framework for economic growth pakistan feg-final-report_2-1-2012.pdf

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International conference on “Framework for Economic Growth, Pakistan” Hosted by Planning Commission,

Government of Pakistan in collaboration with UNDP

13-14 July, 2011

Islamabad

International Conference on “Framework for Economic Growth, Pakistan”

www.planningcommission.gov.pk

FRAMEWORK FOR ECONOMIC GROWTH PAKISTAN

International conference on “Framework for Economic Growth, Pakistan”

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Copyright © 2011 International conference on “Framework for Economic Growth, Pakistan” Planning Commission Government of Pakistan Material in this publication may be freely quoted or reprinted, but acknowledgement is requested, together with a copy of the publication containing the quotation or reprint. This publication is available from: Government of Pakistan Planning Commission Pak Secretariat, Block – P Islamabad, Pakistan Tel: + 92 51 921 4464 [email protected] www.planningcommission.gov.pk

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Conference Moderators:

Ayaz Amir Mohammed Mallick Moeed Pirzada Syed Talat Hussain Farrukh Khan Pitafi Coordinator/ Advisor editing - “Framework for Economic Growth, Pakistan”:

Imran Ghaznavi (Advisor) Dr. Haroon Sarwar (Assistant Chief) Dr. M. Sabir Afridi (Assistant Chief) Amna Khalid (National Institutional Officer) Editor – “Framework for Economic Growth, Pakistan”:

Zahid Ali (Consultant-UNDP)


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Planning Commission

is pleased to present

The Framework for Economic Growth

Approved by the National Economic Council

in its meeting held on 28th May, 2011

under the Chairmanship of

the Prime Minister of Pakistan


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I have the honor and the privilege to present the Framework for Economic Growth (FEG) - a strategy that seeks accelerated and sustained growth and development based on economic reform and an emphasis on productivity. The FEG is based on widespread local and international consultation developing strong local ownership for a quality development strategy that is informed by the best knowledge and analysis available. An unintended consequence of our policies has been the stifling of internal markets, cities and communities, which play a critical role in fostering productivity, innovation and entrepreneurship and ultimately promote growth, prosperity and development. In the new development framework, private sector should be the growth-driver in open market environment that rewards efficiency, innovation and entrepreneurship, while the government is facilitator that protects public interests and rights, provides public goods, enforces laws, punishes exploitative practices, and operates with transparency and accountability. The new growth strategy places emphasis on what might be called the "software" of development incentives viz. institutions, markets, communities, and governance; and then on the "hardware" viz. physical investment in buildings, equipment, roads etc. NGS is an approach needed to release the dynamism of individuals and enterprises and seeks to do this through measures for improving the investment climate, reduce the cost of doing business and to dissolve the impediments to entrepreneurship along with increasing the productivity of investment. It places much emphasis on matters of economic governance, that is, to the formulation and implementation of

rational, efficient, and equitable rules and procedures for the management of economic assets and activities. Accelerating the economic growth rate and sustaining it at a high level must therefore be treated as a national priority. The old paradigm of project and government led growth has to change. This reasoning has led the Planning Commission towards rethinking the traditional growth narrative in Pakistan. Today international indicators suggest that Pakistan has more of a ‘software’ (management and productivity) problem than a shortage of ‘hardware’ (physical infrastructure). The strategy emphasizes the need to reduce economic distortions, improve functioning of domestic markets, create space in cities through proper zoning, energizing youth, engaging communities, inducing investment in human and social capital; and enhancing connectivity and interactivity. Vibrant cities in an enabling environment will be the hotspot for entrepreneurship and innovation, assuring better returns through improved productivity on investments for all investors. Pakistani cities presently are configured as suburban clusters instead of creative cities which are locomotives of growth. The new ‘cities’ of Pakistan occupy a large part of the landscape. In this context it must be understood that the urban-rural divide and the classification of cities has undergone a paradigm shift through demographic changes. Our development projects for building required human and physical infrastructure have not been able to impact growth and private investment because of continued cuts and inappropriate project selection. While the projects do generate employment and economic activity in the first instance, they

Foreword


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lack strategic direction and coherence that is required for sustained high growth and the delivery of sustainable development benefits. We have a young and growing population. Our calculations also suggest that if we do not accelerate growth to over 7 per cent per annum on a sustained basis, the coming increases in labour force cannot be absorbed. Past data suggests that our long run growth on average is close to 5 per cent per annum. At this rate of growth, a very large percentage of the youth bulge will not find employment. The New Development Approach should now be based on endogenous growth, where the quantity of investment should be complemented by efforts to improve the quality of investments i.e. their productivity and efficiency. The private sector must drive economic growth

with timely implementation of market reforms which should promote competitiveness. I would like to acknowledge and appreciate the hard work of the growth team and staff of the Planning Commission and UNDP which was put in towards the preparation of this national document. I extend the sincere gratitude of the Planning Commission to our partners (donors, civil society organizations, and academia etc.) who have been a source of guidance through out this process. Implementing the growth strategy will require serious, sustained and disciplined efforts. A process of reforms beginning with the Planning Commission has been outlined. Reform is a continuing process and it needs to be institutionalized.

Dr. Nadeem Ul Haque Deputy Chairman Planning Commission


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ADB Asian Development Bank ADP Adolescent Development Program AIDS Acquired Immune Deficiency Syndrome ATM Automated Teller Machine

BMZ Bundesministerium Für Wirtschaftliche Zusammenarbeit (German Federal Ministry for Economic Development Cooperation

BPR Business Process Re-engineering BRAC Bangladesh Rural Advancement Committee CBR Central Board of Revenue CDA Capital Development Authority CDIA Cities Development Initiative for Asia CEO Chief Executive Officer CFPR-TUP Challenging the Frontiers of Poverty Reduction and Targeting the Ultra Poor AERC Applied Economic Research Council ETP Economic Transformation Programme FATA Federally Administered Tribal Areas FDI Foreign Direct Investment FTA Free Trade Agreement GCI Global Competitiveness Index GDP Gross Domestic Product GHG Greenhouse Gas GIZ Gesellschaft für Internationale Zusammenarbeit GLC Government Linked Companies GPA Grade Point Average GTP Government Transformation Plan HEC Higher Education Commission HIV Human Immunodeficiency Virus HR Human Resource HRM Human Resource Management ICT Information & Communication Technology IT Information Technology KPK Khyber Pakhtoon Khawa LUMS Lahore University of Management Sciences MDG Medium Term Development Goals MNA Member of National Assembly MoU Memorandum of Understanding MPA Member of Provincial Assembly NADRA National Database and Registration Authority NCGR National Commission for Government Reform NEC National Economic Council NES National Executive Service FEG Framework for Economic Growth

Abbreviations


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NGO Non-Government Organization NGS New Growth Strategy NIT National Investment Trust NLC National Logistic Cell NUST National University of Science and Technology ORIC Organization for Research, Innovation and Commercialization PASDEC Pakistan Stone Development Company PhD Doctor of Philosophy PIA Pakistan International Airlines PPP Public Private Partnership PPRA Public Procurement Regulatory Authority PRA Participatory Rural Appraisal PSDP Public Sector Development Programme SAARC South Asian Association for Regional Cooperation SBP State Bank of Pakistan SCEP Securities and Exchange Commission of Pakistan SME Small and Medium Enterprises SMS Short Message Service SoFEA Social and Financial Empowerment of Adolescents and Youth UET University of Engineering & Technology UK United Kingdom UN United Nations UNDP United Nations Development Programme UNESCO United Nations Educational, Scientific and Cultural Organization USA United States of America USAID United States Agency for International Development


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Page No. Introduction 11 Welcome remarks by Dr. Nadeem Ul Haque, Deputy Chairman, Planning Commission

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Introductory remarks by Ajay Chhibber, Assistant Secretary General, UN and Assistant Administrator and Regional Director for the Asia and the Pacific, UNDP

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Session 1: Implementing Governance Reforms Speaker: Sulaiman B. Mahbob, Chairman, Malaysian Industrial Development Authority

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Civil Service Reforms: Speaker 1: Norma Binti Mansor, Secretary General, National Economic Advisory Council, Malaysia Speaker 2: Dr. Ishrat Hussain, Director, Institute of Business Administration, Karachi Question and Answers

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Session 2: Openness and Competitive Markets Speaker 1: Muhammed Ali, Chairman, Securities & Exchange Commission of Pakistan Speaker 2: Philip Auerswald, Professor, George Mason University Discussion by discussants: i) Rahat Kaunain, Chairperson, Competition Commission of Pakistan ii) Farhan Bokhari, Pakistan Correspondent & Country Manager, Financial Times UK Question and Answers

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34 Session 3: Results based Management in Public Sector Speakers 1: Heru Prasetyo, Deputy Chairman of the President’s Delivery Unit for Development Monitoring and Oversight Indonesia Speakers 2: Nohman Ishtiaq, Advisor, Finance Division, Pakistan Discussion by discussants: i) Dr. Akmal Hussain, Professor, Beaconhouse National University ii) Dr. Andrew, Rathmell, Coffey International Development iii) Vinaya Swaroop, Sector Manager of Economic Policy in South Asia, World Bank iv) Raza Rumi, Public Policy Advisor/Editor Question and Answers

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Session 4: Creative Cities and Urban Development Speaker 1: Emiel A. Wegelin, GIZ Program Coordinator, Cities Development Initiative for Asia, Philippines Speaker 2: Belinda Yuen, Urban Development Unit, World Bank

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Contents


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Discussion by discussants: i) Tahir Shamshad, Member Planning, CDA, Islamabad ii) Parvez Qureshi, Urban Planner and Architect, Lahore iii) Philip Auerswald, Professor, George Mason University iv) Dr. Nuzhat Ahmad, Director AERC v) Special comments by Rafeh Alam (from Lahore) Question and Answers

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Session 5: Human Capital, Productivity and Innovation Introductory remarks by Javed Laghari, Chairman HEC Speaker: John Speakman, Private Sector Specialist, World Bank Speaker: Shaukat Hameed Khan, Former Member Planning Commission Discussion by discussants: i) Ali Arshad Hakeem, Chairman NADRA ii) Dr. Sohail Naqvi, Executive Director, HEC iii) Philip Auerswald, Professor, George Mason University Question and Answers

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Session 6: Connecting to Compete Speaker: Amer Z. Durrani, Sector Coordinator for Trade Logistics, Transport and Customs, World Bank Discussion by discussants: i) Arshad Zuberi, Chief Executive, Business Recorder ii) Shaukat Hameed Khan, Former Member Planning Commission iii) Muhammad Saleem, Director General, Pakistan Telecommunication Authority iv) Fatma Gul Senior Economist, UNDP Question and Answers

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Session 7: Youth and Community Engagement Speaker: Mahbub Hossain, Executive Director, Bangladesh Rural Advancement Committee (BRAC) Discussion by discussants: i) Ali Asghar Khan, Head of Omar Asghar Khan Development Foundation ii) David Martin, Country Director, British Council, Pakistan iii) Faisal Mushtaq, Chief Executive, Roots School System, Pakistan iv) Shireen Naqvi, CEO, School of Leadership Question and Answers

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78 78 79 80

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Interviews

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Special lecture over video conference by Professor Richard Florida

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Welcome remarks by Nadeem Ul Haque, Deputy Chairman, Planning Commission Lecture by Professor Richard Florida Question and Answers

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Closing Ceremony / Remarks by Parliamentarians Remarks by Nadeem Ul Haque, Deputy Chairman, Planning Commission Remarks / Answers to questions by Parliamentarians: Palwasha Khan (MNA) Fauzia Wahab (MNA)

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Closing remarks by Ajay Chhibber Assistant Secretary General, UN and Assistant Administrator and Regional Director for the Asia and the Pacific, UNDP Closing Remarks and Vote of Thanks By Nadeem Ul Haque, Deputy Chairman, Planning Commission

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Conclusion and recommendations 128


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Planning Commission was charged with developing growth strategy and managing the Public Sector Development Program. The National Economic Council (NEC) headed by the Prime Minister has approved the Framework for Economic Growth (FEG) - a strategy that seeks accelerated and sustained growth and development based on economic reforms and an emphasis on productivity. Following the NEC approval of the NGS, the Planning Commission, in collaboration with UNDP hosted an international conference on “Framework for Economic Growth, Pakistan” on 13-14 July, 2011 in Islamabad. The Conference brought together around 500 delegates including parliamentarians, international and national experts, federal and provincial policy makers, economists, development sector leaders, academia, business community and officials from UN agencies from across Pakistan. “Framework for Economic Growth, Pakistan” is a new approach to accelerating economic growth and sustaining it. It has been developed with world renowned experts and all the stakeholders following extensive research and consultation.

The conference was inaugurated by Dr. Nadeem Ul Haque, Deputy Chairman Planning Commission and Assistant Secretary General of the UN, Ajay Chhibber. The FEG formulated at Planning Commission through widespread local and international consultation focuses on building strong local ownership for a quality development strategy that is informed by the best knowledge and analysis available. The consultations clearly identified the need to develop a coherent approach to growth that goes well beyond projects and targets in public service delivery, productivity, competitive markets, innovation and entrepreneurship. The strategy is based on sustained reforms that build efficient and knowledgeable governance structures; and markets in desirable, attractive and well connected locations. It recognizes the severe resource constraint that the country faces and therefore focuses on ‘productivity’ - improving the efficiency with which assets are used. Global indicators such as ‘competitiveness’ and ‘cost of doing business’ also highlight factors such as ‘management’, ‘innovation’, ‘quality of regulation and governance’ and ‘research and development’ as the more immediate

Introduction


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constraints to growth. The thrust of this strategy, therefore, is to focus on the ‘software’ of economic growth (issues of economic governance, strengthening institutions, incentives, human resources, etc.) so as to provide an environment in which the ‘hardware’ of growth (physical infrastructure) could be expanded and made more productive at every level. The Deputy Chairman acknowledged the problems being faced by the country and presented a “new” and “fresh” approach for the economic growth to follow and improve "Quality of Life" based on the four pillars of the FEG viz. quality governance, vibrant markets, energetic youth and community and creative cities. The new approach places the growth and jobs at top of the agenda. The key areas of the new growth strategy includes enhancing the role of the private sector, entrepreneurship and innovation as major drivers of growth, enhancing productivity, improving the quality of governance through Civil Service reforms, making cities hubs of economic activities by relaxing zoning and building regulations, minimizing the role of the government in the economy and restricting it to improving regulation and policy environment. The new approach takes cities as engines of growth in the country. Strategy also focuses on inclusiveness for the development of rural infrastructure and markets for growth and poverty reduction, enhancing competitiveness and productivity by investing in tertiary education, vocational and technical training and development of a

knowledge economy. Around 68% of Pakistan’s population is regarded as youth (under 30 years). Many of them are now coming into the labor force, increasing the size of the workforce by over 3 per cent annually. Human resource development is taken as one of the major objectives of the new approach. The strategy urged for the development of financial markets and institutions, effective governance and management through strengthening institutions. The speakers presented their ideas papers on various themes which were discussed by the selected discussants. Open discussion was followed by the question & answer session which served as a good source of knowledge sharing and to take views from all the participants. An important feature of the conference was interviews of the parliamentarians, national and international experts who shared their views and gave well thought recommendations on the subject. At the conclusion of the conference, the Planning Commission and UNDP exchanged a letter of intent for the establishment of the proposed Centre for inclusive Growth and Development. The revamped centre will contribute towards building institutional capacity to support the implementation of the Framework for Economic Growth. It will conduct research, advocacy and policy advice, promote learning and exchange of solutions.

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Dr. Nadeem Ul Haque

Deputy Chairman, Planning Commission

Ladies and gentlemen I welcome you to the conference on the Framework for Economic Growth. Let me announce here that Hon’ble Finance Minister couldn’t attend the conference as he had to go to Baluchistan to attend a meeting there. But Insha’Allah he will be here with us in the closing meeting tomorrow. It surprises me that we had many conferences here in Planning Commission but we discussed very little on the topic of ‘growth’ and ‘jobs’. We have a huge population and a large number of youth in our country. We have a low growth rate in the country. There is a large number of population and especially the youth who are looking for the jobs. Let us put growth and jobs to be at top of the agenda of this conference. We have also taken a very new approach to the subject which is the participation of a large number of people and well known speakers in the conference. It is not the agenda of a person but rather a national agenda we are working on. The key objective of this conference is to challenge ourselves to a fresh approach and place

before you a new Framework for Economic Growth. It has taken more than a year in Planning Commission to develop new framework for which we have talked to the academia, chambers of commerce and industry across country and people in all the provinces. We have here with us in the conference UNDP, World Bank, ADB, USAID and many international donors with whom we had been engaged in discussion and they have made valuable contribution in the development of this fresh approach on the agenda of ‘growth and jobs’ in Pakistan. We want to place before you this fresh approach and ask you to contribute in it. We got the Framework for Economic Growth approved by the National Economic Council, Cabinet and from Parliament and we promised them to give implementation plan in next four to six months. We want to discuss everything here like reconstruction of the economy, poverty reduction etc. The first question I want to put before you is that why there is so little discussion on the growth in this country? If growth doesn’t take place at 7-8% in next few years there would be millions of people who will not have jobs in the country. Let us

Welcome Remarks By


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also remember it that we have failed to provide adequate education in the past. With this uneducated and unskilled population our future doesn’t look to be good and promising. I am also surprised that when I look at newspapers face book, twitter etc. I find very little material and discussions on ‘growth’ and ‘jobs’ there. Media is also not discussing this important subject. We find media and experts discussing issues like Tax-to-GDP ratio and sovereign economy whereas there are many other important issues to discuss like growth and creating opportunities for the youth in the country. Ladies and gentlemen I invite you to examine this new fresh growth approach and reform agenda and give your valued input. Without emphasizing an economic reform, productivity, using our resources and ensuring that wastages are eliminated we can't achieve higher economic growth. Government can't provide everything and engineer society. Government can only make policies and regulate. For education quality we need to think that whether resources being provided by the government are being properly utilized or not? Education quality is not a funding issue but purely a governance issue. Government can't pump in money where there is a lot of wastage and inefficiency. Corruption is another issue which needs reforms and good public administration. Along with hard infrastructure we need to build soft infrastructure. It is soft infrastructure which would help in managing hard infrastructure, plan resources and help in increasing efficiency and productivity. Poverty reduction is another important area which needs a strategy to make it an opportunity for growth. We have missed out our opportunity as we have missed growth. Security is another important challenge for us and we can manage it by taking certain measures like creating job

opportunities and engaging population in economic growth activities. Another important aspect of Framework for Economic Growth is to reduce the role of government. Right now government is a major stakeholder in many areas like transport (PIA and Railway), energy, infrastructure, land, purchase of agriculture commodities (like grains) etc. In cities there is huge regulatory burden that government carries and this role is to be reduced under new strategy being presented here. Let us try something new and work on fresh approaches. Solutions which have failed to work in the past need to be refreshed and we need to adopt correct approaches. To my mind this conference is about changing narratives of growth, policies and whole paradigm to place economic reforms upfront on the agenda. All the new literature in the world suggests doing something new and developing software of growth. We need to develop good institutions for economic reforms. Growth is not a hardware which we can buy from the market. We need to develop it. Pakistan is a country of more than 170 million people. Growth is a very complex subject which is more difficult than the rocket science. We need to work out the solutions which require hard work and implementation. All we need to do is implementing the strategies. For growth we need solutions which need to be worked out. It is the most complex subject one can imagine. It is not like an artwork. Implementation is the most important challenge in the new growth strategy which we have to develop and act upon. Let’s also think about constraints to the investment and growth. Investment rate has fallen from 17% to 13% in Pakistan. India has an investment of 30% whereas it is around 40% in China. Pakistanis are making


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investments out of the country. Savings are at very low level in the country. People are putting their money overseas in real estate. We need to think about regulatory structure for investment which is a binding constraint for investment by the governments. Whatever we are saying here in the conference is not the old debate of government vs. markets but to work together for socio-economic growth. We need to talk about a professional, productive, efficient and quality government. Government used to attract talent which is not being seen any more. We need to think about Civil Services Reforms in this country to face the challenges of 21st century. Civil Services system is a system which is not using technology, good practices and professional approaches in our country and we need to talk about this subject in the new approach. From education to energy, and legal system to law & order we need to think about reforms. Civil Servants control everything and there is centralization of power in this system for which we have to think in the new framework. Role of the government is at the center of the economy. Government is important as it regulates and controls everything. The first role of the government is to guarantee life and liberty. The pursuit of happiness is one of the things which government has to do and provide. We need a kind of regulations which is professional, not outdated and well informed. Growth will not happen in a vacuum. Growth happens in cities like history tells us that it took place in cities like Baghdad, New York, London etc. Estimates tell us that about 75% of the world output takes place in 40 cities. Our cities are centers for growth and we have to think about it. A city is a bunch of humans which has density, creativity, culture, high rising buildings,

mobility, connectivity etc. Cities are places where commerce takes place and industries are developed. Cities must be commerce and industry friendly. Economies can't grow without the growth of the cities. Cities provide infrastructure and environment to the youth for development. We have large number of youth in our country that needs to be involved in growth. How do we provide them infrastructure, facilities and opportunities is an important question. Everyone is going for innovation, productivity and developing entrepreneurship where as we are still looking for protecting certain sectors of the economy. Why construction activities not growing and leading in our country? Building codes, zoning laws, regulations in the real-estate sector are at heart of the problem due to which construction activities not taking place. Construction is youth friendly as it provides opportunities to youth, develop skills and helps youth to participate in creativity and help in developing social capital. Social capital is very important for growth and we need to think of youth while making growth strategies. We need to adopt an inclusive growth agenda which speaks about all the segments of the society. Growth strategy doesn’t require money but a clear headed reform agenda. It requires building institutions to meet requirements of the 21st century and thinking solutions to complexities. Growth strategy is not something simple but more complex than rocket science. We need to understand this reality that things are changing now. We in Pakistan can't stay with status quo and need to accept change, and the Framework for Economic Growth is all about a new change.

