Suchergebnisse

Rarely a month passes-by in Pakistan without complains on the
state of basic commodity markets, be it wheat or sugar, cotton or rice.
Prices are too high for the consumers, or too low for the farmers; and
often the government is asked to intervene, buying for or selling from
stocks, prohibiting export or import, increasing or reducing import
duties, introducing/withdrawing export taxes, or taking other measures
to protect the consumer or producer. It is as if domestic prices can
have a life on their own, with the government asked to guarantee "fair"
prices for everbody. The resulting on-and-off policy intervention by the
government is likely to have had a deleterious effect on the development
of the domestic and international trade for these commodities. This is
because of the uncertainty so generated, with the private traders always
facing the risk of a regime change at a time when import or export
contracts have already been signed. As a result too, the role of the
state-owned Trading Corporation of Pakistan self-perpetuates, even if
the government would like to see it minimised, as it is always being
asked to intervene because of the private sector's
"failings".

How exports affect growth has attracted considerable attention
of the researchers in recent years. The failure of the import
substitution policy during 1950s and 1960s to engender growth, led the
South Asian countries to adopt export promotion strategy in the 70s and
80s to foster their economic growth. Many factors have caused this
shift. Firstly, higher export earnings are expected to enhance the
ability of a developing country to import additional industrial raw
materials and capital goods, which in turn, are likely to expand its
productive capacity. Secondly, the competition in the exports market may
allow for greater capacity utilisation, higher economies of scale,
greater specialisation on the basis of comparative advantage and
accelerated technical progress in production for greater contribution to
increased employment. Thirdly, strong correlation observed between
exports and economic growth prompts export promotion further as part of
the development strategy [Khan, et al. (1995)].