Development economics

Rostow development model and Pakistan

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Submitted to:

Ehsan sheikh

Submitted on:

10th Jan 2011

Submitted by:

Komal Irfan

Sarah S Farooqui

Tooba Hasan

Tooba Mansoor

M. Umair Kapadia
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Table of Contents

Acknowledgement:......................................................................................................................................4
Introduction ……………………………………………………………………………………………………………………………………………5

Rostow development model…………………………………………………………………………………………………………………..5

Traditional society ……………………………………………………………………………………………………………………5

Transitional stage …………………………………………………………………………………………………………………….5

Take off stage model…………………………………………………………………………………………………………………5

Drive to maturity model…………………………………………………………………………………………………………..6

High mass consumption………………………………………………………………………………………………………….6

Pakistan and Rostow development model……………………………………………………………………………………………..6

Recommendations …………………………………………………………………………………………………………………………………7
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Acknowledgement:

To,

Prof. Ehsan Sheikh

Bahria University

Karachi campus.

Respected sir,

On the behalf of my group members, I Tooba Mansoor would like to thank you for giving us an
opportunity to enhance our theoretical knowledge and implement it in the practical field. We must
apologies for any poor performance found in this paper.

I especially like to give my gratitude to you for this opportunity which helped us to perform in
our best capabilities. Moreover, it helps us in more areas than just one.

Thanking you once again.

Yours sincerely;

Tooba mansoor

My group members:

Komal Irfan

Sarah S Farooqui

Tooba Hasan

M. Umair kapadia

Date: 10th Jan 2011

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Introduction:

The discussion about the development and underdevelopment is very ancient. After
Second World War, countries around the world have started to pay attention on the development
related issues. However, the traditional approaches to the development had lost validity due to an
increase in the complexity of the changing world.
Walter Rostow offers a model which is applicable in this very complex world. The key
interest of this essay is to explain the modern theory with the help of the Pakistan’s development
stages.
The text is structured in three parts: first part explains the Rostow five step developments
the application of the theory will be done in the second part. In the last part provides the
recommendations for the government on; how they can improve the development processes.
Rostow five step development model:
The concept of modernization begins in the era of the industrialization. At that time,
there were two factors, which influence the theories of modern disclosure. These two factors
were the continuous changes and other factors are the development. Rostow model has both
elements. He outlines these factors in his book “stages of economic growth”. According to
Rostow, every economy transit through 5 stages in its life span. These stages include:
Traditional stage:
It is a stage which is depicting the time where trading was not been introduced, and
whatever is been produced is consumed by the producers themselves. Barter trade was
encouraged. The only existing industry at the time used to agriculture, which is labor intensive.
Limited amount of capital is been utilized and allocation of resources is done by the traditional
methods.
Transitional stage:
Transitional is the stage where people have gained specialization, which has created the
surplus amount of goods. That in return has created the opportunity for the trade. This later
supports the development of the infrastructure of the country. As the development of the
country progresses, more businesses establish and international trade among the countries
becomes possible.
Take off stage:
Take off is the third stage where an economy undergoes through rapid industrialization.
The economy changes from agriculture to industries. The opportunities and growths are now
concentrated in few regions and industries of the country. Economists roughly believe that the
percentage of the investment should be equal or more than 10%.
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The economic changes are come with the evolution of new political and social
institutions that support the industrialization. The growth is self-sustaining as investment leads to
increasing incomes in turn generating more savings to finance further investment.
Drive through maturity:
At this stage, the economy diversifying into new areas. The technology innovation provides the
opportunities for a diverse range of investments. At this point, of time dependence on the imports
have been reduced because the economy has become self sufficient in producing the goods and
services.
High mass consumption:
This is the last stage where an economy is geared towards the mass consumption. The
industries have been flourished completely. In this era service sector has emerged to be dominant
in the economy.
Pakistan and Rostow model:
Today Pakistan is the second largest economy in south Asia. However it was never like
this. After the independence and till date Pakistan’s economy is striving for the growth. Pakistan
emerged on the maps of the world in 1947. However its economy was not alien to the
industrialization. Although at the time of the independence the dominant sector was agriculture
but the industries and service sector was also contributing to the GDP of the country.
Traditional society:
Pre independence stage can be classified as the traditional society stage of the Pakistan.
The area of Pakistan is one of the neglected parts of the United India in terms of the
development. However, as far as agriculture is concerned, it is indeed a rich country and the
government of India has made efforts in order to promote.
Transitional stage:
At the time of independence Pakistan’s economy was going through a transitional stage.
At that time industries comprised 24% of the economy. Small number of entrepreneurs came
forward and takes the risk of investing in the new emerging country. The pioneers of the
industrialization include rangoonwalas, habibs and minshas.
Take off stage:
Since the independence economy of Pakistan has grown with a rapid. Many of the
industries were been set so far. Karachi, and Faisalabad are been considered the major hubs of
the country. The composition of industry in the economy of Pakistan has grown from 24% to
55% in the past 60 years. This pace of growth is equal to the average growth of the newly
independent country.
Unfortunately, after 60 years of the hard ship the economy of Pakistan could not shift
itself from take off stage to the drive through maturity stage due to serious political turmoil
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which has not only created political instability but also economic stability. This economic and
political stability leaves no other option but to deindustrialization.

Recommendations:
For the economy to grow in the future it is really important for the government to follow
the following recommendations:
• Stabilize political and economic conditions, which will encourage not only locals to
invest but also attracts foreign investments
• Improvement of infrastructure
• More development plans and need to be implemented
• Create more opportunities for the investments like Gwardar.
• Generate more energy so the industries can be expended, and people set new industries.
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