Economy of Pakistan

Pakistan’s economy is currently considered one of the weakest, facing the threat of bankruptcy and default. At the time of partition, Pakistan’s economic problems compelled it to join the western camp while seeking assistance from the United States. Agriculture was the principal contributor to Pakistan’s economy during the formative years. However, in the 1950s, Pakistan’s economy had become one of the most vibrant in the region due to industrialization and economic reforms, with a sustainable growth rate. The breakup of Pakistan in 1971 and the subsequent nationalization of booming industries had a detrimental effect on the national economy and growth. The growth rate was further retarded during the 1980s due to the effects of the Afghan War and the influx of refugees. Pakistan faced a severe debt crisis in the 1990s due to corruption, political instability, and borrowing from international financial institutions. Pakistan’s economy suffered losses of over $250 billion from 2001 to 2016 due to its role as a frontline ally in the US war on terror, and it had to spend heavily on military operations in Balochistan and tribal areas. Pakistan’s economy was brought to the brink of collapse due to non-profitable megaprojects, public subsidies, and the luxurious lifestyles of the elite.