The Pakistan Development Review
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Non-agricultural Market Access: A South Asian Perspective
Get PDFDespite the fact that the WTO has helped to reduce the overall
level of tariffs with increased transparency, a majority of the
developing countries with the capacity to increase exports of labour
intensive manufactures continue to face significant barriers in
accessing foreign markets. Tariff rates applied by the developed
countries for textile and clothing and leather for instance are much
higher than those on other manufacturing products such as electronics,
computers and telecom equipment, thus indicating a clear discrimination
against exports of the developing countries. Moreover, tariff peaks,
tariff escalation, tariff rate quotas and other non-tariff measures
including antidumping duties, countervailing duties, and safeguard
measures to protect against serious injury from import surges, allowed
under the WTO, have become major impediments to market access for
developing countries exports
The Demand for International Reserves: A Case Study of Pakistan
Get PDFForeign exchange reserves have clear implications for exchange
rate stability, financial markets, and hence, for overall economic
activity. Stakeholders have different views about reserves holding. Some
economists believe that foreign exchange reserves are useless and
unutilised as Friedman (1953) criticised the fixed exchange rate system
with the argument that it contains unutilised foreign exchange reserves.
On the other hand, some economists argue that foreign exchange reserves
should be there to smooth out the imbalances in balance of payments [see
Kemal (2002)]. There is continuous debate about the need to hold
reserves.1 The critics are worried about the cost of holding reserves.
The cost of holding reserves is the investment that nations must forego
in order to accumulate reserves. In contrast, the supporters of reserves
holding argue that the cost of reserves holding is small compared to the
economic consequences of exchange rate variations. For instance, a
depreciation in the value of the currency, caused by either financial
crises or others internal or external shocks, may raise a country’s
costs of paying back debt denominated in foreign currency as well as its
costs of imported items. Besides, it also creates high inflation
expectations
An Analysis of Occupational Choice in Pakistan: A Multinomial Approach
Get PDFOccupational choice plays an important role in determining
earnings and success in the labour market. In the social structure of
Pakistan, an occupation reflects the socio-economic status of the
individual. In this backdrop, the paper looks at the occupational
structure and analyses how different characteristics help individuals to
access jobs of their choice. The main issue discussed in the paper is
how men and women have a different occupation distribution. Estimates
are based on a multinomial log model of occupation choices for men and
women, using the Pakistan Integrated Household Survey (PIHS) 2001-02
data. The empirical results show that individuals with high educational
achievements choose high-ranking jobs. It is also noted that gender has
a role in the labour market and males are sorted out in high-paying
occupation. Occupational choice is influenced more by the human capital
variables than by the individual characteristics. Among human capital
variables, education has the strongest impact in the selection of an
occupation of choice
The Public and Private Sector Pay Gap in Pakistan: A Quantile Regression Analysis
Get PDFThis paper examines the magnitude of public/private wage
differentials in Pakistan using data drawn from the 2001-02 Pakistan
Labour Force Survey. As in many other countries, public sector workers
in Pakistan tend both to have higher average pay and education levels as
compared to their private sector counterparts. In addition, the public
sector in Pakistan has both a more compressed wage distribution and a
smaller gender pay gap than that prevailing in the private sector. Our
empirical analysis suggests that about two-fifths of the raw
differential in average hourly wages between the two sectors is
accounted for by differentials in average characteristics. The estimated
public sector mark-up, ceteris paribus, is of the order of 49 percent
and is substantial by the standards of developed economies. The quantile
regression estimates suggest that the mark-up was found to decline
monotonically with movement up the conditional wage distribution. In
particular, the premium at the 10th percentile was estimated at 92
percent as compared to a more modest 20 percent at the 90th
percentile
David A. Robalino, et al. (eds.). Pensions in the Middle East and North Africa: Time for Change. Washington, D. C.: The World Bank, 2005. pp.xxviii+253. Price not given.
Get PDFThis report by David A. Robalino, et al. on Pensions in the
Middle East and North Africa: Time for Change evaluates the current
mandatory pension systems formulated in the 1970s in the region. Since
the publication of Boersch-Supan Palacios and Tumbarello (1999), cited
in the volume, the Word Bank has been providing technical assistance to
the countries of the region in the area of pension reforms. According to
Schwarz and Demirguc-Kunt (1999), also cited in the volume, more than 60
countries have introduced pension reforms in the last 20 years. The
financial problems and the fiscal burden of these generous schemes was
the common motivation for the reforms undertaken. The present book by
David Robalino and his co-authors is the extension of those previous
works published five years ago
An Analysis of Exports and Growth in Pakistan
Get PDFTrade is presumed to act as a catalyst of economic growth and
the growth in exports leads to increase in the incomes of factors of
production, which in turn increases the demand for input for further
expansion in production. The resultant pressure on domestic capacity may
stimulate technological change and investment opportunities. Also
increase in demand due to raising incomes of the factors of production
on account of exports may spill over into other sectors of the economy.
A part of such growths could also be diffused abroad through technical
assistance and aid. According to Emery (1967) empirically proved that
higher rates of exports growth leads to higher economic growth.
