ECONOMIC

DRAWBACKS OF
PAKISTAN’S
ECONOMY.

MAHEEN RIZWAN
TOOBA FAREED
ABDUL RAB
SHEHROZ YASEEN
MOHAMMAD AHMED
SYED ZAIN BUKHARI
 TABLE OF CONTENT:
1. EXECUTIVE SUMMARY……………………………………… 1

2. INTRODUCTION ………...……………………………………. 3

2.1 The Beginning

2.2 Economy Of Pakistan

2.3 Poverty
3. FINDINGS……………………………………………………… 4

3.1 Poverty In Pakistan

2.31 Economic And Poverty Trends

2.32 Causes Of Recession

2.33 Exogenous Factors

2.34 Longer Economic Trends

4. ANALYSIS …………………………………………………….. 5

4.1 Urban-Rural Contrasts

4.12 Urban

4.13 Rural

4.14 Punjab

4.15 Sindh

4.16 Kpk And Baluchistan

4.2 Causes Of Poverty ………………………….. 6

4.21 Poor Governance:

4.22 Political Instability:

4.23 Lack Of Education & Rampant Illiteracy:

4.24 Landlessness In Rural Area:

4.25 Non-Transparency In Resource Allocation:

4.26 Corruption & Corrupt Practices:

4.27 Rising Unemployment:

4.27 Declining Industrial Output:

4.28 Other Miscellaneous Causes:

5. CLOSING ………………………………………………………. 11

5.1 Conclusion And Future Strategies

5.12 Provision Of Local Economic Development;

5.13 Construct Community Capability And Institutions;

5.14 Improve Workers’ Productivity;

5.15 Social Security For Workers In Rural Area:

6. REFERENCES ……………………………………………….. 13
Pakistan is a gift from Allah to the Muslims of sub-continent; it came into being through the struggle and
selfless efforts of the Muslim leaders of subcontinent, who sacrificed there today for our tomorrow. But they
were totally unaware of the challenges we Pakistani’s had to face in the future. After the partition the
Muslims as considered as minority were kept far away from getting most of their rights, the Hindus as being
favorites of the British Empire were given priorities in every aspect such as the time of distribution of funds
between the two states. Out of 750 million allocated by the British govt. Pakistan only got only 250 millions
and rest 500 million were not given, but after the great protest of Quiad-e-Azam 450 million were then given
to Pakistan while the rest of 50 million are still not given, So we can conclude that from the birth Pakistan
has been under serious financial crises. People who migrated from India were mostly belonging to
agriculture sector but due to migration they lost all their assets and properties and came to their new home
land empty handed. The situation of Pakistan at the time of partition was very critical. So the government of
Pakistan in that state of despair had to take aids from the America and other developed countries to survive.

Time has not been in the hands of state of Pakistan, we lost brilliant leaders like Quiad-e-Azam and
Liaqat Ali Khan during the first 5 years .So Pakistan never got a great leadership to make Pakistan proceed
towards the way of development. With tons of resources that many countries dreamed of, Pakistan already
had all of them but we didn’t use our capabilities and became the victim of a never ending virus of
POVERTY that has eaten the whole countries economy like termite. So what really is poverty, It is an
inability of a human being to effectively contribute to the society, It also means that a person does not have
enough food or clothing for a family, does not have access to hospital or a school, does not own a land on
which he can grow food, does not have a job to earn one’s living and does not have access to money,
poverty refer to powerlessness, uncertainty, and excepting of individuals from contribution in society.

Even today the scale of poverty has raised so high that about 58.7 million out of a total population of 180
million subsist below the poverty line This includes more than half the population in the forever remote
Balochistan, 33 per cent in Sindh, 32 per cent in Khyber Pakhtun khuwa (KPK) and 19 per cent in Punjab.
There are more mouths to feed than there are hands to earn. Ones income is limited as he cannot afford to
maintain a large family, He works hard and consequently he falls ill and dies. Then his wife steps in works
in village, fields or city, homes to bring up her children, this cycle of poverty goes on. Poor remain a poor,
the whole of his life.

