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THE BALANCE OF PAYMENT PROBLEM IN DEVELOPING COUNTRIES, ESPECIALLY IN PAKISTAN

Hafeez ur Rehman, * Hafiz Abdur Rashid Abstract. The balance of payments has been an important indicator of the growing economic activities in all the countries. It reflects how much a country is technically developed and competitive in the world market. Balance of payments is the statistical record of all transactions taking place between its residents and the rest of the whole world. There are three analytical approaches to the balance of payments namely; the elasticities approach, the absorption approach and the monetary approach. There are many factors that determine the position of balance of payments in the country either it is surplus or deficit. This study highlights these multi-factors for the developing countries and mainly focused on Pakistan. The statistically the balance of payment position of Pakistan is analyzed and use full policy measures are suggested. These policy measures may be helpful to improve balance of payments position in Pakistan and in other developing countries. Introduction Balance of Payments problem in developing countries, especially in Pakistan has been very important and burning issue of the recent days. It tells how many goods and services a country has been exporting and importing and how much a country is borrowing or lending. In this way BOP accounts are the statistical record of all transactions taking place between its residents and rest of the world and would help to formulate a countrys future strategy. This is the time of competition and technology. The one who will opt new methods of living, new methods of economic stability will get his share from the rest of the world, otherwise will remain behind. Pakistan being a developing country should go forward to enter in the circle of developed countries. For this purpose we have to correct our BOP situation.

The authors are Associate Professor, Economics Department, Punjab University, & Lecturer, Hailey College of Commerce, Punjab University, Lahore Respectively.

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The Balance of Payment Problem in Developing Countries, Especially in Pakistan

Many problems are common in almost all developing countries but some are area specific and are especially meant for Pakistan. This study has been divided in three sections. Section 1 relates to concept of BOP, discussing the methodology, causes and methods for improvement of BOP, profile of developing countries and the problems of BOP have been discussed in section 2. In section 3 two ways of presentation of BOP in Pakistan are presented. BOP situation in Pakistan has been discussed with the help of supporting data, and then in the final section the BOP problems and measures to improve imbalance have been discussed. I. Balance of Payments

The balance of Payment (BOP) of a country is a systematic record of all economic transactions between the residents of the reporting country and the residents of foreign countries during a given period of time. Balance of Payment (BOP) is a statistical statement that systematically summarizes, for a specific time period, the economic transactions of an economy with the rest of the world. Transactions, for the most part between residents and non-residents, consists of those involving goods, services and income; those involving financial claims on, and liabilities to, the rest of the world; and those (such as gifts) classified as transfers, which involve offsetting entries to balance in an accounting sense one side transactions. The balance of payments is one of the most important statistical statements for any country. It tells us how many goods and services the country has been exporting and importing and whether the country has been borrowing from or lending money to the rest of the world. It also tells whether or not the central monetary authority has added to or reduced its reserves of foreign currency is reported in the statistics. So a nations BOP accounts are the statistical record of all transactions taking place between its residents and the rest of the world. The BOP accounts also show the connection between foreign transactions and national money supplies. Therefore a thorough understanding of BOP accounting will help us in evaluating the implications of a countrys international transactions. So in order to know what is happening to the course of international trade, government keeps track of the transactions between countries. The main purpose of BOP is to inform the government about the international economic position of a country and to help make decisions about monetary and fiscal issues, on one hand, and about trade and payments on the other hand.

The Journal of Commerce Approaches to the Balance of Payment

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There are three analytical approaches to the BOP: (i) the elasticities approach (ii) the absorption approach and (iii) the monetary approach.

(i)

The Elasticities Approach

Robinson developed this approach originally in 1930s. It concentrates on the elasticity condition necessary for a devaluation to improve the current account component of BOP. It is a partial equilibrium model, which focus on the response of exports and imports to charges in relative prices and ignores income effects, capital flow, and the money market.

(ii)

The Absorption Approach

This approach emphasizes the fact that payments imbalances are characterized by ex ante divergences between aggregate income receipts and aggregate domestic expenditures (absorption). This approach focuses specific attention upon the product market, rather less on the exchange rate market and appears to ignore completely the money market.

