An analysis of national productivity
By Dr. K. A. Saeed*
Dec 18 - 24, 2000
While emphasizing the importance of national
productivity, the Government is urged to declare this area as priority
The paper is divided into three parts, namely
national productivity movement, sectoral analysis and other aspects.
It has taken 52 years for Pakistan to announce the
establishment of National Productivity Organization — starting a
third round of Rip Van Winkle's sleep. The paper reviews
pre-requisites to national productivity movement, presents an analysis
of three sectors of Pakistan's economy, namely agriculture, industry
and infrastructure. It reviews APO's guidelines in the above three
It ends up with a plea for a positive response by
Government to develop an action plan to translate the objectives of
NPO announced in April, 1999.
The importance of national productivity is
stressing an obvious. This requires commitment by Governments to treat
productivity as priority one. At the enterprise level, many
organizations have given this a serious thought. No wonder positive
results have been achieved. This movement must be continued with
sustained vigour and zeal to achieve desired results.
The main emphasis of this paper is on national
productivity analysis and excludes focus on enterprise level which
constitutes a separate topic.
Constituents of the paper
The paper has been divided into the following
A. National Productivity Movement
B. Sectoral Analysis
C. Other Aspects
It ends up with concluding remarks for a plea to
the Government for developing an action plan for implementation.
PART A. National productivity movement: npo
The national productivity movement has never been
on the active agenda of the former Governments in Pakistan. The
parliaments have been manned by persons for whom no minimum
qualifications were prescribed. The output of the existing system
leaves much too be desired. The macro leaderships failed to provide
solid contributions for boosting national productivity.
Whereas several Asian countries, particularly Far
East countries, have registered considerable increase in productivity,
we in Pakistan have kept productivity increase at a low priority.
Whereas we were born on August 14, 1947, the Government, vide
notification of April 14, 1999, announced the establishment of
National Production Council (NPC) with the following objectives:
a) To stimulate and generate productivity
consciousness at macro and micro levels in the country.
b) To measure, evaluate and improve
productivity of various sectors of economy.
c) To encourage and promote innovative
methods and products for enhanced productivity and competitive edge.
d) To prepare master plan at national level
to address needs of Human Resource Development (HRD) in the field of
e) To take steps to set up information
collection and dissemination system.
f) To secure full benefits of Pakistan's
membership of Asian Productivity Organization (APO).
g) To establish linkages between wages and
h) To examine and suggest ways and means
towards improving existing mechanism for higher productivity.
So far only one meeting has been held. Whereas the
above objectives are highly laudable, who will start the
implementation. It is a pity that, for public consumption, we hear
speeches of Government functionaries mentioning productivity but these
were not backed up by logistics for an efficient and effective
delivery system. When will we wake up from the third round of Rip Van
Pre-requisites to national productivity movement
The general Asian experience reveals that the
following ingredients encourage a strong national productivity
a) Saving Rates - Higher Trends
b) Labour Force - Young and hard working
c) Entrepreneurship - strong culture
d) Education - strong inclination
e) Goals and aspirations - nationally shared
f) The presence of a vibrant, driving, result orient Nationals
PART B: Sectoral analysis
Three sectors are the constituents of an economy of
Sectors of an Economy
- Livestock and Poultry
- Fisheries — Forestry
A brief review of productivity analysis in respect
of each of above will be presented later.
APO'S GUIDELINES ROLE
For increasing productivity in agriculture, the
basic objectives of the APO's programme are as under:
a) To help member countries to deal with thematic
issues and concerns in agriculture, and
b) To deepen their understanding of the appropriate
measures and techniques for achieving sustainable development in
Pakistan can learn a lot by comprehending the above
aspects for implementation. APO has conceptualized the following three
a) Agriculture Development and Policies
Four areas have been identified for promoting the
i) Agricultural development
ii) Agricultural diversification
iii) International agricultural trade, and
iv) Food security
b) Resources & Technology
Three areas for special focus in this respect are
i) Achieve sustainable development and
environmental protection in agriculture.
ii) Disseminate prospective technology for
higher productivity, and
iii) Development human resources.
c) Agricultural Marketing & Institutions
Two aspects of attention are identified below:
i) Promoting the efficiency of agricultural
ii) Strengthening agricultural extension and
Agricultural output 1999-2000 - A Review
The agricultural sector of Pakistan recorded an
increase of 5.50%. This was 71% more than 1998-99. For the first time
in the history of Pakistan, we became exporter of wheat (one million
ton) and got relieved from the consistent pattern of import of wheat
for the past two decades. Wheat production was recorded 22 million
ton. Rice registered an increase of 10.3% over 1998-99. Estimated
production was 5.16 ton. Cotton production showed an increase of 28%
over the last year. Estimated production was stated to be 11.24
million bales. However, the regret was in sugarcane which recorded a
decline of 25%. This was due to many reasons. The major ones were
non-payment by sugar mill owners to sugar growers and shortage of
Major Issues in Productivity
Major issues in productivity in agricultural sector
in Pakistan are as under:
Effect of the vagaries of the weather.
