Pakistan experienced the reverberations starting in 1988 of the changes that swept the Asian emerging markets. To create an investment friendly environment the GoP adopted liberal economic policies of deregulation, privatisation, opening of capital markets to foreigners, liberalisation of foreign exchange regulations and dismantling of investment control - policies that lead to a significant increase in direct and indirect foreign investment in the country. These changes resulted in a drastic increase in the financial assets of Pakistan with stock market capitalisation rising from Rs.l88 bn in 1991 to Rs.547 bn at present, daily trading volume improving from 2 mn shares in 1991 to 50 mn shares at present and number of listed companies rising from 542 in 1991 to 788 at present.
KEYWORDS: Capital markets, domestic market capitalisation, investment, mutual fund investment, Pakistan.

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In 1995 the Republic of Korea (ROK) was officially admitted to the Organisation for Economic Cooperation and Development (OECD). This organisation groups together industrially developed countries of the world. Recently, the World Bank has also released a study of China that predicts that China is going to become the second biggest economy in the next fifteen years if its economic growth follows the pattern of the last fifteen years. ROK is the only country from among the developing countries to join the ranks of the developed industrialised countries in the last thirty years. However, it is still a small country compared to China. Hence when China completes its transformation into an industrialised country the whole world will be affected. How did South Korea achieve such an accelerated transition to prosperity? What measures were adopted by the Chinese leadership that has allowed China to grow so rapidly? There are many factors that have been cited to explain Korea's miracle, and rapid Chinese growth. However, In the following we will highlight the role that education, science and research and development (R&D) have played in their success.
KEYWORDS: South Korea, ROK, GDP, OECD, research and development, R & D, investment.

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This article will attempt to answer the question why the redistribution of land ownership (i.e. land reform) is important and even necessary for our society's progress and development. Why there remains a crying need to concretely study the question of agrarian land ownership and all it implies in terms of political and economic power distribution and its social fallout in the rural milieu. Let us begin with an examination of how the present land ownership patterns originated and evolved. A discussion of the pattern of agrarian land ownership must necessarily take as its main focus the areas where agriculture is the mainstay. That inevitably means the provinces of Punjab and Sindh. The other two provinces, NWFP and Balochistan, with the exception of some relatively limited areas where canal fed or barani cultivation exists, have economies that are mixed pastoral/agricultural, an economic base reflective of their surviving tribal structures.
KEYWORDS: Land Reform, land ownership, agrarian reforms, Pakistan, economic distribution.

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Child labour exists throughout the third world including Pakistan. For some unknown reason, the Western Press has chosen to single out Pakistan to decry the system. The May 1997 issue of the Readers’ Digest carried a particularly vicious article entitled `No Life for a Child’ giving harrowing tales of beatings and other forms of coercion to make little children in Pakistan to work in factories. Advantage is taken of the fact that there has been no census in the country for two decades to bloat the figures of child labour. One estimate going the rounds is 15 million. But the more popular figure is 8 million which both UNICEF and SAARC have adopted. ILO produced a figure of 6.3 million till, in 1996 it sponsored a survey which turned up the figure of 3.3 million. In a country with a population of 132 million, every man, woman and child of which is under a debt burden of about Rs 13,021 per annum the figure of 3.3 million labouring children should not take anyone by surprise. Not that this is any justification for child labour.
KEYWORDS: Child Labour, welfare, enforcement, ILO, UNICEF, social welfare, education.

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Policy formulation and implementation are the chief, though not the only, business of a modern government, implying exercise of its power. In a democracy the people themselves grant permission to the government to exercise power in their name. Thus through the democratic process power is transformed into legitimate authority. However, there is a feeling that a policy, formulated through due procedures at the highest echelons of the government, is sometimes not implemented in the same spirit or in the same way as was originally intended by the policy makers. Thus there If need to locate and identify the points where such lapses take place.
KEYWORDS: Policy formulation, policy implementation, political leadership, administrative leadership.

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In economics we study how and why “people” whether they are consumers, firms, non-profit organisations or government agencies make decisions about the use of valuable limited resources. When studying the environment from an economics perspective we are in fact primarily focusing on how and why “people” make decisions that have environmental consequences. Secondly, we focus on how we can manage institutions to bring these environmental impacts more into balance with changing human demands and the demands of the ecosystem itself. If we follow this economic approach several answers emerge to the basic question asked in environmental economics, that is “Why do people behave in ways that cause environmental degradation?”
KEYWORDS: Environmental resources, environmental economics, environmental impacts, Pakistan.

