Munich Personal RePEc Archive

Development Paradox in Pakistan

Abbass, Ahsan and Ahmed, Vaqar (2008): Development Paradox in Pakistan.

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Pakistan has been experiencing robust economic growth for the past few years. The macroeconomic position as exhibited by the real sector growth, fiscal indicators and external balance has reasonably improved. However the big question remains; will Pakistan be able to sustain these growth levels? Preserving the momentum becomes difficult when growth is consumption-based. Prosperity if measured by the increased sale of consumer durables gives a partial impression of the underlying economic changes. Promoting luxuries at the opportunity cost of necessities does not promote a pro-savings attitude at the national level and has deeper sociological consequences as well. Pakistan being a small open economy has limited or no control over the consumer or producer price levels. The vulnerability of the economy is again being tested in the face of global energy price increases and food shortages. We try to revisit the stop-go cycle of economic growth in Pakistan, the missing link between sources of growth and meso-micro level development and the knee-jerk reaction type(s) that we adopt as an answer to every economic crises.

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