ECONOMY OF PAKISTAN
A Portrait of the Death of an Economy My 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
Statistical issues In addition to plans for the improvement of the quality and timeliness of data on public expenditures, the government is to address remaining deficiencies in the economic database of Pakistan: in national accounts, through Public enterprise reform During the course of 1997/98, seven major public sector enterprises developed plans to restructure their operations and to improve their financial performance so as to increase their efficiency and/or prepare for privatization. All this goes against the very nature of the free market economy that Pakistan is supposed to be running. Public debt management Due to the high levels of public debt and its effects on the budget, the government is to adopt a debt management policy to reduce the debt and debt-service ratios. The treatment of its foreign currency account holders and IPPs last year illustrates this point. The government will consider restructuring and privatization of Pakistan State Oil Ltd. Power sector In the energy sector, Pakistan's reform program is to increase the efficiency and reliability of energy supply and to create a competitive market structure. Before this paper begins finding solutions to the problems at hand, we need to remind ourselves of the key issues. This issue is that the colonists never bothered building up the necessary base for industrialization. Tax reform The focus of the tax reform program is to achieve larger revenues from tax collection, while promoting a more equitable distribution of the tax burden and greater documentation of the economy. Expenditure and civil service reform Improvements in expenditure policy are to concentrate on maximizing its effectiveness and developmental impact. There are very few people willing to risk their own and their families' safety by running against their subjugators. 9) The country's ability to export is also affected by sluggish world trade, which coupled with an over valued currency, is rendering Pakistan's exports uncompetitive. It can also play a strong role in supporting small-scale industry and in checking rural-urban migration. Before the budget is presented to the Assembly, it is sent to the IMF scrutiny team for approval.
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