11 research outputs found
A Few Comments on Professor Hilda's Conference Address: "Planning Experience in Pakistan"
Professor Huda's conference address on the "Planning
Experience in Pakistan" covers, within a space of some twenty pages, a
wide range of issues important for the country's economic planning and
policies. Many problems are not, however, considered at length, and some
questions are just raised for detailed study by experts. But with its
analysis, suggestions and questions, this address is highly stimulating
to economists and policy-makers in their endeavour to identify and
resolve the problems confronting development planning in Pakistan. He
dwells, among other things, on the problems of relationship between the
planning technician and the policy-maker, appropriate planning
techniques, interregional balance in development, the pace and the
pattern of industrialisation, incentives to private enterprise and role
of the public sector, income dis¬tribution and saving generation, and
costs and benefits of external aid. He finally reflects on the major
tasks that should be undertaken in the Fourth-Plan period. The main
focus of the following comments will be on the relationship between the
technician and the politician in development planning, private
incentives and social goals, and income distribution and mobilisation of
domes¬tic savings
Labour Force and Employment in Pakistan, 1961-86: A Preliminary Analysis
As the need for a long-run perspective in development planning
becomes recognized in Pakistan, the long-term problems of the economy
are bound to become policy issues of great importance. The future
employment of a rapidly increasing labour force is one such problem,
although it cannot, of course, be separated from the problems of growth
of investment and output. Although planning goals have, in the past,
been set essentially in terms of growth of national and per-capita
income, planners cannot ignore the problem of employment. Large numbers
of the existing labour force are now either unemployed or
underemployed1, and to these are added the new entrants to the labour
force as population increases. At the same time, a large shift in the
occupational pattern of the labour force (but not necessarily a net
transfer) away from the agricultural sector into the nonagricultural
sector is necessary for the growth of the economy and per-capita income.
It is for these reasons that a properly conceived employment objective
should be incorporated in the planning process, especially in a long-run
perspective plan. The purpose of this paper is to project for Pakistan
the future growth of population and labour force in order to examine the
magnitude and complexity of the employment problem which Pakistan faces.
The projections cover a period of 25 years from January 1961 to January
1986. The terminal date is so chosen that it roughly coincides with that
of the proposed perspective plan (July 1965-June 1985) which will
reportedly aim at tripling per-capita income from the level of 1961,
achieving equality in per-capita incomes of East and West Pakistan, and
reaching a stage of full employment by 19852
Trend of Real Income of the Rural Poor in East Pakistan, 1949-66
Pakistan's gross national product has been rising over time.
While GNP per capita remained practically unchanged during the 1950's,
it increased appreciably in the 1960's. The trend of per capita income
does not, however, indicate whether and to what extent economic
development had 'trickle down' effects to improve the lot of the
relatively poorer sections of society. Studies of intertemporal changes
in inequality of income distributions and in levels of income
(consumption) could show what changes actually took place in their
absolute and relative income positions. "Diminishing inequalities in the
distribution of income" is one of the professed objectives of Pakistan's
Third Five-Year Plan [21, p. 40]. This objective implies both an
absolute and a relative improvement in the income level of the poorer
sections of population. The two studies which are known to have been
made on income distribution in Pakistan do not cover enough ground to
indicate whether this was achieved in the past: the study by Mrs. Haq
[10] is limited to personal income distribution in the high-income
brackets (income tax payers) in urban areas for the period 1948/49 to
1960/61, and that by Bergan [1], although comprehensive, refers to a
single year, 1963/64
Pakistan's Development — The Role of Government and Private Enterprise
In the 1960's Pakistan's economy started generating rates of
growth of over 5 per cent per year—higher than those observed in many
other underdeveloped countries including its neighbours. Industry is
growing rapidly. Exports are increasing by over 7 per cent per year.
