FREE Devaluation Of Pakistan's Currency Essay (original) (raw)

  1. Pakistan at the time of independence.

General factors leading to devaluation.

Pakistan at the time of independence.
Pakistan's birth was a difficult one, which involved the immense suffering of thousands of its citizens. The British so called motherhood had abandoned it to a chaotic environment in which an elder Indian sibling looked on with scarcely disguised hostility.
Thus Pakistan started out as an economically in viable state when it attained the status of independence in 1947. .
The initial years of Pakistan were fraught with difficulties. These problems took much energy and time to solve.
The first and foremost problem was that of the refugees.
The issue of constitution making took up another nine years. .
The disputes over Kashmir.
The distribution of water resources.
The division of financial assets.
Pakistan's Economic inheritance.
Pakistan was denied of its equitable share in the financial and military assets by India in order to strangulate its fledgling economy. The Radcliff award had given Pakistan an economically unstable and undeveloped area. Most of Pakistan consisted of regions that the British has ignored in the process of industrialization. The agricultural system was obsolete. The areas mostly produced raw materials for which the processing industries were located elsewhere. Thus these areas were not economically viable. .
Pakistan's initial economic conditions could not have been much less favorable for supporting rapid economic growth and development. .
In sum Pakistan began its economic development in an environment of :.
Pre-industrial institutions.
Low productivity.
Non-existence of an established manufacturing industry. .
Uneven regional development.
High population growth.
These problems created anxieties about Pakistan's precarious economic situation in relation to its much larger and economically stronger neighbor.
Quad-e-Azam immediately set to the difficult task of rebuilding the economic system of the new country.

1. Money and the Capital Market

The State Bank Of Pakistan reports the interest Rate in the Pakistan, which is the central bank of the Pakistan. In Pakistan, a country located in South Asia, The State Bank Of Pakistan sets an interest rate at which it lends to financial institutions. ... Inflation is an increase in the amount of currency in circulation, resulting in a relatively sharp and sudden fall in its value and rise in prices (McMahon, 2010). ... This has thus not led to steady rates over the years and Pakistan shown several fluctuations in the money market interest rates of Pakistan. ... In Pakistan, the State Bank o...

2. Globalisation

Policies include the removal of subsidies, increased levels of taxation, reduction in public expenditure, de-regulation/liberalisation of economies, privatisation of the public sector and devaluation of currency. ...

3. Global Apparel Sourcing for US----The post January 01, 2005 scenario.

Take the case of Singapore which once used to earn a chunk of its foreign exchange with apparel exports to US and EU but as the economy advanced and labor supply became more and more specialized Singapore lost its competitive edge to countries like Thailand, Phillipines, Pakistan etc. ...

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