The Pakistan Development Review
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Intergenerational Mobility: Evidence from Pakistan Panel Household Survey
Get PDFPakistan over the years, since its independence in 1947, had a
rather erratic growth profile but on average GDP growth rate hovered
around 5 percent per annum with per capita income growth ranging between
2 to 3 percent. The structure of the economy graduated from being
predominantly agriculture in 1950s to being service sector orientated
since the turn of the century. The manufacturing sector grew from almost
insignificance in 1947 to a reasonable level accounting for around one
third of the GDP. The demographic inertia associated with unchecked
population growth and emergence of job opportunities in urban areas led
to massive rural to urban migration, which resulted in a rather high
level of urbanisation. Concomitant changes in both the urban and rural
labour markets are visible too. Not only did average years of schooling
of the labour force rise but also changes in occupational classification
suggest a relative ris
From Energy Blues to Green Energy: Options Before Pakistan
Get PDFEnergy crisis in Pakistan had been brewing long before it
became an important national issue with the potential to significantly
affect the outcome of general elections of 2013. The looming crisis of
depleting non-renewable energy sources combined with a feeble economy
has lent a new urgency to the search for an energy mix which is
sustainable, economically viable and environmentally least hazardous.
Fossil fuels with their known adverse environmental impacts dominate the
current energy mix of Pakistan. The renewable energy sources remain
underutilised despite being cost effective and less hazardous for the
environment. A substantial amount of literature has highlighted various
dimensions of existing energy sources in Pakistan with a particular
emphasis on the environmental impact, the sustainability and the
efficiency of various energy sources [see Asif (2009); Basir, et al.
(2013); Bhutto, et al. (2012); Mirza, et al. (2009, 2008, 2003); Muneer
and Asif (2007); Sheikh (2010) for example]. This study analyses the
environmental impact, economic feasibility and efficiency of various
energy sources subject to various economic and noneconomic constraints.
Section 2 discusses energy security by reviewing various tapped and
untapped energy sources besides analysing current energy mix and its
future prospects. Section 3 highlights the interaction of energy use and
environment. Section 4 discusses two approaches to assess the
feasibility of an energy mix: disaggregated and aggregated. The latter
approach makes a multidimensional comparison of all the energy sources
discussed in this study. Section 5 consists of discussion and concluding
remarks
Energy Intensity: A Decomposition Exercise for Pakistan
Get PDFSince the recent energy crises, the research in this strand
has increased considerably. A variety of its dimensions have been
examined in the literature. For instance, higher energy prices;
instability in the supplies of its various components; its rapid
depletion and global warming are some of its dimensions, which have been
the focus of discourse among both researchers and policy-makers.
Equally, energy intensity measuring the energy consumption to GDP ratio
has been an important component of energy policies [Ang (2004); Liu and
Ang (2007); Jimenez and Mercado (2013)]. In particular, there is a
special focus on sorting out the contribution of energy efficiency—
ratio of sectoral specific energy consumption to sectoral GDP—to
alienate the impact of efficiency on energy intensity from other
relevant factors. This is because energy efficiency is recognised as one
of the most cost-effective strategies to address crosscutting issues of
energy security, climate change and competitiveness [IDB (2012)].
Consequently, the information regarding energy intensity, its efficiency
or activity aspects are useful tools for policy decisions and evaluation
and are regularly in practice in most of the advanced
countrie
Impact of Fossil Fuel Energy Consumption on CO2 Emissions: Evidence from Pakistan (1980-2010)
Get PDFGlobal environmental problems are getting more attention
especially the increase in earth temperatures and change in climate.