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Mr. Ajay Chhibber

Assistant Secretary General, UN and Assistant Administrator and Regional Director for the Asia and the Pacific, UNDP

Your Excellency Dr. Nadeem Ul Haque, Deputy Chairman, Planning Commission of Pakistan, distinguished representatives of civil society, academia and media, Development partners and UN colleagues. Ladies and gentlemen! It is an honor to be able to address you all today on such an important issue. I would like to thank Dr. Nadeem Ul Haque, Deputy Chairman of the Planning Commission and Timo Pakkala, the UN Resident Coordinator and Resident Representative of UNDP and their team and all our esteemed partners for their tireless efforts in organizing this conference. This International conference on the New Growth Strategy organized as a high level policy dialogue among the policy makers, international experts, development community, business and civil society comes at a very critical time in Pakistan. It is the last link in the chain that has formed the participatory and transparent advisory process through which the Framework for Economic Growth has been formulated. It is a great privilege to be part of such

discussions which we think will affect Pakistan’s future profoundly and positively. Pakistan sits in a region which has seen very rapid growth over the past two decades with average growth in Asia at around 7.8% from 1990-2010. Parts of Asia were hit hard by the Asian financial crisis in 1997-98, but rebounded quickly. More recently, the Asia Pacific region has been least affected by the Global Financial Crisis of 2008, partly because many countries had become more resilient after the Asian Financial Crisis and partly because of effective stimulus packages, high levels of competitiveness, flexible labor markets and less exposed financial systems . Rising food and fuel prices have increased vulnerability among the poor and now high inflation - not deflation - is a major worry in many Asian countries. But as Asia contends with these problems there is growing recognition that the global economic crisis has accelerated the balance of economic power towards Asia. Both East Asia and South Asia have witnessed a considerable acceleration of

Introductory Remarks By


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growth, more than any other region in the world. In terms of per capita GDP growth, the acceleration has been from 5 percent in the 1970s to 8 percent in the 2000s in East Asia, and from 0.6 percent in the 1970s to 5 percent in the 2000s in South Asia. This growth acceleration has happened as a consequence of a series of economic reforms- which led to a stronger states, more vibrant markets, and better human capital. With rising prosperity poverty has declined. In Asia, the absolute number of poor people living on less than $1.25 a day has declined significantly from 1.7 billion in 1981 to 933 million in 2005. Despite rising population, Asia lifted about 712 million people out of poverty in that 25 years period. But despite significant progress on poverty reduction, Asia still hosts about two-thirds of the global poor. Pakistan has not so far fully shared the successful Asian growth story and I believe the Framework for Economic Growth for Pakistan comes at a very important time and our conference today gives us an opportunity to better understand what is happening in the region and in the world and to see how best Pakistan can join the rest of Asia in achieving high, sustainable and inclusive growth. I am by no means an expert on Pakistan as many of you gathered here are, but a very quick overview of Pakistan‘s economic history tells us that there have been periods when Pakistan achieved very high rates of economic growth. Pakistan achieved impressive rates of economic growth in the 1960s and 1980s, but growth fell in the 1970s and 1990s. Over a 40 year period the trend growth rate in Pakistan is declining, whereas in most other countries in South Asia it has been rising. What has marked Pakistan out from others in Asia is that Pakistan’s growth spurts have not been sustained over a sufficiently long period of

time which is needed in order to lift large sections of the population out of poverty. We hope that the new growth strategy will help Pakistan reverse this trend and your deliberations over the next two days will address the issue of how best to ensure sustained growth in the future in Pakistan. Until recently the economic literature provided little guidance on the 'recipe' for strong economic growth. One interesting exercise is the work of the 'Growth Commission’. The commission closely examined 13 cases of sustained high growth - those economies that had achieved seven per cent or more for 25 years or more and found that there is no 'magic bullet' to achieving growth - 'orthodoxies only apply so far'. There were, however, five common elements to those economies that did achieve sustained high growth: 1) they fully exploited the world economy; 2) they maintained macroeconomic stability; 3) they mustered high rates of saving and investment; 4) they let markets allocate resources; and 5) they had committed, credible, and capable governments. The Commission noted a big role for infrastructure in high growth economies. These economies had investment rates of at least 25 percent of GDP. The Commission observed that high growth economies put substantial public investment at least 7-8 per cent of GDP into their people. The Commission found infrastructure spending in low-growth countries, on the other hand, to be badly neglected. The Commission highlighted the importance of governance in a fast growing economy. To promote growth, governments should facilitate the entry and exit of firms and labor mobility. Governments should protect people, not job positions through social safety nets to cushion the 'blows of the market'. While growth is necessary for poverty reduction it is not sufficient. Asia’s rise has


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helped reduce global inequality but at the same time we have seen rising in-country inequalities across most of Asia. The recent Asian growth has not been sufficiently inclusive. One important indication of inadequate inclusive growth in Asia is that inequality among rural-urban population and between regions is still not only high, but also increased over the period. During the last two decades, out of 14 Asian countries for which sufficient data are available, inequality measured by the Gini coefficient is found to have increased in 11 countries. Inequality increased by 6 to 9 Gini points in Sri Lanka, China, and Cambodia and by about 4 to5 Gini points in India, Indonesia and Nepal. Rural-urban inequality is often a large component of overall inequality, contributing about half of the overall inequality in country like China. The ratio of urban to rural per capita income has increased from 2.2 in 1990 to 3.3 in 2007 in China, and from 2.4 in 1971 to 2.8 in 2005 in India. Growth in Asia has been less-inclusive because (i) growth has been uneven across sectors and locations, (2) demand for skilled and unskilled labor also uneven resulting huge wage premium for skilled labor, (3) growth has been driven by capital-intensive sectors and (4) high disparities in assets and access to infrastructure impede the poor from fully participating in the growth process. Government policies in terms of public spending on social sectors, social protection and agriculture, and financial inclusion, among others, have also not been sufficiently inclusive in Asia. Since the poor lack both human and financial capital, public policies that help poor to build their human capital, better manage their risks, and improve the access to credit are key for making growth more inclusive. Lack of inclusive growth could undermine pace of poverty reduction and achievement of the MDGs. Even in China which has an

impressive record on poverty reduction has inequality problems. There are also compelling reasons why high levels of inequality could dampen growth prospects. High inequality could lead to adverse consequences for social cohesion and the quality of institutions and policies, which, in turn, slow growth. The Growth Commission also strongly argued that growth strategies cannot succeed without a commitment to equality of opportunity, giving everyone a fair chance to enjoy the fruits of growth. Healthy and well educated populations are essential not only for the sake of productive labor force for economic growth but to achieve a healthy and well educated society is a goal in itself. As the great Pakistani economist Mahbub Al Haque observed that the real wealth of the region are its people. If sufficient investment is made in these people they can radically change the prospects of the region in the 21st century. Instead South Asia in particular has been falling behind the rest of the world in terms of its health and education spending but leads the world in military spending as a share of GDP. Pakistan is no exception. Maternal mortality rate is still very high in Pakistan with 276 women die during birth out of every 100,000 live births. Only 22 percent of Pakistani women participate to the labor force, one of the lowest in the world. 45 percent of the population in Pakistan is still illiterate and a disproportionate share of these is women and girls. Providing high quality education to young people is important for Pakistan which is one of the most valuable resources. Girls and children living in rural areas must have equal access to high quality education same as their urban and male counterparts have, and their human potential needs to be realized. One marked feature of Asia’s rise has been its heavy focus on trade as an engine of growth. Intra-Asian trade has also risen very markedly. For South-East Asia, for example,


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intra-regional trade has been rising rapidly and now accounts for more than half of trade in manufactured goods – up from 40 per cent in 1994- 95 (ADB, 2009). In other sub-regions, such as South Asia and Central Asia, the level of intra-regional trade is low. These are impressive potential gains waiting to be tapped. The recent experiences of India-Sri Lanka FTA are striking since they highlight the potential of bilateral trade to strengthen supply capabilities leading to correction of trade imbalances. Since the operationalization of the FTA, Sri Lanka‘s exports to India have grown by 132 per cent. After the global crisis Asian countries have tried to re-balance their economic orientation towards more reliance on domestic demand. This is a necessary rebalancing for the larger Asian economies. But for the smaller and medium sized Asian countries trade with developed countries and intra-regional trade still remains a very important engine for growth. Pakistan, in my view, has huge unexploited potential for more trade both globally and regionally; and as outlined in the New Growth Strategy Pakistan will need to become more open and build up its competitiveness to achieve that potential. The new growth strategy rightly points out that it‘s not an issue of government vs. markets but instead government and markets working together. The Asian state-led development success has occurred because of a strong and smart state not a large one. It has come because of a partnership between state and market to build competitiveness and improve productivity. It has not come by dismantling the state but by changing its role from direct producer to regulator and guide as an enabler. We need an active, smart, effective state for efficient and vibrant markets. Pakistan‘s New Growth Strategy points out in the right direction, highlighting the need for public sector reform and the importance of reducing the costs of doing business, in order to develop more vibrant markets.

Access to finance will play a key role in this effort, as well as reducing the time it takes for business startups through removal of red-tape and artificial restrictions. Pakistan‘s 18th amendment brings the state closer to the people but it now requires building sufficient capacity at the local level to carry out the newly expanded responsibilities and adequate coordination between various levels of government. Pakistan‘s Framework for Economic Growth correctly highlights the role of vibrant cities. Well functioning cities are the engine of dynamic innovation and efficient modern life. They are the springboards for new ideas and a better life for Pakistan’s rapidly growing population. At the same time with such a large population still dependent on agriculture and living in rural areas it is important that the rural-urban divide does not become too large. Even by 2035 almost half of Pakistan‘s population will still be living in rural areas and must feel included in its growth processes. If the goal of high sustainable and robust growth is to be realized, there is urgent need for policies that not only would address how to increase economic efficiency but also the different concerns of the rural poor and the urban poor. Failure to do so would make cities uninhabitable, with pressures on water, transportation, fuel and power, and countries susceptible to conflict, and growth meaningless for a large majority of people. Like many other Asian countries Pakistan is vulnerable to natural disasters and conflict. In the last six years we have seen two huge disasters; the 2005 Kashmir earthquake and massive floods in 2010, which affected the entire country. In the last decade, Asia accounted for about three fourths of global casualties from natural disasters. These factors reinforce the need to proactively consider building resilience in countries like Pakistan as a part of the sustainable


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development agenda. Building resilience will help households, societies, and countries to withstand not only short-term economic and environmental shocks, but also longer-term climate change threats. Therefore, spending on social protection and helping build resilience from disasters is not a cost; it is an investment for nations. Asia has done a lot to protect its people from such vulnerabilities, but there is still a lot to be done. The New Growth Strategy proposes to put the dynamic sectors and the resources of Pakistan in front of the steering wheel. It is a forward looking strategy that will mobilize resources from areas that have been untapped until now; from cities, young brains, and from communities. The Arab spring shows us that jobless growth, especially if it neglects the youth and creates a sense of despair, can easily lead to social unrest. Pakistan can reap a huge

demographic dividend if the kind of vision laid out in the New Growth Strategy of engagement, empowerment and job creation is realized. The international community must stand by and support Pakistan in this formidable task. It is nevertheless vital that the Framework for Economic Growth is fully owned and implemented by Pakistan‘s own institutions. External support is vital but it must be embedded in Pakistan‘s own structures and systems. We believe the new Growth Center in the Planning Commission can be a very useful and valuable base for planning the implementation. I wish you all great success in your discussions and deliberations as you help Pakistan’s leaders prepare a new framework for re-imagining Pakistan. Thank you.

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Speaker: Sulaiman B. Mahbob Chairman, Malaysian Industrial Development Authority

I thank Dr. Nadeem Ul Haque, Deputy Chairman Planning Commission for organizing such a good conference and inviting me here to speak. There are two key players to economic growth viz. the government and the other is private sector. Both of these sectors can’t be separated as they both complement each other for economic growth in the country. Rural development is one of the important areas which need to be focused for the economic growth. Other important area is private investment in the country which will create opportunities for employment and help in reducing poverty. Investment in private sector helps in improving productivity and creating niche markets. Privatization is also important to bring efficiencies in the sector. Trade and investment are also important for private sector growth in the country. List of public goods and services need to be developed so that we can plan what we can do now and what can be done in the future. Deregulation is another important factor to be reviewed. There are many bureaucratic procedures and unnecessary requirements which need to be simplified or abolished. Public Private Partnership (PPP) is one of the important areas which can help in risk sharing and filling the resource gap in the country. There are many areas where PPP

can work effectively like maintenance and management of public goods and services etc. Governance should be focused to manage the private sector, ensure healthy competition and to help build new markets in the country. Provision of utilities is the government’s responsibility. We need to build capacity of the public services to get desired results. There is need to bring transparency and accountability in the governance and all aspects of the economic activities. There is need to build institutions and strengthen institutions like anti- corruption department etc. to eradicate corruption, special commissions for looking after regulations, competition etc. The key to success lies in privatization and deregulation. Implementing governance reforms require strong political support, as otherwise things would fail to work. In our country it was Mahathir Mohammad who provided us political support from the top for brining reforms in the country. In Malaysia Chief Secretary is also there to oversee all the areas and monitor progress. The most important thing is that we focus on implementing our policies and work on Result Based Management for outcomes.

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Session 1: Implementing Governance Reforms


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Civil Service Reforms

Speaker: Norma Binti Mansor

Secretary General, National Economic Advisory Council, Malaysia First of all I thank Dr. Nadeem Ul Haque for giving opportunity to share what we are doing for moving Malaysia towards a high income advance nation. A new reform vehicle i.e. Performance Management and Delivery Unit was established under Prime Minister’s office to work on the agenda of transformation in Malaysia. Unit was established by the government as a corporation, headed by a CEO from private sector, to support the government and provide a vehicle for transformation. The idea of vision 2020 was given by Mahathir Mohammad which was continued by Abdullah Badawi and President Najib Razak. Vision 2020 was to support united Malaysian nation with a focus on National Transformation Programme. Two Pillars of the National Transformation Programme are: i) Economic Transformation Programme (ETP): New economic model for a high income, inclusive and sustainable nation,

ii) Government Transformation Plan (GTP): Effective delivery of government services. Malaysian government is embarking on both National Transformation Programme pillars at the moment. There are 6 key areas which will be focused in the transformation process which are: 1. Reducing crime, 2. Fighting corruption, 3. Improving student outcomes, 4. Improving living standards of low income households, 5. Improving rural basic infrastructure, and 6. Improving urban public transport. Two documents were presented to the government for the reforms in the country.

The documents presented by us have so many similarities with Pakistan’s FEG and I think that we are moving in the same direction. For medium to long term period growth (next 10 years period) we are moving towards making Malaysia a high income advance nation in the world. After two years of establishment, the Performance Management and Delivery Unit presented eight strategic reform initiatives and 51 policy measures to the government. Six key priorities were the main theme on which we have been working in Malaysia to improve quality of life. For the new economic model we went to the public for their input. We went to the politicians, opposition parties, private sector, NGOs and academia to ask what you want Malaysia to be by the end 2020? Three objectives of the new economic model were identified which are as follows: 1. High income: growth + wealth creation, 2. Inclusiveness: narrowing disparity, 3. Sustainability: fixing the foundational issues. We defined specific quantifiable measures for all above three objectives. High income was defined to be an income level within the range of US $15,000 - 20,000 per capita by the year 2020. Inclusiveness being the second important objective would enable all communities to fully benefit from the wealth of the country. Sustainability was the third objective which meets present needs without compromising future generations. We have targeted a growth rate of 5-6 % in the region for sustainable development. Public investment has to be supported by private investment. We need effective and


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dynamic capital markets in the country. Inclusiveness also means sustainability, and responsiveness to the environmental issues such as sensitivity to climate change. We need to manage our renewable and non-renewable resources. We can’t use oil resources to finance management of the country. Economic transformation program needs to be focused. One of the important programmes is focusing all the sectors where we have strength. Second important programme is the cross cutting foundation of issues which were divided into following categories: 1. Creating a competitive investment environment:

• International standards & liberalization,

• Government’s role in business, and • Enhancing the sources of growth.

2. Developing quality workforce:

• Human capital development.

3. Transforming government: • Public service delivery, and • Public finance reform.

4. Narrowing disparities:

• Regional, ethnic and income levels.

Some of the key policy measures are further explained below: 1. Public Finance:

• Improve tax administration, • Rationalize corporate tax incentives, • Transparent procurement, • Control Expenditure, • Broad based Tax, and • Accrual accounting.

2. Public service delivery.

3. Human Capital Development:

• Modernize labor laws,

• Labor safety net, • Women’s Talent, • Strengthen HR Management, • Labor market analysis, and • Up skilling & re-skilling

4. Government’s role in business:

• Reduce crowding out private sector

- Divestment of Government Linked Companies (GLCs)

• Increase liquidity in capital markets - Pare-down & listing of government’s stake in companies

• Improve governance for state-owned companies - Anchored on performance. - Replicate the success of Khazanah’s Putrajaya Committee on GLC high performance.

5. International standards & liberalization:

• Competition law - encourage competitiveness. - Implement Competition law by 2012.

• Liberalization: Healthcare, education and business services.

• Standards: Adopt international standards, develop Malaysian standards and raise Malaysian standards as the benchmark.

6. Narrowing disparities:

• Improve social services and infrastructure to all regions,

• Improving capacity of the bottom 40% of households,

• Improving capacity of SMEs: - Entry point with 1,100 companies. - High Performance Bumiputra Scheme. - Performance based with clear entry and exit criteria.

Until we work with all the sectors and propose to the government that we work on


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above key areas for the transformation Programme we can’t get out of the middle

income trap.

Speaker: Dr. Ishrat Hussain Director, Institute of Business Administration, Karachi

First of all let me thank Dr. Nadeem Ul Haque for inviting here and to share my thoughts on this important subject. The Framework for Economic Growth has taken into consideration a very important element of the governance structure. The overall governance structure is important because it is through this structure that economic policies are intermediated and translated into economic and social benefits for the vast majority of the population. I would like to focus on the governance structure which consists of the executive, judiciary and legislature. The highest impact on day to day life is created by the executive branch of the state. The present discussion will, therefore, focus firstly on the executive branch whose main pillar is the Civil Service. The second important question I am going to ask is that if there is a need for change then what different and new we should do and present a package which will make a difference to the lives of the common citizens of the Pakistan? The third important point is that if there is a consensus on the package then we should see that how it can be implemented. The present system of Civil Services has become dysfunctional and is not doing the job. The following extracts from the Human Development Reports on South Asia of 1999 and 2005 depict a vivid picture of the governance in South Asia and which is even more applicable in case of Pakistan? Human Development South Asia Report 1999 and 2005 presents the picture in following words:

“South Asia presents a fascinating combination of many contradictions. It has governments that are high in governing and low in serving; it has parliaments that are elected by the poor but aid the rich; and society that asserts the rights of some but perpetuates exclusion for others. Despite a marked improvement in the lives of few, there are many in South Asia who have been forgotten by formal institutions of governance. These are the poor, the downtrodden and the most vulnerable of the society, suffering from acute deprivation on account of their income, caste, creed, gender or religion. Their fortunes have not moved with those of the privileged few and this in itself is a deprivation of a depressing nature.” (Human Development South Asia Report, 1999) “Governance constitutes for ordinary people, a daily struggle for survival and dignity. Ordinary people are too often humiliated at the hands of public institutions. For them, lack of good governance means police brutality, corruption in accessing basic public services, ghost schools, teacher absenteeism, missing medicines, high cost and low access to justice, criminalization of politics and lack of social justice. These are just few manifestations of the crisis of governance.” (Human Development South Asia Report, 2005) A question that is often raised in Pakistan is that why has India retained the same Civil Service Structure as they had inherited from the British? Why is Pakistan moving to


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change the legacy, texture, and complexion of the Civil Service? I don’t think that after these very cogent reasons about the crisis of governance anybody in this room would disagree with my hypothesis that economic growth can't take place unless these policies are translated into the benefit of the longer majority of the population and is free of corrosion and fully functional. This can be compared to a water system whereby water is gushing out of the tap but if the pipe through which water is conveyed is corroded, leaking or clogged then those expecting water at the other end of the pipe would either only get a trickle or water of unhygienic quality that is not usable for drinking, cooking, bathing and other uses of human consumption. This pipe is the institutions of governance which needs to be fixed. Economic growth can't yield results unless it is backed by good governance. In my point of view main pillar of the good governance is Civil Servants. Empirical evidence across countries has now confirmed that economic performance not only in terms of aggregate growth but also the distribution of income is determined by the quality of institutions. These institutions, in turn, are manned by the Civil Servants. We have a history that clearly tells us that for the first two and half decades the country had Civil Servants who had the capacity and competency to take decisions in the larger public interest. They also enjoyed courage of conviction whereby they resisted extraneous pressures and influences which could disable them from taking the right decisions. Being wedded to the Colonial Civil Service their mindset and attitude betrayed the tendency of guardianship and paternalism. They were not responsive to the needs of the population and lacked the compassion to come to rescue the poor, marginalized and less well-to-do segments of the society. What is being proposed here is that the first three attributes (3 Cs) of

Civil Servants – Capacity, Competency and Courage – have to be revived in them through these reforms while the compassion has to be imbibed through greater exposure, awareness and incentives. The end result of the reform should therefore be a majority, if not all, Civil Servants displaying and practicing these attributes. There is need to restore ‘3Cs’ in Civil Servants of the future. I was heading National Commission for Government Reform (NCGR) consisting of both senior serving Public Servants and individuals from the private sector who have excelled in their professions. We spent two years and submitted a comprehensive report to the Government of Pakistan in May, 2008 with very detailed and specific recommendations for the Civil Services Reforms. The gist of these recommendations is given below:

1) Open, transparent merit-based recruitment to all levels and grades of public services while protecting regional representation as laid down in the constitution.

2) Performance evaluation to be based on measurable objectives, and assessment of key performance indicators.

3) Promotions and career progression to be based upon a combination of past performance and assessment of potential with mandatory training at post-induction, mid-career and senior management levels.

4) Equality of opportunity for career advancement to all employees without preferences or reservations for any particular class. A shift should take place in the mind set from “Entitlement” to “Eligibility”.

5) Replacement of the concept of Superior Services by equality among all cadres and non-cadres of public servants, federal and provincial Civil Services, professionals and generalists. Suitability for the job


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should be the governing principle rather than the origination of the appointment.

6) Grant of a living wage and compensation package including decent retirement benefits to all Civil Servants.

7) Strict observance of security of tenure of office for a specified period of time.

8) Separate cadre of regular Civil Services at the federal, provincial and district levels co-existing with contractual appointments and lateral movement.

9) Creation of a National Executive Service (NES) for senior management positions open to all federal, provincial and district Civil Servants through a competitive process.

10) Induction of three specialized cadres under the NES for Economic Management, Social Sector Management, and General cadre.

11) Citizens’ Survey and Score Cards to judge the responsiveness.

To implement above recommendations we need to focus on some key reforms and institutions first. We need to adopt a selective approach to go ahead. It has therefore to be phased over a period of 5-10 years with adjustments and fine tuning to meet the exigencies of circumstances. Government rules, regulations and manuals are not widely available to the affected

population. They are not updated and have therefore become a major source of harassment and extortion. There are conflicting rules on the same subject co-existing in the rule book or manual because the old ones and those superseded have not been weeded out. Some of the rules are so outdated that they have become a nuisance. If all the government rules, regulations, instructions, circulars are continuously updated and only the most current versions are posted on the website of each ministry a lot of good will be done to make the lives of common citizen easy. The transparency achieved through automation will minimize the discretionary powers of the government functionaries and provide convenience to the citizens who are actually the voters in ultimate analysis. The posting of updated Foreign Exchange Manual on the website of the State Bank of Pakistan (SBP) which could be accessed by anyone from his home or office created a lot of trust in the organization. Computerized land records will substantially bring down the volume of litigation that is clogging our courts and provide a lot of relief to those engaged in protracted and expensive court cases. Good governance reforms are necessary for improving economic performance and reducing income inequalities and regional disparities in Pakistan. The thrust of these reforms lies in a dynamic and vibrant Civil Service.

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QUESTIONS: Question: I would like to share my observation that best decision to empower local communities is by shifting power to the local governments. We talked about District Civil Service idea. Is there any example of successful District Civil Servants in the world? Question: It is told here that we have 56% literacy rate in Pakistan. My question is that whether this figure is correct or not and what is the quantum of literacy in Pakistan, Malaysia and Bangladesh? We have 70% population living in rural areas of Pakistan. I can’t understand that how this literacy rate is established. Please comment. Question: We have a wonderful growth strategy but we see things going in different directions. We reviving 1861 Police Act again and my question is that what is happening in the country? Question: We had been using ‘5 Years Plans’ in the past in Pakistan and other countries following our model have progressed very well. Why we have failed to evolve ‘5 Years Plans’ and why Planning Commission is not considering it for the growth in Pakistan? Question: Why a democratic government is hostile to local government structure whereas military government implemented it? Question: New Framework for Economic Growth is presented by the Planning Commission. How would this new framework work with energy crises in the country? And why issue of Thar Coal project is not being addressed by Planning Commission whereas there is so much delay in this project? ANSWERS: Answer by Dr. Ishrat Hussian (Director, Institute of Business Administration, Karachi): I think there is a lot of misinformation about the devolution of the local governments. Amendments which were made after 2002 in the Local Government Ordinance have deprived the local governments of the real power. It is the small plant which needs watering and nourishing over time. We have four experiments of local government. What we need is a very strong local government institution in this country. So we can’t just uproot the plant and replace it by a tree over time. I would submit that the empowerment of local communities leads to outcome. I personally believe in empowering local communities to take decisions. For the district Civil Service I would say that two third of the provincial government servants operate at the district levels. To provide the real power we propose a district service. All the teachers, health workers etc. would be in district government and there would be no clash between district, and federal government. About literacy rate the definition is not invented by Pakistan. There is a definition for literacy by UNESCO which is followed by all the countries. Bangladesh has much more literacy rate than Pakistan. Malaysia’s literacy rate is also very high. Bangladesh’s female literacy rate is also higher than Pakistan. Even India has 63% literacy rate with the definition being the same.

