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Key Issues in Industrial Growth in Pakistan
A. R. Kemal
Published:Sept 2006
The author here looks at problems in the manufacturing sector.
One macro enigma is that while growth had recently risen to 8%,
investment levels as a ratio of GDP seem to have fallen. One reason for this
is the re-evaluation upwards of the GDP. But the same issue emerges in
manufacturing with very high growth rates coinciding with falling
investment levels. The declining investment levels could be due to a number
of factors including high production costs, transaction costs, policy
continuity risks, skills and wages and changes in the demand structure.
KEYWORDS:
GDP, Pakistan, industrial growth, manufacturing sector.
JEL:
N/A.
Why Pakistan Must Break-into the Knowledge Economy
Rashid Amjad
Published:Sept 2006
The author emphasizes in this paper that this was the moment in
Pakistan’s economic trajectory for it to learn to leap frog technologically
from a labor intensive economy, by passing the intermediate stages of
resource based and scale based activities, to a knowledge based economy. A
knowledge based economy is one that bases its growth not on increasing
capital or land or labor inputs, but on knowledge. The transition required
is considerable, the author points out.
There is growing recognition that the global economy is increasingly
driven by “knowledge” rather than the traditional factors of production.
Pakistan’s Medium-Term Development Framework (MTDF) 2005-2010 and
Vision 2030 Approach Paper both recognize the key role of knowledge in
economic growth when they describe the goal of transforming Pakistan by
2030 into a “Developed, industrialized, just and prosperous Pakistan
through rapid and sustained development … by deploying knowledge
inputs”.1
KEYWORDS:
Pakistan, knowledge economy, trajectory, technology.
JEL:
N/A.
Local Government Finance in Pakistan Post 2001
Shahid Kardar
Published:Sept 2006
The paper calls for financial devolution from the federal and
provincial levels to the local level. The author argues that the present high
degree of centralization has failed to deliver an adequate level of social
services. In addition, while the more important services such as education,
health and water supply had devolved to the local level, higher levels of
government imposed constraints on their expenditures.
KEYWORDS:
Pakistan, local government, financial devolution.
JEL:
N/A.
Federal and Provincial Public Management and the Civil Service Paradigm
Javed Hasan Aly
Published:Sept 2006
This paper discusses the institutional structures of the civil service.
The author traces four periods in this service, pre-1971, 1972-1977, 1978-
1999 and 2000 onwards. In the first time period the author maintains the
service worked well. In the second, the paradigm was vitiated. In the third
period the anarchy continued by default. And in the last period the
anarchy continued by accident. The author attempts to illustrate the
growing disincentives in the paradigm for efficiency.
KEYWORDS:
service worked well, paradigm was vitiated, anarchy continued by default.
JEL:
N/A.
Exports, Productivity and Economic Growth in Pakistan: A Time Series Analysis
Aurangzeb
Published:Jan - June 2006
This paper investigates the relationship between exports and economic growth in Pakistan by utilizing the analytical framework put forward by Feder (1983). The hypothesis that marginal factor productivities are not equal in export and non-export sectors of the Pakistan economy is tested by using time series from 1973 to 2005. The estimation results indicate that marginal factor productivities are significantly higher in the export sector. Moreover, the difference seems to derive, in part, from inter-sectoral positive externalities generated by the export sector. In broad terms, therefore, the results of this study are supportive of the export oriented, outward-looking approach to trade relations adopted by policymakers over the past decade.
KEYWORDS:
Pakistan, economy, developing countries, growth rate.
JEL:
F1,
F21,
O53.
Trade Liberalization and Economic Development: Evidence from Pakistan
Bushra Yasmin, Zainab Jehan, Muhammad Ali Chaudhary
Published:Jan - June 2006
Unrestricted trade stimulates economic growth and bridges socio-economic gaps existing in different countries of the world. Pakistan has adopted trade liberalization policies since the late 1980s with the same expectations. This study has empirically analyzed how trade liberalization has affected economic development in the country. Its effects have been examined with respect to four measures of economic development: per capita GDP, income inequality, poverty and employment over the period from 1960-2003. The main analysis is based on a simultaneous equation model. Keeping in view the simultaneity of the chosen development measures, the model is estimated with the 2SLS technique of regression analysis. The analysis shows that, over the study period, trade liberalization has not affected all the chosen indicators of development uniformly. It has affected employment positively but per capita GDP and income distribution negatively. However, it has not affected poverty in any way. The obvious message is that trade liberalization has not affected all the indicators of development favorably in Pakistan. It thus implies the need of a cautious move towards liberalization. The focus of trade liberalization should be to bring about improvement in the performance of mediating factors and to focus exports on labor-intensive products.
