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The Role of Power Generation and Industrial Consumption Uncertainty in De-industrialising Pakistan
Get PDFThe term deindustrialisation refers to the process of
socio-economic changes taking place due to reduction in the industrial
capacity and/or the loss of industrial potential of an economy. This
also connotes the secular decline in the share of industrial sector
employment as observed in developed countries since 1970s. The secular
shift from manufacturing to services sector reflects the impact of
discrepancy in productivity growth between the said sectors. A faster
rise in productivity in manufacturing sector than in services switches
the employment from manufacturing to the services sector, as suggested
by Rowthorn and Ramaswamy (1997). Generally, deindustrialisation is
considered as the natural outcome of economic development because it
involves the transformation from primitive agriculture-based economy to
the modern industrial-based. After the establishment of manufacturing
sector, the long-run economic growth stimulates an innovation-based
economy implying the services sector’s growth [Galor (2005)]. However,
the process requires a gradual shift accompanied by allied institutional
and infrastructural reforms and the process of deindustrialisation
occurs at the later stage of development
Energy Crisis and Productive Inefficiency: Micro-Evidence from Textile Sector of Faisalabad
Get PDFEnergy, being an essential component of every production
process, plays a pivotal role in the growth process of a country. The
production process has undergone a massive transition from labour
intensive to energy intensive techniques [Stern and Cleveland (2004)].
Now, it is widely recognised that industrialisation is an
energy-intensive process; hence, uninterrupted supply of energy is
necessary to keep the production process in run. In addition, high
percapita energy consumption is considered as an indicator of the level
of economic development. This positive correlation between energy
consumption and output growth (and development) led many countries,
particularly developing ones, to design policies for subsidised energy
provision with focus on supply-side in late eighties. At the same time,
some European countries (i.e. Germany, Denmark, Belgium, Sweden)
formulated energy policy focusing on demand-side (energy conservation),
and achieved smaller growth rates in energy consumption without any
reduction in economic growth [Pintz (1986)]
Keynote Address
Get PDFMr Hasan Nawaz Tarar, Secretary Planning, Development and
Reforms, Dr Asad Zaman, Dr Musleh ud Din, distinguished economists,
members of the Pakistan Institute of Development Economics (PIDE) and
the Pakistan Society of Development Economists, students, ladies and
gentleman, it is indeed a great honour and privilege for me to open the
PSDE’s Conference, which has become an annual feature of the Pakistan
Society of Development Economists. It offers us a great opportunity to
deliberate on the challenges that our country is facing. Before I
proceed with what I have to say, I would like to place on record my
appreciation for the outgoialso ng Vice Chancellor of PIDE, Dr Musleh ud
Din, who has provided leadership to PIDE and has been instrumental in
arranging this Conference. I would also like to welcome Dr Asad Zaman as
the new President of the PSDE and Vice Chancellor of PIDE. I hope that
under his leadership PIDE will touch, In šāʾ Allāh, new heights and
become a centre of excellence, not only in Pakistan but also in Asia.
Being in a meeting of economists and a leading public sector economic
think tank, I am reminded of an anecdote about an economist. A man was
walking by a road in countryside where he saw a flock of sheep. He could
not resist and said to the shepherd that he would like to make a bet on
correctly guessing the number of sheep in the flock. He said to the
shepherd that he would give him a hundred dollars if he were unable to
guess correctly the exact number of sheep. But if he were right, the
shepherd would give him one sheep from the flock. Shepherd thought that
it was a huge flock, this person had to be crazy, so it was an easy
hundred dollars and accepted the bet. Within a few minutes, the man said
that these were nine hundred and eighty one sheep. The shepherd was
surprised because the man was exactly right. He said he was man of his
word and told the man to pick up any of the sheep. The man picked up a
sheep and started to walk away. As he was walking away, the shepherd
said he wanted to get even with the man and asked him to make another
bet. He said that he could tell him exactly what his occupation was, to
which the man agreed. He was from a far off place and thought there was
no way the shepherd could guess his profession. The shepherd asked him
if he were an economist from a government think tank. The man was
greatly surprised because the shepherd was right. He asked the shepherd
how was he able to guess his profession. The shepherd asked him to put
down his dog first. The man had picked up shepherd’s dog instead of a
sheep! I hope it is not the case here and hopefully we have economists
who can not only count the sheep exactly but who can also pick sheep
from the flock and not a dog
A Review of Contributions of Friedrich List Commemorating his 225-Year Anniversary.