Questions and Answers


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I can’t comment about reviving Police Reform 1861 as that decision was taken by particular government and they must know what they are doing. Police Act of 2002 which was relatively good act has been changed. I think there is always competition for political space. The MNAs and MPAs feel that Nazims had taken over all the powers and that is why there is power tussle in political governments. The military is one man rule and they want to have the legitimacy and they think that the local government can provide them the broad band democratic space. Answer by Norma Binti Mansor (Secretary General, National Economic Advisory Council, Malaysia): For improving quality of education in rural and urban population, one of our 6 key priority areas is education. In Malaysia women are much more educated as Malaysia has a small population and we have to use all available citizen resources in the country. The Women enrolment in the universities is also very high and we have policy that higher level posts should also be occupied by the women. We have a federal system with 30 states and we want the local governments to come there in the federal system. We talk to the opposition parties, NGOs etc. about the framework that what is to be done in the government. We start dialogues and take suggestions from the stakeholders. Using e-government tools we also get suggestions from people and have made it interactive. Answer by Sulaiman B. Mahbob (Chairman, Malaysian Industrial Development Authority): We involve the private sector in dialogues for policy making and take suggestions from them. Preparedness to change is the approach we follow in our country for which we always look for participation of the stakeholders and take their input for better implementation. Answer by Ayaz Amir (Columnist/ Journalist): Some of the best public relation experts in this country are confused with the fact that we are again going to run our police force using 18th century old Police Act. 1861 Police Act is a very short act of at the most two pages which is just an enabling umbrella sort piece of legislation just saying that a police force would be setup. It doesn’t speak about a good police force. Even Police Order 2002 didn’t lessen incidences of police brutality or corruption. Most important thing in Police Act is that how we implement the things. There is no shortage of good intentions in this country and a paper of few pages would not make our police force a good force. Good intentions and implementation is required for a good police force to work.

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Speaker: Muhammad Ali Chairman, Securities & Exchange Commission of Pakistan

I would like to start my presentation by sharing a story with you first. Mid last year I went to the office and found that one of my good staff persons has resigned. My office staff told that the person resigned because he wants to start his own business and he is interested to meet me. The gentleman came to me and I asked him that how could I help him? He requested me for a loan of hundred thousand rupees for two years period to start a grocery business. After listening to his logic I provided him the required money. Today that gentleman is running his own shop successfully, employing two people and paying back the loan every month. Twelve hundred dollars were needed by that gentleman and he was not able to get that money and start his own business in this country. Entrepreneurship and human capital is the basis we need for competition in our country. In my presentation I would like to focus on two important areas viz. openness and competition. The theme is that we as a nation for the last so many years have only rewarded the financial capital in Pakistan. Because of short sightedness we valued financial capital and failed to value human capital and talent. We have not been able to develop a competitive environment in our country. Pakistan’s economic growth since 1972 shows a volatile growth with boom and bust. I would like you to note that Pakistan have had high economic growth rate only in times when there was financial assistance from the outside world. In 1979, after the Afghan war, we saw an economic boom in the country. After 1990 when sanctions were

imposed on Pakistan there was only one year in which we saw real economic growth. In 2001, after the incident of 9/11, we started receiving financial assistance and we were able to achieve economic growth. Government’s reliance on borrowings and foreign resources has undermined the economic growth in the country. We have not been able to develop a competitive environment in this country whereby businesses and manufacturing sector can lead us to growth. Foreign assistance has played a major role in our growth and that can’t go on in future. We have under developed markets. We have financial markets in our country. We can’t be competitive without creating entrepreneurship in our country. We can’t create entrepreneurship without financial capital. We have developed only equity market in the country which is less than 25% of our GDP. Debt market is non- existent in our country. Commodity markets are also in infancy stages yet and we need to promote it. We are a banking centric nation. Without being financially strong we can’t have financial capital. If someone needs financial capital it is almost difficult to get it unless he is already financially strong. Our savings are lying in the banks and the banks have been lending only to the government or large size corporate sector. We have not been able to develop an effective SME sector. For the last 20 years I keep hearing two words – debt market and SME sector. I have not seen any of these two developed in our country. Unless we create a competitive debt market where people can borrow from

Session 2: Openness and Competitive Markets


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debt markets, from mid-size financial institutions which are not banks rather non-banking financial sector, merchant banks or investment banks we would not be able to develop entrepreneurship in the country. No nation in the history of mankind has grown by keeping their money in banks. Today we have an environment where without any effort we can earn 10-14% interest rate on our savings and the economic growth rate is 3 to 4 %. There is no incentive to take the risk to go into business. Unless interest rate comes down and we have high growth rate

we will not be able to create a competitive environment. Ease of access to credit is very important. Financial market sophistication and ease to access to credit is very poor in Pakistan. Lack of governance and transparency is also very important. Without transparency and proper government structure we would not be able to create a competitive market. PIA, insurance sector, NIT, mutual funds etc. are still controlled by the government. We need to privatize these sectors sooner or later.

Table -1

Countries Intensity of Local

Competition Prevalence of

Trade Barriers Global Competitiveness

(rank/125) Pakistan 87 106 101

Indonesia 54 58 54 India 30 96 49 China 19 69 29

Malaysia 38 88 24 Source: Global Competitiveness Report 2009-2010

As per Global Competitiveness Report 2010-2011 Pakistan’s rank is 101 in the world. In GCI rank (Table -1) Indonesia is at 54, India’s rank is 49 whereas rank of China is 29, and Malaysia’s rank is 24. Pakistan is very low in ‘Comparative Competitiveness Position’ in the region. In ‘Intensity of Local Competition” Pakistan’s position is 87th which is lowest in the region. For “Prevalence of Trade Barriers” Pakistan’s position is 106th which is again lowest amongst countries compared. Openness will lead to competitive markets and economic growth. We need to think about trade in the region especially in the SAARC countries. Regional trade will lead to higher competition and growth and competition will help bringing efficiency in the sectors. Consistency of policies is also important for sustainable growth. Due to

lack of consistency of policies people are not investing in the country. We as a nation are losing our competitive position. Competition will increase efficiency, increase choices, lower the prices and increase innovation. Achieving higher growth was not easy task in the past. Today people sitting in China are serving people in Japan. People sitting in Bangalore are serving companies in Europe and USA. We have failed to capitalize the opportunity. Today the world is much smaller. Internet, e-commerce, technological advancements are tools giving us opportunity to create competition and to achieve higher growth rate. Regional trade, macro economic and political stability, consistency in policies and sound legal and institutional infrastructure can leverage competitive advantage.


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Speaker: Philip Auserwald

Professor, George Mason University I appreciate the process led by the Planning Commission. I am honored to be the part of this event. One of the things working in Pakistan today is mobile firms. In telecom sector there are 5 major providers in Pakistan with 100 million subscribers and lowest SMS and call rates in the world. It is a very highly competitive industry which is providing the needed service in the country and we can celebrate that. We discussed about the banking industry where service area is seriously deficient. Currently banks serve only 15 per cent of Pakistan's population. Credit availability to SME is inadequate. Only 7 per cent of bank lending is to the rural population. House financing facilities are not available through the banking service in Pakistan. An almost identical case pertains to housing finance, in particular the total denial of funding for low cost housing (construction, purchase or renovation). In each of the three product markets - agricultural credit, SME financing and housing finance - there is neglect in the policies. I want to point out the dots between entrepreneurship, competition and growth. Given the number of banks in the country, banking should be the most competitive sector in the economy. I want you to think about the economy as one sector. The sector I am interested to discuss an example is the forest sector. Forest sector has a number of large trees which form the canopy and all we see from the outside is just the large trees or the canopy. In the forest there is also large number of underbrush we can’t see from the top. In between the trees there is the growth sector. The growth sector of the forest is the same as of the growth sector of the economy. It is those trees which are small

but are growing and are not visible from the top. There is the middle range which is deficient in many countries and not meeting the economic potential. Immortality is an ugly thing from a social point of view as there is no place for new to develop. But this is not the case with regard to the countries which have not achieved maturity through competition. These are the immature competitive economies. So I would focus on new and growing enterprises which is the SME sector or the ‘Missing Middle’ of the economy. The new and growing firms may have a small share of the GDP but both in poor and high income economies they have a substantial share both in terms of GDP and employment. Exit of the firms create opportunities in the economy. In a forest some old trees die and give place to some new tress to take place. Firms’ failure is an opportunity to reconfigure economy. Exit of the firms that fail to utilize the resources of the firm is important for a new entry. So an enabling competition enables both exit and entry of the firms. The growth of economies is the growth of firms1. One of the important factors in the growth of the economy is the ‘Missing Middle’. For doing business the exit and entry of firms both are important for the economy. We need private sector to be engaged and provide them a favorable business climate. Dr. Nadeem Ul Haque said in his speech that growth is a very complex subject which is more difficult than the rocket science. I agree with his statement. We need private

1 Schumpeter,1911; Shell ,1962, 1966; Lucas ,1978; Baumol, Litan, Schramm, 2007.


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sector to be engaged. A good example of the development made in a country is Korea. What do we learn from the Korean model is explained by one of my colleague at Kennedy School. He has worked in Korea and in his paper, presented in 1995, he explained it in following words:

“What was required was a competent, honest and efficient bureaucracy to administer the interventions, and a clear-sighted political leadership that consistently placed high priority on economic performance [along with] an exceptionally high degree of equality in income and wealth. Wealth distribution played an important role in shaping the political landscape in both countries. This is probably the single most important reason why extensive government intervention could be carried out effectively, without giving rise to rampant rent seeking.”

The circumstances which made South Korea to develop and move forward from devastation is very important. We also need to look at the development in China, Rwanda, Sri Lanka, and Israel etc. An important challenge of the growth strategy is the sense of determination to change and transform the economy without going to the conditions of devastation. People will come in Pakistan and invest when we will have good governance. This country in my view has globally the number one business opportunity in the world because it is the country which is still far from its potential. For an entrepreneur there are three choices viz. to immigrate, compete or rent seek. Society needs to create opportunities for its most talented people to compete and create, and not to leave. To foster entrepreneurship there is need to make trust affordable. Pakistan needs to join rest of the Asia on the turn pike of growth.

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Discussant: Rahat Kunain Chairperson, Competition Commission of Pakistan

First of all I would like to thank Planning Commission to give me an opportunity to be here. We are the Competition Commission agency to ensure a competitive and healthy environment for doing business. In telecom sector we went for an inquiry for cartelization. What happens here is that a person goes to court and takes a stay. Same is with edible oils and many other sectors. A report made by Competition Commission tells that in banking sector 95% of the profit made was concentrated in just top five banks whereas there are 51 banks operating in the country. The banking sector needs to be closely monitored and regulated to improve efficiency and increase healthy competition. Another important issue to be addressed in our society is cartelization. Cartelization is taken as something normal in our society and we need determination to address this

issue. Penalties of 7.3 billion rupees were made by Competition Commission on various firms and sectors but the cases are pending in the courts. There are 140 cases in the courts with decisions pending. People are making profits in our country due to unhealthy business competition practices. What these regulatory bodies doing if decisions are not being taken there? To have an impact on the economy we are focusing now on two areas in Competition Commission. One is public procurements and the other is concessions being given. PPRA rules are not being followed in public procurements. Companies are making profits and still taking concessions. So there are many areas which we need to look at to create a healthy competition in the country.

***

Discussant: Farhan Bokhari

Pakistan Correspondent & Country Manager,

Financial Times UK It is not much difficult to come up with a success story as in many years Pakistan has gone forward. It is very important to discuss about the issue of institutions and governance in Pakistan. The role of the institutions is very central to the economic development of the country. It is the time to come up and take Pakistan towards economic growth. It was 2008 when

Pakistan celebrated one of the largest inflows of US $ 8.4 billion, including FDI etc. We need to focus on many aspects to move forward. Collapse of the democracy may result in collapse of the economy. If we want to be a democracy, democratic aspiration should not collapse. Regional trade is also one of the important factors we need to look at.

Discussion


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QUESTIONS: Question: The gap between the actual and potential productivity in our country can be seen as a great opportunity. Power structure in this country is restricting competition as a small coalition of elites can generate risk. With this power structure the development of a new institutional framework is very problematic. What is the nature of power structure that has prevented fundamental institutional changes which was required for sustainable economic growth and efficient markets to operate? What specific strategy you suggest to address this issue? Question: SECP is one of the important organizations in Pakistan to regulate the markets. What challenges SCEP see in the implementation of the Framework for Economic Growth and regulating the markets? Question: Laws governing economic sector are ambiguous. There are many agriculture related disputes unsettled for the last many years. Resources are not being utilized due to poor laws governing various sectors of the economy. Please comment on above referred issues. Question: We can see cities burning in Pakistan and shipments stuck in cities and at ports. There is severe shortage of electricity, gas, furnace oil etc. Offices and factories are being forced to shut down in cities due to strikes. How can we compete with other countries globally with cost of doing business going high and investment not coming in Pakistan? Question: As we heard the panelists that there is a gap between the potential productivity and actual productivity in Pakistan, how FEG can help in filling this gap and avail this opportunity? ANSWERS: Answer by Dr. Nadeem Ul Haque, Deputy Chairman Planning Commission: There are many issues to answer like why stock markets not working properly? Why stock markets not encouraging entrepreneurship in the country? Why competition not unleashing the competition? We need regional trade to promote. Our

industrial competition practices need to be looked at. We are offering answers to all the issues through our new growth strategy for the markets to be competitive and productivity to increase to create opportunities.

Answer by Professor Philip Auerswald, George Mason University: There should be a coalition of industrial giants who can come forward and work for Pakistan. They need to work with Planning Commission, SECP, and Competition Commission etc. and take Pakistan where it should be. It is their country and country of their children. Now is the time to make a

coalition and come forward to develop Pakistan. Government needs to give a competitive environment to create a space for the future. There is need to promote entrepreneurship. Investors are even working in countries like



35

Afghanistan. The local entrepreneurs understand the local markets better then foreign investors and they need to come

ahead. There is need to develop a healthy environment for the business.

Answer by Rahat Kunain, Chairperson Competition Commission of Pakistan: Mandi system should also be taken into account to make the markets competitive. Informal sector should also be developed and regulated. It requires a lot of research and documentation for these markets to bring in formal network and regulate them. There is a need to meet compliance to

minimum standards for increasing competitiveness. We also need to be very clear about openness, free trade and liberalization policies. There is need for our domestic markets to be competitive, compete globally, and protection of the domestic markets should not be the policy.

Answer by Muhammad Ali, Chairman SECP: Companies go to stock markets to raise capital. The moment a company starts business as a private or public limited company the regulation starts. Along with promoting equity market SECP is also working for the development of debt and

commodity markets in the country. We are an agriculture based economy and we need to develop mandi system in this country. We need pricing of the agricultural markets which mandis can develop.

***


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Speaker: Heru Prasetyo Deputy Chairman of the President’s Delivery Unit for Development Monitoring and

Oversight, Indonesia While coming to this room in the morning the first emotion I have is that I feel amazed. There are forty universities connected in this conference which is something really good. While listening to the discussion I feel more humble as all this intellectual work is also being done in my country as well, but not with so many universities connected through the internet. I find similarities in the approaches. I would not try to be more intellectual here but just to present what my President asked me to be. We need to make a strategy with a bias for the implementation as otherwise it is not workable. Let me start with some background of Indonesia. Indonesia has 1.9 million /km2 land with 6 million /km2 at the water. We have population of 235 million people. Pakistan is going to face the same challenges in 2020 which we are facing now. We have 33 provinces, 400 districts and 43000 villages. We have blessing of many natural resources such as coal, oil and wood. We were formerly a Dutch colony and we fought our independence in 1945.We have experienced three governance stages in our country which is as follows:

1. 1945 – 1966 (The Soekarno Era – Nation Building),

2. 1966 – 1998 (The Soeharto Era – Economic Growth), and

3. 1999 – Now (The Reform Era – Democratic Balance).

Now we are working in reform era. We need to remember one thing that “solution to a problem has the potential to be a new problem”. In 1998 we faced economic crises and riots etc. in the country and the

condition was very disheartening. That was the time when president Soeharto stepped down and handed over the government to President Dr. B.J. Habibie and reforms era started. Before 1998 we had only two presidents, but in the last twelve years we have seen four presidents. We reformed the government from provincial level to the district level. We activated a system to take presidential and parliament campaigns’ promises as key performance indicators of the government. We started monitoring presidential campaign. I am of the opinion that Framework for Economic Growth for Pakistan should also be implemented and monitored in the same manner. In year 2020 the per capita income in Indonesia would be approximately US $ 4800. With new reforms poverty is going down, unemployment reducing and growth of investment also looking good. Jakarta Globe2 writes about the ambitions of the government in following words:

“There is no denying that the country is on the right path. But speed is of the essence so that 2011 will be an even better year than 2010.”

Our economy is growing fast and issue with us is that how can we grow faster in future? We are looking for money from public-private partnership. For the growth in the country it is estimated that 80% of the funds must come from private sector. Indonesian government’s current budget is about US$

2 Jakarta Globe, 31 December, 2010

Session 3: Result Based Management in Public Sector


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130 billion. To achieve the growth targets we need three times the current budget. We are looking for money from public-private partnership. US$ 150 billion are planned for infrastructure and US$ 50 billion are planned for community development. After decentralization under new reforms we are facing new problems as districts are now more in control than the centre and provinces. Bureaucracy is still bad and decision making is poor. Indonesian government has set up 11 national priority areas for reforms, which are:

1. Bureaucratic Reform and Governance,

2. Education, 3. Health, 4. Poverty Reduction, 5. Food Security, 6. Infrastructure, 7. Investment and Business Climate, 8. Energy, 9. Environmental and Post Disaster

Management, 10. Disadvantaged, Isolated, and Post-

Conflict Area, and 11. Culture, Creativity and

Technological Innovation. Problem of our government is lack of consistency, synchronization within ministries, and poor coordination at community as well as village level. There is lack of inter-ministerial coordination. We planned a methodology and a ‘5 year program’ in the government. We planned about 369 action plans from 11 priority area for which challenge foreseen was monitoring i.e. how to and what areas to monitor. These 369 action plans of strategic importance were identified out of 6000 action plans which were identified by our Planning Department. We have placed all these action plans in our monitoring system.

If one ministry was not coordinating with the other ministry it was being reported in cabinet meetings. We have set up targets on every 3 months basis. Presidential Delivery Unit started reporting actual performance on an eight column (standard) form. We monitor them, check on ground physical achievement, score them and report to the cabinet. Whatever target achievement is reported by the ministries we send a team on to physically verify that. We are also focusing on debottlenecking problem areas. Based on the feedback from the field we remove bottlenecks. For infrastructure development the land is not available for which we find solutions through public-private partnership (PPP). In PPP we are facing many problems. We are trying to find that who is responsible for the failures in PPP and why it is not working? Coordination between Ministry and local government is another problem. We place everything in front of the President in his ‘Situation Room’. President himself monitors progress of all the development and priority areas of the whole country. We also have web-based online reporting system and anybody can report progress of a program to the President’s Delivery Unit. Moving forward the lessons and challenges are as follows:

1. Managing bureaucracy, without a bureaucratic mindset,

2. Coordination is a challenge: Not only central-local, but also among central government agencies,

3. Non-partisan working unit: In the midst of a ‘noisy’ democracy, and

4. Courage for breakthroughs: ‘fail in trying’ is better than ‘failing to try’

In my point of view “proof of a strategy to be successful is its implementation”

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Speaker: Nohman Ishtiaq

Advisor, Finance Division, Pakistan An ordinary strategy well executed is better than a brilliant strategy that for one or the other reason is never implemented. Importance of the implementation of the strategy has already been highlighted by the speakers and my presentation is also about implementing the Framework for Economic Growth. The FEG speaks about two important constraints to the economic growth in Pakistan which are given as follows:

1) Inadequate market development: It includes following important factors to be considered:

- Lack of competition, - Tax, tariff and policy distortions, - Poor regulation, - Entry barriers, and - Government involvement.

2) Lack of efficient public sector management: It includes the following areas to be focused:

- To provide core governance goods,

- To facilitate markets and investment, and

- To promote deepening of physical, human and social infrastructure.

Growth strategy basically needs an implementation strategy. Government should provide a framework for non-government action rather than operate institutions. Reforming Public Sector in Pakistan requires ‘New Public Sector Management” which include following areas to be considered:

1. Government should steer rather than row (provide a framework for non-government action rather than operate institutions),

2. Government should focus on outcomes (desired results) and needs of customers (service recipients), rather than inputs (rupees and jobs) and needs of bureaucracies (rules),

3. Government should decentralize and address problems from the lowest level of government possible (subsidiary),

4. Public agencies should compete with private agencies, and should adopt a market orientation, and

5. Government which works better also costs less.

The core of whole Public Sector Management is the Result Based Management (RBM) which focuses mainly on the customer or people. The inputs are human, financial and material resources which give output in form of service delivery. In Pakistan public sector currently looks at only inputs i.e. economy factors. We in Pakistan don’t have system whereby we can measure efficiency by looking at service delivery performance in public sector. As effectiveness of the public sector is also not being properly looked in Pakistan we don’t have a comprehensive mechanism where we can monitor, budget and plan outcomes. Results Based Management system focuses on service delivery and this should have an orientation at planning, budgeting and monitoring stages. Monitoring results should back the planning process in the form of feedback. The overall working should be aligned with the individual performance assessment mechanism of the Civil Service


39

and reward and penalty should be attached with the achievement of the results. My first recommendation for the whole system would be to put at one side different government actors and political setup. On the other side there would be planning and budgeting, whereas monitoring would be at the top. It would all be about a fiscal framework approved by the cabinet with expenditure limits for each of the ministry to form basis for ministerial planning. Ministerial planning should also be based on the results with an over sighting body from Planning Commission and Finance Ministry together to look at the performance. This fiscal framework should at the end be approved by the parliament and a cabinet sub-committee for monitoring government performance, same as President’s Delivery Unit doing in Indonesia or like Prime Minister’s Delivery Unit in UK. With regards to this medium term fiscal framework government already has a process whereby a macro economic situation is analyzed, revenue and fiscal policies are debated, and results and expenditure ceilings are given to all ministries, which is also endorsed by the cabinet. We also have a process whereby the budget in the federal

government is made based on inputs and outputs along with performance indicators given for each of the ministry. The system is there but there is need to look at this overall holistic picture whereby plans, budgets and monitoring and evaluation is focused for results. Important question here is to overlook the performance. In case of Indonesia it is the President’s Delivery Unit which monitors the implementation process. In UK the Prime Minister’s Delivery Unit performs this job. In case of Pakistan Prime Minister’s Office or cabinet can answer, but these questions require further deliberations. Linkages between federal and provincial government are also important for the whole system to effectively work. One last important thing I want to say before closing remarks is that our constitution allows government to approve and spend supplementary budgets along with re-appropriations without prior approval by the legislator. This article within the constitution undermines our planning, budgeting and monitoring. It requires considerable thinking so that ex- ante approval by the legislator is made mandatory before spending any amount.

