Pakistan Institute of Development Economics

Despite rapid technological advancements and rural transformation in many Asian agricultural economies, persistent sociocultural norms, patriarchal barriers, and limited access to funding pose significant challenges to rural womenʼs participation in agricultural development. However, studies addressing gender disparities in this context are absent in Pakistan, highlighting a critical research gap. The present address this gap by conducting an analysis based on 78 districts over the period 2004 to 2019 to investigate whether gender inclusion has any role in the rural transformation process at the regional level or not. Using fixed effects panel model, findings highlight the role of educated women in advancing rural transformation. These impacts vary in magnitude across regions and stages. Education is significantly related to share of high‐value crops in agriculture, especially in districts of Punjab and Khyber Pakhtunkhwa, where the impact is more pronounced compared to Baluchistan. However, education does not significantly increase female off‐farm employment in Punjab compared to Baluchistan, likely due to regional heterogeneity. In Sindh, increased female education correlates with a shift from farm to off‐farm employment. Additionally, female employment rate, female labour force participation rate, and per capita income positively influence rural transformation, especially at advanced stages.

This study presents a new hybrid forecasting system to enhance the accuracy and efficiency of predicting stock market trends. To do this, the proposed involves several steps. Firstly, the closed stock index price time series is preprocessed to address missing values, variance stabilization, nonnormality, and nonstationarity. Second, the stock index closing prices are processed and filtered into a nonlinear long-term trend series and a stochastic series using three proposed filters and a benchmark filter. Third, the filtered series are estimated using the nonlinear and neural network autoregressive models. Fourth, the residual from both the fitted models is extracted, and a new series is obtained. The new residual series is forecasted using the autoregressive condition heterogeneity model. Finally, the forecasts from each model are combined to get the final estimates. The results indicate that the proposed final hybrid model produced the most accurate and efficient comparison with the baseline models.

Early Cretaceous and Paleogene shale and limestone sediments in the southern Indus Basin were investigated by geochemical data and 1‐D basin modelling. Most of the shales from the Early Cretaceous and Paleogene formations exhibit total organic carbon (TOC) content between 0.51 wt. % and 6.06 wt. %, overall, indicating organic matter richness capable of generating hydrocarbons. However, the limestone samples of the Paleogene formations have lower TOC values in the range of 0.36–0.97 wt.%, inferring poor to fair petroleum source rock. The studied shale and limestone sections exhibit also varying hydrogen indices (HI) ranging from 27 to 430 mg HC/g TOC and different kerogen pathways, ranging from Type II to Type IV. Generally, most of the samples with the Lower Cretaceous and Paleogene formations consist mainly of hydrogen‐poor Type III and IV kerogens, with HI values range from 27 to 206 mg HC/g TOC, while some other samples belonging to the Paleogene formations exhibit Types II and II/III kerogen (HI from 219 to 430 mg HC/g TOC). The dominance of such kerogen shows the presence of oil‐ and gas‐prone source rocks, with high potential for gas generation. Maturity‐related indicator of Rock‐Eval T max shows different thermal maturity levels, ranging from immature to post‐mature. Most of the Lower Cretaceous Goru shales are more mature than other Paleogene sediments, and rank from main oil to gas generation windows, reaching the generation efficiency. This is probably attributed to the deep burial of the Goru Formation reaching a depth up to 4050 m. Therefore, the preliminary geochemical results of the Goru shale unit were integrated into a basin modelling analysis using three exploratory wells to simulate the timing of oil and gas generation. In this case, the simulated basin models reveal that the Goru source rock system currently attained the main oil and gas generation windows, with computed vitrinite reflectance values between 0.75 and 2.00 Easy %Ro. The simulated models indicate that commercial amounts of oil have been generated from the Goru source rock system since the early Palaeocene, as demonstrated by the TR ratio of up to 62%. Moreover, oil was cracked into thermogenic gas during the late Eocene to present‐day, with computed vitrinite reflectance of up to 2.00 Easy %Ro. The oil and gas generation was increased with increasing the burial depth, thus, an intensive hydrocarbon exploration and production program is highly recommended in the deeper stratigraphic succession of the Goru source rock system in the southern Indus Basin.

