Pakistan Journal of Applied Economics

27-61

Authors: shfaque H. KHAN & Zafar MAHMOOD

Efforts to achieve regional economic integration are not new. The post-World War II era has witnessed the emergence and growing importance of regional economic groupings in many different parts of the world to overcome obstacles to international trade and to isolate the region from the fluctuations of the world economy. The process of regional economic cooperation was initiated by Western Europe in the late 1940s with the formation of the European Coal and Steel Community and subsequently to the Treaty of Rome in 1957 that established the European Economic Community (EEC). The formation of the EEC encouraged some other countries outside the EEC to form the European Free Trade Area (EFT A). The spectacular success of the EEC in the immediate aftermath provided an added impetus to the growing tide of regional integration. Accordingly, a large number of integration schemes, ranging from bilateral or multilateral agreements to sub-regional or regional cooperation, came into existence in different parts of the world.

89-105

Authors: Qazi Masood AHMED

In developing countries fiscal policy is designed to increase economic growth, to reduce inflation and budget deficit. The international comparison of performance of macroeconomic variables shows that the performance of Pakistan's fiscal policy has been satisfactory over the last thirty years in achieving economic growth and maintaining a low price level. However, fiscal policy conspicuously failed to keep the level of budget deficit at manageable levels. During the last decade the government has started implementing suggestions of the IMF/World Bank for Tax Reforms. This paper shows that if the trend of existing reforms is not altered altogether, the advantages of fiscal policy regarding economic growth and inflation will disappear which might damage the economic plan of the government for the year 2010.

121-152

Authors: Mansoor AHMAD & M. Mansoor ALI

Recently the energy sector and the Government energy policies have become one of the more controversial and hotly debated issue of Pakistan's socio-economic scene. The paper presents a picture of the historical growth in power sector, of both demand and supply. The controversial 1994 power policy is then critically discussed. The related problems and policy options available to the government, under the current economic and political constraints, are also outlined. While the lack distribution capacity would suggest that Pakistan has long had a "hidden demand" (the bulk of the country's geographic area is still not connected to the National power grid), power shortages only became a major issue of public debate during the early Eighties when the urban areas of the country first began suffering regularly from "load-shedding" by the public sector utilities. This not only affected the business and industrial sector but was also severely affected the daily routine of households (thus gathering the potential of becoming a major political issue). The controversy reached its height in 1995 when the then Pakistan People's Party (PPP) government announced its private power policy, which envisaged not only the set up of new power units in private sector but also the privatization of state owned power generation units under private sector (mostly foreign) management. While all due credit must be given to the Government for attending to a potentially crippling shortcoming in the economic infrastructure, one must nonetheless also look at the political aspects of the power policy in order to appreciate its various elements. The paper docs this in the end.