So the main reason that is to be questioned now is why a country with full resources that other countries just
dreamed of is in a despair dangers of poverty, it all started after independence of Pakistan as most of people
were migrants so they didn’t had the basic necessities to satisfy their basic need, poverty got raised the
country due to lack of funds couldn’t please every individual. But that was the past why is Pakistan is having
poverty even when whole world is developing, the answer is We All Are Culprits, from political rulers to
educational sector, from minister of finance to the representatives of law all are equally responsible for the
worst economic downfall by means of poverty. Due to our belief on us before others we have taken the
rights of the real owners of the money of the state.
There are many issues that gave rise to poverty but the main cause is illiteracy, as most of the people in
Pakistan are uneducated. They are ill equipped to lead a good life as they do not know the modern methods
of farming. They are ignorant to better ways of earning money in the mills and factories with poor
knowledge of life. They cannot increase production in mills and factories. Modern machinery is mostly
computerized. An uneducated person cannot understand and operate computer. The result is that the remains
poor till the last day of his life. As most of the people in Pakistan live in rural areas and being illiterate they
become the victims of feudal system. Mostly occurring in Punjab and KPK a big landlord keeps the small
farmers and workers under his political slavery, thus the economic condition of the small farmers and
workers cannot become better in the presence of feudal lords.

Next biggest issue ruining Pakistan economy and increasing poverty is; corruption , a disease that had
spread itself into the base of Pakistan, as People use wrong way to get money by using fair and unfair
means. Officials waste their time has low efficiency. Only one relationship that is exists in society is money.
One has to pay a heavy cost to get his right. Law and order conditions are out of control and institutions are
failed to provide justice to a common man. Justice can be bought by money only. But government is unable
to control such type of things. Due to corruption in every field the country suffers from lack of investment
in industries which arises a new economic problem causing poverty i.e. unemployment that exists due to
scarcity of jobs in the public and government sector. Our rulers are not responsible, dedicated and
missionary. They failed to build new dams, a network of industry and roads in the country. The shortage of
electricity and gas has resulted the lock up of mills and factories. New factories were not set up in the past.
The result is that our uneducated worker remains unemployed the educated people have degrees, but they do
not have opportunities to get job. And last but not the least a not stopping problem is ever growing
population, with about 22 million recorded people in Pakistan the poverty rate is increasing rapidly.
Population-wise Pakistan is the 6th largest country in the world and its population growth rate is 1.8%,
which is the highest in the region. Pakistan’s GDP growth rate is less than 3%.So, there is a shortage of
goods and services like food, clothing, housing facilities, education and health etc all these things are
inadequate to meet the necessities of a growing population. One earning hand has to feed a large number of
family members. Due to the high level of demand and less production, there is general poverty.

It is all because of poverty that the economic condition of Pakistan is declining rather than increasing as of
most countries of this region. We really need to change our fate through getting dedicated towards our state
and consider others rights before ours, because it not a one person act whole nation needs to stand together
during this despair time of Pakistan’s economy downfall.

Now how could we be able to solve such a problem, the answer starts by removing Corruption through the
different sectors of Pakistan because when there is no corruption the people are getting their right for which
they pay their taxes. The poor people of the country will get the facilities that were given to them by their
government. By removing corruption the education sector will also get established, the kids of poor will be
getting quality education, they will be getting there common rights and will become a valuable asset for their
country. Next the government need to increase the investment rate of the country and invite other countries
to invest their business in Pakistan so that the industry in Pakistan starts to flourish and the unemployment
rate of the country is decreased, the more the jobs are there the more the people will be earning money to
help their family. By improving industries the country will also be using most of its resources and will be
producing more then what we will consume so that even having a high population rate the government will
be able to provide the everyday luxuries to every individual of the country such that everyone gets what he
deserved.

Getting rid of a issue like poverty is not a short term work it will take time but if we are doing our roles then
no one can stop us from removing poverty and getting our economy to flourish more than most of the
countries dreamt of.
THE BEGINNING:
Pakistan was a gift by the All Mighty Allah for the Muslims of sub-continent, it came to being through the
selfless and undeniable struggle of the Muslim leaders who sacrificed their today for our tomorrow. The
partition of United India in 1947 eventually accompanied the creation of two independent dominions, India
and Pakistan The partition displaced over 14 million people along religious lines, creating overwhelming
refugee crises in the newly constituted dominions, there was large-scale violence, with estimates of loss of
life accompanying or preceding the partition disputed and varying between several hundred thousand and
two million. But that was not the only problem that we had to face, as being a new born state Pakistan’s
economic conditions were quite low with most of the migrants coming empty handed there was more people
then the government could satisfy. And it was our bad luck that the funds issued by the British government
were also being seized by the Indians, because of which Pakistan got 250 million out of the allocated 750
million and the rest 500 millions still remains a mystery. So Pakistan’s economy has always been a victim of
downfall, Due to which Pakistan needed to borrow aids from USA and other financially stable states.

