Inclusive Growth

Punjab's Agriculture Growth and the Kisan Package

Ijaz Nabi

Pakistan's agriculture has stagnated from low crop yields and slow progress to crop diversification. Punjab - the province with the most agricultural output - has several structural problems that mire its agriculture sector despite its fertile soil. Ijaz Nabi, chairman of CDPR, outlines these factors in this policy note, and explains the measures included in the province's new Kisan Package that aims to rejuvenate agriculture in Punjab.

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Harnessing Natural Resources for Inclusive Growth

Paul Collier and Caroline Laroche

This policy brief investigates how sub-Saharan Africa’s natural resources can be harnessed for sustained development. It outlines the steps involved in managing resource wealth successfully. The policy brief suggests that governments of resource- endowed countries need to get the natural resource management (NRM) policy chain right. They should build robust institutions and rules, and ensure the citizen body supports them. Such strong political action is necessary to build and maintain the integrity of the NRM policy chain. The successful management of revenue from undiscovered resources could represent the much needed opportunity for growth.

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Reclaiming Prosperity in Khyber-Pakhtunkhwa

Khalid Ikram, Turab Hussain, Bilal Siddiqui, Usman Khan, Yasir Khan, Munir Ahmed, Osama Siddique, and Sarah Saeed

The KP Growth Strategy, which is a collaboration between the Governmnet of KP and the International Growth Centre, provides policy makers an analysis of the growth drivers, while taking into account the factors that have inhibited KP’s growth. It highlights the sectors that need to be prioritized in order to harness their full potential and steer KP’s economy to a high growth trajectory, which is pro-poor and inclusive.

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Punjab Growth Strategy 2018- Accelerating Economic and Social Growth in Punjab

On the directives of the Chief Minister of Punjab, the Planning & Development Board convened an expert group of economists and sector specialists to assist in the development of the Punjab Growth Strategy. This expert group contributed towards the conceptualization and development of the Framework presented here. The Provincial Government envisions Punjab as a secure, economically vibrant, industrialized and knowledge-based province, a province that is prosperous and internationally competitive and whose citizens enjoy high quality life. Punjab Growth Strategy aims to overcome the key challenges to realizing this vision.

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Economic Growth and Structural Change in South Asia: Miracle or Mirage?

Ijaz Nabi

This report reviews the principal economic trend in the South Asia and the achievements and the vulnerabilities associated with South Asia’s recent growth experience. It also focuses on sectoral issues that affect productivity and growth outcomes in the region highlighting the salient policy issues. The progress in the services, manufacturing and agriculture sector is reviewed and the challenges identified in sustaining the international competitiveness of South Asians services. Moreover, since most of South Asia is deeply affected by internal security problems, a review of internal security and how it impacts economic performance is also carried out.

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The Opportunities and Pitfalls of Pakistan’s Trade with China and other Neighbors

Naved Hamid

While Pakistani trade with India could give a boost to Pakistan’s economy, there are other neighbors with whom trade could be equally important. We look at this aspect of regional trade and show that promoting trade with the rest of Pakistan’s neighbors could have a significant positive impact on the country’s growth. We show that Pakistan’s trade with these neighbors has grown rapidly over the last 10 years and at present they constitute the largest market for Pakistani exports. We also explain how these exports are not only important in terms of absolute value; they have also contributed to the development of new export products. The overall impact on Pakistan’s economy could well be to raise the trend growth rate for the next decade or so by 2 to 3 percentage points above the historical trend growth rate of 5 percent per annum.

