The Balance of Payments and External Resources in Pakistan’s Third Five Year Plan

Attainment of the goals in the international sector of her economy is essential for the achievements of Pakistan’s growth goals for the Third Five Year Plan. The Plan’s growth goals are ambitious, as is well known: whereas the increase in gross national product during the overfulfilled Second Five Year Plan was Rs. 9,725 million, the increase in GNP planned for 1965/66 through 1969/70 is to be Rs. 16,035 million i. So are the goals in international trade and finance ambitious: in the Second Plan period, Pakistan’s foreign exchange earnings were Rs. 13,252 million [10, p. 96]. They are planned at Rs. 20,000 million for the next five years. At the same time, foreign exchange requirements are to grow (absolutely speaking) even more than earnings. Total international payments by Pakistan during the Second Plan period were an estimated Rs. 21,260 millions [10, p. 96]. In the Third Plan period they are expected by the planners to be Rs. 35,500 million [10, p. 98]. The widening gap between earnings and foreign exchange requirements must somehow be met. This means increasing exports, increasing foreign assistance, or both. The Government of Pakistan has chosen both, but to attempt to accelerate Pakistan’s own earnings to a rate of growth greater than that of foreign aid, so as to end the Plan period with a reduced proportional weight of reliance on other nations.