New Growth Strategy for Pakistan - Updated Draft comes out
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kugga
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I would love this if such reforms are made in our railways system... and any one will be willing to buy such huge asset of pakistan... there is lot more potential in railways then any one ever thought of...
ajpirzada
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this is exactly what is being proposed. the document is very much ready. It should get uploaded on PC's website by this month. it wont be the final document but a kind of working paper open to comments from anyone.
ajpirzada
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download draft report/policy from the following link:
http://pc.gov.pk/Blogs_material/GrowthStrategy.pdf
to express ur views, go to: http://115.186.133.2/pcportal2.0/Blogs/tabid/56/EntryId/16/Pakistan-New-Growth-Framework.aspx
http://pc.gov.pk/Blogs_material/GrowthStrategy.pdf
to express ur views, go to: http://115.186.133.2/pcportal2.0/Blogs/tabid/56/EntryId/16/Pakistan-New-Growth-Framework.aspx
ajpirzada
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Planning Commission to focus on new growth strategy
Saturday, January 22, 2011
By Mansoor Ahmad
LAHORE: The pillars of Planning Commission’s new growth strategy include quality governance, creative cities, vibrant markets and energetic youth, said its Deputy Chairman Dr Nadeemul Haq on Thursday.
“For growth, we have to move beyond PSDPs, ADPs, acronyms and metaphors. We need to think beyond ‘brick and mortar’,” he told The News.
He said that the commission would need input from economists, civil society, media and general public to formulate a sustainable growth strategy.
He said internationally available indicators such as competitiveness, investment climate and enterprise surveys point to weaknesses in governance as major constraints to growth. “The regime of subsidies and protection leads to the structure of our industry remaining quite resilient to change,” he said, adding that as a result exports were confined to low value-added items.
Haq said sustained growth remained elusive because of poor quality of investments. There is “continuous reliance on foreign resources” owing to poor resource mobilisation at home, he said.
He added that the growth model lacked elements of innovation, entrepreneurship and learning.
He pointed out that Pakistan’s growth remained volatile, averaging about five percent per annum over the last 20 years. “For Pakistan to become a middle-income country, we need a sustained growth of about eight percent,” he added.
The PC chief said infrastructure of Pakistan, China and India was almost the same according to global competitiveness report. But Pakistan was far behind India, China, Indonesia, Thailand and Malaysia in global innovation index, quality of education and spending on research and development, he said.
Haq said Pakistan needs to grow at 8 percent per annum to absorb the growing labour force.
He said the government would have to tackle major issues such as energy shortage and availability and pricing of credit.
“Growth will come through economic reforms, better management of public resources, better managed PSDP and restructuring and privatisation of PSEs,” he said.
He said governance agenda includes civil service reform based on monetised salaries, merit-based promotions, and easy entry and exit and incentives to attract talent.
He said for better service delivery, responsibilities and resources would have to be transferred to lower tiers of government.
Agriculture market committees, he added, would be revamped to facilitate farmers. Entry of new investment into the engineering sector would be facilitated and modern bankruptcy law would be enacted.
He said agriculture commodities such as wheat and sugar would be traded through commodities exchanges.
“The cities will be made hub of commerce by freeing government land for commercial purposes,” he said.
Planning Commission to focus on new growth strategy
ajpirzada
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By Ahmed Jamal Pirzada
With increasing cost of construction, frequent occurrence of large-scale natural disasters, and ongoing fight against insurgents, it has become impossible for the government to continue financing infrastructure projects. This can be seen from the recent reductions in the budget of public sector development projects (PSDP). Historically, PSDP has been the main source of finance in addition to foreign loans. Much of the international aid, however, was directed towards social sector projects which were arguably of temporary relief.
To deal with these challenging circumstances, IMF has highlighted some key issues which need to be looked at when undertaking any infrastructure development project. These include: what investments offer the biggest boost to growth? How much investment is needed and by whom? How to finance this investment without taking on too much debt? Without looking at these issues, there remains a much higher probability that the project will get delayed to an extent that it no longer remains needed. If the project does get completed, long delays will push the cost to an extent that the cost-benefit analysis done when the project was conceived is no longer valid. Countries like Pakistan which are very much financially constrained must realise these issues and bring out policies aimed at utilising their full strength.
In answer to the first question, National Trade Corridor Management Unit (NTCMU) was established to come up with projects which help improve trade-related infrastructure facilities with the end goal of making Pakistan a regional trade hub. However, projects are still being approved in isolation with no broader vision of achieving sustainable growth. Ideally, a strategy should have been prepared by now and we should have moved on towards implementation stage.
Similarly, there is a need for improving PC-I with respect to involving private sector in development projects. The entire PC-I documents, expect the project to be fully financed from the PSDP. Instead, it should be made sure that first the project is floated to the private sector for take up with full ownership and if not successful, only then the government is approached for funding. Another section on Public-Private Partnership (PPP) Option Analysis in the PC-I document, as suggested by the Infrastructure Management Unit (IMU), can be a good addition.
IMU (2007) has also done an extensive and useful study on constraints to private sector investment in infrastructure. But much needs to be done in removing these constraints. Some of the key constraints highlighted by the study are related to procurement laws and procurement processes. Existing procurement laws do not include a requirement for the public body to consider infrastructure service delivery through the private sector. Procurement processes, on the other hand, are too centralised. All procurement decisions for a value as low as US $4-5 million are made at the highest level of the government. This is the case even for projects which are 100 per cent PPP and will not require any public expenditure.
Despite considerable realisation and wide consensus, Pakistan is still to come up with a detailed yet clear framework on PPP. This is mainly because the direction, content and the responsibility for the PPP framework still remains unsettled. Restriction on local governments against financing development projects through user charges or fees is also a major constraint to PPP at municipal level. Knowing that various amendments are being considered in local government law at provincial levels, these issues can be revisited with the approach of promoting private sector in infrastructure projects. Furthermore, land acquisition laws are currently in conflict with international norms. It is one of the major issues and has often resulted into delays and sometimes abandonment of the project.
