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Volume
Issues
The Exchange Rate and its Effects: An Overvalued Quantity?
Sikander Rahim
Published:July - Dec 1998
The exchange rate poses an awkward problem; if the same goods are
produced by and traded between different countries and if international
trade is competitive, the prices of such goods in any country will be the
same, regardless of the country of origin. The law of one price must hold
within each country; exchange rate movements cannot alter the relative
prices in the same country of competing goods according to country of
origin. There is, then, no general a priori reason why purchasers in a given
country should choose the product of one country rather than the
competing product of another and the standard argument, that changes in
exchange rates alter the volumes of imports and exports through such
relative price changes, cannot hold for such goods. The conclusion is that, if
most of the imports and exports of a country are goods that have
international competition, there is no reason that exchange rate changes will
have predictable effects on its balance of trade
KEYWORDS:
Exchange rate, balance of goods, unemployment, trade, price comparison, imported and domestic goods.
JEL:
N/A.
Published:July - Dec 1998
The state of Pakistan appears to have embarked upon a process of
transforming itself. It faces a host of grave socio-political and economic
issues which manifestly do not yield to the traditional style of governance. It
has also realised that its decayed and outdated administrative system cannot
enable it to discharge its social sector obligations even on the limited scale
the population has become used to. Thus, on the one hand, it is availing of
the opportunities afforded by the rhetoric of globalisation and market
economy, and withdrawing from whatever social responsibilities to the
people it hitherto recognised - in the areas of education, health,
employment, communications, public utilities, etc. On the other hand, it is
trying to reinforce its coercive powers through increased reliance on
majoritarianism, authoritarian approaches to issues generally reserved for
democratic decision-making, and short-circuiting of judicial processes.
KEYWORDS:
Comment, Civil society, Pakistan, representative government, institutional safeguards.
JEL:
N/A.
Book Reviews: Structural Adjustment, Global Trade and the New Political Economy of Development
Mir Annice Mahmood
Published:July - Dec 1998
Biplab Dasgupta. Structural Adjustment Global Trade and the New
Political Economy of Development. New Delhi. Sage Publications. 1998.
Price Indian Rupees 450 (hardback).
The author has written a very topical book the relevance of which
cannot be understated. At the core of the book the author discusses the
concept of the new political economy of development which forms the
theoretical underpinnings that lie behind the structural adjustment/
stabilisation programmes of the international financial institutions such as
the World Bank and the International Monetary Fund.
Biplab Dasgupta has very concisely and succinctly analysed the new
political economy of development which has, as its centre-piece, a blind
faith in the operation of free-market forces. This can be traced back to the
Reagan and Thatcher years, which saw a shift away from interventionist
policies to allowing the markets to decide.
KEYWORDS:
Book review, structural adjustment, Pareto-optimality, political economy of development, developing countries.
JEL:
N/A.
Dynamics of Agricultural Productivity and Poverty in Pakistan
S.M. Turab Hussain & Mohammad Ishfaq
Published:Jan - June 1998
This paper addresses two topics which essentially compliment each
other. The first is the empirical investigation of the relationship between
aggregate agricultural productivity and poverty in Pakistan through the
course of time. The second is the estimation of the central inputs or
determinants of agricultural production, again on an aggregate level and
through time. The main empirical findings of this research suggest that
increases in agricultural productivity have alleviated poverty in Pakistan but
not to the extent to which the negative forces of a high population growth
and increasing food prices have worsened its incidence. In the case of the
determinants of agricultural productivity, the results show that accompanied
with the size of the cropped area, fertiliser off-take has played the most
significant and powerful role in increasing agricultural productivity through
time in Pakistan, especially at the onset of the Green Revolution __ the
introduction of High Yield Variety crops and seeds in the late sixties.
KEYWORDS:
Agricultural productivity, rural poverty, Pakistan, alleviation of poverty.
JEL:
N/A.
Published:Jan - June 1998
The crisis in East Asia has tempered the loud enthusiasm of many
economists, magazines and multilateral institutions for unbridled
international flows of capital. Since its start some prominent economists and
financiers have expressed doubts that market mechanisms, left to
themselves, necessarily end with a desirable outcome. Perhaps this is the
first step to questioning whether free flows of capital between countries are
desirable at all.
