hope this article will help you in your Pakistan economic history topic and you will get major key points about economic history of Pakistan. We will discuss economic history of Pakistan from 1947 in details. If you like this please don’t forget to share this article with others:

Early Issues

Immediately after the establishment of Pakistan, the initial problems faced by govt of Pakistan were as follows:

Transfer of experts

In order to bring order to the country, it was necessary to bring Muslim officials and administrative experts from various departments across India to Karachi as soon as possible and to transfer the works and their records as soon as possible so that the new government could run from have its own system of government.

The refugee problem

Providing housing, food and adequate employment to the 8 million Muslims who made Pakistan their homeland and migrated from India was a major problem.

Evacuation of trained staff

The lack of staff to run the government's business was also a problem. This problem was created by the migrants who left Pakistan and went to India.

Attitude of the Reserve Bank of Pakistan

The Reserve Bank of India did not pay Rs. 55 crore to Pakistan despite the agreement. It was difficult to tolerate this evil for so long. Therefore, the State Bank of Pakistan came into being as soon as possible.

Exploring overseas markets

 Pakistan had emerged on the world map with a new name, so it was necessary to establish political ties with the outside world as well as business connections and credibility. Apart from Indian competition, Pakistan also faced huge difficulties in this regard. 6- Depreciation of pound

When the British devalued the pound string by 30% in 1949, a new ordeal arose for us. On the other hand, India cut off all trade with Pakistan, which made it very difficult for us to immediately find new markets for our son and other exports.

The effects of the Korean War

The Korean War pushed up raw material prices. Pakistan earned a lot of foreign exchange but the increase in foreign exchange proved to be temporary and the prices of raw materials started falling very quickly.

Measures for economic stabilization

Establishment of State Bank of Pakistan

The establishment of the State Bank of Pakistan was a great step towards the economic foundations of the country. The bank has made significant contributions to monetary reform. He immediately started performing the duties of the central bank.

Establishment of National Bank

The National Bank of Pakistan was established in 1949 to serve as an assistant in the absence of a branch of the State Bank of Pakistan in view of the growing need for banking and the need for an institution.

Establishment of Central Engineering Authority

In 1947, the total power generation was only 400,000 kW, which was far below the requirement. In view of this shortcoming, a Central Engineering Authority was set up in Karachi.

This authority assisted in the implementation of power plant and Malakand hydroelectric project at Rasool. Nowadays, Hub Portation Karachi is also helping to meet the electricity needs of the country.

Establishment of Central Anti-Corruption Office

The Central Bureau of Statistics was established in 1950. The responsibilities of this organization grew over time. Islamic Economic Conference was held in November 1949 in Karachi. An Economic Conference of all Islamic countries was convened in Karachi to discuss the joint use of resources of Islamic countries, ease of trade and various economic issues of common importance. Was discussed.

Establishment of Pakistan Refugee Relation Finance Corporation

The corporation was established in May 1948 for the purpose of resettlement of refugees under which loans were issued at an interest rate of 4.5% per annum. Until 1953 this corporation

Helped resettle 94,000 refugees.

Pakistan Security Printing Pearls was established in February 1919 in collaboration with a British company Pearls. It started with banknotes, post office coats, receipt stamps, postal envelopes, commercial bank checks, drafts and other government stationery sugar.

Establishment of Pakistan Stock Exchange Market

Through the State Bank of Pakistan, the stock market was set up to raise investment in the country and to run the market in a disciplined and orderly manner. Establishment of Pakistan Industrial Finance Corporation

• Pakistan Industrial Finance and Naati Development Corporation was established in 1949. 
• Was set up to encourage domestic industry and new industrialists in the country. Establishment of research in the Department of Scientific Industry
• The department was established in 1950 and consisted of prominent scientists, industrialists and leading government officials. He did Naat research work. In addition, it was to create a conducive environment for new inventions and discoveries and to provide financial resources for research purposes.

Establishment of Development Board

In early 1948, the Government of Pakistan for the first time set up a Development Board to guide Pakistan on the path of economic development and make full use of the existing national resources.

