The Pakistan Development Review
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A Search for an Optimum Currency Area Partners for Pakistan
Get PDFThe Indian government has on several occasions advocated the
idea that a common currency area be formed in the SAARC region. The
response from other member countries has been somewhat lukewarm. They
are unconvinced that the benefit of currency union establishment will
outweigh the cost emanating from the abandonment of national monetary
sovereignty. This paper seeks to empirically investigate the feasibility
of a common currency area for Pakistan with each one of the following
countries; India, Bangladesh, Saudi Arabia and Sri Lanka. This empirical
investigation involves estimation of the co-variation of the bilateral
real exchange rates using the Japanese Yen and the US dollar as base
currencies. Section 2 begins with an eclectic overview of the Optimum
Currency Area (OCA) literature. Section 3 presents the estimation
methodology, Section 4 discusses the findings and Section 5 concludes
the analysis
Exports and Economic Growth Nexus: The Case of Pakistan
Get PDFThe theoretical association between trade and economic growth
has been discussed for over two centuries. However, controversy still
persists regarding their real effects. The favourable arguments with
respect to trade can be traced back to the classical school of economic
thought that started with Adam Smith and subsequently enriched by the
work of Ricardo, Torrens, James Mill and John Stuart Mill in the first
part of the nineteenth century. Since then the justification for free
trade and the various and indisputable benefits that international
specialisation brings to the productivity of nations have been widely
discussed in the economic literature [Bhagwati (1978) and Krueger
(1978)]. The suitability of trade policy-import substitution or export
promotion—for growth and development has been also debated in the
literature. In 1950s and 1960s, most of the developing countries
followed import substitution (IS) policies for the economic growth. The
proponents of the IS policy stress upon the need for developing
countries (LDCs) to evolve their own style of development and to control
their own destiny [Todaro and Smith (2003), p. 556]. Since the
mid-1970s, in most developing countries, there has been considerable
shift towards export promotion strategy (EP). 1 This approach postulates
that export expansion leads to better resource allocation, creating
economies of scale and production efficiency through technological
development, capital formation, and employment generation
Export Competitiveness and Comparative Advantage of Pakistan’s Non-agricultural Production Sectors: Trends and Analysis
Get PDFThe composition and volume of global trade has witnessed
significant changes during the last two decades. Trade liberalisation,
rising income and technological advancements, have been the main
determinants. Against the backdrop of a rapidly changing global export
pattern, and the success of Southeast Asian economies, there is a strong
case for Pakistan to pursue an export-led growth strategy that leads
ultimately to improve living standards. However, given Pakistan’s past
macroeconomic performance and its current export structure, such a
turnaround would require a major structural transformation of the
economy and changes in its export specialisation patterns
Financial Market Linkages in South Asia: Evidence Using a Multivariate GARCH Model
Get PDFThe economic and social benefits of more openness and
internationalisation are well supported by both academics and
policy-makers. Many countries are also trying to become part of the
world trade bloc such as the World Trade Organisation (WTO) or AFTA.
Efforts are also made to strengthen the existing regional economic and
trade coordination or establish new regional economic and financial
integration. Unfortunately, at the time (during the 1980s and 1990s)
when many emerging economies in East Asia were involved in openness,
internationalisation and regional economic and financial integration,
the South Asian countries wasted their resources in dealing with
political crisis (such as Bangladesh), internal conflicts (such as Sri
Lanka) or border issues (such as India and Pakistan). It is only
recently that regimes have realised that a peaceful economic environment
is essential to attract foreign investment, pursue a pro-growth policy
and achieve a sustainable growth. The recent dialogue between Pakistan
and India and some progress in SAARC consultation are a few steps
towards these goals
Noriyuki Takayama (ed). Pensions in Asia: Incentives, Compliance and Their Role in Retirement. Tokyo: Maruzen Co. Ltd. 2005. 256 Pages. Hardbound. Price not given.
Get PDFIn view of the rapid ageing of population in many Asian
countries due to a longer life expectancy and a fast decline in
fertility, the concerns about the sustainability of public pensions and
social security systems have gained increased relevance both at policy
and planning levels. Countries that have already experienced demographic
transition and indicate rising trends in old-age dependency rates are
facing a challenging situation not only to improve their pension systems
but also to comply with the financing of retirement and old-age benefit
schemes. The effects of an ageing population in these countries are
becoming apparent in terms of increasing costs of the health-care
system, social security schemes, and changing social attitudes towards
older people that demand an assessment of the support base to meet their
socio-economic needs
Landlessness and Rural Poverty in Pakistan
Get PDFPoverty imposes a repressive weight on Pakistan particularly
in rural areas where almost one third of population and majority of the
poor live. Although poverty has declined during the 1970s and 1980s, the
absolute number of poor has increased substantially since the 1960s.
