Pakistan History

THE ANALYSIS:

From 1949 to 1953, Pakistan was on Traditional society growth stage according to Rostow’s model. During this time period, the refugees who came from India with a decent amount of capital started their own trading firms which later, because of the government policies, were made into industries. In this time period, the average GDP of Pakistan was just 3%. But fortunately in 1952, Korean War broke down which increased our exports of raw materials, especially Jute, to the international market which resulted in our GDP jumping to 9.4%. Domestic savings and investments were 2% and 3% of the GDP respectively in 1949-1950. Pakistan had the right to be called an agrarian economy at that time because a huge part of our exports and GDP consisted to agricultural products. During this period Pakistan joined a couple of military pacts and because of that it started getting financial aid from the USA block. During this era, system of private enterprises was being encouraged due to which industrial sector was 6.9% of the total GDP in 1950.

After 1953 till 1959, Pakistan was in a pre-takeoff position. In this era Rs. 185.11 crore were allocated for the betterment of the industrial sector. Because of this, large manufacturing units for tires, tubes, paints, etc were setup. Local industries were given tariff protection under this era. In addition to that, skilled labor was also being produced in this time period by the establishment of Swedish-Pak institute of technology and Pakistan Industrial Technical Assistance Centre (PITAC). In 1954, the green revolution started in Pakistan but it could not revolutionize the agriculture sector of Pakistan. There were no land reforms in Pakistan. The peasants and the farmers were being crushed and all the profitability was being given to the industrialist.

1960s is known as the ‘Golden Era’ for Pakistan. At this point, Pakistan’s economy was at take off stage. Industrialization was at its peak. Pakistan’s exports had started to have larger quantity of industrial good now. General Ayub Khan was flourishing Pakistan. But all of this was at some cost. Capitalism was being promoted in the country which led to income disparity between the individuals, classes, states etc. All the industrialization was being done in Punjab and Karachi, ignoring the other places of Pakistan. The period from 1964 to 1965 was known as ‘foreign aid led industrial growth’.