Inadequacy of natural resources
Natural resources consist of geographical configuration, mineral resources, water resources, and soil, among others. Concerning natural resources, no country can claim to be self-sufficient, but those with a fair degree of natural resources have experienced increased economic growth. Pakistan is not so rich in natural resources as it has problems of oil and gas, waterlogging, droughts, floods, salinity, iron, copper, coal, and gypsum, hence hindering its economic growth.
Technological challenges
The recent study shows that approximately sixty-five percent of the Pakistan population depends on the agricultural produce, but the farm sector is carried on with primitive techniques. There is a lack of sophisticated and automated machines in both small and large scale firms. Lack of improved technological tools has resulted in less production of firm produce, which lacks quality. Therefore, due to backwardness in technology, Pakistan can only export raw materials. It cannot export locally produced products to the foreign markets but import several products from the foreign market hence losing its foreign exchange.
Under-developed human resources
The labor force is an essential requirement for economic development in all countries in the world. Pakistan is a developing country with the illiterate and unskilled labor force. Therefore, it lacks enough labor force to help in the full utilization of available resources, thereby hindering the economic growth rate. Moreover, it is also not to the mark in both the energy and physical health needed for developmental activities.
Inadequate financial and capital formation
Pakistan lacks physical capital such as buildings, raw materials, machinery and tools, and other intermediate goods, hence hindering Pakistan’s economic development. Pakistan depends on the investment resulting from savings to produce the above capital goods, but the savings ratio is meager and can not support capital formation.
Unfavorable economic institutions
In Pakistan, financial institutions such as banks, stock exchange companies, insurance companies, and other credit firms cannot provide loans on better interest rates necessary for capital formation. Many economic institutions’ functions are not up to the mark as they use primitive techniques in small agricultural scale and industrial-scale production. The recent research indicated that the law of inheritance in Pakistan divides the land into uneconomic units, which does not promote the use of modern machines in farming.
Population pressure
population pressure is a social obstacle that has hindered economic growth in Pakistan. The number of population in Pakistan is too high and therefore exceeds its resources. A recent report shows that Pakistan experienced a population growth rate of 3 percent. Increased growth increases the dependency rate in the country as it increases the number of children who contribute nothing in the production sector but are only consumers.
Cultural obstacles
Cultural obstacles come from people’s attitudes, conventions, and beliefs. According to Pakistan’s social normative values, female education, female jobs, and family planning are considered socially detestable, unIslamic, and against society’s social values. The citizens incur substantial expenditures on birth, circumcision, marriage, and death occasions. Exhibition of jewelry, buildings, and weapons are salient features in the Pakistan society and are considered symbols of prestige. Therefore, the above cultural practices and beliefs hinder economic development in the country.
Political incompetence and administrative obstacles
Political and economic institutions were not properly established during democratic regimes in Pakistan. There is inefficient administrative machinery as the appointments are made based on politics but not on a merit basis. The administrative personnel is corrupt and dishonest due to a lack of checks and balances in Pakistan. The political leadership of the country is self-centered, and many individuals are politically immature. Therefore, politicians deceive the masses to cast their votes based on gender, region, and vested interests but not based on competency, hence hindering economic development.