Title: Foreign Trade Regime and Savings in Pakistan
Abstract: Without generating high growth rates of national income, a country cannot make a sustained attack on poverty, unemployment, and other economic problems. Developing countries have, generally, pursued the goal of rapid economic growth with the help of industrialisation. In this regard, an optimal structure of the industries enables a country to experience 'sustainable' economic growth. Countries adopt various trade strategies to allocate resources to their optimal use in order to exploit their industrial potential. Developing countries, including Pakistan, have adopted the import -substituting (IS) trade strategy to foster industrialisation.1 But the disillusionment with the IS strategy and its results is increasing over time. Contributing to this trend is the remarkable increases in growth rates by many countries that have shifted to an export-promoting (EP) trade strategy. At the same time came a fundamental question of the adequacy of economic growth itself. That is to what extent the economic growth under the IS strategy has given rise to the unfavourable results with respect to employment, capital accumulation, and income distribution. Analysis of these effects presents a tall order and we do not go that far in their evaluation. In this study we restrict ourselves to the question how various trade regimes are related with savings. The nature of this relation is somewhat complex.