The authors gratefully acknowledge the technical support of Indian Institute of Finance and IIF Business School. We would such as to thank Prof. Jaurahi Ali (University Utara Malaysia, Malaysia), Prof. Manuel Jose The paper has been accepted and presented at the 7th ISINI International Conference on “Frontiers in Finance and Economics” at Ecole Supérieure de Commerce de Lille, France. The paper was presented in the session Chaired by Prof. Patrice Fontaine, President, AFFI, France on 22nd August 2003 (16:00 – 18:30).
KEYWORDS: ASEAN, economic issues, international norms and practices, Focus of Total Quality, Total Quality Management, FTE, TQM.
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This study examines the impact of monetary variables on the balance of payments of Pakistan. Besides, exogoneity of monetary variables is also tested. The empirical findings of the study show that balance of payments is a monetary phenomenon and monetary policy could be useful in improving the foreign sector. The studies so far have not confirmed this effect. The study also shows that an increase in price level and real income lead foreign reserves to inflow. However, an increase in the interest rate, money multiplier and domestic credit lead international reserves to outflow. Partial sterilisation was evident in the short run. But in the long run, it tends to be equal to minus one, indicating no sterilisation effect on the foreign reserve movements. The central implication derived from the study is that an increasing government budget deficit leads to excessive expansion in domestic credit creation and as a result a loss of foreign reserves. The null hypothesis for exogoneity of price level, real income, interest rate and inflation rate to foreign reserves is accepted. However, the null hypothesis for the exogoneity of domestic credit is rejected for the general model but accepted for the linear model. It appears that monetary policy is effective in Pakistan
KEYWORDS: Pakistan, monetary variables, exogoneity, domestic credit, monetary policy, balance of payments, adjustments.
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Child labour has emerged as a serious, widespread and growing problem in many parts of the world. Asia has a large number of children employed as child labourers. Child Labour Survey 1996 reports that there are 3.3 million children working between the ages of 5 and 14 years in Pakistan. Developed countries have linked trade with child labour through the Harkin Bill and the Uruguay Round of Multilateral Trade Agreement (1994), which banned the market manufactured or mined goods produced in whole or in part by children under 15 years of age. Pakistan is also facing restrictions on some of its exports due to allegations of child labour. However, Pakistan has enacted the Employment of Children Act of 1991, which has banned employment of children below the age of 14 years.
KEYWORDS: Child labour, socio-economic conditions, labour force survey, Pakistan.
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The purpose of this paper is to analyse the decline in private investment and formulate a comprehensive strategy to overcome this problem, which is the main cause of deceleration in the growth momentum of Pakistan’s economy. Due to lack of investor confidence, private investment has reached its lowest point in the recent economic history of the private sector led growth phase (1978 to 2002) in Pakistan. This paper argues that economic as well as non-economic factors are responsible for this declining investment. Economic policies are formulated in such a manner that the short-term objectives of lowering the fiscal and trade deficits were to some extent achieved but overall economic performance and investment were ignored. In order to control external trade deficits, a policy of devaluation increased the cost of production through an increase in prices of imported raw material especially of plant and machinery. Higher real interest rates due to excessive public borrowing that were due to the failure in reducing fiscal deficits has resulted in financial crowding out and has corroded the savings that might be used to finance private investment. The unexplained part of private investment that is not determined by economic factors can be attributed to non-economic factors, which include internal and external shocks. These shocks start from the sanctions which were imposed after the nuclear blast. Events following that initial shock like the freezing of foreign currency accounts, the military coup, the harassment of the partially successful accountability drive of the military government, the 9/11 incident, the Afghan war and tensions on the Pak-India border have complemented the shock. A comprehensive programme is required to boost private investment and for the restoration of investor confidence. Therefore, an economic package is recommended in this paper that consists of incentives that relax the supply side constraints by reducing cost of production as well as demand-enhancing efforts. It is the best time to introduce a strategy to increase investment activities in the * Kalim Hyder is an Economist at Social Policy and Development Centre, Karachi, Pakistan. Qazi Masood Ahmed is an Associate Professor at the Institute of Business Administration (IBA), Karachi, Pakistan and is a Member of the Advisory Board at the Social Policy and Development Centre, Karachi, Pakistan.
KEYWORDS: Pakistan, investment, economic package, recommendations, sanctions, determinants.
