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Infographics of Growth Strategy of Pakistan, prepared by Madiha Younus
Shared by: MadihaYounus1
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- views:
- 16
- posted:
- 8/7/2012
- language:
- English
- pages:
- 10
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Growth Strategy of Pakistan, 2011
Growth strategy aims to make growth more inclusive and
Decades long struggle with macroeconomic
stabilization arising from unsustainable
speed up the movement out of poverty
fiscal policies Exports, Imports and Current Account
1980s-2000s In 2010 - 110 million people in working age group
Pressure of demography By 2050 - 236 million people in working age group
20
15
Heightened expectations of the population for a 10
better life from a democratic government 5 Targeting Growth
0
Battering from external events, including Exports Imports Current Account
(%) of GDP (%) of GDP Deficit/GDP
earthquakes, floods and a continuing
longstanding low intensity conflict
Sectoral Shares in GDP (%)
60
Legacy of economic distortions
50 Agriculture Deep and sustained reforms in
Revival of the economy to its
40 areas such as public sector
short-term potential annual GDP
Low and declining productivity Industry management, competitive markets
30 growth rate of about 5-6% and
development, urban management
20 long term growth rate of 7-8%
Service and connecting people and places
10
Large loss-making public sector that impedes
0
market development
1970 2010
Key determinants of growth are
Thrust of the Growth Strategy
The growth strategy seeks to increase return on investment through measures to improve investment climate,
economic governance and
to reduce cost of doing business and to dissolve impediments to entrepreneurship human capital
Constraints to Economic Growth of Pakistan GDP Growth (%) Key Points
Prepared and Presented by Madiha Younus
1971-2009 (Annual Avg.) • Focus is on fresh approach of
China “Software” of growth
Inadequate Market Development • Politicized PSDP projects selection,
Inadequate market 4.9 India requiring rationalization of PSDP
development 9.1 • Gross under utilization of existing
Lack of competition
Lack of Efficient Public Sector Management Malaysia
infrastructure
5.9
Tax tariff and policy Indonesia
• Simultaneous engineering of
distortions
5.3 stabilization and growth can be done
Entry barriers Provide core governance Facilitate markets and
Lack of efficient goods such as security of investment with
Promote deepening of
6.0 Thailand • Energy crisis in Pakistan, a
public sector Government physical, human and
life, property, transaction informed policy and
management involvement
and contract competent regulation
social infrastructures 6.4 management issue rather than a
Poor regulation Pakistan capacity issue
Productivity and Innovation
Never before in history has innovation offered promise of so much to so many in so short a time ~ Bill Gates
Labour Productivity by Sector, 2007 To increase public sector productivity, role of state needs to be transformed from
3 owner-operator to facilitator-regulator across economic activities
2 Industry-University linkages should be emphasized as they play
a decisive role in fostering innovation
1
0
Agri. Manuf. Const. Wholesale Finance &
Reforms for Productivity
& Others Others
Competitive markets
Agriculture Industry
Productive human resource
Cotton production can be increased by
Consistent subsidies have adversely
62.5% by developing seed
affected the risk taking culture Healthy population
industry, controlling weeds and pests
(CLCV and Mealy Bug) and adopting in private sector
improved crop management techniques Meaningful education
Environmental degradation is costing Connecting markets and people
Pakistan in terms of low GDP growth
Knowledge creation
Prepared and Presented by Madiha Younus
40% of irrigated land has been affected by and commercialization
either salinity or water-logging
Less than impressive Diffusion and absorption
20% of current milk production is lost due contribution of productivity in
to poor infrastructure facilities GDP growth of Pakistan Development of cluster
Productivity and innovation impart sustainability to growth
Quality Governance
If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand ~ Milton Friedman
Issues
Large government footprints Weak public finance
(50% of GDP) crowds out Excess regulation hurts •Inefficiencies in resource mobilization
Weak institutions and
private investment business milieu civil service
•Unnecessary subsidies
•PSEs bleeding
Reforming Governance
Improve public sector management
Changing role of government
HRD
(Right skill-mix)
Exit from Markets Merit based
remuneration
Restructure and promotion
Privatize
Close down
Restructuring
Prepared and Presented by Madiha Younus
Tax reforms
Deregulation
Remove untargeted Autonomy
CCP subsidies
SECP Accountability
SBP Efficient PSDP/RBM
Quality governance to improve delivery of public service and sustainability to growth
Deepening and Maintaining Openness
You have to be very rich or very poor to live without a trade ~ Albert Camus
No success story in growth accelerations worldwide has featured exclusive inward-looking growth
Openness allows reaching new markets
Openness in trade is a critical ingredient for self sustained growth that creates jobs and raises productivity
Tariff system has become distorted and non-transparent and is exposed to corruption
Good logistics is critical for trade and competitiveness due to its wide ranging impact on economy
Trade Share of Pakistan in Selected Countries (%) Composition in Goods (%) Total Openness (%)
Textile 35
10
Leather Prod. 30
5
Misc Manuf.
