This paper identifies important economic and social determinants of child labour, taking grassroots level data on the working children of Dera Ismail Khan City of Pakistan. Working conditions and their impact on child health are also identified. The variables like fertility, adult literacy and schooling system etc., are empirically examined. The analysis shows that poverty is the main cause of child labour in the city while other factors such as fertility, family size, adult illiteracy and schooling system also contribute to the supply of child labour. The situation is comparatively less serious for female child labour, showing the importance of traditional factors, which restrict females from working outside their homes. The social system of the area does not allow female children to work outside the home. Therefore, female child labour is not wide spread in the city, which is contradictory to the findings of the national survey on child labour. Thus, national surveys do not accurately represent regional child labour by sex. The present study has been carried out in an area which is backward and where child labour is wide spread. Moreover, large family size and poor schooling are also keeping children away from school since parents think that poor quality education does not add to the children’s ability to improve their productivity. Additionally, working conditions for the children were analysed. The children work for the longest hours and are the worst paid of all labourers in the city. Child labour results indicated that working conditions were poor and dangerous and harmed children by ruining their eyesight, bone deformations, chronic lung diseases, and sometimes resulted in the death of children. In addition, the attitude of the bosses was also harsh towards young child labourers. These outcomes call for an effective policy to eliminate poverty. The policy requires spreading literacy and introducing effective and quality education that can lead to skill training, which in turn improves the productivity of children. Poor parents’ income may also be compensated to successfully eliminate child labour. Population control programmes need to be made more effective to control family size. Such programmes may be introduced through schools and adult literacy programmes.
KEYWORDS: Pakistan, child labour, determinants, household, primary health, working conditions.
JEL: N/A.

Primary school enrollment rates in Pakistan are lower than in other countries at the same level of economic development. The proportion of children reaching grade 5 is about half that in Sri Lanka and China and three-quarter that in India. Nationally, the gross primary school ratio is 74, and 101 for boys and 45 for girls. According to the National Education Policy 1992-2002, the target of literacy rate was set at 70 percent by the year 2002, which was achievable besides other measures, by inviting the private sector into education. Now, overall, private education accounts for about 10-12 percent of gross enrollments. The government of Pakistan has established a goal of universal primary enrollment by the year 2006. In the present study the quality characteristics of private schooling are discussed, i.e. qualitative aspects of schools, physical infrastructure of schools, teachers’ qualification and salaries, and fee, dropout rate, and repletion rate of the students, etc.
KEYWORDS: Pakistan, Primary school enrollment, education, economic development, privately run institutions, government, state.
JEL: N/A.

The financial sector in Pakistan has evolved over the years in response to the growth of the economy and the government’s plans for the growth and development of the country. The sector as on 31 March 2002 comprises the State Bank of Pakistan, 4 state-owned banks, 2 newly privatised banks, 4 specialised banks, 14 private scheduled banks, about 30 leasing companies, 45 Modarabas, 14 investment banks, 3 stock exchanges, 58 insurance companies, and Government Saving Centers. Commercial banks were nationalised in 1974 and are now in the process of being privatised. Two nationalised commercial banks have been privatised since 1990: Muslim Commercial Bank was sold by auction/ negotiation, while Allied Bank was sold to its employees .The market share of the nationalised commercial banks has been declining with the introduction of new private banks.
KEYWORDS: Pakistan, commercial banks, risk analysis, foreign banks, domestic banks, growth, gross revenue.
JEL: N/A.

The fad that different studies seeking to measure poverty in a given country often give differing results, although they apparently use the same method and same data source, has long disconcerted both experts in the field and the public in general. Such differences regarding poverty incidences reduce the credibility and technical reliability of these measurements, shed doubts on estimates of the level and evolution of poverty, and hinders inter-temporal comparisons. That is why it is important to foster greater consensus among researchers regarding the criteria and procedure to be used, with a view to progressing towards a common pattern, which will make the measurements more consistent and homogeneous, and guarantee their effective comparability. This policy paper provides a recommended strategy for estimating an absolute poverty line using household survey data of the years 1987-88, 1996-97 and 1998.
KEYWORDS: Poverty, income poverty, macro perspective, poverty incidence, Pakistan.
JEL: N/A.