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Discussant: Dr. Akmal Hussain

Professor, Beaconhouse National University

Let me start this with a note of appreciation. Link between public sector management and economic growth is very important. Let me start with the question that what is the link between Result Based Management in public sector and the macro economics? I think the link precisely is the institutional framework. Institutional framework, whether for a public sector organization or economy as a whole, consist of a set of rules and norms and incentive structure embodied within it to shape different kind of behavior by the economic actors. The growth framework should unleash the productivity, quality of life and growth potential of various actors. At the same at micro economic level it should be considered that what kind of institutional framework we need to build so that they can set incentive structure, rules and norms that can be built in public sector organizations. An important challenge in front of us is to generate a growth which is sustainable and equitable. It should be inclusive to involve large number of people both in middle class and the poor in the process of investment and high wage employment. When a large

number of people are involved in the growth process where there is competition, efficiency, innovation etc. it can be sustainable. If we look at micro level public sector management system we can have a system which build new rules and performance evaluation system to enable them to do their jobs. Government should focus on providing a minimum set of key services such as quality education, quality health, sanitation etc. which are to be delivered by the public sector. Internal performance and evaluation mechanism can also bring results. RBM is an important element. It should be customer at the other end to monitor the results and performance. In Pakistan we need to enable organizations of the poor to be institutionally linked with every part of the government at provincial level, district and village level. We need to enable local government with institutional network to bring results. Poor should be systematically involved in the process of performance evaluation and results.

***

Discussant: Dr. Andrew Rathmell Coffey International Development

Thank you very much for inviting me here. I will talk about four observations based on UK experience and other in a number of different environments around the world. In UK they are using target selection approaches using flexible management

framework for helping public sector organization and civil society in getting outcomes. Pakistan has a complex political and economic environment with whole range of issues. How can we improve organizations in Pakistan to RBM

Discussion


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programs? There are following three ways to make public sector more effective and responsive to the service delivery:

1) Process of agreeing and setting outcomes across federal and provincial bureaucracy i.e. forcing decision makers and stakeholders to really think that how their interventions may lead to give outcomes. Using outcome and results in setting process forces decision makers to look at actual outcomes rather than just looking at inputs.

2) How to use monitoring and evaluation once budgets and programs have been set to build capability for responsiveness. In Pakistan direct feedback mechanism don’t exist for many areas of service delivery, especially for the citizens at federal, provincial and district levels. If a combination of product and service

delivery monitoring and evaluation mechanism may be developed in Prime Minister’s Office, involving focus groups to take feedback, it can help in improving public responsiveness. So flexible management framework along with public participation would be important in improving public sector responsiveness and results.

3) Improving planning including even medium term budget planning for the development programs in public sector.

We need a very flexible and responsive management framework to get desired results in the public sector. For Pakistan we need to also include stakeholders and to take public opinion for getting better results, improving overall planning process, public service delivery capability and responsiveness and making budget planning more adaptive.

***

Discussant: Vinaya Swaroop

Sector Manager of Economic Policy in South Asia, World Bank

I need the attention of Deputy Chairman Planning Commission and would like to talk about the things which should not be done. Back in 1990’s I first time heard about Result Based Management System (RBM), also known as Performance Based Management. We must collect information on performance indicators for improving performance in public sector. We heard about the experience of New Zealand and Australia where it turned on the economies. In New Zealand performance and pay of the head of a financial institution working under a contractual agreement was linked to inflation. The head was asked to manage and bring down the inflation and his performance was linked to controlling inflation. When I told this example to one of my counterparts in the country he just

started laughing and said that you want my performance to be judged based on inflation in my country? You must be kidding as I am a Civil Servant. It was 1995 and we knew that this thing couldn’t go forward.

Pakistan needs to collect information to develop performance indicators. We have worked on medium term expenditure framework in over hundred countries and we must admit that this was not a successful experience as we have found that infrastructure spending in developing countries is not associated with higher economic growth. We have worked on explaining this fact and also developed working papers on the issue. To explain here, I share Uganda’s experience where their bank started Public Expenditure


42

Tracking Surveys (PETS). PETS started looking at the amount of resources budgeted in ministry of finance and the actual money which reached the school. It was found that in terms of actual expenditure only 30 % amount was actually spent on the sector and the rest leaked out. If we talk about the productivity of public expenditure and just look at infrastructure spending we are not going to get the right answers. We did a working paper for looking at the impact of public sector spending on education outcomes and health outcomes and we also looked at governance matters. We found that the public expenditure is closely associated with the education sector outcomes and health sector outcomes when we controlled governance. In other words the countries where governance is good the outcome was also found to be good. We have a growth strategy here and looking at the implementation plan. Suppose we take one indicator of Tax-to-GDP. This indicator is easy to monitor. But what happened in many countries is that they over achieved the targets by specifying lower targets and using unlawful measures. We should be very conscious while using incentive framework.

One such example is of South Asian countries where they used one such indicator for improving performance of doctors in public sector. They developed an indicator in which doctor’s performance was linked with the condition that “how many patients a doctor saw in a day”. But this experience to bring efficiency in checking maximum number of patients became a nightmare. Same is the problem with setting too many targets and collection of information which is inversely related to the effectiveness of an RBM system. Simply collecting performance information also does not necessarily lead to service delivery improvement. The key to success is what to do with that information and how to use it effectively to change behavior and outcomes. We in World Bank have come a long way. While lending we have disbursed money on the basis of expenditures. But we have just coined a new instrument which is called ‘P4R’ i.e. Program for Results in which we disburse money based on actual results achieved and outcomes. Concept is not easy as we can’t look at the end result. But we are in the process of putting things together to develop a mechanism.

***

Discussant: Raza Rumi

Public Policy Advisor/Editor

First of all I would thank Dr. Nadeem Ul Haque for having me here in this conference on Framework for Economic Growth. Planning Commission is holding a good conference for the change and let us hope that this momentum is carried through and sustain to help the government in developing and implementing programmes and strategies.

Pakistan’s governance has been an issue as our inability to focus on results has resulted into decline in social indicators. Nothing better illustrates this that what happened with the Social Action Programme which was started in 1990s. A large amount was given to the program from various donors and international organizations and at the end of 1990s our social services were worsened. Whether it was child or mother mortality all indicators had gone down. It


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was institutional failure that we never focused on the results from the federal to the local levels. In Pakistan institutions are unfortunately not delivering results which have led to successive erosion of public trust and legitimacy in the state. Due to institutional failure we also find many stateless regions in the country like in Baluchistan, FATA, even Karachi and South Punjab where land mafia, terrorist and non-state actors are operating. One of the missing part of the growth strategy is that how do we tackle informal sectors and black economy, mafias and many other issues being faced in this country? Unfortunately in Pakistan we take one step forward and ten steps back. Current government has moved to a better structure for defining powers of the Centre and the provinces. But at the same time in Sindh 1861 Police Order has been restored. So it is almost a joke that in the year 2011 we want 1861’s police model to work again.

I would sum up with few key points that the FEG has talked about very useful steps for the Civil Service reforms. It talked about monetization of perks and to have right people at the right jobs. We are getting funds from World Bank etc. for the training of Civil Servants but when they come back they are not being placed in the ministries where they ought to be. A person trained with investment of sixty thousand ponds in London Business School comes back and work in Ministry of Minorities. Important point here is that nobody in Pakistan is held accountable. Accountability is all imaginary and just on papers. Moreover, without having local governance system in place we can’t have feedback mechanism, state engagement and results in a heavily populated country like Pakistan. Use of benchmarking techniques, report card tools, introduction of e-government etc. can be the way forward for a Result Based Management system.

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QUESTION: Question: We discussed about RBM and public-private partnership. Why is this not working in Pakistan? Question: We have Prime Minister’s Inspection Commission in Pakistan. Why that commission is not doing the job to effectively monitor and evaluate the results in the country? Question: We are talking about growth in the country. In a country where we have load shedding how can we go for the growth? Question: Economic growth comes with the introduction of new products and processes in the economy. My question is that how government is monitoring actions in term of innovation in products and processes, innovation in society and institutions etc? Question: In RBM we heard about disbursement of budgets against outcomes. I was just wondering that it takes long time to know about the results then how this tool would work in the real world? Question: What is our strategy to make public and private sector accountable? And how people are going to be the part of this strategy in context of role of local government? ANSWERS:

Answer by Dr. Akmal Hussain, Professor, Beaconhouse National University: In Pakistan decision are being made at top-down basis in. The Prime Minister or the Chief Ministers forget taking feedback from the inspection team or the feedback is vague and doesn’t work as it should. We talked about two kinds of institutional mechanisms for ensuring that public sector service delivery becomes questionable. One important thing is to identify clearly time-bound objectives. Second important thing is the evaluation of performance in measureable terms. My point is that instead of internal performance based efficiency and controls we also need to have a system of external evaluation where we can link service delivery with community based organizations. There are many community based organizations working at district, tehsil and village level which can be linked

up with the local government delivery system. I would also like to say that new products and processes are essential for sustained economic growth of the country. It is the duty of the government to provide a setup to have such impacts for the development of new products and processes. But the problem is that how we measure that impact? I think that Dr. Nadeem and his team has tried to bring together what all new literature in the last three decades on economics suggest. It tells that new products and processes and innovation occur as a result of opening up of the economy for private sector competition where a large number of economic actors outside government compete and their survival



45

depends on increasing efficiencies and innovation and merit based selection. Inefficient firms in the process die and there

is fresh entry of the efficient firms who compete to survive.

Answer from Heru Prasetyo, Deputy Chairman of the President’s Delivery Unit for Development Monitoring and Oversight, Indonesia: Let me share with you Indonesia’s experience that we have very large tropical forest in our country. Different ministries give licenses for cutting forests, mining etc. There are 20,000 villages in these forests. To protect marginalized people living in forests we try to decide boundary lines of the forests and involve local community

living in these forests in the process of planning and monitoring and to decide the use of that land. We don’t just follow top-down approach in monitoring but it goes both ways. So involving local community at the stages of planning, implementing and monitoring has been very useful.

Answer by Dr. Andrew Rathmell, Coffey International Development: Based on lessons in UK for target monitoring mechanism I am of the view that

there should be some formal mechanism to make the reports public.

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Speaker: Emiel A. Wegelin GIZ Program Coordinator, Cities Development Initiative for Asia, Philippines

Before I start my presentation let me express my gratitude to the Planning Commission to open up discussion on such an interesting and important planning document with cities being at the heart of the agenda. Let me also thank Planning Commission and UNDP for inviting me here. In the course of the presentation I would discuss that why it is a good idea to focus cities for economic growth of the country. I first visited Pakistan in 1977 when I started my work with Karachi Metropolitan Corporation as a member of team of Dutch experts to help the city in implementing a program of regularization of katchi abadis which was at that time a policy decision of the city government. Let me explain you briefly a series of running commentary, documents and regional statistics. The world’s urban population in 2009 was estimated at 3.4 billion. Asia’s urban population in 2009 was estimated at 1.72 billion and between 2010 and 2020 there would be 411 million people added to Asian cities. 60% of the growth in the world takes place in the urban areas. By 2020 urban population of the world will increase to 4.2 billion out of which approximately 2.2 billion people will be in Asia. Cities provide 80% of the economic base, but generate significant environmental footprints, including contamination of air and water, as well as 75% of the GHG emissions. Developing Asia’s projected global share of CO2 emissions for energy consumption will increase from 30% in 2006 to 43% by 2030. The economic potential of the cities is clear but we need to be careful about handling of the environmental issues as well. City

regions serve as magnets for people, enterprise and culture, but with urbanization, poverty also urbanizes. The Asia-Pacific region remains host to about 60% of the world’s slum population which in 2010 amounted to an estimated 505.5 million people. The world slum population in 2010 is 828 million people. It is estimated that urban environmental infrastructure investment requirement in Asia Pacific region is about $100 billion/year. Urban environmental infrastructure investment means development of various facilities such as water and sanitation, drainage, transport, flood protection etc. Cities often have macro development strategies and spatial plans, but city infrastructure projects to implement are often not adequately defined and prepared for financing. Particularly there is issue for the 1,400+ medium sized cities in Asia’s developing countries with populations of 250,000 to 5,000,000. The CDIA is assisting medium sized Asian cities to bridge the gap between their development plans and financing of their infrastructure investments, with emphasis on:

- Urban environmental improvement, - Urban poverty reduction, - Climate change mitigation or adaptation, and - Improved governance.

The CDIA partnership was established in 2007 jointly managed by ADB and GIZ and financially supported by ADB, BMZ, government of Austria and the Shanghai Municipal Government etc. CDIA has a core

Session 4: Creative Cities and the Urban Development


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budget of $ 35.3 million (2007-2012) and non-core resources of $ 19.3 million. CDIA assists cities to implement their development strategies through the following measures for demand-driven support approach to provide:

- Advisory support to infrastructure investment programming & prioritization,

- Consultancy support to prepare pre-feasibility studies for high priority projects,

- Local institutional capacity strengthening in infrastructure investment planning,

- Identification of potential private sector involvement, and

- Linking cities and their infrastructure investment proposals to investment financiers (local/international).

CDIA in Pakistan is working on city interventions in Faisalabad and Chiniot. The focus areas include water supply, drainage and waste management and improving urban transport & industrial waste management. A MoU with Infrastructure Project Development Facility, Ministry of Finance was also signed in 2011 for development and transfer of knowledge and to provide expertise in the field of municipal infrastructure financing and PPPs through exchange programs, seminars, conferences and material dissemination in Pakistan and the region. Urbanization is the spatial translation of economic growth and restructuring. The framework recognizes urban development as a driver of economic growth. Overall direction of deregulation and retreating government is required. Let government and the private sector do what they are best placed to do, but do not throw out essential provision of public services with the privatization. The Planning (compact development, more attention to mixed land

use zoning) and housing (low income housing space standards; incentives for private sector rental housing) directions are by and large supported. Let us also recognize the diversity of urban places. Islamabad is a totally different place and not a typical of Pakistan’s cities such as Hyderabad, Karachi etc. The main problems have been plan implementation and enforcement, rather than planning itself. In Islamabad regulations are more dominant then other cities. Katchi abadis are the dynamic growth areas of the cities, which are affordable to the poor, as they are the world over. Small scale entrepreneurs and small home/cottage industries flourish in such areas, unless they are repressed by the wrong government actions. Creativity takes place in such areas and should be supported by the government. The policy towards katchi abadis should be supportive and should be supported to make them participate in the development of the overall city. Public transport is the most serious bottleneck within the cities, particularly impinging on the poor’s ability to connect to work which must be addressed as a core priority area for action. Public housing is not a doable option at scale in Pakistan, given the public sector capacity constraints. There is need for public-private partnership which requires strong government support and reliable government partner to work along with a clear regulatory framework. Urbanization is essentially a local government activity and should be supported. Government support must primarily be through provision of local infrastructure and services (roads, public transport, electricity, water and sanitation), and ensuring security of land tenure. Local government must come into its own as the driver of urban management – a third tier of government with legally/constitutionally defined functions and resources. Cluster city


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development also needs to be supported, but the institutional ramifications must be carefully considered. There is need to look at organizational programmes and implementation and it should be seen as investment. Deputy Chairman Planning Commission has also said earlier that institutional reforms and capacity building are essential for local governments. Capacity doesn’t mean to just provide training or send

people abroad. Government authorities, such as development authorities should be integrated into the local government system for better functioning. At the end I would like to wish best of luck to Planning Commission and Dr. Nadeem Ul Haque for this ambitious plan.

***

Speaker: Belinda Yuen Urban Development & Local Government Unit, World Bank

Over the next fifteen minutes or so I would talk about three topics which are cities, urban markets and growth. Cities are the centers of economic progress. By the year 2050 it is estimated that 75% of the total population is expected to live in cities with total world population to be 9 billion. No country has achieved advance levels of development without urbanization3 and the same trend is observed in last many years in Pakistan. In year 1900 there were only 16 cities in the world with population over one million. In year 2007 cities with population over one million have increased to 450 and would increase to 600 cities by the year 2050. Same trend of population growth is taking place in Pakistan. By year 2030 about 50% of the Pakistanis would be living in urban areas with more than 17 cities living with a population of more than one million. As urbanization is expanding the cities are becoming incubators of innovation, technology, and creativity. Cities are generating more than 80% of the global GDP. In Pakistan this figure is approximately 78% of the country’s national wealth. Firms seek to locate at places where

3 World Development Report, 2009

they have access to markets, good infrastructure and connectivity. Besides, cities are also important places for human health and wellbeing where they grow up, grow old and spend much of the leisure time. 75% of the GHG emissions are generated by cities. We need to balance economic growth and ecological sustainability. What makes the cities successful the experience may vary from city to city. But in successful cities we find three common factors (3 Is) working for development which are:

1. Institutions: Promote institutions that enhance functioning of land markets and provide basic services,

2. Infrastructure: Strategically place infrastructure to connect the city with external markets and ensure local mobility, and

3. Investment: Invest into local economy to create jobs and improve living conditions for the public.

If we look at successful cities in Asia like Seoul it has focused on strong institutions, connective infrastructure and targeted interventions to enable transformation of


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slums to improve their environment and make part of a bigger economic growth agenda. Change in Seoul’s planning concepts involved a change from growth-oriented model (quantitative growth) to growth-management model (quality of life) having a focus on following factors: Growth-oriented model:

- Expansion of urban space, - Model based on car transport, - Large-scale investment, - Model based on facilities

development, - Strategic point development.

Growth-management model:

- Balanced development, - Model based on public transport, - Improvement of life quality, - Model Based on

benefit/management, - Based on network system.

Cities in China managed to develop special economic zones. Shenzhen is also one of the successful model cities in China. Shenzhen served as a pilot project for implementing policies, bring change, and it is working on a carbon free environment. Development gives these zones special economic policies and flexible measures. The institutions of reform and special policies allowed to use more market oriented economic management system which is especially conducive for doing business. Good connectivity improves productivity. Mobility and public transport system such as ‘tube station’ improved passenger comfort, boarding time and accessibility in successful cities. There are many cities in the world which are not working on the agenda of carbon-free green cities. Successful cities need to work for equally providing the basics of urban development and ensuring basic services such as water, electricity,

security, waste management and necessary interventions which are important to improve urban growth and investment. Preparing to a livable and prosperous city is very important. There is a need to make the cities livable and prosperous places by setting higher benchmarks. World Bank urban strategy has a focus on the following important areas to make the cities livable and prosperous:

- A system of cities – driving growth, reducing poverty,

- Focusing on the core elements of the city system,

- Making pro-poor policies a city priority,

- Supporting city economies, - Encouraging progressive urban land

and housing markets, and - Promoting a safe and sustainable urban

environment. One of the tools developed under urban strategy by World Bank is ‘Eco2City’ approach. The ‘Eco2City’ program comprises methodologies, studies, best practices, as well as multiple financial systems. Managing urban development is important for city development, job creation and asset utilization. The stock of land and property is often an overloaded resource in most of the cities. Non utilized and underutilized land and property assets can provide major opportunities for development and re-development. Raising capital to finance urban infrastructure is a big challenge. One solution is to use land based financing to unlock urban land value. A good example of raising money from unutilized resources is of Cairo where more than 3 billion US dollars were raised from the auction of desert land. Levy on land is another tool to collect funds. All such activities require a clear regulatory framework. Land use regulations are significant in determining the pattern of


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population and urban development. There is also need for long term planning to make livable cities. When city improves it attracts business and skilled workers. But it also requires protecting natural environment. Efficient cities have service and land policies to support urbanization and connectivity for markets. Livability attracts people from various areas to migrate towards cities. Integrated land use and transport planning improve the options for efficient communities to grow. Singapore in 1960s faced acute urban problems. Its city centres were overcrowded and there was shortage of proper housing facilities. More than half of the population was living in slums. There was also very high unemployment and lack of urban

infrastructure. Much has changed over now in Singapore’s urban land structure with careful planning. Singapore has become a viable and livable green city. Successful cities demonstrate a viability of social, economic and environmental systems. Livable and prosperous cities are not a dream but a reality to happen. However they need good local government, and to ensure that visioning, planning and actions take place in the cities. Here World Bank would like to join our colleagues at UN to help Pakistan in progressing and implementing the New Growth Strategy because I think you (Pakistan) are at a very exciting threshold of development time.

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Discussant: Tahir Shamshad

Member Planning, Capital Development Authority, Islamabad

Islamabad is considered to be one of the best developed cities in Pakistan but, because of slums coming up and informal development taken place around in recent past; it is not that Islamabad which was dreamed at the time of planning. Instead of going into the theories about cities I would like to go straight to what we have planned for improving Islamabad in future. Islamabad was planned in 1960 and at that time there was very little concept of public participation particularly in the decision making and infrastructure development. CDA Ordinance 1960 didn’t include sufficient provisions for public participation and investment in infrastructure. We have identified basic requirements now that what we need in today’s scenario to ensure that the city is at par with other imaginative and creative cities. Recently we have prepared an amendment of the ordinance to bring the city at fast track again. In master plan of the Islamabad there were many green and distinct areas planned for the city to cater for the food needs and other basic requirements of the city. With shortage of space and rapid growth in population we have come up with a new plan for Islamabad. In new plan Islamabad has been divided into five zones, with each zone

having provisions for basic facilities. Very recently we have once again studied the issue of slum and informal development in the city. In Zone No. 4 we have opened 75,000 acres of land for public to come up, invest and make all kind of recreational facilities in that area. I told earlier that public participation had not been there as part of policy in the city development we are inviting architects, planners along with public to participate in the city development. Islamabad has diversified cultural assets. People from various countries and various places of Pakistan come and live here. Cultural planning is one of the important challenges for us to plan and we are taking care of these diversified resources while planning. Very recently we have seen opening of Pak-China friendship centre in Islamabad. Art & craft village has also been added to the city. Very soon a cultural complex is being developed in Shakkarparian. A proper thought out cultural planning is being made to ensure that diversified cultural asset is taken care while planning the city. I would take benefit of this audience and request this august forum to give some suggestions.

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Discussant: Parvez Qureshi Urban Planner and Architect, Lahore

I am thankful to Deputy Chairman Planning Commission for inviting me in the conference. It is heartening to hear Mr. Tahir Shamshad (Member Planning, CDA,

Islamabad) speaking about urban issues. People have been talking about issues pertaining to development, expansion; issues related to traffic, pollution, environment,

Discussion


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housing, katchi abadis etc. All these issues have been recurring over a long period of time in Pakistan. But I would like to focus here on an important area which is institutional framework under which all above referred areas have been working. Institutional development framework issues are very old. Director Generals of the development authorities are the persons who have no understanding of the urban problems. They come from federal and provincial Civil Services and they don’t have understanding of the problems related to city development like road, traffic, pedestrian traffic, pollution, bicycle lanes etc. In Lahore about 10 to 15 % of the population is utilizing 85% of the city resources such as roads, electricity, land space etc. Majority of the population don’t have adequate resources available with them. In terms of space utilization there is a major disparity. We need to bring reforms in institutional

framework and urban management. These two important areas need to be addressed to effectively respond to urban planning issues. We need to clearly define that who are our urban development managers? One of the potential solutions is that along with Civil Service we need to have another specialized cadre of experts, i.e. urban managers. These people would serve as urban managers with continuity to better understand the problems of the city. Key solution to urban development is the institutional reforms. People from Civil Services come for 10 to 18 months and then go to some other place. Our friend Mr. Tahir Shamshad has seen two to three bosses in last two to three years. We need to recognize that our institutions need strengthening. We need people who have understanding of the problems and are trained in the areas of city development.

