Monday, February 6, 2017

Pakistan's Focus on Hardware (Infrastructure) Instead of Software (Education)

American theologian and author James Freeman Clarke (1810-1888) is reported to have explained the distinction between a politician and a statesman as follows: "A politician thinks of the next election. A statesman, of the next generation."

How does this apply to the current crop of Pakistani leaders in charge of running the country? Are they statesmen or mere politicians?

I think the answer to this question can be found in how they invest available national resources, particularly their longer term investments in education, training, nutrition and health care sectors which do not show results as quickly as building roads, metro bus, metro trains, ports and other physical infrastructure.

China Pakistan Economic Corridor:

Pakistani politicians, particularly PMLN and Nawaz Sharif, love to highlight China-Pakistan Economic Corridor  (CPEC) projects and their accomplishments in terms of motorways, metro bus, metro trains, ring roads and airports rather education and health care. And the reason they do it is because such projects can be completed before the next elections while the returns on investments in education and health take much longer to become visible.

Pakistan's M2 Motorway

In a recent piece titled "Pakistan's misguided obsession with infrastructure", The Economist magazine  said Chinese diplomat assigned to work with Pakistan on China-Pakistan Economic Corridor acknowledged this problem. Here's an excerpt from The Economist:

"Lijian Zhao, a Chinese diplomat, says China is all too aware that Pakistan needs more than just big-ticket infrastructure if it is to flourish. Disarmingly, he praises the efforts of Britain and other countries to improve Pakistan’s “software”, such as education and the rule of law. “But China’s expertise is hardware,” says Mr Zhao."

Education and Literacy Rates:

Pakistan's net primary enrollment rose from 42% in 2001-2002 to 57% in 2008-9 during Musharraf years. It has been essentially flat at 57% since 2009 under PPP and PML(N) governments.

Source: Economic Survey of Pakistan 2015-16

Similarly, the literacy rate for Pakistan 10 years or older rose from 45% in 2001-2002 to 56% in 2007-2008 during Musharraf years. It has increased just 4% to 60% since 2009-2010 under PPP and PML(N) governments.

Source: Economic Survey of Pakistan 2015-16

Pakistan's Human Development: 

Human development index reports on Pakistan released by UNDP confirm the ESP 2015 human development trends.Pakistan’s HDI value for 2013 is 0.537— which is in the low human development category—positioning the country at 146 out of 187 countries and territories. Between 1980 and 2013, Pakistan’s HDI value increased from 0.356 to 0.537, an increase of 50.7 percent or an average annual increase of about 1.25.

Pakistan HDI Components Trend 1980-2013 Source: Human Development Report 2014


Overall, Pakistan's human development score rose by 18.9% during Musharraf years and increased just 3.4% under elected leadership since 2008. The news on the human development front got even worse in the last three years, with HDI growth slowing down as low as 0.59% — a paltry average annual increase of under 0.20 per cent.

Going further back to the  decade of 1990s when the civilian leadership of the country alternated between PML (N) and PPP,  the increase in Pakistan's HDI was 9.3% from 1990 to 2000, less than half of the HDI gain of 18.9% on Musharraf's watch from 2000 to 2007.



Summary:

The history of the industrialized world tells us that democracy, peace and prosperity can not be sustained in the long run without a solid foundation of a healthy and well-educated society. Pakistani leaders must learn from history and pay more attention to accelerate human development along with building the necessary infrastructure such CPEC projects. They must allocate greater resources and maintain sharp focus to improve education and health of the people of Pakistan.

Related Links:

Haq's Musings

Pakistani Democracy's Disappointing Record on Human Development

China-Pakistan Economic Corridor

Pakistan's Infrastructure and M2 Motorway

Pakistan's Lost Decades

Saving Pakistan's Education, Airline and Railway

Asian Tigers Brought Prosperity; Democracy Followed

Pakistan Democracy: Neither Democracy Nor Development

Challenges of Indian Democracy

Pakistan's Economic History

Comparing Bangladesh with Pakistan

Economic and Human Development in Musharraf Years

India's Share of World;s Poor Up from 22% to 33%

Why is Democracy Failing in Pakistan?

