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Impact of Trade Reforms on Poverty

Author

Listed:
  • Usman Qadir

    (Pakistan Institute of Development Economics, Islamabad.)

  • Muhammad Ali Kemal

    (Pakistan Institute of Development Economics, Islamabad.)

  • Hasan Mohammad Mohsin

    (Pakistan Institute of Development Economics, Islamabad.)

Abstract

Trade plays a vital role in determining the growth process of any country. Trade liberalisation and openness of the economy are now almost universally accepted as the main ingredients of successful economic growth and welfare of the population. These are believed to be responsible for the exceptional growth of industrialised and newly industrialised countries. Many developing countries, under the auspices of the WTO are taking major steps to liberalise their trade regimes. However, in the short run, the impact of these policy changes is generally perceived to be painful for both the producers and the consumers; and especially so for the latter. A key question here is the impact of trade reforms on poverty, which has persisted in most developing countries despite concerted efforts on many fronts to eradicate this social evil. Like many developing countries, Pakistan has undertaken far-reaching trade reforms aimed at creating an open international trading environment. Pakistan’s dependence on international trade, as measured by the total trade to GDP ratio, has increased significantly from 13.3 percent in 1960-61, to 32.47 percent in 1992-93. As such, it is important to determine if there is a relationship between trade liberalisation and poverty alleviation; do trade reforms lead to reduction in country wide poverty levels or not. The aim of this study is to examine the impact of trade reforms on poverty alleviation in Pakistan. It attempts to answer the question of whether openness of trade has led to a reduction in poverty or not. The study is organised as follows. Sections 2 and 3 provide a review of Pakistan’s trade policies and literature on the estimation of poverty. Data and methodology used to examine the relationship between trade reforms and poverty are discussed in Section 4. Empirical findings of the study are analysed in Section 5 and in Section 6 the main conclusions of the study are presented.

Suggested Citation

  • Usman Qadir & Muhammad Ali Kemal & Hasan Mohammad Mohsin, 2000. "Impact of Trade Reforms on Poverty," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 39(4), pages 1127-1137.
  • Handle: RePEc:pid:journl:v:39:y:2000:i:4:p:1127-1137
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    File URL: http://www.pide.org.pk/pdf/PDR/2000/Volume4/11127-1137.pdf
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    References listed on IDEAS

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    1. Salman Syed Ali & Sayyid Tahir, 1999. "Dynamics of Growth, Poverty, and Inequality in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 38(4), pages 837-858.
    2. Rizwana Siddiqui & Zafar Iqbal, 2001. "Tariff Reduction and Functional Income Distribution in Pakistan: A CGE Model," MIMAP Technical Paper Series 2001:10, Pakistan Institute of Development Economics.
    3. Shahnawaz Malik, 1996. "Determinants of Rural Poverty in Pakistan: A Micro Study," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 35(2), pages 171-187.
    4. S.M. Naseem, 1973. "Mass Poverty in Pakistan. Some Preliminary Findings," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 12(4), pages 317-360.
    5. A.R. Kemal & Rehana Siddiqui & Rizwana Siddiqui, 2001. "Triff Reduction and Income Destribution A CGE-based Analysis for Urban and Rural Households in Pakistan," PIDE-Working Papers 2001:181, Pakistan Institute of Development Economics.
    6. Sarfraz K. Qureshi & G. M. Arif, 2001. "Profile of Poverty in Pakistan, 1998-99," MIMAP Technical Paper Series 2001:05, Pakistan Institute of Development Economics.
    7. Ehtisham Ahmad & Stephen Ludlow, 1989. "Poverty, Inequality and Growth in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 28(4), pages 831-850.
    8. Rashid Amjad & A.R. Kemal, 1997. "Macroeconomic Policies and their Impact on Poverty Alleviation in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 36(1), pages 39-68.
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    Cited by:

    1. Muhammad Arshad Khan & Abdul Qayyum, 2007. "Trade Liberalisation, Financial Development and Economic Growth," Trade Working Papers 22204, East Asian Bureau of Economic Research.
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    3. Atif Khan Jadoon & Ambreen Sarwar, 2020. "Is Trade Liberalisation Pro‐Poor in Pakistan? Evidence from Large‐Scale Manufacturing," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 53(3), pages 360-394, September.
    4. Onialisoa Mirana Rakotoarivelo & Hanitriniaina Sammy Gr´egoire Ravelonirina, 2019. "On the Dynamic of Country Development," Journal of Mathematics Research, Canadian Center of Science and Education, vol. 11(2), pages 1-19, April.
    5. Bushra Yasmin & Zainab Jehan & Muhammad Ali Chaudhary, 2006. "Trade Liberalization and Economic Development: Evidence from Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 11(1), pages 19-34, Jan-Jun.
    6. Muhammad Shahid Hassan & Samra Bukhari & Noman Arshed, 2020. "Competitiveness, governance and globalization: What matters for poverty alleviation?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(4), pages 3491-3518, April.

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