Periods of stagflation in Pakistan

First period of stagflation to tackle down the stagflation with full force. Yasmeen Niaz Mohiuddin, the author of Pakistan: A Global Studies Handbook, points out that East-Pakistan had provided employment and market of ~50% of West Pakistan's goods and materials before the 1970s. The civil war had shattered the economy; the captive markets, employments, and industrial attraction in East Pakistan was lost, and the industrial production in the country came to halt. As response to this, Bhutto devalued the national currency and announced the new labour policy at an instance. Bhutto cancelled the planned economic system and focused on intensifying government control of private business industries. The stagflation was temporarily ended in the country. However, Sharif's programmes were widely criticized by Pakistan Peoples Party in state media and the growth did not contain the sustainability. According to the Pakistan Peoples Party, Nawaz Sharif's government arbitrarily fixing the reference prices of the (privatized) state units and ignoring those suggested by the evaluations; though, Sartaj Aziz strongly dismissed the claims. (lowest growth since 1970) and the rate of inflation had risen to 10.79% (highest since 1991). After returning to power with heavy margins, Nawaz Sharif made several attempts to end the stagflation in the country. Overall, the conditions had been worsened and a year after being elected, Sharif ordered the nuclear tests in a response to India's nuclear aggression. Despite the 1997 Asian financial crisis and the 1998 Russian financial crisis, and amid economic sanctions after nuclear tests, the foreign exchange increased to $1.5 billion, the stock market improved and inflation was contained at 3.5% as opposed to 7% in 1993-96. Sharif's second government restored the GDP growth to 3.49% in 1997, tough inflation remains high at 11.80%. Little progress was made by Sharif in 1998, and his reforms only leveled up the GDP growth to 4.19%, while retaining the inflation and unemployment at 7.8%. However, Sharif's reform suffered a major set back in 1999 when the country began militarily involved with India in two occasions, which led the dismissal of his government in 1999. By the time Sharif was dismissed the GDP remains at ~3.19%, though the unemployment and inflation rate decreases down to 2%, and was at 5.74%. ==Reassessment and development==

Policies and enforcement In 1999, Sharif was dismissed in a military coup d'état led by chairman joint chiefs general Pervez Musharraf and without wasting any time, the new military government brought a role of Shaukat Aziz. There was a ~70% declining in the national economy with the loss of $150 million (1999) to $600 million (2000), which constituted 0.21% of FDI global flow. Aziz took initiatives for Foreign direct investment (FDI) offering incentives to foreign investors with his macroeconomic policies, taxation framework and a consistent investment policy. The implementation and enforcement of economic liberalisation and privatization programmes led the boom the economy, which subsequently ended the stagflation era, and for the first time since 1984, the GDP growth had reached to 9.0%— one of the highest in the world. ==Economic decay and responsive measures==

Third era of stagflation , indicating the high rise in stagflation. The economic performance and growth dramatically decayed after the 2008 general elections and the wide spread militancy in Western Pakistan. President Pervez Musharraf was forced to step down by a collective leadership led by Yousaf Raza Gillani and Asfandiar Vali. The country's working class (which dominated the population of the country) became virtually deprived from basic necessities and natural resources, notably the food, water and electricity. The nationwide floods wiped out the 20% of the economic infrastructure in the country and the economic development initiated by private sector was curbed to ~2.5%, resulting the billion dollar worth of loss of private sector. In a less intensified nationalization programme, there was a massive hiring of unskilled and less-trained working class labour, on a political basis, which slowed down the technological productivity and halted the overall social, political, economical growth. Experts views this problem as this problem also reduced the Gillani's government ability to earn adequate revenues foreign exchange, keeping fiscal and external balances perpetually under pressure. In 2012, just months before being ousted by Supreme Court, Gillani presented the last of five federal budget which Gillani admitted the country's economy was facing the period of stagflation. The Pakistan Today reasoned that more than ~48% unskilled and blue collar workers were absorbed in the private-sector industries after the government-management ownership which was engaged in agriculture; thus resulted in a decline of productivity and labour discipline. In 2012, the Pakistan Institute of Development Economics (PIDE) vice-chairman Dr. Rashid Amjad claims that, "the fiscal and financial constraints are hampering the capacity for investment and growth and the Finance ministry are reluctant to support rapid development of deeper debt markets." Ahmad further endorsed and maintained that, "a major cause of continuing stagflation in Pakistan was lack of Gilani's policy coordination between fiscal and monetary authorities." The new strict and tight monetary policy could not tame the soaring inflation, it did stagnate the economic growth. One economist maintained that stagflation took place when the tight monetary policy did not encourage the strong private sector to play a key part in growth. Analyzing the stagflation problem, the PIDE observed that a major cause of continuous era of stagflation in Pakistan was lack of coordination between fiscal and monetary authorities. ==See also==