This article draws on examples from east Asia to point out that political will, well-conceived vision and clear strategic directions have been critical ingredients in the most successful stories of development. With this perspective, it examines the role of the state in guiding, stimulating and hindering growth and distribution in Pakistan over the last 60 years. It reviews Pakistan's economic progress with reference to commitment to markets and the private sector, strategic directions provided by the state, the burden of defence on national resources, the quality of governance, effectiveness of delivery of basic public services, attention to matters of distribution and domestic resource mobilisation efforts. It assesses progress under president Musharraf on macroeconomic, governance and structural economic issues. It then lays out the key economic and non-economic challenges that remain.