This study examines the effect of trade agreements on the bilateral export flows of South Asian Association for Regional Cooperation (SAARC) countries. For empirical estimation, we applied a structural gravity model using the Poisson pseudo-maximum likelihood estimator on annual data from 2000 to 2019. Our approach, following recent developments in gravity trade literature, incorporates domestic sales alongside international trade to fully account for multilateral resistance to trade. The findings show that free trade agreements (FTAs) play a significant role in facilitating trade among SAARC countries, particularly in exporting raw materials and intermediate goods. In contrast, extra-bloc trade largely depends on preferential market access through programmes such as the generalized system of preferences (GSPs) scheme of the European Union. However, preferential tariff schemes designed for the least developed countries have no discernible impact. Surprisingly, no trade facilitation role is evident in the exports of capital goods. Based on these findings, the study offers policy guidance on how the structure of a trade agreement impacts trade connectivity within and beyond the bloc as well as export composition. Well-designed agreements with comprehensive tariff line coverage can facilitate exports of high-value-added products. Moreover, to effectively leverage the trade benefits enabled by GSP arrangements, developing countries must enhance their institutional capacities to ensure compliance with the social, environmental and other prerequisites outlined by GSPs.

In an era of economic volatility, consumer and business confidence are in the spotlight in shaping market outcomes. To this end, this study examines the impact of economic policy uncertainty (EPU) on business confidence (BC) and consumer confidence (CC) in China over a period spanning from 2000M1 to 2023M4. This study employs quantile-on-quantile regression and quantile causality approaches for empirical estimations. These approaches can illustrate the overall dependence structure among EPU, BC, and CC, enabling us to identify the underlying asymmetries. The empirical evidence underscores the negative association between EPU and BC in the low, medium, and high quantiles. Regarding the association between EPU and CC, the lower quantiles of EPU negatively influence the lower to medium quantiles of CC. In contrast, the lower quantiles of EPU have a positive association with the high quantiles of CC. In conclusion, the impact of EPU on BC is uniformly negative across the entire distribution, whereas the impact of EPU on CC exhibits asymmetry in China. The study recommends that policymakers should ensure transparent and proactive economic communication to propel business and consumer confidence in China.

This study examines the debt sustainability of State-Owned Enterprises (SOEs) in Indonesia to evaluate its implications for the country’s fiscal health. The rising external debt of SOEs, which has surpassed private businesses in recent years, has raised significant concerns among stakeholders. Employing financial risk tools, this research compares the performance of SOEs relative to their peers and assesses their vulnerability through stress tests and government mitigation strategies. Key financial indicators, including profitability, liquidity, leverage, and efficiency, are analyzed for 16 SOEs listed on the Indonesian Stock Exchange from 2017 to 2021. The findings reveal considerable risks to SOE debt sustainability across industries, with no sector being consistently secure or unstable. However, SOEs in the mining sector demonstrate better debt sustainability performance than those in the construction sector. While some SOEs face significant risks in managing their debt, others remain positioned to meet their financial obligations. The study underscores the critical need for stakeholders to closely monitor and manage SOE debt, as it directly affects the fiscal performance of the Indonesian government.

This Comment derives from a group discussion, generously funded by the Transactions Workshop Grant in 2023, to reflect retrospectively on the nature and degree of interaction among six trailblazing women members of Pakistan’s constituent assembly of 1972–3 (‘women constitution-makers’) within and without the assembly against the backdrop of their life histories. I refer to this group discussion as a ‘collective reflection’ to describe its open-ended structure of snowballing conversations among a small cohort of oral history narrators on the women constitution-makers as well as archivists whose work engages with material on or related to Pakistan’s enduring Constitution of 1973. The objective of the collective reflection was twofold: to provide an interactive mnemonic context for storytelling on the women constitution-makers and their personal and political associations; and to explore the extent to which these six women acted in concert in their constitution-making role on the question of women’s political representation. In relation to the former, the collective reflection yielded valuable observations. With respect to the latter, however, it presented a mixed picture and struck a note of caution in reading strong inferences into documentary archives – in this case, the constituent assembly debates.

Textiles serve as the export engine of Pakistan's economy, constituting roughly 60% of its total exports. Despite this prominence, Pakistan's global share in textile exports has consistently declined. In light of this, this study explores the potential impact of free trade agreements (FTAs) on fostering textile exports. The study applied a structural gravity model with the Poisson pseudo‐maximum likelihood (PPML) estimator to analyze annual exports for the period 2002–2021. Findings exhibit a positive and statistically significant effect of FTAs on textile exports, with varied impacts compared to major competitors. Moreover, we categorized textile products at the HS four‐digit level based on their value addition. Pakistan's FTAs facilitate the export of low‐ and medium‐value‐added textile products to Malaysia and South Asian countries, while exports of high‐value‐added products benefit from FTAs with China and Sri Lanka. The Pakistan–China FTA, in particular, stands out as highly effective. Regarding the European Union’s Generalized System of Preferences (EU‐GSP+), which is designed to leverage trade benefits, findings reveal a significant impact on textile exports across various value‐added categories. Overall, the lack of policy support for high‐value‐added exports contributes to the sector being mired in a low‐value‐added export trap.