National Highway Authority Act, which does not contain any requirement for PPP Option Analysis, also appears to discourage private sector participation.
It does not empower assignment of toll receivables in favour of the private project company executing the project. Another issue is that of competition with public sector construction firms. It is argued by the private construction companies that lucrative projects are always given to public sector corporations in a non-transparent and discriminatory manner. Such attitude discourages growth of private sector firms and hence their ability to undertake projects which are spread thin over the time horizon.
-- (The writer is an economic graduate from University of Bath (UK) and is currently working as an Economic Consultant in Pakistan. He can be contacted at ajpirzada@hotmail.com)
http://jang.com.pk/thenews/jan2011-weekly/busrev-24-01-2011/p9.htm
With increasing cost of construction, frequent occurrence of large-scale natural disasters, and ongoing fight against insurgents, it has become impossible for the government to continue financing infrastructure projects. This can be seen from the recent reductions in the budget of public sector development projects (PSDP). Historically, PSDP has been the main source of finance in addition to foreign loans. Much of the international aid, however, was directed towards social sector projects which were arguably of temporary relief.
To deal with these challenging circumstances, IMF has highlighted some key issues which need to be looked at when undertaking any infrastructure development project. These include: what investments offer the biggest boost to growth? How much investment is needed and by whom? How to finance this investment without taking on too much debt? Without looking at these issues, there remains a much higher probability that the project will get delayed to an extent that it no longer remains needed. If the project does get completed, long delays will push the cost to an extent that the cost-benefit analysis done when the project was conceived is no longer valid. Countries like Pakistan which are very much financially constrained must realise these issues and bring out policies aimed at utilising their full strength.
In answer to the first question, National Trade Corridor Management Unit (NTCMU) was established to come up with projects which help improve trade-related infrastructure facilities with the end goal of making Pakistan a regional trade hub. However, projects are still being approved in isolation with no broader vision of achieving sustainable growth. Ideally, a strategy should have been prepared by now and we should have moved on towards implementation stage.
Similarly, there is a need for improving PC-I with respect to involving private sector in development projects. The entire PC-I documents, expect the project to be fully financed from the PSDP. Instead, it should be made sure that first the project is floated to the private sector for take up with full ownership and if not successful, only then the government is approached for funding. Another section on Public-Private Partnership (PPP) Option Analysis in the PC-I document, as suggested by the Infrastructure Management Unit (IMU), can be a good addition.
IMU (2007) has also done an extensive and useful study on constraints to private sector investment in infrastructure. But much needs to be done in removing these constraints. Some of the key constraints highlighted by the study are related to procurement laws and procurement processes. Existing procurement laws do not include a requirement for the public body to consider infrastructure service delivery through the private sector. Procurement processes, on the other hand, are too centralised. All procurement decisions for a value as low as US $4-5 million are made at the highest level of the government. This is the case even for projects which are 100 per cent PPP and will not require any public expenditure.
Despite considerable realisation and wide consensus, Pakistan is still to come up with a detailed yet clear framework on PPP. This is mainly because the direction, content and the responsibility for the PPP framework still remains unsettled. Restriction on local governments against financing development projects through user charges or fees is also a major constraint to PPP at municipal level. Knowing that various amendments are being considered in local government law at provincial levels, these issues can be revisited with the approach of promoting private sector in infrastructure projects. Furthermore, land acquisition laws are currently in conflict with international norms. It is one of the major issues and has often resulted into delays and sometimes abandonment of the project.
National Highway Authority Act, which does not contain any requirement for PPP Option Analysis, also appears to discourage private sector participation.
It does not empower assignment of toll receivables in favour of the private project company executing the project. Another issue is that of competition with public sector construction firms. It is argued by the private construction companies that lucrative projects are always given to public sector corporations in a non-transparent and discriminatory manner. Such attitude discourages growth of private sector firms and hence their ability to undertake projects which are spread thin over the time horizon.
-- (The writer is an economic graduate from University of Bath (UK) and is currently working as an Economic Consultant in Pakistan. He can be contacted at ajpirzada@hotmail.com)
http://jang.com.pk/thenews/jan2011-weekly/busrev-24-01-2011/p9.htm
ajpirzada
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AHMED JAMAL PIRZADA
WEEKEND MAGAZINE (January 22, 2011) : A survey was conducted on the transport sector of Pakistan to get first hand experience of citizens' problems. Out of all the surveys distributed randomly in various universities, engineering firms and government agencies located in either Islamabad or Rawalpindi, 83% response rate was achieved.
Targeting universities provided us with easy access to youth belonging to different areas of Pakistan and therefore helped us in significantly eliminating the sample bias problem. In the sample, 52% of the respondents were from the age group of 21-25 years followed by 30% from the age group of 26 and above. Remaining 18% were between 17-20 years of age. Similarly, 38% were fully employed including 1% not in paid employment, 58% were students while 4% were both student and employed.
It was found that only 26% of the respondents use public transport on daily basis. However, there is considerable demand which is visible from 41% respondents using it at least once or twice a week and 60% using it at least once in two weeks. On the other hand, only 21% respondents said they never use public transport. Main problems faced while commuting are quality and lack of transport. 51% reported that they think quality is the major issue while 36% view it to be lack of transport.
Of the female respondents, many reasoned security related to quality and overcrowding to be the main reason for their reluctance to travel on buses. On the contrary, only 13% reported higher prices to be their major concern. This highlights that currently insufficient routes are being served with inadequate number of buses. It, therefore, makes it necessary for the regulators to realign existing routes and ensure minimum number of buses per route.
Problems facing rail travel are also very similar but of greater magnitude. Almost all the participants complained for poor services. However, 55% thought of it as their major problem while 16% opted for long delays. It was found that 57% of the sample had never travelled via rail. Out of the university students, who represent the newer generation, only 36% had ever used railways.
This is again due to poor services and long delays which 78% of all the students considered to be their immediate issues. Air travel is considered to be the most attractive mode of travel for long distances but is the least used due to higher prices. Only 36% had ever experienced air travel and 86% find it expensive. Of the employed class, 41% do use it at least once a year but this significantly does down to 31% for students.