ECONOMY OF PAKISTAN:
So the question that arises now is, “What Is Economy”. Economy is defined as a social domain that
emphasizes the practices, discourses, and material expressions associated with the production, use and
management of resources. The economy of a country is the result of a set of processes that involves its
culture, values, education, technological evolution, history, social organization, political structure and legal
systems, as well as its geography, natural resource endowment, and ecology. Pakistan currently operates a
mixed economy in which state-owned enterprises account for a large portion of gross domestic product
(GDP). At the time of independence agriculture was the biggest contributor is the economy of the country
but now has become considerably diversified. Agriculture, now no longer the largest sector, contributes
roughly one-fifth of GDP, while manufacturing provides about one-sixth. Trade and services, which
combined constitute the largest component of the economy, have grown considerably.

POVERTY:
As there has been a relentless increase in population, so, despite real growth in the economy, output per
capita has risen only slowly. This slow growth in per capita income has not coincided with a high incidence
of absolute POVERTY, a virus that was made its path far in Pakistan such that it sounds almost impossible
to eliminate it from Pakistan. So how did a country with so many resources, so many a huge number of
population , got to be a victim of this disease, the answers starts by defining poverty ; “the state of one who
lacks a usual or socially acceptable amount of money or material possessions”. According to International
Labor Organization poverty is a situation in which a person or household lacks the resources necessary to be
able to consume a certain minimum basket of goods. The basket consists either of food, clothing, housing,
and other essentials (moderate poverty) or of food alone (extreme poverty). It exists where people are
deprived of the means to satisfy their basic needs that are mandatory to their survival. Poverty breeds
unbridled crimes and moral degradation, frustration and bribery, malnutrition and infectious diseases so on
and so forth. Thus aspirations of the deprived people never materialize throughout their lives and their
sufferings end with their deaths while the rich led luxurious lives and enjoy every kind of facility. Poverty
has many faces, changing from place to place and across time, and has been described in many ways.
However, in my view poverty cannot be described it can only be felt.

POVERTY IN PAKISTAN:
The magnitude and volume of poverty in any country depends upon factors, the average stage of
national income, and degree of inequality in its distribution. here earnings approach the minimum
income required to purchase the ones gadgets that society considers important to hold
reasonable living, the minimum level required to avoid inhumane living conditions. It is normally
presumed that decrease the average profits or extra the unequal distribution of the wealth the
greater the prevalence of poverty. Pakistan is the classical testing ground to measure the
phenomenon in which the level of national per capita profits is low, exists grave level of inequality in
financial manner of living, rapidly increasing population with minimal degree of technical and expert
education, financial system with high charge of inflation and unemployment, these all in the
long run supply birth to poverty. In Pakistan, for example, the folks who earn profits which cannot
meet the daily intake of approximately 2350 calories in step with person are taken into consideration to fall
beneath the poverty line.

ECONOMIC AND POVERTY TRENDS:

Contemporary financial crisis Pakistan presently faces one of the maximum severe monetary crises of its
current history. The most instant and obvious features of this monetary disaster are to do with public
price range, rising debt ratios, and inflationary pressures. while the prospects for Pakistan graduating
from the low earnings class to the low center profits institution of nations had regarded shiny in the
past years, the current outlook stays rather unpromising.

CAUSES OF RECESSION:
Some of the causes of the current disaster are deep-rooted, and of long standing, they consist of
unsustainable styles of presidency revenue and expenditure, inefficiencies in the general public
area, and dis-centered subsidies and concessions to the private region. In addition, the uncertain
macro-monetary, political and 'regulation and order' situations of the beyond few years have done
little to instill self assurance among domestic and foreign traders. Commercial recession has resulted,
arguably, as a aggregate of factors: an adjustment shock, in particular in sectors which include textiles
which have experienced sharp cuts in government subsidies and concessions . Investor self belief has
additionally been undermined with the aid of vast reviews of corruption in legit and private transactions.
despite the fact that Pakistan has been through a range of monetary reforms, and is presently beneath
agreement with the IMF to carry out further reforms, the outcomes have not, consequently a ways,
been very promising. The fundamental triggers of the monetary disaster have been public finance
imbalances, and there want for stability of bills assist.