Ownership; patterns of the farm lands.
Yield per hector of the crops.
Use of inputs and methods based on the latest
results of scientific and technological research.
An analysis of Pakistan's position in respect of
above and relating to productivity is as under:
As against the common belief that agriculture
constitutes crops only, it may be stated for clarity that agriculture
sector constitutes four parts.
Constituents of Agriculture
2. Livestock & Poultry
Each of the above points for the analysis of
productivity is now briefly explained.
(A) Pakistan is a four crop economy. Traditionally
wheat, cotton, rice and sugarcane have dominated the agriculture
scene. Productivity increase in terms of yields is the genuine need.
Yield of four crops
Source: Excerpted from:
Economic Survey 1999-2000, pp.12-15
There is a need to optimize the use of farm inputs
(fertilizer, seed, mechanization, plant protection, irrigation support
price policy and agricultural credit) to increase productivity.
The education of farmers through electronic media
and extension services can go a long way to ensure increase in
Besides agriculture research in the direction of
development of new varieties, technology development can be of
tangible help in achieving goal of increasing productivity.
B) Livestock & Poultry Analysis
Livestock represents 37% of agriculture value
added, 9% of GDP, and 9% of experts of Pakistan. Around 35 million
rural population is engaged in livestock raising.
There is a great need to increase productivity in
the following two areas:
a) Livesock: cattle, buffalo, sheep, goat, camels,
horses, asses and mules.
b) Production from Livestock: milk, beef, mutton,
poultry meat, wool, hair, bones, fats, blood, eggs, hides and skins.
Production of poultry (commercial poultry, poultry
products and rural poultry) requires to be carefully examined for
increase in productivity.
C) Fisheries: Around 400,000 people work in
fisheries sector (marine and inland). This is a non-traditional item
to be pushed in exports. Due to excellent efforts of SMEDA,
productivity of marine fisheries has registered a considerable
increase. However a major breakthrough is needed to achieve higher
productivity, the following suggestions are worth giving a serious
a) Improvement in extension services.
b) Introduction of agriculture techniques.
c) Improvement in post harvest techniques.
d) Strengthening infrastructure facilities.
Forest sector contributes about 0.1% to GDP and
0.3% to agriculture sector.
Total forest area of our country including
rangelands is 10.5 million hectares. This is considered as a
low-forest cover attributable to the following two reasons:
—Skewed distribution of rainfall.
Break up of provincial forest area including
rangelands is as in table:
Provincial Forest Area
2. Northern Area
5. Azad Kashmir
Source: Excerpted from:
Economic Survey 1999-2000, p.23
The break up of above is: productive forests 1.40
million hectares, protective forests 2.21 million hectares and
remaining one (6.99 million hectares) is rangelands supporting 110
million livestock population.
Productive efforts are needed to increase timber
production to meet a demand gap of 735,000 cubic meter of timber which
is being imported.
Avenues for boosting wood and wood based products
exports need to be explored.
APO's Guidelines Role: APO's activities in the
industry and services sectors fall into ten categories:
APO's Activities In Industry & Service Sectors
S. No. Activities
1. Socio-Economic Development
2. Sector Specific
3. Small Industry Development
5. Human Resources Development
6. Productivity Measurement & Analysis
7. Quality Management
8. Production & Technology Management
9. Information Technology
10. Development of NPOs
Source: APO'99 Annual Report, Tokyo: APO, p. 23
Major thrust areas in industry and services sector
of APO are as
APO's Major Thurst
1. TQM = Total Quality Management
2. IT = Information Technology
3. GP = Green Productivity
4. SME = Small & Medium Enterprises
5. ICD = Integrated Community Development
6. DON = Development of NPOs.
Manufacturing represents the second largest sector
of Pakistan's economy and is 17% of GDP. During 1980s its average
growth was 8.2% and this became 4.7% in the first half of 1990s and
2.5% in the second half of 1990s. Effective use of productivity tool
can be instrumental in increasing productivity in important industries
of large scale manufacturing e.g. textile, fertilizer, vegetable ghee,
sugar, cement, automobile, jute, steel etc.
Small and medium enterprises deserve special
attention for mobile training institutes by Small and Medium
Enterprises Development Authority, Punjab Small Industries
Corporation, Sindh Small Industries Corporation, NWFP Small Industries
Development Board and the Directorate of Small Industries Balochistan.
A speedy privatization programme of public sector
enterprises can help develop a favourable climate for increase in
productivity. The Government has enacted law for comprehensive
privatization programme but the process needs to be speeded up.
DFI inflow during the 1990s has been less than half
a US $ billion, on an annual average, as against annual target of US $
2 billion. Productivity increase through transfer of technology can be
The contribution of mining to GDP is 0.5%. There is
a vast scope for exploiting resources of baryte, dolomite, gypsum,
rock salt, magnesitre, soap stone, silica sand, limestone, marble,
onyx marble, granite, precious stones and previous metals (gold,
copper tin, silver, antimony, platinum group of elements, tungsten,
lead, zinc, chromite and lithium. Exploiting potential untapped
mineral sources with a productive approach is the crying need of
today. To achieve this goal, the following issues need to be
a) Non-availability of latest technology.
b) Inadequate geological data.
c) Lack of infrastructure in remote mineral bearing areas and
d) Tapping mineral resources to real life situation.
