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INTENSITY OF CONFLICT AND WEAK INSTITUTION AS GROWTH IMPEDIMENT IN PAKISTAN

Pakistan Economic Policy

Assignment No. 1

Submitted by: Sonia Agarwal

2009-1-90-10008

WEAK INSTITUTION AS IMPEDIMENT

Pakistan's economy improved drastically in a period of over 20 years. But sadly, this has not been reflected in improving the lot of the average Pakistani.

Pakistan's real income per capita increased by a whopping 231 percent between 1970 and 1993. This was the highest rate of increase in all of South Asia. But sadly, the country's progress on the plane of human development at the same time did not correspond to this boom

Such is the paradox of Pakistan, a country which has one of the lowest literacy rates in the world, but, some of its highly educated people have dominated many international forums. In addition, Pakistan's human capital abroad represents some of the finest talent available. There are few countries in the world which show a larger gap between their performance on economic growth and human development than does Pakistan. The discrepancy is even more obvious when compared to the performance of other countries.

There are a number of reasons for the discrepancy between economic growth and human development in Pakistan. Some of these include: an extremely skewed income distribution, no significant land reforms, the heavy burden of defense and debt servicing on small budgetary resources, a very corrupt ruling elite.

Major dilemma the country faces is the steady deterioration in its institutions. There is still a problem establishing public accountability. Although Pakistan inherited a strong civil service, it is now not only very politicized, but also demoralized. Over 90 percent of recruitment in government service and corporations is based on provincial domicile, not merit.

And in the midst of this discrepancy, the common Pakistani struggles to improve his or her lot in life. While some do succeed in breaking out of the cycle of...