Export Diversification and the Structural Dynamics in the Growth Process: The Case of Pakistan

Mohammad Akbar, Zareen F. Naqvi

Abstract


In the present paper we have tried to examine Pakistan’s
experience with exports and growth by constructing several measures of
diversification and structural change in Pakistan’s exports from a
dis-aggregated data over a period of 27 years (1972-73 to 1997-98). Then
using these measures we have tested a number of relationships among the
structure of exports, export growth, aggregate growth, and world growth.
By looking at the evolution and structural change of exports by sectors
over the long run, we find a number of interesting results. First, the
degree of export diversification increased sharply from 1979 and
continued till 1985. After 1985, and with the return of the democracy in
the country. There was a marked reduction in the export diversification
and it went back to pre-1979 level. Secondly, a crude association of
‘traditionality’ with primary products and ‘non-traditionality’ with
manufactured exports fails to represent Pakistan’s experience. As
Pakistan emerged from an import substitution period into a period of
structural change and free trade, its true comparative advantage was
more visibly expressed, thus some manufactured exports declined while
some primary products grew. Third, the shortrun dynamics of
diversification and structural change show a marked pattern. Most change
in the composition of exports has taken place during periods of boom in
the domestic economy but when the world economy was experiencing a
relatively recessionary period.

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DOI: https://doi.org/10.30541/v39i4IIpp.573-589

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