Musharraf Era Higher Education Reforms in Pakistan

Comparing 30-Year Dictatorships in Indonesia and Pakistan



10 comments:

Riaz Haq said...

Pakistan is moving towards development, economic growth: World Bank CEO Kristalina Georgieva

http://www.pakistantoday.com.pk/2017/02/07/pakistan-is-moving-towards-development-economic-growth-world-bank-ceo/

She highlighted following opportunities and challenges for Pakistan:

In my discussions with the government in Pakistan we focused on three areas of opportunity and challenge: the first is higher growth and jobs. The government wants annual economic growth of 6 to 7 per cent compared to 4.7 per cent achieved in fiscal year 2016. But this will only happen if investment doubles to 30 per cent of Gross Domestic Product (GDP). Investments in energy, such as Tarbela, to end constant power cuts, as well as improvements in the business environment, so that companies hire more people, will be critical to success. A more favorable environment for private investment would open up opportunities for women, youth, and the underserved.

A second area is one of the best investments Pakistan can make: investing in its own people. Pakistan’s population of 200 million is expected under current projections to double by 2050 and so these investments cannot wait. Currently Pakistan spends only three per cent of its GDP on health, nutrition, and education. This needs to double if it is to make a significant impact. Pakistan will need to raise more tax revenue to pay for these services and improve on the way that the money is spent.

A third area that I discussed with Pakistan’s leaders is the intertwined challenges of water, energy and security. Tarbela was completed in 1974 as part of the Indus Basin Project following the Indus Waters Treaty between India and Pakistan in 1960. This Treaty, to which the World Bank is a signatory, has survived frequent tensions between India and Pakistan, including conflict, and provided a framework for irrigation and hydropower development in both countries for more than half a century.

The need for a regional integrated water resources management approach

Since the Treaty was agreed, population has multiplied, use has boomed, and now we also have climate change. In the first 45 years Treaty disagreements were resolved by the Indus Waters Commission. In the past 12 years these have been elevated to a Neutral Expert and a Court of Arbitration.

Riaz Haq said...

#PWC’s ‘brave’ report predicts #Egypt and #Pakistan will surpass #Canada’s #economy by 2050. #GDP http://business.financialpost.com/news/economy/pwcs-brave-report-forecasts-egypt-and-pakistan-will-surpass-canadas-economy-by-2050 … via @financialpost

The economies of emerging market minnows Egypt and Pakistan could surpass the Canadian economy by 2050, according to a “brave” new report by management consultancy PricewaterhouseCoopers.

“By 2050, emerging economies such as Mexico and Indonesia are likely to be larger than the UK and France, while Pakistan and Egypt could overtake Italy and Canada,” PWC said in a report published Tuesday.

The findings — based on gross domestic product purchasing power parity (PPP) terms — also forecasts India will replace the United States as the world’s second largest economy after China by 2050.

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The PWC forecast seems incredulous as Egypt’s GDP based on the more common market exchange rates (MER) stood at US$340 billion and Pakistan a mere US$284 billion in 2016.

By contrast, Canada’s US$1.5 trillion massive economy placed it as the 10th largest in the world.

By PWC’s MER measure, Canada’s GDP will slip to No. 17 by 2050, only narrowly beating both Egypt (No. 18) and Pakistan (19).

Riaz Haq said...

Excerpts of The Price Waters Cooper PWC's The World in 2050 Report


http://www.pwc.com/gx/en/world-2050/assets/pwc-the-world-in-2050-full-report-feb-2017.pdf

Pakistan 20th largest economy by 2030 ($1.87 trillion) & 16th by 2050 ($4.24 trillion) from 24th largest in 2016 ($988 billion)


By 2050, emerging economies such as Mexico and Indonesia are likely to be larger than the UK and France,
while Pakistan and Egypt could overtake Italy and Canada (on a PPP basis). In terms of growth, Vietnam, India
and Bangladesh could be the fastest growing economies over the period to 2050, averaging growth of around
5% a year. Figure 3 shows the projected average annual GDP growth rate over the next 34 years for all of the 32
countries we modelled. Total GDP growth is also broken down into how much is attributable to population
growth and how much to real GDP per capita growth.

