Pakistan's Economic Performance Since 1960

Asia 2025, a US Defense Department Study produced in summer of 1999, forecast that Pakistan would "disappear" as an independent state by 2015.  Since the issuance of this dire forecast, Pakistan has not only survived but its economy has nearly quintupled from $62 billion in 1999 to over $300 billion in 2018. This has happened in spite of political corruption and instability and terror Pakistan has suffered from due to the Afghan war next door and Indian sponsored proxy war against it.

US Department of Defense Summer Study 1999

Dire Forecasts:

The US DoD 1999 forecast was not the first nor would it be the last dire prediction by western and Indian "scholars" working in the American academia and Washington think tanks.

Many western and Indian analysts have been forecasting Pakistan's demise as the country struggles to deal with terrorism at home. Among them is former President George W. Bush's adviser David Kilcullen.

"We're now reaching the point where within one to six months we could see the collapse of the Pakistani state, also because of the global financial crisis, which just exacerbates all these problems. . . . The collapse of Pakistan, al-Qaeda acquiring nuclear weapons, an extremist takeover -- that would dwarf everything we've seen in the war on terror today", said Bush Iraq adviser, David Kilcullen, on the eve of Pakistan Day in 2009 commemorating Pakistan Resolution of 1940 that started the Pakistan Movement leading to the creation of the nation on August 14, 1947. Kilcullen is not alone in the belief that Pakistani state is in danger of collapse.

Others, such as Shahan Mufti of the Global Post, argued in 2009 that Pakistan is dying a slow death with each act of terrorism on its soil.

In 1947, Lord Mountbatten, the British Viceroy of India who oversaw the partition agreed with the assessment of Pakistan made by India's leaders when he described Pakistan as a "Nissen hut" or a "temporary tent" in a conversation with Jawarhar Lal Nehru.

Here's the exact quote from Mountbatten: "administratively it [wa]s the difference between putting up a permanent building, a nissen hut or a tent. As far as Pakistan is concerned we are putting up a tent. We can do no more." The Brits and the Hindu leadership of India both fully expected Pakistan to fold soon after partition.

GDP Growth Comparison 1998-2008

Economic Comparisons:

In spite of all of the multiple challenges on several fronts that Pakistan continues to face, the country's 5X GDP growth over the last two decades is not too shabby when compared with India's 6.5X jump in the same period. Here are the figures for several countries from Spectator Index:

China:  13X growth in  GDP from $1 trillion in 1998 to $13.1 trillion in 2018

India: 6.5X growth in GDP from $400 billion in 1998 to $2.6 trillion in 2018

Pakistan: 5X growth in GDP from $62 billion in 1998 to $308 billion in 2018

United States: 2.2X growth in GDP from $9 trillion in 1998 to $20 trillion in 2018

Japan: 1.25X growth in GDP from $4 trillion in 1998 to $5 trillion in 2018

Per Capita Incomes:

Pakistan has not done as well in terms of per capita income growth for several reasons including poor governance and corruption since 2008 and faster population growth than in China, India and other countries. Per Capita income in Pakistan grew 22% since 2012, half of the 43% growth in India during the same period. China topped with 48% in per capita income since 2012.

Here are per capita income growth figures for selected countries since 2012:

China: 48%, India: 43%, Turkey: 32%, Indonesia: 29%, Pakistan: 22%, UK: 15%, US: 15%, Japan: 15%, Germany: 13%, Canada: 13%, France: 11%, Saudi Arabia: 10%, Greece: 9.5%, Russia: 8%, Italy: 8%, Nigeria: 7.5% and Brazil: 0%.

Per Capita GDP Comparison. Source: Hindustan Times


Pakistan Growth By Decades. Source: National Trade and Transport Facility

Since 1947, Pakistan has seen three periods of military rule: 1960s, 1980s and 2000s. In each of these decades, Pakistan's economy has performed significantly better than in decades under political governments. The worst decade for Pakistan's economy was 1990s, also known as the lost decade, when the GDP grew just 4% as Benazir Bhutto and Nawaz Sharif took turns to mismanage it.

Pakistan's GDP growth in decades under military rule has been 1.5-2.5% faster on average than under civilian rule. Though the difference of 1.5% in GDP growth appears small, it would have made a huge difference when compounded over multiple decades and put Pakistan in the ranks of Asian Tigers.


Pakistan has defied repeated dire forecasts of doom and gloom since its independence. Its economy has grown 500% over the last two decades in spite of political corruption and serious security challenges and instability created by the Afghan war next door and Indian sponsored proxy war against it.  Pakistan's GDP growth in decades under military rule has been 1.5-2% faster on average than under civilian rule. Though the difference of 1.5% in GDP growth appears small, it would have made a huge difference when compounded over multiple decades and put Pakistan in the ranks of Asian Tigers.

