The history of Pakistan has been marked with periods of military rule, political instability and

violence since its acquisition of independence. They have suffered from decades of internal
political conflicts, a fast-growing population, uneven rates of foreign investment, and
expensive, unresolved conflict with neighbour India. The country faces problems such as
poverty, illiteracy, corruption and terrorism. Khalid (2017) stated that most western countries
have been reluctant to invest in Pakistan for the same cause, although Pakistan was the only
nation to fight terrorism that has become a global threat (para. 2). Defence and energy, which
was a challenging security concern and has historically prevented investors from investing in
Pakistan, which has led to the economic slowdown in Pakistan. (Central Intelligence Agency,
2020, p. 1). Resolving Pakistan’s various problems and restoring the country’s infrastructure
needs close partnerships between government organizations with the private sector to ensure
that all Muslims have fair market opportunities and employment. (Khalid, 2017, para. 11).
Government policies, however, have created robust macroeconomic recovery through foreign
investment and renewed access to global markets over the last decade.

Pakistan’s economic forecast looks promising due to its current economic outlook,
strategically suitable position between the two economic giants, the rapid growth of
infrastructure and its flexible government investment policy. According to Shahid
(2020), “Moody’s Investor Service upgrading Pakistan’s economic outlook from negative to
stable” (para. 5) and the World Bank has listed Pakistan as one of the top 10 “most
developed” countries in the ease of doing business ranking (para. 5).

Pakistan’s economy is currently rising at 5.79 percent and expects to become the 18th
largest economy by 2050. In terms of the purchasing power parity (PPP), it is the 25th
largest economy in the world and the 42nd strongest in terms of nominal gross domestic
product. Pakistan population is more than 207 million, 5th largest in the world, making it a
total GDP per capita of $1,641 in 2018. Pakistan is going to surpass Saudi Arabia, Iran,
Malaysia, Singapore, Australia and Taiwan’s existing giant economies by 2050. (Neill, 2014,
para. 1).

Pakistan is placed between prominent south Asian, central and middle eastern regions
making position as a perfect location for economic growth as in the future of 2050, China
and India are the world’s leading economies, Pakistan is the only significant region bordering
both nations, and once their trade with India improves, and the China-Pakistan Economic
Corridor has constructed a linkage between Xinjiang and Gwadar, imagine the game-
changing opportunities for people and businesses in this region.

The government of Pakistan acknowledges the importance of improving and expanding

infrastructure services as they are actively working on eliminating infrastructure gaps to
create better conditions for business growth in Pakistan for example, it continues to support
the public-private partnerships in sectors such as setting up industries, transport, logistics
(Emarhub, 2018, para. 22). According to Manzoor (2016), the ‘One Belt One Road’ (OBOR)
Project seeks to strengthen the connection between Asian, European and African continents
and the China-Pakistan Economic Corridor (CPEC) is one of its main projects aimed at the
cooperation and growth of both countries. It is termed as a life-line initiative for Pakistan’s
economy as it focuses mainly on Pakistan’s energy and transportation, and the development
of these sectors would serve as a driving force for Pakistan’s economy. CPEC would not
only improve Pakistan’s industrial sector but would also create a lot of employment
opportunities in other areas (p. 1). According to the International Monetary Fund (2018),
Pakistan’s gross domestic product (GDP) growth in 2018 was 5.53% after inflation
adjustment. Forecasts for the coming years estimate that the GDP growth will be continuous
to around 5% in the coming years. (para. 1). According to the Board of Investment Pakistan
(2020), the strategic location of Pakistan would make it Asia’s most significant gateway for
trade, electricity and transport. It also provides access to the steady Central Asian States,
the financially stable Gulf States and Far East Tigers, which are advanced economically
(para. 1).

The investment policy is designed to establish an interconnected structure for the attraction
of FDI to a sustainable business climate. The political trends have been constant in
Pakistan, with the essential key elements being liberalization, deregulation, privatization and
facilitation (Board of Investment Pakistan, 2020, para. 4) and the government is increasing
the inflow of foreign direct investment (FDI) and has made it flexible and more comfortable to
start a company in Pakistan to draw more FDI, as well as by offering lucrative incentives to
foreign investors (CEIC, 2020).

 
Although the studies mentioned above include numerous examples to show that Pakistan’s
economy looks more stable now and will work better in the future if necessary measures are
taken to combat terrorism effectively, some experts argue that Pakistan will not recover from
the current situation and their economy will continue to crash. First, the growth rate in 2019-
2020 has decreased by nearly 50% from 6.2 % to 3.3% and expected to fall to 2.4% by next
year (Siddiqui, 2019, para. 3). Second, the Pakistani rupee has lost one-fifth of its dollar
value. (para. 3). Third, inflation is expected to reach approximately 13 percent in one year,
which is the highest inflation rate in the last ten years in Pakistan (para. 3).
However, since the future of a country cannot be judged on a last one-year poor performance as there
are other reasons in the real world, which has impacted Pakistan economy, they had real tensions with
their neighbour India and their fight against the terrorism has directly impacted their economy but
now with a support of China their economy is recovering again, and it is challenging to say that
Pakistan economy will sink by seeing their future planning and enormous growth in the past ten years,
that has shown a more positive side and their future growth looks bright.
 

Manzoor, F., Wei, L., Latif, A., & Shah, S. I. A. (2017, October). A review on one belt one road-
China Pakistan economic corridor and its policy implications. In Second International Conference
On Economic and Business Management (FEBM 2017). Atlantis Press.
https://www.researchgate.net/publication/322048091_A_review_on_one_belt_one_road-
China_Pakistan_economic_corridor_and_its_policy_implications

 
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