Pakistan
A Portrait of the Death of an EconomyMy topic deals with Pakistan, its relationship with the IMF and World Bank, and its internal problems that are causing unemployment, poverty, economic crisis and hunger. I shall be analyzing the situation using the neo-classical theory, as it is what the economists of the Pakistan government and the IMF are using to alleviate the economic instability of the country.Situated in the sub-continent, Pakistan is a low-income country, with great promise for growth. Unfortunately, it is held back from reaching middle-income status by chronic problems like a rapidly growing population, sizable government deficits, a heavy dependence on foreign aid, recurrent governmental instability and large military expenditures. It is to address these fundamental faults in Pakistan's economy that the IMF has initiated the Structural Adjustment Programs (SAPs) in the country. This is discussed in further detail later in the paper.Like all developing countries, Pakistan's population is largely employed in the agricultural sector, which accounts for about 48 percent of the labor force. In today's world the Industrial and Service sectors are the largest growing areas of a developed county's economy. Yet Pakis
Rather the problem will continue to grow right under the economists' noses. All this goes against the very nature of the free market economy that Pakistan is supposed to be running. To achieve this the government is to reduce spending on lower-priority activities by reducing the public investment program, lower spending on personnel, allocate resources toward high-priority and essential operating and maintenance expenditures, provide adequate money for basic social services which are part of the SAPs, and improve the planning and monitoring of budgetary expenditures. These are the same rights that people in developed countries take for granted. m) The government also needs to stop focussing on debt servicing which is obviously impossible at this point, and start focussing on getting the debt either absolved or completely restructured with equitable interest rates. And did the IMF and World Bank's policies help them recover? The answer is "No. The economy could be further decontrolled and privatized. 5 billion on critical quality-enhancing nonsalary expenditures in the provinces and federal areas. Nevertheless, there are no easy options left. Pakistan can neither repay nor service this debt. The release of credit is then delayed until each and every condition of the IMF has been met. Thus, unless companies owned by sitting ministers install invoice based systems for tax accounting, it will continue to be difficult to enforce retail taxes. This is a paltry figure, compared to the employment statistics of a developed country. The literacy rate in Pakistan is also very low. 13) Most of Pakistan's industry faces the issue of negative or nominal growth, while value-added industry is operating at 30% below capacity.
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