When asked 'how should we improve Pakistan Railways and Pakistan International Airline?', 36% preferred privatisation over any other solution. 26% were in favour public-private partnership and 27% want the government to run the affairs of these enterprises on commercial basis.
Most importantly, only 5% wants government to continue giving them subsidy. This is a major finding and is against the general perception of possible public anger against privatisation. Another critical issue which deserves to be highlighted is limited role of universities in career counselling. Only 20% of the students said that they received some job related information from their respective universities. Out of those working, only 3% received help from their educational institutions when looking for a job.
Internet has come to the forefront in helping students looking for jobs. 29% of the respondents find role of internet to be the most important in their job hunt. Newspapers, however, still play a lead role with their share of 31%. Remaining 26% prefer relying on their friends and family. Significant use of internet for this purpose, despite limited employment information available online, provides the labour market with a much transparent platform which is all set to be fully exploited. Dedicated job portals along with online career counselling can play a significant role in ensuring efficient signalling.
Use of Internet has also started to become visible in the professional spheres of people's life, 62% of the respondents said that they mostly use internet for work or study purposes. This percentage is almost the same for both employed and students. These findings have been taken into account when proposing key reforms on connectivity of Pakistan in the work of New Development Approach (NDA) undertaken by the Planning Commission.
Weekend Magazine - Survey reveals key citizens' issues: Connectivity of Pakistan
WEEKEND MAGAZINE (January 22, 2011) : A survey was conducted on the transport sector of Pakistan to get first hand experience of citizens' problems. Out of all the surveys distributed randomly in various universities, engineering firms and government agencies located in either Islamabad or Rawalpindi, 83% response rate was achieved.
Targeting universities provided us with easy access to youth belonging to different areas of Pakistan and therefore helped us in significantly eliminating the sample bias problem. In the sample, 52% of the respondents were from the age group of 21-25 years followed by 30% from the age group of 26 and above. Remaining 18% were between 17-20 years of age. Similarly, 38% were fully employed including 1% not in paid employment, 58% were students while 4% were both student and employed.
It was found that only 26% of the respondents use public transport on daily basis. However, there is considerable demand which is visible from 41% respondents using it at least once or twice a week and 60% using it at least once in two weeks. On the other hand, only 21% respondents said they never use public transport. Main problems faced while commuting are quality and lack of transport. 51% reported that they think quality is the major issue while 36% view it to be lack of transport.
Of the female respondents, many reasoned security related to quality and overcrowding to be the main reason for their reluctance to travel on buses. On the contrary, only 13% reported higher prices to be their major concern. This highlights that currently insufficient routes are being served with inadequate number of buses. It, therefore, makes it necessary for the regulators to realign existing routes and ensure minimum number of buses per route.
Problems facing rail travel are also very similar but of greater magnitude. Almost all the participants complained for poor services. However, 55% thought of it as their major problem while 16% opted for long delays. It was found that 57% of the sample had never travelled via rail. Out of the university students, who represent the newer generation, only 36% had ever used railways.
This is again due to poor services and long delays which 78% of all the students considered to be their immediate issues. Air travel is considered to be the most attractive mode of travel for long distances but is the least used due to higher prices. Only 36% had ever experienced air travel and 86% find it expensive. Of the employed class, 41% do use it at least once a year but this significantly does down to 31% for students.
When asked 'how should we improve Pakistan Railways and Pakistan International Airline?', 36% preferred privatisation over any other solution. 26% were in favour public-private partnership and 27% want the government to run the affairs of these enterprises on commercial basis.
Most importantly, only 5% wants government to continue giving them subsidy. This is a major finding and is against the general perception of possible public anger against privatisation. Another critical issue which deserves to be highlighted is limited role of universities in career counselling. Only 20% of the students said that they received some job related information from their respective universities. Out of those working, only 3% received help from their educational institutions when looking for a job.
Internet has come to the forefront in helping students looking for jobs. 29% of the respondents find role of internet to be the most important in their job hunt. Newspapers, however, still play a lead role with their share of 31%. Remaining 26% prefer relying on their friends and family. Significant use of internet for this purpose, despite limited employment information available online, provides the labour market with a much transparent platform which is all set to be fully exploited. Dedicated job portals along with online career counselling can play a significant role in ensuring efficient signalling.
Use of Internet has also started to become visible in the professional spheres of people's life, 62% of the respondents said that they mostly use internet for work or study purposes. This percentage is almost the same for both employed and students. These findings have been taken into account when proposing key reforms on connectivity of Pakistan in the work of New Development Approach (NDA) undertaken by the Planning Commission.
Weekend Magazine - Survey reveals key citizens' issues: Connectivity of Pakistan
ajpirzada
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Affordable housing for low income groups
By Mustafa Omar Asghar Khan
WITH the highest urbanisation rate in South Asia and an expanding middle-class in cities, access to affordable housing has become a key issue for Pakistan’s lower and middle classes.
The population growth rate in cities is at three per cent compared to the national growth rate of 1.8 per cent and it is expected that by 2030, two-third population will be living in urban areas.The World Bank has estimated a shortage of 7.6 million housing units in Pakistan of which two-third is because of the demand from low-income groups, earning less than Rs12,000 a month.
Under such severe pressures for urban housing, Pakistan has yet to formulate a sustainable market-based housing policy that can effectively provide affordable housing to its citizens.
However, in recent conferences, the Planning Commission has presented several urban reforms plan in its ‘New Development Approach’. The objective is to create affordable housing which reduces the creation of informal settlements on prime real estate in urban areas.
Globally, housing is defined as affordable if a basic housing unit that provides minimum amount of personal space and amenities, is accessible at 20 to 40 per cent of gross monthly household income for either rent or mortgage. Minimum space can be from anywhere from 250 to 500 square feet, depending on a country’s definition.
An estimated 50 per cent of urban population is currently living in squatter settlements commonly known as Katchi Abadis. Often these settlements lack basic infrastructure and unable to meet public health and safety standards.
