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Pakistan & global competitiveness

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Ehsan Mehmood Khan

Global Competitiveness (GC) Report 2010-11 published by the World Economic Forum and Pakistan’s GC Index therein is a true mirror image of our standing in today’s globalized economy. Global Competitiveness is based on 12 pillars falling under three main factors. Pakistan’s ranking in all these factors is appallingly low. Pakistan’s overall ranking in Global Competitiveness Index is 123 amongst 139 countries. To add to ones’ despair, Pakistan was 101 out of 133 countries last year and has dropped by virtually 20 points this year. Other than Nepal and East Timor, those behind Pakistan are all sub-Saharan countries to include Madagascar, Malawi, Swaziland, Nigeria, Lesotho, Côte d’Ivoire, Mozambique, Mali, Burkina Faso, Mauritania, Zimbabwe, Burundi, Angola and Chad.

To correctly understand the context of the GC Index, its relevance to Pakistan it is important to view Pakistan’s ranking in all 12 pillars. In basic requirements factor, Pakistan is ranked 132 and in its four pillars, 112 in institutions, 110 in infrastructure, 133 in macroeconomic requirements and 123 in health and primary education. In the realm of efficiency enhancers, Pakistan is ranked 95 and in its six pillars 123 in higher education and training, 91 in goods market efficiency, 131 in labor market efficiency, 73 in financial market development, 109 in technological readiness and 31 in market size. It stands 76th in innovation and sophistication and in its two pillars, 79 in business sophistication and 75 in innovation. It may be observed that virtually all pillars are directly or indirectly linked with the quality and competitiveness of people, thus making a case for knowledge-based economy. It is also important to note that all these pillars have policy linkages and implications. There are two main issues that can be discussed herein: our economic efficiency and the economic priority.

The problems with the entity called Pakistan’s economy is that save for the decade of 1960s, it has never been able to salt away the juggernaut of our political opportunity structure. Claims and counter-claims overshadow Pakistan’s economic landscape. Often it is proclaimed by the government that Pakistan is moving fast on the pathway to become Asian Tiger. Soon (with the change of the government), the Tigerhood claims vanish, and it occurs that the national treasury is empty and that Pakistan is at the verge of default.

The problem is not with the size of economic “mass” of Pakistan. Primary issues facing Pakistan’s economy may be summarized as: growth unpredictability because of ever-existing political uncertainly; imprudent allocation of resources; total reliance on domestic borrowings and foreign loans to make for fiscal as well as current account deficit; inability to keep pace with the modern economic trends; and near indifference of the political leadership towards economy. Today, Pakistan’s economic space is marred by rent-seeking at macro-level, opportunity-seizing at meso-level and acute despair at micro level. A lot of water has flown over our heads. It is high time that we start thinking in terms of short-term recovery, medium-term stability and long-term sustainability of our economy.

That said, we also need to seriously revisit our economic priorities both as a state and society. As for now, there seems to be no confusion that education is one of the last concerns of the state. In my honest view, if we do not do anything else and just invest in our people, we can enhance our global competitiveness times more than today and can find a bright socio-economic future in the near term. It is ironic to note that the nation whose tax revenue (to include both direct and indirect taxes) is estimated to be Rupees 1778.7 billion for FY 2010-11, has been allocated a peanut amount of Rupees 34.5 billion for Education Affairs Service in the annual budget. Thus, by means of simple mathematics, Pakistan’s per capita education expenditure comes to virtually Rupees 191; horrifying indeed. Likewise, if we go down to expenditures on higher and lower education separately, the situation is even more awful.

Education is one of the fundamental human rights in today’s world and a duty on every Muslim (both male and female). Even under today’s appalling conditions, Pakistan’s is 26th largest economy of the world. If we are too poor to allocate an appropriate share from the national exchequer of this size on the luxury of education, can we divert Rupees 90 billion being spent on BISP to education?


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