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2.1 Background to our World in 2050 reports
Our first ‘World in 2050’ report was published in March 2006, featuring projections for potential GDP growth
for 17 leading economies over the period to 2050. Our initial model covered:
 the 10 largest advanced economies: the G7 (US, Canada, UK, France, Germany, Italy and Japan),
Australia, Spain and South Korea; and
 the seven largest emerging economies, which we referred to collectively as the E7 (China, India, Brazil,
Indonesia, Mexico, Russia and Turkey).
We subsequently updated our projections in March 2008, January 2011, January 2013 and February 2015.
With each new edition up to 2015, more countries were added to our model, which now also covers:
 Argentina, Saudi Arabia and South Africa to complete coverage of the G20;
 the Netherlands, as a key European advanced economy;
 Poland and Malaysia, as two fast-growing medium-sized countries; and
 Bangladesh, Colombia, Egypt, Iran, Nigeria, Pakistan, the Philippines, Thailand, and Vietnam as
additional relatively large emerging markets.

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The largest movers over the next 35 years are projected to be Nigeria, Vietnam and Pakistan. Nigeria, which
currently ranks in 22nd place, could move up to 14th though this is dependent on diversifying its economy and
addressing weaknesses in institutions and infrastructure, as discussed further in Box 2. Vietnam could move
from 32nd to 20th, and Pakistan could move from 24th to 16th. Other strong emerging market performers include
Bangladesh who moves from 31st to 23rd and the Philippines, which moves up 9 places to 19th by 2050.


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As previously touched upon, strong population growth will be a key driver of overall GDP growth in many of
today’s emerging market and developing countries, boosting their potential workforce and domestic consumer
markets. Figure 13 shows that the growth in the working age populations of many emerging markets, including
Nigeria, Pakistan and India, will outstrip growth in the total population. In contrast, for many advanced
economies, such as Japan, Italy and Germany, their populations will actually shrink in size by 2050. This
contraction will predominately be driven by a fall in the working age population; across the G7 economies,
average growth in the working age population will be negative over the period 2016-2050 at -0.3% per annum.

Riaz Haq said...

Progress in education by provinces in Pakistan:


Literacy rate for 10+ years in Pakistan's provinces:


KPK flat at 53% from 2013-14 to 2014-15

Punjab up from 61% in 2013-14 to 63% in 2014-15

Sindh up from 56% in 2013-14 to 60% in 2014-15

Balochistan up from 43% in 2013-14 to 44% in 2014-15


Primary Enrollment Rate by Province:

KPK up from 54% in 2013-14 to 56% in 2014-15

Punjab down from 64% in 2013-14 to 61% in 2014-15

Sindh up from 48% in 2013-14 to 51% in 2014-15

Balochistan up from 39% in 2013-14 to 46% in 2014-15


http://www.finance.gov.pk/survey/chapters_16/10_Education.pdf

Riaz Haq said...

Forget #India, Its Neighbors #Pakistan, #Bangladesh & #SriLanka Are the Next Big Thing. #Economy http://www.barrons.com/articles/forget-india-its-neighbors-are-the-next-big-thing-1486517309 … via @barronsonline

Forget India. Investors looking for the next big thing should look to its South Asia neighbors instead – Pakistan, Bangladesh and Sri Lanka.

With a combined 390 million people, the three countries represent what Morgan Stanley chief global strategist Ruchir Sharma calls “the quiet rise of South Asia” as opposed to India which has been “flattered by spasms of hype for years”. While overshadowed by their larger neighbor, the trio is enjoying fast-paced growth, embracing much needed reforms, and look set to enjoy a demographic dividend over the long term. “A substantially higher economic growth rate than in many other economies globally, coupled with fantastic demographics that will continue supporting growth for many years ahead”, East Capital fund manager Adrian Pop tells Barron’s Asia. The Stockholm-based firm manages nearly EUR3 billion in frontier markets.

