Comment: Chronology of consistent disappointments

It is frustrating that in the last 79 years of independence, our country has repeatedly demonstrated that it can grow but fails to do so. We failed to adequately industrialise and build infrastructure and regularly failed to convert temporary achievements into permanent economic institutions.

The first decade after independence was essentially a struggle for survival. Pakistan inherited almost no industrial base, inadequate infrastructure, weak educational and health facilities and limited administrative capacity. Yet the state succeeded in establishing the institutions necessary for a functioning economy. It was a period of nation-building rather than spectacular growth.

The 1960s remain Pakistan’s strongest economic decade. Growth approached 7 per cent annually, manufacturing expanded rapidly, agriculture benefited from the Green Revolution and major investments were made in dams, irrigation and electricity. The decade demonstrated that Pakistan could achieve rapid structural transformation when investment, policy continuity and state capacity worked together. Its major weakness was that the benefits of growth were distributed unevenly, creating regional and social disparities.

The 1970s brought a dramatic reversal. The trauma of 1971 was followed by the widespread nationalisation of industries, banks and educational institutions. The state assumed a much larger role in the economy. While the decade strengthened the rhetoric of social justice and expanded public-sector provision, private investment and industrial efficiency suffered. Economic growth fell sharply from the levels achieved in the 1960s.

The 1980s restored growth. Remittances, foreign assistance, agriculture and infrastructure helped Pakistan achieve respectable expansion. But the decade also deepened the country’s dependence on external strategic and financial support. Growth was strong, but the foundations for an autonomous, export-driven economy remained weak.

The 1990s were perhaps Pakistan’s most disappointing economic decade. Political instability, repeated changes of government, fiscal weakness, external imbalances and policy reversals undermined investment. Power shortages became increasingly serious. Tax avoidance expanded as large sections of the economy remained outside effective documentation. Pakistan increasingly turned to the International Monetary Fund and other external sources to finance its recurring crises.

The 2000s produced another growth episode. Banking reforms, telecommunications, consumer finance and foreign investment transformed the services economy. Universities multiplied and private healthcare expanded. Yet, once again, consumption grew faster than the productive and export base required to sustain it.

The 2010s became an infrastructure decade. Motorways, power plants, ports, urban transport and China-Pakistan Economic Corridor-related projects transformed the physical landscape. Social protection also became more systematic through programmes such as the Benazir Income Support Programme. But infrastructure alone could not solve Pakistan’s structural problems. The tax base remained narrow, exports remained weak and the power sector accumulated enormous liabilities despite increased generation capacity.

Pakistan entered the 2020s carrying the accumulated baggage of every previous decade: debt, circular debt, weak exports, inadequate human capital, population pressure, tax evasion and institutional weaknesses. The current decade has so far been more about stabilisation than transformation. Tax collection has improved through digitisation and documentation, while social protection has expanded. Yet Pakistan’s tax-to-GDP ratio remains far below what is required for a modern state.

The most revealing feature of this history is that Pakistan has repeatedly succeeded and then failed to institutionalise success. The 1960s created industrial capacity that the 1970s damaged. The 1980s generated growth that the 1990s squandered. The 2000s created another boom that ended in serious macroeconomic imbalances. The 2010s built infrastructure whose financial sustainability remains unresolved.

The deeper problem, therefore, is neither a shortage of resources nor a shortage of successful economic episodes. It is the inability to sustain policy continuity, enforce taxation, protect productive investment and build institutions stronger than individual governments.

Pakistan does not need another temporary economic miracle. It needs to make its next phase of growth institutional, productive, export-oriented and socially inclusive. Until that happens, every boom will remain merely a prelude to the next crisis.