The period from 1958 to 1969 during which President Ayub ruled and Mr. Shoaib served as Finance Minister for most of these years is considered as the golden era of Pakistan’s economic history. The period had strong macro economic management and the economic indicators were extremely impressive. Agriculture grew at a respectable 4 percent while remarkable rates were achieved in manufacturing (9 percent) and trade (7 percent) GNP growth rates exceeded 6 percent on average throughout the period. Economic growth was very strong on all fronts.
Structural changes that took place under the stewardship of Mr. Shoaib laid the foundation for Pakistan’s subsequent economic performance. Manufacturing sector which was quite nascent increased to nearly 15 percent of DGP. Pakistan’s economic model was considered a benchmark for the developing countries. By the end of the decade, Pakistan’s manufactured exports wee higher than the combined manufactured exports of the Philippines, Thailand, Malaysia and Indonesia. It is purely a matter of conjecture as to where Pakistan would have stood today in terms of per capita incomes if it had continued the economic policies of 1960s.
A country’s economic outcomes depend upon a host of factors (a) Initial resource endowment; (b) External environment; (c) Strategy and policy framework; (d) Administration capacity; (e) Political stability.
Pakistan inherited a weak resource endowment as the part that constituted India was relatively advanced in terms of natural, human and physical resources while the two wings of Pakistan separated by 1,000 miles of Indian territory were quite backward.
Delivered as the 19th Shoaib Memorial Lecture organized by the Institute of Cost and Management Accountants at Karachi on August 18, 2009 External environment facing Pakistan in the decade of the 1960s was mixed. The war of 1965, however,