0 25
Vegetable Prod.
India 20
USA Others
China 1995 2000 2005 2009
Need for Addressing Information Gaps and
General Specific Sectoral
Coordination Failures Transparency
Recommendations Recommendations
Recommendations
Substantial improvement in
Re-establish unilateral trade
Issuance and implementation of a computerized version of detailed
Extremely high liberalization program customs tariff schedule
general trade policy statement
Implementation protection
Active use of Abolish distortive regulatory Thorough inventory and review of
issues related slows down
non-tariff duties (SROs) tariff distortions
Prepared and Presented by Madiha Younus
to poor development
barriers is an
governance of efficient and Maintain a neutral real Immediate abolition of ad-hoc Publication of MOC regular
area featuring
and competitive exchange rate policy system of quasi-import licensing statements
coordination
management industries and Accelerate re-establishment of Publication and easy access
failures in
structures need promotes normal trade relations to information on
government
to overcome rent-seeking with India anti-dumping decisions
behaviour Accelerate maximum potential Thorough review of economic Frame of all policies and regulatory
possible under signed free justification for sectors/industries stance based on intentions
trade agreements defined in the growth strategy
Openness allows to reach new markets, raise productivity and accelerate innovation and competitiveness for sustained growth
Vibrant and Competitive Markets
Open markets offer the only realistic hope of pulling billions of people in developing countries out of abject poverty,
while sustaining prosperity in the industrialized world ~ Kofi Annan
Key Issues in Markets Pakistan ranks 85th out of 183 countries
in ease of doing business
Outmoded urban management and zoning • Urban areas have excess demand for retail, office and mixed use
for domestic commerce space
Inadequate transport and storage facilities • About 30% to 40% of agricultural produce is wasted due to
for agricultural markets inefficient farm to market channels and inadequate storage facilities
• Agriculture Produce Markets Act of 1939 is outdated and requires
Legal issues and regulatory environment fresh legislation
• Pakistani businessmen claim delayed justice, weak property rights,
Key Reforms corruption and time and cost of enforcing contract as key
constraints to investment
• Promoting trade openness and competition
• Land reforms Most Problematic Factors for Doing Business, 2010
Macro • Taxation reforms 20
Level
Reforms • Labour reforms 15
10
• Agricultural and rural markets 5
Meso • Reforms for manufacturing sector 0
Prepared and Presented by Madiha Younus
Level • Trading processes Corruption Govt. Policy Inflation Inefficient Crime &
Instability Instability Govt. Theft
Reforms Bureaucracy
• Initial setup of business
Firm • Enforcing contracts
Level
Reforms
Competitive markets ensure higher productivity and efficiency of economy
Creative Cities
Focusing on cities as engine of growth
Area Density in 1 sqkm Population by 2030
Cost of investment per
27 sqkm in Pakistan (000)
Dubai Pakistan • Karachi 27,993
(Vertical (Horizontal • Lahore 14,626
Cost of investment Expansion) Expansion) • Faisalabad 6,192
per sqkm in Dubai 200,000 people 6,000 people • Rawalpindi 4,149
• Multan 3,025
Urban Governance Issues
Laws and Regulations for Cities
• Restrictive zoning and building regulations
• Lack of mixed use and high rise development • Amend zoning laws and • Modernize land and
building regulations registration system
Reforms for Commercialisation
• Ambiguous urban land policies
Reforms for Land and Housing
• Auction/privatize state- • Establish housing and
Excess Demand owned land information system
• Build linear • Revise laws favoring
• Demand for commerce, office space, warehouses commercialization along tenants
and housing inner city roads • Establish regulatory
• Missing space for community infrastructure • Improve capacity of urban bodies for real estate
planners for low cost markets
Land Markets energy construction and
Prepared and Presented by Madiha Younus
• Increase access to housing
for facilitation of research finance - revitalize HBFC
• Idle-state-owned land
• Complex land registration system
• Revise city planning for • Curtail growth of katchi
deregulation to unlock abadi by producing low
Property Rights productivity and income housing
innovation • Repeal Land Acquisition
• Lack of titles and tax related issues • Establish more community Act 1894
• Biased rent laws space
Cities generate ideas, innovation, technology and choices to accelerate growth
Connecting to Compete
Measured in time of transport and communication, the whole round globe is now smaller than a small European country was a 100 years ago ~ John Boyd
Connectivity Scorecard Rankings
Connectivity Resource and Efficiency Driven Economies
Malaysia Turkey Iran India Pakistan
State of Physical Human Resources 2009 1 2 12 20 24
Social Connectivity
Connectivity Connectivity
2010 1 7 14 21 25
Inefficiencies in Human capital Social divide among
transport sector is comprises low to people belonging to
annually costing medium skilled labor different economic
Pakistan 5% of GDP classes is consistently • Encourage public private partnership in
