Musharraf and After: 2004-2008

➢The Caretaker government under Musharraf took numerous poor decisions where
politics trumped economics.
➢Muslim League re-elected in a power sharing agreement with Benazir Bhutto's
Pakistan People's Party.
➢The single most important attribute of Pakistan's economy throughout the 1990s was
its excessive and severe debt burden. In 2001/02, external debt was equivalent to
57 per cent of GDP, and domestic debt accounted for 43 per cent.
➢By 2006/07, domestic debt had fallen to 30 pet cent of GDP.
➢On account of agreements reached with bilateral and multilateral donors following
9/11, huge amounts of debt were either written off or rescheduled.
➢False foundations, largely consumer-led growth and investment in the speculative
real estate and stock market sectors with remittances and foreign aid driving this
growth.
➢What was missing was a long-term strategy and direction needed to guide this money
being sent to Pakistan into more productive sectors.
➢The large inflows helped create a bubble, which eventually burst.
➢The government to provide the much needed infrastructure, and indeed roads were
built and communication networks advanced.
➢Extensive shortages of electricity affecting domestic manufacturing and industry,
Persistent inflationary pressures and weak performance Of key sectors Of the
economy and emerging bottlenecks in infrastructure particularly in the power
sector.
                                           Continue …..

➢Pakistan's average real GDP growth rate during 2004—07 at Over 7 pe