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Industrial Policies
The Political Economy of Industrial Policy in Pakistan 1947-1971
Mushtaq H. Khan, Department of Economics, SOAS, University of London.

The period from 1947 when Pakistan was created to the watershed of 1971 when East Pakistan split off to become Bangladesh is an important one for studying the determinants of industrial performance in the Indian subcontinent. On the one hand, despite substantial differences in the industrial policies of Pakistan and India, their rates of industrial growth were remarkably similar. On the other hand, while Pakistan’s authoritarian institutions had many features similar to contemporary East Asian states, in particular South Korea, its long run performance was much poorer than in the East Asian industrializers. Table 1 Manufacturing Growth Rates in East and South Asia
East Asia South Korea 1950-55 1955-60 1960-65 1965-70 NA NA 11.8 20.0 Taiwan (West) NA NA 12.7 19.1 NA NA (11.1) (7.5) 9.1 5.7 10.0 6.8 Pakistan (East) NA NA (5.7) (6.9) South Asia India

}

6.1 6.8 4.2

Sources: Griffin & Khan (1972) Table Intro.3, World Bank (1994b), World Development Report (1992), Taiwan Statistical Yearbook (various years), Chakravarty (1987): Table 5. Figures not available indicated by NA.

Table 1 summarizes the manufacturing performance of several East and South Asian countries. Comparable figures are only available for the sixties. Table 1 suggests that over the long term, Pakistan’s performance over this period was very similar to that of India with the exception of a burst of industrial growth in the early sixties under Ayub. In contrast, industrial growth rates in the East Asian countries have been consistently high. In the eighties and nineties industrial growth rates in Pakistan and Bangladesh remained at the long-run South Asian level of between five to ten per cent while the East Asian countries continued to industrialize rapidly. 1

The high growth rates in manufacturing in Pakistan for 1950-55 are to some extent a



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