widening infrastructure development
Bureaucracy • Improve public transport network
30% agricultural (generalists) and
• Create a sophisticated market for
output wasted due to stringent rules and Weak collaboration
railways
inefficient farm to regulations make it of diaspora by local Reforms
market channel, lack hard for enterprises and • Be a regional hub of aviation
of cool storage and professionals to institutions for • Improve trade facilities through
obsolete trucking fleet participate in the Connectivity adoption of ICT
economic affairs of • Incentivize ICT services
the country • Open domestic trade market
Prepared and Presented by Madiha Younus
Impact of Poor Connectivity
• Disintegrated markets
• Lethargic cities
• Youth with unemployable skills
Better connectivity reduces cost of doing business and thus boosts growth
Energetic Youth and Community
Much education today is monumentally ineffective. All too often we are giving young people cut flowers
when we should be teaching them to grow their own plants ~ John W. Gardner
Education with Current State of Youth The Real Challenge Opening Windows of
Opportunity • Youth bulge in coming years • Introduce youth development Opportunity
Poor quality of basic and university • Largest proportion (32%) of programs in provinces • National youth service reforms
education uneducated youth
• Youth education and skill
• Parallel education systems • Less than 6% of youth has development
vocational and technical education
• High school drop-outs • Youth and women
• Highest illiteracy rate (30%) of entrepreneurship
• Failure to engage large youth
population
Pakistani youth in the region
• Youth volunteer services
• Corruption, stringent laws and • Curriculum does not prepare youth
• More youth space
financing major impediments to for job market
self employment
71% - have no school career counseling Reform policy and regulation to involve
Success young people in community activities
83% - term school career counseling important of
Orangi
18th Amendment (Quality
79% - unsatisfied with either schooling system education PPP)
or curriculum Introduce courses related to economic
• Abolition of Concurrent choices and decision making for all disciplines
47% - do not have sports or recreation facilities Legislative List
Youth is a
• Amendment in Federal Solution, Not a
90% - want extracurricular activities Legislative List Problem! Create space and opportunities for youth
• Article 25 A - education and women entrepreneurs
(Youth service)
Prepared and Presented by Madiha Younus
28% - feel syllabus/curriculum irrelevant to compulsory for children
market demand • Curriculum, syllabus, planning
and policy fall under the
jurisdiction of provinces Promote career counseling services at
12% - not keen to learn occupational skills National Internship community and school levels
• Ministries and their functions Program
100% - hold poor accountability the reason for devolved to provinces
(Also for metric
corruption
pass students)
Engage youth in economic, social
95% - believe education can resolve problem of and community services
extremism
Energized youth and community allows reaping the benefits of demographic transition and accelerating growth
Implementation: RBM
You were born to win, but to be a winner, you must plan to win, prepare to win and expect to win ~ Zig Ziglar
• Implementation of change must alleviate constraints to productivity
Emphasis on performance and results and facilitate growth
that affect people's lives • RBM requires systematic implementation of key processes led by
The current system does not make growth and
employment a core objective of policy the overall growth strategy
• Output based budgets must emphasize on outputs, outcomes and
key performance indicators
Control of Planning System under Five Critical Changes to Strengthen Linkage
Post 18th Amendment Milieu
New Vision for Economic between Planning Commission and
Growth • Consulting and setting medium Government Performance
term and annual development
• Periodic identifying emerging objectives
Strengthen MTDF and MTEF
constraints to economic growth • Identifying key economic reforms
• Consensus building through extensive • Specifying government and Support unified results based budget
ministry-level reporting preparation process
consultations requirements
• Building a system for measuring Decentralize responsibility for projects
• Strengthening capacity of to line ministries
productivity and public service ministries
delivery Redefine role and processes of
• Developing capacity of planning Planning Commission
• Developing and monitoring system
quantifiable plans regularly Establish results based monitoring and
evaluation system
Prepared and Presented by Madiha Younus
• Provides change agenda for a • Fiscal allocations
greater degree of implementation • Ministerial/departmental
Results Introducing policies and plans
assurance
Based • Helps government to focus on
RBM in • Budgeting
Management achievement of results and Government • Accounting
utilization of resources • Monitoring
RBM enhances quality of planning, implementation and outcome of development efforts and improves quality of life of people
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