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Essay for CSS | The Major Challenges in Achieving Economic Development in Pakistan

Essay for CSS | The Major Challenges in Achieving Economic Development in Pakistan
CSS Times
Written by CSS Times

One of the mainstays of any country around the world for economic development is its existing reserves of the natural resources and assets base. Pakistan has plenty of natural resources such as large reserves of oil and gas, great quantity of copper and ore deposits, in addition huge coal and salt pits, and gemstones. Likewise, it possesses sound manufacturing industries of textiles and clothing, steel fabricating, cotton ginning factories, sugarcane mills, sports goods and leather manufacturing etc.

The current account deficit of Pakistan is expected to widen by 2.4 percent of Gross Domestic Product (GDP) by 2018-19 (FY19), largely on the back of declining exports and widening trade deficit, said the World Bank (WB).

The WB in its latest report, South Asia Economic Focus, predicted that the current account deficit is expected to widen from 1.2 percent of GDP in FY2016 to 2.2 percent in FY2017 and 2.4 percent by FY2019. ‘The key contributor to this will be a widening of the trade deficit due to moderate growth in exports due to weakening of exports competitiveness and global demand and higher growth in imports due increased economic activity’.

Apart from these mineral resources and industries, Pakistan also has vast tracts of agriculture land. Out of total geographical area, about 27 percent is cultivated, and of this, 80 percent is irrigated. Pakistan has one of the most developed irrigation systems in the world, i.e. Indus Basin Irrigation System. We have rivers and sea. We have harbours to export and import goods. We are blessed with four seasons and a fit tropical weather in terms of farming and agriculture.

There is no doubt that Pakistan is a resource-rich country and possesses mineral fuels, manufactured goods and beverage and tobacco (13%). Moreover, the other resources include: food and live animals (11%), crude materials (11%), chemicals (11%), machinery (8%) and miscellaneous articles (8%). In addition, we have 175 billion tons of coal reserve. It is up to 618 billion barrels of crude oil. The natural gas reserves are also in abundance, it’s about 885.3 billion cubic meters.

Despite being blessed with fertile agriculture land, abundance of minerals and sound industrial base, our economic development is not progressing as it should.

The major challenges in achieving economic development are:

Energy Crisis

The constant leading power cut-off challenge has troubled the economy. Since the year 2000 this curse has wreaked havoc on the overall economy. As admitted by Federal Minister for Water and Power Khawaja Muhammad Asif during a National Assembly session a few days ago that the power shortfall has exceeded up to 5,000MW. Until energy lingering crisis is not resolved the determined economic development is a far-off dream.


It is a huge stumbling-block for economic generation in Pakistan. Since 2002 we are a war-torn country. The State Bank of Pakistan report (2016) says that war on terrorism has cost $118 billion. According to Global Terrorism Index (2016), out of 163 countries, Pakistan stands 4th worst hit. This has long been a reason for Pakistan’s negative international image which has limited the foreign investment in the country.

Wealth Concentration

In Pakistan wealth is concentered among a few rich families. The rest of the population is dependent on them. Due to wealth concentration, around 35 percent people spend their lives under poverty line. According to Multidimensional Poverty Index (2016) 39 percent population of Pakistan lives in poverty, which means that 4 out of 10 people in Pakistan live in poverty.


Since 1947, the ongoing corruption has steadily planted its roots. In current circumstances, it has become a highly political debate as even the prime ministers of the country are accused of it. The corruption has proven to be a menace for institutions.

Pakistan scored 32 points out of 100 on the 2016 Corruption Perceptions Index reported by Transparency International. Corruption Index in Pakistan averaged 24.37 Points from 1995 until 2016, reaching an all-time high of 32 Points in 2016 and a record low of 10 Points in 1996.

Youth Unemployment

Basically unemployment rate identifies the number of people in percentage which are looking for any job or lively hood as compared to the entire labor force percentage in the state. There are various institutions which calculate this rate according to the consensus, which is being done in every quarter of the fiscal year in Pakistan. The most reliable institution which is accountable for calculating the unemployment rate in Pakistan is the Pakistan Bureau of Statistics. The unemployment rate in Pakistan for the year 2016-2017 is 6 percent. It was 6.30 percent at the start of the second quarter of the fiscal year but at the latter half of the second quarter it declined by 0.30 percent and currently the unemployment rate in Pakistan as per the report of the Pakistan Bureau of Statistics is 6.0 percent

Lack in Quality Education

Education is a key component for economic progress. Unfortunately, our current literacy is 60 percent, least in South Asian countries. About 25 million children in are out of school. More importantly, on grass root level, thousands of schools are lacking very basic facilities such of sanitation, water, electricity, boundary walls etc.

Poor Health Facilities

The public hospitals depict bleak pictures where we find lack of proper medicines, beds, equipment and etc. Due to absence of basic health facilities, 170 women die from pregnancy for every 100,000 births. For every 1,000 babies born, 66 die before their first birthday. In addition, approximately 44 percent children in Pakistan are stunted.. More than 3500 children have lost their lives in three months due to insufficient medical facilities in various Khyber Pakhtunkhwa (KP) hospitals. According to a report obtained by Roznama Dunya, in 15 July, 2017, 40 minors had died on daily basis at government hospitals from January to March whereas 1800 children were born with the weight of less than 2.5 kg. The report also revealed that 150 women died during deliveries in government hospitals whereas 45,640 children came into the world in these three months. 1457 infants fell prey to different diseases

Tax Evasion

Regressive tax system collects about 90 percent tax revenue from common men. Big corporations, landlords, businessmen, politicians do not pay their due share of taxes. They earn lot but pay less tax; on the other hand poor earn less but are taxed more. Each year billion rupees are evaded through tax havens established in foreign counties. The incidences of tax evasion have hampered Pakistan’s economic progress.

Lack of Good Governance

Pakistan suffers from a number of crises but the crisis of good governance is on top because it is the core of all other problems. Our country is suffering from weak institutional set-up, political instability, rampant corruption, lack of accountability and transparency and bad law and order situation.

What should be done to overcome the above challenges?

Government should improve relations with neighboring countries like India, Iran, and Afghanistan.

For economic information, communication and technology sectors among others should be given more preference and government should improve ICTs system. Because in forthcoming years, all the economies will be measured through technologies. India earns lots of money through its IT industry.

The employment zones for youth should be opened so as two-third of youth could contribute for the economy of Pakistan. They could use their potentials and skills for better Pakistan.

The alarming education system should be improved. The quality education from primary to university should be ensured. Proper school monitoring mechanism should be designed. New and upgraded curriculum need to be introduced. Instead of investing lot of budget on defence side, more budgets should be allocated for education.

Quality vocational training zones should be established in each district for youth as they could learn technical skills in different cadres and trades. Government should ensure those vocational zones that how they are operating and functioning. One of the primary ways of enhancing economy is to support entrepreneurship and to create new avenues for growth by guiding the youth.

Before everything else, the government ought to overcome the lingering energy crisis.

Pakistan should enhance export competitiveness by reducing cost of doing business. Pakistan should adopt strategic approach to increase its export in neighboring markets and underline the need of holding single country.

As a result of overall economy dilemma, the common men and women in the country are facing economic deficiency and deprivation.

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