The Pakistan Development Review
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Inaugural Address
Get PDFIt is a real privilege to be in the midst of such an august
gathering for the fourth time in six years. Last night as I was
preparing my remarks to come here I could not help but think about my
first interaction in this very hotel in Islamabad six years ago. It was
the 15th AGM of PSDE where in November 1999, I had been in the office
for a few weeks, I took this opportunity to present a road map to this
very audience. We have come a long way since November 1999. As I
reflected last night, six years ago it was a very daunting, exciting and
a very stimulating thought process. Six years ago the country was faced
with many challenges. Today, we are also faced with challenges but
different challenges. Six years ago we were in crisis management rather
then economic management. Today we are in a different plane and heading
towards a different destination. In my remarks six years ago I talked
about the need for good governance, the need for structural reforms and
the need for raising the quality of people we have engaged, i.e.,
increasing the human capital of the country and improving it. I do not
want to spend too much time on where we were six years ago except to say
that the country was in a debt trap, and we were living from crisis to
crisis. We were in a balance of payment situation where the situation
was precarious, our credit rating was off the charts, creditors were
chasing us to be paid. I remember entering the MoF office every morning
and suppliers, mostly foreigners, chasing us as to when we will be paid.
So we were in technical default and so on and so forth. The fund
programme was going from tranche to tranche. Why did a sovereign state
of 150 million people end up the way it did six years ago and we still
have a lot of work to do. We also had issues like IPP’s impacting the
investment climate in the country. We had a lot of litigation going as a
result the deficits were huge and growing. Overall situation look
challenging. At that time I had talked about the need for
reforms
Interaction between Population and Environmental Degradation
Get PDFEconomic development and population growth in the poor areas
of the earth is a subject of an essential concern for the environmental
economists. Developing countries are facing and suffering by the serious
problem of high population growth which is causing environmental
degradation. A rapidly growing population exerts pressure on
agricultural land and raises demand for food and shelter which
encourages the conversion of forest land for agricultural and
residential uses, now we know that growing population is a major cause
of air, water, and solid waste pollution. The world population was 2.52
billion in the year 1950, which increased to 6.06 billion in 2000 and is
likely to reach 8.3 billion by the year 2030. While the population size
will remain almost stationary in the economically developed part of the
world, around 1.2 billion, during the same period population is likely
to grow in the less developed regions. This is likely to pose challenges
for the economic growth and pressure on environmental resources in the
developing countries. Furthermore, most of the population growth in the
developing countries is likely to be concentrated in the urban areas.
This has implication for increased demand for energy and water resources
in the urban areas. This will also pose challenges for the management of
increased solid waste, air and water pollution. One of the striking
experiences of the developin
Estimation of Export Supply Function for Citrus Fruit in Pakistan
Get PDFNature has blessed Pakistan with an ideal climate for growing
a wide range of delicious fruits. Thus a very wide range of tropical,
sub-tropical and temperate fruits are grown in the country. Over the
years, Pakistani experts have developed unique strains of exotic fruit
varieties. Pakistan is producing a large variety of fruits on an area of
734.6 thousand hectares with a total production of 5712.4 thousand tons.
Out of this 354.4 thousand tons fruit is exported from the country
[Pakistan (2004)]. Horticulture is an important sub-sector of
agriculture and plays a vital role not only in rejuvenation of rural
economy but also in improving human nutrition which is often deficient
in ingredients such as vitamins and minerals. Citrus and mango are the
main fruit crops which contribute substantially to the national
income
Economic Growth, Inflation, and Monetary Policy in Pakistan: Preliminary Empirical Estimates
Get PDFThe recent increase in financial market volatility and the
increased surge within developing world to become part of the global
market have posed several challenges for policy-makers in the emerging
markets to decide on a policy regime— monetary or exchange rate—that
suits their needs and could also provide stability to the financial
system. In view of the macroeconomic characteristics of these emerging
economies, the choice of an appropriate policy becomes important to
achieve certain targets such as sizeable domestic and foreign
investment, reduced reliance on external borrowings, fiscal discipline,
etc. These would require both price and exchange rate stability and
country’s ability to deal with external shocks to maintain and achieve
sustainable economic growth. Pakistan is no different and until recently
had a history of macroeconomic imbalances with extremely high foreign
(as well as domestic) debt, high budget and current account deficits,
extremely low international reserves, high inflation, high nominal
interest rates and low economic growth. The average economic growth over
40 years is around 4 percent. The main focus of any policy has been to
achieve a sustainable growth pattern. However, due to a number of
macroeconomic imbalances such as high budget deficits, extremely high
indebtedness, low savings and investment rates, lack of fiscal
discipline, undeveloped financial markets, unstable exchange rates along
with high population growth and huge defence expenditure made this task
almost impossible. Some of these macroeconomic imbalances contributed to
episodes of high inflation and unemployment that the country experienced
during most of the period since independence
In Search of Poverty Predictors: The Case of Urban and Rural Pakistan
Get PDFThe main objective of this research is to provide correlates
of household consumption or poverty using the latest household survey.
