Foreword

The Asian Development Bank (ADB) and Pakistan have been development partners for almost 35 years. The first loan provided by ADB to Pakistan was in 1968. ADB's cumulative assistance to Pakistan in the form of public sector loans amounts to over $12.45 billion, and the country programme has been significantly enhanced over the last few years, averaging over $1 billion in 2002-03. During the period 2004-06, ADB plans to provide assistance of about $2.7 billion to the country, as detailed in ADB's Country Strategy and Programme (CSP) for Pakistan, discussed by the ADB Board of Directors in May 2002. ADB's Poverty Reduction Strategy, approved in November 1999, articulated poverty reduction as the Bank's overarching goal, and the Bank is committed to supporting poverty reduction efforts in developing member countries. ADB shares a vision for poverty alleviation with the Government of Pakistan and supports the ongoing wide-ranging and extensive reform agenda.

To complement ADB lending operations in Pakistan, in early 2003 ADB's Pakistan Resident Mission (PRM) in association with the ADB Institute, Tokyo, initiated a series of policy seminars in Pakistan to be delivered by the ADB Institute. These are intended to inform the policy community in Pakistan of international thinking and experience in a number of important areas. The first set of these seminars was held in Pakistan in November 2003 on the important topic of `Industrial Competitiveness`. As part of the preparation for the seminars, the ADB Institute produced a detailed background paper written by Sanjaya Lall of Oxford University and John Weiss of ADB Institute.

Given the importance of this topic, PRM feels that it would be useful to circulate the paper to a wide audience. Hence it is produced here as a joint publication of PRM and the ADB Institute. We hope that it will not only contribute to the debate on this key issue in Pakistan but will also prove useful for scholars, development practitioners and policy analysts.

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