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Five-Year Plans of Pakistan
The Five-Year Plans for the National Economy of Pakistan (Urdu: اقتصادی منصوبہ جاتِ پنج سالہ ، پاکستان) (otherwise publicly known as Five-Year Economic Plans for the National Economy), were the series of nationwide centralised economic plans and targets as part of the economic development initiatives, in the Pakistan. The plan was conceived by the Ministry of Finance (MoF), and were studied and developed by the Economic Coordination Committee (ECC) based on the theory of Cost-of-production value, and also covered the areas of Trickle-down system. Supervision and fulfillment of this programme became the watchword of Pakistan's civil bureaucracy since early 1950s.
Inspired by the five-year plans of the Soviet Union, the programme was visioned and proposed by the first Finance Minister Malik Ghulam Mohammad to Prime minister Liaquat Ali Khan who initially backed the programme, in 1948. The first five-year plans were approved by the prime minister Ali Khan in 1950 for the period of 1950–55; it was accepted in a view to serve in the rapid and intensified industrialisation, expansion of banking and financial services, with a major focus on heavy industry. Although not five-year plans did not take up the full period of time assigned to them, some of the plans were failed and abandoned whilst some completed successfully. Altogether, there were eight five-year plans (starting 1950 till 1999) and were replaced with the more effective programme, the Medium Term Development Framework (MTDF) under Prime Minister Shaukat Aziz (office: 2004–2007).
Although Pakistan didn't officially launch a First Five-Year Plan, it embarked on various development initiatives during this period. The key focus areas included agriculture, industries, and infrastructure development. At the time of partition of British India by the United Kingdom, Pakistan was a relatively under-developed country. The country's systems of production, transportation, trade and consumption yielded a very low standard of living, with little opportunity for education, or economic advancement in the country. The industries and financial services were non-existent in the country and agriculture development was among the lowest in the world. The vast majority of the population still lived in villages and was untouched by the scientific and technological development of the past two centuries. The partition had a major effect on the country's existing economic infrastructure that disrupted the wholesale transfers of population, trade and business, channels of communication, industrial and commercial organisation, and the pressing need to establish new provisional governments. Economic planning began in 1948 when Prime Minister Liaquat Ali Khan presented the first Five-Year plans at the parliament of Pakistan on 8 July 1948. The first plan was conceived by the Ministry of Finance (MoF), and were studied and developed by the Economic Coordination Committee (ECC) based on the theory of Cost-of-production value, and also covered trickle-down economics. As part of this programme, the State Bank of Pakistan was established to give a kickstart to banking services in the country. The major economic infrastructure was quickly expanded and the hiring gap was filled as government revenue began to rise. The currency war with India following the devaluation of the British Pound Sterling and Indian refusal to recognize the Pakistani rupee in 1949 led to a deadlock in India-Pakistan trade.
In the middle of 1950, relations were restored when India and Pakistan resumed trade, and in February 1951, India formally recognized Pakistan's currency after entering in a new trade agreement, but older trade relations were not restored. The Korean War brought about an economic boom but growth declined after the assassination of Liaqat Ali Khan in October 1951. Moreover, efforts to continue the programme failed, partly due to inadequate staff officers and lack of ambitions. In 1953, the programme collapsed when shortages of clothes, medicines and other essential consumer goods arose; there was also a serious food shortage as a result of monsoon floods after 1951. Prime Minister Khawaja Nazimuddin was forced to end the programme after requesting economic assistance from the United States and other friendly countries.
