Pakistan's rebound from the globalfinancial crisis has been slow and fragile, and unless theeconomy changes course swiftly, it could face its secondbalance of payments crisis in five years. Its recovery fromthe 2008-09 global financial crisis has been the weakest inSouth Asia, with a double dip pattern. This reportidentifies conditions for a sustainable job-enhancing growthagenda for Pakistan. Policy must target both goals as theyare closely intertwined. Higher growth rates can be achievedthrough productivity improvements (technology, innovation,better economic governance), but also from higher outputextracted from factors-physical capital, labor, humancapital, and land. This report considers whether Pakistanshould pursue historical growth of 4.3 percent a year,supported by piecemeal structural reforms leading to partialand unsatisfactory outcomes-or rapid growth of 7 percent,requiring comprehensive big-bang reforms. The report isorganized around three major themes: (i) the stylized facts,what are the pluses and minuses of Pakistan's patternsof growth and job creation? (ii) the diagnostics, what isholding back Pakistan's growth? And (iii) thetransformational agenda, what are the core ingredients ofjob-enhancing growth? And how can analysis of the politicaleconomy identify policy tradeoffs?
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