Perhaps more significant, many believe, an agricultural revolution is
underway. Some observers consider this to be remarkable and a model of
development in the non-socialist world. However, the brief growth
experience of the 1960's, after the long stagnation during the 1950's,
can hardly be a basis for definitive conclusions about long-run
development. Observation of a longer period and evidence of certain
basic conditions are necessary for such extrapolation. The dependence on
foreign aid continues to be large and the domestic saving rate is
relatively low. It is too early to talk of self-sustaining growth. How
and why Pakistan could achieve this development and what it signifies
for the country's future growth is surely of interest. Yet apart from
some spotty reviews of progress, mainly from official sources, no
systematic and comprehensive study of Pakistan's development process
explaining its mechanism had been available. Dr. Papanek's book on
Pakistan's development [13] is an important contribution in this field.
The author analyses the factors that led to development in the past, and
drawing upon that experience, suggests policies that would accelerate
future development. He tries to explain how the saving rate was raised
in a poor country of traditional agriculture, where industrial investors
came from, how agricultural output could be increased at a high rate,
and what role government and private initiative played in this
development. Any analysis of the role of government and private
enterprise has ideological overtones, and the reader of Dr. Papanek's
book is definitely aware of his in¬dividual predilections. This does
not, however, reduce the worth of the book
The Export Bonus Scheme: A Preliminary Report
The purpose of this paper is to present an interim report on a
study of the Export Bonus Scheme now underway at the Institute. The
Institute plans to publish in monograph form later this year a complete
report of its findings on this subject. The objective in making this
preliminary report available is to attract comments and criticisms of
the approach employed and the data used from other people interested in
and acquainted with the Export Bonus Scheme. The scheme was inaugurated
in January 1959 (and is now scheduled to continue until 1965) for the
announced purpose of increasing Pakistan's earnings of foreign exchange.
There was no excess saving problem in Pakistan at this time and any
failure of the system to operate at full capacity was due to supply
problems, especially imported raw materials and spare parts. Therefore,
such an objective required that a larger proportion of the total
domestic output of the products covered by the scheme be exported than
was the case before the scheme was inaugurated. That such an objective
be sought necessarily presumes that the existing exchange rate
undervalues imports. To maintain this inconsistency between the official
nominal value and real value of imports required a form of rationing of
foreign exchange other than that effected by its cost. The State Bank is
responsible for carrying out the government's foreign exchange control
policies. The bonus scheme is a form of altering the terms of sale of
exports in such a fashion that exports become more attractive to
producers at an unchanged official rate of exchange. On the import side
the scheme creates a small sector within the economy in which some
foreign exchange is sold on a virtual free market basis
The Cost of Draft Animal Power in West Pakistan
Most of the writings on the benefits of agricultural
mechanization begin with an analysis of the savings in cost which will
be achieved if mechanical rather than animal power is used for certain
agricultural operations. There have been some studies, mostly in India1,
which have tried to measure these savings. The mechanization issue
cannot, however, be judged solely on this criterion. In addition to
bullock displacement, mechanization is likely to involve farm-labour
displacement. As we have argued in a recent paper [2], the extent of
such labour displacement and its social costs are among the basic issues
which should be considered before going from bullocks to tractors. But
leaving aside these other issues, before one can measure the cost
advantage of mechanical power over animal power, one must define what
the costs are and how they should be measured. For mechanical power,
such measurement of costs is not difficult. We know the cost of
importing the tractor and its imple¬ments. We know the costs of fuel
which we have to pour into the machine every time we want it to do
something. The first is clearly a fixed cost and the second, after
adding repairs, maintenance, the driver's pay, etc., is clearly a
vari¬able cost
Some basic considerations on agricultural mechanization in West Pakistan
West Pakistan is at present experiencing remarkable production
increases in agriculture. These appear to be resulting from the rapid
adoption of new varieties of seeds, the increased use of fertilizers and
massive investments in tubewells — coupled with, during the 1968 rabi
(winter) season, favourable weather conditions. Price-incentive
policies, particularly agricultural price support, have helped
considerably in the quick adoption of these innovations by farmers. A
distinctive element of all the innovations so far promoted is that they
are com¬plementary to labour. There are virtually no economies of scale
associated with their use. New seeds and fertilizers are as productive
on small holdings as on large. The private tubewells are sufficiently
inexpensive, even the small farmers can afford to invest in them, at
least through partnership. Water, seeds and fertilizers are essentially
infinitely divisible inputs. They can benefit the small farmers as much
as the large