New studies were conducted in 1955 after the collapse of the first programme. According to the census, over 90% of the population lived in rural areas while only 10% lived in urban areas. In East Pakistan, the urban proportion was as low as 4.0% compared to 18.1% in West Pakistan, although the urbanisation had been increased at an accelerated level. In 1955, Prime Minister Muhammad Ali Bogra again revived the plan and published it in 1956. After reassessment, the programme was launched again with agricultural development as the highest priority, and strong emphasis placed on rapidly increasing developmental efforts in East Pakistan and in the less-developed areas of West Pakistan. Prime Minister Huseyn Suhrawardy of the Awami League gave much priority to food development, agriculture and social development in both states. The concept of Collective farming was introduced by Suhrawardy as part of his agricultural policies and around 27.0 million rupees were spent in order to organised the agricultural in the country. However, this programme was built entirely in the absence of much essential information and basic statistics.
In practice, this plan was not implemented because of its enormous size. The shortage of technical knowledge also devastated the programme. The Awami League's government also had shortage of foreign exchange to execute the plan, and was unable to find outside assistance to fulfill its commitment to the first five-year plans.
Despite the failure of the first five-year plans, the programmes were revived and restated by the military government of President Ayub Khan. The second five-year plans gave highest priority to heavy industrial development, and advancement in literature and science, and had a single underlying purpose: "to advance the country as far as possible, within the next five years, along the road of these long-range objectives.". Further improvements were made in railways, communications, and transportation. More attention was given to private sector industrial development and agricultural industries; the second five-year plans aimed to increase the national income by 20%. The unemployment was tackled with the industrialisation of the country, and overall major industrial development was carried out in West Pakistan while few in East. The Second Five-Year Plan surpassed its major goals when all sectors showed substantial growth which also encouraged private entrepreneurs to participate in those activities in which a great deal of profit could be made, while the government acted in those sectors of the economy where private business was reluctant to operate.
This mix of private enterprise and social responsibility was hailed as a model that other developing countries could follow. The second five-year plans oversaw the development of water and power utilities in East and West Pakistan and had energy sector built with the help from private-sector. The financial services heavily depended on the foreign investment and aid from the United States that bolstered the economy. The second five-year plans were a quiet a big success but it was partially due to generous infusions of foreign aid, particularly from the United States. preference of village agro technical program of rural development so that the agro technical production methods may be improved.
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Five-Year Plans of Pakistan
The Five-Year Plans for the National Economy of Pakistan (Urdu: اقتصادی منصوبہ جاتِ پنج سالہ ، پاکستان) (otherwise publicly known as Five-Year Economic Plans for the National Economy), were the series of nationwide centralised economic plans and targets as part of the economic development initiatives, in the Pakistan. The plan was conceived by the Ministry of Finance (MoF), and were studied and developed by the Economic Coordination Committee (ECC) based on the theory of Cost-of-production value, and also covered the areas of Trickle-down system. Supervision and fulfillment of this programme became the watchword of Pakistan's civil bureaucracy since early 1950s.
Inspired by the five-year plans of the Soviet Union, the programme was visioned and proposed by the first Finance Minister Malik Ghulam Mohammad to Prime minister Liaquat Ali Khan who initially backed the programme, in 1948. The first five-year plans were approved by the prime minister Ali Khan in 1950 for the period of 1950–55; it was accepted in a view to serve in the rapid and intensified industrialisation, expansion of banking and financial services, with a major focus on heavy industry. Although not five-year plans did not take up the full period of time assigned to them, some of the plans were failed and abandoned whilst some completed successfully. Altogether, there were eight five-year plans (starting 1950 till 1999) and were replaced with the more effective programme, the Medium Term Development Framework (MTDF) under Prime Minister Shaukat Aziz (office: 2004–2007).
