Hope and change for modern Pakistan by ALI KHIZAR AND SOHAIB JAMALI

Hope and change for modern Pakistan
ALI KHIZAR AND SOHAIB JAMALI ARTICLE (March 01 2010): In December 2009, Time magazine carried a front cover with the headline: "The Decade from Hell", describing the state of global economic and political affairs in the last ten years.

This, at the time of limping economy across the world and apocalyptic voices on climate change, scarcity of food and fuel commodities, wars, conflicts and the so-called 'clash of civilisations' presents a rather defeatist outlook on life - a theme not surprisingly in vogue in Pakistan as well.

It's too early to speculate on how will the world deal with these uncertainties. Rest assured, and hopefully so, the world will deal with the problems, given man's ability to handle testing times, especially since the onset of modernity in the post-Dark Ages world. Pakistan, though struggling with a multitude variety of problems, should be no exception.

Opportunities abound for those who see. A great many things are happening and can potentially gather further steam given the yet untapped potential in several fields, including the crucial areas of alternate energy, farming, mining and infrastructural development.

Attractive as they are, however, these new opportunities face a few major barriers. First is the gap between the academia and industry. Broadly speaking, this is true for all forms of industries, farming, manufacturing and the service sector, albeit, the latter is still relatively better off than the former two.

A related problem is that while most government-funded education is found wanting, most private universities are too focused on service industry than the real economy.

Second, is the localisation problem - something that partly stems from the lack of co-ordination between domestic universities and business enterprises. Most firms simply adopt the products, business models and practices of their foreign counterparts. Few adapt to local socio-economic environment, fewer are the result of purely indigenous thought. Businesses' failure to localise themselves and penetrate deeper into the sub-urban and rural market has kept an unwanted dichotomy in the society.

Third, is the lack of documentation and research. Businessmen are quick to point out this fact as the failure on the part of the government. However, those following the industries closely - especially outside the circle of multinationals or big local corporations - know well how ill-documented their industry is.

Elementary information such as market share, price history, cost structure, sales figures and so forth aren't compiled in many cases - even by their trade associations. Those who do, would rather hide the numbers in fear or in favour of one party or another.

A related problem is rampant corruption in private sector. According to Global Competitiveness Index 2009-10, Pakistani private sector corporations are ranked 112 out of 131 in training and employee development, 95 in the degree of customer orientation, 100 in terms of ethical behaviour in interactions with public officials, politicians and other enterprises and 80 when it comes to corporate spending on research and development.

The private sector is also believed to be poorly managed. The GCI reports that there is little reliance on professional management and most corporations rely on relatives or friends without any regard to merit. Pakistan is ranked 91 in this context and 117 in terms of the efficacy and accountability of corporate boards.

These problems converge to serious lack of opportunities for the youth of this country. The median age of Pakistani population is 20.8 years, with 36 percent of the population younger than 14 years. But these demographics, which separates Pakistan from developed and emerging economies (such as China), can potentially backfire unless the potential in real economy is explored with a sense of urgency.

In the developed West, ageing problems are cited as the main reason behind ballooning fiscal deficits. Ageing is also responsible for likely hindrances in their future economic growth owing to unavoidable expenditure on older people in the coming decades.

The unsustainable deficits will eventually shift the nucleus of global growth towards the east, whether or not the West keeps attracting migrants from other economies. Recent developments in Singapore, that plans to offer Swiss-style banking in the aftermath of post-crisis reforms in the banking haven of the world, point in the same direction.

In contrast to developed countries, Pakistan has enough labour force in the form of young and vibrant population to tap the vast under-utilised natural resources. But, if left unguided amid a shortage of basic needs, it can create a social unrest.

The spirits of the masses are already too fragile. Burden them with weak social security, cost-push inflation, income disparity, energy deficit, water shortage, corruption, and the war against terror, and the same population will become a liability instead of an asset.

The mayhem over wheat, sugar, and commodity shortage in Ramazan in recent years are just initial tell tale signs of the kind of chaos that can be in the offing - unless, right policies are framed and implemented soon.

Central to these reforms is the diversion of focus away from service sector towards the real sector for large-scale development of mining, farming, energy and water resources, which is direly needed across the country.

In this context, it is refreshing to see the heightened state of awareness among the youth, many of whom are now questioning the legacy of chequered economic and political decisions made by the generation ago - almost just as government officials are trying to experiment with new policies such as public-private partnerships, restructuring of public sector entities, taxations reforms and so forth.

But, and aside from inter-provincial rifts, perhaps the biggest of all the barriers to the required development is pessimism. It's understandable that current times of upheaval can be quite distressing. However, it is imperative for students, professionals, businessmen and policymakers to understand how to deal with uncertainty, for it can be pernicious for some and fodder for others.

Time and again, history has proved that action is the antidote to despair. What Pakistanis need is to wipe their own slate clean and move forward with a spirit of nation building. Let's get busy.

Source: http://www.brecorder.com/index.php?id=1025802&currPageNo=1&query=&search=&term=&supDate=