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FIVE YEAR PLAN FIFTH (1978-1983)

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FIVE YEAR PLAN, FIFTH (1978-1983) The work on the Fifth Five Year Plan began in the winter of 1977-1978 under the overall direction of Ghulam Ishaq Khan, who at that time was the principal economic advisor to the martial-law administration of General Zia ulHaq Vaseem A Jaffrey, secretary of planning, was assigned the responsibility for preparing the draft of the Plan for consideration by the military government The Plan’s principal objective was to restore the momentum of economic development that was severely interrupted during the closing years of the administration of Prime Minister Zulfikar Ali Bhutto The Plan made three profound contributions to economic development in Pakistan First, it instituted a set of policies aimed at rationalizing the role of the public sector in economic management and development Second, it defined the role, scope, and speed with which the economy was to be Islamized Third, it set the stage for the beginning of Pakistan’s second “green revolution” At the time of the promulgation of the Fifth Plan, the Zia government had three choices: it could have denationalized governmentowned industries, curtailed further expansion of the public sector, or continued with the expansionary policies of the Bhutto administration The Zia administration chose the second course



It limited the expansion of the public sector to the investments started during the Bhutto period No new industrial investments were undertaken in the public sector during the Fifth Plan period The Plan adopted an equally conservative approach toward the development of physical infrastructure Emphasis was placed on improving the operation of existing facilities, rather than on building new ones A number of projects that were on the drawing board when Bhutto was forced out of office were either put on the back burner or were abandoned altogether The Plan adopted a cautious approach toward the Islamization of the economy Although it accepted the recommendation of a panel of experts to introduce such Islamic taxes as zakat and ushr, it postponed to a later date, pending a careful study of the matter, the elimination of riba (interest) from the economy It also reversed the Bhutto government’s benign neglect of the agricultural sector by committing a significant amount of resources to subsidies on agricultural chemicals, new irrigation works, reclamation of saline and water-logged land, and farm credit It was hoped that by pursuing these approaches the Plan would reverse the virtual stagnation of the productive sectors of the economy during the Bhutto years The gross domestic product (GDP) was expected to increase at a rate of 7 percent a year, made possible by an increase of agricultural output by 6 percent and of industrial production by 10 percent a year These objectives were realized; during the Plan period (1978-1983), GDP increased at the rate of 6

8 percent a year, income per capita of the population by 37 percent, manufacturing output by 11 percent, and agricultural production by 4 percent By the close of the Fifth Plan period, Pakistan’s economy had regained the momentum it had lost during the years that Zulfikar Ali Bhutto was in power

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