TWN Global Economy Series no. 22 Pakistan: Causes and Management of the 2008 Economic Crisis By IRFAN UL HAQUE Publisher: TWN (ISBN: 978-967-5412-18-9) Year: 2010   No. of pages: 40

ABOUT THE BOOK

Like many other Asian emerging economies, Pakistan experienced major economic turbulence in 2008 amid the general global downturn. While the economy was plagued by serious balance-of-payments problems, the Pakistani crisis, this paper argues, was essentially homegrown.

The seeds of economic instability had been sown in the immediate post-9/11 years when Pakistan, as a frontline state in the newly launched “war on terror”, became the beneficiary of massive foreign resource inflows. Instead of funding productive investment, however, the incoming capital was largely channelled towards speculative activity in the stock and real estate markets. This was the result of a domestic economic setting where the financial sector had become increasingly prominent, fuelling asset market bubbles on the back of a loose monetary policy. It was the imbalances created by this finance-driven boom which, exacerbated by the unfavourable global economic climate, would eventually set off the crisis in 2008.

Looking ahead, this paper underlines the need to chart a more sustainable course for the Pakistani economy. This would entail, among others, directing financial resources towards economically productive rather than speculative ends, and overcoming the infrastructural bottlenecks that have long impeded the country’s industrial progress.

ABOUT THE AUTHOR

IRFAN UL HAQUE is Special Advisor on Finance for Development to the South Centre, and a member of the board of the New Rules for Global Finance Coalition.

Contents

1.      INTRODUCTION                                                                 

2.     THE GENESIS OF A CRISIS 

3.     THE YEARS OF FAT COWS                                               

4.     MACROECONOMIC MANAGEMENT

5.     CONCLUDING OBSERVATIONS – BEYOND THE CRISIS

6.     References

PRICE

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US$6.00 for Third World countries

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