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

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

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

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