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Economic problems affecting a nation have much effect on the economic growth as well as development. Economic problems affect the nation’s plan on expanding its local and foreign operations. The main drawback of the economic problems is the increase in poverty among the citizens. They create a situation of economic difficulties, which makes it hard for the government to implement its strategies that lead to economic stagnation. The problems hinder investors from undertaking risky projects that are viewed as being beneficial in the long-run. The investors lack the chance to invest in such businesses. The main economic problems that affect Pakistan make it a weaker nation economically. The main economic problems in Pakistan include the rise in the level of unemployment, high inflation, low level of foreign and local investment, monstrous debt, corruption, poor education, and poverty.
Unemployment in Pakistan has been rising in the recent past. Many people who are well-trained in Pakistan are jobless with over 50% being the youth who are the most productive members of the society. Unemployment in any nation arises when the individuals who are willing and able to work cannot secure a job at the prevailing pay rate. This has led to economic developments being hindered since the Pakistan citizens are not fully productive. Unemployment rates have increased since 2009 where the rate was 5.5% and currently it is now hitting 6.4%. The rise has been associated with many economic problems in Pakistan that the government has been unable to control (Rahman 44). Due to the drawbacks associated with unemployment, Pakistan has been unable to move onwards on the economic grounds.
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Inflation levels in Pakistan are rising, declining the value of its currency. The prices of the most essential products and services have gone up. The consumers have felt this effect in terms of inability to purchase the required goods to sustain their life. Consumers are now incurring a lot in terms of purchasing the basic commodities such as food stuffs. This has created a problem in the health of the citizens, hence reducing the production in the industrial and agricultural sectors (Korson 78). The other effect of inflation has been on the cost of production that has also risen. The cost of production has increased due to the increase in levels of oil prices and the internal unfavorable business conditions in Pakistan.
Oil is a major factor of production in Pakistan and is used by many industries and factories. The rise in the oil prices has made the products to hike in prices, hence affecting consumers. This has led to an increase in inflation in Pakistan to reach 5.3%. The Consumer Price Index and Wholesale Price Index that are used to measure inflation have also risen up. The inflation increase has prevented the government from attaining its economic goals that are quite essential for the economic growth and development (Husain 30). This inflation has also reduced the investor&rsquos willingness to undertake investments in Pakistan. This has made Pakistan remain with many unexploited opportunities since the investors help to attain this exploitation.
War and terrorism have affected the economic growth and development of Pakistan. This has been evident by the effects on the tourism industry. The war has created fear among the tourists, hence creating a link in the global sectors of the neighboring countries. The tourism industry in Pakistan is known to cause an increase in the level of foreign exchange. Pakistan has great tourist attraction centers that are unique, such as beautiful hills, green valleys, flowing waterfalls, and shimmering lakes. They have made tourism become one of the booming industries in Pakistan (Korson 122). Terrorism has seen to reduce the number of foreign tourists, hence affecting the industry adversely. The tourism sector relies much on the degree of any nation security that evaluates the costs associated with the absence of the security.
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Terrorism in Pakistan has also led to an increase in migration to other areas of the country. Pakistan has experienced a lot of migration since its independence in 1947 till now. The businesses have been affected by the migration. In most cases, the businesses are abandoned once migration takes place (Korson 67). The migration causes the industries to be affected adversely since there are no employees to work there. Migration is associated with an increase in government expenditure as the government is much concerned with settling the migrants. The large influx of people and their rehabilitation causes an increase in government expenditure. Unemployment arising from the migration process is another problem the government faces. The political stability as well as economic progress is affected by the migrants as they tend to pressure on the set policies. Terrorism has hence hindered the attainment of economic goals as they make people congested in the peaceful areas. This creates a non-uniform distribution of economic resources. The other essential element of migration is the distraction of government investments in Pakistan that affect the already started projects.
There are poor education systems in Pakistan. The level of illiteracy has gone quite high as in 2012 61.2% were illiterate (Korson 63). This illiteracy affects the general performance of the economy. Education developments in Pakistan have been ignored as a lot of resources are directed towards debt payment. The educational sector lacks this crucial funding, hence offering substandard education to the citizens. 50% of the men are illiterate while 75.6% of women fall in this category, hence limiting their opportunities in economic planning and development. The techniques used in Pakistan to train students are much more concerned with the theoretical training than practical skills. This makes the student less effective when they get their jobs. They perform poorly in the first days, hence affecting the economic performance.
The population of Pakistan has more effects on the economic performance. The high level of illiteracy results in an increase in population. The illiterate people are less likely to participate in family planning. They do not consider any population control being relevant since there is no understanding of the effects of high population. In most cases, the population increase is associated with the scarcity of resources that are necessary for developing the entire society. The illiterate population makes this nation discriminated by foreign investors. Pakistan requires foreign investors to initiate developments in the economy and lack of this leads to poor economic growth (Husain 55). The high level of illiteracy among women in Pakistan makes it hard for them to engage in the labor force. This makes them have less incentive to limit their family sizes as most of them spend a lot of their time with their husbands, hence increasing the population. The increase leads to stress on the natural resources of Pakistan that are overexploited and hence extinguished.
The stock exchange also shows a clear scenario of economic meltdown in Pakistan. The political instability and the dictatorship in Pakistan badly affect the stock of the three stock exchanges in Pakistan. This has made Karachi Stock Exchange go down to the lowest level due to the basic factors of price shifts. The shifts are related to the political instability in Pakistan. The local and foreign investors fear investing large sums of money as they fear that the money invested will be lost (Rahman 44). They try to avoid incurring any loss. Last year, the stock exchange markets showed very poor performance. This perception also affected the investors who reduced the total amount of cash invested in the stock. There is a change in the stock recovery state. It has now become quite alarming, hence affecting the investor’s perspective. Initially, the stock markets of Kuwait used to plunge and would recover everything in a few days. Nowadays, the share prices take quite long before generating profits. The stock market helps Pakistan government in developing the economic decisions that are essential for the daily developments. The costs incurred in the markets are used to develop the economy.
An energy crisis in Pakistan represents a great shortfall in the supply of energy resources to an economy. It usually means shortage of oil and electricity as well as natural resources. Energy crisis in Pakistan has affected the economic growth and developments since there are effects on the industry due to the lack of maximum production. Employees are usually given a hard time in trying to come up with new products that suit the industry (Husain 33). Energy crisis affects how businesses are carried out in Pakistan. The other factor is the level of production to be adopted in coming with final goods. The shortage will thus imply a negative contribution for the entire market. They require a sound production process that is determined by the business.
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