KEYWORDS:
Trade Liberalization, Economic Development, Poverty.
JEL:
F41.
IMF Stabilization Programs, Policy Conduct and Macroeconomic Outcomes: A Case Study of Pakistan
Nawaz A. Hakro and Wadho Waqar Ahmed
Published:Jan - June 2006
This study is designed to assess the macroeconomic performance of fund-supported programs, and the sequencing and ordering of macroeconomic policies in the context of the Pakistan economy. The generalized evaluation estimator technique has been used to assess the macroeconomic impacts of the IMF supported programs. GDP growth, inflation rate, current account balance, fiscal balance and unemployment are used as the target variables in order to gauge economic performance during the program years. The vector of policy variables (that might have been adopted in the absence of programs) and the vector of foreign exogenous variables are also taken as explanatory variables in the model, so that the individual effect of the IMF supported programs could be assessed. The result suggests that as the IMF prescriptions were applied, the current account balance has worsened, the unemployment rate has significantly increased, and the inflation rate has increased during the years of fund-supported programs. Only the budget balance has shown signs of improvement. Furthermore an inadequate sequencing of reforms has contributed to the further worsening of the economic scenario during the program period.
KEYWORDS:
Pakistan, IMF, macroeconomic, policy conduct, policy variables, unemployment rate.
JEL:
N/A.
Determinants of Capital Structure: A Case for the Pakistani Cement Industry
Syed Tahir Hijazi and Yasir Bin Tariq
Published:Jan - June 2006
This paper attempts to determine the capital structure of listed firms in the cement industry of Pakistan. The study finds that a specific industry’s capital structure exhibits unique attributes which are usually not apparent in the combined analysis of many sectors as done by Shah & Hijazi (2005). The study took 16 of 22 firms in the cement sector, listed at the Karachi Stock Exchange for the period 1997-2001 and analyzed the data by using pooled regression in a panel data analysis. Following the model developed by Rajan & Zingle (1995) it has chosen four independent variables i.e. firm size (measured by natural log of sales), tangibility of assets, profitability and growth and further analyzed the effects on leverage. The results, except for firm size, were found to be highly significant.
KEYWORDS:
Capital structure, Pakistan, cement industry, tangibility of assets, leverage.
JEL:
N/A.
NGOs and Gender Development, the Case of AKRSP in District Chitral, NWFP, Pakistan
Humayun Khan
Published:Jan - June 2006
The empowerment of women and improvement of their socio-economic status are essential ingredients of economic, political and social development. To achieve these objectives, the Government and NGOs have launched a number of programs in various parts of the country. The Aga Khan Rural Support Program (AKRSP) is working on the same agenda in Northern districts of North West Frontier Province (NWFP). The aim of the present research was to study the gender related interventions introduced by the AKRSP in District Chitral. The study findings show that the gender related interventions introduced by AKRSP have played a key role in the development of rural women in the area under reference. In addition to the provision of water supply schemes, health and credit facilities, training has also been imparted to the local women in different sectors of the rural economy including: agriculture, livestock management, vocational and enterprise development. This training has had a positive effect on economic activities performed by rural women and has enhanced the income of the respondents from various economic activities in their respective fields in the research area. Another major effect of the AKRSP interventions was the saving of time of rural women that had been spent on fetching water before these interventions. Though these interventions have improved the socio-economic conditions of women to a greater extent in the area, their sustainability requires regular monitoring and follow-up of training.
KEYWORDS:
AKRSP, NGO, Gender, Pakistan, NWFP.
JEL:
N/A.
Bonded Labor in the Brick Kiln Industry of Pakistan
Muhammad Javaid Iqbal
Published:Jan - June 2006
Bonded labor is a dominant feature of the brick kiln industry of the country. Apparently an outcome of poverty, it is closely linked to the socio--cultural fabric of society. The vicious cycle of bondage subjugates the families physically and economically so that they are unable to break out of the trap despite putting in hard labor. The issue has a number of socioeconomic implications and its solution lies in a multi pronged strategy; economic uplift, social involvement and educational breakthrough of the bonded families. The paper explores the nature and extent of bonded labor in the brick kiln sector and analyzes its repercussions on children and women of the bonded families. It also examines the available legal infrastructure tackling bonded labor. Finally the paper proposes a comprehensive scheme to ameliorate the concerns of bonded families and ways to eradicate the menace from the industry.
KEYWORDS:
Pakistan, bonded labor, brick kiln, economic uplift, poverty.
JEL:
N/A.