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Budgeting for a knowledge economy
Dr Atta-ur-RahmanSaturday, May 31, 2014
From Print Edition
The budget is looming ahead, and the million-dollar question is whether our government, particularly the finance minister, has a plan to transition our country from a low value added agriculture economy to a high value added knowledge economy.
Pakistan should be setting aside a major portion of its budget on strengthening existing universities and research institutions as well as organisations such as PCSIR, PARC, PAEC etc, establishing new institutions particularly in emerging technologies such as nanotechnology, genomics and bioinformatics; training high quality professionals and workers in line with market demand; creating effective linkages of academic institutions, with industry; providing incentives to the private sector to undertake research and development by government financial support for human resource development and laboratories and establishing technology incubators and specialised technology parks.
Agriculture happens to be the largest income and employment-generating sector of Pakistan’s economy. However, our crop yields on average farms are lower by 31-75 percent than the yields in the so-called progressive farms, while the productivity even in the progressive farms is 25-57 percent less than that demonstrated at the research stations. Improper farmer education results in poor farming methods, lack of quality control, and high post-harvest losses.
The losses in agricultural output due to salinity/water logging are more than Rs40 billion per annum, and post-harvest losses for fruits and vegetables alone are estimated at being up to 60 billion rupees every year. The minister of finance in the next budget should ensure a higher level of investment in agricultural research and development (R&D) activities.
The engineering sector is undoubtedly the backbone of economies of developed and fast developing countries. Unfortunately it has been largely neglected except for the role played by the HEC during 2003-2008 in strengthening engineering universities. The single most important step for the promotion of engineering sector in Pakistan is to create world class engineering universities and technical institutes. There is an urgent need to develop design engineering capabilities, establish industrial engineering departments, and initiate public-private partnership in projects leading to innovation of new products and processes. Electronic engineering underpins many important industries including automotive, Information and Communication Technologies (ICT), consumer appliances, defence, biomedical appliances etc.
Pakistan has unfortunately significantly lagged behind in the development of its electronics industry. Electronics manufacturing and design activities are almost non-existent, largely because of highly qualified manpower and R&D capabilities. We need to invest in human resource development especially in the emerging areas of digital signal processing (DSP), optics, digital communications (DC), and microelectronics; development of indigenous R&D capabilities; establishment of VLSI design and training centres; and development of specialised technology parks with high-quality infrastructure to support the concentration of high-tech industries.
Another high priority area to transition to a knowledge based economy is Information Technology (IT). As the federal minister of science & technology during 2000-2002, I tried to give a jump start to this sector. The rapid progress made by Pakistan in the IT and telecom sector during 2000-2002 under my charge as federal minister led to the spread of internet from 29 cities in the year 2000 to 1000 cities, towns and villages by 2002, and the spread of fibre from 40 cities to 400 cities in this two-year period.
Internet prices were reduced sharply from $87,000 per month for a 2MB line to only $900 per month, and now to less than $100 per month. The mobile telephony boom began by the drastic lowering of prices, bringing in of competition (Ufone) and changing the system so that the person receiving a call was no longer required to pay any charges. A satellite was also placed in space (Paksat 1). A national digital library was established that provides free access today to all public sector university students to 60,000 textbooks from 220 international publishers and to 25,000 international journals with back volumes.
A 15-year tax holiday was given to the IT industry in 2001 that has contributed to the growth of IT related exports from $30 million in the year 2001 now to over $1.5 billion. The minister of finance needs to extend this holiday by another 10 years so that the growth continues.
Mining for minerals is another high priority area. Many of the minerals and rare earths that we have are in wide demand in defence, electronics, engineering, transport, energy and sport industries. We need to focus on development of new materials especially the composites. We need to acquire technologies to exploit domestic reserves of iron ore for the production of specialised steels and establish mini steel mills at various sites like Nokundi, Kalabagh and others. There is need to establish a top class research centre for exploitation of copper and other precious metals.
For promotion of the chemical industry it is imperative that a naphtha cracker is set up in the country. This facility is critically important for the indigenous manufacturing of a large number of chemicals and pharmaceuticals. We have a rich flora that can be exploited. Indeed about 40 percent of all modern pharmaceuticals are either directly or indirectly derived from medicinal plants. Many of these plants occur in Pakistan but little is done to promote basic manufacture. A 15-year tax holiday should be given to all basic manufacturing of pharmaceuticals, particularly in biotechnology based high value added products.
As federal minister of science in 2001 we had carried out a project to map the major wind corridors of Pakistan. It turned out that the Katti bander-Gharo-Hyderabad triangle in Sindh has potential to produce more than 20,000MW of electricity. This should be fully exploited. A recent report of the US Department of Energy has stated that Pakistan has 206 Tcf of risked shale gas. The technically recoverable shale gas resource is estimated at 51 Tcf. Similarly there are large reserves of methane under the sea off the coast of Karachi.
We should be working with our Chinese friends to provide the technology to tap into these resources. We have one of the largest coal reserves in the world, but coal contributes less than one percent to electricity generation as opposed to over 50 percent in India and China. Thermal power generation through application of clean coal technologies and beneficiation techniques is another urgent need. Construction of mini-hydel plants, wind power plants and solar power plants can also substantially increase the power supply in remote areas and thus contribute to their economic development.
To do all the above the federal ministers and secretaries need to be technocrats, highly knowledgeable in their respective fields, and the ministries need to be backed by powerful think tanks. Each ministry should be assigned targets to be achieved and the ministers and secretaries removed if they fail to deliver after regular performance assessment. This requires a much tougher approach than is presently visible.
The writer is the president of the Pakistan Academy of Sciences and former chairman of the HEC.
