Major Issues In Pakistan Economy PDF

Major Issues in Pakistan Economy Scholar Society Creator: Syed Muhammad Hamza Naqvi Semester: 5th B (M) Pakistan's economy faces several structural challenges. Below is a breakdown of major issues, with an emphasis on problems related...

Major Issues in Pakistan Economy Scholar Society Creator: Syed Muhammad Hamza Naqvi Semester: 5th B (M) Pakistan's economy faces several structural challenges. Below is a breakdown of major issues, with an emphasis on problems related to natural resources, human resources, trade, debts, and the history of Pakistan’s development plans: 1. Problems Related to Natural Resources Water Scarcity: Pakistan relies heavily on agriculture, which consumes a significant amount of water. With diminishing water resources and poor water management, there is an increasing strain on this vital resource. Energy Crisis: Despite possessing natural energy resources like coal and gas, Pakistan struggles with energy shortages, which impede industrial and economic growth. Environmental Degradation: Overuse of natural resources without sustainable practices has led to deforestation, soil erosion, and loss of biodiversity. 2. Problems Related to Human Resources Low Literacy Rates: Pakistan’s education system has historically been underfunded, leading to low literacy rates and a shortage of skilled labor. Brain Drain: A significant portion of the educated population seeks better opportunities abroad, causing a loss of skilled human capital. Gender Inequality: Women's participation in the labor force remains low due to cultural, social, and institutional barriers. 3. Increase in Unproductive Expenditure Defense Spending: A large portion of the budget is allocated to defense, which leaves less room for development spending in areas like health and education. Subsidies and Inefficiencies: Subsidies to inefficient public-sector enterprises and energy subsidies have created fiscal imbalances. 4. Issues Related to Trade Trade Deficit: Pakistan faces a significant trade imbalance, with imports (especially oil and machinery) far exceeding exports (textiles and agricultural products). This leads to a shortage of foreign exchange reserves. Low Export Diversification: Pakistan’s export base is limited and heavily reliant on textiles. There has been little diversification into value-added products or new markets. 5. Rising Burden of Debts External Debt: Pakistan has accumulated significant external debt, which places a heavy burden on the economy. Debt servicing takes up a large chunk of the national budget. Debt Dependency: The country has often relied on loans from international institutions like the IMF to cover fiscal deficits, leading to a cycle of borrowing and repayments. 6. Unfair Income Distribution Wealth Inequality: The gap between the rich and poor is stark. The wealthiest segment of society controls a disproportionate share of the country’s resources. Urban-Rural Divide: Economic disparity between urban centers (like Karachi and Lahore) and rural areas is wide, with rural populations facing more poverty and fewer opportunities. 7. Poverty High Poverty Rates: A significant portion of the population lives below the poverty line. Rural areas are particularly affected, where access to basic services like education and healthcare is limited. Inflation and Food Insecurity: Rising inflation, especially in food prices, has exacerbated poverty levels, making it harder for the average citizen to meet basic needs. 8. Unemployment Youth Unemployment: With a growing youth population, the country faces a high rate of unemployment among young people due to insufficient job creation and a mismatch between educational qualifications and market demands. Underemployment: Many people are employed in low-productivity sectors like agriculture or informal markets, where earnings are meager. 9. Limited Human Resource Development Inadequate Investment in Education and Health: Historically, Pakistan has underinvested in human resource development, resulting in poor educational outcomes and health services. Vocational Training: There has been a lack of focus on technical and vocational training, leaving a gap in the availability of skilled labor in sectors like manufacturing and services. Historical Context: Pakistan’s Development Plans 1st Five-Year Plan (1955-1960): Focus: Agriculture and irrigation were primary areas of focus. The goal was to increase food production and reduce dependence on food imports. Outcome: The plan underperformed due to lack of infrastructure and weak institutional capacity, leading to missed targets in industrialization. 2nd Five-Year Plan (1960-1965): Focus: Emphasis shifted toward industrialization and import substitution. Private sector investment was encouraged, and significant infrastructure projects like the Mangla Dam were launched. Outcome: The plan was relatively successful, leading to moderate industrial growth, but economic inequality also grew during this period. 3rd Five-Year Plan (1965-1970): Focus: Continued focus on industrial growth with additional emphasis on the development of basic industries like steel and cement. There was also a focus on agricultural reforms. Outcome: The plan was interrupted by the 1965 war with India and political instability, leading to a failure in meeting its goals. It contributed to increased debt levels.  Questions sample These issues, along with political instability, corruption, and regional conflicts, have made it difficult for Pakistan to achieve sustained economic growth. Which factor contributes to low literacy rates in Pakistan? A. Historical underfunding of the education system B. Lack of vocational training leading to unskilled labor C. Gender inequality limiting women's access to education D. High youth unemployment due to insufficient job creation Pakistan faces significant challenges with water scarcity impacting agriculture, energy shortages hindering industrial growth, and environmental degradation due to unsustainable practices. The economy struggles with high poverty rates, youth unemployment, and a stark urban-rural divide exacerbated by low literacy and inadequate investment in education. How does water scarcity affect Pakistan's agricultural sector? A. It leads to increased food imports from other countries. B. It encourages the use of more chemical fertilizers. C. It has no significant impact on agriculture. D. It strains vital resources needed for crop production. Describe the impact of water scarcity on agriculture in Pakistan. ANSWER Water scarcity in Pakistan severely impacts agriculture by:  Reducing crop yields  Increasing production costs  Limiting irrigation options  Threatening food security  Causing economic strain on farmers Best of Luck