Income taxes treat interest either as cost or as income. It is a cost when borrowed funds are used to generate a taxable stream of income, justifying deductibility. When it is an accretion to income, interest is liable to taxation. Interest income, it may be pointed out, has been viewed as unearned income compared with earned, wage income right from the days of Adam Smith, furnishing the basis for higher taxation of the former. However, the cost and income concepts are not strictly adhered to. In the United States, the so-called tax expenditures have resulted from these departures, first, by allowing tax deductibility without interest being a cost of producing taxable income and, secondly, by exempting interest income from state-local securities despite accretion to taxable income. All these interest categories have interesting implications for efficiency, equity, investment pattern and corporate financial structure. The present paper seeks to spell out some of these in the context the United States insofar as there are lessons for the debate on riba.
KEYWORDS: Pakistan, tax, income tax, interest, tax expenditure, consumer debt, interest as income.
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One of the most key initiatives of the military government that assumed power in Pakistan in October 1999 is devolving power to the grassroots level.2 The elections for the lower three tiers, (Union, Tehsil and District) have taken place as has the elections for the pivotal post of the District Nazim (governor). Notwithstanding expressed reservations about the suspension of democracy, many civil society groups and donors, who had been advocating devolution or decentralisation in the past, hoped for the success of this initiative as one possible way for making effective the delivery of public service to the grassroots level. While others have undertaken benchmarking exercises to evaluate this initiative, it was thought that using theatre as a tool would be a unique method for complementing these other initiatives.
KEYWORDS: Pakistan, theatre, arts, grassroots, research tool.
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As societies grapple with incorporating the concepts of gender equality and gender sensitivity, female decision making is quickly losing its designation as a peripheral issue. Indeed the United Nations Division for the Advancement of Women in support of the Commission on the Status of Women has been exploring the question of women and decision making for some time. In 1997 it called upon governments to take into consideration diverse decision making styles and to enhance the images of women in political and public spheres [UN, (2000)]. Decision making in Pakistan, as in much of South Asia has been regarded as a predominantly male prerogative. Although some progress, albeit slowly, has been made in the emancipation and enhancement of women in all areas of society, in comparison with their male counterparts, women are largely neglected in economic, social, legal and political spheres. This can be ascertained by the fact that only 28% of women are present in the labour force in Pakistan in comparison with 42% in Bangladesh and 32% in India and an average of 33% for South Asia. (Haq, 2000). Female literacy in Pakistan still remains only 25%; representation in civil service remains a negligible 5.4% whereas female judges in 1999 were 1.5% of the total (Haq, 2000).
KEYWORDS: Pakistan, Punjab, female decision making, decision-making ability, poverty, household.
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There is a long list of studies related to distribution of income in Pakistan. Most of these have been confined to the calculation of various measures of inequalities. These studies include Khadija Haq (1964), Bergan (1967) Mehmood (1984), Ercelawn (1988), Ahmad and Ludlow (1969) etc. Apart from these there are other studies including Jeetun(1978), Chaudhry (1982), Cheema and Malik (1984) Kruijk and Leeuwen (1985), Kruijk (1986), Kemal (1994), Jaffery and Khattak (1995), Chaudhary (1995) etc. Jeetun (1978) in his paper concentrated on consequences of economic growth on the level of inequality whereas Chaudhary (1982) tried to find out the impact of the Green Revolution on income inequalities. Cheema and Malik (1984) tried to find out the effects of different income policies on the consumption and level of employment in Pakistan. Kemal (1994) examined the impact of the adjustment period of Pakistan since the late 1970s on efficiency and equity. Jaffrey and Khattak, while utilising HIES 1990/91, measured and analysed inequality and poverty in Pakistan together with their historical trends. They also analysed the phenomenon of income inequality and poverty and their relation to the distribution of assets and employment. Chaudhary (1995) computed and analysed income inequality in Pakistan as well as in its provinces broken down to rural urban level. He not only studied the extent of inequality in Pakistan but also its change over time measured on the basis of per capita income distribution involving households.
KEYWORDS: Pakistan, income inequality, income, household income, Gini coefficient.
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Empirical studies of international trade have concentrated on singleequation models to analyse the demand relationship for imports and exports [Houthakker and Magee (1969). Naqvi et al (1983), Bnhmani-Oskooee (1984,1986)]. These studies have assumed that the imports and exports price elasticities facing any individual country are infinite or at least large. The assumption of infinite supply price elasticity may be acceptable for the world supply of imports to a single country. Export demand and supply functions have been estimated in a simultaneous equation framework by Khan (1974), Goldstein and Khan (1978). Dunlevy (1980), Arize (1986.1988). Balassa et al [1989]. Anwar (1985), and Khan and Saqib (1993)] for both developed and underdeveloped countries. Haynes and Stone (1983) argue that previous studies failed to estimate the supply behaviour of both imports and exports not only because of a simultaneity bias but also because quantity rather than price were specified as the dependent variable. They have, based on the evidence of USA and UK trade data for the period 1947-79, found support for a dynamic supply- price model for both exports and imports and no evidence to support dynamic supply-quantity specification for these countries.