(iii)

The Monetary Approach

According to this approach it would appear that what is happening to a countrys BOP will depend, given the demand for money in that country and in the rest of the world, upon the rate of the growth of the money supply in the country vis--vis the rate of growth of the money supply in the rest of the world. The key feature of the monetary approach is the automatic balance of payments adjustment mechanism i.e., a BOP surplus or deficit is removed by adjustment of money supply to money demand. Collection, Reporting and Presentation of Balance of Payment Statistics The balance of payment statistics records all the transactions between domestic and foreign residents when they purchase or sale of goods, services or of financial assets such as bonds, equities and banking transactions. Recorded figures are normally in domestic currency of the reporting country. The authorities are collecting these information from the custom departments, surveys of tourists, data on capital inflows and out flows are obtained from banks, and information on government expenditures and receipts with foreign residents is obtained from local authorities and central government agencies. The responses from the various sources are compiled by government statistical agencies.

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The Balance of Payment Problem in Developing Countries, Especially in Pakistan

There is no unique method governing the presentation of balance of payments statistics and there can be considerable variations in the presentations of different national authorities. However, the International Monetary Fund provides guidelines for the compilation of such statistics published in its Balance of Payment manual. In addition IMF publishes the balance of payment statistics of all its member countries in a standardized format facilitating inter-country comparison. These are presented in two publications The Balance of Payment Statistics Year Book and the International Financial Statistics. The usual reporting period for all statistics is year. However, some of the statistics that make up the balance of payments are also published on a more regular monthly and quarterly basis. According to IMF standard the record of BOP can be divided into two major parts; the current account and the capital account, which are further subdivided into some other parts. A schematic representation of the BOP can be seen as under:

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Current Account

Exports and Imports of goods (visible)

Transport Services

Travel

BOP

Export and Import of Services

Investment

Business/Professional Services

Banking and insurance Services

Unilateral Transfers

Private unilateral Transfers

Govt. Unilateral Transfers

Capital Account

Private long term Investment

Govt. long term Investment

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The Balance of Payment Problem in Developing Countries, Especially in Pakistan

Surplus and Deficit in Balance of Payment Any payment to foreigners is a deficit item in BOP while any receipt from foreigners is a surplus item in BOP. In other words whenever the demand for foreign exchange is more than the supply of foreign exchange the deficit in BOP occurs. If receipts are equal to payments on the current account and long-term capital account of balance of payment, then it is said the balance of payment of that country is in balance. If receipts are larger than payments on both the accounts, than it is said that the balance of payment is surplus. Conversely if payments are larger then the receipt on both of these accounts, then it is said that the balance of payment is in deficit. If there is persistent deficit in BOP then country should take some measures. However, when a country enjoys surplus it feels a sense of relief. The countries that have persistent deficit in their BOP may take one or more of the following measures.

1. 2. 3. 4. 5. 6. 7.

By receiving assistance from IMF By getting short term loans from other countries By receiving grants from other countries By selling foreign assets of the country By reducing investment made in other countries. By selling foreign currencies from countrys foreign exchange reserves Business firms of the country can purchase goods on credit from other countries. The values of these imports need to be paid later on, etc.

The position of a country having surplus in BOP is different from the country having deficit in BOP. If there is persistent surplus in a country, there is a continuous increase in the reserves of foreign exchange of that country and it is not necessary to correct this kind of situation. Some countries however take some measures sometimes to help the other countries. In addition, these steps would help these countries to reduce internal inflationary pressures. Sometimes, the countries running their surpluses are compelled to reduce the surpluses. For the sake of balancing their BOP, these countries can lower rate of interest, can reduce tax rates and can, raise government expenditures. They can lower tariff and other barriers to trade. They can also liberalize export of capital or can do revaluation

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(i.e., raising the external value of its currency) or they can eliminate subsidies on exports. There are few countries having surplus most of the time one of them is USA. From about World War-I until 1980, the United States was a net creditor internationally; that is, it had more foreign assets than liabilities. Since the early 1980s, however, the United States has continuously run larger annual current account deficit. These current account deficits have had to be financed by net foreign borrowing including sale of US owned assets to foreigners as well as the incurring of new foreign debts. II Profile of Developing Countries