Oddly enough, despite all that has been written in textbooks and
journals extolling international capital flows and all the romanticisation of
‘globalisation’ in television advertisements, there appears to be no systematic
examination of the gains and losses to be expected from them. One reason
may be that economic theory, as it stands now, is ill suited to carrying out
such an examination. International economic theory has two strands, the
one to explain how trade in finished products and raw materials is
determined by comparative advantages and the other, using quite separate
assumptions, to explain the balance of payments. In the former it is assumed
that capital flows are negligible, in the latter they do little more than
accommodate trade imbalances. Neither address the question of what
determines capital movements or what their effects might be.
KEYWORDS:
Globalisation, market mechanisms, balance of payments, economic development, capital movements, trade barriers..
JEL:
N/A.
Published:Jan - June 1998
The majority of Pakistani womanhood belongs to the silent,
invisible peasantry in the rural areas. Essentially belonging to an
underdeveloped region, the rural female toils relentlessly from morning
till night. Her status is highly complex. In certain roles she is exalted; on
other counts her very being is negated, which, when translated to human
development indicators, depicts the profile of a woman with a very
disadvantaged status, in fact, one of the lowest in the world. This study
collects and collates data to present the profile of the rural female of
Pakistan. It clearly shows that without concrete moves to do so, the mere
acceptance and recognition of her contribution to society would do much
to elevate her status.
In Pakistan the role of the woman is strongly defined by religious
and cultural/social norms. Due to illiteracy and misinterpretation, the
latter is vastly perpetuated (UNESCAP 1997 p 3) under the garb of the
former. There is “widespread misconception about the place Islam accords
to women...” (Report of the Commission of Inquiry for Women 1997 p ii).
Pakistan is a classic case where steady economic growth has not been
accompanied by concurrent growth in the social sector. Within the
confines of this phenomenon, the rural population suffers from inequitable
distribution of resource availability and human development services. The
condition of rural women is not hard to conceptualise, given the above
circumstances.
KEYWORDS:
Profile, Rural Woman, Pakistan.
JEL:
N/A.
Published:Jan - June 1998
Is there a conflict between development on the one hand and
democracy and/or human rights on the other? The issue began to be
seriously examined some forty years ago1 and the controversy has simmered
because there has been empirical evidence to indicate at least some shortterm
validity to those who do see a conflict and press the primacy of
growth. They take off from premises like Einstein’s, “An empty stomach
makes a poor political adviser.”
The controversy in recent years has not so much been for and
against human rights as over which category of it should have precedence:
civil and political rights or economic, social and cultural rights. Originally,
the bill of rights had remained confined only to the first category. But after
World War II, when the newly formed United Nations began to consider the
need for a universal declaration and, later, for a binding covenant on the
subject, inclusion of economic, social and cultural rights was vehemently
and successfully argued, especially by the socialist bloc of countries.
Later the issue even became an element in the cold war. While the
West assumed the title of ‘Free World’ on the basis of its relative
guarantees of civil and political rights, the East claimed credit for its
primacy to economic rights. The developing countries too, unable or
uninclined for various reasons and to varying degrees to accept international
standards in guaranteeing the freedoms to their people, began when
challenged to claim an overriding need to concentrate on the economic
KEYWORDS:
controversy, democracy, growth, United Nations, economic, social and cultural rights.
JEL:
N/A.
Upgrading Pre-Literacy Skills of Disadvantaged Children
Shireen Zafarullah
Published:Jan - June 1998
Prescription of a common syllabus for all children in Pakistan is the
demand of social activists. The author feels that this is not a feasible
proposal at this time as there is a huge gap between the life experiences in
the two worlds that exist within Pakistan ---the world of the privileged and
the world of the deprived. Children of the poor fail to develop certain
essential pre-literacy skills (Zafarullah, 1996) and are therefore unable to
compete with their more fortunate counterparts. These underprivileged
children lack an orientation towards literacy:
1. They lack certain essential pre-literacy skills,
2. Their home language is different from the school language,
3. They lack the motivation to become literate.
Privileged children, on the other hand, have few such shortcomings.
In fact they are overly motivated, competent and competitive in the area of
school learning. Hence, if we have a combined syllabus we will either have
to downgrade the educational standard of the advanced children (bringing
them down to the level of the backward children) or up-grade the
disadvantaged children and take them closer to the level of their more
fortunate counterparts. The second option is obviously more desirable.
This paper briefly describes some of the methods employed by the
researcher to rapidly upgrade under-privileged children before and during
elementary schooling. These methods have been implemented and tested by
teams led by the researcher and have proved dramatically successful.
