Overpopulation and political instability are two major obstacles to economic development in Pakistan. Other obstacles include corruption, market imperfection, an inappropriate social structure and the country's dual economy.
Population increase can be positive to a nation's economy. It allows more human resources for the development of natural resources. However, a growing population also increases economic and social problems. These problems arise from the nation's inability to keep up with housing, education, health care and transportation for the ever-increasing mass of people.
Overpopulation reduces per-capita income by diverting resources from investment to meet the consumption needs of the population. Without means of investment, an economy cannot grow. This also creates further issues with unemployment and a decrease in national income.
For the first 50 years of Pakistan's independence, the nation suffered from religious, sectarian and ethnic unrest. During most of that time, the government was under the control of the military. These conditions led to political instability and subsequently economic instability with the misuse of resources and by dissuading foreign investment.
National and global economic experts agree that political stability is necessary to transform Pakistan's economic growth into economic development. Under a stable government, Pakistan is capable of developing economic plans that efficiently allocate resources and gain the interest of foreign investors.