ECONOMIC PERFORMANCE OF PAKISTAN FROM 1947-1972 This long period of 25 years was split into two major eras

of our economic history; first starting from 1947 to 1958 and second from 1959 to 1972. First era (1947-1958) Pakistans economy and society have evolved considerably since the time the country gained independence in 1947. Primarily an agrarian and rural country at the time, a fair amount of structural change has led to the development of large services (contributing to 50% of the GDP) and manufacturing (contributing to 25% of GDP) sectors. At the time when Pakistan gained its independence, country was struggling to make the ends meet with no infrastructure, no industrial base, no currency of its own and no resources to meet the challenges faced by the country at that time such as the refugee problem. The GDP growth rate of the country was between 3- 3.5% in the initial years. If it had not been the Korean War in 1951, the fate of Pakistan would have been something different. The Korean War not only boosts the Pakistani economy but also gave the initial start to our industrial base. In order to further boost the economy from the industrial start the government imposed trade and foreign exchange controls in 1952. That turned out to be the most important cause of the rapid growth in the Pakistans industry at that time. The country chose licensing and quantitative import controls over devaluation to deal with the Bop (balance of payment) problem. So the system allowed the rupee to remain overvalued which in turn created an excessive demand for the imports at duty paid prices. This policy of high tariffs and quantitative controls paved the way for the import substitution in particular and industrialization in general. The average rate throughout the decade was 19.1%, which is impressive. The average rate for agriculture was 1.43% and performed poorly in this period. Second era (1958 1972) The era (1958-1968) is most commonly known as The Decade of Development. Pakistan, essentially an agricultural economy, went through a turbulent decade (during the 1950s) following independence. The decade of the 1960s registered impressive growth (6.8 % annually, on average) while the economy diversified, as agricultures share in GDP fell from 46% to 38% while manufacturings share more than doubled. The state re-allocated resources from agriculture to industry, through public investment as well as creation of large rents for the manufacturing sector. Agriculture was also mechanized by state initiative ( Green Revolution).A large part of the development achieved was a product of heavy amounts of US and international aid (10% of GDP) received by Pakistan, owing to its perceived geo-strategic importance at the time. Ayubs growth policies have been criticized for the regional imbalances and social dislocations they created. Uneven development between the Eastern and Western wings

of the country and prioritization of industrialization over agriculture were the main reasons for discontent. Ayubs era was followed by another martial law led by Yahya Khan. He failed to make any impact of his rule in the Pakistani history and led to the fall of the East Pakistan and the emergence of Bangladesh in 1971.The disparities between the two wings led to the creation of a separate country.