EXOGENOUS FACTORS:
In accordance to some analyses, agricultural growth is likely to taper off in the absence of radical
structural and institutional reforms in that sector .It wishes to be delivered, however, that for that
reason a ways the proof of a popular slowdown in agricultural boom is not convincing. A element
from a disastrous harvest specifically due to floods, agriculture has in reality executed better taken
as a complete. The decline in remittances has been mainly due to the fall in call for for Pakistani
labor inside the middle East.
LONGER ECONOMIC TRENDS:
The effect of Pakistan's cutting-edge monetary troubles on poverty will be discussed with
reference to poverty tendencies further below. It is beneficial, but, to location the modern-day
monetary state of affairs in its historical angle. broad trends in the structure of the financial system
additionally inform the evaluation of poverty.

URBAN-RURAL CONTRASTS:
There is a few confusion in the empirical paintings on poverty in Pakistan, on the relative
occurrence of poverty between city and rural areas. There are sturdy reasons to anticipate poverty to
be extra acute in rural in comparison with city regions. This, certainly, is the standard pattern in
developing nations, and in South Asia in unique. Even though the prevalence of poverty is lower in
city regions compared to rural ones, issues of urban poverty are however no longer unimportant.
Pakistan has visible a few of the fastest fees of city is due to migration from rural to city regions.
There are economic and demographic factors that may lead to city poverty turning into a greater
acute hassle than it has hitherto been.\

URBAN:
As anticipated, in urban regions, profits from wages and salaries taken collectively were the primary
assets of income. Salaries have been more important than salary income in all provinces. Non-
agricultural self-employment become additionally an vital source. the primary troubles of inter-provincial
contrast in urban regions have been that urban Sindh had the maximum reliance on salaries, and in
urban KPK remittances were an critical supply, accounting for 7 per cent of common household
earnings. The significance of salaries in Sindh is specifically due to the overpowering presence of
Karachi within the city Sindh pattern, and the importance of formal zone employment in this metropolis.

RURAL:
In rural areas, additionally according to expectation, the two agricultural categories taken together
accounted for the largest proportion of earnings in all the regions. There had been vital differences
between the regions, and the proportion of income coming from agriculture is different. KPK turned into
accompanied by means of top and center Punjab respectively inside the diversification faraway from
agriculture. Balochistan and decrease Punjab, like rural Sindh, were heavily dependent on agriculture.

PUNJAB:
Punjab is the most populous province of Pakistan, and is also generally regarded as the seat of political
power in the country. It is the heartland of the agrarian economy and agricultural development, and has also
witnessed a large increase in non-agricultural activities. Upper Punjab is historically appeared as a poor
region because of its low productiveness agriculture. Lots of the land right here is unirrigated and
is based on rainfall. In evaluation with the rest of Punjab and most of Sindh, there is little ability
for irrigation development on this place. Labor migration and employment inside the armed services
has been a long-status supply of employment on this area. lower Punjab is particularly
agricultural, and is enormously nicely-endowed with cultivable land. the primary crops here are cotton
and wheat. The settlement pattern in decrease Punjab, as in middle Punjab is dominated by means of
'canal colonies'. These are settlements in canal-irrigated zones which have been hooked up over the early
part of this century. unlike center Punjab, however, there maintains to be a presence of surprisingly
powerful landlords in components of decrease Punjab.
SINDH:
Rural areas of Sindh are generally seemed as extraordinarily terrible and backward. They are dominated
via effective landlords who work out a superb deal of political impact, and control over land, irrigation,
and credit. The finding that Sindh is not specifically badly off, therefore, contradicts traditional
information on the difficulty. huge percentage of landless families paintings as tenants of landlords,
on a percentage-cropping device, at the same time as particular arrangement would possibly range from
area to place, the standard pattern is that the tenant and land lord are each entitled to half of the
harvest. Arrangements about sharing of agricultural inputs are difficulty to a superb deal of neighborhood
variation. In practice, landlords make coins and grain advances to tenants over the crop cycle and
recover the loan at harvest time. the relationship is, therefore, not simply that of land apartment,
but a complete which includes credit score and insurance preparations additionally. There is a tremendous
deal of anecdotal evidence on the abuse of privilege by means of landlords, and the poverty and
oppression faced by way of tenants

