During the last four years, Pakistan has no doubt succeeded in achieving a certain degree of macro-economic stability and improving its performance in certain areas of the economy. The external sector has come out of the woods and the country no longer faced the threat of default, as a result of surplus presently being enjoyed by our current account and the strong foreign exchange reserves position.

The fiscal deficit has, also, been reduced as a percentage of the GDP. Inflation has remained under control at three to four per cent. Exchange rate of Pak rupee vis-a-vis the US dollar has shown stability. In 2002-03, the GDP growth was reported to have moved up to 5.1 per cent, while the per capita gross national income (GNI) had reportedly increased to $492 in 2002-03, from the previous year’s level of $420.

Exports had crossed the mark of $11 billion, which was a new record, while tax revenue had gone up to around Rs460 billion for the first time in the country’s history. During the last two years, income from workers remittances had, also, witnessed a surge and in 2002-03 the same stood at $4.23 billion. A jump in the income from remittances was the main factor that had helped in pushing the KSE 100 index above 4300 points, in recent weeks.

Encouraged by the successes, enumerated in the preceding paragraph, the government’s optimism seemed to have been boosted and Finance Minister Shaukat Aziz has declared more than once during the last couple of months that Pakistan would soon be joining the Asian Tigers’ Club and that within the next few years the country would move from its low income country (LIC) status to that of a lower middle income country (LMIC).

It was, also, stated recently that the country’s per capita income was expected to double to $1,000 by 2010, as a result of higher agricultural and industrial output and the upward trend in the income from workers remittances and direct foreign investment (DFI). In his latest statement on the subject, about a week ago, the finance minister had reiterated that, like Malaysia, Pakistan would also float bonds in the international markets in order to get rid of its dependence on foreign aids.

Is Pakistan really poised, at present, to achieve rapid and sustained economic growth, as the Asian tigers had done in the past? What are the chances for Pakistan to be successful in boosting its the GDP, per capita income and exports to a level close to that of the Asian tigers, in the foreseeable future? It is regretted to say that the chances do not appear to be bright, in view of the facts mentioned in the following paragraphs.

When the Asian tigers started their journey on the road to economic development, they were fully aware that economic progress and social transformation could not be possibly achieved without educating the population, both male and female. Therefore, for the first one or two decades, they remained seriously engaged in improving their literacy percentage.

Their target was of course to achieve a 100 per cent literacy rate, as is a common phenomenon in the advanced countries. As a result of their efforts, the tiger economies were successful in vastly improving their literacy percentages. As shown in the World Development Report, 2003, a World Bank document the adult literacy rate (percentage of people 15 and above) stood at 98 percent in Korean Republic, 95 per cent in Thailand and 87 per cent in both Malaysia and Indonesia, in year 2000.

Next, the Asian tigers made an endeavour to develop their manufacturing sector as best as they could, with a focus on high-tech manufacturing. The countries knew fully well that the per capita income of the people could be raised meaningfully, only by increasing the share of the manufacturing sector in the GDP. This is, first and foremost,because the manufacturing sector provides the best opportunity for value addition. Secondly, the performance of the manufacturing sector is not subject to the vagaries of weather, as in the agriculture sector.

Thirdly, manufactured goods can be stored for almost any length of time, being durable and, last but not the least, the manufacturing sector is also not subject to the law of diminishing returns, like the agriculture sector or, at least, the application of the law comes very late in case of the manufacturing sector. Thus, the development of the manufacturing sector on scientific lines provides a solid ground for a country to achieve rapid and sustained economic growth.

A look at the statistics given in the World Development Report, 2003 shows that all those economies known as Asian tiger had succeeded in boosting the share of their manufacturing sector in the GDP. For instance, in Korea, the share of its industry in the GDP (as of 2001) was 41 percent as against 4 percent of the agriculture and 55 percent of the services sector. In Malaysia, the share of its industry in the GDP during the same year was 50 per cent compared to 8percent of the agriculture and 42 percent of the services sector. In Thailand, industries’ share in the GDP was 40 per cent as against 10 per cent of the agriculture and 50 per cent of the services sector whereas in case of Indonesia, the share of its industry in the GDP was 47 per cent, compared to 16 per cent of agriculture and 37 per cent of the services sector.