Nearly half of all marriages in Pakistan are consanguineous, with 29 and 21% of women marrying first cousins on their father’s and mother’s sides, respectively. Despite its high prevalence, little is known about the change over time in consanguineous unions in Pakistan. Examining the patterns of the marriage market is particularly important given the substantial improvement in women’s education as women’s education is associated with the decline in consanguineous unions across the world. Our analysis, based on four waves of nationally representative Pakistan Demographic and Health Survey (PDHS) (1990-91, 2006-07, 2012-13, and 2017-18) of currently married women ages 15–49 shows that the prevalence of consanguineous unions has remained stable over time. In fact, a slight increase in cousin marriages is observed in 2006-07. Further, women’s education is negatively associated with cousin marriages. Historically, men in the country have had higher levels of education than women, leading to common occurrences of hypergamous unions (where the husband is more educated than the wife). However, with the advancement of women’s education over time, there has been an observed increase in educational hypogamy, where the wife is more educated than her husband. However, the rise in educational hypogamy has not changed the marriage market norms related to cousin marriages. Moreover, use of modern contraceptive methods is not associated with consanguineous unions. We found an inverse relationship between the children ever born (so far) and cousin marriages. Women in consanguineous marriages tend to have fewer children than women in non-consanguineous marriages. Contrary to common expectations, women in both hypogamous and hypergamous relationships tend to have more children than women whose spouses have the same level of education as them. Overall, the results show that consanguinity patterns are stable, and there is no evidence that the societal changes such as improvement in women’s education and urbanization over time have led to a substantial decline in cousin marriages in Pakistan.

Pakistan Telecommunication Company (PTCL) serving as a pivotal entity in the nation’s telecom sector underwent significant shifts in its financial dynamics following its privatization in 2006. Chapter 8 provides an in-depth exploration of the privatization and subsequent performance of PTCL. Before privatization, PTCL demonstrated robust financial metrics, making substantial contributions to the national treasury. However, post-privatization, the company encountered challenges, experiencing declines in operating profit, net income, and return on equity. Despite a sudden revenue surge in 2020 attributed to increased demand for broadband services amid digitalization trends, PTCL’s net profit stagnated, exacerbated by high-debt ratios resulting from leverage. This chapter critically evaluates the efficacy of the privatization decision, shedding light on transparency concerns raised by discrepancies in property transfers and the sale of shares to a foreign investor. Ultimately, the analysis underscores the paramount importance of transparency and welfare considerations in privatization endeavors, advocating for a balanced approach to safeguard the long-term success of national assets.

A robust legal framework is paramount for the successful implementation of privatization initiatives. Chapter 11 provides an extensive overview of the intricate legal landscape surrounding privatization in Pakistan, tracing the evolution of laws and regulations governing this transformative process. It meticulously examines key enactments such as the Transfer of Managed Establishments Order of 1978, which initially vested significant powers in the federal government regarding privatization. The discussion extends to the Privatization Commission Ordinance of 2000, pivotal for consolidating commissions and empowering the Privatization Commission with enhanced authority. Moreover, the chapter sheds light on recent amendments to the Privatization Commission Ordinance in 2021, aiming to bolster the commission’s autonomy, simplify procedures, and safeguard employee rights amidst privatization efforts. It introduces the Inter-governmental Commercial Transactions Act of 2022, delineating pathways for state asset privatization through government-to-government agreements.

While privatization has led to improved rates of return on assets, but in general, non-profitability persisted, raising concerns about its effectiveness in enhancing efficiency, particularly in under-developed nations like Pakistan. Therefore, Chap. 4 provides an exploratory analysis of privatization in Pakistan, focusing on the performance, efficiency, competitiveness, and fiscal burden of SOEs before and after privatization. This chapter also evaluates various indicators such as rate of returns, net profit-to-asset ratio, and concentration ratios to assess the impact of privatization. Marginal gains in competitiveness post-privatization were observed, but market power still existed for the privatized firms. The chapter also discusses the fiscal impact and notes partial relief following privatization. Overall, it emphasizes the need for a clear approach to address the issues faced by SOEs, while emphasizing that further empirical analysis is required due to complexities surrounding privatization efforts.

This study examines the impact of privatization on SOEs, explained that while privatization has somewhat alleviated the fiscal burden on national resources, it has not significantly enhanced overall performance or efficiency. Through sectoral analysis, it shows that operational efficiency has improved due to better asset utilization, yet results vary across sectors. For example, while compare power, cement, and finance, the cement industry showing notable performance improvements both pre- and post-privatization. The paper advocates for corporate governance reforms, enhanced transparency, and capacity building in government as initial steps toward effective SOE reform. It also highlights the importance of robust legal frameworks and Public-Private Partnerships (PPPs) to ensure the success of privatization efforts, and note them as the essential strategies for achieving a balance between public needs and private sector efficiency.

