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...ctor to contribute in economic development of the country. It was normal custom of our policy makers until 1980s to subsidize agricultural and industrial activities. Due to unfavorable outcomes of these subsidies the policy makers became worried and ultimately they found only one way which was to remove these subsidies. Key economic reforms were introduced during second phase of liberalization in Pakistan in 1990s. [12] concluded that liberalization’s impact on poverty based on environment of the country and liberalization could not be seen as an isolated policy for this purpose. According to [1] economic reforms were comprised of and focused on various developmental challenges such as reduction in tariff for more than 90 percent to 45 percent on various products and removal of some bans and quantitative limits. Simplification of documentation and other trade related procedures. Privatization of many import export related institutes and implementation of market based monetary and fiscal policies. It maintained outward looking trade policy and developing a package of incentives for exporters and importers, establishing industrial and free trade zones, etc. Unlike reforms introduced in ...

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...ubstantial debt relief and debt rescheduling was offered by US by softening the foreign policy towards Pakistan. Meanwhile US forced overseas Pakistani and investor community settled in America to place their funds in Pakistan. Due to these initiatives taken by western countries foreign exchange reserves of Pakistan reach at a peak level of above US$14 billion which results in appreciation Pak Rupee and improvement in credit rating of Pakistan. As a result in 2003, for the first time in the last three decades, country’s growth rate reaches at 5.1 percent with inflation rate about 3.3 percent. [6] found that after the process of liberalization country perform well economically which could be recognized by improvement in GDP growth rates, increase in foreign direct investment. On the other hand this sharp increase in openness results in worse balance of payment conditions and a remarkable high level of poverty and unemployment. Part-III Conclusion and Suggestions It is supposed that liberalization is essential but not provide adequate condition for economic growth. There are various other things which can affect the economic growth like political and institutional environment to behavio...