Even after six decades of her existence, Pakistan struggles at the paltry $25 billion export level. Despite having one of the largest work forces in the world, today even the tiny Sweden exports more than us!
What is the secret that makes others more successful than us? Why it is that today even Bangladesh has exceeded our export levels. To find out the secret let’s look at the following map which illustrates who exports what in this world.
Fact 1: As you can see from this map, the richest countries in the world are not those which possess abundant natural resources but those that produce value added goods. Leaving aside Qatar, the world’s top ten countries are also the world’s leading exporters.
Fact 2: The exporters of value added products are those countries which are among the highest spenders on education. They invest on their real resource i.e. the human capital rather than wasting money on metro bus.
Fact 3: With an overall population of some 185 million, Pakistan has almost a 100 million people below the age of 20. This window of opportunity will not last long unless we invest massively in education, science, technology and innovation over the next decade. Otherwise this population bulge will soon turn into a demographic disaster.
Fact 4: At present Pakistan invests merely two percent of its GDP on education. If we want to go from the low value added agricultural economy to a high-value added knowledge economy we need to spend much more than this on education.
Fact 5: The government needs to introduce mechanisms to foster private sector Research and Development (R&D). Nations can only enhance the level of innovation and competitiveness by massive investments in R&D. Government also needs to take steps to encourage private sector R&D activities.
Fact 6: We should encourage and develop policies to encourage new entrepreneurs to build export oriented businesses. However with a low savings rate Pakistan needs foreign investment for economic growth.
Fact 7: To attract foreign investment we need to lower costs of doing business in Pakistan. At present labor and electricity costs in India and Bangladesh are lower than in Pakistan. Many countries in the past have industrialized rapidly by attracting export oriented foreign investment.
Fact 8: To ensure equitable development we must build adequate infrastructure in all districts of Pakistan. China is an eye opener for the world where economic growth has remained limited to the coastal regions while the rest of the country remains backwards.
Fact 9: Pakistan China economic corridor is a major project which will yield long term benefits but we need to do much more than this for rapid industrialization. Pakistan should seek greater access to the western markets.
Fact 10: To industrialize rapidly Pakistan needs to increase its trade with its neighbors. At present exports to both Iran and India form a negligible portion of our total exports.
Fact 11: Pakistan can never develop economically until it rids itself of the menace of terrorism. This is a fact which our policy makers should always remember. With low savings we need foreign investment for economic growth and no foreign investor is going to walk into an unstable country.
Fact 12: Fact 11 is the most important factor which our government needs to deal with on an emergency basis in order to ensure progress of the country.
It’s a pity that it took the government of Nawaz Sharif a year and a half to realize that terrorism is the greatest threat to the country.
Undoubtedly Pakistan is a land of great potential and time has come that we unlock this potential on an emergency basis for with three million new entrants in the job market; time is a luxury we simply don’t have.
