While multiple economies in the world suffer from global recession, Pakistan’s economy is no exception. Moreover, developing economies like Pakistan have suffered more from this crisis situation than other developed countries have. The reason being, that Pakistan’s economic conditions are further worsened by the political situation in the country. Severe political unrest has resulted in fluctuations in the stock market and has created an uncertain atmosphere for any investments.
The major economic challenges facing the country at this moment are of unemployment, increasing rate of poverty, internal and external debts and lack of investments. Unemployment and poverty could be linked to the poor economic policies of the government and the lack of implementation of policies which could help improve the economic conditions of the country. There are hardly any social benefits such as unemployment benefits for the people. Many would think that the absence of social benefits might encourage people to work but that is so not true in the case of Pakistan. The reason for that is even if people have the motivation to work there are so few jobs available in the market that they would still remain unemployed. People lack skills which various MNCs and other local companies are looking for. There is an alarming situation in the country as there is a growing trend towards studying commerce and business administration by giving up on subjects like science, engineering and technology. The youth of the country have a soft attitude and dream of becoming rich over night which has harmed their competence in the knowledge based economy of the country. Poor employment rates mean that there would be poverty in the country and that is the case for Pakistan too.
The internal and external debts have been increasing since forever as enough goods are not being produced locally. There is an increase in the demand for imports as locally produced goods are either substandard or not available. The country’s exports have witnessed a severe decline in recent times and the major cause of it is the worsening of the textile industry in the country. Textile exports previously formed a major crux of the country’s total exports but since the global recession the whole textile industry has been suffering and there are hardly any textile goods available to be exported. The increase in imports and a decrease in exports have resulted in a worsening of the balance of payment. Pakistan has been trying to fill these deficits by borrowing from other countries and as the borrowing increases the burden of heavy debts fortifies on Pakistan’s economy.
Despite all the negativity about the economic conditions of Pakistan, there is a glimmer of hope for the country. These economic conditions could be easily improved because there are certain factors which are in favor of Pakistan. The demographics of the country are such that 60 percent of the people are below the age of 30 which provides the country with an excellent opportunity to move this demographic factor to its advantage. If this young labour is properly educated then it would be able to strengthen the country’s economy by creating business opportunities and stimulating investments.