KPK AND BALUOHISTAN

the populace densities, mainly in Baluchistan, are highly low. The huge intra-provincial versions,
consequently are unfold over a small population. General sampling techniques that recognition on
particularly simple stratification standards are not able to account for such versions. a range regions,
possibly some of the poorest ones, are not effortlessly available to enumerators due to remoteness
(mountainous regions in KPK and northern Balochistan, and deserts in central and southern
Balochistan), and due to the have an impact on traditional tribal laws and customs. whilst such
survey problems do not compromise the exceptional of usual national averages (due to the small
relative contribution of these regions to the country wide pattern), they do pose problems in the
interpretation of vicinity-sensible poverty estimates.

CAUSES OF POVERTY:
Poverty in Pakistan, for my part, is just too regular and too complicated, and can't be limited to few
factors shown in diagram below. There are many interrelated elements that make a contribution to
poverty in growing nation like Pakistan. Negative governance is the key underlying purpose of poverty in
Pakistan. The most usually enumerated causes in this regard encompass overpopulation, excessive
dwelling fee, growing unemployment, inadequate training, environment degradation, unequal
distribution of sources in particular agricultural land and so forth. However, monetary vulnerability is a
key thing that results in social powerlessness, lack of ok health care political disenfranchisement, ordinary
harassment and unwell-functioning and distortionary establishments. Economic and social elements
such as the slowdown in GDP boom in the final decade, and the endurance of a regressive social
shape, stemming from the exceedingly unequal distribution of land, have additionally
contributed manifolds to the boom in poverty. but, troubles of proper governance and degeneration
of socio-monetary establishments are the primary motives. Widespread factors taken into consideration
to be the reason of poverty are described in the figure below;
POOR GOVERNANCE:
Good governance is an essential pre-condition for pro-poor growth as it establishes the enabling regulatory
and legal framework essential for the sound functioning of land, labor, capital and other factors of market.
Whereas, good governance is considered to be non-existent in Pakistan and poor governance is taken one of
the key underlying causes of poverty in Pakistan. Poor governance has not only enhanced vulnerability, but
is the prime cause of low business confidence, which in turn translates into lower investment levels and
growth. The effects of poor governance serve to reinforce the adverse impact of structural factors. The
existence of pervasive poverty, wherein a significant proportion of the population remains poor over an
extended period of time is strongly linked with the ability of the government to ensure good governance.
Beset with the threat of terrorism which is eroding the very foundations of the state. Governance problem
has also resulted in inefficiency in provision of social services, which has had serious implications for
human development in the country. Resultantly, lack of public confidence in state institutions, including the
police and judiciary, have eroded their legitimacy and directly contributed to worsening conditions of public
security and law and order during the past decade.
POLITICAL INSTABILITY:
Political stability is fundamental to the creation of an enabling environment for growth and development.
Economic agents, particularly investors, must be reassured with regard to the continuation of policies,
should have confidence in the government’s credibility in order to operate effectively, and in the case of
investors, be induced to take risks. The perceived security threat on its eastern border that has dominated
Pakistan’s political culture has resulted in the domination of the military in politics, excessive public
spending on defense at the expense of social sectors, and erosion of the rule of law. Politically, Pakistan has
alternated with regularity between democratic and military governments. All these factors have in turn
affected growth, and subsequently poverty levels in the country. In general, political instability and
macroeconomic imbalances have been reflected in poor creditworthiness ratings, even compared to other
countries of similar income levels, with resulting capital flight and lower foreign direct investment inflows.

LACK OF EDUCATION & RAMPANT ILLITERACY:

The country schooling signs portray a dismal image while compared with other international
locations at the similar level of GDP in step with capita. extra especially, the public expenditure on
training as percentage of GNP have been round 2% in Pakistan in comparison to other (low profits)
nations of the area. for the reason that, basis of any improvement in socio-monetary area is corollary to
the degree of abilities of its human capital consequently, popular notion that one of the major
causes of the poverty in Pakistan is pitiable country of training across the country. more than half
of the population cannot read and write and extensive quantity of people do now not have any idea
approximately the present day earning strategies. The majority are not able to adopt era to decorate
agriculture yield thereby finishing up some distance beneath the productivity targets and revenue decline.
Resultantly, decrease in sales leads the society to terrible financial situations and leaving no room
for allocating adequate fund for education quarter. The continual refrain has been that Pakistan
devotes less than according to cent of its annual GDP to schooling while most different countries,
even in South Asia, allocate at least three to seven according to cent. The already meager amount
of the fund is in addition subjected to misuse, coupled with mismanagement and malpractices.
Certainly, the first-class of education can be advanced within the allocations up to massive quantity
supplied right use is made of allotted funds. Furthermore, blaming lack of schooling as essential
purpose of poverty seems exaggeration.