Most of the worlds population is substantially poor. The income range among these developing countries is very wide. Some of these countries, such as Singapore, are in fact on the verge of being graduated too advanced country status, both in terms of official statistics and in the way they think about themselves. Others, such as Bangladesh, remain desperately poor. Nonetheless, for virtually all-developing countries attempt to close the income gap with more advanced nations has been a central concern of economic policy. We have to see some basic facts of developing countries, which are responsible for deficit in BOP. These are large Population size, high Population growth rate and large family size, low output and low per capita income, weak structure of production, more hunger and poor health, low literacy rate, varying income inequality, political instability, a high proportion of the labour force in agriculture, inadequate technology and capital, low saving rate, dual economy and an unskilled labor force, varying dependence on international trade and a high proportion of primary product export. Causes of BOP Problems for Developing Countries BOP problem in developing countries is not caused by a single reason rather there are multi reasons due to which this problem take place. The main factors are discussed below: Central Banks do not hold the currency of a small developing country as reserves, because neither the government nor private banks will freely convert them into gold, dollars or other international reserve assets. Only convertible foreign currencies are held as foreign exchange reserves. The developing countries are borrowing from abroad to finance their current account deficit and start spending the funds but they have to increase their

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The Balance of Payment Problem in Developing Countries, Especially in Pakistan

export capacity necessary to generate export earnings, to repay the debt. But due to their internal constraints the developing countries are not able to utilize the borrowed money properly that put them in the awkward position. There is one entry in balance of payment that is called Statistical discrepancy or errors and omissions. These measurement errors are larger in developing countries due to mishandling of data because not having a sophisticated statistics department due to their limited resources. The developing countries may have the slow means of transportation and communication. So goods that leave one developing countrys ports near the end of the accounting year, may not reach their destination in time to be recorded in the recipients import statistics for the same year. So there may be a chance of discrepancy of missing data. Sometimes interest payments earned abroad are not reported to government authorities in the recipients home country. In many cases such interest payments are credited directly to a foreign bank account and do not even cross-national borders. So this situation is of great loss for developing countries. Many developing countries can face the problem of dis-equilibrium in the balance of payment because of persistent deficits in their trade with developed countries. Developing countries has to make huge imports from advanced countries for the sake of implementation their economic development programmes but they are unable to make as much exports out of their domestic production to finance their imports. The inflow of grants from developed countries and foreign capital to these countries is far short of their needs. As a result those countries are loosing their reserves of foreign currencies and facing very serious difficulties in this regards. Special drawing rights (SDRs) sometimes described as Paper Gold are assets created by IMF and their value is defined in terms of five currencies the Dollar, Yen, Mark, Pound and French Frank. All these currencies are related to the developed block. The developing countries would be having the exchange rate difficulties at the time of improvement in the deficit of BOP; because only convertible foreign currencies are held as foreign exchange reserves. In developing countries there is a problem of dual economy. Often relatively modern, capital-intensive, high-wage industrial sectors exist in the same country

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as well as a very poor traditional agriculture sector. This division of a single economy into two sectors creates uneven distribution of wealth and is probably a sign of markets working poorly. In case there is a combined effort for a country to correct the BOP position would be difficult for whole of the economy, as this economy has been divided into two sectors. The developing countries basically based on agriculture. The production of agriculture is highly uncertain. In case of any decrease, draught etc. the output of agriculture can come down and the agricultural export decline sharply. So agriculture-base economy cannot improve the BOP deficit rather the gap would be increased many time. It is the duty of the central bank to maintain a stable ratio between reserves and liabilities but it cannot be done due to a lot of pressure from the countrys problems such as political problems etc. At the same time central bank is not only an important holder of assets. The developing countries are highly populated with higher population growth rate. These situations increase the use of domestic goods and increase the demand of imported goods. These countries are not able to meet the requirements of the increasing population. The existing natural resources of the developing countries are depleting very fast. These countries are not able to dig out new resources due to their own limitations. In this way their exports of natural resources such as iron, gas, copper etc. are coming down. This is world of competition; developed countries are not allowing the developing countries to come forward for competition due to highly sophisticated technology. Developing countries are often in a state of uncertainty; the political situation in most of the time is disturbing the environment. Their economic policies are often being changed. Due to this uncertain situation the domestic capital is going out and no new investment is coming in, thus there is very small inflow of capital. Developed countries are specialized in the production of those goods in which they have comparative advantage to some other goods. But due to less resource the developing countries cannot adopt this pattern.