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Unknown said…
When compared the GDP growth between Civilian and Military Governments in Pakistan the GDP growth during Military Period had always been much better as compared to Civilian Period.The large scale ratio of corruption,nepotism and misgovernance during democratically elected Governments in Pakistan had always created problems for the smooth and steady development of the Nation.The example of PIA and Pakistan Steel are eye opening for us during democracy and autocracy.
Riaz Haq said…




A shared sense of history
Riaz Haq said…
Latest World Bank data on GDP published in June, 2018:

Pakistan GDP in current US$ 1960: $3.7 billion, 2017: $305 billion

India GDP in current US$ 1960: $36.5 billion, 2017: $2,597 billion
Riaz Haq said…
After 5.8% growth in #GDP in FY 2017-18, #Pakistan’s #economy is $313.13 billion as of June 2018, says the nation's central bank

The size of Pakistan’s economy stood at $313.13 billion at the end of June, 2018, according to provisional figures released on Thursday by the country’s central bank, as a weaker currency took toll on gross domestic product (GDP) in dollar terms.

Pakistan’s GDP stood at $304.97 billion at the end of June, 2017, and the economy registered a 13-year high GDP growth rate of 5.8% in FY18. That said, the size of the economy shrunk in dollar terms as the rupee weakened against the greenback in four separate rounds since December 2017, with a 5.8% growth rate effectively reduced to 2.7%.

The State Bank of Pakistan (SBP) used a period average month-to-month exchange rate to calculate the GDP, which according to calculations came to around Rs108 to the US dollar. With the rupee having weakened further, the size of the economy is likely to have shrunk even more in dollar terms. The currency is currently hovering around the Rs128-mark as depleting foreign exchange reserves and a widening current account deficit create a headache for economic managers that are at a loss to save the country from a balance of payments crisis.

The SBP has already increased the key interest rate by 175 basis points since January, taking it to 7.5% to tackle increasing inflationary pressure in the months to come.

Additionally, the 5.8% growth registered during FY18 is also not enough for a developing economy like Pakistan to absorb the number of job seekers that pile up each year. According to experts and global financial institutions, Pakistan needs at least 7% growth to create enough jobs and tame rising unemployment. However, the country is likely to face a slowdown in growth during the ongoing fiscal year as tighter policies to improve macroeconomic stability have a negative impact.

Ratings agencies, Moody’s and Fitch, have already lowered their forecast for Pakistan’s GDP growth, while the World Bank has also suggested that it will slow down to near 5% in FY18.

According to additional figures released by the SBP, Pakistan’s current account deficit stood at $17.99 billion in FY18, translating to 5.7% of GDP and more than twice than the government’s own estimates.
Riaz Haq said…
After observing that most civil-military theory assumes that the civilian and military worlds must necessarily be separate, both physically and ideologically, Rebecca L. Schiff offered a new theory—Concordance—as an alternative. One of the key questions in Civil-Military Relations (CMR) theory has always been to determine under what conditions the military will intervene in the domestic politics of the nation. Most scholars agree with the theory of objective civilian control of the military (Huntington), which focuses on the separation of civil and military institutions. Such a view concentrates and relies heavily on the U.S. case, from an institutional perspective, and especially during the Cold War period. Schiff provides an alternative theory, from both institutional and cultural perspectives, that explains the U.S. case as well as several non-U.S. civil-military relations case studies.

While concordance theory does not preclude a separation between the civilian and military worlds, it does not require such a state to exist. She argues that three societal institutions—(1) the military, (2) political elites, and (3) the citizenry must aim for a cooperative arrangement and some agreement on four primary indicators.

1. Social composition of the officer corps.
2. The political decision-making process.
3. The method of recruiting military personnel.
4. The style of the military.

If agreement occurs among the three partners with respect to the four indicators, domestic military intervention is less likely to occur. In her book, The Military and Domestic Politics, she applied her theory to six international historical cases studies: U.S., post–Second World War period; American Post-Revolutionary Period (1790–1800); Israel (1980–90); Argentina (1945–55); India post-Independence and 1980s; Pakistan (1958–69).
Riaz Haq said…
Rethinking Civil-Military Relations in a Pakistan: Some Lessons from

Volumes of literature exists explaining the reasons of military
intervention in domestic politics, however, the special aspect of
Pakistani military intervention in politics has not been widely debated
in Pakistan, partly because of the reason of military enjoying a status of
“sacred cow” at home and any objective criticism directed towards
military establishment is regarded synonyms with un-patriotism and
may bringing reprisals through formal as well as informal means.
Samuel P Hungten proposed the theory of separation for keeping the
military under the supremacy of civil control on the pattern of Western
democracies. Hungten’s formulations were based on post world war-II
civil-military relations of America. Rebbeca 6chiوٴ has given the theory
of concordance for civil-military relation. Military interventions in
domestic politics occur only where there is discordance between the
three partners. Нe author further elaborates the three partners of
concordance as the military, citizenry and political elite to agree over
four indicators such as military recruitment, political decision making
and military style [2]. Another view of military’s intervention in state
politics is described by Nordlinger with a tripartite clDssificDtion based
on the powers exercised by intervener and the type of goals pursued
[3]. Нe lowest level of interventionists is the “Praetorian Moderates”
who act as pressure groups mostly and avoid indulging in direct
government. Нe\ return power to the civilian rule Dіer “displacement
coups”. Нe second category is of “Praetorian Guardians” who share the
values of moderates but willing to take over the power usually for two
to four years and preserve the system which serves the military
interests. Нe last category is of “Pretorian Rulers” who deeply involve
in governance and extent their rule. Нe\ embark on an ambitious
economic and political agenda and when they handover power, they
maintain the status of praetorian moderates, keeping watchful eye on
the civilian government. In an another discourse on democratizing

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