Increase in world average air and ocean temperatures, widespread melting
of snow and ice, and rising global average sea level are some evidences
of global warming. A CO2 emission, which is a global pollutant is the
main greenhouse gas that causes 58.8 percent of global warming and
climate change [The World Bank (2007a)]. The intergovernmental panel on
climate change (IPCC) reported a 1.1 to 6.4 °C rise in the world
temperatures and an increase in the sea level of about 16.5 to 53.8 cm
at the end of 21st century [IPCC (2007)]. Combined global land and ocean
surface temperature for January 2010 on the average was 0.60°C (1.08°F)
above the 20th century average of 12.0°C (53.6°F) and the average global
temperature for January 2010 at the surface air was recorded 0.83°C
(1.49°F) above the 20th century average of 2.8°C (37.0°F). Global
warming is partly resulting from higher night temperature and partly due
to rapid urbanisation. Other factors adding to global warming are the
continuously changing irrigation systems, desertification and variations
in the use of local lands. The developing countries need more energy
consumption for economic growth that’s why these economies face more
environmental issues
Burning of Crop Residue and its Potential for Electricity Generation
Get PDFThis paper identified the factors influencing the rice crop
residue burning decision of the farmers and the potential of the burnt
residue to generate electricity. For this study, data were collected
from 400 farmers in the rice-wheat cropping system. Effects of different
variables on the burning decision of rice residue are investigated
through logit model. A number of factors had significant effects on the
burning decision of crop residue. These included farming experience of
the farmer, Rajput caste, farm size, owner operated farm,
owner-cum-tenants operated farm, silty loam soil type, livestock
strength, total cost associated with the handling of residue and
preparation of wheat field after rice, availability of farm machinery
for incorporation, use of residue as feed for animals, use of residue as
fuel, intention of the respondent to reduce turnaround time between
harvesting of rice and sowing of wheat, convenience in use of farm
machinery after burning of residue and the geographic location of farm.
The overall quantity of rice straw burnt is estimated to be 1704.91
thousand tonnes in the rice-wheat cropping areas with a potential to
generate electric power of 162.51 MW. This power generation from crop
residues would be a source of income for the farmers along with
generation of additional employment opportunities and economic
activities on sustainable basis. In order to minimise the cost of
haulage of rice straw, installation of decentralised power plants at
village level would be a good option. Further, use of rice crop residue
as an energy source can help in reducing foreign exchange requirements
for import of furnace oil. JEL Classification: O44, Q12, Q16, Q42, Q48
Keywords: Bioenergy, Crop Residue, Electricity, Energy, Growth,
Ric
Macro-economic Policies and Energy Security—Implications for a Chronic Energy Deficit Country
Get PDFThe paper assesses the energy sector’s foreign exchange
requirements for meeting energy consumption and for capital
expenditures, and identifies its implications for the country’s
macroeconomic policy and management. We develop a conceptual model for
projecting the energy sector’s long-term requirements for foreign
exchange. The model indicates that the country’s chronic dependence on
oil imports is likely to expose the economy to high and volatile oil
prices. A fundamental issue for Pakistan is how the energy projects
requiring large inflows of foreign capital and technology will be
financed. The main implication of our analysis is that there will be
continuing pressure on the country’s foreign exchange resources. The
demand for foreign exchange by the year 2024-25 is projected to be US 23- 24 billion. An
implication of the country’s chronic energy deficiency is that the
macroeconomic policies, particularly the foreign exchange rate policy,
need to be redefined to reflect the projected demands on hard currencies
and their expected scarcity value. It is likely that Pakistan will
remain dependent on foreign imports to meet its energy requirements for
a long time and will need to generate commensurate foreign exchange
resources to ensure longterm energy security. JEL classification: E66,
F37, Q43 Keywords: Macroeconomic Policy, Exchange Rate Policy, Energy
Securit
Structure and Regulation of the Electricity Networks in Pakistan
Get PDFThis paper studies the electricity industry network in
Pakistan, particularly in the context of structural and regulatory
reforms started in the 1990s. Published reports by the regulator show
that the reforms process is not going anywhere even after two decades
and the industry is performing poorly [NEPRA1 (2010)]. The market is not
clearing as load demand is higher than total system supply, particularly
during the summer season.2 There is no electricity, due to load
shedding, for long hours in major parts of country served by the
distribution networks during the hot and long summer period. An effort
is made here to document the basic facts of industry in an orderly
manner and to draw major lessons from the failure of the reforms process
and poor functioning of the electricity market. The focus will be on the
electricity supply chain networks and issues in the regulation of the
electricity industry. The restructuring of the natural monopoly
components of industry will be discussed in detail. The electricity
industry in Pakistan is quite under researched [Pakistan (2013)], the
main source of industry knowledge is based on government publications.