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Discussant: Philip Auerswald, Professor, George Mason University

I share Richard Florida’s sense who discussed about Pakistani cities like Karachi and Lahore and other cities in Asia as Shanghai, Singapore. I take city planning like holding a party for 18 million people that would last for four years. Holding a party for 200 people that would last three days requires a lot of work to do that where they would stay, what would they eat etc.? To arrange a party for 18 million people for next thirty years need a lot of work to do. To have good time both party organizers and participants need to have a sense of participation. Party planning involves topics like engineering, planning details and thinking in advance. It is not possible to have a successful party without having a

party planning. City planning, transport, governance etc. all are boring topics which need a lot of work and general public don’t have interest and inspiration in such work. When we talk about the violence in cities we talk about security issues related to the cities. Washington D.C. is the capital of the United States and a prosperous city. If we look at violence in Washington D.C. we find that in 1991 there were 482 murders which come to 68 murders per hundred thousand. In 1996 in Karachi there were 1782 murder cases which come to 17 murders per hundred thousand which means that Washington D.C. is four times more violent place in terms of murders than Karachi


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which is a reality. But in fact the case is not the same as it look like. Prosperous markets create prosperous firms. We don’t develop prosperity in the rural

areas. Connection of prosperity between cities and rural areas is very simple. A pro-rural policy is required for a growing country like Pakistan to bring prosperity.

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Discussant: Dr. Nuzhat Ahmad Director, AERC

I want to discuss about public housing in which the role of the government can be to subsidize development in the housing sector. In terms of financial decentralization changes are made in the 18th Amendment. Capacity development in city management is another important area to focus. For cities like Lahore and Islamabad we have the data available but the data is not available about most of the cities, especially small and medium sized cities. While making the growth strategy the federal government need to consult the cities that what priorities they have in their mind for their city. Major stakeholders should be consulted for the feedback for the urban development strategies. For countries like Pakistan an important question comes to mind is that what we are going to do for the rural areas in strategy development? Cities should be taken as clusters with surrounding areas included into it. Clusters need to be

studied while making city planning. In a latest research project we are studying comparative advantages of various cities, their competitiveness, supporting infrastructure, overall environment, skills in surroundings etc. Important question to be asked is that why cities are different from each other. Why Sialkot, Karachi and Islamabad are different. We have started consultation with industry focus groups, business leaders etc. to know about specific clusters there, their competitive advantages and make development plans for specific city clusters. ADB has conducted studies in Delhi, Dhaka and Colombo to identify special industrial clusters. They found what is lacking in specific clusters in various cities. We are studying the important areas identified in ADB’s study and trying to apply that knowledge in some of the selected cities in Pakistan.

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Special Comments From Rafeh Alam (from Lahore)

First of all I want to congratulate Deputy Chairman Planning Commission for arranging such a successful conference. I want to read out five short points which I have prepared about our cities.

I would like to react first to the comment made about Islamabad that indeed it is not the best city in Pakistan. It has slums around because of the failure in urban planning, misallocation of resources and misalignment of priorities. Islamabad has no water (like in


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G-10 sector) and high crime rate (like sector G-13). There is no public transport in Islamabad for general public. It is difficult to move unless you have a car. It is an anti- poor city with a segregated society. City economics stimulate people by encouraging entrepreneurship, using capital in cities and providing opportunities. Cities don’t socially segregate people. If we look at cities like London and New York we find few city blocks which gave culture to the

entire world since World War II. Where is that Pakistani culture in Islamabad? This city has not produced writers, intellectuals and artists. This city kills the entrepreneurship spirit and creativity. Islamabad is running out of resources. We need to realign our priorities. I thank you and congratulate the Deputy Chairman for organizing such a successful conference.

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QUESTION: Question: Most of the donors in Pakistan don’t have community development as one of their priority areas. How Planning Commission going to find resource gap and address this issues? Question: With respect to devolution there are many other challenges to be addressed like encroachments, city mafias, capacity crises, urban migration, security threats etc. There is also over deterioration in public infrastructure. I think we need to undo some wrong things in our way forward. Please comment. Question: How Planning Commission would implement strategies announced in FEG? Question: There is no local government in Pakistan. What you think is the goal of the development strategy in this regard? ANSWERS: Answer by Dr. Nadeem Ul Haque, Deputy Chairman Planning Commission: We have a resource gap in our country. Resource gaps are there everywhere around the world. It is not question of resources but to reorganize ourselves and think differently. For example we have China Centre, Jinnah Centre etc. in Islamabad. The main idea of this conference is also to adopt a fresh approach and rethink

differently for better utilization of our resources. Our cities have tremendous potential, but the real challenge is to change the way we think. Implementation can’t take place in a room. It takes time and a lot of work to do. People, Civil Servants, universities, private sector etc. need to take responsibilities to address these issues, bring change and play a proactive role.

Answer by Parvez Qureshi, Urban Planner and Architect, Lahore: Whole focus in last forty to fifty years in our policy development was like poor don’t exist in this country. In Lahore there are no pedestrian lanes for more than 7 million people. Vehicles have roads but over 2.5 million people don’t have bicycle lanes. We are widening roads but not thinking about urban poor. Same is the issue with Islamabad and nine cities I have worked in. In housing there has been no plan for urban poor except some small projects. In last fifteen years there has not been a single urban focused project for the poor and as a

result poor go to marginalized lands. While we talk about encroachments where we expect the poor person to go? Where poor people will go to exist? There has been an absolute failure of understanding of urban poor. In terms of urban development it is a total failure. Same is with Islamabad, Lahore, Faisalabad, Multan and other cities. All these are administratively failed cities. We have cities run by incompetent people having power. Strategy needs to focus on these issues.



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Answer by Emiel A. Wegelin, GIZ Program Coordinator, and Cities’ Development Initiative for Asia, Philippines: Before I answer the questions we need to be very clear about the concept of decentralization. Good public service is the right of both rich and poor alike. It is important for us to ensure that poor people can transform environment, reduce cost and corruption to a small fraction through high quality technical support and innovation. It also shows the importance of high quality technical support capacity. There must be a

partnership between the informal sector and the local government. Innovative partnerships between the government and agents involved can address the problem of the poor with participation. Shifting urban policy from pure providers to sharing responsibilities and mobilizing local resources for co-implementation is important.

Answer by Belinda Yuen, Urban Development and Local Government Unit, World Bank: Yesterday Dr. Nadeem mentioned about the issue of change. Change is necessary indeed. At the same time we underscored a point that it is a complex issue and we need to plan it comprehensively. For example to understand the issue of law and order we need to understand the factors and drivers of

the issues. We need to identify factors before going for solutions. All this requires leadership, commitment and champions to plan urban development very differently. We need to plan differently to integrate the urban planning and agencies involved. We need to build livable and viable cities.

Answer by Philip Auerswald, Professor, George Mason University: We talked about problems of housing markets and housing finance. Generally speaking whether it is issue of physical spaces or marker spaces there needs to be physical space in a city for investment to happen. It is important to create mechanisms to promote and encourage the type of development which will be beneficial to the country, and that’s the planning we should

think about. Violence and crimes are also important problems in cities. To deal with the crimes we need to develop opportunities so that people participate in communities. Traffic accidents are another source of violence we need to look at.

Answer by Dr. Nuzhat Ahmad, Director AERC: We need to create more job opportunities so that people get diverted from violence. Role of the state needs to be improved. Another important thing to look at is family ties. We

have conducted a research on violence and family ties. I think family ties are breaking. Basics of family values are important and we need to look at that.

Answer by Tahir Shamshad, Member Planning, CDA, Islamabad: We have a big gap in social and cultural planning of the city. Social and cultural planning is being focused by CDA in future plans. Physical planning actually caused social segregation. We have adopted a

business management system and a system to deal with paper-less public management system. Now we coming up with a phase-wise mass transit system and purchasing new busses for Islamabad. Within next six


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months buses will be on the road. We have also planned tourism system to take tourists in surrounding areas such as Rawat and Taxila. We are making pedestrian zones in various areas. We have planned a project for

water supply. Physical and social planning shall go side by side. We are also making a bylaw to collect rain water in houses to overcome water shortage problem in the city.

Comments by Vice Chancellor, UET Peshawar: With the help of Planning Commission and HEC we have developed first national institute of urban infrastructure in our university. I agree with the things discussed here in this conference. We need to design

cities by focusing on roads, transport, slums etc. There is need to put creativity into design, as Deputy Chairman Planning Commission has also emphasized upon.

Comments by Tallat Hussain, media person: We are grateful to all of you for giving remarkable remarks. I would just comment that “Cities are what our politics is”. “States and cities rise and fall together”. We have not been able to plan our cities as politics is

involved in cities. Cities are designed by the rich and for the rich. When we talk about Karachi we need to talk about land mafia and city politics as well.

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INTRODUCTORY REMARKS BY

Dr. Javed Laghari Chairman Higher Education Commission, Pakistan

If we look at the report on Framework for Economic Growth it states that:

“Countries that have attained sustained economic growth show that they have invested in their people”.

“One can’t have developed countries with under developed people”.

Report further says that Pakistan is one of the twelve countries where public spending on education is less than 2% of the GDP and actual numbers are even less than 1.3% of GDP. Last night we also had an opportunity to listen to Richard Florida in video lecture and he also talked about 4 Ts i.e. Talent, Tolerance, Technology, and Territorial Assets. He discussed about importance of universities for a creative economy in following words:

“Universities serve as an innovative engine of economic development”.

“Investment in academic research yields significant returns to the economy and the society”.

One of the entrepreneurs put it very correctly about the secret of silicon valley’s success by saying that:

“Take one research university and venture capitalism and shake vigorously, that is the recipe”.

World Bank talks about three pillars of knowledge economy which are:

i) Education and skilled force, ii) Infrastructure and communication

technology, and iii) Innovation.

If we look at World Economic Forum’s Global Competitiveness Report 2011 it talks about some of the important pillars of global competitiveness, among which some important are ‘higher education and training’, ‘technological readiness’, and ‘innovation’.

Table - 2: The Global Competitiveness Index 2010-2011 rankings

World Economic Forum, 2010

Country/Economy GCI 2010 GCI 2009

Change 2009-2010 Rank Score Rank Pakistan 123 3.48 101 -22

India 51 4.33 49 -2 Indonesia 44 4.43 54 10

China 27 4.84 29 2 Malaysia 26 4.88 24 -2

Session 5: Human Capital, Productivity and Innovation


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As per GCI Report 2010-11 Pakistan’s overall competitiveness rank is 123 in the world. In 2009 Pakistan’s GCI rank was 101 which have further deteriorated in 2010-11. India’s ranking in GCI is 51, Indonesia at 44, China at 26 whereas Malaysia’s rank is 26. In “Information and Technology” our rank is 109, in “Education and Training” we are at 123, in “Technology Readiness” we are at 109, and in “University-Industry Linkage” we are at 92. These are some of the aspects we need to focus on to increase our competitiveness. There is another fact that comes out of U.S. Department of Commerce’s Economic Development Administration Report (2009) which says that 10,000 dollars investment in incubators created 45 jobs whereas

investment in road and building with the same amount created only 5 jobs. This is an important thing for our planners to think about as we are spending large amounts on building roads and underpasses etc. and less on incubation, innovation and capacity building. Some facts about incubators are that there are 1100 incubators in USA, 500 in China, 270 in South Korea, 50 in India and only 2 in Pakistan which are still at infancy stage. We in HEC since the last year are encouraging innovation and creative research and trying to convert it into tangible output i.e. commercialization of research. We are also pursuing initiatives like Competitive Support Program to establish incubators at our universities.

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Speaker: John Speakman

Private Sector Specialist, World Bank Thank you very much Mr. Chairman and it is good to speak here about innovation. If we look at the ideas of creative cities and quality of governance innovation is required in all these areas. My talk today is about innovation policy. We don’t have an innovation policy here in Pakistan, but we need that. It needs to cover innovation, commercialization, research and competition that drive innovation, vibrant markets, and incubators for innovation. In Pakistan we see firms which are globally competitive. But at the same time we also have firms here which seem to be working in stone ages and are even they are not mechanized. Adoption of existing technologies may also include using accounting systems. There are many countries who have achieved higher technological levels. A new drug developed by a pharmaceutical industry is a kind of

real new innovation. Adoptation of existing technologies is another important thing we need to look at. Upgraded technological capabilities in a firm lead to productivity improvements. These innovations can be: - New to the firm, - New to the market, or - New to the world. The channels by which this up-gradation occurs can be in following forms: - Original research and development, - The adoption of existing technologies

that have not yet been applied in a firm, and

- Through inputs that embody the innovation.

The Pakistan Innovation Ecosystem consists of the following factors and institutions:


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Knowledge providers: - Government Research

Institutions/Academia (e.g. LUMS), - Associations and Cooperatives (e.g.

PASDEC), - Private Sector Suppliers (e.g. Business

Development Services – Business Edge), - International Technology Transferors

(e.g. Foreign Investors). Government: - Policy Makers (e.g. Planning

Commission), - Resource Providers – financial and

human (e.g. foundations, donors, associations, government),

- Coordinators (e.g. NUST), - Regulators (e.g. Ministry of Commerce). If we look at the growth strategy I would like to talk about the competition. Competition is the key driver for innovation. Moreover innovation doesn’t live in a vacuum but it is dependent on many important factors e.g. the level of human development, the strength of the regulatory environment and levels of infrastructure particularly the great innovation enabler viz. ICT. Culture for innovation is very important that how we develop more competition to go for more innovation. Countries’ level of development is very important. The distance a firm is from the frontier of what is technologically possible is a strong determinant of the effectiveness of research and development expenditures. Institutional capacity (monitoring and evaluation, coordination, policy development and financing) is needed to drive innovation development.

We need to encourage openness. How many textile companies in Pakistan have foreign know-how and capital coming in the country? Countries like Bangladesh, Sri Lanka and Ukraine etc. have more openness in their country which makes others to help and make things better. Foreign investors bring technology to the country. Level of development of a country also matters. Country should be very careful about R&D for the development. Pakistan needs to focus on middle income people. The institutional capacity is also important for innovation. Subsidies are very common in Pakistan and the experience has been very mixed. There are some very clear do’s and don’ts in this area. Countries can’t pour resources from the government. Countries embrace technologies and they work very actively. Koreans experience of development in 1960s and 70s was very successful. They focused on technology. Pakistan needs an innovation policy. Deputy Chairman talked about many such areas which need to be focused and can work as accelerating indicators for economic growth. Pakistan has a very huge domestic market which they need to focus. Pakistan needs to follow what Koreans did for their economy. Commercialization of research is also very important. Firms need to think about new ideas, the capital from where resources can come in. Competition policies, capacity building, encouraging knowledge, innovation financing and venture capital are also important to encourage innovation.

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Speaker: Shaukat Hameed Khan Former Member Planning Commission

I am grateful to Dr. Nadeem Ul Haque for giving this opportunity. I would like to congratulate Dr. Nadeem and his team for opening up a bit of new pandora box in this conference on important factors. A lot of things have to be done and implementation framework is still to be identified. I am glad that this new Framework for Economic Growth is a natural extension and follow up of vision 2010. I would like to talk briefly about constraints to Pakistan’s economy. I would like to particularly highlight a particular aspect of our labor force for our economy. I would like to say something about global environment, the competitive environment in which we have to operate. Issues of entering into 21st century are changed and Pakistan has to accept difficulties of this new world. The dispersion of information and technology are the key profiles of new industrial economy. Shifting of industries to Asia, South America etc. from developed countries need to be taken into account. We need different and high skills. There is dispersion of skills, work and talent across national boundaries which we need to understand in new paradigm for growth. Because of the change in information and communication technologies there are also organizational and technological changes taking place. Induction of unskilled workforce is also seen in developing countries in the era of globalization and this trend is being seen there since 1970s. National Science Foundation report of 2010 found that China (9 Asian countries) has overtaken Japan in components of technology and manufacturing. Changing profile of the workforce and skills in last 20 years require attention. China and India are at top in Asia and they have increased their share of skilled labor. In Pakistan

diversification of our exports is also low as per world market demand. Still major share of our exports is based on cotton based products. There is a great demand for pharmaceutical and mechanical products etc. and we need to go for diversification. In vocational and technical education performance of Pakistan is poor. 70% of the technical institutions in Pakistan are run by the private sector. 60% of the enrollment is in the private sector. When we talk of the knowledge economy, knowledge workers don’t have to be necessarily Ph.D. or master degree holder. Persons working in a house as electrician, a telephone operator, people working in offices etc. are all knowledge workforce. There are a large number of drop outs in educational institutions. International data shows that nations with a large proportion of student enrolling in upper secondary vocational programs have significantly higher rate of school attendance, participation and completion and there is very little drop out there. In USA 90% of the students attending comprehensive school take at least one occupation specific course. In UK there are about 45 to 50% of students who go for ‘O’ level. Keeping this in mind we must reform secondary education to improve low productivity, low skills, invoke secondary schools into comprehensive schools of a specific labor market for at least one program. It will also help in reducing drop outs in non-metropolitan areas. Developing soft skills will have a major impact on SMEs. At higher education level we need to bring higher qualified people from abroad. Generally we are against importing talent. But we need to fill this gap from abroad. We need to focus on school teachers as well. If there is shortage of teachers we need to


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bring good teachers from outside. International benchmarking is also important for every sector. Strategic alliances are required to match skills with what is

required by the partners in other countries. Innovation is also important to develop collective competence.

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Discussant: Ali Arshad Hakeem

Chairman NADRA I am thankful to the Deputy Chairman Planning Commission for inviting me here. Core job of NADRA is to register National Identity Cards. Our banking sector is now connected through ATM cards and online transaction has become possible due to technology. We were also able to use our database to make arrangements to make payments to 1.7 million flood affected people through cards. To make payments to such a large number was not possible without having databases and technology. What we learnt from different programs is that we can innovate to provide specific services to people. We also have a challenge

in taxation. We are working with CBR and trying to look at the patterns that how our databases can be used to identify people paying more taxes or the people who are not there in the system. Pakistan is a large country with a big internal economy. We need to be more creative while looking at this economy. Percentage of educated persons is less but the number is huge. We have good telecom connectivity, a high growing banking sector and a larger market size. What we need is to be creative, see at positive side and innovating new products.

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Discussant: Dr. Sohail Naqvi

Executive Director, Higher Education Commission of Pakistan I would like to focus on three things i.e. institutions, implementation and application of idea. Universities are there to serve as engines of growth for the socio-economic development of Pakistan. Universities are to be considered as one of the owners of this idea of human capital development, innovation, and productivity. Universities need to build economy, leadership and entrepreneurship across Pakistan. Curriculum reform is also important for education. It is important to know that how we teach and what is the creative spirit of individual to do that. Third step is application of the ideas like building a new aircraft, a wind mill etc. Next step is to move from technological domain to business

domain where academia-private partnership can be focused. Ownership is very important in all above domains. Community and industry needs also need to be looked at while developing curriculum. Innovation and research based education is one the part to be looked at. We need to introduce application oriented programs based on specific needs. For example subjects like Mathematics, Statistics, Economics or Botany are excellent to teach. But to introduce such courses in an area like Chaman (in Baluchistan) may not be much useful based on geographical and industry requirements. We need to look that what kind of programs to be introduced based on specific requirement for each of geographical area and institutions.

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Discussant: Philip Auerswald, Professor, George Mason University

When I came here last October I had an opportunity to travel around in Karachi, Lahore and Islamabad and met some Pakistani entrepreneurs. I met with Monis Raheem, who is an engineer. He worked successfully in his profession. He decided to come back to Pakistan and started a company. He is the CEO of ‘Rozee.pk’ which is a good example of entrepreneurship development. He is one of the many young people in Pakistan who started business and there would be many other examples of entrepreneurship development. I also had a chance to meet Seema Aziz of Care Foundation who has educated about

1,50,000 students in Pakistan. Another example of successful woman entrepreneurs is Nasreen Kasori of Beacon House School System. She in their schools has educated about 600,000 children which are about 2% of all the children being educated in Pakistan today. If two women like Seema Aziz and Nasreen Kasori can educate more than 0.7 million children then I am sure that about 50 women entrepreneurs can educate more than 10 million people in this country in next few years. This kind of entrepreneurship experience is required in Pakistan.

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QUESTION: Question: I am Chairman of IT department of University of Sargodha. My question is that while talking about creative ideas we see that government has invested billions of rupees in public school buildings. Some other countries like India are using their buildings in evening. Buildings can be used for software houses and call centres in the evening. Is that idea applicable or not to use these buildings twenty four hours for classes in evening in Pakistan? Question: I am Professor of Political Science Department in Karachi University. I would like to refer to the issues like we facing here in Karachi. If we talk about USA, Canada and Japan we find that their political environment is absolutely perfect. We have both domestic and foreign studies on political economy of Pakistan. My question is that how can we make concrete and practical recommendations for the political stability of Pakistan? Question: If in our education system universities are designing courses in relevance to the different area requirements then when this system is going to be implemented? Question: I am from Lasbela University and I teach entrepreneurship subject. We talked about business plans and developing linkages with the industry for their development. Researchers need research facilities for their work. We have a very limited job market and we need to motivate our graduates to develop their own businesses. My question is that how researchers can have facilities to apply entrepreneurship skills in the industry? Question: In the presentation the speakers discussed about universities as centres for knowledge creation. Industry-academia linkage was highlighted for innovation. Is the role of the universities confined to knowledge creation or to develop industry-academia linkages? Question: I am from University of Sargodha. My question is that how can we develop human capital for productivity and development. There are political problems in universities with fight for titles, devolution, and lack of academic leadership etc. There is absence of senior faculty members.. How can we develop human capital for being competitive and to meet globalization challenges? Question: Based on my experience of serving in universities I feel that universities should be academically, administratively and financially autonomous. Boards in universities should have the powers to take decisions. I invite the comments of the speakers and discussants. Question: I am Akbar Khawaja, former Senator and World Bank official. I would like to appreciate Dr. Nadeem Ul Haque, Dr. Leghari and the sponsors here for having such a large audience in this conference. In my opinion determination and implementation are very important to make things possible. FEG is an excellent framework and I have gone through the document. I would like to ask one line message to integrate all the things discussed here. Question: We have discussed about human capital development. There are so many ghost schools in rural areas in Pakistan. Schools are there in papers but don’t physically exist. My point is that we have universities, HEC etc. but don’t have focus on school education. Please comment.



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Question: We have many traditional skills already available there in the country. India and other countries have also worked on this important area and these traditional skills can easily be marketed all over the world. My point is that we need to harness this potential and universities need to do research on it. Please comment. ANSWERS: Answer by Dr. Nadeem Ul Haque, Deputy Chairman Planning Commission: My one liner message is that:

“It is innovation and competing in global economy on global standards”.

We need to accept global standards whole heartedly. Innovation is to get a new idea in business. For human capital development government needs to do it, but not directly. For higher education PSDP funding is already there. It would be HEC’s choice that whether they need more buildings or more professors. There are international standards available. Education is the only way forward and change will take time. In global

economy we are not doing well. Money is a major problem but main issue is how efficiently and effectively we use our resources. Innovation is something which depends purely on education. Uneducated people can also be innovative. Universities should be most innovative and creative part in the world and should be taken as part of the community. Universities should be places for youngsters to take risks and take initiatives. It is a global market place for talent. We need to understand talent which is already there with us.

Answer by Shaukat Hameed Khan, Former Member, Planning Commission: If we talk about innovation in businesses it is all about management, financing, strategies. But innovation is like development of Chinese bureaucracy system which was a great innovative idea at that time. Chinese did it thousands of years ago. Google was a different and innovative idea. Along with innovation harnessing the innovation is also important. I see many challenges in Pakistan. Whenever there are

challenges, we find there innovation taking place. I don’t see problems in innovation. Harnessing innovation in a structured manner to make it productive is important. I would say that in running business we need to build collective competence in a structured manner. It is important to understand that this is our world and we need to change it for us.

Answer by Sohail Naqvi, Executive Director, Higher Education Commission: Innovation and entrepreneurship is also to understand that when we will wake up next day we will still have load shedding; political problems etc. and we have to deal with this reality. This is our country and entrepreneurship needs to accept these challenges to turn these into opportunities.