Traditionally, a developing country had the choice of two alternative
trade strategies for supporting industrial development, export promotion
or import substitution. A consensus has emerged among many development
economists that an export expansion policy by permitting resource
exploitation according to comparative advantage and by allowing for
utilisation and exploitation of economies of scale leads to higher
growth rates of output and employment, greater technological progress
and availability of foreign exchange. These in turn enable the countries
with export oriented policies to attain higher rates of growth of GNP
vis-à-vis countries following import substituting industrialisation
[Donges and Muller-Ohlsen (1978)]
Sustainable Cotton Production through Skill Development among Farmers: Evidence from Khairpur District of Sindh, Pakistan
Get PDFPakistan is the world’s fourth largest producer and one of the
major cottonexporting countries. Cotton is grown largely in Punjab and
Sindh provinces and accounts for about 10.5 percent of the value-added
in the agriculture sector. The majority of cotton growers are
smallholders and a large number of them are tenant farm households.
Frequent pest outbreaks since the early 1990s have induced
pesticide-based farming in Pakistan. Also, the liberalisation of generic
pesticide import has resulted in a many-fold increase in pesticide use
in the country. However, this has neither increased cotton productivity
nor the prosperity of the poor cotton growers [Poswal and Williamson
(1998) and Ahmad and Poswal (2000)]. In Pakistan, research and
development in Integrated Pest Management (IPM) was initiated in the
1970s. However, the efforts to implement IPM at the farm level were not
very successful. Pesticides became a major instrument of production
leading to a ‘pesticide treadmill’ situation [Irshad (2000)]. An
analysis of pesticide policies through the UNDP-FAO Policy Reform
Project paved the way for the establishment of a National IPM Programme
and provided instruments to scale up farmer-led IPM through joint
international and national efforts on various fronts. Pesticide policy
studies estimated environmental and social cost of pesticides in
Pakistan at US$ 206 million per year [UNDP (2001) and Azeem, et al.
(2003)]. About 49 percent of these external costs were attributed to
pest resistance problems, while 29 percent to loss in bio-diversity and
nearly 20 percent occurred to human and animal health. On the other
hand, damage prevention expenditures for residue monitoring and raising
public awareness on the dangers of pesticides is less than 2 percent of
the total social costs of pesticides
An Analysis of Allocative Efficiency of Wheat Growers in Northern Pakistan
Get PDFFor the last couple of years several agricultural and trade
experts have been advocating if Pakistan has to compete in the
international market for export of agricultural products then it needs
to decrease the cost of production. In the light of Agreement on
Agriculture of WTO, member countries are required to provide increased
market access, decrease domestic support and tariff. These agreements
are likely to increase the cost of production of various agricultural
products for farmers producing these products, and make international
competition tougher for export of agricultural commodities. There are
three possible ways to decrease the cost of production—by decreasing
cost of inputs, by developing cost effective high yielding technologies
or by improving management practices. There is little hope for decrease
in the cost of inputs. Over the recent years prices of the petroleum
products, were revised upward several times and this trend is likely to
continue in future. Similarly, there was increase in the prices of gas,
electricity and other agricultural inputs. Historically, in Pakistan,
increase in prices of agricultural inputs has been much higher than the
increase in prices of agricultural outputs [Pakistan (1988)]. Under
these circumstances there is little hope of decease in prices of
agricultural inputs. As far as development of new agricultural
technologies, particularly high yielding varieties, is concerned it is a
long-term process. It takes several years to develop a new variety and
in its formal approval for distribution to farmers. Nevertheless, there
is room for decreasing cost of producing through improvement in the
management practices. When economists talk about improvement in the
management practices they talk in terms of ‘technical efficiency’ and
‘allocative efficiency’. Technical efficiency has been defined as firm’s
ability to produce maximum output given a set of inputs and
technology
P-Star Model: A Leading Indicator of Inflation for Pakistan
Get PDFThe P-star inflation model is based on the long-term quantity
theory of money and puts together the long-term determinants of the
price level and the short-run changes in current inflation. The P-star
model-based indicator has replaced the previous monetary policy
procedures in a number of countries because it offers by far more
information and predictive power than monitoring movements in money
supply and the rate of monetary growth. In this paper we used the P-star
model to calculate the leading indicator of inflation, and also to test
the forecasting performance of the P-star model-based leading indicator
of inflation. The results of the study show that compared to the simple
autoregressive model and the M2 growth augmented model, the P-star model
can be used to obtain the leading indicator of inflation in Pakistan
because it has additional information about the future rate of
inflation. Therefore, this paper provides a useful tool to the
policy-makers to assess the future movement of inflation in
Pakistan.
Citrus Marketing in Punjab: Constraints and Potential for Improvement
Get PDFPakistan is blessed with the agro-ecological environment
conducive to the production of nearly thirty types of fruits of which
citrus, mango, dates, guava, apple, melons and banana are relatively
more common. The market value of these fruits produced during 2002-03 is
estimated at about Rs 73 billion, which is roughly 6.73 percent of
agriculture value added in the year [Pakistan (2004)]. During the same
period, Pakistan earned nearly 5 billion rupees from fruit exports,
representing 9 percent of total export earnings from all raw
agricultural commodities. Citrus is the largest grown fruit in Pakistan.
The market value of citrus produced in 2002-03 was Rs 10.6 billion
[Pakistan (2004)]. Within the citrus family, Kinnow is the largest
planted specie