Pakistan is the flag bearer of the positive changes taking place in the South Asian nations. Since coming to power five years ago, Prime Minister Nawaz Sharif has got inflation under control, cut the budget deficit and reined in the current account deficit. But more importantly, terrorism finally appears to be on the back-foot given more assertive action by the army. Chinese investment has also poured in: $50 billion will be spent on new roads, transport links and energy projects. “More power capacity is key for Pakistan to move to an even higher economic growth rate,” says Pop. That will benefit stocks in materials and energy. In December, the Pakistan Stock Exchange sold 40% of itself to consortium of Chinese investors.

The Karachi stock index is up by about 50% since the start of last year, propelled by index compiler MSCI’s decision to bump up the country to emerging markets status. That will bring in hundreds of millions of dollars from passive funds into the Pakistani benchmark. The rally in stocks has arguably left the market looking a little pricey as the KSE 100 index trades at over 12 times earnings, its heftiest valuation since late 2009. That’s still about a 15% discount to the MSCI emerging markets index, however, plus Pakistani stocks yield an attractive 4%-plus dividend.

Riaz Haq said...

Smart Solutions to Improve #Pakistan’s #Education. #Technology to monitor #teacher attendance http://www.worldbank.org/en/news/feature/2017/02/13/smart-solutions-to-improve-pakistans-education via @WorldBank


Story Highlights

The Sindh School Monitoring System spreads across 15 districts and to the remotest parts of the province. Plans are underway to expand it to the entire province.
This first digital system in the education sector in Pakistan allows transparent and effective monitoring of staff, students and school infrastructure.
More than 210,000 teaching and non-teaching staff have been profiled using biometric information, covering more than 26,200 schools.
Grade seven in the Qureshi Government Boys Secondary School in Karachi is bustling with activity. The science class is in session and the chemistry teacher is talking about atoms and molecules. The students listen eagerly as the sea breeze permeates the room.

In the adjacent staff room, Sultan Dogar has just arrived. He is the Field Monitoring Assistant from the Sindh government and comes every two months to monitor teacher presence and school infrastructure. He uses a fingerprint-based biometric and photo system supported by Global Positioning System (GPS) coordinates.

More than 26,200 schools and 210,000 education staff spread across the province are being monitored. The transparent and effective system aims to address such problems as “absconder teachers” – teachers who are employed yet absent for a lengthy period--, missing basic facilities and infrastructure, closed schools and lack of reliable and timely information on school status and teacher presence.

To date, disciplinary action has been initiated against 40,000 absent teachers and 6,000 absconders.

As Dogar records the data, it is transmitted in real time to a centralized dashboard. The Education and Literacy Department has access to this information and uses it to plan and make informed decisions.

The system has been set up under the Sindh Global Partnership for Education project, which supports the government’s reform efforts over a three-year period.

The government has been at the forefront of this effort and sees immense value in it. ‘‘The Sindh School Monitoring System brings together technology and a robust accountability mechanism to address long-standing governance issues in education,” says Fazlullah Pechuho, Former Secretary Education and Literacy Department, Sindh.

“It is a scalable solution to address teacher absenteeism, missing facilities and student attendance and enrollment. By receiving data directly from the field, we are able to undertake key administrative and policy actions in a timely manner. We consider this an important step towards improving education outcomes in Sindh.”

Teachers also recognize the benefits. Mohammed Shakeel Siddiqui, Section In-charge, Qureshi Primary School, says: ‘‘The system addresses the issue of ghost teachers in school, very often reported in the media. Through thumb impressions, teacher presence is verified. You cannot go wrong. That is really good.’’

Teachers consider it a just and fair system.

‘‘The system acknowledges teachers like us who come regularly and identifies those who don’t. That is only fair,’’ says Shaheen Afrooz who teaches Urdu in a primary school.

Riaz Haq said...

