IDEAS home Printed from https://ideas.repec.org/a/lje/journl/v20y2015ispp205-224.html
   My bibliography  Save this article

The State of Manufacturing in Pakistan

Author

Listed:
  • Rajah Rasiah

    (Department of Development Studies, University of Malaya)

  • Nazia Nazeer

    (Department of Economics, University of Malaya)

Abstract

The history of successful industrializers, such as South Korea and Taiwan, shows a systematic shift in the production structure from low- to high- value added activities in manufacturing and its resulting impact on agriculture, mining and services. Within manufacturing, the transformation is seen in both a movement from low-value added sectors, such as apparel making, to high-tech activities, such as automotive and electronics products, and, within particular industries, vertical integration into knowledge-intensive activities. Pakistan’s failure to engender the conditions to stimulate technological upgrading within its leading manufacturing industry of clothing, and a shift away to higher-value added industries is the prime reason why the country has not achieved rapid growth in GDP per capital over the long-term. This paper discusses Pakistan’s stagnation in manufacturing over the period 1960-2013 against the experience of the rapid industrializers of South Korea, Taiwan and Malaysia. Drawing on empirical evidence it argues that Pakistan requires a dynamic industrial policy that focuses on technological upgrading in its existing manufacturing sectors and the creation of competitive advantage in high value-added sectors if the country is to experience sustained long-term economic growth.

Suggested Citation

  • Rajah Rasiah & Nazia Nazeer, 2015. "The State of Manufacturing in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 20(Special E), pages 205-224, September.
    • Handle: RePEc:lje:journl:v:20:y:2015:i:sp:p:205-224
    as

