ECONOMY OF PAKISTAN AND SOLUTIONS

ECONOMY OF PAKISTAN AND SOLUTIONS

How can we overcome these challenges and problems and improve our economy? A lot
has been written and talked about, but I will focus on only a few action points

1. Change in National Psyche and Mindset.
2.  Building up of Human Capital.
3.  Use of Technology.
4.  Young Labour Force
5.  Governance, Devolution and Decentralization.

1. Change in National Psyche and Mindset. We as a nation are too much
negative oriented and too much  cynical where we find everything wrong in this
country. Unless we change our mindset and unless everybody who is doing what
he is supposed to do, carries out his or her task with sincerity and honesty, we
are not going to go anywhere. We should not expect any Messiah to come and
fix our problems we have to do it ourselves individually and collectively. There
are no short cuts available.  Media is  muddying the water by their sensational
stories and inviting so called experts who contribute in projecting negative
thinking and negative national psyche. Unless we have a positive “can do”
mentality, it will be difficult to progress. Unless each one of us changes our
mindset rather than blame the government and the system, we are not going to
go anywhere in this race for global economic survival. This is easier said than
done. But I expect our younger generation to be more responsive and
responsible.
2.  Building up of Human Capital. There is no substitute to building up human
capital. Private sector, public sector,  NGOs, local communities, philanthropists
etc, all here to put their hands on deck and participate in making sure that every
child goes to school. Every high school graduate has some technical and
vocational skill or goes for higher education. Unless we build up human capital,
we are just going to be left behind because the world economy is going to be a
knowledge based economy. It is not an economy where you memorize material
or reproduce that in the exam and forget about it - that is no longer the case. One
has to acquire the knowledge and use it in order to apply to problem solving. This
is a new paradigm where human capital is as important as machinery and
equipment. Pakistan lags behind other countries in the institutions, infrastructure
and incentives for human capital formation. We have no choice but to accelerate
the pace to catch up with others.
3.  Use of Technology.  The technology is spreading like a wild fire. How many
people five years ago could have thought that even in a small towns and villages
of Pakistan, one would access to mobile telephones. 95 million Pakistanis have
mobile phones today. You  can use this technology in order to provide them
banking services, information on climate/weather, agriculture extension, health,
education etc. It is a powerful tool which can leapfrog a lot of time which we have
wasted. Using technology particularly the information/communication technology
for the betterment of social and economic problems of Pakistan is something
which needs to be done but it cannot be done the way we have
compartmentalized this into different ministries. A more holistic and
comprehensive approach that deploys technology for poverty reduction has to be
put in place.
4.  Young Labour Force.     Pakistan is one of the few countries which has a young
labour force which can be harnessed for its own and global economy. Japan,
Europe, USA and after 2050 China are going to have aging population where the
ratio of old to young people is going to  increase. India and Pakistan are two
countries where the ratio of younger people to the older ones is going to
increase. If we tool these young men  and women properly, we increase the
female labour force participation, give them skills and knowledge, they can
become the labour force for the rest of the world. This will give a big boost to
Pakistan’s own economy. In 2001, worker  remittances were less than a billion
dollars; today we have almost 7-8 billion  dollars. Now this can be multiplied by
three or four times if we have educated labour force i.e. skilled labour force going
for overseas employment. This is also a way to create employment opportunities
because if you have large number of younger people coming to labour force and
you don’t have job opportunities for them you can have social upheaval.
Therefore, it is imperative to create employment opportunities for them and one
of the avenues is to train them in the kind of the skills which are needed not only
by the national economy but also by the international economy.
5.  Governance, Devolution and Decentralization. As the population is
increasing, one cannot govern Pakistan sitting in Islamabad, Karachi, Lahore,
Peshawar or Quetta. One has to devolve powers, decentralize and delegate
authority, provide resources  to the local/district governments so that they can
take decisions at their own. Those decisions would be very much in accordance
with the requirements and the needs of those communities. Sitting in Islamabad
one cannot visualize what is needed in  Chaghi or Loralai, but the people in
Loralai and Chaghi know exactly whether  they need water, fertilizers or fruit
processing industry. Let us devolve powers to the people at the grassroots level
and there would be much better allocation and utilization of resources. There
must, however, be accountability of the  local governments by the provincial
governments and of provincial governments by the federal government but not
interference or usurpation of powers. If we do that, then a lot more can happen
with same amount of resources which are being wasted today, and the economic
growth rate can be raised from 6-7 percent average to 8-9 percent annually.