Export Incentives and Industrial Efficiency
Foreign exchange constraint, due to recurring balance of payments deficits, is a common feature of the developing countries. In order to boost the growth of their exports, particularly those of manufactured and non-traditional products, these countries have, from time to time resorted to various incentive schemes which have the effect of creating a dual exchange rate regime. The success or failure of these schemes has generally been judged in terms of improvement in export performance only. But these schemes have many indirect effects which have a bearing on industrial efficiency. Thus there can be situations where production may increase without regard to efficiency and exports may become profitable without being competitive. The expected long run beneficial effects of these schemes may tend to get partially or wholly negated. A prominent example of such a scheme is the export bonus scheme (EBS) of Pakistan which
Export Policy in Pakistan
One of the main objectives of Pakistan's export policy has been the promotion of exports of manufactured goods. This is an objective which many underdeveloped, predominately primary-exporting countries have in common because of their interest in export diversification. The general arguments us.ed to justify such a policy, e.g., improvement in the terms of trade and increased stability of export proceeds-will not, however, be discussed in this paperI. Attention will instead be focussed on the economic consequences of the specific measures adopted by Pakistan, namely, a combination of export duties and subsidies which discriminate in favour of processed goods and against raw materials.
The Export Bonus Scheme. A Preliminary Report
The purpose of this paper is to present an interim report on a study of the Export Bonus Scheme now underway at the Institute. The Institute plans to publish in monograph form later this year a complete report of its findings on this subject. The objective in making this preliminary report available is to attract comments and criticisms of the approach employed and the data used from other people interested in and acquainted with the Export Bonus Scheme