Our first task was to establish the behaviour of the overall economy and the level and pattern of fixed investment in the sixties by critically examining the official series available, by seeking new data and by making independent estimates against which to check them. Given the important differences between West and East Pakistan we constructed a national expenditure series separately for the two provinces to trace the behaviour of key national accounting variables.
After having established the level and movements of private industrial investment in the sixties as accurately as possible from alternative data sources we then present a broad framework in terms of a range of factors which can influence industrial investment and which provides us with the basis for our subsequent analysis and explanation.
Overall behaviour of the economy 1950–70
The growth rates of the important sectors between 1950 to 1970, divided amongst the Plan periods, are given in table 1.1. During the fifties, there is the sharp contrast between the achievements of the agricultural and large-scale manufacturing sectors. Whereas the former stagnated, the latter, albeit so small that any substantial absolute step forward would represent a high growth rate, grew at the rate of almost 25 per cent until 1954/55, after which it began to slow down. Given the domination of the economy by the agricultural sector and the small initial contribution of industry (table 1.2), and the rapid rate of growth of population, G.N.P. per capita failed to increase in the fifties.
The period of the sixties witnessed a very impressive growth rate in the agricultural sector as well as a significant rate of growth of per capita income.