Pakistan’s Economy and Regional Challenges

Pakistan was one of the top 10 fastest growing developing countries between 1960 and 1990 recording an annual average growth rate of 6 per cent. The structure of the economy was also transformed during this period with the share of agriculture coming down from 50 per cent to 20 per cent. The subsequent 25 years have, however, brought about a significant decline in growth rates and in more recent seven years, it has lagged behind other South Asian countries. A combination of political instability and disruption of evolving democratic process, lack of continuity in policies and poor governance have contributed to this outcome. Pakistan has also not utilized its geographic location to take advantage of intra-regional trade and investment. Many promising opportunities were lost due to lingering tension with India. The future potential can only be realized if Pakistan is able to position itself for meeting the future challenges of integration into the regional and global economy, reaping demographic dividends because of youthful population and moving up the ladder of technology. The realization of these goals will depend upon sound macroeconomic policies, strong institutional and governance framework, investment in infrastructure and human development and political stability.