FRANCISCO, Ma.

Francesca DL
2ASN2
CHAPTER 6 : NATIONAL OUTPUT AND STRUCTURE ECONOMY

The central role in discussing unemployment and underemployment

in South Asia is : what a country produces and how much its people
earn.
The development of underemployment and unemployment in South
Asia is hindered by the poor quality of statistics.
Problems encountered in the accounting of South Asian economies :
1. sometimes we tend to relate the national income directly to
the net geographical output
o NATIONAL INCOME a very crude indicator of the
degree of development / underdevelopment
- difficulties involved in the way such
an aggregate is defined and the data are compiled
- viewed as the main indicator of
success or failure of development plans
2. actual valuation of output
o economy is often linked to markets which has a bartered
output which implies that tasted and preferences in the
monetized and the bartered market are identical and
that the prices would be similar if the bartered goods
were sold for money
o frailty of data extends to the extent that planning in
South Asia relies on the data available
o REASONS WHY WE HAVE HAZARDED USING STATISTICAL
FIGURES :
Figures on national income play an important role
in economic planning in the region
Such comments as we have already made lay
bare the overwhelming importance of clarifying
the concepts and perhaps changing the entire
focus of the discussion of development of South
Asia
application of Western concepts may be
unsuitable for most or some of the South
Asian countries
A possibility that evidence presented here may
have some rough relationship to reality
The comparison of income per person indicates a wide disparity
between the poorest country in the region
1. exchange rate varies

For this data to be comparable, this implies that the relationships

between gross national product, gross domestic product, national
income and similar aggregates at either market prices or factor cost
of some particular year, are stable for each country.
The general picture for South Asian countries whose data seem
somewhat more reliable appears to be roughly as follows : Pakistan,
Thailand and Ceylon were relatively stagnant in terms of output per
person.
To get the broad picture of the structure of the economy in the
South Asian countries : break up the aggregate figure for national
income into its component parts and relate the income originating
in each main sector to the number of persons employed in, or
earning their livelihood from, that sector.
The statistics on occupational distribution are especially
UNRELIABLE
The definitions of AGRICULTURAL and NON-AGRICULTURAL vary
from country to country and the statistics coupled with these
definitions are questionable.
Half the income in South Asia originates from the agricultural and
some two-thirds to three-quarters of the people gain their livelihood
form AGRICULTURE.
Agricultural output per person remained relatively stagnant in the
region as a whole during the 1950s and the early 1960s.
Non-agricultural sector in South Asia is a mixed bag of occupational
groups, retail trade, domestic service and the government positions.
The proliferation of retail outlets and petty traders and the growing
number of middlemen can easily be seen
The growth of petty trading has been a response to a trend toward
URBANIZATION
Public expenditures for government activity have risen in response
for the needs of development.
One explanation for the increasing waste in the public sector is the
pressure exerted by the so-called educated unemployed who seek
clerical positions.
Plantations in South Asia should be considered as industrialized
agriculture. These plantations play a big role in the export
programs.
2 MAIN AVENUES OF GROWTH OPEN TO THE POORER COUNTRIES :
1. to rationalize agricultural techniques
2. to reduce the relative significance of traditional
agriculture
BOTH AVENUES REQUIRE / IMPLY INDUSTRIALIZATION
South Asian countries look to industrialization outside the
agricultural sector

MANUFACTURING importing of raw materials levels of wages and

labor productivity investment as well
A combination of capital scarcity with low levels of labor skills, work
discipline and efficiency results in low productivity and wages in
South Asian economies
3 INDUSTRIAL ESTABLISHMENTS WITHIN THE BRANCHES OF
MANUFACTURING:
1. COTTAGE INDUSTRY small in scale and frequently
confined to a single dwelling unit
2. SMALL - SCALE INDUSTRY using modern techniques ;
LABOR SAVING WITH HIGH CAPITAL INVESTMENT
3. LARGE SCALE INDUSTRY using large capital
investments
and raw materials ; LABOR SAVING WITH HIGH
CAPITAL INVESTMENT