A Note on the Consistency of Pakistan’s Cotton-Cloth Statistics for Recent Years (Notes & Comments)

This brief note is written in the hope that some further light can be shed on the cotton-textile situation in Pakistan, since available (and widely used)i data appear to be internally inconsistent. There seems to be a rather startling inconsistency among the data (for the 1960’s) on production, exports, and domestic prices of cotton cloth, given reasonable assumptions about the income and price elasticity of demand. The most likely explanation for the inconsistency is that the cotton-textile production figures are currently being underestimated, and that the growth rate of cotton-textiles is also being underestimated. Since cotton textiles make up about one quarter of value added in large-scale manu¬facturing industries in Pakistan, the effect of a substantial understatement in the growth of the cotton-textile industry on the growth rate of manufacturing could be quite marked. There has been a very good performance rate in cotton-textile exports in the past several years, both with respect to the rate of increase in exports and the rising share of cotton-textile production that is exported. It is this very promising improvement in export performance that led to the questions raised here.