    Download full text from publisher

    File URL: http://121.52.153.179/JOURNAL/volume%2020-se/09%20Rasiah%20and%20Nazeer.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rajah Rasiah & Yap Xiao Shan & Yap Su Fei, 2015. "Sticky Spots on Slippery Slopes: The Development of the Integrated Circuits Industry in Emerging East Asia," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 7(1), pages 52-79, April.
    2. Rajah Rasiah & Ajit Singh & Dieter Ernst, 2015. "Alice Hoffenberg Amsden: A Consummate Dirigiste on Latecomer Economic Catch-Up," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 7(1), pages 1-8, April.
    3. Lall, Sanjaya, 1992. "Technological capabilities and industrialization," World Development, Elsevier, vol. 20(2), pages 165-186, February.
    4. Singh, Ajit, 1989. "Third World Competition and De-industrialisation in Advanced Countries," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 13(1), pages 103-120, March.
    5. Rowthorn, R E, 1979. "A Note on Verdoorn's Law," Economic Journal, Royal Economic Society, vol. 89(353), pages 131-133, March.
    6. Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542.
    7. Richard Nelson, 2008. "Economic Development from the Perspective of Evolutionary Economic Theory," Oxford Development Studies, Taylor & Francis Journals, vol. 36(1), pages 9-21.
    8. World Bank, 2014. "World Development Indicators 2014," World Bank Publications - Books, The World Bank Group, number 18237.
    9. Rosenberg,Nathan, 1983. "Inside the Black Box," Cambridge Books, Cambridge University Press, number 9780521273671, January.
    10. Carl J. Dahlman, 1984. "Foreign Technology and Indigenous Technological Capability in Brazil," Palgrave Macmillan Books, in: Martin Fransman & Kenneth King (ed.), Technological Capability in the Third World, pages 317-334, Palgrave Macmillan.
    11. World Bank, 2008. "World Development Indicators 2008," World Bank Publications - Books, The World Bank Group, number 28241.
    12. World Bank, 2008. "World Development Indicators 2008," World Bank Publications - Books, The World Bank Group, number 11855.
    13. Rajah Rasiah, 2004. "Technological intensities in East and Southeast Asian electronics firms: Does network strength matter?," Oxford Development Studies, Taylor & Francis Journals, vol. 32(3), pages 433-455.
    14. Rajah Rasiah, 2007. "The systemic quad: technological capabilities and economic performance of computer and component firms in Penang and Johor, Malaysia," International Journal of Technological Learning, Innovation and Development, Inderscience Enterprises Ltd, vol. 1(2), pages 179-203.
    15. Alice H. Amsden & Wan-wen Chu, 2003. "Beyond Late Development: Taiwan's Upgrading Policies," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011980, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bilal Raza, 2021. "Balance of Payments Constrained Growth in Pakistan - Implications for Development Policy," SBP Working Paper Series 107, State Bank of Pakistan, Research Department.
    2. Ghulam Yahya Khan & Salik Mehboob & Lydia Bares Lopez, 2018. "Deindustrialization and Economic Growth: Empirical Evidence from Pakistan," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 6(4), pages 462-475, December.
    3. Nazia Nazeer & Rajah Rasiah, 2016. "Explaining Pakistan’s Premature Deindustrialization," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 21(Special E), pages 351-368, September.
    4. Rajah Rasiah & Shujaat Mubarik & Xiao-Shan Yap, 2017. "Financing Technological Upgrading in East Asia," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 22(Special E), pages 153-182, September.
    5. Rajah Rasiah & Nazia Nazeer, 2016. "Comparing Industrialization in Pakistan and the East Asian Economies," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 21(Special E), pages 167-192, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rajah Rasiah & Nazia Nazeer, 2016. "Comparing Industrialization in Pakistan and the East Asian Economies," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 21(Special E), pages 167-192, September.
    2. Rasiah, Rajah & Shahrivar, Rafat Beigpoor & Yap, Xiao-Shan, 2016. "Institutional support, innovation capabilities and exports: Evidence from the semiconductor industry in Taiwan," Technological Forecasting and Social Change, Elsevier, vol. 109(C), pages 69-75.
    3. Rajah Rasiah & Shujaat Mubarik & Xiao-Shan Yap, 2017. "Financing Technological Upgrading in East Asia," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 22(Special E), pages 153-182, September.
    4. Kravtsova, Victoria & Radosevic, Slavo, 2012. "Are systems of innovation in Eastern Europe efficient?," Economic Systems, Elsevier, vol. 36(1), pages 109-126.
    5. Fagerberg, Jan & Srholec, Martin & Verspagen, Bart, 2010. "Innovation and Economic Development," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 833-872, Elsevier.
    6. Kaushik Basu, 2016. "Beyond the Invisible Hand: Groundwork for a New Economics," Economics Books, Princeton University Press, edition 1, number 9299.
    7. Philip G. Pardey & Jason M. Beddow & Terrance M. Hurley & Timothy K.M. Beatty & Vernon R. Eidman, 2014. "A Bounds Analysis of World Food Futures: Global Agriculture Through to 2050," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(4), pages 571-589, October.
    8. Rajah Rasiah & Jebamalai Vinanchiarachi, 2013. "Institutional Support and Technological Upgrading: Evidence from Dynamic Clusters in Latin America and Asia," World Economic Review, World Economics Association, vol. 2013(2), pages 1-24, February.
    9. Andrea Morrison & Lucia Cusmano, 2015. "Introduction to the Special Issue: Globalisation, Knowledge and Institutional Change: Towards an Evolutionary Perspective to Economic Development," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 106(2), pages 133-139, April.
    10. Mutsa Mutowo & Usha Gowda & John Mangwiro & Paula Lorgelly & Alice Owen & Andre Renzaho, 2015. "Prevalence of diabetes in Zimbabwe: a systematic review with meta-analysis," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 60(1), pages 1-11, January.
    11. Melloul Anass & Chaik Saif Eddine & Oujgha Reda, 2017. "Empirical Analysis of Islamic Banking and Economic Growth," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 1, pages 89-102, March.
    12. David E. Bloom & Jocelyn Finlay & Salal Humair & Andrew Mason & Olanrewaju Olaniyan & Adedoyin Soyibo, 2016. "Prospects for Economic Growth in Nigeria: A Demographic Perspective," PGDA Working Papers 12715, Program on the Global Demography of Aging.
    13. Jan Fagerberg & Martin Srholec, 2017. "Global Dynamics, Capabilities and the Crisis," Economic Complexity and Evolution, in: Andreas Pyka & Uwe Cantner (ed.), Foundations of Economic Change, pages 83-106, Springer.
    14. Liverpool-Tasie, Lenis Saweda, 2012. "Targeted Subsidies and Private Market Participation: An Assessment of Fertilizer Demand in Nigeria:," IFPRI discussion papers 1194, International Food Policy Research Institute (IFPRI).
    15. Klaus Desmet & Ignacio Ortuño-Ortín & Romain Wacziarg, 2009. "The political economy of ethnolinguistic cleavages," Working Papers 2009-17, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
    16. Shafaeddin, Mehdi, 2010. "Trade liberalization, industrialization and development; experience of recent decades," MPRA Paper 26355, University Library of Munich, Germany.
    17. Seung-Whan Choi & James A. Piazza, 2017. "Foreign Military Interventions and Suicide Attacks," Journal of Conflict Resolution, Peace Science Society (International), vol. 61(2), pages 271-297, February.
    18. Minh Quang Dao, 2012. "Government expenditure and growth in developing countries," Progress in Development Studies, , vol. 12(1), pages 77-82, January.
    19. Nicole Grunewald & Inmaculada Martínez-Zarzoso, 2009. "Driving Factors of Carbon Dioxide Emissions and the Impact from Kyoto Protocol," Ibero America Institute for Econ. Research (IAI) Discussion Papers 190, Ibero-America Institute for Economic Research.
    20. David M. Waguespack & Robert Salomon, 2016. "Quality, Subjectivity, and Sustained Superior Performance at the Olympic Games," Management Science, INFORMS, vol. 62(1), pages 286-300, January.

    More about this item

    Keywords

    Manufacturing; industries; policy; Pakistan;
    All these keywords.

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lje:journl:v:20:y:2015:i:sp:p:205-224. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Shahid Salahuddin (email available below). General contact details of provider: https://edirc.repec.org/data/lsecopk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.