KEYWORDS:
Competition,
Pakistan,
economic growth.
JEL:
N/A.
Social Welfare, Health and Pakistan
Noshi Arif and Farakh A. Khan
Published:Jan - June 1998
Some would claim that charity is a core cultural trait of mankind.
The urge to help others is a selfish act of survival of the group and hence
individual security. In today’s world, welfare has assumed a wider meaning
and is linked with the economy of the state, the concept of human rights of
society, structure of society and cultural expression of welfare. The state
may be willing to contribute towards welfare but poor economic conditions
may not allow welfare programmes or only allow low key programmes. With
poor level of governance most welfare work comes to a standstill. In such
situations the burden of poor economies can be shared by all rather than
the poor alone. Human rights, as defined by the UN, impinge on the basic
concept of welfare as seen by individual states. The right of all people to
shelter, security, health, job, education as well as freedom to speak,
associate and practice religion are concepts difficult to swallow for many
societies and states. Social disparity may not allow many to grant rights to
others. Yet social welfare is a practical arm of human rights and not an act
of charity to be left to individual whims. In Islam, social welfare is the right
of the underprivileged and not an act of charity extended by the state or
individual. On the other hand the welfare of all the citizens of the state is
vital for economic and social development. There are more than 94
indicators to measure social development. Each country’s performance in
this area can be monitored following each intervention.
Although social welfare had been debated by philosophers for a long
time, it only became important after the Industrial Revolution in the 1840s.
This was the time of the birth of modern cities with all its problems of
communal living and compression of people into tight compartmental life,
dynamics new to the first generation rural society. Since the Industrial
Revolution started in England, the first city to cross the 2 million mark
inhabitants a hundred years ago was London. The responsibilities of the new
industrialised state was projected in the domain of social welfare of its
people. Social welfare was the responsibility of the parish but with a large
number of new towns, this became impractical. The Poor-Law Amendment
Act was passed in 1834 and the Municipal Corporations Act in 1835. These
were the basis of social welfare in the Britain of the future (Hill, 1997).
Social welfare at the level of local government started in the middle of the
19th century West and emerged as a profession. Social welfare work in the
hospital started in Massachusetts General Hospital, USA in 1905 (Morales
and Sheafor, 1989). Social welfare departments in hospitals in Pakistan
started in 1963.
The Lahore Journal of Economics, Vol.3, No.1
106
The concept of a welfare state was introduced in the 1910 budget
by David Lloyd George and Winston Churchill which was blocked in the
House of Lords. In the USA Child Welfare was started in 1912 and social
welfare was introduced during the Roosevelt era in 1935. The Social
Security Act of 1935 was a significant landmark for the US. WH Beveridge
(1879-1963), born in Rungpur, now Pakistan) is considered as the father of
the modern welfare state when he produced the Beveridge Plan in 1944.
The Beveridge Plan recommending war on Want, Disease, Ignorance,
Squalor, and Idleness formed the basis of post war liberalism (Dean, 1994).
It was after World War II that the Labour Government in Britain put the
theories of social scientists into practice with great enthusiasm. It was a
combination of “Keyesian economics and Beveridgean social concern that
gave the welfare state its strong political legitimacy and popular appeal”.
Health, education, housing, minimal wages, money for the unemployed,
care of the handicapped and destitute were assured by the state.
KEYWORDS:
economy, cultural expression, welfare, Human rights, UN.
JEL:
N/A.
Published:Jan - June 1998
The fifth decennial population Census was held after 17 years and its
data is now being processed. Originally the Census was scheduled to be held
in March 1991. The exercise had been actually initiated that year from
Sindh but was soon abandoned when two major ethnic groups in the
province started accusing each other of resorting to false enumeration in
order to achieve a fake majority in the province. Some of the prominent
Punjabi politicians also objected that the head count figures in Sindh were
being engineered in order to stake claims to more resources for the
province at the expense of other federal units. The Census was postponed in
view of the objections and it was announced that the exercise would be
undertaken in October the same year. This time the Balochistan government
announced that it would reject the Census results if thousands of Afghan
refugees living in the province, many among whom had acquired fake
Pakistani identity cards, were not first repatriated to their own country. As
the federal government failed to do this, the Census had to be postponed
without any new date being fixed.
KEYWORDS:
Census Problems, Pakistan, Afghan refugees, Punjabi politicians, NWFP, PKMAP.
JEL:
N/A.