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The Balance of Payment Problem in Developing Countries, Especially in Pakistan

Developed countries sometimes in the form of a group are tightening the trade restriction for developing countries. Sometime they are imposing different type of tariff and quota restrictions. They can do so because they are powerful and have an upper hand. Now World Trade Organization (WTO) has been setup comprising 154 members of the world countries but there is again a doubt about the working of WTO. III. Presentation of the BOP in Pakistan There are two types of presentation of balance of payments used in Pakistan. These are reported in Table I and II. Both contain the same information but presentation is different.

Table I

Balance of Payments: 2000-2001

Trade Balance Merchandize Exports (f.o.b) Merchandize Imports (f.o.b) Non-factor Services (Net) Investment Income (Net) Receipt Payments Private Transfers (Net) (Workers Remittances) Current Account Balance Private Capital (Net) Direct Investment Other Long Term Short Term Public Capital (Net) Long Term Disbursements Less Repayments Long Term Other Short Term and Long Term Changes in Reserves Errors and Omissions Financing Accumulation of Arrears Source: Pakistan Economic Survey-2002-03. -1269 8933 -10202 -981 -2161 113 -2274 3898 (1087) -513 -380 146 -214 -312 577 2302 1795 70 -1001 625 692

The Journal of Commerce

- 41 Table II

Alternate Presentation of Balance of Payments of Pakistan: 2000-2001

Trade Balance Services (Net) Exports Imports Receipts Payments Shipments Investment Incomes of Foreigners Others Private Unrequited Transfers (Net) Workers Remittances Current Account Balance Long Term Capital (Net) Private Capital (Net) Official Capital Basic Balance Errors and Omissions Balance Requiring Official Assistance Official Borrowings Official Short Term Capital (Net) Balance of Payments Borrowing Changes in Reserves -1269 8933 -10202 -3142 1464 -4606 (877) (2274) (1455) 3898 (1087) -513 171 -68 239 342 313 -29 338 431 93 1001

Financing Accumulation of Arrears

Source: Pakistan Economic Survey-2002-03.

692

Balance of Payment Situation of Pakistan The balance of payment of any country is a crucial issue. Different countries of the world solve this issue by determining the volume of trade and investment between them. Similarly, Pakistan does the same. Surplus and deficit are two major determinants for the BOP of Pakistan. The figures of the table at Annexure-A show that Pakistan has been experiencing a consistently deficit in BOP from the date of independence. On the one hand, its foreign exchange earnings are very small and is limited to primary products, the market for which

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The Balance of Payment Problem in Developing Countries, Especially in Pakistan

is unstable. On the other hand, the developmental programmes of Pakistan require imports of equipments, machinery and so the burden of interest on foreign capital exerts pressure on BOP. Pakistans exports mainly depend on agriculture for which the natural conditions and environment in most of the time is not favorable. At the time of draught and other circumstances the exports of Pakistan fall sharply. As earlier told that developing countries usually export their raw material and import the finished goods, so Pakistans export mostly include raw materials, or primary goods, which being cheaper, fetch less foreign exchange. In Pakistan major source for financing the balance of payments deficit continued to be foreign loans. The situation will be more clear when we will have a look on Pakistans trade from 1947 uptil now (Annex-A). When analyzing the value of trade of Pakistan starting from 1947-48 we see that there is almost trade deficit except at three places during the last 50 years; 1947-48, 1950-51 and 1972-73. The reason for surplus in 1947-48 was that the exports of the newly Pakistan were quite high and non-devaluation decision in 1948. In 1950-51 the surplus figure was due to the Korean War when excess export of cotton and jute [from East Pakistan which is now Bangladesh] turned the deficit into a surplus. After the Korean war our imports exceeds exports so there was a continuous deficit in trade for many years. In 1948-71, 99 percent of United Pakistans foreign trade comprised of five primary commodities: raw jute, raw cotton, raw wool, hides and skins, and tea. All jute and tea was exported from East Pakistan. In 1971-72 again we had surplus trade balance of Rs.124 million. The reason behind this was the massive currency devaluation in 1972 when rupee was depreciated from Rs.4.76 to Rs.11 per dollar. The exports increased significantly and share of exports in the GD rose to 14.9 percent. A deep analysis has been done after 1972 i.e. after separation of East Pakistan in 1971. Starting from 1972 we see that the most important contribution to the BOP has been the workers remittances, mainly from the Middle East countries. In fact, for many years Pakistans trade and economy have been highly dependent on money from the Gulf. This situation continues uptill 1981-82. Exports have shown a healthy trend after 1982 but workers remittances have fallen. We can see the workers remittances from 1972-73 onward at Annex-B. The huge gap in the deficit in BOP of Pakistan was also due to the sharp decrease in the remittances of the Pakistans working abroad which is very clear from the Annex B. Pakistan

