Capital Labour Substitution in the Large-scale Food-processing Industry in Pakistan: Some Recent Evidence
Food-processing is one of the first industries developed by man. Most agricultural commodities require some sort of processing for them to be edible. In primitive societies man processed his own food using the simple mortar and pestle. With the advent of industrialisation there emerged important implications for foodprocessing technologies. The workers in the industrial and commercial sectors of urban areas required greater supplies of food. This encouraged the establishment of processing plants supplemented by storage facilities to ensure that the urban population received the food that they required. Food-processing, therefore, began to occupy a fairly predominant position in the overall industrial sector. Its importance was heightened by its strong backward and forward linkages with the rest of the economy. In a labour-surplus developing economy, where most of the labour is unemployed or underemployed, the absorption of this surplus labour force in the industrial sector is an important issue. In recent decades, there has been significant growth in the industrial sector in most developing countries, in terms of both
Production Relationships in Pakistan's Manufacturing Industries
Despite the fact that there are great disparities in factor endowments, -techniques employed in the manufacturing sector of underdeveloped labour -surplus countries are comparable to those of highly industrialized capital .abundant countries like the United States. A.R. Khan in his paper on capital intensities and factor use [13] concluded from an international comparison of factor intensities that Pakistani capital intensities are near the American level in a number of industries while in some cases they are even higher.
Employment Aspects of ~ndustrial Growth in West Pakistan
Employment has been one of the major explicit objectives of all development plans in Pakistan. The Third Five Year Plan estimated [3] that at least 255,000 additional employment opportunities would be created in West Pakistan in large-scale manufacturing sector. Although complete reliance on the date reported about employment in the C.M.I. is not recommended. the orders of magnitude can easily be seen. It appears from the statistics available that employment in this sector has increased by approximately 90,000- 100,000 only during these eight years. The average annual rate of growth of employment between 1954-1959/60 was 16.8 %, slightly higher than 15.6% annual rate of output growth but this rate declined to 3.1 % between 1959/6() and 1967/68 while output at factor cost rose by about 11.4%. The output elasticity of demand for labour thus works out to be 0.27 for this period. Implicit in these growth rates is the fact that labour productivity was increasing at an average of 8 % per year.