#China investment boosts #Pakistan's economic growth- #CPEC #infrastructure #power #ports #coal Nikkei Asian Review
http://asia.nikkei.com/Politics-Economy/Economy/Chinese-investment-boosts-Pakistan-s-economic-growth?page=2

More than $35 billion of the CPEC investment will be allocated to energy projects. Once completed by the end of next year, power generation projects are likely to help Pakistan overcome its crippling power shortages, a major bottleneck for growth. This is a big reason the CPEC is welcomed by many in Pakistan's industry, who say it is going to be a "game changer" for the country.

China also recognizes that the CPEC initiative will help secure the quickest trade route connecting the country's western Xinjiang region and other landlocked areas to the Arabian Sea, which could facilitate economic development in the Chinese hinterland. The infrastructure development initiative will also allow China to mitigate the problem of overcapacity at home by exporting materials and equipment to Pakistan.

There are proposals to develop a power plant, an airport and highways and other facilities particularly around the port of Gwadar on the southwestern coast of Pakistan, which is strategically important for China as it provides the country easy access to the sea.

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According to a local newspaper, $700 million of the $1.1 billion spent on CPEC-related projects in the July-September period last year was financed by loans from the China Development Bank. The amount is mainly earmarked for importing materials and equipment from China, which are needed to complete the projects.

Many in Pakistan have voiced concern over the country's rising debt obligations to China. Also, Chinese companies typically bring their own engineers and workers in large numbers to do work in Pakistan.

"Surging imports from China will damage local companies," said Ehsan A. Malik, CEO of the Pakistan Business Council, which represents 62 major companies and organizations. "Tax revenue and employment will not increase." He added, "CPEC may be a Trojan horse."

However, the logic of companies participating in CPEC is very simple. "We asked China, because nobody in the world finances coal projects," said Hussain Dawood, chairman of Dawood Hercules, a large Pakistani conglomerate that includes the Engro group, which is involved in the production of energy and chemicals.

"Investment in CPEC is not only from China," said Arif Habib, CEO of the Arif Habib group. "Companies from Germany, Denmark and Saudi Arabia are also showing interest."

Despite widespread concern about the health of China's economy, Ahsan Iqbal, Pakistan's minister of planning and development, said confidently: "The CPEC projects are a high priority for Chinese companies because they can expect good returns. Even though the Chinese economy is slowing down, the companies still have huge cash reserves."

Many Japanese companies also think the best thing to do now is to take advantage of Chinese-built infrastructure in Pakistan to expand their own business. No matter who invested, if energy and infrastructure investment gains momentum, it could stimulate Pakistan's economy.

Amid all the speculation, Pakistan is moving toward its goal of becoming the next big emerging market by gradually shaking off its reputation for terrorism, corruption and political blunders.

Riaz Haq said...

#Lahore #Metro #OrangeLine Budget Exceeds Total Spend on #Education & #Science: Prof Atta. #CPEC https://propakistani.pk/?p=121022 via @ProPakistaniPK

Renowned scientist and former Minister of Science, Dr Atta-ur-Rehman has called for increased collaboration between natural and social scientists to implement new ways of bringing peace to the world.

While delivering a lecture on “Science, Technology and Innovation: Imperatives for Socio-economic Development’ at an event in Karachi, he said,

Technology is a double-edged sword and it needs to be used for the betterment and welfare of mankind and not for their destruction, To earn peace for human beings.

When queries were raised about why scientists have not done much to contribute towards peace in the world, the former chairman of the Higher Education Commission replied that coordination between social scientists and [experts in] natural sciences is essential.

Dr. Rehman compared the GDP and economic development level of China and Singapore with Pakistan and recognized that development in these countries was made possible thanks to efficient utilization of manpower through quality education.

Orange Line Uses More Funds Than Our Educational Budget
He added that a limited budget is being spent on education, science and technology in Pakistan. He remarked that In Pakistan, the Orange Line train project has more funds allocated to its budget than the educational budget for the whole country. Dr. Rehman continued saying,

If Singapore’s exports are $400 billion, it is unfortunate that Pakistan’s exports are only $22 billion because Pakistan lacks in exporting technology and value-added goods.

Removing The Gaps
He highlighted the need to emphasize on polishing creative minds in order to eliminate the gap in knowledge, science and technology. He said that the universities are not measured by the number of enrollments or the buildings they have, but on the basis of research work they do.