Get PDFFriedrich List was a German-American economist who considered
economics a science of politics and culture. As a modernist, he promoted
an urban-industrial society, through gradual and pragmatic policies. He
had considerable impact on a geopolitical scale, and his theories
contributed to significant changes in the international balance of
powers. For a good reason, the textbooks of mainstream Anglo-American
economics weeded out the German-American economist Friedrich List
(1789-1846). Why? Because List gave away the family secret. List
described its details, reasons and logic. The treasure to be kept secret
was, and is, the strategy to accumulate national wealth and power. List
has thus been characterised as
Jean Drèze and Amartya Sen. An Uncertain Glory: India and its Contradictions. Princeton: Princeton University Press. USA. 2013. 448 pages. $ 29.95.
Get PDFThe spectacular performance of India in terms of economic
growth has generally been a source of pride for the Indians as a nation,
in addition to attracting significant international applause. Drèze and
Sen, on the contrary, question the justification of lauding Indian
performance in their book, ‘An Uncertain Glory: India and its
Contradictions’. In their book, they focus on the performance parameters
that actually reflect standards of living of Indian population. Their
analysis portrays a shockingly dismal state of affairs for a vast
majority of citizens of the country. The book disillusions the reader
about the projected image of Indian development through a detailed yet
objective discussion on specific issues plaguing the social sector of
the country. The discourse throughout is substantiated by extensive
statistical evidence, in addition to a comprehensive statistical
appendix given at the end of the book
Fiscal Decentralisation, Democratic Institutions and Inflation
Get PDFThis study examines the role of democratic institutions in an
attempt to explain the relationship between fiscal decentralisation and
inflation. The empirical analysis is based on time series data over
1972–2010 for Pakistan using the GMM estimation procedure. Three
different measures of fiscal decentralisation are used in order to
capture multidimensionality. The major findings of the study suggest
that expenditure decentralisation has a negative impact on inflation if
accompanied by democratic institutions. Revenue decentralisation,
however, has a negative impact on inflation even in the absence of
institutions, though institutions accentuate this effect. The role of
institutions, therefore, is important in realising the benefits of
fiscal decentralisation. Composite decentralisation has a negative and
significant impact on inflation. This implies that expenditure
decentralisation becomes effective when it is complemented with revenue
decentralisation. Intuitively, provincial governments become more
responsive when their expenditure needs are met with their own revenues.
JEL Classification: E31, H11, H72 Keywords: Fiscal Decentralisation,
Inflation, Institutions, Pakista
Electricity Demand in Pakistan: A Nonlinear Estimation
Get PDFPakistan has plunged into darkness because of severe
electricity shortage over the last few years. The electricity shortfall
has reached 4,250 MW with demand standing at 16,400 MW and generation at
12,150 MW in June 2013 (PEPCO). The load shedding and power blackouts
act as a binding constraint to the economic growth through their impact
on employment, trade and poverty [Kessides (2013)]. The existing
statistics reveal that Pakistan has witnessed low GDP growth rate during
the periods of low or negative electricity growth and during the periods
where electricity growth picked up there is an increase in GDP growth
rate [Pakistan (2013)]. The power crisis has destroyed the industrial
sector of Pakistan. Around 40 percent factories and industry units have
now been closed and around 7.5 percent of labour force is out of jobs
only because of this dilemma.