To talk about shortage of professors it is important to note that we can’t create professors as it takes thirty years in their development. We can import them to fill the gap. So our emphasis is on the faculty development. For allowing universities to


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take decision at local level it can be done by remaining within the legal framework. As far as standards are concerned international standards are already available and we have to meet those standards. About question of Karachi and political role I would say that it is the political sanity and the strategy to decide that whether universities develop leadership or play a leadership role. There is a leadership vacuum. Let the intellectuals get together and present a solution.

For industry-academia linkages we need to do that immediately. We need to immediately start work on the implementation of the strategy. For the comment about the teaching standards we certainly need working at higher standards and we need to work on that. Education is the only way forward to keep going.

Answer by John Speakman, Private Sector Specialist, World Bank: We need linkages between universities and private sector for innovation. We need to build incubators in universities and provide

venture capitals for entrepreneurship development.

Answer by Philip Auerswald, Professor, George Mason University: First of all I agree with the point that innovation is mostly not all about universities. The whole functions of the universities are changing globally like we also have virtual universities there in the

world and also in Pakistan. Universities should be places where young people go and make experiments, take risks and come out to apply knowledge.

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Speaker: Amer Z. Durrani Sector Coordinator for Trade Logistics, Transport, and Customs, World Bank

Before I start on the topic of connectivity to compete I was thinking that what was the thing in this conference which impressed me? What would be my answer if someone asks me that how was the conference? Before I answer these questions allow me to give you a Romanian quote that “In today’s free market nothing seems visible until it is scandalous, and nothing is scandalous enough to be memorable”. So I hope that it will be a very scandalous growth workshop and would remain in our national and collective memories. Before I start I would like to explain that what actually connectivity means in the way the growth strategy presents it. We talked about connectivity in term of transport. We also talked about connectivity in physical terms i.e. to take people and goods from one place to another. Transport actually provides connectivity as a utility of place. In real terms connectivity can be physical or virtual. In case of connectivity it is important that whether it is virtual or physical connectivity it should have access and mobility. Connectivity is linked with utilization and provision of services. Like road is there but we are not using that. In urban and cross border terms connectivity is also important. It is also important in cross border and international border context. Just ten to fifteen years ago it required to physically go to banks to deposit utility bills which now require less than thirty seconds doing the same job. To think of virtual connectivity is fast replacing the need to physically move. While talking of connectivity we also talk about internet and mobile revolution.

Internet contributes about 4% to GDP. Connecting people and goods behind the borders (internal) is also very important. 70 million tonnes of goods move across our borders every year out of which 98% moves through two ports in Karachi. In terms of cargo the given volumes move five times inside Pakistan. Impediments to connectivity include technology and we have not been able to use it properly. Affordability is also important - like use of taxi is expensive. External connectivity is something that not only contributes to trade but also to regional stability. We are working basically in traditional textile goods and with the markets which are far way. It takes 27 days longer to take citrus to Spain from the point of production to the point of use. We need to explore new markets which have value both in terms of distance and value for us. Transport and logistics system is performing poorly and costing economy 3% of GDP annually which is about 480 – 550 billion rupees a year, and cause direct and indirect losses to occur in the following ways:

- Highways, trucking and railways sector

contribute a loss of Rs. 254-323 billion/year,

- The ports and shipping sector contribute losses of Rs. 60 billion/year, and

- Poor trade facilitation and logistics costs Rs. 167 billion/year.

There is 30% loss of the farm produce to take to another area. Container dwell times at Pakistani ports are back to 9-11 days which is 4 times that of developed countries and 3 times that of East Asia. Customs

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clearance alone takes 4-5 days which is 1.25 hours in Singapore. In trucking sector rates for high value commodity traders are higher than India and Brazil. Rail carries less than 5 % of freight in Pakistan and again taking 14–28 days to deliver up country (1800 km) which is 4 to 7 times slower than in China and United States. There was a study conducted in 2006 by a Swedish firm on logistic sector efficiency. The study benchmarked Pakistan against Korea and Malaysia and compared public logistic sector efficiency with private sector. The study pointed out that by bringing efficiency in public sector logistic we can bring about 14 rupees of efficiency. Major internal logistics challenges in Pakistan are:

- Domestic Transport, - IT Development, and - Contemporary in-house logistics. Pakistani firms are very inefficient in many areas and still go to the government for subsidies. While talking about internal connectivity we find that half of the rural Pakistan is not ‘mobile’. Women carry the transport burden. Following is the position of access and mobility in the country: - 15% communities still lack basic

motorable access, - 53% communities have paved access,

- 48% communities served by regular public transport services,

- 45% of communities with basic access still lack regular public transport,

- Un-served village communities have to travel 4 km (30 minutes) on an average to reach public transport.

Looking at cities we find that 21 million pedestrian trips are generated in Lahore and yet we have not heard that government is making anything special for them. Coverage of broadband is a good story in Pakistan, but it is not being delivered to the wider public. Key to competitiveness is not easy. As Deputy Chairman said earlier that everyone says that solutions are out there and it is not rocket science. I challenge that it is far more difficult than the rocket science and also difficult than what nuclear scientists doing in Pakistan. With cost of fossil fuel going high internal connectivity is getting difficult. We need to talk about key institutions. Increasing effectiveness and fixing inefficiencies means handling multiple stakeholders and processes. We should allow other people to run Railways and give autonomy to provinces. Connectivity with Gawadar needs to be developed. Why can’t we do an experiment like metro cab? Internet connectivity is another challenge and government needs to start serving using internet.

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Discussant: Arshad Zuberi Chief Executive, Business Recorder

The topic is connecting to compete and I would like to start by telling you that there used to be tea houses and restaurants near the ministerial and Civil Servant enclave in Karachi and Lahore where poets, writers, journalists and government functionaries used to sit and share ideas on a variety of national issues. Communication of concepts and ideas can be regarded as diffusion similarly as particles of perfume are spread in a room. Pakistan needs an incremental intellectual growth. Social connectivity between the middle class and the decision makers has suffered in Pakistan in the past. Civil Servants, khaki and white collars that used to come from middle class are now part of the upper elite. With this change the government funds are shifted from social sector to the defense and infrastructure as desired by the elite. The British were very proud of their services as they introduced postal services, railways and connected

many states of the British India. In Pakistan we have NLC which has containerized cargo services whereas train cargo share has decreased to less than 5% in Pakistan. Pakistan Railways last year carried the same number of passengers and less freight which it did in 1955; while Pakistan’s population has increased seven folds. In public sector organization we would find many other examples of inefficiency due to which connectivity has suffered. There is need to develop national trade corridor to connect people and goods for servicing business efficiency. We also need to ease the visa processes with our neighbors and other countries for easy movement. There is need to improve rail and road connectivity along with connectivity from farm to market. We also need to improve inter and intra-city connectivity. We also need to connect both physically and socially.

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Discussant: Shaukat Hameed Khan Former Member Planning Commission

Mr. Amer Durrani (Sector coordinator for Trade Logistics, Transport, and Customs; World Bank) did an excellent job and covered a wide spectrum of things and we needed some more time from him to expand some other themes. I would like to tell that mangoes are being exported in large number these days and have become expensive. Such a large number of exports are because of another reason which is internal technology transfer and another type of connectivity to link with exports. With Horticulture Development Board and

Pakistan Atomic Energy Commission Authority working together the shelve life of mangoes has been increased to 80 days. We have example of USA before us. They worked on productivity, physical connectivity, and social connectivity. In 1905, USA had only 3000 vehicles and 100 kilometers paved roads. It took hundred years to become an industrial giant. It is important that physical environment must conform to the needs of the time. When we talk about information technology we find

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that data storage capacity is a very important factor in that. Let me quote Bill Gates here. He said in 1981 that to have a personal computer 640 K data storage capacity should be enough for anyone. He was happy to quote it at that time. In IT sector, Pakistan has a major constraint of electronic security. Infrastructure for electronic data security is not in place. We also don’t have electronic commerce developed as it should have been. We also

have a social responsibility of conserving our local languages. Linguistic heritage is not being taken care in IT. Universities etc. should come ahead to promote local languages. Industry-academia connectivity should also be encouraged. Connectivity within university environment is also important. We also need to connect with various mother institutions. There should be cross discipline accessibility and access to workshops etc.

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Discussant: Muhammad Saleem

Director General Pakistan Telecommunication Authority I appreciate Mr. Amer Z. Durrani as he has given very informative and analytical paper on connectivity. He has also discussed about the access and disparity between rural and urban areas. He has also highlighted impediments in the connectivity and issues related to broadband connectivity. When we talk about connectivity, things can’t be completed unless we discuss some revolutionary changes which have taken place in ICT sector. If we compare ICT sector of 2003 with today, when deregulation process was started, we find that how much revolution has taken place. If we look at number of telecom subscribers there were only 0.2 million mobile subscribers in 2003 and we crossed figure of 1.7 million subscribers. Similarly when we

look at government collection we find that tax collection in this sector was Rs. 30 billion in 2003 and now government is collecting more than Rs 100 billion a year. Looking at foreign direct investment it was US $ 6.4 billion between 2006 and 2010 which had opened up about one million jobs in the country. There are still many issues about connectivity but I want to bring to your notice that at present about every tehsil headquarter in each province is connected through fiber optic. We are looking forward for ‘3G’ technological revolution now. With the introduction of 3G the scenario will be totally changed as we would be having another telecommunication revolution in Pakistan.

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Discussant: Fatma Gul Senior Economist, UNDP

First of all I am thankful to the government of Pakistan and UNDP, Pakistan office for organizing such a profound conference. Last two days of conference have exceeded my

expectations and I was surprised by participation, the criticism made and information of the people of this country.


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We have been listening to the ideas like this is the time of knowledge society. In different periods of time we had different modes of production. This is the knowledge era, and an era of Information technology and internet. As an economist we try to justify use and importance of such technologies for efficiency purposes and resource allocation. Internet access is also important to provide. As per UN document, access to information and internet is human right. The connectivity through telecom technology and internet is important thing for knowledge society. Information technology is very important for connectivity these days. Internet access is important as a source of information. In Asia, internet users are approximately 44 % of the population. There are approximately 5 billion people waiting to join internet. IT is one of the major engines of growth in economic development. Pakistani universities also have internet connectivity. Asia has 22% internet users and with many populous countries there are tremendous opportunities to grow this sector and to use this

technology to integrate the rural market which will help in growth. Pakistan has very good internet connectivity. Last night I also heard Richard Florida saying that it is not just trading any more to make growth in a country but there are other important factors to it like technology and innovation, new products and processes etc. Logistics is also very important for connectivity which helps in connectivity and increasing efficiency. Logistics is also important as part of supply chain. I would say here that Pakistani universities should motivate their students to conduct research on the supply chain and give recommendation to the industry in this regard. Connectivity is very important for growth strategy. We also need to connect society and youth when we talk about the connectivity in FEG. Uses of internet, telecom, logistics etc. are all important. Pakistani culture, legacy and market environment are also important and we need to talk about it FEG.

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QUESTION: Question: We talked about connectivity here. But we didn’t talk about connectivity of ministries which is missing in our country. Connectivity within academia is also important. Please comment. Question: What percentage of growth we trying to achieve after this conference? Question: One of the panelists mentioned here that UN has recognized right to internet as a basic human right. Based on that statement what level of connectivity service and public information should be available to public from government about various departments under this framework? Question: What steps would be taken to follow up the points learnt from this conference and how participants would come to know that points discussed here would be translated into workable plans? Answer:

Answer by Dr. Nadeem Ul Haque, Deputy Chairman Planning Commission: We have given recipe and way how to cook. Please don’t expect from us to be chefs. Go and try to understand this strategy.

Universities need to debate on it and come up with ideas to make implementation happen.

Answer by Muhammad Saleem, DG, PTA: After independence we have not added even a single rail track for connectivity. We inherited railways from British. We built motorway. But nobody talks about mass

transit in Karachi. We need to develop connectivity in all the areas discussed for growth.

Answer by Amer Z. Durrani, World Bank: We need to develop and promote both hard and soft infrastructures for connectivity.

What Dr. Nadeem Ul Haque said is that we need to build architects in this country.

Answer by Shaukat Hameed Khan, former member Planning Commission: When we talk about privatizing Railways we need to be very careful. We need to learn from examples what a country should not do. Privatization of water services, national

health services etc. were disasters. We don’t have electricity and we need to work on electricity connectivity.

Answer by Fatma Gul, Senior Economist, UNDP: Pakistan has good technology base especially in terms of internet access. I think for access to information and internet government should play its role as it is also

there in UN declaration to give access to everyone being a fundamental right. Idea like making a web page and advertise in one dollar to one million companies can be an



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innovative idea and can help entrepreneurship. People using internet

technology and using ideas are becoming entrepreneurs as well.

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Speaker: Mahbub Hossain Executive Director, Bangladesh Rural Advancement Committee (BRAC)

First of all I would like to thank Planning Commission and UNDP for giving me opportunity to participate in this conference and to share our experience about civil society engagement, youth and community engagement. I started my career in Karachi as staff economist of the Pakistan Institute of Development Economics. As an NGO we are working in Bangladesh. We have also started work in Pakistan. Since independence in 1971 we reduced population growth from 3.0% in 1970s to 1.3% in 2010. We have achieved self-sufficiency in rice production from large import dependence. Under five years age mortality has reduced from 148 in 1990 to 52 in 2009. Our net primary school enrolment has reached to 94 percent and we have achieved gender parity in secondary school participation. Poverty rate has been reduced from 76% in 1973 to 31% in 2010. A driver behind the progress is the government giving space to civil society organizations as partners of development, particularly for inclusive growth. Bangladesh is a country of large NGOs such as Grameen Bank and BRAC etc. NGOs have been working for reaching microfinance, education, health, hygiene, nutrition and community empowerment services to marginalized people, especially women. BRAC was established in 1972 as a relief organization to resettle refugees returning from India. Later it turned into a “not for profit” development organization which operates in 9 countries outside Bangladesh to share knowledge and experience with a

budget of US $ 495 million in Bangladesh and US $130 million in BRAC International. BRAC employs 54,000 core staff, 45,000 teachers and health workers, and 89,000 community health volunteers. Youth development is an important subject for socio-economic growth of any country. At 1.4 billion population in world (0.5 billion in South Asia) youth in developing countries constitute almost a quarter of the population and growing at 1.8% per year. Investing in youth can accelerate the fight against poverty, socio-economic disparity and gender discrimination. Opportunities like access to education, gainful employment, or financial services remains limited in many countries in the region. Youth must be equipped with appropriate skills, capacities and knowledge to effectively deal with the present day development challenges – urbanization, migration, ethnic conflicts, HIV and AIDS, etc. Marginalized youth are at risk of being engaged in crime, armed conflict and terrorism. Increased youth unemployment threatens civil unrest, safety and security of people. In Bangladesh, civil society organizations join hands with the Government for social and economic empowerment of the youth. BRAC reaches over 1 million adolescents and youth in Bangladesh to empower them through multiple interventions. BRAC is training 260,000 adolescent girls on livelihood skills and opens space for social engagement with peers through Adolescent Development Program. We are helping generate employment and livelihood for 240,000 adolescent girls and young women

Session 7: Youth and Community Engagement


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with financial education, training and micro-credit. We also supporting multipurpose community library for continuing education of 250,000 out of school youth. Adolescent Development Program (ADP) is one of the important programs in Bangladesh focusing to improve the quality of life of vulnerable adolescents and youth (14 to 21 years), especially girls with coverage of 260,000 girls in 8,660 clubs organized. We are providing life-skills based education and livelihood training, community participation through forums, rallies, adolescent fairs, organize cultural competition, cricket tournament, safe-swimming initiative etc. to identify and groom talent. Another program being run by BRAC is “Social and Financial Empowerment of Adolescents and Youth” (SoFEA) to empower adolescents and youth (15-24 year) socially and economically so that they can lead their lives with confidence and dignity. Programme includes building capacity through life-skills based education, livelihood training, financial education, microfinance, and community participation for long-term sustainability of the clubs. Another important program is “Community Empowerment Program” which forms social capital of marginalized people and assists in strengthening local governance through capacity enhancement of women union council members and builds up mechanism for transparency and accountability at grass root level. BRAC supports a network of 12,000 people with 750,000 memberships all over Bangladesh. Approach of the Community Empowerment Programme is as follows: - Making the marginalized people aware

of their rights, - Empowering them to claim their

entitlements, and resist exploitation by facilitating functioning of community based organizations,

- Making the local government more responsive to the needs of the marginalized people,

- Developing direct linkages between the people and different tiers of local govt.

We are engaging communities to redress insecurity and violence to ensure participation of all level of people in the community (men, women, youth, adolescent boys and girls, local elites, local government, police) activities. We have given consideration to ensure women’s and adolescent girls’ participation in planning, implementation and monitoring of projects. The community safety and security concerns are identified and prioritized for actions by the community themselves by following participatory approaches. The community themselves develop action plans to address the concerning issues identified. Community mobilization for effective utilization of sanitary latrines involves formal and informal community and religious leaders, seeks participation of educational institutions and engages media and other local civil society groups. BRAC is also working for the extreme poor under the program entitled “Challenging the Frontiers of Poverty Reduction and Targeting the Ultra Poor” (CFPR-TUP)”. It is a unique case of community participation and contribution in combating extreme poverty in rural Bangladesh which has especially targeted ultra poor households who are provided:

a) Grants of small assets, b) Intensive training on management of

assets, and c) Free medical care, for a period of two

years to graduate them out of extreme poverty.

It costs US $ 320 per households to provide this facility. A total of 400,000 households already graduated through the programme.


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The Program ensures intensive community involvement in two major program activities:

i) Targeting program participants, ii) Mobilizing community support

through formation of Village Poverty Reduction Committees.

The program participants are selected through Participatory Rural Appraisal (PRA) method. The two major steps in PRA are:

i) Social Mapping, ii) Wealth Ranking.

Villagers draw the map of their village and follow a wealth ranking exercise to identify households as non-poor, poor, very poor and ultra poor. Through various activities, BRAC encourages the village elites to work for the development of their own village.

Lessons learnt from above programmes include the following:

- For inclusive growth community engagement is essential.

- Community proactively identifies problems, suggests solutions and participates in implementation.

- Multi-stakeholder participation (people, local government officials, religious leaders) ensures greater ownership and accountability.

- Youth and adolescents can be invaluable assets to improve community safety, and for voluntary social work, if guided properly.

- Equal participation of women and men is necessary to ensure positive outcome and sustainability.

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Discussant: Dr. Ali Asghar Khan Head of Omar Asghar Khan Development Foundation

We are here to talk about youth and community engagement. As Dr. Nadeem said that FEG is a recipe, I agree with his point that we need to add spices in it for implementation. Connecting people is very important because we as a nation need to connect with others in this region. If we talk about people in Baluchistan or KPK we know that what is happening over there. Connectivity of people in these areas should be prime objective of the government to lead them to improving things. Youth in our society feels that their voices are not being heard and they are looking for space for them. Organizing citizens and particularly the youth in society is the way forward and the government needs to play its role for their development and engagement in socio-economic development. If we look at the institutions we find that all our institutions have suffered due to military rules in the past. Trade unions, labor unions and student unions are not active as they were also affected in these regimes. We need to give youth space to organize themselves, and provide them opportunity to

collectively work for them. Access to information is also important. Students are being used as instruments by many to hold their rallies in the streets. But unfortunately in decision making process the youth are seldom seen. Access to information has also become very difficult in the country and even budgetary information is not correctly available. If we look at KPK budget we find that out of 85 billion rupees about 56 billion were not allocated. So if we can’t ascertain that where money is to be used how can we hold institutions accountable? Without holding institutions accountable no change will come and that requires political will. Last year KPK government allocated 4.5 million rupees for educational budget for Mardan city. But at the end of the year in the revised budget 576 million rupees were spent. Unless, we as a nation, including state don’t raise the questions we would not be able to solve the problems. We need to give youth chance to be heard and strategies need to give importance to youth to empower them.

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Discussant: David Martin

Country Director, British Council, Pakistan Thank you very much for inviting me here. It was fascinating for me to hear about NGOs working in Bangladesh. In Pakistan many NGOs are doing fascinating job. Last night I was talking to a number of representatives of organizations that how they can achieve networks and work

together to avoid stepping over each other’s toes and being rivals, but instead becoming trade partners and allies in work activities. British Council is running a programme for active citizens for youth engagement and empowerment in community. We had setup a program in 2009 to train young people to

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enable them to engage in social action programmes in communities. We have trained facilitators all over the country. We are working on training more facilitators of some new partner organizations. We have

done a lot of work across Pakistan under active citizenship programme. We plan to expand that network to mobilize youth to work for society.

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Discussant: Faisal Mushtaq Executive Director, Roots School System, Pakistan

First of all I would like to thank Dr. Nadeem Ul Haque and congratulate and compliment him for sponsoring the change that we wanted to see serve. Inviting young people at this forum discussing and debating the growth strategy is by itself a testament to the commitment of the Planning Commission. To me the single problem to help and sustain the youth and community engagement is through education. Without a viable, relevant and public education system we can’t implicate the values of the community education, civic education and citizenship education. Without sponsoring community, civic and citizenship values we can’t create a viable society which has both the desire and determination for sustainable social impact. Process of education starts from the curriculum. The gap between public and private education system also needs to be looked after. To create opportunities we need citizen based programmes- like British Council and Ibrar Ul Haque’s foundation is doing in Pakistan. Such forums create an inert-generation engagement, civic engagement; and democratic and social development planning. Through education we can create employment for the engagement of youth.

Engagement means connectivity to help engage the youth in value added activities so that they can create and help sponsoring the change in their provinces, districts, tehsils etc. Without a viable and progressive national public education system it would be very difficult to create social and entrepreneurship values to help masses, provide them skills, and understand their potential. If we want to have citizens in action then the debate is that how state is going to provide them opportunities to serve the state, especially the youth? It can work both ways. It is duty of the state to engage youth and communities in their personal development and create opportunities for them. Thus education, employment, engagement, empowerment and entrepreneurship will create a viable and scalable socio-economic impact. We need to develop a new education system to meet challenges of 21st century and promote the value of community education. 68.8% of the Pakistan’s population is under the age of 30, 63.3% is under the age of 25 and 28% are in age group of 15 to 25. 50% of the economy is service economy and 8.3% is the level of entrepreneurship outside agriculture sector. We need workable and sustainable solutions for youth connectivity and engagement.

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Discussant: Shireen Naqvi CEO, School of leadership

Thank you for inviting me in the conference. School of leadership has been working for the last ten years in country. Sadly community service is a subject which is not being taught at all. The first university for any child in the world is the mother’s lap. For the growth of children we need to build community spirit. Community development is a mindset. My organization is working to change that mindset towards community service. Youth come with a very low self-esteem from their homes and that can’t be easily changed. To change low self-esteem from “I Can’t” to “I can” and “I will” we have worked hard in our organization and trained more than twenty thousand people. When we started school of leadership we had a vision that we will change Pakistan. We believe that every human being has some potential and the important thing is the realization of that potential. We also need to

change our mind set from blaming the government, America and others and instead take the charge of the things. We have come together with one mandate which is youth. We need to be creative to find solutions to the problems. Pakistan is a land of opportunities. Every human being is born with a potential and main thing is the realization of that potential. Fortunately we have here with us public and private sectors, social and education sectors along with media to support us in this endeavor to work together for youth. We can impact 7.2 million in one year and investment can be paid back in seven years. With public and private sectors coming ahead together we can change Pakistan in next four to five years. Let us join hand to bring this revolution.