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In this paper we cite evidence regarding the likely impact of IMF/World Bank policies on labour and the poor in Pakistan. Our findings show that since the 1987 bout of structural adjustment, public sector employment has decreased while wages have been frozen. Also, overall unemployment in occupations with a high incidence of the poor has dramatically increased and real wages of skilled and unskilled labour sharply declined. In addition, subsidies that were critical to the consumption pattern of the poor have been cut while the burden of indirect taxes on the poorest income group has increased. Not surprisingly, there has been an increase in poverty and inequality, particularly in the rural areas.
KEYWORDS: Structural adjustment, Pakistan, IMF, International Monetary Fund, structural adjustment agreements.

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The diverse growth experience of economies across the globe is perhaps the most intriguing question that the economics profession faces. The economies of East Asia have grown rapidly over the past three decades, while the economic performance of the South Asian and Latin American countries has been relatively mediocre, although better than that of the African countries, where the per capita incomes have been generally declining. Among the developed countries also, there has been considerable diversity of economic performance. There is no dearth of research on the question, but there is little agreement among economists on what explains the diversity of economic growth experience. One reason for the absence of consensus is that economic growth is a relatively recent phenomenon and we, as economists or social scientists, still do not understand well what factors bring it about. Sustained economic expansion and rise in living standards can be traced back only to the late eighteenth century, i.e., the time when the Industrial Revolution started in Great Britain. This is not to suggest that there had been little social or economic change prior to that epoch. Quite the contrary. Agricultural practices had been improved over time, and there is a rich record of the mastery and ingenuity of artisans all over the world. But such improvements in products and processes as occurred over the period prior to the Industrial Revolution somehow did not become an economic force, leading to a general improvement in the living standards.
KEYWORDS: Global economy, analytics, growth, technology, total factor productivity, TFP.

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In the post war world, numerous attempts at all levels – multinational, bilateral and domestic – have been made to foster growth and development in the low income world so that these countries can catch up with their richer brethren from the industrial countries. Why has growth not been faster? What can be done to make these countries achieve more balanced and sustainable growth? These are important questions of the day that are preoccupying all serious positive social science and development policymaking. To a large extent, many of the answers that are being derived relate to the failure of these countries to develop key institutions. Most practitioners and thinkers are now in agreement on this issue but remain perplexed at what is required to develop these institutions. The public sector’s attempts at developing the institutions within its fold have not succeeded. The fostering of non-governmental institutions also remains fairly uneven in its results. Donor funding for institutional support too has had very limited results despite the extensive history of sectoral and institutional reform that has been supported by substantial financial and technical assistance and resources.
KEYWORDS: Growth, Development, institutions, institution-building, donors.

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The Pakistan economy is currently going through a period of much needed structural adjustment focusing on: (i) Reducing fiscal deficits from about 6 to 4 per cent of GDP, which should reduce public sector borrowing and bring down interest rates and inflation; (ii) Reducing tariffs from an average of about 80 per cent in 1993 to about 60 per cent currently and about 45 per cent next year – which while requiring painful adjustments particularly in the industrial sectors, should make Pakistan more competitive in the long term and also benefit consumers; (iii) Reducing the size of the public sector in the economy by privatizing nationalized banks, nationalized and public sector industry and public utilities including power, gas and telecommunications, which should increase the efficiency of these sectors. All these measures have implications for employment generation. In the short term they are slowing down the economy and therefore employment creation is not taking place at the earlier higher rates. In the long term they should help stabilize the economy and add significantly to economic growth.
KEYWORDS: Pakistan economy, employment generation, employment, government policy, GDP, formal employment.