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had relied for a number of years on this highly unstable source for financing its growing imports and sizeable underlying deficit in external payments. From the peak year of remittances that is 1982-83 when the total remittances from abroad were US $2886 million, it decreases to US$ 2279.00 in 1986-87, US $1468 in 199192, US $9846 million in 1999-2000 and still have a decreasing trend. Pakistans BOP balancing depends mainly on the export of agricultural crops. The production of main crops in Pakistan can be seen at Annexure C where production of wheat, rice and cotton has been given from the year 1990-91 to 2000-2001. The only purpose to see, if some thing happens with these products the BOP situation of Pakistan would be deteriorated. The deficit reached at the level of Rs.33212 million in 1981-82 from Rs.24,264 million in 1980-81 as the international market prices of Pakistans main export, cotton, crashed. We can see that deficit increased from Rs.32, 832 million in 1990-91 to Rs.81,685 in 199293 while the production of cotton and rice was also declined during the same years. In 1993-94 the deficit figure came to Rs.52,751 million from the last yeas figure of Rs.81,686 million while the production of rice grew upto 3995 thousands tons for the year 1993-94 from 3116 thousands tons for the last year. In the same way the deficit figure is oscilating around 80,000 million rupees in 2000-2001 and we can see the decrease in production of wheat, rice and cotton during the same year and this was due to the highly dry season and shortage of water in Pakistan. In 1998-99 there was again a decrease in the production of cotton help to bring deficit upto Rs.75622 million. This was also due to the decrease in cotton prices at world level. In Pakistan BOP deficit is also due to the heavy import of food grain. We have to import foodstuff to feed our growing population. Our domestic production of food grains is not matching our population growth. Imports during 1988-89 increased as a result of import of food grains. If we see the import figure in 1997-98 that was decreased to Rs.436,338 million from the level of Rs.465,001 million was due to the bumper increase in the production of wheat and sugarcane. This decline in import bill was also due to decline in oil prices because of slow down of global economic situation. This was also due to the completion of power project in the country, which starts power generation resulting reduction in import of power generation machinery.

- 44 IV.

The Balance of Payment Problem in Developing Countries, Especially in Pakistan Causes of Balance of Payment Problem for Pakistan

As stated earlier Pakistan has been facing BOP problem since the independence. Therefore, it has been under deficit since then. Some statistical work has been done in the previous section. to see the real picture. A brief description of BOP problems of Pakistan are given as under:
Pakistan is an agro-based economy and its exports mainly depend on rice and raw cotton. Whenever there is an international price shock or internal draught situation the export situation of these agricultural products are affected badly increasing the deficit gap. The overall BOP deficit in Pakistan is being financed largely by foreign credits, which increase our future debt, services liabilities and which would cause strains on the future balance of payments. The net private transfer in Pakistan consists of the home remittances of Pakistani nationals abroad and this is a temporary phenomenon. Our economy is dependent on this factor, which is external and uncontrolled. Whenever there is some natural disaster such as floods etc. our economy is badly affected and we cannot meet the requirement of improving the BOP. Further more, law and order situation of our country is discouraging for the foreign investors to invest in Pakistan. This situation has stopped inflow of capital in Pakistan. High population growth has been a hurdle and main problem in BOP of Pakistan as this has been increasing the import bill of Pakistan for importing foodstuff. On the other hand, we are not increasing our agricultural products more than the population growth rate. There is a lack of continuity in the government policies that is also discouraging the foreign as well as local investors to start new projects or to do new investment, which is stopping inflow of capital as well as increase the domestic production. Political instability is also one of the major hurdles to improve the BOP situation of the country. This situation is very much disappointing internationally as well as internally.

