Pakistan’s Economic Challenge: Evaluating the Key Issues and the Structural Factors

Abstract

Historically, Pakistan has been preoccupied with internal
political instability and regional security threats. The country has
failed to adopt a long-term economic roadmap and experience
socio-economic development. Consequently, the country faces
various economic issues such as trade deficit, current account
deficit, fiscal deficit, inflation and burgeoning debt. These issues are
connected with lower GDP growth rate, which remains far below
the potential in all economic sectors. In broader context, Pakistan’s
prevailing economic problems are the result of several structural
factors—historical, political, security, social and environmental.
This paper elucidates Pakistan’s key economic issues by following a
qualitative analytical approach and providing the indicators of
these economic problems in quantitative form. The paper also gives
an account of the structural factors that persist as the root causes
of Pakistan’s economic challenges. Based on Rostow’s model of
economic growth, the paper shows that Pakistan fails to take-off as
the country still follows traditional society practices and struggles
to meet the take-off preconditions.