The issue of Katchi Abadis is twofold: first is the economic opportunity and the cost of development of squatter settlements on state owned land. These settlements hinder the development of vital infrastructure for cities. Lyari Expressway in Karachi is a prime example of the difficulty faced by municipal authorities in building infrastructure where Katchi Abadis are located. This land can alternatively be sold to the private sector and provide revenue for the government.
The second issue is the social concern for squatter settlements in urban areas as they lack basic infrastructure and amenities. The lack of sewerage systems is the biggest problem in Katchi Abadis. The only mechanism of mitigating the growth of Katchi Abadis is to predict the demand for low-income housing and engineer supply to meet this demand.
The United Kingdom produces 50 to 80 per cent of its affordable housing through planning mandates which require that all new housing developments of more than 25 units must build a pre-agreed number of affordable units. The UK has also transferred control of local government rental stock to ‘not-for-profit’ housing associations. These associations have brought management expertise, capital through philanthropy and have executed large scale affordable housing schemes.
China has moved from state production of housing to creating incentives for the private sector to produce affordable housing at 50 to 75 per cent below market prices. The state allocates land free of cost, provides basic infrastructure and tax exceptions to private developers.
The incremental development of squatter settlements in developing countries has been described by the Peruvian economist, Hernando De Soto. These settlements have illegal tenure with the consequence of residents living under the constant fear of eviction. This deters them from investing into their dwelling or settlement which could enhance their quality of life.
Moreover, the illegal nature of their assets means that they are unable to collateralise their dwellings to raise capital and build a business.Their inability to raise finance is why the likes of De Soto have passionately argued for the legalisation of squatter settlements so that newly acquired legal tenure can become a gateway towards enhancing entrepreneurship.
The Khuda Ki Basti model, developed by a Karachi-based NGO, Saiban, aims to develop low-income settlements by facilitating legal entitlement of the land. The government provided land at below the market prices.
The applicants pay a 20 per cent down payment and the rest on monthly installments spread over eight years after which legal title is transferred to them. The only other condition to this agreement is that the household must start construction immediately after possession is handed over to them and make the property their primary residence. This is to make the scheme unattractive for speculators.
Just like the informal developer, houses are made in stages while the NGO builds up infrastructure incrementally as installments are collected over eight years. Once installments are paid, the title of ownership is transferred to the individual. Acquiring ownership creates an opportunity for low-income households to gain access to formal credit institutions.
A multi-faceted policy aimed at deregulating the housing sector is required to meet the enormous demand from low-income groups. The government should make land available for low cost housing. Additionally, fiscal incentives need to be provided to private developers to develop affordable housing like in China.
Mandates can also be used as they are being used in the UK to ensure mixed income housing developments. Such policy reforms should enable a significant growth in the production of affordable housing, reduce the growth of illegal settlements and promote collateralisation of housing units to spur entrepreneurship.
There are many experts on housing working in NGOs, the private sector and the government. A lot can be achieved if these institutions can collaborate to reach their common objective of making housing affordable for all income groups.
Affordable housing for low income groups
By Mustafa Omar Asghar Khan
WITH the highest urbanisation rate in South Asia and an expanding middle-class in cities, access to affordable housing has become a key issue for Pakistan’s lower and middle classes.
The population growth rate in cities is at three per cent compared to the national growth rate of 1.8 per cent and it is expected that by 2030, two-third population will be living in urban areas.The World Bank has estimated a shortage of 7.6 million housing units in Pakistan of which two-third is because of the demand from low-income groups, earning less than Rs12,000 a month.
Under such severe pressures for urban housing, Pakistan has yet to formulate a sustainable market-based housing policy that can effectively provide affordable housing to its citizens.
However, in recent conferences, the Planning Commission has presented several urban reforms plan in its ‘New Development Approach’. The objective is to create affordable housing which reduces the creation of informal settlements on prime real estate in urban areas.
Globally, housing is defined as affordable if a basic housing unit that provides minimum amount of personal space and amenities, is accessible at 20 to 40 per cent of gross monthly household income for either rent or mortgage. Minimum space can be from anywhere from 250 to 500 square feet, depending on a country’s definition.
An estimated 50 per cent of urban population is currently living in squatter settlements commonly known as Katchi Abadis. Often these settlements lack basic infrastructure and unable to meet public health and safety standards.
The issue of Katchi Abadis is twofold: first is the economic opportunity and the cost of development of squatter settlements on state owned land. These settlements hinder the development of vital infrastructure for cities. Lyari Expressway in Karachi is a prime example of the difficulty faced by municipal authorities in building infrastructure where Katchi Abadis are located. This land can alternatively be sold to the private sector and provide revenue for the government.
The second issue is the social concern for squatter settlements in urban areas as they lack basic infrastructure and amenities. The lack of sewerage systems is the biggest problem in Katchi Abadis. The only mechanism of mitigating the growth of Katchi Abadis is to predict the demand for low-income housing and engineer supply to meet this demand.
The United Kingdom produces 50 to 80 per cent of its affordable housing through planning mandates which require that all new housing developments of more than 25 units must build a pre-agreed number of affordable units. The UK has also transferred control of local government rental stock to ‘not-for-profit’ housing associations. These associations have brought management expertise, capital through philanthropy and have executed large scale affordable housing schemes.
China has moved from state production of housing to creating incentives for the private sector to produce affordable housing at 50 to 75 per cent below market prices. The state allocates land free of cost, provides basic infrastructure and tax exceptions to private developers.
The incremental development of squatter settlements in developing countries has been described by the Peruvian economist, Hernando De Soto. These settlements have illegal tenure with the consequence of residents living under the constant fear of eviction. This deters them from investing into their dwelling or settlement which could enhance their quality of life.
Moreover, the illegal nature of their assets means that they are unable to collateralise their dwellings to raise capital and build a business.Their inability to raise finance is why the likes of De Soto have passionately argued for the legalisation of squatter settlements so that newly acquired legal tenure can become a gateway towards enhancing entrepreneurship.
