Pakistan's growth experience 1947-2007

Ishrat Hussain, Institute of Business Administration, Karachi, Pakistan

Abstract

Pakistan's growth experience over the past sixty years is both impressive and disappointing. It is impressive because rapid growth rate has resulted in a quadrupling of per capita incomes and reduction in poverty levels by one half despite fairly high population growth. Structural changes have transformed a predominantly agrarian economy to a more diversified production structure. Manufactures account for 80 percent of the country's exports. But there is a sense of disappointment too. Social indicators are among the worst in developing countries. Pakistan ranks 134th among 177 countries in Human Development Index. Income Inequalities, Rural Urban disparities and Gender differentials have worsened over time. Pakistan has lagged behind East Asian Countries and more recently India is so far as integration into the world economy is concerned. Global Competitiveness Report ranks Pakistan 92nd while India's rank is 48th This paper attempts to shed light on the determinants and sources of long term growth of Pakistan, the impact of growth on poverty and inequality and then offers some suggestions for sustaining the growth momentum in the future. The paper is divided into five sections. Section-I present the growth accounting framework. Section-II documents Pakistan's long term growth record and empirical evidence on the determinants of growth in Pakistan. Section-III summarizes the various studies on the sources of growth in Pakistan in the growth accounting framework. Section-IV traces the relationship between Growth, Poverty and Inequality while Section-V discusses the lessons to be drawn from this review and the proposals for sustaining the growth momentum in the future.