ISLAMABAD, Sept 2: A delegation of the Asian Development Bank headed by Jesus Felipe gave a presentation at the Planning Commission on “Competitiveness and Structural Transformation in Pakistan,” here on Tuesday.
The objective of ADB’s research programme was to understand Pakistan’s constraints to industrialise and to transform, upgrade and diversify its economy. The findings of this analysis would be incorporated into ADB’s operations in Pakistan namely, lending and policy dialogue.
Felipe underscores that economic development requires diversification, not specialisation. He said that growth accelerations were associated with structural changes in the direction of manufacturing. For rapid growth, a large manufacturing sector is essential.
The presentation highlighted the importance of sophisticated goods and underlined that countries that export more sophisticated goods, grow faster.
It was noted that Pakistan’s exports were relatively unsophisticated.
It was pointed out that services sector was the largest contributor to output growth but Pakistan has an agricultural economy for the employment structure which has low level of labour productivity. Also it has low manufacturing share compared to successful economies. All this ends at low level of export sophistication.
In order to get the firms move from the poor parts to the rich parts of the world, a country needs to change to products that use similar capabilities. It was observed that Pakistan occupied textiles and garments cluster in the product space which is tightly connected to itself, but poorly connected to the rest of the space. Moreover in Pakistan’s case, the export dynamism lagged relative to comparators in the region.
For transformation, public-private cooperation was strongly recommended. Some policy initiatives like open architecture, self-organisation, co-financing and transparency were also proposed.
Deputy Chairman Planning Commission chaired the meeting, whereas representatives of various other ministries and officials of the Planning Commission attended the presentation.
—APP