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For an increasing number of people around the world, habitation is not a question of good or bad architecture but of shelter, food, health and economic survival, a question of political empowerment, domination and the control over resources, and ultimately a question of criteria and goals of “development” and “progress”. With their heroic manifestoes, at the beginning of the century the modern movement had set out to transform the world. Architects, the champions of industry and the new mass production technologies were to bring prosperity, happiness and joy to all mankind. With mechanised production of buildings and new modes of transpiration we were to build clean, healthy, well designed, comfortable and aesthetically satisfying new cities. At the center of much of these dreams were the habitation s of the common man. Yet today, at the close of the century after some remarkable “progress” and “development” and despite a profusion of ingenious buildings by a galaxy of brilliant architects, the world, the real world inhabited by a very large section of humanity, has been transformed not into the promised paradise but into a living hell.
KEYWORDS: Urban development, Pakistan, Lahore, poverty, technology, global warming.

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First, an overview of the world economy to provide us with the stark evidence of the deep economic and social crisis which the world still faces despite the process of far reaching economic reforms and adjustments which many countries have undertaken over the past decade and a half, Global unemployment today, as a proportion of potential employment, is higher than at any time since the Great Depression. Of a world labour force estimated at 2.8 billion people, an estimated 30 per cent are not productively employed. More than 120 million people are registered as unemployed throughout the world, in that they seek and are available for work but cannot find it. An estimated 700 million people are underemployed, the ‘working poor’, and they form the bulk of the estimated 1.1 billion absolute poor in the world. With new entrants joining the labour force at an increasing rate, the pressures on the employment situation and poverty problem will further intensify in the coming years. Recent economic trends are not very encouraging. In 1993, for the fourth year in succession, average world per capita income fell. In 1992-93, the employment situation worsened in most countries, whether developed, developing or in transition. Outside East and South-East Asia, even if employment levels were sustained, it was usually at the price of falling wages. Employment conditions have also changed considerably and in many cases deteriorated – the risk of job loss persists, young people especially find it more and more difficult to get employment, and the informalisation of employment in urban areas continues as more people turn towards self-employment.
KEYWORDS: Structural reform, economy, stabilisation, employment levels, unemployment, macro-economics, macro-economic stability.

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Trade Weighted Real Exchange Rate --- Methodology For the purpose of calculating the trade weighted real exchange rate series for the years 1982 to 1995 the following definition of PER is used: PER = price of tradeables Price of non-tradeables or PER = E x Pt Pn Instead of simply taking the WPI as a measure of the price of tradeable goods and CPI as a measure of nontraded goods, the whole system to calculate their appropriate proxies is worked through. Price of nontradeables --- domestic price level (Pn) The definition of expenditure on GDP, used in the Economic Survey of Pakistan includes private consumption (C), general government current consumption expenditure (G), gross domestic fixed capital formation and changes in stock (I), export of goods and non-factor services (X), less imports of goods and non-factor services (M). In symbols this can be written as: GDP = C + I + G + X – M To find the domestic expenditure on non-traded goods, exports (X) from the above equation are subtracted, which becomes domestic expenditure on non-traded goods: GDP – X = C + I + G + X – M – X or Yn = GDP – X 74 The Lahore Journal of Economics, Vol.2, No.1 The ratio of domestic expenditure on non-traded goods (Yn) at current prices to the domestic expenditure on non-traded goods at constant prices can be used as a proxy to measure the domestic price level (Pn) or the price of non-tradeables. Pn = Yn at current prices Yn at constant prices where; Yn = expenditure on GDP – exports Pn = domestic price level
KEYWORDS: Real exchange rate, exchange rate, Pakistani rupee, Pakistani rupee devaluation.

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Enthusiasm about finding the magic route to development and economic emancipation of the deprived masses of the Third World seems to have yielded place to cynicism, inertia and an air of resignation. No wonder, the world has gone back to the two hundred years old Adam Smithian philosophy of market mechanism, and unbridled capitalism ------ a “systemless system”. The present "back-to-the-market" wave, of course, has been expertly marketed by donor agencies and governments. But the meek way in which the developing countries have accepted it is also the product of frustrations resulting from assorted strategies and programmes implemented in the last few decades. Rural development, basic needs, population planning, import substitution, export-led growth, nationalisation, public sector corporations, agricultural extension, heavy industry ---- the list of half-baked policies is long. These were supposed to have been delivered by bureaucracies which lacked imagination, energy and empathy for the poor. But their appetite for corruption and capacity for inaction and lethargy were enormous.
KEYWORDS: Regional economic integration, Supply.

