POLITICAL INSTABILITY AND ITS EFFECT ON ECONOMY/ INDUSTRY

Abstract

Political system has never been stable ever since the creation of Pakistan. The feudal lords have been in power and working for their own interests rather than working for national interest. The Presidents and Prime Ministers have been changing frequently on the plea of corruption and inefficiency. Repeated Martial Laws have been the hallmark on our political history. The basic reasons of our instable political system are, feudalism, rampant corruption, lack of industrialization, scarcity of leadership and family oriented politics. All this resulted in downturn of country and today majority of population is living below poverty level. During 1950’s a number of heads of state were changed and there was no continuity of policies except that the industrialization was given preference over agriculture. The decade of sixties is remembered for Ayub Khan regime’s professional competence in its approach to economic policy and good management. The era was a period of substantial economic development based on performance by both the industrial and agricultural sectors. The manufacturing sector had shown 9.9% growth that is highest during 70’s through 90’s. Z.A. Bhutto’s era was the worst as he nationalized the industries, banking, educational institutes and insurance. It put a stop on local as well as foreign investment. Zia’s regime(1977-88) was more liberal in economic terms as he denationalized the industries. Rapid growth and prosperity and relatively stable prices made the Zia period appear to be an era of exceptional political and economic stability in Pakistan. Benazir’s two tenures have been poor as a number of industrial units were closed down due to high rates of electrical charges. Nawaz’s two tenures also didn’t contribute much towards industrial growth. Musharaf’s tenure so far has been quite good for the economy specially 4 for industries. During 2003-04 manufacturing sector showed a historic growth of 13.4%, which is highest ever since the creation of Pakistan. The major hurdles in industrial growth have been the discontinuity of policies because of frequently changed heads of state. Pakistan is rich country as far as resources are concerned but no leadership has fully utilized these for national advantage. If the government focuses on following, there is no reason why Pakistan should not become Asian Tiger: -  Political stability  Law and order  Facilitate investors  SMEs  Education  Corruption  Exports