As a result of a high literacy percentage and a fully developed manufacturing sector, the Asian tigers were able to increase their GDP, per capita income and export manifold during the last few decades. Korea ( with a population of 48 million) succeeded in boosting its GDP from $63 billion in 1980 to $422 billion in 2001. Its per capita income stood at $9,400 in 2001.

During the above-mentioned period, exports from Korea went up from $22 billion in 1980 to $151 billion in 2001. 91 percent of Korea’s exports in 2001 consisted of manufactured items, 35 per cent of which were high-tech products. In the same way, Malaysia’s GDP (population 24 million) went up from $24 billion in 1980 to $88 billion in 2001. Its per capita income stood at $3,640 in 2001. During the above-mentioned period, its exports grew from $14 billion in 1980 to $89 billion in 2001.Eighty per cent of the exports from Malaysia in 2001 consisted of manufactures, with the share of high-tech products being 59 percent.

Thailand (with a population of 61 million) was able to boost its GDP from $32 billion in 1980 to $115 billion in 2001. Its per capita income stood at $1,970 in 2001. During the aforesaid period, Thailand’s exports grew eight times, from $8 billion in 1980 to $64 billion in 2001. Thailand’s 76 per cent exports in 2001 consisted of manufactured goods, the share of high-tech products being 32 per cent.

Even Indonesia (population 214 million), which had suffered badly in the Asian financial crisis a few years ago, was able to boost its GDP from $78 billion in 1980 to $145 billion in 2001. Its per capita income stood at $680 in 2001. During the above-mentioned period, Indonesia’s exports moved up from $24 billion in 1980 to $57 billion in 2001; 57 per cent of the country’s exports in 2001 consisted of manufactured products, 16 per cent of which were high-tech products.

Due to substantial increase in their GDP and per capita income, as shown in the preceding paragraphs, the Asian tigers were also able to bring down poverty in their respective countries. According to statistics given in the World Development Report, 2003, both in Korea and Thailand less than two percent of the population had an income below $1 a day, In Indonesia, 12.9 per cent of the population had an income below $1 a day, while the information in respect of Malaysia was not available.

As against the above-mentioned performance of the Asian tigers, Pakistan had a literacy percentage of only 51.6 percent, at present (as shown in the Economic Survey, 2002-03) and the share of its manufacturing sector in the GDP remained constant at 18 percent, as against 25 per cent of the agriculture sector.(the government was now planning to raise the share of the country’s manufacturing sector to 25 per cent by 2010). Pakistan had been able to boost its GDP from $24 billion in 1980 to around $70 billion in 2003. The country’s per capita GNP stood at $492 in 2003. During the above-mentioned period, exports from Pakistan had gone up from $3 billion in 1980 to $11 billion in 2003.

As shown in the World Development Report, 2003, 85 per cent of the exports from Pakistan in 2001 had consisted of manufactured products. However, the share of high-tech products in these products was reported to be zero. So far as poverty was concerned, 31 per cent of Pakistan’s population was reported to be having an income of less than $1 a day, according to the statistics given in the World Development Report, 2003.

Pakistan may find it extremely difficult to bring about a hundred percent increase in its per capita income (from the present level of $492 to $1000) by 2010, as forecast by the country’s economic managers, unless it pays more attention to human resource development and succeeds in increasing the share of its manufacturing sector in the GDP, to a considerable extent, with a focus on value addition.

Unfortunately, the literacy programme faces many roadblocks such as paucity of funds, poor governance, a pitiably low literacy percentage among the country’s female population and an environment unfavourable to promotion of education, particularly in rural areas of the country. Without removing the above-mentioned roadblocks, the literacy percentage could not be improved substantially in the country.