Special Edition-07.pdf - Lahore School of Economics

24
A. R. Kemal
while productivity growth is quite encouraging it needs to be noted that it
reflects rather poor levels of productivity levels in the base year and has
been just catching up through learning by doing. There has been hardly any
growth in productivity arising from technological development and human
resource development.
Table-6: Trends in Total Factor Productivity
(%age Growth Rates)
Sector
Contribution of
GDP*
Capital Labour TFP
Overall 5.31 2.48 1.17 1.66
Agriculture 3.89 2.70 0.82 0.37
Manufacturing 6.39 2.23 0.94 3.21
Contribution to
Aggregate Growth 46.62 22.12 31.26
Agriculture Growth 69.33 21.11 9.57
Manufacturing Growth 34.99 14.74 50.27
Source: Kemal, Muslehuddin and Qadir (2002)
TFP growth in the manufacturing sector has shown wide variations.
It has accounted for almost a 3% increase in output per annum in the 1960s
and 1980s, but it was quite low in the 1970s and in the 1990s. In the
1990s it was just 0.78%. However, in the manufacturing sector it was
1.64%.
Table-7: Trends in Total Factor Productivity during 1990s (%)
Sector
Growth Rates
GDP Capital Labour Residual
Overall 4.41 2.38 1.25 0.78
Agriculture 4.54 2.21 0.81 1.52
Manufacturing 3.99 2.09 0.25 1.64
Contribution to
Overall Aggregate Growth 53.97 28.25 17.78
Agriculture Growth 48.63 17.83 33.55
Manufacturing Growth 52.54 6.26 41.20
Source: Kemal, Muslehuddin and Qadir (2002).