Migration plays a pivotal role in the reallocation of human resources under changing demand and supply conditions. Migration takes place when an individual decides that it is preferable to move rather than to stay and where the difficulties of moving seem to be less than the expected rewards. In recent years there has been a trend of increasing migration rates. The United Nations (2000) estimates that about 140 million persons (roughly 2 per cent of the world’s population) reside in a country where they are not born.1 Usually migration takes place from the regions that are associated with poverty and insecurity towards regions which offer greater security of life, employment and basic social services. Poverty pushes people to migrate to urban areas-the outcome, the world’s urban population approaches 2.3 billion by 1990 with 61 per cent living in the metropolitan areas of developing countries and touches 66 per cent in 2000 (United Nations). Within the world Asia has about 15 of the largest cities of the world and most of them are growing at more than 5 per cent per annum. Increased rate of natural growth, immigration and rural-urban migration might be the causes of such a high rate of growth of urban population.
KEYWORDS: Pakistan, Punjab, internal migration, gender, male, employment, unemployment.
JEL: N/A.

When Carlos Saul Menem was elected Argentina’s president in May 1989, the economy was already under the punishing throes of hyperinflation. To salvage investor confidence and stabilise the economy, the government resorted to a desperate measure. In March 1991 the Congress passed the “convertibility law” establishing the convertibility of the austral (the Argentine currency since 1985) at a rate of 10,000 australes per U.S. dollar. In January 1992, the peso replaced the austral (1 peso for 10,000 australes). Under this arrangement (a form of a currency board system), outflows of foreign currency reserves had to be matched by reductions in the domestic monetary base. The domestic currency could be issued only in exchange for a specified foreign currency at a fixed rate. The convertibility plan allowed the use of either U.S. dollars or Argentine pesos in any transactions except wage and tax payments. Most importantly, the peso/dollar exchange rate was pegged at one to one with full convertibility between the two currencies. This meant that the public could go to the Argentine central bank and exchange a peso for a dollar, or vice-versa, at any time.
KEYWORDS: Review essay, IMF, Argentina, discretionary lending powers, fiscal policy, meltdown.
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The book consists of revised papers and commentary from the symposium "The Future of Development Economics" held in Dubrovnik in May 1999 and sponsored by the University of Zagreb and the World Bank. Nicholas Stem has written the forward to the book. In the Introduction: Ideas for Development, G. M. Meier notes that " Over the past Half-Century, we have witnessed an unprecedented effort by the international community to accelerate the development of poor countries. This effort has been based on evolution in thinking about economic development - its nature, its causes, and the choice of policies for improving the rate and quality of the development process. Although the development record exhibits many successes, there are also failures and disappointed expectations". He further points out "No formula exists for development. Aid alone cannot yield development".
KEYWORDS: Book review, development economics, general economic theory, governance, institutions, regulatory policies, next generation, growth.
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Haque Irfan ul Ed. Trade, Technology and International Competitiveness Economic Development Institute of the World Bank, Washington DC, 1995 pp 218. The book deals with the issue of international competitiveness and why developing countries need to look at this aspect of world trade in the context of their aspirations and limitations, keeping in mind the fact that the global economic system is becoming more and more unipolar and sophisticated. Haque’s book consists of papers by a number of well-known economists and policy anaylists, all of whom deal in detail with the present scenario of world trade and the lessons learnt from the past.
KEYWORDS: Book review, international competitiveness, technology, external environment, macro-economics, policy.
JEL: N/A.

This paper reviews the trends of two types of foreign capital inflows, namely foreign aid and foreign private investment, to Pakistan. Like other developing countries, the volume of foreign aid to Pakistan has been decreasing. Meanwhile foreign private investment to Pakistan has increased, though not as sharply as that to other developing Asian countries. The study finds that the impacts of foreign capital, aid and private investment on the economic performance of Pakistan have been insignificant. This paper suggests that these consequences are due to the inadequate development of domestic institutional structure, human capital, and indigenous entrepreneurship.
KEYWORDS: Pakistan, economic performance, capital, foreign capital, productivity, inflows, developing world, foreign aid, FDI.
JEL: N/A.

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.
JEL: N/A.