SHIFTING TO KNOWLEDGE-BASED ECONOMY

PROF. DR. S. M ALAM
(feedback@pgeconomist.com)
Apr 26 - May 2, 2010

Research and Development is an essential component for economic development of the country. We must accept that whatever at present has been developed in the country is due to sheer hard working of people.

Highly qualified and educated people laid the foundation of economic development in the country five decades ago.

Talented work force has developed the country in many fields. Pakistan is slowly but developing in the fields of agriculture, industry, information technology, communication, banking, insurance, health, textile, cement, leather, education, ship building, fertilizers, glass, plastic, rubber, marble, gemstones, tiles, sports goods, livestock, fishery, poultry, milk, carpet, software, surgical goods, medicines, infrastructure, machinery, automobiles, chemical industries etc. Increasing portion of investment flowing into these sectors has significantly diversified the industrial structure of the country in recent years. Research and Development harmony is on increase in scientific organizations throughout the country.

However, the number of PhDs is few in the country. Even those who go to foreign countries on PhD fellowships and scholarship do not return to Pakistan after completing doctorates, which keep the research and development in the country detached from modern world.

PhD programs in local universities are dwarfed and neglected to some extent.

Students in the university want to have a foreign degree no matter if it may be from countries in Eastern Europe and Middle East. At present, Pakistan is producing only 50 PhDs in science subjects every year. Recently, a report was published stating that only 3500 out of 11000 teachers of 57 public sector universities are PhDs.

Education plays a major role in the economic and social development of the country. The functions of the college or university are to develop the students physically, mentally, and spiritually. Education improves and promotes economic, social, political, and cultural life of the nation.

All over the world, universities are guiding and cooperating with the industrial and agricultural development organizations and they are developing their economies in various fields rapidly and meaningfully.

In Pakistan, even after more than five decades the development indicators are not showing positive results and have drastically affected the education in colleges and universities.

Pakistan at this point is in need of some serious government measures to revamp its deteriorating education system.

Government, as per budget 2009-10, is spending only 2.1 per cent of its GDP on education. The current expenditure is extremely low keeping in view the current level of literacy. The spending is not enough to tackle the ills of education system.

The report says a mere 3.7 per cent of youth (16-40 years of age) have access to higher education. There are 216,490 education institutions in the country and out of which 106,435 are in Punjab, 46,862 in Sindh, 36,029 in Pukhtoonkhawa, and 10381 in Balochistan.

Pakistan is a land of promise and tremendous development possibilities because of its unique geographical location, youth, and richness of natural and cultural resources.

Pakistan is one of the sixth most populous country after China, India, USA, Indonesia, and Brazil, with almost 185 million tough, diligent, and hardworking people. Its labor force has a reputation of being one of the hardest in the world and is also cost effective that provides high returns on investment. A large percentage of the labor force is skilled from domestic training through network of training institutes, and from employment in the middle-east and studying in the developed countries. Pakistan's 45.05 million labors are trained and experienced professional managers, engineers, computer scientists, and bankers who are vital to the growth and development of the industrial and corporate environment.

The country ranks amongst the top seven fastest growing economies of Asia. Except for the periods in the fifties and the seventies and end of first decade of 21st century, the country has witnessed an average annual GDP growth 7 per cent.

Agriculture is bedrock of its national economy. It accounts for nearly 25 per cent of Pakistan's national income (GDP) and employs 43.4 per cent of the country's workforce. Besides providing raw material to Pakistan's industries, especially textile, agriculture sector is the major source of exports. It provides livelihood to 66 per cent of the country's population living in rural areas.

The rural literacy rate is however about 42 per cent against the urban literacy rate of 65 per cent, with an overall literacy rate of 54 per cent in a population of 185 million.

Promoting scientific agriculture education and thereby raising farmer's income should be the cornerstone of national policy. The share of agriculture in GDP is declining while the share of manufacturing sector in GDP is constantly increasing, with an annual rate of more than 8 per cent over the last 40 years. In manufacturing sector, cotton yarn and textiles are the leading sectors, followed by food processing industries largely based on indigenous raw materials.

In the last three decades of the 20th century, Pakistan witnessed an unprecedented technological and economic transformation. It was able to achieve food self-sufficiency, triple its agricultural exports, reduce poverty, increase income levels, and improve quality of life for its people.

The transformation started in the late sixties with the advent of the Green Revolution (a technology package of high yielding varieties of wheat, rice, water, and fertilisers). Pakistan has made headway in reviving its economy in the last five years by achieving macroeconomic stability, resuming the path for high growth, introducing deep-rooted structural reforms and improving governance.

Education is a prime component of human resource development. Only the educated, skilled, and healthy people can make the best use of the enormous natural resources of the country. Service sector has been playing a vital and important role in the economic growth of the country since last many years. Economic significance of this sector is evident from the fact that it contributes 54 per cent to the gross domestic product and 3/5th to the real GDP. This sector primarily comprises of transport, storage and communication, finance and insurance, ownership of dwellings, public administration and defence, community and social services.

Pakistan in recent years has made remarkable progress by ways of reform and the resulting growth of information and communication technology sectors. Of 1,082 active information technology companies in Pakistan some 110 are certified by international standards organization (ISO). In banking sector, the ATM transactions are about 60 per cent of the total e-banking transactions.

Pakistan's essential requirement is to develop a potential human-force comprising of resource persons in all segments of social, political, economic, scientific, and cultural advancement.

With fertile lands, fresh water resources, diverse climate and dynamic people, this region could have done much better in economic and social development fronts. Pakistan has the potential and the will to be developed, industrialized, and prosperous.

Within the constraints imposed by the physical resource base, we should reach the required development levels by deploying knowledge inputs and human capital.

Pakistan can meet challenges by shifting its support from conventional aid to market access, investment, technology transfer, education and training, scientific research, and infrastructure development.