The Balance-of-Payments Problem and Resource Allocation in Pakistan—A linear Programming Approach .

Syed Nawab Haider Naqvi


The purpose of this study is to examine Pakistan's
foreign-trade problems and policies in the context of the wider question
of a rational allocation of domestic resources. It will be argued that
measures taken in Pakistan to regulate the flow of imports and exports
have led to a pattern of resource allocation which may aggravate the
balance-of-payments problem. The difficulty is mainly attributable to
the fact that foreign economic policies and policy measures taken to
regulate the domestic economy have often been at cross-purposes. For
instance, whereas the domestic .investment policy has aimed at promoting
the most economical use of scarce investment resources, the licensing
system has provided strong incentive for a wasteful use of these
resources by encouraging import substitution even where the country may
have a long-run comparative disadvantage. While domestic policy has
aimed at raising the marginal rate of savings, the policy of protecting
consumption goods, particularly the nonessential ones, has tended to
liberalize consumption.

Full Text:




  • There are currently no refbacks.