Energy, Environment and Sustainable Development in South Asia (The Quaid-i-Azam Lecture)
No full textHonourable Federal Minister for Planning, Development and
Reform, his excellency Mr Ahsan Iqbal, the President, Pakistan Society
of Development Economists, discussants, Dr Ashfaque Hasan Khan and Dr
Rehana Siddiqui, Dr Durr-e-Nayab, distinguished ladies and gentlemen,
let me say at the outset that it is a great privilege for me to be here
and to be given this opportunity to deliver the Quaid-i-Azam Lecture. I
regard this as a signal honour and I feel particularly privileged coming
from India being able to speak in honour of the Quaid-i-Azam, the
founder of this country. I want to express my gratitude for this
particular privilege which I have been given. I also want to acknowledge
the very warm sentiments expressed by his Excellency the Minister. I
certainly believe that in this day and age we have to look forward, we
have to look at the future and I think we have to erase some of the
problems, demolish some of the barriers and the hindrances that have
prevented South Asian cooperation in the past. So Sir, your words in
that context are certainly appreciated and I would say that we have to
put them into effect by ushering in a new future for this region. I want
to mention that when I had the privilege of accepting the Nobel peace
prize on behalf of Inter-governmental Panel on Climate Change (IPCC) in
2007 along with Mr Al Gore, in my acceptance speech I used a Sanskrit
phrase which is Vasudhaiva Kutumbakam and that means the universe is one
family. Now if the universe is one family, may I submit that, we
particularly in Pakistan and India are really the core of that family. I
believe the future lies in our ability to develop a model of economic
growth and development that serves as an example for the rest of the
world. Let me at the very outset say that we have been somewhat
negligent and perhaps short sighted in emulating what has been
established as a form of development in other parts of the world and I
will say a little more about this as I move on. Let me start by
referring to the definition of sustainable development which essentially
comes out of the work of the Brundtland Commission that was completed in
1987 and it’s a very simple definition. It defines sustainable
development as that form of development which allows the current
generation to meet their own needs without compromising on the ability
of future generations to meet their own needs. So, therefore, it
essentially takes into account the issue of intergenerational equity.
Whatever we do today should not be selfishly oriented by which we might
meet more than our needs toda
Energy Security and Economic Sustainability: The Way Forward (The Presidential Address)
No full textHonourable Minister for Planning, Development and Reforms and
Chancellor PIDE, Past Presidents and Distinguished Members of the
Society, Excellencies, Ladies and Gentlemen, It is my pleasure to
welcome you all to the 29th Annual General Meeting and Conference of the
Pakistan Society of Development Economists. On behalf of the members of
the PSDE, I would like to thank you, Honourable Prof. Ahsan Iqbal for
having spared your precious time to open this important meeting. I would
also like to especially thank our members and guests who have come from
different parts of the country and from different continents to
participate in the Conference. We are extremely pleased to see here
today many young students— Pakistan’s future economists and business
leaders—who I am sure are enthusiastic to learn from the many leading
specialists attending this Conference on the critical issue of ‘Energy’
that we in Pakistan face today. Let me join Dr Durr-e-Nayab in
especially welcoming Dr Ilhan Ozturk, Professor at the Çağ Üniversitesi
in Turkey who will be delivering the The Mahbub Ul Haq Memorial Lecture.
Dr Prof. Zhaoguang Hu, Vice-President and Chief Energy Specialist at the
State Grid Energy Research Institute in Beijing who will deliver Gustav
Ranis Lecture. Professor Mohan Munasinghe, Chairman of the Munasinghe
Institute of Development, Sri Lanka who will be delivering The Allama
Iqbal Lecture and Dr Rajendra K. Pachauri, Chief Executive of the Energy
and Resources Institute, New Dehli who will deliver The Quaid-i-Azam
Lecture this yea
An Investigation of Multidimensional Energy Poverty in Pakistan
Get PDFPoverty is an alarming problem all over the world. It is one
of the severe challenges today faced by not only the developing nations
but by the developed nations also. However, the problem is worst in
developing countries [United Nations and IEA (2010)]. All these
countries face poverty in different forms such as food poverty, energy
poverty, shortage of natural resources, shortage of agricultural
products, lack of shelter and clothing among others. It is persuasive to
correlate poverty with lack of energy consumption also. Such a
correlation identifies that poor use energy very inadequately [Pachauri,
et al. (2004)]. Energy helps societies to move from one development
stage to another. Worldwide energy demand is increasing while supply is
decreasing due to increase in the world population, emerging economies
and economic development. In current day to day life energy has become
an essential requirement. For all of us energy is required for lighting,
transportation, cooking, health services, and to fulfill many of our
basic needs. Electricity access at household level enhances
telecommunication, entertainment, and knowledge via radio, television,
and computer etc