LANDLESSNESS IN RURAL AREA:

Being from an agricultural country, most of the people of Pakistan have farming as their primary source of
living. This source is shrinking with the division of lands amongst the family members and depriving
honorable way of living to the families- once well of. Only 37% of rural households own land and around 35
million people in rural areas are poor- representing about 80% of Pakistan’s poor. Hence, rural poverty is
found to be strongly correlated with lack of asset in rural areas. Poverty estimates using official poverty line
suggest the high prevalence of rural poverty ranging from 39 percent to 48 percent in all provinces. The
incidence of landlessness is common in rural areas. The unequal land ownership in the country is found to
be one of the major causes of rural poverty, as poverty level was the highest among the landless households
followed by non-agriculture households. The highly unequal land distribution seems to have resulted in
tenancy arrangements resulting in high prevalence of absolute poverty particularly in Sindh..Further,
persistent load shedding of electricity and water, and highly escalated fuel prices has negatively affected
agriculture yield. Being an agriculture country, our economy has to be agriculture centered. Therefore, main
stay of our exports has been on rice, cotton etc or other value added product to decrease its foreign trade
deficit.

NON-TRANSPARENCY IN RESOURCE ALLOCATION:

The lack of transparency in public quarter planning, budgeting and allocation of sources in Pakistan
has been the hallmark of our economic resource planners and coverage makers. Political or the
ruling management has by no means spoke back to the real wishes of the populace and accountable to
the guarantees they made with the public. Resultantly, without having regards of the real
stakeholders or the capability beneficiaries, the priorities for the development were decided by
using the bureaucracy following the supply pushed approach having no difficulty for the call for /
wishes of the residents. Such an mind-set in managing public accounts has led to a distortion of
improvement priorities and a tendency to guard the hobbies of unique organizations on the price of the
bigger public interest.

CORRUPTION & CORRUPT PRACTICES:

Corruption is one of the most dangerous factor that eroded Pakistan’s economic and governance system
since its inception. The corruption and corrupt practices are not restricted to public servant only rather,
social dishonesty and irresponsible behavior of people as well. Everyone tries to become rich in nighttime
by using unfair means. A shopkeeper is ready to get whole money from the pocket of customer. People
doing jobs are not performing their duties well. People, who do not pay taxes or continuously violate the
laws, are considered brave and respectful. The persistently rampant corruption in Pakistan not only
jeopardizes its resolve to fight against poverty rather adding to the menace of poverty from all direction.
Corruption is perceived to be pervasive, creating a culture of lawlessness and lack of credibility and trust in
authorities. Public institutions are often politicized and peace, social justice, merit and public trust and
credibility are the victim of this game. In this whole scenario some corrupt people has been occupying the
resources and common man is living in miserable conditions. Rising inflation forcing people to sell family
members, turn to crime. The selling of kidneys was very common in Pakistan. Burt in recent years there has
been a sudden increase in suicide attempts.

