LAHORE: By reducing industrial power tariffs and the export refinance rate, the government has tried to reduce some frictions that impeded growth though hurdles are still there. The private sector should now guide the government in formulating prudent policies.
The prime minister has given the responsibility of recommending measures on improving the economy and commerce to the private sector. Now that the private sector is heading all committees established by the government, they should recommend measures that increase fair competition. The private sector should stop demanding protection against foreign suppliers. They must forgo their vested interests in their policy recommendations that only provide them temporary relief but make them less efficient
The direction of the economy is encouraging. The interest rates are declining, foreign reserves are increasing and little improvement in governance has raised some hopes. However, after achieving macroeconomic stability the planners should pay full attention to the structural imbalances in the economy. Improvements would not come overnight but if the right policies are adopted, we could embark on a sustained growth path that would accelerate as the policies start showing their impact.
Pakistan is not producing true entrepreneurs as the society is operating on corrupt values. Only exceptional entrepreneurs find opportunities in the worst economic scenario but ideal entrepreneurship flourish mostly in transparent and less corrupt societies. Exports from Pakistan are declining despite improved macroeconomic indicators. The current concessions given by the government would likely put a stop to that decline, but we need accelerated exports for sustained growth. Highest job creation in Pakistan would come from export-oriented industries. Moreover, the technology upgrade is witnessed mostly in export-oriented industries, which is essential to produce quality products efficiently.
Exporters make better bosses on average not only in Pakistan but around the world. Exporters achieve higher standards of occupational health and safety. They are equal opportunity employers. Moreover, exporters provide better working conditions as they are obliged to follow all globally acceptable production, environmental and ethical practices.
There may be many reasons for declining exports that would take time to address. However, immediate attention should be given to workers’ productivity that is a major factor in determining the competitiveness of a country. Countries with higher labour productivity have substantial opportunities to maintain higher GDP growth and enhance their exports.
The demographic advantage that Pakistan enjoys would go waste if workers’ productivity remained at the current level. It has now been established that productivity is the highest in countries that are exposed to competition rather than operating in protected mode. Research by creditable global institutions has revealed that more than a 50 per cent increase in global GDP has come from increase in workers’ productivity and the rest from increase in the number of workers.
Growth is essential for survival not only for the country but for companies as well. Large companies that grow below the GDP growth for a period of seven years are likely to go down or be taken over by successful competitors. Large companies should give equal importance to both top line and bottom-line growth. Like in the case of the government, it is also in the supreme interest of an enterprise to foster meritocracy and engagement throughout the company, particularly with the top talent of the company.
Creditable research has shown that SMEs taking full advantage of technologies available through smartphone devices grow at 1.5-2 times higher pace than their peers that still ignore the powerful tools provided by mobiles.
The issues that need immediate attention of the planners are education and health. Without a skilled, educated and healthy human resource we would not be able to reap the dividends of the demographic advantage that we have over all our regional competitors.
Bad governance is the major obstacle for equitable growth. We need transparent policies and systems for selection and appointment of public officials and clearly stated procurement procedures. Social evils like nepotism, favouritism, and even ‘sale of vacancies’ are nurtured due to bad governance. In the absence of transparent systems, the officials concerned have a great propensity to exploit the situation to extort bribes.
