The contrasting economic trajectories of India and Pakistan have been a subject of interest for economists and policymakers alike. While both countries started on relatively similar economic grounds post-independence, their paths have diverged significantly over the years. India now stands as the world’s fifth largest economy in nominal terms and the third largest in purchasing power parity (PPP) terms. Its GDP is approximately eleven times higher than Pakistan’s, with at least one Indian state, Maharashtra, surpassing Pakistan’s total GDP in nominal terms. In contrast, Pakistan’s economy has faced numerous challenges including political instability, governance issues, and mounting debt and inflated import costs.
This variance can be attributed to several factors. India’s economic liberalization in the 1990s, its focus on technology and service industries, and its larger domestic market have contributed to its robust growth. Pakistan, meanwhile, has been hampered by its overreliance on agriculture, a lack of diversification in exports, and insufficient investment in human capital development. Pakistan must undertake comprehensive reforms to improve governance, attract foreign investment, and diversify its economy. The country must also leverage its strategic location for trade and transit, capitalize on its young workforce, and invest in education and technology.
Ali Madad
Islamabad
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