Email: ibne_sina@hotmail.com
Budgeting for a knowledge economy - Dr Atta-ur-Rahman
Dr Atta-ur-RahmanSaturday, May 31, 2014
From Print Edition
The budget is looming ahead, and the million-dollar question is whether our government, particularly the finance minister, has a plan to transition our country from a low value added agriculture economy to a high value added knowledge economy.
Pakistan should be setting aside a major portion of its budget on strengthening existing universities and research institutions as well as organisations such as PCSIR, PARC, PAEC etc, establishing new institutions particularly in emerging technologies such as nanotechnology, genomics and bioinformatics; training high quality professionals and workers in line with market demand; creating effective linkages of academic institutions, with industry; providing incentives to the private sector to undertake research and development by government financial support for human resource development and laboratories and establishing technology incubators and specialised technology parks.
Agriculture happens to be the largest income and employment-generating sector of Pakistan’s economy. However, our crop yields on average farms are lower by 31-75 percent than the yields in the so-called progressive farms, while the productivity even in the progressive farms is 25-57 percent less than that demonstrated at the research stations. Improper farmer education results in poor farming methods, lack of quality control, and high post-harvest losses.
The losses in agricultural output due to salinity/water logging are more than Rs40 billion per annum, and post-harvest losses for fruits and vegetables alone are estimated at being up to 60 billion rupees every year. The minister of finance in the next budget should ensure a higher level of investment in agricultural research and development (R&D) activities.
The engineering sector is undoubtedly the backbone of economies of developed and fast developing countries. Unfortunately it has been largely neglected except for the role played by the HEC during 2003-2008 in strengthening engineering universities. The single most important step for the promotion of engineering sector in Pakistan is to create world class engineering universities and technical institutes. There is an urgent need to develop design engineering capabilities, establish industrial engineering departments, and initiate public-private partnership in projects leading to innovation of new products and processes. Electronic engineering underpins many important industries including automotive, Information and Communication Technologies (ICT), consumer appliances, defence, biomedical appliances etc.
Pakistan has unfortunately significantly lagged behind in the development of its electronics industry. Electronics manufacturing and design activities are almost non-existent, largely because of highly qualified manpower and R&D capabilities. We need to invest in human resource development especially in the emerging areas of digital signal processing (DSP), optics, digital communications (DC), and microelectronics; development of indigenous R&D capabilities; establishment of VLSI design and training centres; and development of specialised technology parks with high-quality infrastructure to support the concentration of high-tech industries.
Another high priority area to transition to a knowledge based economy is Information Technology (IT). As the federal minister of science & technology during 2000-2002, I tried to give a jump start to this sector. The rapid progress made by Pakistan in the IT and telecom sector during 2000-2002 under my charge as federal minister led to the spread of internet from 29 cities in the year 2000 to 1000 cities, towns and villages by 2002, and the spread of fibre from 40 cities to 400 cities in this two-year period.
Internet prices were reduced sharply from $87,000 per month for a 2MB line to only $900 per month, and now to less than $100 per month. The mobile telephony boom began by the drastic lowering of prices, bringing in of competition (Ufone) and changing the system so that the person receiving a call was no longer required to pay any charges. A satellite was also placed in space (Paksat 1). A national digital library was established that provides free access today to all public sector university students to 60,000 textbooks from 220 international publishers and to 25,000 international journals with back volumes.
A 15-year tax holiday was given to the IT industry in 2001 that has contributed to the growth of IT related exports from $30 million in the year 2001 now to over $1.5 billion. The minister of finance needs to extend this holiday by another 10 years so that the growth continues.
Mining for minerals is another high priority area. Many of the minerals and rare earths that we have are in wide demand in defence, electronics, engineering, transport, energy and sport industries. We need to focus on development of new materials especially the composites. We need to acquire technologies to exploit domestic reserves of iron ore for the production of specialised steels and establish mini steel mills at various sites like Nokundi, Kalabagh and others. There is need to establish a top class research centre for exploitation of copper and other precious metals.
For promotion of the chemical industry it is imperative that a naphtha cracker is set up in the country. This facility is critically important for the indigenous manufacturing of a large number of chemicals and pharmaceuticals. We have a rich flora that can be exploited. Indeed about 40 percent of all modern pharmaceuticals are either directly or indirectly derived from medicinal plants. Many of these plants occur in Pakistan but little is done to promote basic manufacture. A 15-year tax holiday should be given to all basic manufacturing of pharmaceuticals, particularly in biotechnology based high value added products.
As federal minister of science in 2001 we had carried out a project to map the major wind corridors of Pakistan. It turned out that the Katti bander-Gharo-Hyderabad triangle in Sindh has potential to produce more than 20,000MW of electricity. This should be fully exploited. A recent report of the US Department of Energy has stated that Pakistan has 206 Tcf of risked shale gas. The technically recoverable shale gas resource is estimated at 51 Tcf. Similarly there are large reserves of methane under the sea off the coast of Karachi.
We should be working with our Chinese friends to provide the technology to tap into these resources. We have one of the largest coal reserves in the world, but coal contributes less than one percent to electricity generation as opposed to over 50 percent in India and China. Thermal power generation through application of clean coal technologies and beneficiation techniques is another urgent need. Construction of mini-hydel plants, wind power plants and solar power plants can also substantially increase the power supply in remote areas and thus contribute to their economic development.
To do all the above the federal ministers and secretaries need to be technocrats, highly knowledgeable in their respective fields, and the ministries need to be backed by powerful think tanks. Each ministry should be assigned targets to be achieved and the ministers and secretaries removed if they fail to deliver after regular performance assessment. This requires a much tougher approach than is presently visible.
The writer is the president of the Pakistan Academy of Sciences and former chairman of the HEC.
Email: ibne_sina@hotmail.com
Budgeting for a knowledge economy - Dr Atta-ur-Rahman
