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| The application of development theories and strategies for Pakistan |
 PRINTABLE VERSION |
Marxian theory is not applicable to underdeveloped countries. Marx did not think of the problems of such countries, for he was mainly concerned with the development, the primary aim is to create larger employment opportunities to increase purchasing power and fresh demand, to build a strong capital base and increase productive and technical capacities within the economy.
According to Paul. N. Rosenstein Rodan, a big push or a large comprehensive program is needed in the form of a high minimum amount of investment to overcome the obstacles to development in an underdeveloped economy and to launch in on the path to progress. The theory states that proceeding kit by kit will not launch the economy successfully on the development path rather; a minimum amount of investment is a necessary condition for this. It necessitates the obtaining of external economies that arise from the simultaneous establishment of technically interdependent industries. Thus indivisibilities and external economies flowing from a minimum quantum of investment are a prerequisite of launching economic development successfully. He distinguishes between three kinds of indivisibilities and external economics.
1. Indivisibility in the production function, specially of social overhead cost (SOC)
2. Indivisibility of demand
3. Indivisibility inn the supply of Savings.
A similar theory is presented by R. Nurkse. According to him, the vicious circles of poverty are at work in underdeveloped countries which retard economic development. If they are broken, economic development will follow. The vicious circles operate both on supply side and demand side. They can be broken by balanced growth in all the sectors.
These theories are also inapplicable to Pakistan. They neglect the investment in the agricultural sector, which is the basis of our economy. Indeed, the decades of neglect in this sector have already taken their toll, with a decline in the contribution from agriculture to the national economy. These theories also neglect the economics from import substitutes and exports promotion. These do not consider economic planning, and they are beyond the capabilities of LDCs because of the shortage of resources.
The concept of unbalanced growth is popularized by Hirschman. It is his contention that deliberate unbalancing of the economy according to a predesigned strategy is the best way to achieve economic growth in an underdeveloped country. According to him, investment in strategically selected industries or sectors of the economy will lead to new investment opportunities, and so pave the way to further economic development. In practice, development policy should aim at:
1. Prevention of convergent series of investment.
2. Promotion of divergent series of investment.
This is possible by investing either in SOC (Social Overhead Capital) or DPA (directly productive activities). The path of development via SOC capacity is self-propelling and essentially permissive. The other, via SOC shortage, is an instance of disorderly compulsive sequence. According to Hirschman, economic development typically follows a path of uneven growth; that balance is restored as a result of pressures, incentives and compulsions.
This theory is beyond the capabilities of underdeveloped countries, due to the lack of factor mobility and lack of basic facilities. The result of this theory is the emergence of inflationary pressures.
Strategies to be adopted for Pakistan
The development strategy for Pakistan should be made according to the circumstances of the country and keeping in view its capabilities, natural, financial and human resources, its basic needs, political institutional and social frame-work etc. This is essential so that policies are applicable to the country for development, and keep in view the overall needs of the people, the levels of literacy, development and so on in the country at large.
Pakistan is basically an agrarian country. Agriculture is called its backbone. For the development of Pakistan, it is necessary to develop its agriculture. Agricultural activities are mostly done under private sector, but the government should take initiative steps to promote the agri-sector. It is necessary to increase total output and production per acre to become self-sufficient, especially in food despite being an agricultural country, we have to import wheat. This practice must be stopped. There should be technical improvements on the land in order to boost productivity and take advantage of the full potential in this sector.
The government should implement the land reforms and keep a tight watch on the implementation. Credit facilities small farmers should be extended so that they can expand their activities. The government should also make arrangements for the supply of inputs like seeds, fertilizers and pesticides are reasonable prices and without adulteration. The government should encourage small farmers and those who themselves cultivate their land, rather those big land lords who live in big cities and do not participate in the production process.
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aneel SALMAN
aneel SALMAN Lecturer, Dept of Economics Forman Christian University, Pakistan. Currently a Fulbright Scholar, pursuing PhD in Economics at Rensselaer Polytechnic Institute (RPI) Troy, NY USA 12180-3590 Email: aneelsalman@yahoo.com
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