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Keys macro economic growth
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By Dr. S.M. ALAM
July 23 - 29 , 2001
The success or failure of any country over the next
two decades hinges on economic growth. It is assumed that by the next
generation, some countries are likely to have being improved
substantially their standard of living, and their quality of life and
some becoming a little richer. The economic development of a country
generally depends on the development of agriculture, industry, health,
education, social reforms, zeal and enthusiasm of the population in
economic development. Honesty, hard work, investment of foreign moneys
also plays a pivotal role in the economic uplift of a country. The
economic growth can be measured and defined in various ways. One of
the most commons, is the rate at which aggregate production and
spending i.e. the gross national product (GNP) or the gross domestic
product (GDP) growth grows. Alternatively, the rate of growth of per
capita GNP or GDP is used because of its closer proximity to the
growth of living standards and economic welfare. The recognition of
growth is measured as a natural part of economic history of a nation
is fairly new, dating more or less from the Industrial Revolution. The
economical growth of a country is related with per capita income. This
causes the rise in living standards of the people.
The increase in economic growth are due to
improvement in GNP, GDP, exports of the surplus commodities and these
factors will simultaneously improve the reserves of the gold in the
treasury of the individual government of a country. The commodities
produced in the country in surplus and when the excess products are
exported, the ultimate benefit is to be increase in the GDP growth and
in per capita GNP. The GDP is the value of all goods and services
produced in a year, whereas the GNP is GDP plus payments from abroad
from investment, and labour, minus similar payments to foreigners. The
real GDP registered a decline growth of 4.5% in 1999-2000, against a
growth of 5.3% in the year 1998-99. The rate of inflation in terms of
consumer price index (CPI) increased to 5.1% in 2000 as compared to
3.4% in the year 1999. Life expectancy is the number of years a new
born infant will live if patterns of mortality prevailing at the time
of its birth were to stay throughout its life.
In the today's world, the freedom and sovereignty
of a country depends on its economy. That is why, the International
Financial Institutions, which are functioning under the patronage of
Anti-Muslims people of developed and industrialised countries at the
very outset entangle a county in financial problems and then compel it
to fulfil their own demands. In order to achieve their ends, render
the Muslim countries financially weak and create among the people an
atmosphere of restlessness and distrust in their governments, these
financial institutions carryout propaganda through world media. As a
result not to speak of foreign investment, local people begin to
transfer their savings to the foreign countries. According to a
survey, during the last three months, about 3 billion dollars were
siphoned out of Pakistan. Now, the number of the poor exceed 40
million and the unemployed exceeded to 8 million. Due to drainage of
country's money to foreign countries, has reenacted in increased
dearness, poverty, distrust and frustration. The tendency of
transferring the state wealth to foreign countries has created an
atmosphere of distrust and frustration among the local industrialists
and investors, resultanty, the local industry is shrinking day by day
and unemployment is on the rise, giving birth to many immoral crimes.
The major scenario in the economic development, is
also the export factor. Whereas, the shortage of commodities for the
population of a country's needs is benefited by import. This import
phenomenon generally has a negative effect on the real economic growth
of a country. In this context, the exports and imports scenario of
Pakistan is as: The major exports of Pakistan are in million US dollar
for the year 1998-99, fish and fish preparations (120), rice (522),
raw wool (2.7), raw cotton (2.3), leather (173), cotton farn (931),
cotton cloth (1088), petroleum and petroleum products (48), synthetic
textile (396), guar and guar products (33), ready made garments (652),
drugs and chemicals (48), surgical instruments (112), carpets and
carpeting rugs (190), sport goods (257), and other exports (3143) and
thus the total earning is 7,718 million dollars. Due to shortage of
different commodities, the country is bound to import necessary items
to fulfil the population requirements. Therefore, the import items of
the country are as in million US dollar — edible oil (814), sugar
(3.1), tea (223), wheat unmilled (407), fertilizer (265), machinery
(1782), road motor vehicles (290), petroleum and petroleum product
(1458), synthetic and artificial silk yarn (44), insecticides (109),
drugs and medicines (256), iron and steel (287), rubber crude (39),
paper and paper board and manuf (110), and other imports (9,287). It
was noted that expenditure on imports are greater than exports items.
We will have to increase our exports upto 25 to 30
per cent a year to come upto the level of exports of other countries
in the region. Some of the nearing countries, whose exports income are
mentioned in the table for example are as Malaysia 70 billion US
dollars, should encourage non-traditional products particularly those
produced by the small and medium size industries. In India for
example, the small and medium size industries contribute 60% of the
current Indian exports of 30 billion US dollars. The quality of
exports goods, delivery schedule and after sale service of their
products should be firm commitments of our exporters. For revival of
economy, export growth is the key factor. This needs the improvement
in the production of exportable items. National economy revolves
around cotton and textile. The textile is the only sector, which earns
around 5 billion dollars a year. There is a need to improve the export
scenario by producing the items of good qualities. In order to reduce
trade gap, there is a need to minimize imports and increase exports.
The fall in Pakistan's exports is attributed to the high cost of
inputs, like imported materials, fuel, electricity, credit,
transportation and devaluation of local currency.
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