Pakistan Economic History

By | December 18, 2021

With the division of the Anglo-Indian empire, 20% of the population fell into Pakistan, just 10% of the industrial establishments and minimal shares of mineral resources and transport infrastructures. The prospects for agriculture were more favorable, given that Pakistan had inherited most of the irrigation systems; these, however, depended on the Indus waters, in turn fed mainly by rivers coming from Indian territory: if India had used its waters intensively, the Pakistan would have suffered a dangerous reduction in its water resources. Despite the conflict that has always characterized relations between the two states, in particular with regard to the control of Kashmir and the border with China, the Pakistan obtained the guarantee of the use of water, which allowed him to realize about 65. 000 km of canals, with which to irrigate about 2/3 of the cultivated area; the two countries also built hydroelectric plants that could be used jointly. The economic planning started in the 1960s was thwarted by the armed conflict with India and by the secession of Pakistan Orientale (1971), which involved huge military expenses and a territorial and demographic decrease, which however concerned a seriously underdeveloped region. A drastic statist economic policy followed, with the nationalization of industries and banks and one land reform based on the reorganization of companies, the introduction of modern technologies, the further expansion of irrigated areas. The results were below forecasts and the economic policy was oriented towards privatization and foreign capital. Since the 1980s, the global gross domestic product has been increasing, while the public debt and the trade deficit decreased; GDP per capita remains very low (2600 dollars in purchasing power parity), with strong social inequalities and structural weaknesses in services to the population (health care in particular). A quarter of the population lives below the poverty line. Military expenses (3% of gross domestic product) and those aimed at a regional power policy (nuclear weapons, launch of satellites) always have a significant impact. For Pakistan business, please check

The active population in agriculture is about 42% of the total and produces almost 20% of the gross domestic product. The large estates are still widely present, alongside a small property that has been pulverized despite the reform. The crop scenario is dominated by cereals and legumes, destined for self-consumption, and especially wheat, which occupies about a third of the total cultivated area (approx. 10 million ha and 21.2 million t in 2006), although production is often insufficient and needs to be supplemented by imports. Rice cultivation is widespread in the lower Indus valley (8 million tonnes) and is partly destined for export. A rapid development has marked the cultivation of citrus fruits, and fruit and vegetables are generally well represented. Cotton, of which Pakistan is the fourth largest producer in the world (with 2.4 million t of fiber and 7, 3 of seeds), and sugar cane (47 million t) are the main plantation crops, largely processed locally and absorbed by the domestic market. The forestry patrimony, consisting mainly of wood from work, is concentrated in the lower Indus valley and in the pre-Himalayan areas. The reduced extension of the wooded area translates into negative effects ranging from soil erosion to runoff in the plains and the progressive increase in imbalances in river regimes, for which reforestation plans are in place in the northern regions of the country; the Pakistan, nevertheless, produces about 30 million m3 of lumber. The zootechnical patrimony is abundant (over 50 million cattle, half buffalo, 57 million goats and 25 of sheep), but exploited in inadequate forms, so it is lacking from a qualitative point of view, while it often negatively affects the environmental balance. The Pakistan is one of the major producers of leather and leather goods. Fishing is of local importance only.

Modest quantities of natural gas, oil and coal represent the mining sector of the Pakistan A thermonuclear facility is in operation near Karachi.

Industrial activities, which employ 1/5 of the active population and contribute 27% to the formation of the gross domestic product, are aimed at satisfying internal needs: relatively modest are the steel and metallurgical productions (Lahore, Karaci), the oil ones (refineries in Morgah, Karachi for imported oil) and mechanical ones. Of greater importance are the production of fertilizers and basic chemicals, pharmaceuticals, some mechanical sectors (shipbuilding and vehicle assembly) and above all textiles, dominated by the cotton mill (P. is the third largest producer of cotton yarns in the world).. Cement and food processing complete the industrial picture.

The terrestrial communications system requires modernization, partly in progress. The network railway (7791 km in 2006) is underdeveloped and follows that set up in colonial times, while the road network is relatively extensive (260,000 km) and almost two thirds of it is artificial. The vehicle fleet (just under 1,750,000 units) is expanding rapidly. An important contribution to the internal mobility of people and goods is provided by river traffic on the Indus and its tributaries of the Punjab; Karachi is by far the most important seaport, as well as an airport, in the state. Air traffic is also growing relatively (68 million km flown). Foreign trade has increased significantly in recent decades: especially due to the import of fuels, chemicals and machinery, mostly from the United Arab Emirates, Saudi Arabia, China, United States, Japan, Germany, and for exports of rice, raw cotton, cotton fabrics, carpets and blankets, mostly destined for the United States, United Arab Emirates, Afghanistan, Great Britain. However, the trade deficit has progressively increased, and is partly offset by remittances from emigrants, partly by international financial aid.

Pakistan network railway