International economic policy is now more under the sway of orthodox economics than it has ever been. The main international economic institutions, the IMF, the World Bank, the WTO, and the major developed economies are unremitting advocates of free trade and impose their views on the developing countries. And the developing countries, whose attempts at economic development through protection have mostly failed, are on the whole inclined to accept these views. Over the last twenty years economic policy in these countries has more and more come to be formulated by orthodox neo-classical economists, often described in the press as “reformers”, who advocate more reliance on markets and less protection against imports.
KEYWORDS: International trade, neo-classical theory, shortcomings, specialisation, models, Heckscher-Ohlin, Haberler, Bensusan-Butt, mechanised production.

JEL: N/A.

Similar to most countries, the objectives of the taxation system in Pakistan are not well-defined. Historically, the primary objective has been resource generation for the government. The taxation system has simultaneously addressed the secondary objectives of promoting area/sectorspecific economic activities, discouraging undesired imports/production, encouraging savings and investment. These objectives were met through a variety of tax concessions and exemptions, rebates and credits, differentiated tax rates and tariffs. The revenue shortfalls/leakages resulting from preferential tax treatment of the desired activities were offset through appropriate changes in various fiscal instruments, e.g. high tax rates and tariffs, regulatory duties, extended withholding and presumptive taxes, excise duties on services, and many more. These measures, in turn, complicated the taxation system and adversely affected the equity, neutrality and progressivity thereof.
KEYWORDS: Tax policy, preferential tax treatment, structural reforms, administration, federal revenue.

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Ishrat Hussain, a former Pakistani civil servant and currently a World Bank official, has been writing on Pakistan's economy for the national print media. Much like the professional economist that he is, his views reflect an objective approach to a vast range of economic issues. It was now time for him to correlate his analysis of individual problems and sectors to a macroeconomic framework and make some sense out of Pakistan's baffling styles of economic management. How could a compact economy with a rich resource endowment be reduced to the position of a basket case? Hussain's hypothesis: a small group of elites managed to "hijack the state" and "rig the market" for its own exclusive benefit. The "Elitist State" now controls both the private and public sector. No matter which way the economy turns ___ market mechanism or state control ___, the goodies will inevitably land, and are actually landing, in the hands of the controlling elites
KEYWORDS: Book review, elite, Pakistan, privatisation, nationalisation, illiberalism, market mechanisms.

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The development of rural areas is now becoming one of the major objectives of government policy in less developed countries. It has become part of policy simply because governments in developing countries are beginning to realise that to tackle poverty effectively, and to reduce the pressure on urban centres, income levels, as well as the quality of life in rural areas has to be made significantly attractive to prevent people from migrating to the relatively higher income urban areas. Rapid urbanisation in many developing countries has resulted in increased social stress which is reflected in high crime rates, and a substantial decline in social services such as education and health, water supply and sanitation, electricity and housing, etc. The developing countries in Africa, Asia and Latin America are afflicted with both problems - rural poverty/environmental degradation and a rapidly urbanising sector that is estimated to double every twelve to fifteen years.
KEYWORDS: Book review, rural development, urbanisation, rural poverty.

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This is undoubtedly a most useful, updated collection of articles on various aspects of the Pakistani canvas. It is a valuable contribution given the relative paucity of material and literature on such topics. Aside from the somewhat tedious chapter on foreign policy, tiresome by virtue mainly of its bulk (stretching over a total of about a hundred pages in its entirety), the articles make for interesting and refreshing reading for not merely the specialist but the layperson as well. If length is any indication of importance, then surely it is a case of misplaced priorities to have given so much space to a subject such as foreign policy and, in comparison, the pieces on such vitally crucial issues as population planning and human rights are allocated, for whatever reason, a considerably less quantum of space in the book.
KEYWORDS: Book review, Pakistan, economic development, human rights.

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This is the second edition of Dr. Saeed Shafqat's popular and well received book, the first edition of which came out in 1995. Pakistan studies has been an integral part of the country's educational syllabi and competitive examinations for many years now. Unfortunately the syllabi for our school, college and university students reflect a narrow definition of the subject. Not much attention has been paid to historical authenticity and accuracy of facts. The approach in general is simplistic and one is sorry to note, jingoistic. No wonder this discipline, whose importance cannot be overemphasised, fails to capture the minds and imagination of the young students and the level of perceptions manifested by its study are abysmally low. There is need to raise the tone and level of debate and to move beyond the Pakistan Movement to which this subject has largely been confined. Even here the treatment is by and large narrow and simplistic.
KEYWORDS: Book Review, Pakistan studies, Pakistan Movement, syllabi, Pakistan.