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QUESTION: Question: To convert youth in productive assets education is the key. We have three systems of education in Pakistan viz. public schools, English medium schools and madrisas. Until and unless we reform our education system how can we address inequality issues in education system in Pakistan under education reforms? Question: Under 18th amendment provincial ministries have a very important role to play. How Planning Commission is planning to involve Youth Ministry in the implementation of the strategy? It took twenty years for government to come up with a national youth policy. What mechanism Planning Commission has to implement this new strategy? Question: In this youth conference we didn’t heard about the role our religions has set for our society. Moreover, no one in this gathering talked about tolerance space. When we talk about connectivity it is basically connecting different tolerance spaces. Panel is requested to please comment as it is an important issue for educational institutions as well. Question: There is a divide between English and Urdu medium school systems and job market has a bias towards English medium schools which is a double standard. Is this system not a constraint for the youth of Pakistan? Question: Universities and colleges are producing the knowledge but attitude is not being developed in educational institutions. Child is told from the start that after getting seventeen years of education he will get a 17 grade job or a maximum salary. But we don’t develop attitudes in them. Please comment. Question: For the last 64 years we are confused about our education system in Pakistan. We must learn from India as they have one system for their country. Can we do that in Pakistan? Question: Role of music, theatre and their revival should also be recognized. Where youth will go, the youth is taking a leadership role in reviving music, including Sufi music etc. Please comment. ANSWERS:

Answer by Shireen Naqvi, CEO, School of leadership: If I ask you to make list of role models which you have in your mind, or a person who have made a great difference in the history to whom you would like to admire? Just think that what made them to do all those fantastic things? I promise you that none of the lists would have a degree, school, university or GPA mentioned on that list. You would find name of Mr. Abdul

Sattar Edhi in Guinness Book Record and he is just class eight pass. I work for rural communities and public schools. Please don’t say that they are giving bad education as there are many fantastic teachers and students there in public schools in rural areas. The thing lacking is the proper training of the youth.



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Answer by Ali Asghar, Head of Omar Asghar Khan Development Foundation: I think religious extremism comes when there is anger and frustration. So it is important to organize youth and look at their positive energies. Young people need to be encouraged as they have been ignored on

different occasions. Youth has made great sacrifices at many occasions for the country like floods and earthquake etc. So energy is there in our youth but we are wasting that by not providing them opportunities.

Answer by Mahbub Hossain, Executive Director BRAC, Bangladesh: The discussion we are having is on education and opportunities available. Youth is going to schools and there are a large number of drop outs. We need to do something for that also. We need to put

some skills in them to place them into formal industrial sector and develop entrepreneurship etc. to enable them to develop their own businesses. We need to give them opportunity as well.

Answer by David Martin, Country director, British Council, Pakistan We need education reforms to move towards the right direction. There is a large population which is to be taken on board. We need to do something good as other countries have done it and they have moved to near a perfect education system. Look at Brazil and China that what they have achieved in last few years. Second important thing to focus is attitude and behavior of the young people. I agree with the panelists here that we need to focus on the training of the youth. At the end I would like to comment that we need to take English language as a medium of education. Being an educationist I would like to say that the solution is not there in English medium education. I have seen

education systems around the world moving towards English medium for their education system and a decline is seen there in quality of education. Education system in mother tongue in early age allows children o learn in a language which they speak at home. They can afterwards move to another language which can be Urdu or English. There are many countries in Europe where people speak good quality English such as Netherlands. People in country like Switzerland managed to learn English, French, German and Italian. Problem here in Pakistan is that English is taught here in schools as a subject. Better way to learn English is by communicating with students while teaching.

Answer by Faisal Mushtaq, Chief Executive, Roots School system: We talked about uniformity and equality within education system. Private education in Pakistan is no more an urban elite phenomena. There is a recent study by Harvard Business School that education in Pakistan is now a rural-urban phenomenon. There are private schools which start with a fee of 50 rupees a month and go up to 15000 rupees a month. It’s a matter of choice. It is the responsibility of the state to promote quality, relevant, accessible and one

education system. Since denationalization of education in 1979 there has been a successive vacuum which is filled by the private sector. Our national education is world class and nothing is wrong with the education system. But the problem is with the implementation. Now under 18th amendment education is a provincial subject. Even in Germany and India education is a state subject. So while going


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into 21st century we can’t limit the choices for quality education.

***


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REMARKES BY


Basically we are here to discuss the growth strategy. The growth strategy has been approved by the National Economic Council and the Parliament. The growth strategy is about increasing the productivity in the government, reforming the government in main stream, reforming the markets and above all reforming the cities to make them

the beacon of investment and unleash their potential for growth. Finally growth strategy is about including the youth as they comprise the largest segment of the population. Unless youth start looking after themselves there is no security for the rest of us.

REMARKES BY

Ajay Chhibber Assistant Secretary General, UN and Assistant Administrator and Regional Director for

the Asia and the Pacific, UNDP It is an honor to be here. It is a great discussion today on the Framework for Economic Growth. I think FEG really highlights key forces that must be unleashed

for Pakistan to get on a turn pike of growth like the rest of Asia. I think this is a very positive development and we are so happy to be a small part of it.

.

***

Interviews


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Interview

Fatma Gul Senior Economist, UNDP

Question: First of all I request you to give some initial comments on FEG please. Answer: The Framework for Economic Growth which we also discussed in UNDP is a brand new framework which is utilizing different and dynamic parts of the society looking forward into 21st century. It is quite new to look at youth as a major resource for

the Pakistan and creative cities and markets as engines of growth. It is looking promising and dynamic, but at the same time also challenging while looking at the existing institutions and the structure.

Question: Do you agree with the priorities laid down in the FEG like emphasis on cities, Civil Services reforms, youth etc.? Answer: I do agree with the priorities, but with some reservations. There is significant population of Pakistan living in rural areas on which the Planning Commission’s strategy don't emphasize. It also doesn’t elaborate the rural dynamism and role of the rural young people into the economy to integrate. Being an Economist I believe that government and markets can’t be discussed separated. I see government and markets

working together rather we talk about government vs. markets. I think that if it was my strategy I would promote a more efficient government because now in this world, especially with large size countries like Pakistan, there would be no other agency which can reach such a large area in terms of the provision of the services and bringing economic growth.

Question: In terms of way forward, what do you see in the FEG? Answer: Probably one of the biggest challenges in rural areas is land zoning and inequality problem. The production structure in such areas would be a major challenge which government has to face. It would be very difficult to change the status quo. One

promising thing about Pakistan is the openness of the Planning Commission and of the government of Pakistan to be critic about themselves. Another important and promising thing about Pakistan is dynamism from the youth and the media. In terms of

…it is brand new framework which is utilizing different and dynamic parts of the society looking forward into 21st century.


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opportunities to move forward we can see that China is moving on higher wage scale which can be taken as an opportunity for Pakistan as it has cheap labor and a large population. So Pakistan, Bangladesh and Indonesia can take the empty space made by China. But another challenge comes to mind

for Pakistan is quality of education. Once educated and armed with the skills it will also become a major opportunity for Pakistan. There are so many people hungry for the opportunities and interested in making things happen.

***

Interview

Suleiman B. Mahbob Chairman, Malaysian Industrial Development Authority

Question: I would invite some initial comments from you on FEG. How would you compare Pakistan’s experience with the Malaysian experience and compare our growth experience? What you think that where we have gone wrong? Answer: I have gone through the report on the FEG in Pakistan prepared by the Planning Commission. I must congratulate that it is a very good long term path towards the economic growth of Pakistan. Comparing Pakistan and Malaysia, Malaysia has achieved a very high economic growth through liberalization and deregulation, particularly in terms of promoting industrial development and private investments. Pakistan needs to put measures and policies to enhance private investment including foreign investment. Pakistan needs to

liberalize its investment climate. Pakistan also needs to analyze its administrative procedures and bottlenecks and should deregulate some of the areas which may be obstruction to the commercial development of the country. Some of the regulations were needed in the past but those are not required now as competitiveness of the country has come down. There are many administrative hurdles which need to be reduced to make Pakistan more attractive for private investment.

Question: In context of law and order situation and administrative control how would you make a sharp comparison between Malaysia and Pakistan? Answer: Pakistan needs to improve law and order situation, especially of the foreign

There are many administrative hurdles which need to be reduced to make Pakistan more attractive for private investment.


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workers for investments. Law and order problems need to be reduced at earliest for private investors. Support from political leadership is very important in this regard. In our country President Mahathir Mohammad was very supportive of

economic growth and private sector development. I appreciate that top leadership in Pakistan is addressing the same thing which is important ultimately for economic growth as well as job creation.

Question: Going forward what challenges you see for Pakistan? Answer: The real challenge is the implementation of the reform measures which have been identified in FEG. It is very good report which is even very relevant to the Malaysia as well. We need to put a mechanism for implementation and buy support from the society, Civil Servants, and

most importantly by the top leadership in the country. There should be a synergy of support from various sections of the community like businessmen, political leadership, administrators and general public to make a very attractive business environment in the country.

***

Interview

Emiel A. Wegelin GIZ Program Coordinator, Cities Development Initiative for Asia, Philippines

Question: I would like to invite some initial comments on FEG. In your opinion what would be the challenges to this new approach? Answer: FEG is good attempt and breaks new grounds. It is innovative, daring, but requires a lot of work to be done. The main challenge is to think out of the box and bring all the constituents on board which is not an easy task as people are used to doing the things they have always done in the past. The Framework for Economic Growth

suggests to try to move on and not to be hampered. New ways should be found to better harness the resources that exist in the country, especially human resources. At the end of the day nothing will work unless human resources are devoted to what we want to achieve.

Question: Do you agree with the four priority areas and pillars identified in the FEG?

At end of the day nothing will work unless human resources are devoted to what we want to achieve.


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Answer: Four priority areas are not only excellent but also inevitable. Urban development is an essential ingredient for economic growth. One of the reports by McKenzie Global Institute says that as

India's urban infrastructure is in a poor state it misses about 20% of its annual growth rate. So we can say that some of the important economic growth challenges are in the middle of the urban areas.

Question: With respect to Pakistan do you have some suggestions for going forward? Answer: In Pakistan I see two particular challenges which must be addressed. One is the recognition that these are the cities where all economic activities need to be reinforced. A city consists of two parts which is formal city and informal city. The informal city needs to be recognized as what it is, not encroachment, but as a part of the city where people live, work, and create something. The challenge ahead is that how to bring informal part of the city into the

overall growth framework and make poor people participate in overall growth effort. Second important thing is the need for institutions particularly at local level to make this happen which requires more capacity at level of local bodies and sub local levels and a capacity to recognize them as a legal part of the society, deal with the communities and engage them in positive activities.

***

Interview

Dr. Norma Binti Mansor Secretary General, National Economic Advisory Council, Malaysia

Question: I would like some initial comments on the Framework for Economic Growth? Do you find it new, ambitious and challenging? Answer: I was struck by how similar is Pakistan’s Growth Framework with Malaysia’s new economic model. In Malaysia we analyzed the issues and

challenges being faced by the country. Before Pakistan moves forward you need to identify the challenges and issues being faced. Pakistan in FEG document has

The informal city needs to be recognized as what it is, not encroachment, but as a part of the city where people live, work, and

create something.


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identified all the issues and hindrances. Main issues are covered comprehensively

and honestly in the document but the real challenge is the implementation.

Question: Do you agree with the four priority areas highlighted in the framework? Answer: The four main areas identified in FEG are important. The issues Pakistan is facing are identified in four priority areas. To go on high growth trajectory would be the way forward the economy should be

focusing on. The intelligent way of going forward is to focus on some of the important areas instead of looking at all the things altogether.

Question: In similarities with Malaysia what would you suggest for implementation? And have you chalked out Civil Service Reforms for your Civil Servants? Answer: In Malaysia the implementation framework was slightly different as we working closely with the Prime Minister and we brief him about our analysis and findings which he understands. We don't have hunger in our country and unemployment is very low. We established a Program Management Office as a corporation being run by an independent council comprising of ten persons who are economists, socialists, bankers etc. The close relationship between the Prime Minister, the Council, Program

Management Office and the Chief Secretary (number one Civil Servant position in Malaysia) were part of the team. Engagement of all the stakeholders from all the government agencies and stakeholders from private sector was important for implementation and ownership. To address the whole Civil Service Reform was too big to address for us. We worked on Civil Service Reforms with an approach to facilitate economic plans and transformation of the country.

Question: Do you have incentive structure in monetary terms? Was there a challenge to monetize the perks in Malaysia? Answer: We proposed incentive structure based on performance. All of the perks in Malaysia are monetized. Everything is quantified in incentives which are in practice for more than ten years.

To monetize, in my point of view, was not a question of choice as there were not enough housing facilities, cars etc. for the Civil Servants in our country.

Question: Going forward how do you view the challenges for Pakistani growth? Answer: The political will is the main challenge that how government accepts and willing to support reform initiatives. In case of Malaysia the whole Cabinet and Prime

Minister was with us. It requires selling the ideas and consultations for the implementation. Crisis gives both opportunity and challenges. In case of

The Political will is the main challenge that how government accepts and willing to support reform initiatives. In case of Malaysia the

whole Cabinet and Prime Minister was with us.


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Malaysia we engaged the Chief Secretary, Chief Justice and judiciary to support the

economic transformation reforms.

***

Interview

Dr. Parvez Tahir Ex. Chief Economist, Planning Commission of Pakistan

Question: I invite some initial comments on the Framework for Economic Growth. Answer: Framework for Economic Growth of the Planning Commission is very good initiative as people have started thinking, which is an important thing before any change to take place. Areas identified are not new as economists have already discussed these areas in the past. But the question is why didn’t it happen? Civil Service Reform is an important area to talk about in FEG. Civil Servants are of the view that they can do anything which is not a good idea as nobody can do everything in this world. This country is devolving as 18th

amendment has devolved many powers and resources to the provinces. The wish of the provinces is to have autonomy which has been fulfilled to a great extent, but provinces are refusing to devolve powers to the local governments. Local government systems are important everywhere. A centralized Civil Service system is going along with local system reforms in Pakistan. There are same people managing central, provincial and also the local governments. Commissionary system and 18th century old Police Act 1861 are back and we are talking about the reforms.

Things do not happen here as political constituency for reforms is weak in our country. We heard about Malaysia that Prime Minister himself was involved in the reform process, but it is not the case with Pakistan. For education I am of the firm

view that unless we have good elementary education system we would not be able to move ahead. There should be quality universities for higher education and poor should be given scholarships. Public money should be used for elementary education

Things don’t happen as political constituency for reforms is weak in our country


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with a skill bias to make people ready for innovation and do something good for the country. We need to convince political persons and political parties to ask their economic committees to debate important

issues and tell everyone about this important thing for the country. Political will and building the economic capacity of the political parties is very important for country’s growth.

***

Interview

Dr. Mahbub Hossain Executive Director, Bangladesh Rural Advancement Committee (BRAC)

Question: I invite your initial comments on the Framework for Economic Growth. Answer: Framework is good analytical work with innovative ideas for moving forward. But real issue is of implementation. We have

seen many plans in the past but most of the plans remained in shelves because of the issues in implementation.

I think Planning Commission has done a tedious and excellent work with new ideas and way forward for the growth. The conference is very innovative to share the experience of other countries. Pakistan can

take benefit from the experience of other countries to move forward. But the real test would be the real outcome and how the plan is implemented.

Question: According to you the main challenge is the implementation. Would you please specify some more about implementation? Answer: In Pakistan the Civil Service is one of the important actors in implementation. There are also many other actors in private sector to be taken on board. How we mobilize society and involve marginalized people at grass root level is the main challenge. Community mobilization and

good governance at local level is very important for inclusive growth. Government needs to give space to other actors of the society in the economy for inclusive growth. In Pakistan government is controlling infrastructure, information,

The conference is very innovative to share the experience of other countries. Pakistan can take benefit from the experience of other

countries to move forward


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planning and regulations. Involving the civil society as partner of the development process is very important. In Bangladesh

civil society has worked with the government in the development of education, health etc.

***

Interview

Heru Prasetyo Deputy Chairman of the President’s Delivery Unit for Development Monitoring and

Oversight Indonesia Question: Please give some initial comments on the Framework for Economic Growth. Answer: The growth strategy presented in this conference is very comprehensive which talks about the youth, cities, markets as well as governance. In developing countries this is something which needs to be done with a multi-stakeholder approach. The approach adopted in the conference to connect more than twenty universities is excellent. But the key work to be done is the

implementation. Having a very good strategy requires at very next level the review of the existing regulations and the changes required. It is important to consider the inputs of everyone in the strategy development process and their implementation which is a big challenge. But I believe that government of Pakistan would be able to meet this challenge.

Question: How do you compare Indonesia’s reform strategy with Pakistan? Answer: In terms of approach and process there is similarity between both the countries as in this conference you are getting input from academia, NGOs and community at

large. Development stages in both the countries are different but I believe that you have the same vision which you really want to achieve for the people.

The Growth strategy presented in this conference is very comprehensive which talks about the youth, cities, markets as well as

governance


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Interview

Parvez Qureshi Urban Planner and Architect, Lahore

Question: What are your initial comments on the Framework for Economic Growth? Answer: It is an extraordinary conference taking place here. A lot of credit goes to the Planning Commission to put all the things together. Thrust of the framework related to

cities, urbanization, matters pertaining to the urbanization, and having cities as engines of growth for the economy in the agenda topics is very useful.

Question: With respect to creative cities what major challenges you see for Pakistani cities to face? Answer: If we look 40 to 50 years back Pakistan was one of the few countries which had extraordinary experience in building new things and innovations in urban development. We developed a new city ‘Islamabad’; developed projects in Karachi, Kotlakhpat project in Lahore, public housing schemes and katchi abadis etc. People came from other parts of the world came to us and learnt from our experience. For the last few years we have lost track of our institutional history and we are making same sort of mistakes now. This morning we discussed about a number of cities in Pakistan having population of more than one

million. There would be about 17 cities in the next 5 to 10 years in Pakistan with population more than one million. Nobody talks about the secondary cities growing with population of over half a million. In next 5 to 10 years there would be about 35 to 40 cities in Pakistan with population over half million. All these cities need planning, urban management and institutional framework to manage and rum them. Unfortunately we have lost our ability to work out an appropriate mechanism to run our cities. We need to look into our past and revise our policies.

We also need to focus on divide of the poor and rich in the country. With respect to urban housing very little work has been

done in Pakistan for the urban poor. For transportation of urban poor very little work is done yet. For example millions of people

There would be about 17 cities in next 5 to 10 years with population more than one million. Nobody talks about the secondary cities

growing with population of over half a million


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ride bicycles for which we don’t have plan for routes and lanes. There are no concept and plans for pedestrians. Other major issues include pollution, water supply systems and sewerage networks, land use planning, municipal services, land banking and environment etc. Unfortunately our urban institutions are not structures even to talk about these important issues. Institutions that run the cities are very weak and the top management keeps on changing. Top

management lacks background of urban planning and issues related to urbanization. The bosses of the development authorities serve in a city for very short time, learn the subject at the cost of the tax payers and move to some other place. There is a need to make a dramatic change in the system to guarantee appointment of the people with proper background and with some continuity to manage the cities.

***

Interview

Sohail Naqvi Executive Director, HEC

Question: I would like to invite your initial comments on the Framework for Economic Growth. Do you think that it’s a new strategy or a re-hatched strategy, and what challenges you see in it? Answer: The growth strategy builds upon previous thinking, previous initiatives and work done in the past in Pakistan, as it should be. It also brings in new ideas and highlights the critical and important items that are necessary for the economic growth

of this country. In Pakistan it is focusing on connectivity, youth, entrepreneurship, human capital, and cities which are all very core items on which we have to pay great attention if we want this country to grow.

Question: When we talk about ideas, the youth and harnessing our young population universities play an important role. What do you foresee that in what direction our universities are going? Answer: It is indeed heartening to see this growth strategy which comes after the

second phase of HEC’s medium term development framework. HEC mission was

With respect to urban housing very little work has been done in Pakistan for urban poor


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defined to facilitate universities to serve as engines of growth for socio-economic development of Pakistan. So there is a clear link between the development of universities and the economic growth. Secondly we are focusing on three strategies which are that universities are playing role in building economies, communities and the leadership. All our focus is that universities work as

autonomous entities to look at where they are located, look at their surroundings, assets they have and the industry around to play a positive and leadership role in taking the opportunities that are there and making the best out of them for the socio-economic development of the country. For growth strategy of any country to work the universities have to play an important role.

Question: What role HEC is playing in reforming universities? Answer: We looking at the entire environment as an ecosystem of higher education which includes students, faculties, curriculum, facilities, interconnectivity, trainings, research and their application, innovation, entrepreneurship etc. We started programmes for improving universities with entirely focusing on faculty development. We started working on infrastructure and focused first on improving digital infrastructure of the universities. We can see this conference being televised widely across Pakistan through Pakistan educational

network of the universities. We are building physical infrastructure and expanding the universities. We also focusing on the quality standards and building the capacity of the universities to implement these standards. All above acts together have served to reform the higher education sector in Pakistan. Today we have, for the first time, five universities ranked among the top 500 in the world; and our universities ranked amongst top 100 universities in Asia which is a very positive development in the higher education sector.

Question: Last night we heard Dr. Richard Florida and he talked about ‘4 Ts’ viz. ‘Technology’, ‘Talent’, ‘Tolerance’ and ‘Territorial Assets’. We find many youngsters going abroad to find an environment which they think is better and stimulating to harness mental powers. In such a situation how can we harness Pakistani talent? Answer: We recognize a phenomenally talented young population of Pakistan to be a great resource. We talked about the demographic dividend that is to come from Pakistan. We have a lot of young bright people here. Unless we provide them opportunities to recognize and harness their talent we would not be able to convert this resource into capital. Here the role of education system is crucial - staring from

very lowest level of education building up to the higher education. We are focusing on the higher education as an output which is directly going into the economy and making a direct impact. We have to handle both the issues of social and technical nature for better understanding and solutions. We are focusing on our universities to build on a capacity to look

Today we have, for the first time, five universities ranked among the top 500 in the world; and our universities ranked amongst top 100

universities in Asia.


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around them and have an impact on the local community, the local environment and the

economy.

Question: As a Pakistani citizen what would be your comment about our primary education. Answer: We have a real problem with our primary education system. One of the fundamental issues universally acknowledged is that a child learns early in the mother tongue. We are binding our people and putting chains around their necks to learn in a language which is not their mother tongue. English is a very important language, but can be learnt only as a language. English doesn't have to be a medium of instruction and education. Use of English as a medium of education can’t be conducive to the development of this country. Second important issue is that if we are one country we should have one education system everywhere. In Pakistan we have English medium, Urdu medium,

Madrisa education, ‘O’ level, ‘A’ level etc. There is no problem with high school (matriculation) or intermediate (FA/F.Sc.) system but the problem is that how we teach them. In primary education we need to focus on the fundamental problems that how innovatively we are teaching, a focus on the teacher, and provision of training to the teachers. We have an idea in Pakistan that lower is the education level, lower the qualification required. In my point of view we should use Ph.D. psychologists for pre-schooling for their early age education and growth. We should reward the teachers both financially as well in status as teacher is the most important element in this new development paradigm.

Question: Moving forward what do you see a major challenge for economic growth? Answers: The major challenge is the implementation of FEG. We have crises of governance in Pakistan. At the political and institutional levels nothing can be implemented until there is some institutional ownership and agreement at the highest level. Just few days back we changed the local government system in a province. If

you have heard the debate on the creative cities the fundamental part was that if there is no local government there is no creative city. Ownership of institutional framework for implementation would be a real challenge for the government and the role of the leadership is important in this regard.

***

One of the fundamental issues universally acknowledged is that a child learns early in the mother tongue. We are binding our people

and putting chains around their necks to learn in a language which is not their mother tongue.