The estimated coefficients and their weights may be used to predict
poverty incidence from light monitoring survey such as Core Welfare
Indicator Questionnaire (CWIQ). The CWIQ survey instrument essentially
collects simple welfare indicators from a large segment of population
and is not designed to measure income, consumption or expenditure. The
paper estimates consumption functions separately for urban and rural
areas. These functions are estimatedwith the help of non-monetary
correlates of consumption and applied to predict poverty at provincial
and district levels. The paper also provides the latest estimates of
poverty in the country using a consistent methodology. Overall, 33
percent people were poor, according to estimates from the latest
available household survey of 2001-02. Incidence, depth, and severity of
poverty are high in rural areas, as compared to their urban
counterpart
The Green Revolution and the Gene Revolution in Pakistan: Policy Implications (The Quaid-i-Azam Memorial Lecture)
No full textPakistan achieved high levels of Green Revolution Modern
Variety (GRMV) adoption in the Green Revolution. Pakistan out-performed
India and Bangladesh in the Green Revolution. Only China, among major
countries, out-performed Pakistan in the Green Revolution. Pakistan does
not have the food safety and environmental risk studies in place to
support a regulatory environment for biotechnology. In effect, Pakistan
is following the “precautionary principle” and applying it to science
policy. This paper argues that this is a mistake. Pakistan is paying a
“double penalty” for its inability to develop the regulatory systems
required to take advantage of genetically modified (GM) crops. Not only
does it lose the cost reductions enabled by GM crops, but because other
countries have adopted GM crops, world prices are lower as a result and
affect Pakistan’s export crops
Trade Liberalisation and Labour Demand Elasticities: Empirical Evidence for Pakistan
Get PDFTrade has predominantly contributed in the development of
world economies for more than mere agricultural development and
industrialisation. Trade involves many regions across the globe. The
more the regions involved, the more will be the benefits. Trade is an
interaction between economies for the exchange of goods, services,
skills, knowledge and expertise, which is required for bringing in the
desired changes like increase in the availability of choices, reduction
of extreme poverty, and enhancement of physical and mental capability.
As the wave of market oriented moves has spread over the economic
sphere, global trend has also been witnessed in the liberalisation of
capital account, foreign exchange, credit, domestic consumption and
trading sector of many countries. The concept, which has been
predominantly emphasised by the economies, is that of “trade
liberalisation”, which has become the key element of any development
policy since late 1970s after the fundamental change in the economic
policy at global level. The concept of trade liberalisation stems from
Neo-liberalism thinking that has advocated market oriented economic
reforms for social order and economic prosperity that aims to improve
efficiency and stability in the economy. Trade liberalisation process
can be defined in many different ways. In the words of Krueger (1978),
“any policy, which reduces the anti export bias will lead towards
liberalisation of trade and reduction in import license premium is the
fundamental step towards liberalised trade regime”
Human Capital and Economic Growth in Pakistan (Distinguished Lecture)
No full textPakistan’s economy has grown faster on average than many other
low- and middleincome countries over the past two decades. But several
countries in Southeast Asia have fared even better. This paper focuses
on factors that explain Pakistan’s relative growth performance. In
addition to more traditional factors believed to determine growth, this
paper looks particularly at the role of differences in the quality of
human capital. The cross-country empirical results suggest that
accumulation of physical capital and improvements in the quality of
institutions have the largest pay-offs in terms of achieving higher
growth, but that better education and health care also have a
significant impact. Investment in these areas will increase the
possibility of Pakistan entering a virtuous cycle of high growth and
improved living conditions for the population
Philip Albert Theodor Kircher. Poverty Reduction Strategies. Gottingen Studies in Development Economics. Frankfurt, Germany: Peter Lang, 2002. xiv+275 pages. Paperback. Price not given.
Get PDFPoverty is one of the most depressing global problems in the
world today. Therefore, there is a growing consensus among development
organisations that poverty alleviation should be the primary goal of
cooperation between the rich and the poor countries. This consensus is
due to the awareness that a widening international income gap threatens
the well-being of people in the rich countries. In this volume, the
author, Philip Kircher, offers a comprehensive study on the evolution,
the content, the different national accentuations, and the problem of
the international consensus on poverty alleviation, and provides a
systematic analysis of today’s donor strategies for development
cooperation for poverty reduction. The study focuses specifically on the
strategic positions of the World Bank, the Department for International
Development (DFID) of the United Kingdom, the Ministry for Economic
Cooperation and Development (BMZ) of Germany, and the Swedish
International Development Agency (SIDA), as well as the positions
presented by the governments of these countries in regard to
development
Testing Onion Market Integration in Pakistan
Get PDFSpatial market integration of agricultural products has been
widely used to indicate overall market performance [Faminow and Benson
(1990)]. In spatially integrated markets, competition among arbitragers
will ensure that a unique equilibrium is achieved where local prices in
regional markets differ by no more than transportation and transaction
costs. Information of spatial market integration, thus, provides
indication of competitiveness, the effectiveness of arbitrage, and the
efficiency of pricing [Sexton, et al. (1991)]. If price changes in one
market are fully reflected in alternative market, these markets are said
to be spatially integrated [Goodwin and Schroeder (1991)]. Prices in
spatially integrated markets are determined simultaneously in various
locations, and information of any change in price in one market is
transmitted to other markets [Gonzalez-Rivera and Helfand (2001)].
Markets that are not integrated may convey inaccurate price signal that
might distort producers marketing decisions and contribute to
inefficient product movement [Goodwin and Schroeder (1991)], and traders
may exploit the market and benefit at the cost of producers and
consumers. In more integrated markets, farmers specialise in production
activities in which they are comparatively proficient, consumers pay
lower prices for purchased goods, and society is better able to reap
increasing returns from technological innovations and economies of scale
[Vollrath (2003)]