KEYWORDS: Pakistan, exports, supply-price, priced separation, import and export behaviour.
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Economists have been trying to study the linkages between aid inflow and government activities in developing countries. With the passage of time, the analysis has become more sophisticated. The development of two-gap models [for example, Chenery and Bruno(1962); and Chenery and Adelman(1966), among others] was an important contribution to the literature. More recently, two-gap models have been extended into threegap models. Iqbal (1995) added a fiscal constraint to the traditional saving and foreign exchange gap. In such cases, the fiscal constraint is intended to reflect potential limitations to finance public investment that may be required to support a given level of output. Another development is the analysis of effectiveness of foreign aid on the fiscal behaviour of governments in underdeveloped countries. Empirical studies by Khilji and Zampelli(1991), Khan and Hoshino(1992), among others are important contributions to this topic. All these studies gave conflicting conclusions about the effectiveness of assistance in terms of fiscal behaviour. Generally, these studies prove that aid reduces the taxation effort and is substituted between public investment and public consumption.
KEYWORDS: Pakistan, aid inflow, foreign aid, fiscal behaviour.
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After 50 years of nationhood, about 60 million Pakistani citizens still live in absolute poverty which is a condition so debasing that it robs the poor of the very potential of their genes. Illiteracy, malnutrition, high maternal, child and infant mortality afflict more than 50% of Pakistan’s population of 144 million. Due to mismanagement of its human and natural resources Pakistan is in a vicious cycle of economic dependence (Figures 2 & 3) with high indebtedness, low growth rates of exports and GDP and a decaying education system. During the last two decades Pakistan has engaged in firefighting through external debt re-schedulings and increasing its dependence on the Bretton Woods institutions (World Bank, International Monetary Fund) and their richer shareholders. As a result the important development needs of the nation’s human capital have been grossly neglected. It has failed to develop its human capital, particularly its domestic scientific and engineering communities and thus is not ready to meet the growth challenges of the 21st century. It is postulated that Pakistan must, on a crash basis, develop a domestic scientific and technology (S&T) community and create a scientific infrastructure if it seeks to become economically and politically self-reliant. With about 100 scientists/engineers for a million population, Pakistan’s current S&T capacity is woefully inadequate to be able to capitalize on the wealth of opportunities that are becoming available through globalization. The S&T capacities of Pakistan’s competitors in the world marketplace are significantly higher (300 per million for India; 600 per million for China; 2,600 per million for Korea). Pakistan needs both enhanced S&T capacity and the associated education system if it is to increase the “science-cum-knowledge content” of its exports and GDP. This is a sine qua non for achieving expanded economic well being for its citizens and providing the wherewithal for ensuring their security from internal and external threats. Not doing so will leave Pakistan at the bottom of the country league table in terms of poverty, security and even liberty. This is a future that Pakistan should not have.
KEYWORDS: Sustainable development, economic independence, Pakistan, science and technology.
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Imtiaz Alvi, The Informal Sector In Urban Economy: Low Income Housing In Lahore, OUP, Karachi, 1997.pps 323. Price Rs. (Pakistani) 535/-. Cities play an increasingly important role in the economic standing of nations. Urban areas, with their anonymity and fast pace, can be nonconducive to societal cooperation. Social capital and trust are more difficult to develop and sustain in large groups. In many cases, interactions between parties are not repeated and therefore there is no incentive to develop reciprocal relations. In urban settings, people tend to cluster together in small communities and networks of support, but trust and goodwill for those outside immediate groups is minimal. High levels of intra-group social capital and very little inter-group social capital (referred to as "bridging social capital") may have profound effects on inequality, private sector development, government and public welfare.
KEYWORDS: Book review, Pakistan, Lahore, informal sector, low-income, local institutions, capacity.
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Giles Mohan, Ed Brown, Bob Milward and Alfred B. Zack-Williams, Structural Adjustment, Theory, practice and impacts, Routledge, London and New York, 2000, 215 pps, Price not mentioned. This book touches on almost each and every aspect of the extremely topical subject of structural adjustment, delving into the whys and wherefores, the rights and wrongs of the issue. Despite the somewhat technical nature of the subject, it reads more like a narrative. Yet because to my mind it is virtually a masterpiece and one of its kind, it should in fact be read in bits and pieces rather than in one go.
KEYWORDS: Book review, structural adjustment, neo-liberalism, poverty alleviation.
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