It’s time to revive industrial productivity
“Yesterday is gone. Tomorrow has not yet come. We have only today. Let’s begin.” – Mother Teresa
Our yesterday is dominated by horrific memories of an ignorant bunch, brainwashing and training young men and sending them on suicide missions to attack and mercilessly kill their fellow citizens. No place, be it a mosque, school, park, a security installation or busy market was safe from their nefarious operations that were immaculately planned and executed – no doubt by resourceful external masterminds pulling their strings. Surprise was their most lethal weapon that caught people unguarded. They created havoc and terror – all ostensibly following an incomprehensible doctrine of protecting Islam.
Yesterday our country seemed ungovernable. We lived in perpetual fear of the unknown danger from the tribal north to the settled areas deep in the south. Our homes were in darkness. Domestic budgets could never balance due to ever rising costs. Road blocks and random searches made even crossing the street an exasperating and hazardous exercise. Confidence in the nation’s very existence was eroding.
Today, we are in relative peace. The cities and ordinary life gives the semblance of normality. Interruptions of power shortage have reduced. Economic indicators no longer predict doom. Perhaps things are even looking up slowly but surely. We must now ask if we are doing enough to restore our lives and reclaim our good name. Time does not stop for anyone. In fact it flies like an arrow. So let us learn from yesterday and concentrate on today. Let us work for the livelihood of our people and progress of our nation. As James Carville said – It’s the economy, stupid.
Pakistan commenced its economic progress with mixed success through eight five-year plans from 1950 to 1996. The very first five-year plan collapsed even before it took off, due to the lack of capacity and technical knowledge. The second plan of 1960-65 was more successful as it gave high priority to industrial development. Its policy mix of encouraging private entrepreneurs to work in areas of greater profitability and the government acting in areas where private sector was reluctant to operate, led to rapid and substantial growth. Water and power utilities were developed and energy sector was initiated. This period was hailed as an era of industrialisation, economic prosperity and a fine national repute. Considerable engineering and administrative expertise was developed during this period.
After the 1965 war over Kashmir, foreign assistance declined and sanctions were repeatedly imposed. The third five-year plan (1965-70) recorded a growth of 122% during the first three years but economic constraints made the plan untenable. Economic disaster became inevitable. The fourth and fifth five-year plans were abandoned without any progress. The sixth five-year plan was able to achieve a growth of 6.5%.
However, the influx of Afghan refugees and sharp increase of oil prices took the resources away from the development projects. Our penchant for indulgence in short futile wars had already pushed us in political instability, religious militancy and external isolation. Industrialization that required entrepreneurial skills and long term investments were replaced by consumerism for short term gains. This opened the floodgates of cheaper imports that rendered our small and medium enterprise uncompetitive and our productivity into a constant decline.
The basic flaw in all our development models remained the total dependency on foreign financial assistance and loans – primarily from the United States, lately from China – a legacy that has haunted us ever since. Further, no attention was paid to population welfare, self reliance and the cultivation of nationalism or religious harmony.
Many of us like to quote Europe or USA whenever comparisons are solicited. Such comparisons between two different worlds, far apart in every way are nothing but presumptuous, bordering on – unearned – arrogance. The reality is that nations once far behind have overtaken us and the gap with those ahead has become unbridgeable. Even making a comparison with India – which could have been considered normal in the recent past – is no longer realistic due to its galloping progress in all sectors during the past decades.
Let us look at Bangladesh – the former eastern wing of Pakistan that separated in 1971. Bangladesh had the challenges of vulnerability to natural disasters, lack of resources and a large population. Many predicted it would collapse as a state, particularly after the 1974 famine. However, it is now being cited as a development surprise.
The World Bank view is that Bangladesh is setting a global standard at reducing poverty. Two of its NGOs – namely BRAC and Grameen Bank (awarded the Nobel Peace prize) – have gained international acclaim. Both target the poor, focusing on holistic social development and microfinance. They have claimed a fall in child mortality rate by two thirds to 31 per 1000, increase in life expectancy to 70.9 years (Pakistan’s life expectancy is at 66.4) and decline of population growth rate from 3.4 to 1.2%.
Women have been engaged in the productive sectors that now account for 36% of its workforce. 90% of workers in its booming apparel industry are women. More than 85% of the clients of microfinance in Bangladesh are women who are engaged in small businesses. This new found financial independence of women has played an integral role in healthier social environment and falling birth rates. It is not something out of the blue. The country has achieved these successes through sustained efforts and the last few decades’ sensible government policies.
Meanwhile, our progress in Pakistan has been constantly declining – on all accounts. We have been on the brink of bankruptcy with looming threats of being named a failed state or a terrorist state. Mega infrastructural projects – though necessary – do not directly contribute to nation building. We must now diligently work towards across-the-board reforms. Human resource development, poverty alleviation, social uplift and the importance of birth control must be elevated to the top of our priority list. We must also bring our female population (constituting 55% of our headcount) into the mainstream economy by creating work opportunities and encouraging them to step out of their homes.
Bangladesh does not grow cotton nor did it have any textile or processing mills. Yet it has become the second biggest garment exporter in the world after China. Today we must contemplate why foreign exchange reserves of our underdeveloped, former eastern-wing stands at $31 billion and export earnings at $34 billion with a consistent growth rate of around 6%. Is it not ironic that (despite being a cotton growing country) our exports have remained stagnant at around $18 billion and we feel so elated at foreign exchange reserves of a paltry $21 billion?
It is time to revive our early economic model of a public-private development mix that has been followed by other nations of the region with great success. Profit making must not be viewed as a crime. The government and private sector must complement – and not compete against – each other. Projects must be prioritised in national interest and proceed with actionable timelines, in private and public sectors. We must develop an inward-looking national approach to succeed. It is time to raise the potential of our 200 million people.
