This paper explores the impact of two shocks, trade liberalisation policies and decline in remittances, on welfare and poverty in Pakistan. It begins by reviewing the economy, which reveals that during the Nineties although import tariffs were reduced by 55 percent, poverty however remained higher in this period than in the Eighties. At the same time, Pakistan has experienced a slow down in the inflow of remittances, which reduces the incomes of households and puts pressure on the exchange rate resulting in reduction in the inflow of imports despite a reduction in import duties. Thus, in the absence of the effects of decline in remittances, the analysis of the impact of trade liberalisation policies may render biased results. This study overcomes this constriction and analyses the impact of trade liberalisation policies in the absence and presence of decline in remittances in a CGE framework with all the features necessary for trade policy analysis with poverty and remittances linkages. The simulation results show that a decline in remittances reduces the gains from trade liberalisation. The negative impact of remittance decline dominates the positive impact of trade liberalisation in urban areas. But, the positive impact of trade liberalisation dominates the negative impact of a decline in remittances in the case of rural areas. Poverty rises in Pakistan as a whole. It shows that the decline in remittance inflows is a major contributory factor in explaining the increase in poverty in Pakistan during the Nineties.
Women and men are different from each other not only biologically but also in terms of constraints and discriminatory behaviour they face. Women are less fed, less educated, less mobile, less empowered, and overburdened by household work such as cooking, cleaning, taking care of children and the aged, fetching water, looking after farm animals, and gathering wood [Cagatay (1995); Sathar and Kazi (1997); Siddiqui, et al. (2001)]. These activities not only restrain them from education and training but also severely constrain their ability to respond to economic incentives as men do and fail to achieve equal level of men. Men as a breadwinner receive both nutritional and educational priority [White and Masset (2002)], while women remain relatively illiterate and malnourished. Consequently, different quality and quantity of female-labour and male-labour emerges which play a very important role in determining the impact of any policy change.
This study uses a computable general equilibrium (CGE) model specially constructed for investigating gender dimensions of the effects of trade liberalization in Pakistan in both production and consumption. The model employs various indicators to measure the gendered impacts, including income poverty (Foster-Greer-Thorbecke [FGT] Indices), time poverty (leisure), capability poverty (literacy and infant mortality), and welfare (Equivalent Variation [EV]). The simulation results show that revenue-neutral trade liberalization in Pakistan increased women's employment in unskilled jobs and increased women's real wage income more than men's for all types of labor, but kept the division of labor biased against women. The study finds that Pakistan's trade liberalization adversely affected women in relatively poor households by increasing their workload, deteriorating capabilities, and increasing relative income poverty. However, the effects remained gender neutral or favored women in the richest group of households.Capabilities, gender, poverty, trade liberalization, JEL Codes: C68, J16, O24,
The participation of women in paid economic activities has increased in almost all the countries and Pakistan is no exception.1 However, the quantitative increase in female participation in market production has neither led to qualitative improvements in their lives nor to equality of opportunity and treatment between males and females at home and in the labour market. In emerging global economic scenario, the role of females in a country’s economic development is becoming critical. This will be a major issue in the next century, as welfare of a society can not be improved unless specific measures are undertaken to improve the socio-economic status of women. In this study we intend to examine the role of females in labour market, particularly their earnings relative to the earnings of males. The household data show that in 1993-94 the earning gap between males and females was 43 percent. This was lower than the 63 percent gap reported in 1979 and higher than 33.1 gap reported in 1985-86.2 These changes in male-female earnings gap raise a number of questions, including the following:
An efficient transport system is not only a pre-requisite for economic development but is also important to achieve the objective of economic integration in the world economy. Insufficient transport infrastructure results in congestion, delay delivery time, fuel waste, pollution and accident1 which built inefficiencies in the economy and costs the economy 4 to 6 percent of GDP each year [Shah (2006)and World Bank (2007)], which can be saved by investing in transport services. Realising its importance, the government of Pakistan has initiated National Trade Corridor Improvement Programme (NTCIP) in 2005 to improve logistic and transport infrastructure so that it can fulfill the demand of economy more efficiently. This five years programme includes all sectors that improve performance of corridor-high way namely, road transport, railways, airports, and ships etc. The objective of the programme is to reduce the cost of doing business and improve quality of services. The study quantifies the efficiency of transport sector by evaluating the impact of public investment to improve transport services on the economy in general and on cost of land transportation in particular; i.e., cost of freight and passenger movement and cost of externalities such as congestion, air pollution and accident. The outcome of the study depends on how improved facility is achieved, i.e., who bears the cost and who benefits etc. This paper assumes tax financed public investment that not only change domestic price and demand, but also welfare and poverty. The issue is analysed in computable general equilibrium framework taking into account inter linkages of transport sector with rest of the economy. First, a social accounting matrix (SAM) is developed with a detailed transport module. Then, a dynamic CGE model is developed around this SAM and simulations are conducted for short run and long run analysis of public investment in trans port sector.
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