Imagine a country where more than 15 percent of the population was brutally massacred in 100 days in the struggle for power between two ethnic groups. So it went morally, socially, politically, and financially bankrupt some 20 years back. However, it learnt the lesson that it could not depend on foreign aid in the long run, except for knowledge and the development of institutions. By defining safety, security, zero tolerance for corruption as key national values, it started rebuilding the country on the basis of self-reliance and complete rejection of foreign help. Today, it is ninth fastest growing economy in the world with a GDP growth of 7 percent to 8 percent since 2005. It has spent over 4 percent of its budget over the years for education and character building. This is the story of Rwanda - a landlocked country with minimum resources, but with determination to progress. Over the last 10 years, its leadership has consistently promoted free enterprise, innovation, and intolerance of corruption with quick accountability and high moral values to drive such social and economic development.

Malaysia is yet another example of a nation that rose from crises and decided to attain the status of a developed country by 2020. They are working with this vision and following consistent policies over the past 40 years. Education, ethical business practices and merit are yet again the key ingredients in driving its growth

Gross domestic product (GDP), a key economic indicator, is a function of adequate capital, quality human resource (labour) and optimum utilisation of material resources. The growth of GDP is a function of increase in value addition or quantity or both of product and services in a country year by year. In developing economies, the quality and quantity of labour play a pivotal role in financial growth. As a matter of principle, capital is attracted towards passionate, trustworthy and knowledgeable people, who can put the material resources at optimum utilisation and generate the expected rate of return on the capital employed under pro-business environment.

As a policy, Pakistan has to decide how to evolve its society and economy, what should be the key growth drivers, and how they need to be improved, benchmarked and measured over the period.

The table below benchmarks state of affairs in Pakistan.

    Pakistan    India    Bangladesh    Malaysia    China    Rwanda    World   

 GDP (Purchase Power Parity) by Sector       

    Agriculture    USD billion    103.4     805.0     52.9     58.5     1,200.9     5.0      4,904.1    

     Industry    USD billion    131.2    852.3     87.4     202.7     5,769.1     2.1      25,102.2    

     Services    USD billion    279.9     3,077.8     165.3     230.7     5,410.1     7.9      53,113.7    

     TOTAL    USD billion    514.6    4,735.0    305.5    492.0    12,380.0    14.9     83,120.0   

   

 Labour Force by Sector   

     Agriculture    Population million    27.2    264.2    34.7    1.7    291.9    4.0    1,203.0   

     Industry    Population million    12.5    94.7    23.1    4.6    228.3    0.2    733.7   

     Services    Population million    20.6    139.6    19.3    6.5    275.2    0.3    1,368.3   

     TOTAL    Population million    60.4    498.4    77.0    12.8    795.4    4.4    3,305.0   

    

    Labour     % of Total     31.2%    40.8%    47.1%    43.4%    58.9%    38.0%    46.6%

Participation    Population   

                                        

 Productivity Value (GDP/Labour Force)       

     Agriculture    USD    3,800    3,047    1,525    35,075    4,114    1,241    4,076   

     Industry    USD    10,502    9,000    3,782    43,853    25,272    11,654    34,213   

     Services    USD    13,561    22,055    8,586    35,237    19,658    29,567    38,818   

Source: Factbook latest figures of April 2013.

Pakistan labour productivity stands at 93 percent compared to the overall world in terms of the agriculture sector. Overall, this sector is dominated by Asia and Africa; hence, Pakistan’s labour productivity seems reasonable compared with Western economies where modern and mechanised farming techniques are used, and the use of labour in low.

In industry and services sectors, Pakistan’s labour productivity is 31 percent and 35 percent of the world; yet, the situation worsens in the services sector once compared to India, Malaysia, China and Rwanda. These nations managed to attracted local and foreign capital investments with better perception management of availability, skills and character of their human resource.

In Pakistan, however, is it the issue of availability, skills, character or facilities to develop such capacities?

Based on Pakistan Economic Survey 2011-12 report, Pakistan has 41.6 million (primary to university and vocational) students enrolled in 228,000 institutions with 1.5 million teachers in 2011-12, making an average of 182 students per institution and 28 students per teacher.

Apparently, we don’t have an issue with capacity building infrastructure; in fact, it is materially underutilised. We, perhaps, lack very key traits in the human resource deployed there, the environment of institutions and the availability of inspiring role models.

Additionally, low social and economic indicators are key concerns of Pakistani policymakers. Several meetings have been held over the past 65 years with little or no real action. Now it requires a paradigm shift by first defining a desired national character, injection of work ethics in the system and creating inspiring role models with a true demonstration of the desired character. An individual with a strong character and average capacity is far more desirable example in a developing economy than a highly skilled but corrupt person.

Until Pakistan generates a pool of human resource that is passionate about their work, carries high moral values and is knowledgeable enough, it will not be able to attract local and foreign capital or put at best use its available material resources. Other forms of foreign help will not engender any sustainable gains, as in the rest of the world where billions of financial aid is spent. Homegrown social and economic growth is the only way forward.

Malaysia and Rwanda have got Mahathir bin Mohamad and Paul Kagame – the charismatic leaders, who fashioned a national character and stimulated the private sector to expand businesses, besides empowering it through consistent policies. One has earned the title of the “Asian Tiger” and the other achieved the status of “second most improved nation globally.” Leadership is not about capacity building, it is about forming a national character, inspiring and enabling people to decide by themselves and stage stunning turnarounds as Malaysia and Rwanda have done.

 The writer is a chartered accountant and business development professional based in Lahore.