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Strategy for Reversing Pakistan’s Dismal Export Performance

Hamna Ahmad, Mahreen Mahmud, Naved Hamid, and Talal-Ur-Rahim

This paper examines Pakistan’s export performance during the last three decades and finds that it has been very poor in comparison with the performance of other countries in Asia. Although Pakistan is exporting to a diversified market base, the high level of product concentration and low sophistication level of the country’s exports are crucial factors underlying this poor performance. This paper identifies agriculture and medium- technology exports as potential drivers of export growth and highlights specific policies and investments needed to enhance the competitiveness of exports from these sectors. In addition, the paper examines the policy environment for export competitiveness and proposes measures for providing a policy framework, particularly a supportive exchange rate policy, to boost the performance of the sector. Finally, it puts forward broad recommendations for promoting the export sector of Pakistan.

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Rethinking Pakistan’s Development Strategy

Naved Hamid

The objective of this paper is to set out the key components of a development strategy for Pakistan. A fundamental premise of our analysis is that the world economic environment is changing dramatically and a development strategy today must position itself to take advantage of the changes taking place. The paper is divided into five sections: First, we provide a brief review of Pakistan’s experience with development strategies so far. Next, we discuss the changes that have occurred, or are taking place in the global economy, which have strategic relevance for Pakistan. In the third section we look at the current situation in Pakistan with regard to the potential drivers of growth, based on the earlier discussion of the global developments. In the final section key elements of an alternative development strategy for Pakistan are outlined.

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South Asia: A Development Strategy for the Information Age

Naved Hamid

In the 1950s and 1960s, the widely accepted development paradigm was the one in which the Import Substitution Growth Strategy (ISGS) was the key element. ISGS was a product of the distrust that most newly independent countries had for the laissez faire economic models they had been forced to follow under colonial rule, and their admiration for the rapid industrialization achieved by Soviet Union in between the two World Wars. However, the limitations of import substitution strategies began to become apparent by the late 1960s. In this paper the author looks at some features of (M)EOGS in East/Southeast Asia, its limitations in the case of South Asia, and then present an alternative development strategy which may be more appropriate for South Asia. 

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Inequality, institutions and economic mobility: Re-examining the growth- poverty nexus

Ali Cheema and Farooq Naseer

The authors analyze whether the economic conditions of households that have historically occupied different rungs of the socio- economic hierarchy are converging together or diverging over time. Sustained differences in the capacity of different households to exploit market opportunities will indicate that there is a persistent element to poverty in addition to the transient effect of various shocks. The evidence on intergenerational economic mobility suggests that in districts like Sargodha, Pakistan’s post- independence economic experience has delivered limited economic mobility for marginalized social groups. The consequence of economic immobility is that the current generations of different households appear to reside in different centuries, while being physically located in the same district and in the same rural locality.

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The Geography of Poverty: Evidence from the Punjab

Ali Cheema, Lyyla Khalid, and Manasa Patnam

The article is the first comprehensive attempt at estimating the variation in the incidence, intensity and severity of poverty in the Punjab at the level of sub-provincial regions and districts. This estimation has been made possible because of the availability of the Multiple Indicators Cluster Survey (2003-04), which has a sample that is representative at the district-level. Estimates suggest the existence of a high poverty enclave in the south and the west regions of the Punjab. The incidence and severity of poverty in a majority of districts in this enclave, with a few exceptions, is extremely high with one out of every two households being poor on average. The paper also argues that there is tremendous variation in the poverty experience of the districts in the centre. Poverty incidence in the more urbanized and industrialized northern districts of the centre contrasts sharply with the experience of Kasur, Okara and Pakpattan, where the incidence and severity of poverty is extremely high.

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Pakistan’s Quest for a New Growth Vent: Lessons from History

Ijaz Nabi

This article argues that a new growth vent in Pakistan requires tapping into external lucrative markets in a manner that will create multiple entre-ports for growth. Such a growth vent will enable the country to achieve a sustained growth path that is not as susceptible to the political vicissitudes of one mega-growth node. This will be good for regional equity within the country and will also bring new energy to the Indus Basin market. Sustained welfare improvements in this type of regional hub can occur when it transitions from being a transportation hub for goods and energy into a manufacturing hub that creates high-productivity, high- wage jobs in multiple regional growth nodes.

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