Over the last 65 years, the Pakistan economy has displayed considerable
resilience as it has moved through recurring economic cycles of high
economic growth followed by prolonged spells of low growth. Its average
economic growth of around 5 percent during this period would be
considered respectable by most developing countries’ standards, even
though this performance is now clearly overshadowed by the stellar
growth rates achieved since the 1980s, first by the East Asian economies,
followed by China, and then till recently by India.
Is there a limit to the strain that even a reputedly resilient economy can
bear? After being mired in deep stagflation for the last five years (2009–13),1
there is a growing despondency that the Rubicon may well have been
crossed. Breaking out of the current recession will need firm and resolute
policy action and a commitment to deep economic reforms. The time to
resort to easier options such as external financial support as a means to
procrastinate on essential economic reforms has now passed. Neither is
external assistance going to be so easily forthcoming after the country’s
dismal record of reneging on promised reforms, nor for that matter will it
be sufficient. The problem is now much more deep-rooted and structural. It
is no longer business as usual to rekindle sustained growth.