The Khuda Ki Basti model, developed by a Karachi-based NGO, Saiban, aims to develop low-income settlements by facilitating legal entitlement of the land. The government provided land at below the market prices.
The applicants pay a 20 per cent down payment and the rest on monthly installments spread over eight years after which legal title is transferred to them. The only other condition to this agreement is that the household must start construction immediately after possession is handed over to them and make the property their primary residence. This is to make the scheme unattractive for speculators.
Just like the informal developer, houses are made in stages while the NGO builds up infrastructure incrementally as installments are collected over eight years. Once installments are paid, the title of ownership is transferred to the individual. Acquiring ownership creates an opportunity for low-income households to gain access to formal credit institutions.
A multi-faceted policy aimed at deregulating the housing sector is required to meet the enormous demand from low-income groups. The government should make land available for low cost housing. Additionally, fiscal incentives need to be provided to private developers to develop affordable housing like in China.
Mandates can also be used as they are being used in the UK to ensure mixed income housing developments. Such policy reforms should enable a significant growth in the production of affordable housing, reduce the growth of illegal settlements and promote collateralisation of housing units to spur entrepreneurship.
There are many experts on housing working in NGOs, the private sector and the government. A lot can be achieved if these institutions can collaborate to reach their common objective of making housing affordable for all income groups.
Affordable housing for low income groups
ajpirzada
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Entrepreneurship can be taught!
Dr Haroon Sarwar
Entrepreneurship is increasingly acknowledged as an important driver of economic growth, productivity, innovation and employment. It is widely accepted as a key aspect of economic dynamism. While academic studies have long recognised the importance of entrepreneurship, policymakers have only recently explicitly discovered it. Indeed, entrepreneurship was long considered an exogenous factor in government policies, and policy efforts were often directed simply towards the large population of very small firms, rather than aimed at stimulating entrepreneurs able to introduce new products, processes or organisational forms in order to exploit new markets and grow.
Entrepreneurship can be taught! Business educators and professionals have evolved beyond the myth that entrepreneurs are born, not made. Peter Drucker said: “The entrepreneurial mystique? It is not magic, it is not mysterious, and it has nothing to do with the genes. It is a discipline. And, like any discipline, it can be learned.” In America alone, entrepreneurship education has exploded to more than 2,200 courses at over 1,600 schools, 277 endowed positions, 44 refereed academic journals, mainstream management journals devoting more issues to entrepreneurship, and over 100 established and funded centres.
Innovation is fundamentally the task of the markets and entrepreneurs. But history has shown that in moments of major transformations and crises, the role of governments has always been crucial. The government’s role as a catalyst in imposing and funding the adaptation of the educational, research, and other knowledge sources that are required to cope with deep and rapid technical change is well recognised. In the current scenario of fiscal constraint, the government along with the support of media can play the role of facilitator for the promotion of a new culture. An innovation council with designated role of a catalyst for nurturing and invigorating ideas can be a fundamental step towards innovative society.
In order to develop the curriculum for entrepreneurship, teaching economic strategy management, small business skills, legal and book-keeping skills, communication and team work skills should be made part of the curriculum. In this regard, the role of media and internet cannot be underscored. Some suggestions are:
At primary level embed elements of entrepreneurial behaviour, i.e. curiosity, creativity, autonomy, initiative, and team spirit. To this end, use games, cartoons and other tools appropriate to the age of pupils. Starting from primary school, create awareness in young children of the role of enterprises and entrepreneurs in society.
Introduce innovative pedagogies into all courses at secondary level, as a necessary basis for building an entrepreneurial spirit. Extend the range of pedagogies in use through innovative curricula development.
Associate students to real companies and to business people in order to ensure a close relation with real business experience. Students should not be kept in isolation and far from the world outside the school, for instance when running a virtual firm or simulating a business plan. In this regard, the concept of Student’s Mini Company (SMC) in the US and EU can be used as a model. In Europe, it is effective in 40 countries and more than two million students have participated in the year 2005/2006.
Allow and support the spontaneous initiative of student associations pursuing objectives such as creating links with businesses, and involving students in work on enterprise projects. Recognise and reward the time that students dedicate to these activities by means of educational credits.
Offer entrepreneurship education to disadvantaged groups, in particular to young people at risk of social exclusion may greatly benefit from this type of training. It can raise the motivation of those who learn best by doing, and who have difficulties in more traditional subjects. Some programmes addressing these target groups proved very successful both in terms of start-ups and of social integration. For example, the Punjab government’s initiative for providing vocational training to the selected students from the areas of FATA and Swat has been a great success in terms of social inclusion, human development and empowerment. In the current scenario, the flood-stricken youth of southern Punjab, Sindh and Balochistan can be lured towards entrepreneurship. This will have a dual impact of empowerment and rehabilitation on these youth.
Higher education establishments should integrate entrepreneurship across different subjects of their study programmes, as it may add value to all degree courses. All disciplines should develop opportunities for students at every level to experience entrepreneurship. Arts and science exhibitions, expos, and cultural festivals can play an exhortative role. At higher education level, bring entrepreneurs into the classroom and involve students directly in enterprise projects. Successful entrepreneurs may come and share their experiences and upcoming innovative projects with the students and the novel ideas from the students should be incorporated in the projects. This close interaction of the entrepreneurs and students can ameliorate the entrepreneurial streak in the students.
Encourage students and researchers with commercially viable business ideas to develop them into companies, by providing a range of support services within the institution (business incubation, financing, mentorship).
Embed evaluation systematically into all programmes. The most effective evaluation is independent and comparative (i.e. it should be run before the beginning of the programme and after its conclusion). As part of the final evaluation of a programme or course in entrepreneurship, test the entrepreneurial competences of students and offer them a certificate (“entrepreneurial driving licence”
acknowledging the acquisition of those skills. Tests for entrepreneurial competence are a common feature in many western countries.
