A chronic deficit in the balance of payments is a problem which plagues almost all developing countries. In Pakistan, as in other countries, the develop¬ment plans have contained a two-pronged approach to the problem: to increase exports and to reduce the need to import through a process of import substi¬tution. Exports have bsen encouraged by giving numerous concessions and subsidies to the exporting firms1 but the best known and most successful of the export promotion schemes is the bonus voucher system2;3. Industrialization has been pursued behind a wall of tariffs and import licen¬sing which have provided generous incentives for the establishment in Pakistan of import-substituting industries. Within this framework of high protection to ……….