Syed Nawab Haider Naqvi

Capital markets and urban unemployment

In this paper we investigate conditions under which reductions in distortions in one market improve national welfare despite the presence of distortions in another market. The specific distortions we study are a differential between capital rentals and a rigid urban wage. We also introduce a diagrammatic technique which may find use in the analysis of other problems.

The nature of economic development

Abstract Economic development has been associated with a sustained increase in real per capita GDP over fairly long periods of time. Such growth rates have been associated with the phenomenon of structural transformation both among the (European) “leaders” and the late-comers among the developing countries. Equally compelling, though less pervasive, has been an essentially harmonious relationship between the growth of per capita GDP, macroeconomic stability, and a better distribution of income. Moreover, the incidence of poverty has sharply decreased while the leading indicators of “human development” have recorded a significant improvement wherever per capita income has increased rapidly. This property of economic development christened as orderly transformation in this paper, is one of the most outstanding stylized facts of economic development; and it has been most evident among countries where growth of per capita income has been in excess of 3% per annum.

The Significance of Development Economics

Abstract Development economics focuses on the elemental forces that raise per capita income. A key factor in this process is the growth-generating reallocation of labor and capital among sectors, an aspect missed completely by all versions of the neoclassical growth theory. The relevance of our discipline to development policy remains undiminished by a greater recognition of market forces and freer international trade to maximize social welfare. Development economics, however, needs to be guided by a consequentialist ethical philosophy to emphasize a fairer distribution of the fruits of economic progress both nationally and internationally; and, more generally, to promote human development.

An appraisal of wheat market policy in Pakistan

Abstract The food supply situation has improved considerably in several Asian countries since the end of the 1960s. This change for the good calls for a reconsideration of the prevailing policies. In the present paper, the case of wheat in Pakistan is examined. Attention is paid specifically to the development of wheat supply and demand, to the functioning of the various actors in the wheat market chain and to the sources of wheat (flour) of consumers differentiated by province, area and level of income. Some suggestions are then made for alternative policies relating, among others, to the level of wheat procurement and the set up of the wheat releases system.

The Foreign Capital Requirements and External Indebtedness of a Developing Country: A Case Study of Pakistan

Pakistan, like any other developing country, is committed to achieving self-sustaining growth, when it will be possible for the economy to grow at a rate of 5 to 6 per cent per annum without receiving external capital on concessionary terms. The role of external capital is to enable the economy to grow fast by permitting a growth of investment which is more rapid than domestic saving will support. A fast rate of economic growth leads to a higher level of domestic saving, which in turn makes the growth process more self-supporting. However, foreign capital-financed growth is not an unmixed blessing. As growth is a long-term problem, long periods of borrowing and a high level of debt and debt service can hardly be avoided. While capital inflow is net addition to domestic resources, foreign borrowing continues for a longer period because domestic savings are still insufficient to pay both for domestic investment requirements and debt service on past loans. It follows that, given the terms on which foreign capital is obtained (i.e. the rates of interest and amortisation), the economy must be able to save an increasing proportion of additional income in order to achieve an early ‘independence’ from foreign indebtedness.

New Bottles for Old Wine: the Case of Development Economics

Syed Nawab Haider Naqvi is Director, Pakistan Institute of Development Economics, Islamabad. EVER SINCE ITS birth as a new discipline, development economics has experienced the heights of universal acclaim as a pioneer (ready to slay the dragon of poverty single-handed) as well as the depths of a heretic isolation (as an outsider to the realm of mainstream economics). Between these two views, a consensus is emerging that there is a role, though a reduced one, for development economics. This role exists because the concern for growth and distribution, though in the very veins of mainstream economics, has been highlighted fully only by development economics. However, it is a somewhat reduced role because a greater recognition of the (marginal) utility of free markets, in place of an overly interventionist state-which requires it to speak the language of neo-classical economics-makes it difficult for it to differentiate its ’products’ from those offered by others. There also appears to be a changing perception about the key variable(s) that development economics should focus on: the ends of development (i.e., improving the welfare of the people, alleviating rural poverty) rather than the means of achieving it (i.e., the growth of per capita income); a more comprehensive indicator of development constitution, such

Pakistan's Export Possibilities

The recent uncertainties about aid flows have underscored the n~ for achieving an early independence from foreign aid. The Perspective Plan (1965- 85) had envisaged the termination of Pakistans dependence on foreign aid by 1985. However, in the context of West Pakistan alone the time horizon can now be advanced by several years with considerable confidence in its economy to pull the tric