Academia, government and industry constitute the three helices that engage in Triple Helix System (THS) of innovation and entrepreneurship. It is present in a few HEC projects - where it is playing the role of a facilitator between industry and academia. There is a great potential for fostering entrepreneurship and innovation via THS. Few universities in Pakistan have already initiated academic programmes on entrepreneurship and innovation, but a concerted effort at a large-scale is required to enroot the culture of innovation and entrepreneurship in Pakistan. The innate capabilities of Pakistani youth coupled with innovative and entrepreneurial streak can ensure a knowledge-driven, prosperous and tolerant Pakistan.
The writer is the assistant chief of the Planning Commission of Pakistan.
Email: hsa666@hotmail.com
http://nation.com.pk/pakistan-news-.../25-Jan-2011/Entrepreneurship-can-be-taught/1
Dr Haroon Sarwar
Entrepreneurship is increasingly acknowledged as an important driver of economic growth, productivity, innovation and employment. It is widely accepted as a key aspect of economic dynamism. While academic studies have long recognised the importance of entrepreneurship, policymakers have only recently explicitly discovered it. Indeed, entrepreneurship was long considered an exogenous factor in government policies, and policy efforts were often directed simply towards the large population of very small firms, rather than aimed at stimulating entrepreneurs able to introduce new products, processes or organisational forms in order to exploit new markets and grow.
Entrepreneurship can be taught! Business educators and professionals have evolved beyond the myth that entrepreneurs are born, not made. Peter Drucker said: “The entrepreneurial mystique? It is not magic, it is not mysterious, and it has nothing to do with the genes. It is a discipline. And, like any discipline, it can be learned.” In America alone, entrepreneurship education has exploded to more than 2,200 courses at over 1,600 schools, 277 endowed positions, 44 refereed academic journals, mainstream management journals devoting more issues to entrepreneurship, and over 100 established and funded centres.
Innovation is fundamentally the task of the markets and entrepreneurs. But history has shown that in moments of major transformations and crises, the role of governments has always been crucial. The government’s role as a catalyst in imposing and funding the adaptation of the educational, research, and other knowledge sources that are required to cope with deep and rapid technical change is well recognised. In the current scenario of fiscal constraint, the government along with the support of media can play the role of facilitator for the promotion of a new culture. An innovation council with designated role of a catalyst for nurturing and invigorating ideas can be a fundamental step towards innovative society.
In order to develop the curriculum for entrepreneurship, teaching economic strategy management, small business skills, legal and book-keeping skills, communication and team work skills should be made part of the curriculum. In this regard, the role of media and internet cannot be underscored. Some suggestions are:
At primary level embed elements of entrepreneurial behaviour, i.e. curiosity, creativity, autonomy, initiative, and team spirit. To this end, use games, cartoons and other tools appropriate to the age of pupils. Starting from primary school, create awareness in young children of the role of enterprises and entrepreneurs in society.
Introduce innovative pedagogies into all courses at secondary level, as a necessary basis for building an entrepreneurial spirit. Extend the range of pedagogies in use through innovative curricula development.
Associate students to real companies and to business people in order to ensure a close relation with real business experience. Students should not be kept in isolation and far from the world outside the school, for instance when running a virtual firm or simulating a business plan. In this regard, the concept of Student’s Mini Company (SMC) in the US and EU can be used as a model. In Europe, it is effective in 40 countries and more than two million students have participated in the year 2005/2006.
Allow and support the spontaneous initiative of student associations pursuing objectives such as creating links with businesses, and involving students in work on enterprise projects. Recognise and reward the time that students dedicate to these activities by means of educational credits.
Offer entrepreneurship education to disadvantaged groups, in particular to young people at risk of social exclusion may greatly benefit from this type of training. It can raise the motivation of those who learn best by doing, and who have difficulties in more traditional subjects. Some programmes addressing these target groups proved very successful both in terms of start-ups and of social integration. For example, the Punjab government’s initiative for providing vocational training to the selected students from the areas of FATA and Swat has been a great success in terms of social inclusion, human development and empowerment. In the current scenario, the flood-stricken youth of southern Punjab, Sindh and Balochistan can be lured towards entrepreneurship. This will have a dual impact of empowerment and rehabilitation on these youth.
Higher education establishments should integrate entrepreneurship across different subjects of their study programmes, as it may add value to all degree courses. All disciplines should develop opportunities for students at every level to experience entrepreneurship. Arts and science exhibitions, expos, and cultural festivals can play an exhortative role. At higher education level, bring entrepreneurs into the classroom and involve students directly in enterprise projects. Successful entrepreneurs may come and share their experiences and upcoming innovative projects with the students and the novel ideas from the students should be incorporated in the projects. This close interaction of the entrepreneurs and students can ameliorate the entrepreneurial streak in the students.
Encourage students and researchers with commercially viable business ideas to develop them into companies, by providing a range of support services within the institution (business incubation, financing, mentorship).
Embed evaluation systematically into all programmes. The most effective evaluation is independent and comparative (i.e. it should be run before the beginning of the programme and after its conclusion). As part of the final evaluation of a programme or course in entrepreneurship, test the entrepreneurial competences of students and offer them a certificate (“entrepreneurial driving licence”
acknowledging the acquisition of those skills. Tests for entrepreneurial competence are a common feature in many western countries.Academia, government and industry constitute the three helices that engage in Triple Helix System (THS) of innovation and entrepreneurship. It is present in a few HEC projects - where it is playing the role of a facilitator between industry and academia. There is a great potential for fostering entrepreneurship and innovation via THS. Few universities in Pakistan have already initiated academic programmes on entrepreneurship and innovation, but a concerted effort at a large-scale is required to enroot the culture of innovation and entrepreneurship in Pakistan. The innate capabilities of Pakistani youth coupled with innovative and entrepreneurial streak can ensure a knowledge-driven, prosperous and tolerant Pakistan.
The writer is the assistant chief of the Planning Commission of Pakistan.
Email: hsa666@hotmail.com
http://nation.com.pk/pakistan-news-.../25-Jan-2011/Entrepreneurship-can-be-taught/1
ajpirzada
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Govt working on strategy to help poor: Shaikh
Friday, January 28, 2011
ISLAMABAD: Federal Minister for Finance Dr Abdul Hafeez Shaikh said on Thursday that the government has been planning a comprehensive economic growth strategy to help the poor.
