Search

Pakistan offers a fascinating environment in which to study problems of industrialisation in low income countries. Manufacturing industry has grown very rapidly since independence in 1947; the expansion over the past decade has been well sustained. Yet the difficulties faced in the manufacturing sector have been great. Supplies of raw materials and capital equipment have often been uncertain. Technological skills have hardly existed for many branches of industry. Industrial and commercial enterprises have had to be created in a society which in the past placed no emphasis upon them. This paper attempts to analyse one major problem affecting the manufacturing sector in Pakistan, namely the extent of excess productive capacity in various industrial categories, and to assess the possibilities for remedying the problem. The early parts of the paper discuss the policy techniques applied to Pakistan's manufacturing industries as well as some general features of the economy. The available evidence on capacity use is presented. The latter sections represent an attempt to work out whether or not this excess capacity is mainly the result of weak administrative arrangments, shortages of foreign exchange, and a failure to equate overseas and domestic prices through a "realistic" exchange rate. The standard explanation in Pakistan has been in terms of the shortage of foreign exchange and the peculiarities of project aid and tied loans or grants. The study casts doubt on this interpretation. [ABSTRACT FROM AUTHOR]

The objectives of this paper have been developed on the assumption that the functional effectiveness of a state varies spatially within its own territorial limits. The case of West Pakistan has been considered. An attempt has been made to distinguish the areas of varying degree of functional effectiveness in West Pakistan and thus to provide a framework for a more realistic understanding of the functional relationship of a state with the various parts of its territory. The concept implies that the area is culturally homogeneous, and is used here to measure the administrative- economic quality of a given area. The basic criteria employed are a) the density of population and b) density of transportation lines. The ecumene (the effective state area) has been delimited as that part of the total area which provides economic support to most of its inhabitants. The remaining portion of the state has been termed extra-ecumerical." The ecumene has been classified into minimally effective area, intensively effective area, is more, and the core area. The intensively effective area is more densely populated ( 100 persons to the square mile) and has a closer mesh of transportation lines (each part lies within five miles of a motorable road or railroad station. Additional measures of agricultural productivity, intensity of market potential, magnitude of manufacturing, and the degree of urbanization have been used to locate the core area which is depicted as the Lahore-Lyallpur axis Karachi, because of its nonagricultural base, falls short of the measures of a core area and has been termed the "sub-core." Thus it has been found that there are observable disparities of functional effectiveness in West Pakistan.

The prospect of creating policies specifically to increase utilisation rates holds great promise for increasing the level and the rate of growth of income in underdeveloped countries. Having left the utilisation decision entirely to private preferences in the past, any planning that begins explicitly to recognise utilisation as an alternative to saving will quite probably find that there has been too much indulgence of work preferences and too little indulgence of preferences for consumption or growth. The objectives of this paper are two: to investigate the importance of excess industrial capacity and the reasons for its existence in underdeveloped countries through an examination of industry in West Pakistan; and to propose that capacity utilisation can be manipulated by economic planning and suggest that, as a policy variable, it may have an influence on the rate of growth comparable to that of saving. [ABSTRACT FROM AUTHOR]