Economic liberalisation in Pakistan
After the 1993 general elections, the programme was halted and reversed by Prime minister Benazir Bhutto and the Peoples Party after the Pressler amendment went into complete effect and force, that led the economic and financial crises in Pakistan.
[1] After exclusive establishment of Pakistan, the country's economic policy for the rapid growth of the national economy was deeply understood and extensive efforts were carried out by the government of Prime minister Liaquat Ali Khan in 1947.
[2] At the partition in 1947, Ali Khan's government lacked qualified technical personnel, financial institutions, and natural resources to play a large role in developing the economy.
[5] Widely appreciated and backed by the United States to liberalise the economy, the reforms on the other hand, came with controversies and popular rejections by the civil society.
[2] In public circles, the considerable debate about the inequitable distribution of income, wealth, and economic power began to take place at national level.
[2] Dr. Haq and the officials at planning commission claimed that Pakistan's national economic growth had done little to improve the standard of living of the common person and that the "trickle-down approach to development" had only concentrated wealth in the hands of "twenty-two industrial families.
"[2] The Planning Commission argued that the government needed to intervene in the economy to correct the natural tendency of free markets to concentrate wealth in the hands of those who already possessed substantial assets.
[9] By the end of 1993 which was the year of ousting the government of Nawaz Sharif, the benefits from economic liberalisation were seriously limited in the absence of reduction of effective macroeconomic policies.
[9] As it grappled with the ongoing foreign exchange crisis in early 1993–97, Pakistan's most urgent economic need was to raise both national savings and exports.
[10] In midst of 1993, Benazir Bhutto embarked an ambitious medium term programme, Eighth Five-Year Plans, that was aimed to adjust the macroeconomics principles to alleviate the national economy.
Major concessions were made in taxation and monetary policies and the annual budget clearly confirmed the pause in the process of adjustment and reform, eliciting an adverse market reaction.
This policy participated in sharp rise in unemployment and rapid deterioration in the external reserves position, bringing the country back to the brink of a foreign exchange crisis in October 1995.
[11] Sharif's government liberalise the exchange rate policy and residents and nonresidents in the country were allowed the open foreign currency accounts with banks and NBFIs.
[13] A powerful and aggressive liberalisation programme was launched with major state-owned enterprises (SOEs), banks, and other industries were put in private-sector ownership management.
[15] In 1980–89, the economic reforms gained momentum and hard efforts were put to liberalise the economy before the Fall of communism in the Soviet Union, as country had realized long ago.
[16][17] Pakistan's economist and financial specialists are uncertain what caused the stagflation in the first place with some arguing that the planned economy of Prime minister Benazir Bhutto was doomed to failure from the very beginning, while others remained that there was a lack of coordination between fiscal and monetary authorities in a policies directed by Nawaz Sharif.
