Ashfaque H. Khan (Ministry of Finance, Government of Pakistan, Islamabad.)
Abstract
Trade policies in developing countries have been at the centre-stage of analysis for the past several decades. The desire for rapid economic growth in developing countries raised many question about the relationship between trade and growth [Krueger (1997a)]. It is, by now, well-established that there exists a strong positive relationship between export growth and overall economic growth in general and manufactured export growth and overall economic growth in particular.' Those countries that have been most successful in expanding their manufactured exports have not only achieved higher economic growth but also succeeded in alleviating poverty.2 This has indeed been the case in East Asia [ADB (1997)]. The core question therefore is: which trade strategies have enabled countries to expand exports in general and manufactured exports in particular? Pakistan's exports have fluctuated widely during the past 50 years. Exports received limited or no attention during the 1950s and as such registered an average decline of 5.7 percent per annum. Exports recovered in the 1960s and grew at an average rate of 10.7 percent per annum. The 1970s witnessed an acceleration in export growth when it grew at an average rate of 22.3 percent. The 1980s and the first eight years of the 1990s exhibited a marked slow down in export growth as compared with the 1970s. In fact, exports grew by 8.5 percent per annum in the 1980s and 7.6 percent per annum in the first eight years of the 1990s.
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