Sick Industrial Units
There are said to be over 4000 industrial units in
Pakistan. Before October 12, 1999, the focus was to appoint committees
to tackle the problems relating to sick industrial units. Beg
Committee and Legari Committee figured prominently.
Pakistan legislated Companies Ordinance, 1982. In
it, Section 296 did include early warning signals for identifying
sickness. This has not been operationalised and consequently the
rehabilitation package under Section 297 has stayed as promise of
The present Government has now set up a Corporation
as an institutionalized effort to handle sick industrial units. Some
good work has been undertaken by the above Corporation. It is high
time that the Indian experience be carefully studied and full time
assignment to a Tribunal be given to study the sickness of industrial
units and then develop rehabilitation packages. The Tribunal should be
manned by Judges, Chartered Accountants, Cost & Management
Accountants, Financial Analysts and other professionally qualified
personnel. A delegation may be sent to study the system and initiate
steps to tackle the problems through an institutionalized approach
with full time personnel.
Infrastructure is needed to accelerate the
socio-economic development. One theory is that if infrastructure is
developed first, rest of other results in the shape of quantum jump of
economic development follow later. In this respect, it would be
interesting to mention that productivity analysis should be focused on
the four components of infrastructure, namely Technological, Physical,
Social and Financial. A brief analysis of productivity in respect each
of the above is presented below:
a) Technological Infrastructure
We achieved a great in the comity of nations height
on becoming a nuclear power on May 28, 1998. However vast room of
improvement exist in increasing productivity of the internal working
of technological orientation and translation of the research output
relating to forward linkages e.g. PCSIR, Agricultural Research Council
b) Physical Infrastructure
Physical infrastructure consists of roads, dams,
telecommunication systems, energy set ups, bridges, motorways etc.
Optimal utilization of available resources presents an agenda for
productivity analysis for paving the way for improvement.
c) Social Infrastructure
Two components of social infrastructure include
education and health. The users expectations are much higher than the
existing system of social infrastructure. Wastages needs to be weeded
out. Optimal use must be made of manpower, machines and materials
d) Financial Infrastructure
The story of non-performing loans of banks and
development finance institutions is well known. Productivity of the
use of money leaves much to be desired.
PART C: OTHER ASPECTS
Some other aspects are briefly reviewed below:
(a) Bureaucracy - at the service of people
The users of Government and non-Government services
expect efficient, economic and prompt response. The misfortune is that
the delivery system is far from even satisfactory. Whereas delight or
height of delight is the expectation of users, in reality dismay and
disillusionment is the fate. Similar problems were faced by several
countries of the world. The situation improved by following five steps
suggested by Moginson who is believed to be the father of Work
Simplification. His model needs to be operationalised.
(b) Poverty Trend
The lack of use of resources productivity at
national level has resulted in the rise of poverty in Pakistan. Based
on available information, one third of population (45 million) are
unable to generate income sufficient to provide minimum nutrition and
other basic necessities of life. This includes 32 million people in
rural area and 13 million people in urban area. Poverty is increasing
in urban areas. Efforts are going on to utilize the manpower resources
for alleviation of poverty through Integrated Small Public Works
Programmes (ISPWP) and micro credit bank (now known as Khushal Bank).
Zakat and Usher Programmes need to be intelligently utilized for
starting income generating schemes productively.
For properly tackling poverty and increasing
efforts for productivity at the national level, it will be befitting
to recognize the following types of poverty:
1. Human poverty
2. Income poverty
3. Extreme poverty
4. Overall poverty
5. Relative poverty
6. Absolute poverty
(This is the international one-dollar-a day
Productive efforts need to be introduced for
alleviating poverty through operationalising indexation of wages via
productivity and increasing functional literacy.
( c ) Beyond Productivity
Many new and powerful management tools have been
innovated to boost productivity. The dominant ones have been TQM
during the decade of 1980s and Re-engineering during 1990s. These
tools together with the implementation spirit of ISO 9000 and 14000
series are seen logistics to beefing up the bottom line — beyond
dimensions of productivity. Moreover a holistic approach is needed to
translate the benefits of productivity to the advantage of the
organization. The case in example is that of greater productivity in
various cash crops in Swat due to Swis Technology group contribution
but the benefits could not be achieved due to lack of logistics of
distribution and marketing.
It is high time that the government in power should
address productivity as priority number one on national front,
institutionalize the affairs and develop an action plan to translate
the objectives for which NPO has been announced. A positive response
in this respect will enable Pakistan to march into 21 st Century with
an assured confidence.
* Former President, ICMAP (1997-99).
Former Pro Vice-Chancellor & Founder Director, IBA, University of
the Punjab, Lahore. Dean Executive Programs, Punjab College of
Business Administration, Lahore. E-Mail: email@example.com