The Prime Minister, while sharing his vision of an environmentally responsible Pakistan at a high-level event co-hosted by Malaysia and Pakistan at the United Nations in New York on 26 September 2019, stated that such a vision should encompass measures to alleviate poverty, generate livelihood and create jobs. The prime minister highlighted the achievement of his government’s internationally acclaimed billion tree project in the province of KP. However, he completely missed mentioning the need for the industrial revolution in the country, without which sustained economic growth, domestic revenue and employment generation will not be possible.
The comparison of East Asian countries with Pakistan is quite distressing. In the 1960s, many East Asian countries had similar per capita income. Today the per capita income is many times higher than that of Pakistan. What made such a drastic difference in about five to six decades, many explanations can be offered, including political stability, good governance, and institutional reforms etc. According to the World Bank, primary education explains 70 to 90 per cent of growth in these countries. East Asia offers a lot on how education is the first step in poverty alleviation. But only if one wants to learn from their experiences.
The concept of higher education for the sake of higher education may change the statistics of PhDs in the country; however, whether it helps and contributes to the economic development of the country is a debatable issue. Industrial economies have strategically linked and aligned their higher education programmes with their major national economic policies like industrial, agricultural, trade, petroleum etc. Pakistan has not prioritised its industrial activities required by the economy regarding high value-added export-oriented industries which can fetch and save foreign exchange. Nor has the state focused on the establishment of small and medium enterprises and labour intensive units, which form the basis for the expansion of industrial base and large scale manufacturing. Since the higher education in Pakistan is not strategically linked with the industrial development, despite substantial budgetary allocations, the HEC has yet to develop an industrial model or identify an industrial sector which could assist the government in achieving any of its economic objectives.
What is even more important than the total investment in education is the strategy that lay behind it. There could be three major policy aspects of the educational plan. First and foremost aspect is the allocation of education budget between basic and higher education. In East Asian countries, seventy per cent of the educational budget is spent on primary schooling. The state spends only thirty per cent on higher education along with the financial contribution by the private sector who pay for their beneficiaries themselves for higher education. In Pakistan, our educational spending is inversely cascaded with very high budgetary allocations going to higher education and very little for the primary level.
Second, we have forgotten the importance of the technical education and skills without which it will not be possible to derive reciprocal and mutually advantageous benefits accruing from increased market access and the free trade agreements which Pakistan is currently signing with various countries. One reason for the high unemployment is that the market requires applied technical skills which our educational systems are not producing. In East Asia, more than about forty per cent of secondary school students go to professional schools. This contrasts less than five to seven per cent in Pakistan.
Third, there could be a public and private sector partnership for many grass-root crash movements to spread education at a quicker pace and in a cost-effective manner. In Bangladesh, there is an outstanding example of the Bangladesh Rural Advancement Committee (BRAC) spreading primary education to poor and more vulnerable groups in society.
There is simply no doubt that the spread of basic education at a rapid pace is the most crucial and critical issue for Pakistan’s development today. Some countries have spread basic education and technical skills to their population, combined with sensible economic management and good governance, opened up their economies on fair and equitable market access principles prescribed by the WTO and taken over global markets through high productivity of their labour force, at a relatively low wage level. This is the way they have converted their poverty into an asset and leapfrogged several generations of development and participated in global prosperity.
We have to admit that our educational standards are deteriorating and the educational policy has to be devised to improve the position and for bringing about an overall improvement in the educational system. The GATT / WTO charter now governs the world trade; yet the Higher Education Commission (HEC) has failed to revise the curriculum and the syllabi to incorporate the provisions of international trade and industry in commerce and business administration degrees etc.
Trade and industry create opportunities for growth by giving businesses access to a broader customer base beyond the domestic market. It should act as a driver of income growth and job creation to benefit people. Several tools have been developed in recent years by policymakers seeking to leverage trade and industry for employment and development. The foremost aspect is the identification of export sectors with employment creation potential and quantification of not only direct job creation in the export sectors but also indirect and induced job creation through value chain linkages and increased consumption.
Pakistan needs to identify its products or sectors with export potential across international markets based on detailed trade and market access statistics. The main factors, undoubtedly, are supply, demand and ease of trade. Combining these three factors gives a potential export value that can be compared with the actual one to reveal untapped trade opportunities the country may have for any of its exports in new or existing markets. Targeted trade advisory services can help firms tap into these opportunities and export more, remove the bottlenecks that prevent companies from realising their export potential. It goes beyond standard measures of comparative advantage by identifying sectors through comprehensive means by using trade, tariff, GDP, population and other data to quantify a country’s export growth potential by product and market.
Unemployment alone does not ensure that appropriate skills are available to realise the export potential in a given sector with greater demand. Specialised vocational training and education programmes may be needed to ensure that the available skills match those that are required. However, more substantial export increases across several sectors would require investment in additional production capacity.
The portion of women among the newly employed should also be a consideration in the rise following an enhanced demand for workers while accounting for each sector’s employment creation potential. Gemstones’ cutting and polishing and jewellery making are areas where women can be trained. The economists need to work out employment potential in each untapped sector with export potential and devise long term fiscal, trade and industrial policies to achieve the targets.
Finally, it is necessary to find out why the export potential of various sectors is not yet fully exploited and to define strategies showing how the government can help businesses overcome barriers to exports. Targeted trade advisory services can help identify and address some of the frictions that drive a wedge between actual and potential exports. This would enhance exports turning poverty into an asset in the shape of employment contributing to the economy.