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This Report ought to be made essential reading not just for all governments of the countries of the South, but for each and every conscientious citizen of this part of the globe. The reason for this somewhat categorical statement will be made apparent as one reads on. For the time being it can be said without a shadow of a doubt that it gives a fresh, enlightening perspective on each and every aspect of world affairs and the world order, touching not merely the macro canvas but the individual, day to day existence of our citizens. To the extent that even a cursory scanning of the contents of the book transforms the reader’s entire perspective and weltenschauung of life
KEYWORDS: Report of the South Commission, South Commission, Third World, Manmohan Singh.

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In Pakistan, historically, regional economic disparity has been an important political issue. During the 1960’s the economic disparity between East and West Pakistan fueled the movement for provincial autonomy in East Pakistan and subsequently the movement for national independence in what became Bangladesh in 1971. During the late 1970’s and 1980’s the issue of regional disparity between the provinces of what remains of Pakistan has acquired an explosive potential. However, this is an issue that has been charged by emotion, and it may be time now to begin a serious analysis to enable effective policy formulation to overcome the problem.
KEYWORDS: regional disparity, regional economic disparity, Pakistan, Punjab.

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For those trying to find answers to the large number of unresolved and pressing issues resulting from international labour migration, the economies of APEC and their future development provide an area of very special interest. APEC2 includes amongst its member economies the world’s two largest exporters of labour, namely Mexico and the Philippines, as well as the world’s three largest destinations for permanent migration, namely, the United States, Canada and Australia. It includes economies, which both import as well as export labour and economies which have passed through the “turning point” or transition from a labour exporting to a labour importing country. It also includes the world’s most populous economy, the People’s Republic of China, which still exercises strict controls on labour migration, a situation, which could change dramatically in the foreseeable future. APEC, including as it does all the major economies in the fastest growing dynamic economic region in the world, is also ideally placed to provide an answer to the growing debate on whether globalisation will accelerate or slow down the present labour migratory pressures.
KEYWORDS: Labour, APEC, International migration, human development.

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An essential component of a programme for structural readjustment is a reform of the taxation system so that it supports the basic thrust of the reform package. Although the system of taxation in Pakistan is supposedly based on the principles of equity and has a progressive character it has not actually functioned in this manner. This is so because the system has evolved as a result of changes made at different moments in time in response to the exigencies of the government’s revenue needs and the pressures exerted by different lobbies. The attempt to use the taxation system to serve a variety of social and economic objectives has created distortions and made the structure rather complex and non-transparent, thereby weakening its potency as a revenue generation instrument, while adding unnecessarily to costs. The structure is, therefore, characterised by direct taxes not being paid by those who should be paying them, indirect taxes being largely paid by those who are otherwise considered too poor to pay taxes and subsidies and exemptions being cornered by those who should not get them.
KEYWORDS: Taxation, Pakistan, Taxation System, government, revenue.

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No greater disappointment for Pakistan’s foreign policy since the break up of the Soviet Union has been the inability to benefit from increased trade and traffic with five Central Asian Republics (CARs). The continuing civil war in Afghanistan has blocked land routes while neighboring countries such as Iran and Turkey have surged ahead with strengthening economic links with Central Asia.
KEYWORDS: Central Asia, Pakistan, CAR, Central Asian Republics, Soviet Union, US, Nazarbayev.

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This paper argues that competition policy has focused exclusively on the productive and financial sectors which has consequently seen periods of extreme concentration of assets by the private sector, nationalisation and subsequent privatisation and de-regulation. However, the political momentum generated from the nationalisation moves in industry and finance has resulted in complete government control through nationalisation of the education sector which has had adverse consequences for human resource development. Public administration has also deteriorated as a result of expansion of the nationalised sector and consequent diversion of economic rents to public administrators. The challenges facing the economy are to increase competitiveness and reduce rent seeking through eliminating trade barriers, privatisation and de-regulation in the production, finance and education sectors which are only possible in democratic environments and which reinforce the democratic process itself particularly through human resource development. An important dilemma relates to the infrastructure and energy sectors where issues of privatising natural monopolies and cartels raise questions of institutional capacity in regulating these sectors.
KEYWORDS: Competition, Democracy, Pakistan, development, human development.

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