ajpirzada
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By Ijaz Kakakhel
ISLAMABAD: The countrys future development and prosperity are centered on enhanced productivity, strengthened internal markets and innovative, community-led urban development.
In this regard the Planning Commission (PC) is working vigorously on making New Development Approach (NDA), on the basis of which the countrys development plans would be carried out, sources told Daily Times on Friday. An unintended consequence of the countrys policies has been the stifling of internal markets, cities and communities, which play a critical role in fostering productivity, innovation and entrepreneurship and ultimately promote growth, prosperity and development.
Under the new development framework, private sector should be the growth-driver in open market environment that rewards efficiency, innovation and entrepreneurship, while the government is the facilitator that protects public interests and rights, provides public goods, enforces laws, punishes exploitative practices, and operates with transparency and accountability.
Sources said the two key factors that have determined economic growth in the past are external resource inflow and public sector projects. The latter used to be mainly financed by the former. In the old model, Pakistan has excessively focused on public sector investment and producing labour with low-end technical skills. The NDA should now be based on endogenous growth, where the quantity of investment should be complemented by efforts to improve the quality of investments i.e., their productivity and efficiency. The private sector must drive economic growth with timely implementation of market reforms, which should promote competitiveness. Pakistani cities presently are configured as suburban clusters instead of being creative cities, which are locomotives of growth. It is essential for Pakistan to step up its efforts to produce high-end human capital. Promoting innovation and entrepreneurship should be the cornerstone of the governments facilitation to private sector.
Small to medium-sized enterprises (SMEs) comprise of 85% of entrepreneurial businesses in the country. They employ approximately 78% of the non-agricultural labour force and contribute over 30% to Pakistans GDP and 25% of the countrys exports of manufactured goods.
Pakistan, despite having a huge market size, has very weak market efficiency indicators, indicating very low level of innovation.
Despite low cost of doing business in comparison to the regional economies, Pakistan is ranked 103 out of 125 countries in the global innovation index. Pakistani exports have long suffered due to a lack of product and regional diversification. Manufacturing supply chain is skewed towards production and assembly of goods that use imported inputs, intensively. Components of the supply chain, such as research and development, design, distribution and marketing, have long been neglected.
Creation of competitive markets is the starting point towards sustained economic growth. Free and flexible markets should allow businesses, which have run their course, to exit and be replaced by more efficient firms. Instead of providing incentives and subsidies to different sectors, markets should be allowed to determine optimal allocation of resources. Second, it is imperative that there are deep reforms, which limit the effectiveness of rent-seeking mechanisms. Third, a sound judicial system that ensures property rights and contract enforcement could go a long way in sustaining inclusive growth. Fourth, the triple helix system of promoting innovation should require universities, industry and government to collaborate for the promotion of new and marketable ideas. Finally, entrepreneurship should be incorporated in school curriculums at all levels of education. Institutions having practical facilities for young entrepreneurs need to be strengthened. Demand-driven approach for internal markets, starting with consumers and working back to link into supply systems with the producer by improving the quality and quantity of retail outlets according to the NDA.
Government land in prime city center areas should be privatized and made available for mega commercial projects. Taxes, legislation and regulations should not penalise commercial developments, as is currently the case. Clarity in zoning and building regulations needs to be provided to allow for more and bigger warehouses and cold chain services. There should be focus on improving transport efficiency, while prioritising freight transport efficiency considering its role in linking up the entire supply chain network. Promoting openness and competition, e.g. bringing goods of international quality to consumers would promote innovation. Furthermore, competition in value chain development needs to be promoted. Free entry and exit of participants in the market (without special privileges or licenses) as well as a more liberal policy allows for mobility with greater fairness and competition for wholesalers thus, encouraging private investment.
Daily Times - Leading News Resource of Pakistan
ISLAMABAD: The countrys future development and prosperity are centered on enhanced productivity, strengthened internal markets and innovative, community-led urban development.
In this regard the Planning Commission (PC) is working vigorously on making New Development Approach (NDA), on the basis of which the countrys development plans would be carried out, sources told Daily Times on Friday. An unintended consequence of the countrys policies has been the stifling of internal markets, cities and communities, which play a critical role in fostering productivity, innovation and entrepreneurship and ultimately promote growth, prosperity and development.
Under the new development framework, private sector should be the growth-driver in open market environment that rewards efficiency, innovation and entrepreneurship, while the government is the facilitator that protects public interests and rights, provides public goods, enforces laws, punishes exploitative practices, and operates with transparency and accountability.
Sources said the two key factors that have determined economic growth in the past are external resource inflow and public sector projects. The latter used to be mainly financed by the former. In the old model, Pakistan has excessively focused on public sector investment and producing labour with low-end technical skills. The NDA should now be based on endogenous growth, where the quantity of investment should be complemented by efforts to improve the quality of investments i.e., their productivity and efficiency. The private sector must drive economic growth with timely implementation of market reforms, which should promote competitiveness. Pakistani cities presently are configured as suburban clusters instead of being creative cities, which are locomotives of growth. It is essential for Pakistan to step up its efforts to produce high-end human capital. Promoting innovation and entrepreneurship should be the cornerstone of the governments facilitation to private sector.
Small to medium-sized enterprises (SMEs) comprise of 85% of entrepreneurial businesses in the country. They employ approximately 78% of the non-agricultural labour force and contribute over 30% to Pakistans GDP and 25% of the countrys exports of manufactured goods.
Pakistan, despite having a huge market size, has very weak market efficiency indicators, indicating very low level of innovation.
Despite low cost of doing business in comparison to the regional economies, Pakistan is ranked 103 out of 125 countries in the global innovation index. Pakistani exports have long suffered due to a lack of product and regional diversification. Manufacturing supply chain is skewed towards production and assembly of goods that use imported inputs, intensively. Components of the supply chain, such as research and development, design, distribution and marketing, have long been neglected.
Creation of competitive markets is the starting point towards sustained economic growth. Free and flexible markets should allow businesses, which have run their course, to exit and be replaced by more efficient firms. Instead of providing incentives and subsidies to different sectors, markets should be allowed to determine optimal allocation of resources. Second, it is imperative that there are deep reforms, which limit the effectiveness of rent-seeking mechanisms. Third, a sound judicial system that ensures property rights and contract enforcement could go a long way in sustaining inclusive growth. Fourth, the triple helix system of promoting innovation should require universities, industry and government to collaborate for the promotion of new and marketable ideas. Finally, entrepreneurship should be incorporated in school curriculums at all levels of education. Institutions having practical facilities for young entrepreneurs need to be strengthened. Demand-driven approach for internal markets, starting with consumers and working back to link into supply systems with the producer by improving the quality and quantity of retail outlets according to the NDA.
Government land in prime city center areas should be privatized and made available for mega commercial projects. Taxes, legislation and regulations should not penalise commercial developments, as is currently the case. Clarity in zoning and building regulations needs to be provided to allow for more and bigger warehouses and cold chain services. There should be focus on improving transport efficiency, while prioritising freight transport efficiency considering its role in linking up the entire supply chain network. Promoting openness and competition, e.g. bringing goods of international quality to consumers would promote innovation. Furthermore, competition in value chain development needs to be promoted. Free entry and exit of participants in the market (without special privileges or licenses) as well as a more liberal policy allows for mobility with greater fairness and competition for wholesalers thus, encouraging private investment.
Daily Times - Leading News Resource of Pakistan