The main motive of this book is to assess the impacts of privatization in Pakistan, compared to exploratory, the empirical analysis is a more scientific and comprehensive way to examine the evaluation of privatized SOEs. Chapter 5 conducts a thorough empirical analysis of the privatized SOEs by involving difference-in-difference approach. Setting up the before and after outcomes, we analyze the impact of privatization on firm performance, and efficiency, and highlight the sector-specific outcomes. The findings reveal mixed results: while some privatized firms show some improvement in performance and efficiency compared to their pre-privatization state, while overall it is not significant. However, there is a notable improvement in the efficiency of privatized firms in terms of return on assets (ROA). Sector-specific analysis uncovers varied impacts of privatization, with some sectors experiencing positive effects while others remain relatively unchanged. The chapter underscores the importance of an enabling regulatory environment to support successful privatization efforts, emphasizing the need for effective regulation to ensure the efficient operation of privatized entities within a competitive market framework.

The history of Pakistan’s cement industry dates back to 1921, with the establishment of the first plant in Wah. Following nationalization in 1972, the State Cement Corporation of Pakistan (SCCP) observed significant growth in production capacity. However, the industry underwent privatization starting in 1991, transitioning into private ownership. This chapter provides a comprehensive overview of the cement industry in Pakistan, focusing on the key players like Maple Leaf Cement, Kohat Cement, and D.G. Cement. It examines their pre- and post-privatization performance, highlighting challenges and opportunities. Despite facing hurdles, such as payment issues and legal battles during privatization, these companies attracted buyers and underwent significant changes in ownership. Post-privatization, they experienced fluctuations in profitability influenced by factors like production costs, currency depreciation, and market dynamics.

Amidst operational inefficiencies and financial struggles, K-Electric (formerly KESC) faced substantial challenges necessitating its privatization in 2005. Chapter 6 provides an in-depth case study of K-Electric (formerly KESC), tracing its history from its origins as a private entity to its nationalization and eventual privatization. Following its privatization, the efforts made by the new management, particularly the Abraaj Group, to improve K-Electric’s performance through capital injection and operational reforms. However, despite these efforts, K-Electric has struggled to achieve sustained profitability and address systematic issues such as transmission and distribution losses. Despite some improvements in operational efficiency, K-Electric remains ineffective in meeting Karachi’s energy demands efficiently. Thus, this chapter underscores the need for further analysis and intervention to address the challenges facing K-Electric and the power sector in Pakistan, emphasizing the importance of sustainable solutions to ensure reliable and affordable energy supply for the residents of Karachi.

The transition of Pakistan’s financial industry from state-controlled to privately owned entities through privatization has yielded diverse outcomes. Through a historical lens, this chapter analyses the impact of privatization on the financial sector in Pakistan, focusing on case studies of Allied Bank Limited (ABL) and Habib Bank Limited (HBL). The chapter outlines the challenges faced by ABL post-privatization, including a surge in non-performing loans (NPLs) and financial losses. This led to significant restructuring efforts by the State Bank of Pakistan (SBP) to stabilize the bank’s operations and prepare it for re-privatization. In contrast, HBL’s privatization experience, marked by management control transfer to Aga Khan Fund for Economic Development (AKFED), resulted in a swift turnaround and notable improvements in financial performance.” In light of these insights, the chapter advocates for a refined approach to privatization, one that carefully balances privatization objectives with broader economic development goals and ensures the resilience of the financial system.

The role of effective governance, transparency, and accountability in the operations of SOEs is of paramount importance. However, the operational efficiency, transparency, and governance of SOEs have been marred by challenges, necessitating a critical analysis of the SOEs Act of 2023 to enhance governance standards and ensure optimal performance. This chapter provides an in-depth review of the SOEs Act of 2023 in Pakistan, focusing on its key features, provisions, and implications for governing SOEs. It digs into various aspects of the Act, including SOE management policies, criteria for prudent management practices, performance measurement requirements, board member appointments, financial transparency, shareholding rights, and performance monitoring. This chapter adding the flavor on how government is aiming to enhance governance standards and ensure optimal performance of public sector enterprises in Pakistan.

The privatization process in Pakistan from a regulated to a market-oriented economy has spanned over a period of three decades. This chapter offers insight on the historical context of this economic policy shifts, emphasizing on the transition from nationalization in the 1970s to extensive reforms in the 1990s. It also outlines three distinct phases of privatization, from aggressive disinvestment and regulatory reforms in the 1990s to continued divestment efforts post-2008. While privatization has led to revenue boosts in sectors like energy and telecommunications, challenges such as unit closures post-privatization have hindered sustainable growth. Moreover, global examples underscore the diverse outcomes of privatization, emphasizing the need for context-specific approaches and robust regulatory frameworks.