Economic Reforms, Corporate Governance and Dividend Policy in Sectoral Economic Growth in Pakistan

Ramizur Rehman, Mudassar Hasan, Inayat Ullah Mangla, Naheed Sultana


Economic reforms are inevitable for the development of an
economy like Pakistan. During the last two decades, Pakistan has passed
through phenomenal economic changes and reforms. In the 1990’s, we had
seen privatisation plans initiated by the government as a major economic
reform. Similarly, to demonstrate the seriousness of the government in
encouraging foreign investment flows in Pakistan; there has been a
perceptible liberalisation of the foreign exchange regime. Allied to
these efforts, the trade regime was opened up and the maximum tariff
rates were cut down to 25 percent with only four slabs and the average
tariff rate was lowered to 14 percent. The financial sector too, was
restructured and opened up to the foreign competition. Foreign and
domestic private banks currently operating in Pakistan have been able to
increase their market share to more than 60 percent of assets and
deposits. Central to the economic reforms process is a clear progression
towards deregulation of the economy. Prices of petroleum products, gas,
energy, agricultural commodities and other key inputs are mostly
determined by market. Imports and domestic marketing of petroleum
products have been deregulated and opened up to the private sector. More
importantly, taxation reforms have been prominently on the government’s
agenda, with no real reforms undertaken. This is another area where
policy makers and business community has innumerable grievances and
dissatisfaction with the arbitrary nature of tax

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