Although Pakistan didn't officially launch a First Five-Year Plan, it embarked on various development initiatives during this period. The key focus areas included agriculture, industries, and infrastructure development. At the time of partition of British India by the United Kingdom, Pakistan was a relatively under-developed country. The country's systems of production, transportation, trade and consumption yielded a very low standard of living, with little opportunity for education, or economic advancement in the country. The industries and financial services were non-existent in the country and agriculture development was among the lowest in the world. The vast majority of the population still lived in villages and was untouched by the scientific and technological development of the past two centuries. The partition had a major effect on the country's existing economic infrastructure that disrupted the wholesale transfers of population, trade and business, channels of communication, industrial and commercial organisation, and the pressing need to establish new provisional governments. Economic planning began in 1948 when Prime Minister Liaquat Ali Khan presented the first Five-Year plans at the parliament of Pakistan on 8 July 1948. The first plan was conceived by the Ministry of Finance (MoF), and were studied and developed by the Economic Coordination Committee (ECC) based on the theory of Cost-of-production value, and also covered trickle-down economics. As part of this programme, the State Bank of Pakistan was established to give a kickstart to banking services in the country. The major economic infrastructure was quickly expanded and the hiring gap was filled as government revenue began to rise. The currency war with India following the devaluation of the British Pound Sterling and Indian refusal to recognize the Pakistani rupee in 1949 led to a deadlock in India-Pakistan trade.
In the middle of 1950, relations were restored when India and Pakistan resumed trade, and in February 1951, India formally recognized Pakistan's currency after entering in a new trade agreement, but older trade relations were not restored. The Korean War brought about an economic boom but growth declined after the assassination of Liaqat Ali Khan in October 1951. Moreover, efforts to continue the programme failed, partly due to inadequate staff officers and lack of ambitions. In 1953, the programme collapsed when shortages of clothes, medicines and other essential consumer goods arose; there was also a serious food shortage as a result of monsoon floods after 1951. Prime Minister Khawaja Nazimuddin was forced to end the programme after requesting economic assistance from the United States and other friendly countries.
New studies were conducted in 1955 after the collapse of the first programme. According to the census, over 90% of the population lived in rural areas while only 10% lived in urban areas. In East Pakistan, the urban proportion was as low as 4.0% compared to 18.1% in West Pakistan, although the urbanisation had been increased at an accelerated level. In 1955, Prime Minister Muhammad Ali Bogra again revived the plan and published it in 1956. After reassessment, the programme was launched again with agricultural development as the highest priority, and strong emphasis placed on rapidly increasing developmental efforts in East Pakistan and in the less-developed areas of West Pakistan. Prime Minister Huseyn Suhrawardy of the Awami League gave much priority to food development, agriculture and social development in both states. The concept of Collective farming was introduced by Suhrawardy as part of his agricultural policies and around 27.0 million rupees were spent in order to organised the agricultural in the country. However, this programme was built entirely in the absence of much essential information and basic statistics.
In practice, this plan was not implemented because of its enormous size. The shortage of technical knowledge also devastated the programme. The Awami League's government also had shortage of foreign exchange to execute the plan, and was unable to find outside assistance to fulfill its commitment to the first five-year plans.
Despite the failure of the first five-year plans, the programmes were revived and restated by the military government of President Ayub Khan. The second five-year plans gave highest priority to heavy industrial development, and advancement in literature and science, and had a single underlying purpose: "to advance the country as far as possible, within the next five years, along the road of these long-range objectives.". Further improvements were made in railways, communications, and transportation. More attention was given to private sector industrial development and agricultural industries; the second five-year plans aimed to increase the national income by 20%. The unemployment was tackled with the industrialisation of the country, and overall major industrial development was carried out in West Pakistan while few in East. The Second Five-Year Plan surpassed its major goals when all sectors showed substantial growth which also encouraged private entrepreneurs to participate in those activities in which a great deal of profit could be made, while the government acted in those sectors of the economy where private business was reluctant to operate.
This mix of private enterprise and social responsibility was hailed as a model that other developing countries could follow. The second five-year plans oversaw the development of water and power utilities in East and West Pakistan and had energy sector built with the help from private-sector. The financial services heavily depended on the foreign investment and aid from the United States that bolstered the economy. The second five-year plans were a quiet a big success but it was partially due to generous infusions of foreign aid, particularly from the United States. preference of village agro technical program of rural development so that the agro technical production methods may be improved.