RISING UNEMPLOYMENT:
Unemployment is consistently mounting in Pakistan without any alleviation or pause. The activity
possibility and activity seekers are becoming worse every day and the scenario has reached at the level
wherein ‘who you understand’ is replaced with ‘what you recognize’ as the essential criteria for jobs.
financial recession and production downturn, worsening electricity crises, downsizing in industrial
quarter, squeezing agricultural land, shrinking exports, dwindling regulation and order scenario, have
made already far-off possibilities of employment similarly bleak. Tens of lots of graduates leaving
the universities each year are finding it harder to locate a suitable employment.
DECLINING INDUSTRIAL OUTPUT:
In the present age of globalization industry of any country plays a dominant position in
socio-economic development of the kingdom. With the increasing liberalization of loose exchange in goods
and services the giant of the commercial area can be improved manifolds. Pakistan, as soon as an
agriculture country , is hastily losing its fundamental live-agricultural power with each passing day.
however, lamentably Pakistan’s policy makers appears to be ignorant or poorly reactive to the
rising situation. Severe power scarcity, large electricity failure from KESC and WAPDA, long spells
of load-shedding and falling oil reserves have introduced down our production degree and financial
system to the worsening ebb. Pakistan’s already vulnerable production base has been in addition hit
tough by means of the electricity crisis. The burden dropping in the country, during the last three hundred
and sixty five days in unique, has played havoc with the commercial region, as fabric, plastic, steel
and different units have suffered closely. Around 25 percent of fabric devices have been closed because
of scarcity of electricity while still a number of devices are in all likelihood to be closed. Out of around
1,200 textile gadgets, three hundred mills such as spinning, weaving and ginning are closed in Punjab
while nearly same numbers of turbines are dealing with grave troubles. It has caused severe troubles in
production cycle and resolutely the cost of manufacturing improved, went with the brief fall of round
30% and the situation now is predicted to be worst if the contemporary electricity scarcity persists
any further. The reduction in poverty is largely hinges upon protection of domestic purchaser
through clean strolling of the industry and if the enterprise of the country of is dealing with
closure hazard, Pakistan could no longer be in a position to alleviate threat of poverty.
OTHER MISCELLANEOUS CAUSES:
There are number of other causes which could not be deliberated upon due to the paucity of space and scope
of this paper. The most important ones are listed below:

•Law and order situation in Karachi, Balochistan and other parts of the country supplemented with war
against terror has retarded Pakistan production process. The worsening situation is affecting the social order
as a whole and adding to uncertainties in business circles, resultantly stock markets are crumbling, investors
are losing and uncertain increase in commodity prices is leading to poverty for common man.

•Privatization is yielding opposite results then the intended ones. National assets are going in to foreign
hands, companies are monopolizing their ownership and common consumers are being exploited and
charged heavily. Performance of KESC has gone further down and people of Karachi are being asked to pay
more against the poor services marred with long spells of load shedding after the privatization. Similarly gas
prices in the country have shot up after privatization of some of the gas plants.

•Declining Foreign Investment: Owing to number of factors Pakistan has not been able to attract needed
level of FDI despite its pro liberalization and investor friendly policies. These factors include; political
instability, rising trend in terrorism, social disorder and unsatisfactory law and order situation particularly in
the, city of Karachi, the largest industrial and commercial centre and the only port of the country. These
causes have been further reinforced by the inconsistent economic policies, inadequate infrastructure, low
level of skilled work force and slow bureaucratic culture are playing discouraging role for the investors to
come and invest in Pakistan. .

•Rising Trend in Inflation: Inflation in prices of every item of goods and service in Pakistan has been sky
rocketing for the last few years but the current year is setting new records in this regard. This phenomenon
has rapidly undermined the purchasing power of low income groups though the price hike in every
consumable and non-consumable item has direct or indirect price shocks for the low-income families but the
food and energy price shocks have serious impacts on the poverty environment in rural and urban areas. The
recent revision in domestic prices of petroleum products cost of fertilizers and electricity has kicked up the
Sensitive Price Index. Furthermore, food price inflation can lead to significant increases in Pakistani poverty
levels.

•Population Growth: Due to rapidly increasing population the problem of food shortage in most developing
countries are compounded by inadequate provision of basic services such as health and sanitation facilities,
shelter and safe drinking water, also lack of education and increasing unemployment. Resultantly the
phenomenon gives further rise to the poverty line upward.
CONCLUSION AND FUTURE STRATEGIES:
Although some progress has been made in phrases of poverty relief, the government’s policies have had a
marginal achievement, especially in rural areas. Rural areas are tormented by more poverty than urban areas
consequently; the authorities must provide priority to rural areas to lessen poverty. The authorities must
follow an extended‐time period economic plan by means of considering the short‐converting demographic
and financial traits. At this stage, Pakistan ought to pay extra attention to the great of poverty in preference
to amount. There are four complete plans and supplementary regulations that states may comply with in
decreasing poverty, especially in rural areas. Further to those strategies, further research is required on the
features of poverty.

