Ans. The following are the reasons for the slow growth and re-emergence of poverty in Pakistan.
1. Foreign loan dependence: There is a growing reliance on foreign loans. It is having a difficult time repaying the loan and the interest on it.
2. Excessive defence spending: In order to alleviate poverty, more public expenditure should be incurred for a country’s development. However, Pakistan spends a lot of money on defence.
3. Political instability: Scholars believe that political instability is one of the causes of slow growth and the re-emergence of poverty in Pakistan, as there is more expenditure on maintaining law and order.
4. Decrease in foreign exchange earnings: Remittances from Pakistani workers in the Middle East and exports of highly volatile agricultural products accounted for the majority of Pakistan’s foreign exchange earnings. Foreign exchange remittances have now fallen.
5. Agricultural growth based on a good harvest: In Pakistan, agricultural growth and food supply were based on a good harvest. They were not based on a technical institutional process. So, when there was a good harvest, the economy was in good shape; when it wasn’t, the economic indicators showed stagnation or negative trends.