Economists, technocrats, policymakers and businessmen are now giving a wake-up call to develop fast the sorely needed skills that have left Pakistan way behind other Asian countries.
The calls — earnest, loud and clear — came at this week’s annual general conference of the Pakistan Institute of Development Economics (PIDE), where a large number of economists from home and abroad had gathered. Illustrative of the times and needs of the nation, this year’s conference theme was “Skill Development, Productivity and Growth.”
This theme was selected “keeping in view the challenge of global socio-economic changes, together with the aim of achieving sustained growth,” A. R. Kamal, eminent economist, PIDE Director, and the conference host said.
Addressing the conference, Prime Minister Shaukat Aziz stressed the need for large-scale skill development in order to enhance productivity that will reduce the cost of production, as well as to sustain seven to eight per cent annual GDP growth in the future.
He underlined the fact that “rapid improvements in production technologies have changed the complexion of the labour market not just in Pakistan but all over the world.” Innovation and hi-tech know how of a high grade and a highly skilled labour workforce are “the economic edge of the 21st century,” Mr Aziz said.
Pakistan has huge human capital -— 156 million people —- of whom 100 million are below the age of 25, a huge pool of creativity full of talent, energy and brand new ideas for their own prosperity and bright future which, when multiplied, means the whole nation. This is why the government’s focus areas now include establishing a national technical and vocational training authority, bringing all institutions under one umbrella, sustained increases in investment, promoting IT, upgrading industry, building a national trade corridor, investing in human capital, promoting the social sector, accelerating the creation of knowledge, reforming and automating the tax system, strengthening institutions and improving the competitiveness of industries, earning energy and water security, and competing globally for the benefit of Pakistan, earning a big share in the potentials offered by the WTO. This is how the government now looks at the problems, and this is how it plans to attempt to create a knowledge-based economy. It plans to invest Rs319 billion in IT and ICT in five years.
The positive growth of the GDP over the last three years encourages Pakistan to implement these plans and move towards the identified goals. It seems, after much rhetoric, it will do so now, because world competitiveness has forced it to do so, or get ready to suffer further.
Moving in this direction, the government this week enhanced the pay and benefits package for faculty members of public universities who are working under the Tenure Track System (TTS) providing for six-year service on contract. After every three years the faculty member’s work and contribution will be closely reviewed, and then a permanent position will be offered.
The ministry of finance announced that professors under the TTS will receive a maximum salary of Rs174,200 per month, while associates professors will be paid Rs94,300 and assistant professors Rs66,100. The HEC has also launched an In-Country Short Term Teacher Exchange Programme to enhance the quality of education and to promote academic culture at institutions of higher learning.
The HEC has invited applications from faculty members and professionals to deliver lectures or to offer services for academic and research development of public sector universities and degree awarding institutions. These measures are geared to raise and expand the level of technical, scientific and higher education to promote the economy.
These are good attempts —- though belated — to catch up with the rest of Asia. There is a major task ahead in the field of skills development. It is recognized that “productivity has contributed a third to GDP, the increase in total factor productivity has more to do with catching up than the improvement in human resource development, a major source of sustained growth,” say Kamal Musleh-ud-Din and Usman Qadir in their publication, Global Research Project —Pakistan Country Report.
But where do we stand in the Human Development Index (HDI)? Pakistan now figures at 135, up from 142 some years back. The Medium Term Development Framework (MTDF) that covers five years up to 2010, sets the goal for diversification of GDP on the path of high value addition in manufacturing and sophisticated services. It calls for skilled manpower in a variety of categories in very large numbers.
While our businesses and industries are in the habit of expecting the government to do everything for them with public money, including the skill development of manpower they themselves employ, the contribution of the manufacturers and producers of industrial and other services in these 58 years is negligible.
Things will have to change and the producers will have to pay a good amount for training and upgrading skills, whether through public institutions, or by way of on-the-job-training. Raising of skill levels will have to be linked to improvements in technology deployed in industry and services.
The short supply of a skilled labour force means demands for higher wages, which are considered expensive by the producers who are used to paying low remuneration to low-skilled manpower. In case the industry wishes to thrive and deploy higher levels of technology and the labour which can work with it, they have to pay substantially higher wages.
In this way they will be able to earn more profits for themselves. Efforts will have to be focused to develop and upgrade all types of skills, including those aimed at problem solving, linking creativity to action, conflict resolution, coping, facilitation, navigational, vocational and job skills.
Besides raising quality and skill standards, the number of vocational and training institutions will have to be vastly increased, especially those in less-developed regions like Balochistan and the North West Frontier Province.
At present Pakistan has 546 technical and vocational centres, producing 204,670 trained people annually. These include 12 centres in Balochistan producing merely 1,730 persons, NWFP with 35 centres training 3,740, and Sindh with 33 centres producing 3,740 persons.
Some 25,000 people are trained on a “contractual basis.” The Asian Development Bank, in a survey in 2005, has rated the skill levels and abilities developed during training at polytechnics and vocational institutions. It ranks 28 per cent of vocational programmes as poor, 60 per cent as fair and only 12 per cent as “good.”
Even then, the number of trained persons is small and the level of skill training low. The World Economic Forum’s Technology Index indicates that Pakistan’s ranking has improved from 87 to 80 and Growth Competitive Index rank from 91 to 83 (2004-05) and (2005-06). Most industries are hovering around the lower end of technology.
In a situation like this, the country cannot dream of making a quantum leap in any field, ranging from production and quality to export. The demand and potential for higher skills and people to man the future’s sophisticated industries should be assessed, and training institutions need to be provided in the public sector, but in future more so in the private sector or privately-financed by business and industry.
There is a demand for skilled manpower of all types and for all sectors. “Our trained manpower, ranging from masons to technicians and engineers to bankers, is employed all over the world, but the country faces an acute shortage of all such categories,” PM Aziz pointed out. This skill gap needs to be filled to the advantage of both the producers and workers.
Kamal proposes two-year certificate courses to produce a skilled workforce for various activities, which should be provided commercial jobs by the training institute concerned as a sub-contractor in the second year. There should be a two-year diploma course for supervisors to make them well-versed in quality control techniques and at least three months’ apprenticeship in the relevant industry. The courses taught at polytechnics should be thoroughly revised and updated in line with the demand of industries and the latest production techniques.
The “4-Cs” plan initiated by the International Labour Organization (ILO) can form a strong basis to develop training systems that can respond “effectively to the changing demand for skills,” as Rashid Amjad, ILO’s Director for Policy Planning, Employment Sector, suggests. These “4-Cs” are: * Co-determination, or social partnership between employers who are the end users of the skills, the workers who receive them and the government, that provides the framework, is essential. It also generates realistic information on skill needs. * Co-financing, because the constraints on public spending necessitates that employers and individuals sponsor or undertake training. This can be done by providing incentives/tax deductions and giving credit and loans with favourable repayment arrangements to individuals. * Certification, for improving mobility of labour through introduction of a recognition system for skills and competencies, including those acquired on-the-job or in the informal economy. * Cost-effectiveness and market tests in the provision of training, including the one through private training providers.
“At the heart of Pakistan’s transformation into a knowledge-based, globally competitive economy is the need to embed into the thinking of all people, whether employers, policymakers, landowners, factory workers, farm workers and the self-employed, the basic notion of dignity at work and respect and enforcement of basic workers’ rights. But this realization has been slow in coming to Pakistan,” says Amjad.
Economists, technocrats, policymakers and businessmen are now giving a wake-up call to develop fast the sorely needed skills that have left Pakistan way behind other Asian countries.
