With the PML-N government now well and truly settled, the question that is still weighing on the minds of the people is: What about the elusive economic revival, which is proving even harder to spot than a healthy animal in Lahore’s Zoo? The trouble is that the economic leadership is so focused on pleasing the IMF team and busy draining revenue from the markets (to support the spending habits of the new government) that it keeps missing the larger picture: It is growth and unemployment they should really be targeting through shoring up manufacturing in the country. All they need to do is to analyze recent (post 2008 financial crisis and resultant recession) turnaround models to realize that if they really intend to bring about an economic revival they will need to start taking decisions that facilitate manufacturing and enhance Pakistan’s competitive edge, which will not only result in buoyancy in the domestic markets but also help increase our national exports.

Study the economic policies of success stories over the past five years in Euro zone, Central Europe, Gulf and China, and the conclusion that immediately comes to light is that the economic managers of all these economies came out with comprehensive and targeted policies to shore up respective national competitive advantages. Spain as we know came up with innovative measures to shore up labor productivity and longer work-hours and Portugal’s government undertook deliberate reforms to help resuscitate global competitiveness of the country’s traditional product lines. In Central Europe, the Czech Ministry of Economic Affairs with the help of its Economic Council (equivalent of our ECC) went as far as announcing a detailed Economic Plan envisioning conscious attainment of global competitive advantage in sectors carefully chosen to be regarded as ‘Czech Winners’. The plan built around the three Is’ (I: Institution Building, I: Infrastructure Improvement and I: Innovation Encouragement) is turning out to be the single most key factor in not only bringing about a Czech corporate revival but in also ensuring that the country’s economy remained fairly insulated from financial tumbling taking place around it (in most of Europe and the USA after 2008’s financial crisis). In addition, the Czech competitive strategy focused on three implementation areas to achieve its goals, a) Reduce dependency on single markets, b) Move to value added products, and c) Move to more complex products, designs and branding in order to find niches. Their policy-makers were quick to realize that over the next few years the global trade in general will be slowing down, hence exports of all countries would be under pressure and the Czech Republic cannot be an exception. To counter this they adopted some bold policies back in 2009, which are now reaping dividends. In a surprise move Islamic Banking was introduced (now one of the fastest growing financial products in the country), a Business Forum was established selecting carefully chosen business minds to help government in prudent policy making, embarking on an aggressive information technology drive and most importantly, by revamping large icon state enterprises through a combination of professional management and innovation (driven by spending on research & development), and then using them to capture global market share in their related domains - A small European country like the Czech Republic spends nearly US $ 5 billion on research and development from its annual fiscal budget.

As an example, Czech Aero-Holding has recently emerged as one of the leading global service providers to help manage terminal handling, traffic and pollution control programs. It has successfully turned around the once near bankrupt Czech Airline to a profit making operation and this by a series of clever initiatives based on technology transfer agreements, service sharing and cross-corporate equity swaps with other leading world airlines, namely Korean Airways and Etihad. Our PIA would do well by learning some important lessons from them!

Likewise, the Gulf States have also done their own good work in enhancing their national competitive edge. According to the latest report released by the World Economic Forum (WEF), the UAE is becoming more and more competitive on the global stage and has already developed an economic and commercial infrastructure to be ranked in top 15 countries of the world in terms of competing and producing goods. This report is significant as it acknowledges the progress the UAE has made in diversifying and developing its economy and improving its productivity and competitiveness, rising 5 places in the last year alone. According to the report, the Gulf States have been able to achieve this by improvements in labor regulations (making them more operational friendly), increasing access to corporate financing, investing in research and development, improving information technology usage and educating its workforce. China on the other hand has also after a long gap felt the need to keep its exports competitive. And for this they have opted to go back to the basics: Establish more Free Trade Zones and this time also provide them with enhanced financial liberalization. The world’s largest Shanghai free trade zone has already been announced and investors are comparing it with the Chinese reform measures of the mid 70s and likening this step to the establishment of the Shenzhen special zone in 1979 that ultimately saw China’s accession to WTO in 2001.

The fundamental lesson, however, in all these examples is that no where has any of the economic leaderships opted for seeking enhanced competitive advantage through currency devaluation, but instead have invariably gone for improving real value operational efficiencies. Whereas, Euro zone countries operate in the common Euro currency, the Czech Crown, UAE Dirham and the Chinese Yuan have in fact all gained in comparative value in the last five years. Pakistani Rupee (like its Indian counterpart) on the other hand seems to be in a free fall cycle and anyone thinking that it will help increase Pakistani exports in the long run is again missing the larger picture. In countries that carry significant twin deficits (fiscal and trade) the currency gyrations only make life harder. Dearer fuel bills and higher import costs raise inflation and governments with empty pockets when unable to afford subsidies only add to people’s misery and risk social unrest. History is our witness that if this happens, Pakistan will not be the first such case!

The writer is an entrepreneur and economic analyst.