Since the beginning of the 1960s, Pakistan has been experiencing structural transformation. from less than one-tenth as its share in GDP in the 1950s the industrials sector’s share bounced to one-quarter and that of horticulture dropped from less than half to a quarter ( 53.2 percent in the 1950s to 24.2 percent in the 1990s) in five decades. The remaining portion of GDP (49.4 percent) gathered from the fast-growing service sector. The manufacturing sector developed at a faster rate than that observed in their industrial sector in general. It is also interesting to observe that the small scale industries contributed significantly to the general growth of the industrial sector both in terms of employment and income generation. The yearly growth rates over the period of 1976-84 uncover that in numerous important areas such as employment generation, value added and growth in capital stock, the small scale and informal sectors performed vastly improved than the formal, large-scale manufacturing sector. As such, it has been asserted that by most criteria, the small scale has outperformed the formal sector in the 1980s (Zaidi, 1999) However,as contended by one of the architects of Pakistan’s development strategy – Gustav Papanek ( as cited in Zaidi, 1999), the spectacular performance of the industrial sector specifically and the economy, by and large, could be described by the combination of import substitution and interventionist strategy.

In the nation’s superior since the late 1950s, foreign aid was observed to be to a great degree instrumental, without which the fast growth of industralization in the 1960s couldn’t have been possible. The success story of Pakistan which turned out to be short-lived as well as to a great degree disastrous in the long run. It was fundamentally activated by extraneous forces such as foreign aid contingent upon the privatization of the public sector enterprises under support. By all indications, any im…

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