Economic history / Economic resilience

Economic resilience

Historically, Pakistan's overall economic output (GDP) has grown every year since a 1951 recession. Despite this record of sustained growth, Pakistan's economy had, until a few years ago, been characterized as unstable and highly vulnerable to external and internal shocks. However, the economy proved to be unexpectedly resilient in the face of multiple adverse events concentrated into a four-year period —

• the Asian financial crisis;
• economic sanctions — according to Colin Powell, Pakistan was "sanctioned to the eyeballs";
• global recession;
• severe rioting in the port city of Karachi;
• a severe drought — the worst in Pakistan's history, lasting for many years (about four);
• heightened perceptions of risk as a result of military tensions with India — with as many as 1 million troops on the border, and predictions of impending (potentially nuclear) war;
• the post-9/11 military action in neighboring Afghanistan, with a massive influx of refugees from that country;
• the 2005 Pakistan earthquake

Despite these adverse events, Pakistan's economy kept growing, and economic growth accelerated towards the end of this period. This resilience has led to a change in perceptions of the economy, with leading international institutions such as the IMF, World Bank, and the ADB praising Pakistan's performance in the face of adversity.