He said this while addressing the participants of a seminar jointly organised by Planning Commission and Department for International Development (DFID)-UK.
Deputy Chairman Planning Commission Dr Nadeemul Haq also attended the seminar.
Professor Alan Winters, one of the UK Government’s Chief Economists delivered a lecture on “growth policy”.
Shaikh said the government wanted benefits of its policies to reach all segments of the society, especially the poor.
He said the government was facilitating the private sector as the engine of economic growth to achieve this objective.
He said that the new growth strategy would also help improve competitiveness, promote investment based on innovation and entrepreneurship and better exploit the potential of the country’s large domestic market.
The minister expressed the hope that during current financial year, exports of the country would cross $22 billion.
Prof Winters stressed the inextricable link between economic growth and poverty reduction.
“Getting more people jobs lifts them out of poverty and creates more consumers, driving more production and demand for services.” He added that more people in work helps increase tax revenues, allowing the government to improve everyone’s living standards by investing in schools, hospitals and other infrastructure.
He said that Pakistan has talent and potential for economic growth and there is vast mine of latent talent and productivity which needs to be developed and tapped.
Govt working on strategy to help poor: Shaikh
Friday, January 28, 2011
ISLAMABAD: Federal Minister for Finance Dr Abdul Hafeez Shaikh said on Thursday that the government has been planning a comprehensive economic growth strategy to help the poor.
He said this while addressing the participants of a seminar jointly organised by Planning Commission and Department for International Development (DFID)-UK.
Deputy Chairman Planning Commission Dr Nadeemul Haq also attended the seminar.
Professor Alan Winters, one of the UK Government’s Chief Economists delivered a lecture on “growth policy”.
Shaikh said the government wanted benefits of its policies to reach all segments of the society, especially the poor.
He said the government was facilitating the private sector as the engine of economic growth to achieve this objective.
He said that the new growth strategy would also help improve competitiveness, promote investment based on innovation and entrepreneurship and better exploit the potential of the country’s large domestic market.
The minister expressed the hope that during current financial year, exports of the country would cross $22 billion.
Prof Winters stressed the inextricable link between economic growth and poverty reduction.
“Getting more people jobs lifts them out of poverty and creates more consumers, driving more production and demand for services.” He added that more people in work helps increase tax revenues, allowing the government to improve everyone’s living standards by investing in schools, hospitals and other infrastructure.
He said that Pakistan has talent and potential for economic growth and there is vast mine of latent talent and productivity which needs to be developed and tapped.
Govt working on strategy to help poor: Shaikh
keeninterest
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Tax breaks:
Any industry when it wants to gain foothold needs incentives, someone who is still crawling and struggling to standup and walk cant run least that be expected, it needs assistance which is what is done everywhere. Do a case study on indian IT sector on how it grew and manufacturing sector which has taken off in the last few years, tax breaks was one of the few incentives offered. Do a case study on individual indian states which have lagged in manufacturing and how industrialization caught up there as a result of tax breaks, it gives the much needed flip, employment, circulation of money and the indirect taxes are generated, though not much in quantity.
Indias tax to gdp ratio hovers between a very poor 12-13% and still the tax breaks, since you form a part of pc, think ahead not just the immediate or in 3-4years horizon.
Increasing the tax base doesnt necessarily mean only target the industry and certainly not the new set ups that take to business but find sets which have long existed but never touched because of political sensitivities, and agriculture sector is one such. Have it taxed but with rising revolts against the governments in Islamic world it would be ill timed right now.
Low cost credit:
Fair enough and agree and Pakistan is no position to sustain this on a immediate to short term basis but make micro finance and the banking system more accessible and holistic and if the banking network is not as dynamic get services of the post offices assuming that they would have a better coverage which also means no more big expenditure in creating infra but make use of existing infra with slight alterations. Through this empower the average man out there, give him do able business ideas which can sustain his and his families livelihood and make him the driver of the growth which means the government wont have to too much worry about the trickle down effect as well since the down trodden would have been made a factor which drives the growth.
Protectionism:
Amongst the many case studies do a few on the tata and reliance group, will show what wonders protectionism can do, the process has to be channelized in a time bound manner. Look at the Chinese state run enterprises or the west off late since they were hit by the economic melt down or state run petroleum enterprises world wide. The more important thing is run the thing efficiently and if that is done dont be too worried about protectionism as some curse.
Recent report says india is a highly protected economy followed by the Chinese yet the two have done wonders in contract Pakistan economy was much more open and liberalized and the end result?!
In the recent economic melt down the same protectionism was being hailed in india.
stable currency:
Well SBP is anyways doing it and will be required to do it in case the currency was to be under further devaluation pressures, I am sure Pakistan doesnt want rupee trading at over a 100 to a dollar anytime soon given when the country has huge external debts, a big import bill so market intervention from time to time is inevitable.
MSME:
Competition is good and healthy but not senseless and rapid onslaught of competition, decide it case by case, industry by industry and to what extent competition be allowed, may be in most cases you could start by JVs, and stake sales in public/private companies by % points, the extent of which could be limited significantly initially.
Is china the only industrial house to be for times to come? Well let us wait for 2015-16 and see how everyone starts talking about the Indian push, the home work is well in place, the push is there the volumes are required which attracts eye balls and the catchy headlines and that is not far from happening. Industrialization is the next big thing people will be associating with india along with infrastructure build up and not the IT!
Sure enough india and Pakistan have evolved completely differently and the solutions would also be different but no harm in checking out what good the other is doing after all in the region it is the Indian private sector which really does the talking and which is instrumental in indias rapid growth and lastly do check out how Indian private sector has been introduced in the defence sector to which it was largely alien just a few years back but slowly and steadily they have been introduced and would have build a name for themselves in another few years time period, it is happening right as Pakistan is attempting NDA.
ajpirzada
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Latest Draft of the New Growth Strategy comes out after incorporation of comments received from various sectors....