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Pakistan is always exporting raw material, which is giving very low price as compared to manufactured goods that would be a little help to improve the deficit in BOP. In addition to this the market for primary products is very unstable. While importing of equipments and machinery for its developmental programmes causes a burden of interest on foreign capital, thus exerts pressure on BOP. Pakistan being a developing country is not able to get different types of big grants or aids from developed countries to start its developmental programme. The developed countries and international financial institutions helped Pakistan in small quantity and in pieces, which is not at all helpful to improve the BOP situation of the country. Proper pricing policies play an important role in the production and export of agricultural commodities and Pakistan is very weak on this side. Here the farmer is not covering his cost of production and remains in the situation of uncertainty. During recent years there is a substantial increase in the exports of primary commodities, particularly rice and cotton and still there is a potential for future increase and production of these commodities. In addition there is a wide scope for increase the production of food grains, livestock, fruit and vegetables. But the potential for increasing the production and exports of these products is not being utilized properly. Developed countries put restrictions on our exports in one-way or the other. After the atomic explosion they have put us on trial. Some times they put a restriction on our export due to under standard, then quota system or child labour etc. which affect BOP situation badly. Implementation of Fiscal and Monetary policies and Pakistani Tariffs on exports and imports are not being implemented properly and with proper knowledge, which is not improving the BOP situation in Pakistan. The emphasis of Pakistans industrial policy has been more on import substitution than on export expansion. This situation can increase the prices for consumers and make these industries an inefficient. Unless this kind of situation is not finished there will be a threat for BOP.

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The Balance of Payment Problem in Developing Countries, Especially in Pakistan

Reducing the BOP deficit depends on our rapid industrial production and quality of our products. In Pakistan we are under-utilizing the idle capacity of our industrial production. Lack of knowledge about this situation is not in favour of improving the BOP. Pakistan is suffering from acute external and internal debt problems, which is also one cause of deteriorating the BOP situation of Pakistan. Policy measures for Reducing BOP Deficit in Pakistan Various measures may be taken for improving the different components of the BOP which are listed below: 1. 2. 3. Appropriate use of Fiscal and Monetary Policies, income and wage policies, and exchange rate policies Improving the domestic political environment and law and order situation. Measures to increase agricultural productivities and to maintain appropriate price for agricultural produce and setting up of agriculture based industries. Facilitating the foreign investors in Pakistan with improved infrastructural to increase export. Encouraging the setting up of fruit processing industries Encouraging the competitive behaviour of Pakistani investors with rest of the world. Improvement of R&D facilities and level of education in the country. Encourage Pakistanis to use domestic products, which will reduce the import bill. Exemption for exporters and domestic investors from excise duties and sales taxes and encouraging the high value added industries. Arrangement of provision of credit to small and medium size investors and farmers. Allowing duty-free import of textile machinery and duty-free import of other old machinery. Setting up of more export processing zones in the country and supplying infrastructural facilities for the investors.

4. 5. 6. 7. 8. 9.

10. 11. 12.

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14. 15. 16. 17. 18. 19. 20.

21. 22.

Making arrangements for export of skilled manpower rather than unskilled ones on high wages and setting up of polytechnic colleges or institutes and training centers for the manpower going abroad. Opening up of saving schemes for low-income groups to encourage savings out of their income. Making arrangement to strengthen oil and gas and technology sectors. Financing the educational activities and improving the quality of higher education. Policies may be made to facilitate indirect exports and small and medium enterprises and ban on any type of export may be lifted. Exporter of all level may be educated about the latest international rules and regulations to compete the international market. Free import of high tech. Machinery such as computers may be allowed. Policy measures to face the debt problems of Pakistan, e.g., to improve external debt, policy to increase countrys export may be strengthened by developing the domestic production. Restoring the donors and investors (both external and internal) confidence. Most of the producers, exporters and policy makers are not aware of Uruguay Round Trade Agreement on Agriculture. There is an urgent need to pursue public awareness program on the impact of trade liberalization on agriculture, including trade policy developments, priorities and strategies of the major trading partners of Pakistan.