• Join the Colombo Plan
• The Colombo Bottom was a multi-year plan for the economic development of these Commonwealth members, beginning on June 1, 1951 and ending on June 30, 1957. Pakistan
• Joined and reaped limited economic benefits.
• Plan based on annual budget

In the early years from August 1947 to 1950, the most important aspect of planning our economy was to build annual missiles in such a way as to solve the problems that arose after independence. During all this time, in all the development works that took place, the emphasis was on short-term issues.

key points

Pakistan emerged on the world map as an independent entity on August 14, 1947.

The problems that weighed heavily on the economy in the first three years from 1947 to 1950 were: permanent staffing, influx of migrants, trained staff, lack of co-operation from the Reserve Bank of India, overseas market exploration, pounds Cost reduction and the effects of the Korean War.

In the first three years, the Government of Pakistan has taken a number of steps for economic stabilization, including the establishment of the State Bank and the National Bank of Pakistan, the establishment of the Central Engineering Authority and the Institute of Statistics, the convening of the Islamic Economic Conference, Stock Exchange, Pakistan. Manati Corporation, Industrial Research Department, Mahajran Resettlement Corporation, Establishment of Printing Pearls, Establishment of Development Board and Participation in Pakistan's Colombo Plan.

Instead of a multi-year planning scheme for economic stability and development, a plan based on annual budgets was adopted.

The state of economic growth

Although the rate of growth remained slow during the 1950s and 1960s, this period is of great economic importance to Pakistan. During this time the foundations of Pakistan's economic development were laid. The Colombo Plan and the first five-year development plan were launched and completed. Practical efforts were made to utilize foreign capital and domestic resources, which resulted in higher employment in the country. Based on fixed cost factors during this decade, the GDP in 1950 reached Rs. 1286 crore which shows an average increase of 3%. Per capita income grew an average of 4.7 percent during the decade. At the beginning of this society, the per capita income was Rs. 356 per annum and by the end of this decade it was Rs. 373 per annum.

This is the situation in key sectors of the economy.

Agriculture

In this decade, the agriculture sector has been the most important of all economic sectors. The average growth rate in this sector was 3%. The burden on the sector was heavy at the beginning of this decade. And about 60% of the gross national product came from this sector. But by the end of this decade, agriculture accounted for 50 percent of national income.

Industry Domestic industry and consumer goods industries during the 1950s and 1960s

Made a lot of progress. In 1950, industry accounted for only 81% of GDP, which rose to 12% by the end of the decade. The Naats that were composed during this decade had the following characteristics.

• They could be started with limited and medium capital.
• Their production technique was not very complicated.
• Their duration was not very long.

Foreign trade

In the first year of this decade, exports were equivalent to Rs. 256 crore and imports were equivalent to Rs. It became indispensable due to the import of heavy machinery, industrial raw materials, commodities, development equipment and medicines.

Inflation situation

First round

In terms of inflation, this decade can be divided into two parts. The first part is from 1950 to 1955. During this period, there were signs of a decline in prices, rather than a rising trend in commodity prices. The decimal number of prices in the last part of this period (55-1954) was 70.2 based on 1951-52.

Second round

Halfway through the decade, from 1955 to 1960, prices began to rise. Considering 1951 as the base year, the decimal price was 121.8 by the end of this decade, while the GDP growth was 6.5%. At the end of this decade, Rs.150 crore was obtained from Bank Daulat of Pakistan through the first Bartmoil Khasar, which increased the money supply and will also increase inflation.

Wealth distribution situation

Regardless of the ideological differences of economists regarding the distribution of wealth, it is important to note that the largest segment of the population is economically stable. In light of this principle, the situation of wealth distribution at the beginning of this decade was much worse. Emerging as a poor economy, the feudal class in Pakistan occupied a large part of the land. In the trade profession, on the other hand, a short and specific group was controlling the import and export trade in the light of their previous business experiences. Lastly, a large part of the population consisted of laborers, peasants, and those earning a fixed and limited income.

Although the economic situation has improved during this decade, only the landlords, traders and industrialists have been able to count the economic growth for which on the one hand all kinds of market competition had ended after the formation of Pakistan and on the other hand the government. Due to the generous attitude of the government, all kinds of tax exemptions increased their profits dramatically, which had two contradictory consequences. Which was detrimental to the future economy.

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