PROVISION OF LOCAL ECONOMIC DEVELOPMENT:

Exceptional research had noted that income subsidies, tax credits, and low‐profits loans to employers are
incentives that policymakers would possibly suppose for disadvantaged rural regions. Such tools can act as
incentives for employers to amplify their commercial enterprise, create new jobs, hire low and semiskilled
people, and offer services like onsite childcare and van shuttles. Any other research argues for nearby
cooperation and for along with poverty and underdevelopment a few of the explicit criteria to retarget
economic improvement funds to locations most in want. This condition calls for the development of
neighborhood financial structure that no longer simplest advantages neighborhood groups but additionally
enables countrywide economic improvement. The largest criticism to this version is that local Governments
does now not have high-quality human, economic, and logistic sources. further to this, administrative body
of workers at neighborhood authorities lacks simple technical and managerial abilities.
This grievance does no longer provide enough electricity to country wide or provincial government with the
intention to transfer power to neighborhood governments. but, education and support must be provided to
neighborhood governments and their workforce as opposed to forbidding them, because vital governments at
countrywide and provincial stages are unlikely to have the potential to evaluate the range of neighborhood
conditions or nearby necessities and capabilities, their group of workers is in all likelihood extra educated
and professional, but also more faraway and far away from neighborhood conditions. Pakistan needs a
nearby financial improvement that offers possibilities for neighborhood governments, personal zone, NGOs,
and civil society to paintings together to improve the nearby economic system. This improvement centers on
improving effectiveness, growing sustainable increase, and confirming the inclusive increase. The exercise
of nearby economic development should be assumed at special geographic measures. This improvement
version affords higher possibilities to neighborhood communities for monetary development in comparison
to national economic version.

CONSTRUCT COMMUNITY CAPABILITY AND INSTITUTIONS:

Policies to reduce poverty would have to focus on establishing the right circumstances for new industry
masses to develop. The key conditions are the institutions that advocate knowledge formation, a business
culture that supports entrepreneurship, institutions of higher education such as rural community colleges.
Institutions in domestic region not only provide new facilities and jobs but also engage the local community
to improve local situations. Furthermore, if we consider the policies that inspire new concepts of economic
development, then we cannot ignore the necessity of local institutions and their role in the local
development. This objective can be achieved only by cheering the communicative and dialogic exchange
among different stakeholders at both, national and local levels. Therefore, the relationship among local
authorities, economic divisions, and citizens could redefine the reasons and effects of poverty, as well as
strategies to reduce poverty. Social and institutional contribution may look complex because of the different
levels of contributions among local actors. However, it will change the behavior and feelings of citizens to
be part of local development. Their active participation definitely helps their communities to escape the
poverty trap.

IMPROVE WORKERS’ PRODUCTIVITY:

Development of education and team of workers has been visible to have important useful outcomes on
incomes potential. A evaluation of coverage evaluation for personnel improvement in low‐profits employees
concluded that training and activity training are the most successful approaches to help neighborhood
communities to enhance social situations. Occupational fitness and safety is a chief factor for improving
workers’ productivity, particularly in developing nations like Pakistan which might be lagging far at the
back of in fitness situations. Not unusual functions which could lower the health safety and workers’
productiveness are inappropriate workplace layout, susceptible structured jobs, mismatch between employee
competencies and task needs, and terrible capital‐labor ratio. As a result, the authorities should take some
time to improve worker productiveness through schooling and education. A recent observe develops some
policy recommendations via manufacturing jobs to reduce poverty. This studies opinions the literature on
poverty and boom, and cautioned to set up successful establishments for productive jobs so one can final
help to lessen poverty. Marketplace, agencies, and authorities are three important establishments that are
important for development.
SOCIAL SECURITY FOR WORKERS IN RURAL AREA:

As in Pakistan, social security is only serving the workers of public sector and only in urban areas. Thus,
government must construct a social security policy for workers in rural areas that provides safety at their
retirement age, like governments employees. Provision of social security not only reduces the dependability
of old people on their children but also helps to reduce poverty by providing enough funds to old people to
look after themselves. BISP (Benazir Income Support Program) is a first step toward social security for
low‐income families across the country. However, it does not cover the elderly population who claims to be
in retirement age. Poverty in rural areas is different from poverty in urban areas and vice versa. Similarly,
causes of poverty are also different in both areas. The biggest cause of rural poverty is lack of social security
for workers, because most workers depend on their daily or monthly wages which contribute to their current
life that does not provide security for the future. Therefore, initiatives should have been taken to provide
social security to every citizen including private and rural workers.

THE END
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