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In recent years, there has been a rapidly expanding literature on child labour that provides empirical evidence on its nature and determinants. The previous literature on Pakistani child labour includes Khan (1982), Hussain (1985), Ahmed (1991), Khan and Ali (1991) and Weiner and Noman (1995), and recently Addision, et. al. (1997), Burki and Fasih (1998), Ray (2000a), Ray (2000b), Ray (2001) and Ali and Khan (2003). Some studies (see for instance Khan 1982; Ahmed 1991) discuss mainly the qualitative features of child labour. The recent literature has focused attention on the quantitative aspect, taking advantage of the increasing availability of good quality data on child labour. Within the empirical literature on child labour, there has been a shift in emphasis from more quantification to an econometric analysis of its determinants. As child labour is seen to result from the same variables influencing child schooling but in inverse, so school enrolment is strongly correlated with child labour. Child labour commitments are major reasons for children’s non-participation in school. So the literature has moved to incorporate child schooling and child labour and thus analyses schooling and child labour jointly (see for instance, Degraff et. al. 1993; Mahmood et. al. 1994). The present study is one of this category.
KEYWORDS: Pakistan, child labour, household, school, determinants, education, poverty.
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The basis for asset pricing in financial markets was provided by Bachelier (1900) in his magnificent dissertation “Théorie de la Spéculation” submitted at Sorbonne (Université de Paris). Although from today’s perspective, the mathematics and economics he applied were flawed, yet the great genius, Markowitz, declares this early work as an inspiration for his own classical paper of “Portfolio Selection”. The risk return relationship has always been a debatable issue in financial theory. “Portfolio Selection” came up with a meaningful measure of quantifying the risk associated with investment; the variance of returns. The equilibrium model of Capital Asset Pricing (CAPM) (Sharpe 1964, Lintner 1965, Mossin 1966) further classified the risk as relevant and irrelevant risk. According to the CAPM, the relevant risk is the systematic risk or non diversifiable risk. The systematic risk is the volatility of returns of a particular stock to the market returns.
KEYWORDS: Risk analysis, comparative, financial markets, banking sector, United States, South-East Asia, Western Europe.
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Khadija Haq, (Edited) The South Asian Challenge, Oxford University Press 2002, Second impression: OUP Pakistan 2003, pp 333. The South Asian Challenge is a compilation of nine essays on South Asia by eminent economists and social science researchers. The idea was initiated by Dr. Mahbubul Haq who had set up a South Asia Commission to analyse and identify the challenges facing the region, in order to publish a report on its recurrent issues of poverty and economic crises, and to offer new directions for meaningful change. Before the Commission could draft an outline of the Report, Dr. Mahbubul Haq passed away. Subsequently it was decided by the Human Development Centre in Islamabad to publish this collection of essays as a tribute to his memory and his quest for a new world.
KEYWORDS: Book review, South Asia, South Asia Commission.
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It is becoming obvious that all large multi-ethnic societies, after attaining the beatific status of development, lose interest in removing poverty. The undying myth of development, that it will remove all poverty forever from all comers of the world, now lies shattered. It comes somewhat as a surprise that so many people believed it for so many years with a sense of naivety and innocence. Even affluent economies such as the US have not been able to rid their societies entirely of the plague of poverty from within their borders. That said, it appears that somebody somewhere means business. The Centre for Research on Poverty Reduction and Income Distribution (CRPRID), an autonomous body with its own board of directors, has published its rather glossy Human Condition Report 2003, the second in its series. The main intent of the Report, as stated in the Forward, is to guide and influence policy makers and be an autonomous tool for monitoring and evaluating the progress made towards achieving the targets laid out in the Poverty Reduction Strategy of Pakistan as well as the Millenium Development Goals.
KEYWORDS: Book review, UN, united nations, Human Condition report.
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This paper examines the temporal interdependence between gross domestic product and health expenditure per capita for Pakistan in an augmented Solow growth model suggested by Mankiw, Romer and Weil (1992) for the period of 1973-2001. This paper is an extension of the MRW model by incorporating health capital proxied by health expenditure to the augmented Solow model. Moreover, an openness variable is also included in the model in order to capture the effect of technological changes on growth. The paper employs co-integration, ECM methodology and several diagnostic and specification tests. The empirical findings show a significant and positive relationship between GDP and Health Expenditure, both in the long- and short-run.
KEYWORDS: Pakistan, GDP, health expenditure, income, spending, modelling.
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Pakistan as a multilingual country faces numerous problems in language planning in higher education. As educational standards in higher education decline, there are concerns about student difficulties in English and lack of required materials in Urdu, The research reported here is a nation wide survey of 2136 students, 121 Subject and English teachers of public and private sector colleges and universities from all the capital cities of Pakistan, as well as 63 parents who responded to the questionnaire. The survey examines the learner's background, attitudes to languages and motivational orientation, availability and quality of materials in different mediums, learner difficulties in English, provision of English support programmes, and language outcomes. Results point to the significant differences between private sector and public sector students in terms of socio-economic status, and other variables. The study recommends that public sector students be provided more state support by adopting an 'English for all policy', and strengthening the English programmes through a revision of courses, development of materials, and training of teachers so as to meet the students' learning and target needs.
KEYWORDS: Pakistan, language, higher education, access, English language teaching, Urdu, educationists.
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