Understanding Economy

REMEDIAL MEASURES TO OBSTACLES TO ECONOMIC DEVELOPMENT

1. Increase in Per Capita Income: Per capita income should be increased to increase saving, capital, and the rate of investment and capital accumulation which will increase capital resources. The agriculture sector and the industrial sector must be developed to increase the per capita income and to raise the standard of living.

2. Equitable Distribution of Wealth: There is an unfair distribution of wealth in Pakistan which has created two classes rich and poor. So there is a need to reduce income disparities to overcome economic backwardness.

3. Expansion of Technology: The use of modern technology is necessary for the rapid increase in agriculture; industrial, and mineral production land, therefore, for rapid economic development.

4. Commercial Policy: The commercial policy of the country should be so evolved that it raises foreign exchange resources. More attention should be paid to import industrial raw materials and industrial machinery.

5. Training Centers: There is a need for training of labor and entrepreneurs which will increase production efficiency.

6. Control on Population: There must be effective control of the population which is becoming a burden on productive resources.

7. Educational Facilities: The secret of industrial development of Japan’s economy is high education rate which helps in abandoning unnecessary traditions and customs

8. Stable Monetary and Fiscal Policies: Stable monetary and fiscal policies bring a rapid increase in economic development. There is a need to control inflation.

9. Human Capital: Human capital refers to the productive qualities embodied in the labor force. The productive qualities are education, training, health, skill, and nourishment. It is said to have more human capital and greater is productivity. Having more human capital similar to have more material capital to work with them.

10. Capital Accumulation: Capital accumulation capital formation refers to the process adding to the stock of capital. Most theories of economic development emphasize that capital accumulation is a fundamental part of the development. Economists agree that a major requirement for development is the accumulation of real capital.

11. Social Overhead Capital: Social overhead capital is also called infrastructure. It may be defined as “Capita goods used directly or indirectly in the production of goods and services e.g. Road Railways, Highways, Communications, Transport, Electric power, and Research centers. Improved Social Overhead Capital increases economic growth. It provides incentives to the organization for investment.

12. Social and Religious Institutions: The favorable social and religious institutions promote the economic development of the country. If these institutions preach contentment with the existing state of poverty and ignorance, the people would not participate in any new program of development. Similarly, if the social set up of the society looks down upon certain professions, it will lead to the wastage of material talent.

13. Political Stability: Political stability plays an important role in economic development. There should be a stable government to implement development programs. Political instability shatters the confidence of the people and those persons concerned with industrialization.

14. Administrative Factors: Efficient and intelligent organization can coordinate factors of production and noble, honest, hardworking management and administration can not only minimize the cost of production but also increase quality and quantity of production.

CONCLUDING REMARKS:

Keeping in view the above discussion we can conclude that the process of economic development is directly influenced by economic, social, political and administrative factors, to raise the rate of economic growth. The government should take serious steps by making and implementing sound economic plans, according to Ragnar Nurkse, “economic development has much to do with the human endowment, social attitudes, political conditions, and historical accidents. Capital is necessary but not a sufficient condition of progress”.

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