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Government health expenditures as a percentage of GDP have declined in Pakistan, though not in absolute real terms, over the structural adjustment period. Progress over this period is evident on a number of health indicators. However, Pakistan still lags far behind the means of low income countries and South Asian countries in all child survival statistics. In view of this, and since the evidence shows a significant and sizeable association of public sector health expenditures and the decline in infant mortality rates, there seems little justification in cutting public sector expenditures.
KEYWORDS: Government, Pakistan, government health expenditures, public sector expenditures, basic health unites, rural health centres, Social Action Plan, SAP, service delivery.

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The assumption that people were to be given theatre was of course in keeping with the government fiction that people were to be given development particularly if they behaved themselves. (Wa Thiong’o, 1986:41) Despite our short history, the norms of scholarship in Pakistan have already become well entrenched: the grooves already seem so deep that digging ourselves out of them may present some difficulties. (One example of that in the social sciences generally, and political science and history in particular, is the retelling of the major historical events and noting major trends without offering any remarkably new interpretations). The need, in other words, of newer and different understanding of where we are and how we got there is considerable. One purpose of introducing Escobar’s (1997) Encountering Development and related materials is to offer an opportunity to get out of these academic ruts. Specifically, two exits are simultaneously provided by Escobar; one lets us interrogate the dominant narrative of development, and the other enables us to consider the possibilities that postmodernism opens up. He applies the latter to the former, which is an uncomplicated way to make what is valuable in postmodernism clear and accessible. (In what follows, the numbers in parenthesis refer to pages in Escobar’s work).
KEYWORDS: Development, postmodernism, international organisations, Third World, colonialism.

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Of all mankind’s adventures in search of peace and justice, arbitration is amongst the earliest. Long before law was established, or courts were organised, or judges had formulated principles of law, man had resorted to arbitration for the resolution of discord, the adjustment of differences and the settlement of disputes. One of the recurring themes in International Business Arbitration is the tension between the will of the parties and the ability of states of regulate the conduct of arbitration proceedings. The general trend in international commercial arbitration is to respect, within limits, the will of the parties regarding the choice of law and the procedure for carrying out their arbitration. Thus, party autonomy is recognised as one of the cardinal elements of international business arbitration.
KEYWORDS: International business arbitration, proceedings, arbitration international, arbitration, disputes.

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This study raises policy issues arising from the fact that the present tax-expenditure policies and institutional set-up at both the provincial and local government levels of the Province of the Punjab are dated and need revision. There is now an active awareness within the Punjab Province that substantial changes are necessary. The broad outlines of these required changes which have been identified in this study, as follows: i) The Provincial Government needs to recognise that the 1997 National Finance Commission (NFC) Award’s projected high level of Federal Divisible Pool Revenues are unlikely to materialise in the light of the substantial changes made in tax policies by the post 1997- Award Federal Government as well as by the depressed state of the economy. As a result the historical pattern of Federal Transfers covering more than 85 per cent of consolidated Punjab Provincial and Local Government expenditures is unlikely to be ever repeated. In fact the 1997-98 coverage of 75 per cent is likely to go down even further and this gap needs to be filled by active resource mobilisation and expenditure curtailment measures.
KEYWORDS: Fiscal resources, tax collection, local governments, provincial governments, income tax, provincial excises, finances, provincial revenues.

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A conference on Science and Economic Development was held at Hotel Pearl Continental, Lahore on 1-2 December, 1997. The event was sponsored and organised by the Lahore School of Economics. The World Bank provided a grant to help meet the cost of participant travel and subsistence. The conference brought together Pakistan’s leading businessmen, scientists, engineers, and economists to discuss and develop ideas on how to improve Pakistan’s state of science and technology (S&T) capabilities with a view to accelerating the country’s pace of economic development, strengthening its competitive position in the global economy, and preparing it for the challenges of the 21st century. The conference calendar and the list of participants can be found in the Annex.
KEYWORDS: Conference report, science, Pakistan, economic development, promotion of science and technology, national system of innovation.

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The Annual Confidential Report is a government document and is used by all government departments. The document is used for all employees of Grade 16 and above. The same document is used for the teaching staff as well. The inefficiency of the document to present an appropriate appraisal of scholarship characteristics of the higher education academic staff is evident. This study will focus on identifying various factors that ought to be assessed to provide information about the performance of the teaching staff and help formulate an effective format to achieve the objectives of appraisal.
KEYWORDS: Higher Education, Pakistan, Higher Education Academic Staff, HEAS.

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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.

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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.

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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.

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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.

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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..

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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.

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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.

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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.

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