According to available research [NEPRA (2011), Malik (2007)], the rich
information provided in policy documents and regulatory reports has not
been analysed in detail. Therefore, documenting basic industry facts and
related issues in this paper is a contribution to the existing
literature and will be useful for future policy reforms
Dynamic Effects of Energy Sector Public Investment on Sectoral Economic Growth: Experience from Pakistan Economy
Get PDFThe successive economic and financial crisis in recent time
has reemphasised the importance of fiscal policy. Modern literature has
also revisited the debate regarding the effectiveness of fiscal policy
in influencing growth. The issue of the impact of public investment on
growth is debated in economic literature since seminal work of Solow
(1955). The issue is tackled from different angles. Some have used
production function approach [Ligthart (2002), Otto and Voss (1994,
1996), Sturm and de Haan (1995) and Wang (2004)]. Then another seminal
work by Aschauer (1989) led a series of work on this issue once again in
empirical literature (1989a, 1989b). These approaches used single
equation method for estimation and captured only the direct effects of
public investment on growth. Periera (2000) gave another twist to this
literature by highlighting the indirect effects of public investment on
output through its effects on other inputs like private investment and
employment. Periera’s works (1999, 2000, 2001, 2003, 2005, 2007 and
2011) also contributed empirically to this literature by using vector
autoregressive (VAR) technique. This work accounts for both the direct
and indirect effects of public investment on growth and also considers
the feedback effects of each input to other and finally their effects on
outpu
Causality between Trade Openness and Energy Consumption: What Causes What in High, Middle and Low Income Countries
Get PDFTrade liberalisation has affected the flow of trade (goods and
services) between developed and developing countries. The
Heckscher-Ohlin trade theory reveals that under free trade, developing
countries would specialise in the production of those goods that are
produced by relatively abundant factors of production such as labour and
natural resources. Developed countries would specialise in the
production of those goods that are produced by human capital and
manufactured in capital-intensive activities. Trade openness entails
movement of goods produced in one country for either consumption or
further processing to other country. Production of those goods is not
possible without the effective use of energy. Trade openness affects
energy demand via scale effect, technique effect and composite effect.
Other things being same, trade openness increases economic activities,
thus stimulates domestic production and hence economic growth. A surge
in domestic production increases energy demand , which is commonly
referred as scale effect. Such scale effect is caused by trade openness.
Economic condition of the country and extent of relationship between
economic growth and trade openness determine the impact of trade
openness on energy consumption [Shahbaz, et al. (2013); Cole (2006)].
Trade openness enables developing economies to import advanced
technologies from developed economies. The adoption of advanced
technology lowers energy intensity. The use of advanced technologies
result in less energy consumption and more output that is usually
referred to as technique effect [Arrow (1962)]. Composite effect reveals
the shift of production structure from agriculture to industry with the
use of energy intensive production techniques. In initial stages of
economic development economy is based largely on agriculture sector,
thus the use of energy is relatively less. As economy starts shifting
from agriculture to industry, the energy consumption
increases
Pakistan Panel Household Survey: Sample Size and Attrition
Get PDFThe socio-economic databases in Pakistan, as in most
countries, can be classified into three broad categories, namely
registration-based statistics, data produced by different population
censuses and household survey-based data. The registration system of
births and deaths in Pakistan has historically been inadequate [Afzal
and Ahmed (1974)] and the population censuses have not been carried out
regularly. The household surveys such as Pakistan Demographic Survey
(PDS), Labour Force Survey (LFS) and Household Income Expenditure Survey
(HIES) have been periodically conducted since the 1960s. These surveys
have filled the data gaps created by the weak registration system and
the irregularity in conducting censuses. The data generated by the
household surveys have also enabled social scientists to examine a wide
range of issues, including natural increase in population, education,
employment, poverty, health, nutrition, and housing. All these surveys
are, however, cross-sectional in nature so it is not possible to gauge
the dynamics of these social and economic processes, for example the
transition from school to labour market, movement into or out of
poverty, movement of labour from one state of employment to another. A
proper understanding of such dynamics requires longitudinal or panel
datasets where the same households are visited over time. Since panel
surveys are complex and expensive to carry out, they are not as commonly
conducted as the cross-sectional surveys anywhere in the world and in
Pakistan they are even rare