Helping The Blind to “See”
Dr. Rehman talked about providing gadgets to the blind would be able to “see” and drive vehicles and devices which can let you communicate in several languages. He also introduced nanotechnology, e-materials, and ebb materials to the audience.

He emphasized how Pakistanis need to realize the importance of science and technology for economic empowerment and encouraged young scholars to play an active role in their field to promote research culture in Pakistan.

Quality Over Quantity
He stressed upon the importance of developing a research culture by providing incentives to faculty members and students adding that quality should be preferred at universities rather than multiplying their numbers and ignoring the quality.

In his concluding comments, HOD-Faculty of Social Sciences, Dr Moonis Ahmar said the thirst for acquiring knowledge was non-existent among the general population of Pakistan. He prompted the young generation to concentrate on training and trying to exceed expectations in their field without squandering their time as “we cannot afford to remain poor and backward”.

Riaz Haq said...

In #Pakistan, it's middle class rising. #Urbanization #MiddleClass #genderequity

http://www.thehindu.com/opinion/lead/in-pakistan-its-middle-class-rising/article17378526.ece

The general perception still, and unfortunately, held by many people, foreigners and Pakistanis, is that Pakistan is largely an agricultural, rural economy, where “feudals” dominate the economic, social, and particularly political space. Nothing could be further from this outdated, false framing of Pakistan’s political economy. Perhaps the single most significant consequence of the social and structural transformation under way for the last two decades has been the rise and consolidation of a Pakistani middle class, both rural, but especially, urban.

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While a definition, and hence estimation of Pakistan’s middle class, or middle classes, has not been easy, the term has acquired much prominence in social and anecdotal references. Increasing references to the middle class — durmiana tubqa — both as a political category but also as an economic one, occur more regularly in the media. Often, Pakistan’s middle class is referred to by the consumer goods that it has increasingly been purchasing, from washing machines to motorcycles. But more importantly, the term is used for those having an active political constituency and presence. In many ways, the terms used in India after Narendra Modi’s 2014 election, of an “aspiring” or “aspirational” class — also somewhat vague but nevertheless signifying some political and developmentalist notion — have also found some currency in Pakistan

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Data based on social, economic and spatial categories all support this argument. While literacy rates in Pakistan have risen to around 60%, perhaps more important has been the significant rise in girls’ literacy and in their education. Their enrolment at the primary school level, while still less than it is for boys, is rising faster than it is for boys. What is even more surprising is that this pattern is reinforced even for middle level education where, between 2002-03 and 2012-13, there had been an increase by as much as 54% when compared to 26% for that of boys. At the secondary level, again unexpectedly, girls’ participation has increased by 53% over the decade, about the same as it has for boys. While boys outnumber girls in school, girls are catching up. In 2014-15, it was estimated that there were more girls enrolled in Pakistan’s universities than boys — 52% and 48%, respectively. Pakistan’s middle class has realised the significance of girls’ education, even up to the college and university level.

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In spatial terms, most social scientists would agree that Pakistan is almost all, or at least predominantly, urban rather than rural, even though such categories are difficult to concretise. Research in Pakistan has revealed that at least 70% of Pakistanis live in urban or urbanising settlements, and not in rural settlements, whatever they are. Using data about access to urban facilities and services such as electricity, education, transport and communication connectivity, this is a low estimate. Moreover, even in so-called “rural” and agricultural settlements, data show that around 60% or more of incomes accrue from non-agricultural sources such as remittances and services. Clearly, whatever the rural is, it is no longer agricultural. Numerous other sets of statistics would enhance the middle class thesis in Pakistan.

Riaz Haq said...

Table 2 of Human Development Report 2016 shows that Pakistan's HDI grew at an annual growth rate of 1.55% in 2000-2010, much faster than 1.09% in 1990-2000 and 0.95% in 2010-2015.

Pakistan's overall HDI growth rate from 1990 to 2015 as 1.24, slower than India's 1.52%.

http://reliefweb.int/sites/reliefweb.int/files/resources/2016_human_development_report.pdf