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Special Edition-07.pdf - Lahore School of Economics

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24<br />

A. R. Kemal<br />

while productivity growth is quite encouraging it needs to be noted that it<br />

reflects rather poor levels <strong>of</strong> productivity levels in the base year and has<br />

been just catching up through learning by doing. There has been hardly any<br />

growth in productivity arising from technological development and human<br />

resource development.<br />

Table-6: Trends in Total Factor Productivity<br />

(%age Growth Rates)<br />

Sector<br />

Contribution <strong>of</strong><br />

GDP*<br />

Capital Labour TFP<br />

Overall 5.31 2.48 1.17 1.66<br />

Agriculture 3.89 2.70 0.82 0.37<br />

Manufacturing 6.39 2.23 0.94 3.21<br />

Contribution to<br />

Aggregate Growth 46.62 22.12 31.26<br />

Agriculture Growth 69.33 21.11 9.57<br />

Manufacturing Growth 34.99 14.74 50.27<br />

Source: Kemal, Muslehuddin and Qadir (2002)<br />

TFP growth in the manufacturing sector has shown wide variations.<br />

It has accounted for almost a 3% increase in output per annum in the 1960s<br />

and 1980s, but it was quite low in the 1970s and in the 1990s. In the<br />

1990s it was just 0.78%. However, in the manufacturing sector it was<br />

1.64%.<br />

Table-7: Trends in Total Factor Productivity during 1990s (%)<br />

Sector<br />

Growth Rates<br />

GDP Capital Labour Residual<br />

Overall 4.41 2.38 1.25 0.78<br />

Agriculture 4.54 2.21 0.81 1.52<br />

Manufacturing 3.99 2.09 0.25 1.64<br />

Contribution to<br />

Overall Aggregate Growth 53.97 28.25 17.78<br />

Agriculture Growth 48.63 17.83 33.55<br />

Manufacturing Growth 52.54 6.26 41.20<br />

Source: Kemal, Muslehuddin and Qadir (2002).

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