You can see the full document here:
http://growpak.blogspot.com/2011/04/latest-draft-of-new-growth-strategy.html
for those in UK, the above link seems not to work. plz follow the link below: http://www.facebook.com/l.php?u=htt...iles/28000296/New_Growth_Strategy.pdf&h=1cdaa
those who would like to contribute via their Facebook accounts, please follow the link: New Growth Strategy | Facebook (requested to do so)
You can see the full document here:
http://growpak.blogspot.com/2011/04/latest-draft-of-new-growth-strategy.html
for those in UK, the above link seems not to work. plz follow the link below: http://www.facebook.com/l.php?u=htt...iles/28000296/New_Growth_Strategy.pdf&h=1cdaa
those who would like to contribute via their Facebook accounts, please follow the link: New Growth Strategy | Facebook (requested to do so)
keeninterest
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ajpirzada,
was checking out the income tax rates in pakistan and i wondered why is it that no one ever paid a revisit there?
someone who's annual income is 12,00,000pa just pays a meager income tax of 10% and some one who is earning less has tax rates which keep getting negligible as the annual salary drops but interestingly the returns given on savings in a bank hover around 14% and when the two get compared it comes across as a ridiculous expense hitting the banking system hard until and unless the govt is subsidizing this rate which is again is not advisable considering the economic health pakistan finds it self in, and till the time the income doesnt exceed 19,50,000pnr till then it is not just the elites who are taking the system for a ride but almost most of pakistan's middle class as well who also happen to be the biggest critics of all the problems faced by pakistan on the economic front, it was time they were made a part of the solution than a lot which only knows to crib.
this is stupendous source of generating revenue for the government and i am sure you chaps must have thought about this but may be it is time that someone took a call where income tax slabs were no more 0.5, 0.75, 1.5 so on and so forth which by any standards are ridiculous especially in times as faced by pakistan but atleast 5-10-15-20 (all the figs in %).
i understand you people face the huge challenge of inflationary pressures but doesnt not mean revenue generation mode be let off.
was checking out the income tax rates in pakistan and i wondered why is it that no one ever paid a revisit there?
someone who's annual income is 12,00,000pa just pays a meager income tax of 10% and some one who is earning less has tax rates which keep getting negligible as the annual salary drops but interestingly the returns given on savings in a bank hover around 14% and when the two get compared it comes across as a ridiculous expense hitting the banking system hard until and unless the govt is subsidizing this rate which is again is not advisable considering the economic health pakistan finds it self in, and till the time the income doesnt exceed 19,50,000pnr till then it is not just the elites who are taking the system for a ride but almost most of pakistan's middle class as well who also happen to be the biggest critics of all the problems faced by pakistan on the economic front, it was time they were made a part of the solution than a lot which only knows to crib.
this is stupendous source of generating revenue for the government and i am sure you chaps must have thought about this but may be it is time that someone took a call where income tax slabs were no more 0.5, 0.75, 1.5 so on and so forth which by any standards are ridiculous especially in times as faced by pakistan but atleast 5-10-15-20 (all the figs in %).
i understand you people face the huge challenge of inflationary pressures but doesnt not mean revenue generation mode be let off.
muse
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What? Enhanced productivity - is that improving productivity? How?
In other words the foreigner will fund specific projects in which they can be told has a high degree of local ownership - screw central planning, the money's more or less free, so, well, you know... come with empty pockets and leave with them full - Hey give the Awaam what they want and if they want the finger, why stand in their way?
You say you don't follow?? Consider:
Saave?? Comprendo? Samj aahi?
High degree of Selectivity -- based on what?? High degree of local buy in??
What is high productivity in the Pakistani context or in any business context?? Did someone say "lower costs" - you get the Chawani.
And we lower costs by........?? remember the single digit salute?? We can lower costs over the long term by investing in capital equipment to lower our costs or we can pay less OR we can pay more money that has less value -- get it?? Buy that forex in todays rupees, Now.
C
You can't - you just can't create Markets by govt. Fiat -- and as you read the above piece, please do think about the HOW - because it's no where in the article. Could be, Should be ---it's just pie in the sky but the crowd that prefers to feel "good" instead of being real will appreciate it, they always do.
ajpirzada
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yup that improving productivity. How? by making your regulatory procedures simpler. such as monetization of perks, introducing electronic signatures act, reviewing agricultural markets acts, etc etc. To explain further, imagine when the bureaucratic will not be busy in getting a better house/car allocated to them etc, they ll be more productive. Also when a government employee will not have to write a paper application for getting some stationary or a dustbin, he will be more productive. Also when your government will not interfere in agricultural markets through TCP, PASSCO, etc, agriculture market will become more productive. AND SO ON.......
couldnt understand......
projects approved under PSDP are funded by external inflows such as loans, aid etc.
lowering cost but not necessarily thorough subsidies or capital investment. Consider this: regulatory burden in US is 8% of their economy. in other words, total cost to businesses due to various regulations is equivalent to 8% of GDP. Now imagine what it will be for a country like pakistan. To be more direct, a single firm spending around 500 hrs annually in order to go through the taxation process is definitely a cost. Also 30% of agricultural output going waste due to 12-13 middleman involved and also due to poor farm to market channels, lack of cold storage is a big cost. Add to this that a delay of one day in the transport of perishable agricultural good leads to a loss equivalent to 3% of the consignment. Also having to wait at the ports to get your goods cleared from custom is a cost.
yup markets can't be created by the government. but in Pakistan, government can definitely do something with the markets which will result in their development - leave the markets. Consider this: government has a presence of 46% in the fertilizer sector, 75% in construction, 60-70% in transportation and communications, more than 80% in oil and gas, 45% in banking, 20% in trucking and 100% influence on the prices of major crops minus cotton.
Just to clarify, if you read the actual document, much of what i have said is mentioned in it. Now obviously, journalists are not economists. meaning they do not have to capacity to analyse some economic document.
i have put the facebook link to the relevant page in my above post. All the people working on the document are on it. if you read the document and then come up with some comments, plz post them on the page and ill make the right person to respond to your specific questions.
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