Despite a number of policy initiatives and programmes undertaken for
poverty alleviation by various governments, absolute poverty
particularly in rural areas continued to rise in Pakistan during the
1990s. Much has been written about poverty in Pakistan so far. A number
of attempts have been made by various authors/institutions to estimate
the rural poverty in Pakistan in the 1990s. Discussions have remained
limited to estimating the regional and provincial trends for rural
poverty in Pakistan. Although landlessness and rural poverty in Pakistan
received significant attention in the 1970 and 1980, discussions on this
issue remained limited in the 1990s. Landlessness and rural poverty are
closely linked since land is a principal asset in a rural economy like
Pakistan. Landlessness to agricultural land is considered to be the most
important contributor to rural poverty. A high concentration of
landownership is a major constraint to agricultural growth and
alleviation of poverty. There is a general perception that highly skewed
distribution of land in Pakistan is one of the important causes of
widespread poverty particularly in rural areas
Foreign Capital Inflow, Skilled-Unskilled Wage Gap, and Welfare in the Presence of the Informal Sector
Get PDFThis paper attempts to analyse the impact of trade
liberalisation on the skilledunskilled wage gap and the level of welfare
of developing countries, which are generally characterised by large
“informal” labour markets. A neo-classical full-employment foursector
model has been developed, where the informal sector produces either a
final product or an intermediate product on subcontracting basis.
Evidence shows that in either case, trade liberalisation, in the form of
an increase in foreign capital inflow, widens the skilled-unskilled wage
gap of the economy under some reasonable conditions. It also shows that
as a result of an increase in the foreign capital inflow, the level of
welfare of the economy increases, when the informal sector produces a
final product. However, when the informal sector produces an
intermediate product on subcontracting basis, the level of welfare of
the economy falls
Prospects of Economic Integration among the ECO Countries
Get PDFThe idea that the collective regional economic prospects of
the countries of a region exceed the sum of their individual prospects
has attracted the attention of politicians and economists since the
World War II. Its best known example has been the Treaty of Rome in the
Euro-Mediterranean region, which has nearly half of the regional trade
agreements in operation. GATT rules allowed the regional trade
agreements so long as they promoted freer intraregional trade without
raising trade barriers for the third countries. These agreements have
indeed been seen as complementary to the multilateral free trade
initiatives. With the advent of the WTO and the onset of globalisation,
the countries categorised as fast integrators are considered to have
better prospects than those categorised as slow integrators
South Asian Association for Regional Co-operation (SAARC): Prospects for Development
Get PDFRecently, the South Asian Association for Regional
Co-operation (SAARC) completed two decades of its existence. The heads
of states or governments of its member countries, viz. Bangladesh,
Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka, once again
would meet in Dhaka and reaffirm their faith in the organisation and its
charter. Considering the political reality within the individual SAARC
nations, and especially the relationship between the two biggest members
of the association, one could feel satisfied that the association has
survived so far. But its movement in terms of achieving the objectives
for which it was formed has been slow and it is criticised as a house of
cards or a house built on sand, which can fall apart any time. There is
a big stress in the interrelationship between neighbours
Transition in Primary and Secondary Schooling in Pakistan: Gender and Age Cohort Analysis
Get PDFThis study assesses the changing pattern of school attendance
through age cohort analysis for both males and females in Pakistan.
Based on the 1998 census data on educational attainment, the results
indicate a profound rise in school attendance among younger age cohorts
contributing to elimination of gender gap in primary-level schooling in
urban areas only. The disadvantaged situation of rural females is
reflected by a combination of low school entries/attendance to begin
with, and high chance of discontinuing education before completing
primary levels. The pattern of school transition reveals that among
those few who have completed Class Five, the chances of staying through
the secondary level are much higher—after which dropout accelerates
rapidly. Two overall conclusions emerge from these results. First, the
bulk of the deficit from universal primary education comes from females
population, especially in rural areas. Second, the key to reducing
dropouts and gender gap in school attendance lies in actions that raise
the demand for schooling of girls, with equally matched availability of
quality primary- and secondarylevel schools. It appears that achieving
universal primary education by 2015, as mandated in the Millennium
Development Goals (MDGs), remains a tall order for Pakistan