Give reasons for the slow growth and re-emergence of poverty in Pakistan.

Question

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Solution

The reasons for the slow growth and re-emergence of poverty in Pakistan are:

The Pakistan was mainly dependent on Public Sector Enterprises. Pakistan relied largely on the policy of protection by assigning central role to the Public Sector Enterprises. The operational inefficiencies of the system along with the misallocation of scarce resources resulted in slow economic growth rate arid poverty.
The agricultural practices in Pakistan were not modernised and there remained heavy dependence on rainfall and traditional methods of farming, thereby reducing agricultural productivity and output.
The major portion of the foreign exchange earnings of Pakistan was in the form of remittances from Pakistani workers in the Middle-east and exports of highly volatile agricultural products. This can be regarded as one of the reasons for the slow economic growth. This is because the inflow of foreign exchange in the form of remittances substituted the need for development of manufacturing sector to earn foreign exchange by exporting manufactured goods.
There was an increasing dependence on foreign loans for meeting t foreign exchange requirements. Pakistan faced increasing difficulty in repaying these loans along with the mounting interest obligations in the years of agricultural failure. The increasing burden of huge foreign loans impeded the economic growth prospects of Pakistan.
Pakistan failed to attract any substantial amount of foreign investment due to political instability, lack of international credibility and infrastructure bottlenecks.

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