ISLAMABAD: Interior and Planning Minister Ahsan Iqbal said on Wednesday that the old paradigms of growth and development are becoming increasingly irrelevant in the present scenario, and Pakistan needs to recognise and capitalise on the new emerging drivers.
Delivering a special lecture at the Pakistan Society for Development Economics, organised by Pakistan Institute of Development Economics (PIDE), he said that developments in robotics are changing the existing dynamics by providing developed countries an edge to compete with developing countries on low costs arising from low wages and cheap labour.
“Developing countries will be unable to capitalise on this traditional edge for much longer. They need to adapt quickly lest they fade away into oblivion like the ‘Nokias’ and ‘Motorolas’ of today”, he explained.
Mr Iqbal said that capital mobility across borders is increasing and capital controls are less relevant now – the simple lesson being countries and destinations are all now competing for stability, security and attractiveness of markets.
He added that information is also emerging as a key driver and any country that can leverage it for development and growth will benefit. It is also emerging as a tool of spreading chaos and instability, which countries need to recognise and adapt to.
The fourth emerging driver is labour and talent, on these, developing countries need to do their part to attract and retain skilled and talented labour. How the country charts its way forward keeping these drivers in mind and in the new global scenario is the key question to focus on, he pointed out.
The planning minister said that the country was facing many challenges on several fronts; however the state was attempting to face those challenges with the best of its abilities. Pakistan experienced two periods of phenomenal and promising growth but the impetus generated was sadly lost each time, he regretted.
The first, he said, came in the 1960s when the country, under the leadership of Ayub Khan was considered to be the rising star of Asia, and was surpassing East Asian economies of South Korea, Taiwan and Thailand.
“Sadly, the country missed the boat due to a realignment of priorities to face security concerns and now those same economies of South Korea, Taiwan and Thailand are ahead of Pakistan,”, he said.
The second period came when Pakistan was among the first countries to initiate reforms that encouraged growth of the private sector in the early 1990s and attempted to remove the distortions created earlier.
However, the subsequent political instability halted the reforms which adversely affected growth and, once again, other regional economies, particularly India and Bangladesh, which applied the same reform strategy, successfully reaped the benefits while Pakistan was left on the sidelines.
No country has developed when faced with political instability; a stable political environment is the key and the first necessary condition for achieving sustainable, inclusive development, he said.
Stressing the economic success of the current government, the planning minister said that in 2013, Pakistan looked like a hopeless case with widespread power outages of 18-20 hours that were crippling the whole economy.
Secondly, the country’s infrastructure was languishing with no worthwhile investment having taken place in the last 14 years.
Thirdly, the security situation in the country was bleak with numerous episodes of violence and loss of life. Recognising the value of removing these bottlenecks to achieve high growth the present government identified priority areas in 2013 and formulated ‘Vision 2025’.
The government, he said, had made credible progress on all fronts, including energy, connectivity, security, and infrastructure.
The country was now in a position to achieve high growth in the coming years and reap the attendant benefits, he added.
On the second day of the conference, two panel discussions addressed the issues of modernisation of agriculture and cluster-based agribusiness development, and academic diaspora, and human and material resources for development.
The highlight of the second day of the conference was ‘Mahbub ul Haq Memorial Lecture’, delivered by former Deputy Chairman of Planning Commission, Nadeem ul Haque. The session was chaired by Dr Ishrat Husain Professor Emeritus, IBA.
Published in Dawn, December 14th, 2017