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The Balance of Payment Problem in Developing Countries, Especially in Pakistan

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- 49 Annexure -B Workers Remittances (US$ million)

Year
1972-73 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1996-97 1997-98 1998-99 1999-2000 192000-2001 1991-92

Total
136.00 212.00 334.00 578.00 1156.00 1358.00 1744.00 2116.00 2225.00 22886.00 27737.00 2446.00 2595.00 2279.00 2013.00 1897.00 1942.00 1848.29 1467.48 1562.24 1445.56 1866.10 1461.17 1409.47 1489.55 1060.19 983.73 854.60

Source: Government of Pakistan, Pakistan Economic Survey Statistical Appendix (many issues).

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The Balance of Payment Problem in Developing Countries, Especially in Pakistan

Annexure -C Production of Main Crops (000 tons) Cotton Years Wheat Rice (000 bales) 1990-91 14565 3261 9628 1991-92 15684 3243 12822 1992-93 16157 3116 9054 1993-94 15213 6995 8041 1994-95 17002 3447 8697 1995-96 16907 3996 10595 1996-97 16651 4305 9374 1997-98 18694 4333 9184 1998-99 17856 4676 8790 1999-2000 21079 5156 11240 2000-2001 18535 4803 10732 Source: Pakistan Economic Survey various issues.

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References
1. Macroeconomics of Pakistans Economy State Bank officials Training Programme (SBOT), PIDE, Islamabad. Oct. 23 Nov-17, 2000. Abel/Bernanke, Annual Report, State Bank of Pakistan (199899). Abel/Bernanke, Macroeconomics Addison-Wesley Publishing Company, Inc. (1998). Abel/Bernanke, Balance of Payments Textbook, IMF (1996). Banuri, J. Tariq, Khan, Rafi Shahrukh, Mohammad Moazam, Just Development Oxford University Press, 1997. Bruce Herrick/Charles P. Kindleberger, Economic Development KinKeong Printing Co. Ltd. (1984) Caves, E. Richard, Frankel, A. Jeffrey, and Jones, W. Ronald, World Trade and Payments, An Introduction (Seventh Edition) Harper Collins College Publishers, 1995. Connolly, B. Michael and Swoboda, K. Alexander, International Trade and Money. London, George Allen and Unwin Ltd. 1973 Johnson, G. Harry, The Monetary Approach to Balance of Payment Theory. London School of Economics and Political Science and University of Chicago. Cooper N. Richard, The Balance of Payment in Review JPE No.4, 1966. Vol.64. Document of International Monetary Fund Pakistan Selected Issues and Statistical Appendix Nov. 20, 2000. GRABEE J. ORLIN, International Financial Markets (Third Edition) Prentice Hall, Inc. Newjerey, 1996. Krugman R. Paul and Obstfeld, Maurice, International Economic Theory and Policy, Fourth Edition, Addison Wesley Longman, Inc. 1998.

2. 3. 4. 5. 6. 7.

8.

9.

10.
11. 12.

- 52 13. 14. 15. 16.

The Balance of Payment Problem in Developing Countries, Especially in Pakistan Nafziger, E. Wayne, The Economics of Developing Countries, Prentice Hall International, Inc. (1990). Pierce D.G. and Tysome J.J., Monetary Economics: Theories Evidence and Policy, University Press, Cambridge (1985). Pilbean; Keith, International Finance Macmillan Business, Creative Print & Design (Wales) Ebbw Vale (1992). Rodiger Dornbush, Stanley Fischer, Richard Macroeconomics Irwin/McGraw Hill (1999). Startz,

17.
18. 19.

S.Akbar Zaidi, Issue in Pakistans Economy Oxford University Press, 1999. Salvatore, Dominick, International Economics Prentice Hall, Inc. 1998. Tibor Scitovsky, Money and the Balance of Payment Rand Nally & Co. USA (1969).