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Interview

John Speakman Private Sector Specialist, World Bank

Question: Please give your initial comments on FEG. Answers: Growth happens in firms located in cities. Particularly in South Asia we see very little emphasis on these three points. First point is that very little emphasis is given on the importance of the cities and that the cities being the drivers and places where growth will happen. My point is that the growth takes place in the firms, not in

the government. Second big driver of the growth strategy is the need to get the government out and to do the right job. Thirdly firms need the space to breathe and grow on their own. They need supportive regulations, not the regulations that are going to destroy that and refrain from competing.

Question: In terms of the emphasis on the cities in Pakistan what do you see as the major challenge? Why have not our cities been able to evolve? Answer: Cities don’t have the money. I previously visited Middle East and seen very successful cities there. The reason for these cities to be successful was their earning sources, revenue generation and tax

collection. But here the cities, generally and specifically in Pakistan, have cash constraints. What I feel that once the cities have proper resources then they would be able to see the things happening.

Question: Would you recommend revisiting the devolution plan and perhaps the decentralization as well? Answer: I don’t know much about that in Pakistan but I understand devolution has started here. Some of the speakers today had a very strong suggestion that to be an authority of the government, as it is there in case of India also, it must be very much supportive of encouraging not only fiscal devolution but allowing cities to raise their

own revenues. To raise the revenues and engage proper partnership some of the cities in Middle East make the money by engaging in commercial real estate, using the space and involving in corporate businesses etc. Once city governments have resources available they should be accountable to the people. If city governments fail to perform,

… growth takes place in the firms, not in the government.


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people can throw them out. The institutions in cities are naturally going to be held accountable to provide services to the

people, as otherwise people will not stay around.

Question: What main challenge you see for the growth strategy? Answer: Major challenge for the growth strategy is to recognize that Pakistan needs to improve the governance. I think it is incredible that the Deputy Chairman has put on the table a very brave and courageous thing to do. It is a big challenge going forward that how to get the government

behave in a way which would enable the kind of ideas which are happening here. The government has a strong vested interest to keep status quo. To change that status quo this conference would mobilize public opinion and allow them to exchange their ideas.

***

Interview

Philip Auerswald Professor, George Mason University

Question: Please give your initial comments on FEG. Answer: It is a very exciting initiative and I have followed it from inception. I was involved in drafting one of the numerous papers that served an imprint into this growth strategy. So I have seen it developing since then. I can say, from an outsider perspective, that this is a quite

unique initiative. I am not aware of any initiative that has taken specific ideas which are embedded in the growth strategy. I think FEG is a leading initiative that a country would be looking towards in terms of economic growth in 21st century.

Question: Please describe a little about your background paper for the growth strategy. Answer: My paper is about the entrepreneurship in the markets. The title of

this paper is “Creating a Place for the Future”. I think it is one way of thinking

I think FEG is a leading initiative that a country would be looking towards in terms of economic growth in 21st century.


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about what the growth strategy is trying to do. In any environment in combined activities the exciting successful businesses are a little bit like a canopy in a rain forest. This is what an outsider from a distance would see it in totality of an economy. But underneath the canopy of the rain forest there is all the life of the forest including the underbrush etc. And importantly those rapidly growing new trees in terms of

metaphor are the firms and businesses in an economy. It is a process by which large entities succeed and prosper, but eventually they leave and make room for the new businesses which create economic dynamism and ultimately long term growth and economic success. That was the nature of our paper that how firstly we can create markets for Pakistan and government to provide level playing field.

Question: With respect to growth framework do you agree with the four priorities identified? Answer: I absolutely agree with the four priorities. People can find different approaches to articulate that what is fundamentally same idea and connection. In terms of markets, competition, and entrepreneurship what I just described was the dimension that I also emphasized in my work. Certainly the dimension of governance is important in which people in public service need to be effective public servants to contribute to national well-being. Another important dimension is of cities. In

context of urbanization I think understanding the role of cities is very important in 21st century. The growth strategy is inventing the concept relating to large scale urbanization. What I think Planning Commission is articulating by emphasizing cities in growth strategy is that this process is happening now and it should be focused towards the objective of advancing Pakistan’s economy and helping to realize its potential for 21st century.

Question: Do you think that given the current power structure we would be able to think about this reform? Answer: All I know is that every country has its own politics. Every country has its way of organizing existing interests. Whether it is USA or Pakistan, or any other part of the world political parties tend to reflect existing economic power. So in that sense the change will be required in Pakistan, and similarly change also happening in USA. I look at the difficulties that are faced politically here in terms of liberating markets, encouraging

entrepreneurship, creating future markets, opportunity for youth and these are similarly important elsewhere in the world. I believe that people in Pakistan are very much patriot and they love their country. That sense of national pride will lead them to make the choices which will really help this country reach its potential not only in 21st century but also in the future.

***

.. underneath the canopy of the rain forest there is all the life of the forest including the underbrush.


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Interview

Fauzia Wahab Member National Assembly

Question: Please give your initial comments about the FEG. Answer: FEG is a very valuable document for the country. If somebody really goes through this document he will find answers of many questions. This new framework is giving certain new directions to follow. There are solutions to many problems in this document which we had been looking for the last many years. This document should not be confined to the Planning Commission

but to be distributed at all levels like universities and government offices etc. Dr. Nadeem Ul Haque along with his team should go and have interactive sessions in the universities. Boys and girls in the age of 14 to 20 should also be involved in the discussions on this framework.

Question: Do you think that this New Growth Strategy needs to be discussed in the National Assembly as well? Answer: Yes it should also be discussed in National Assembly. It can be discussed in Question & Answer session and in Standing Committee. We can pass a resolution as well. Deputy Chairman and his team should encourage members of the National Assembly to talk about this growth strategy. I agree with the reforms which this document is proposing. I agree with various suggestions and reforms regarding creating a vibrant market. I agree with the concept of creation and creativity. We need to encourage more entrepreneurship among our people, trading

community as well as youth. Why USA is growing very fast is because of the innovation and creativity which has made them a leading nation in the world. In Pakistan when “Khadi” started first time I thought that it would not work. But now it has become a well known brand name in Pakistan. Same is with the “Bareeze” which is mainly due to creativity and their business is growing rapidly both locally and abroad. So our focus should be on creativity and encouraging new ideas. I agree with all the four points which can bring change in our life style.

Question: In governance issues we talked about Civil Services Reforms. Do you agree with the

There are solutions to many problems in this document which we had been looking for the last many years.


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idea of such reforms? And there has been a lot of discussion about local body structure in this conference. FEG gives very much importance to it as well. Please give your comments on the local body structure. Answer: Civil Services need to be reformed and restructured. Bureaucratic structure in Pakistan is very stale and outdated and it needs to be reformed. I have always heard that local body structure is an instrument in delivering services. Actually in Pakistan local body structure has been high jacked by the non-democratic forces. The democratic forces have not been able to adopt this tool

of governance. We find the gap because whenever a military adventurer takes over the country he compensates the wrongs and give the people a new voice in shape of local government. So we have seen the growth of local government during the military government regime. If you want local government to be adopted in genuine way it has to come through the parliament.

Question: During the time of elected governments we have seen the Commissionary system which has come back right now. Do you think that it is a good setup? Answer: Commissionary system is the time tested system. It has been with us for the last more than 125 years. It was introduced in 1882 and since then the subcontinent has

seen many changes. This system has been able to sustain all the pressures and remained intact.

Question: What major challenges you see for this New Growth Strategy? Answer: The challenge is that everyone should read this document and it should become a focus of our people. Other important challenge would be that this document sustains any kind of regime change. It needs to be discussed and made more public. Mr. Ajay Chhibber has very rightly pointed out that there has to be a consensus on this document. Something

which is created by the bureaucracy mostly remains confined to them. But if it is discussed at the parliament level it will also be discussed in electronic and print media. Once discussed at media and at the level of politician people will own it. So this growth strategy should be discussed at the floor of the assembly.

***

Other important challenge would be that this document sustains any kind of regime change. It needs to be discussed and made more

public.


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Interview

Dr. Aliya Khan Department of Economics, QAU

Question: In your opinion what are the key pillars of this growth strategy? Answer: The key pillars which I understand is that we need to have a more efficient government and efficient markets. The cities need to be made dynamic to provide opportunities and spaces for businesses and commerce. As university teachers have due

emphasis on the youth it is important to answer that how we prepare the youth and harness their potential to make them partner in the process of growth and development of Pakistan.

Q: Do you think that our system is efficient enough to deliver when we look at the strategy? Answer: I think that it is going to be the biggest challenge in terms of implementing NGS. I think we should at least open debate on it. Everything would not be possible in the short term but if we have implementation plans we can go accordingly. I think many institutions are in

the process of reforming themselves because they have to fight hard in this global economic environment with the kind of decade’s old structures. Pakistani society is awakening and it is going through a kind of transition and change.

Q: How do you see the entire concept of the growth strategy in the current environment? Answer: I think the New Growth Strategy needs to be widely debated and consulted. As far as the whole concept is concerned Dr. Nadeem very well said that this is a fresh approach and fresh approaches are always difficult to start, propagate and to take forward. So it is important that the Planning Commission and its partners try to make consensus around different issues and I think

they might get views they had not thought about. There is wisdom outside in civil society organizations as they are working in fields and they are well aware of the grass root level issues. So let us hear them and let us see what opinion they have about the implementation challenges and about the ideological components of this strategy.

Q: Do you think that there is a need for selling plan for this growth strategy? And do you think

Dr. Nadeem very well said that this is a fresh approach and fresh approaches are always difficult to start, propagate and to take

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that other key stakeholders would be engaged in the process? Answer: I think that this NGS is more a sort of communication strategy. Now this is the framework for the whole Pakistan so it needs very effective communication strategy. You have to make everyone aware of the role of provincial governments also which are now more empowered and they have to decide that how they want to implement this growth framework. Most of the implementation of this strategy will be at

the provincial level. There is private sector, academia, civil society and workers etc. to be engaged in the process. How does factory workers, vendors etc. connect with this growth strategy is an important question. What does a working woman of Pakistan think about this growth strategy is also important. So you have to connect with different segments.

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Interview

Dr. Akmal Hussain Professor, Department of Economics

BNU, Lahore

Question: Please give your initial comments on FEG. Do you think that it is a new approach and not re-hatched approach of old ideas? Answer: The new economics has emerged in the last three decades and hopefully what this conference is trying to do is to bring the new economic literature broadly under the roof of institutional economics to develop a fresh perspective and fresh growth strategy for economic growth of Pakistan. Basically what this literature is telling is that the central challenge for the policy making is not just resource allocation but to setup an institutional framework, set of rules, incentives and disincentives which can shape the behavior of individuals and the organizations. Objective is that the individual actors and organizations become more efficient, productive and leaders for the process of economic growth.

With reference to the shift of a paradigm and perspective we can say that the conference has redefined it and provided a broader, but abstract, outline of new thinking. There is still long way to put nuts and bolts together. I believe that the future of Pakistan and the process of growth lie in the inclusiveness where a large number of people including poor and middle class get economic citizenship in terms of processes, savings, productivity and investments. Weakness of this conference is that it is not taking account of the central challenge that we don’t just want high growth but an inclusive growth in which poor and deprived people can become subject of this new growth


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process. That requires much work to be done. Question: Do you think that the potential of large number of young people has been included and addressed in the strategy? Answer: I don’t call it a new strategy. But one of the new points of this conference is participation of youth and focus on them. The strategy is more a set of questions which have been raised. It is an abstract outline and a fresh terrain of thinking of new economies. Thus the conference also

recognizes the demographic structure i.e. young people. Any strategy being given must give direction to the youth as well as opportunities and to undertake them in the process having high wage employment, productivity etc. Youth must be given a leadership role in the strategy presented.

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Interview

Participant Q: Would you say that it is a new strategy or a revised growth strategy? Answer: I would say that the part of this strategy is revised and rest is a very new strategy presented, especially the part of the document referred about youth and employment. We need to visualize economy

in such a way that the youth are made participative in whole economic activity. That is the new thing or I would say a new paradigm in FEG.

Q: Are you looking at the strong potential of the youth, and you think that they have been involved in conceiving such strategy and being involved in the thinking process? Answer: Honestly speaking if the new ideas about youth are implemented we can bring something good for them, apart from giving good education. I think that the youth have tremendous potential, much more than us. If

youth are given the due importance which is the requirement of the 21st century then I am sure whole economy, system and governance would be changed. Our youth should be given a chance to outwardly think

The new economics has emerged in the last three decades and hopefully what this conference is trying to do is to bring the new

economic literature broadly under the roof of institutional economics to develop a fresh perspective and fresh growth strategy….


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and they should not be restricted to primitive ideas. Their focus and vision is much broader. Youth has streams of continuous

information available to them which was not available to us.

Question: Do you think that the strategy needs a good selling plan to sell it to key stakeholders? Answer: Yes it requires very concentrative effort, not a halfhearted. It requires involvement of all the stakeholders. It is not a strategy to be ignored if we want to shine in this particular region. We must concentrate on the strategy inclusive of youth. It would automatically involve stakeholders because they know it is good

for the future of their children. Now it is the time to change our choices. The change in our choices would come when there will be change in the mind set and the mindset change come only when we come up with new ideas and fresh blood.

Question: How do you look at the implementation process especially after the 18th amendment in which provinces are more empowered to cater to the needs of the population? Will those stakeholders being involved to implement such strategies? Answer: I am from Ministry of Defense. Even the Ministry of Defense is contributing in economic growth in many ways. We run the cantonments, give civic facilities through cantonment boards and those cantonments are better living places as they have better planning and implementation. Their

implementation is monitored all the time. There are checks and balances in the system. Such check and balances are unfortunately not available in the civil sector. You bring hundred devolution, they will not bring those affects until you put some personal effort in that.

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Interview

The change in our choices would come when there will be change in the mind set, and the mindset change comes only when we come up

with new ideas and fresh blood.


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Dr. Samar Mubarakmand Member Science and Technology, Planning Commission

Q: The people who have knowledge are powerless and those who have power don’t have much knowledge. What strategy you devise to turn Pakistan into a knowledge base society? Answer: I don’t say that the people who have power don’t have knowledge. Some of the people have the power and have knowledge too. Devising growth strategy in the Planning Commission was a very hectic process. We did emphasize in the strategy that we have to make sure that the technology and education play a very leading role in the development and growth of the economy. What we have done in this regard is that the universities which cater the education and research have been guided to conduct research in the areas which are relevant to the growth of the economy. We are funding universities to a larger extent in research programmes. We have leveraged those ideas which have to be done on priority for the growth of our energy sector, industrial sector, development of new materials, technologies, software, automation etc. Industries are really looking hard to work on the relevance of it. Planning Commission is serious about the technical people, the technologists, scientists and engineers as they would lead the

advancement of this nation. This nation has to be modernized and has to advance its industrial growth to achieve GDP growth beyond 3%. The products we produce should be exportable and of good quality which requires engineers and scientists. Deputy Chairman said very well that rocket science is easier and this job is more difficult. I am a person of science and in my opinion optimization theory needs to be adopted to prioritize things within economy, as told also by the Deputy Chairman. 95% of our wealth lies in our mineral resources. Pakistan has third largest coal deposits in the world which in terms of energy is bigger than the oil reserves of Middle East, Saudi Arabia and Iraq combined. Pakistan has third largest deposit of gold and silver in the world in Baluchistan and FATA. We can produce cheap energy using our coal resources and I propose Planning Commission to work on two large projects on priority viz. coal gasification project in Thar (Sindh), and copper and gold project in Riko dek. Both projects will give employment opportunities and will help in boosting economic growth.

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Interview


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Dr. Masoom Yasinzai Vice Chancellor, QAU, Islamabad

Question: While conceiving the new growth strategy was you looking at strategy for a knowledge driven economy? Answer: I believe that we have a role to play in higher education institutions. Pakistan needs to move from resource based economy to the knowledge based economy and we, being a university, have started playing our role. First thing we started in QAU is that we are giving access to the students on merit from all over the country. We have strategically planned things even at departmental level to make it more internationalized and we are moving to introduce internationally compatible programmes. We are targeting markets for our graduates across the border. As part of the agenda we have changed our old departments’ structure to the school structures. Recently we have introduced School of Economics and introduced four

years programme and Ph.D. programme. I have also injected fresh blood in form of Ph.D. from North America. We have also started School of Politics and Intentional Relations. Another important thing is that whatever we do in university it should be relevant to the country needs. We have also introduced ‘Office of the Research, Innovation and Commercialization” (ORIC). We believe that whatever we produce it should be of quality and national agenda. We have established a “Quality Enhancement Cell” in the campus to ensure the quality of intake of students, teachers; quality of teaching and research etc. So we are in line with the national strategy which is being devised for building Pakistan for 21st century.

Q: Pakistani society is passing through an awakening phase. Do you see any role of academicians, intellectuals and scientists as leaders of this country in future agenda? Answer: We heard here that Malaysian government has developed a strategy in which General Secretary of a national forum is a professor of a university. Unfortunately in our country everybody believes that we are purely bookish as we are not as useful as

we should be. We need to involve ourselves in all kinds of national affairs. Everywhere in the world academicians are consulted for developing strategies. In Pakistan unfortunately this role is missing. To make a difference we need to involve academia.

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Interview


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Saqib Mohiuddin Business Support Fund

Question: What role of SMEs you see in FEG for the development of Pakistan? Answer: We all understand that SMEs play an important role in the economic development of the country. In Pakistan we have 96% of SMEs being the business entities which are serving as engine of growth for the country. We need to develop entrepreneurship, innovation and growth strategies in SME sector. An important fact about our SMEs is that 25% of our SMEs go

beyond 15 years of survival. Reason is that they are not able to face global competition. Entrepreneurship skills are lacking and they have failed to bring innovation strategies. Good governance is also lacking. I think that this conference will go a long way in introducing new models in SME sector development and sustainability.

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Interview

Ayaz Amir Columnist/ Journalist

Q: Please give some initial comments on FEG. Do you agree with the growth strategy and will it work?

Answer: Good ideas are presented in the conference. Whatever the growth strategy is, it will not work unless we have political consensus and support behind which should

cut across all the political lines. It is important that this strategy should become a part of all government policies and thinking to make it work.

Q: What is the most binding constraint you see in this growth strategy?

Whatever the growth strategy is, it will not work unless we have political consensus and support behind which should cut across all

the political lines.


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Answer: The situation through which the country is passing the government is caught up in short-termism which is not conducive for long term thinking and can’t serve Pakistan over a period of next twenty to thirty years. We should concentrate and emphasize mainly on key factors and key sectors. It is due to our short-term planning approaches that we are facing crises after crises. We need to rise above everyday problems and to think of larger and long term things. So our task is to sell this idea

not just to the people but also to the government. Planning Commission should be a part of decision making team with powers. The ideas generated by the Planning Commission should be sold to the parliament so that representatives of the people get educated. There should be general economic discussions in the arena of all political parties, party leadership and in the parliament.

Interview

Dr. Ishrat Hussain Director, IBA Karachi

Question: To begin with please give some initial comments on new growth framework. Answer: I think that it is a very good beginning to start thinking about challenges we would be facing in 21st century such as globalization, information explosion, urbanization, demographic transition etc. which are realities of today. At least we have started thinking of implications of these global trends. Particularly our youth population is important. 50% of our youth population is going to be in job market and looking for opportunities. If we fail to create opportunities there can be a risk of social explosion. This is the reason we need at least 7% to 8% growth rate in Pakistan. Implementation is very important which requires will of the successive governments. Desirability of reforms and implementation is a real challenge ahead.

About Civil Services Reform I would like to say that the capacity to translate this vision and policies resides in the capacity of institutions which further depends on capacity of the Civil Servants. If we don’t have high caliber Civil Servants who are responsible to the needs of the poor segments of the population then whatever good policies we may have will not get translated into real benefits. About revival of Commissionary system we think that we have to make a distinction between different jobs such as law and order, revenue and disaster management etc. which my commission has also recommended in Civil Services Reform document. There should be neutral administrators in districts. Sanitation,


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education, health etc. should be administered by the local governments. I have also written a chapter on devolution plan for monetization and presented a complete Performance Management System based on integrated value chain system

including recruitment, training, performance management, career progression, compensation and retirement. If we don’t pay well nobody will come to Civil Services. So there is a need for an integrated system.

Q: Do you think that it is a new growth strategy or re-hatched from the old one? Answer: It is a new growth strategy in the sense that it gives a thinking to address the problems of 21st century. We need to think that where the world is going to be and where we have to position ourselves. To

position ourselves we need to think that how we have to reform our institutions, policies etc. so that living standards are improved and poverty is reduced in the country.

***

Interview

Participant Question: To begin with please give some initial comments on Framework for Economic Growth. Answer: Thank you for having me here at Planning Commission and I am pleased to see all the efforts. We were also involved in giving inputs on the FEG to Planning Commission together with our partner ‘Economic Freedom Network Pakistan’. I am pleased to see efforts going to large public, students, and universities and to different parts of the Pakistan. FEG is really a big step forward. The contents and ideas expressed here are phenomenal. Pakistan has such a good youth, dynamic knowledge assembled here which all we guarantee a

positive development. Pakistan falls behind just for not reforming things. Population growth will eat up all the efforts. How successful are policies we can see at India which is transforming from socialist ideas to a free market economy. Free market economies will improve quality of life. Ideas of giving subsidies harm economy and benefit few people. Pakistan needs to take into account knowledge which is already here and implemented. I agree with the sequencing of four pillars of FEG. It has structures and patterns from all over the

50% of our youth population is going to be in job market and looking for opportunities. If we fail to create opportunities there can be a risk

of social explosion.


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world which are also experienced by Malaysia, Indonesia and other neighboring countries. Implementation is the real challenge for NGS. Implementation must go on and it should be a constant reform. Pakistan is

falling back in Economic Freedom Index by not doing things and delaying reforms. The process of FEG needs to be continued.

Question: Is aid good for Pakistan or it is crippling our economy? Answer: Even Western countries have made mistakes in the way of giving aid. The main case study was conducted in Africa, but the principles remain the same. Now we are shifting towards a free market economy. In

traditional aid system countries remain beggars. In new strategy the focus is on creating structures to enable people to earn their own living with dignity which is a much better approach to provide aid.

***

Interview

Muhammad Ali Chairman, SECP

Question: How do you find this conference on Framework for Economic Growth? Please also comment that how can we develop entrepreneurship in our country? Answer: I fully agree with the timing and the approach of this conference and we need a new growth strategy in the country. It is easier said than done. In my session I pointed out that we have seen the period of high growth when we were receiving foreign assistance. We have to look at the internal flaws and need to identify the weaknesses of the system.

One thing which is identified by everyone is entrepreneurship. We need to encourage the businesses and entrepreneurship in this country for that we need vibrant financial markets which can provide financial capital to the people who have talented ideas. With financial gap it is not possible to bring entrepreneurship. Secondly we need to

Pakistan has such a good youth, dynamic knowledge assembled here which all we guarantee a positive development. Pakistan falls behind

just for not reforming things


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reduce the interest rate in this country. We have very high interest rate regime because of which there is no motivation to take the extra risk in the investment in businesses. Legal infrastructure also needs to be improved and policies have to be consistent across the board. We need to come up with

the ways by which trade can be promoted with the neighboring countries and to take benefit of the competitive advantage. We need to improve the education level of this country. All these factors need to work together to achieve high growth rate.

Question: Talking about competitive advantage and trade with India our industrialists seem to be petrified from Indians. Please give your comments. Answer: In terms of talent our businessmen are not less than Indian businessmen. What we are getting is a market of billion people and what India is getting it is a market of 170 million people. So we have a lot of benefit to get and we have to encourage people for competition. Being petrified and

scared of the competition we would not be able to become efficient and effective in longer term. Pakistan has a lot to benefit from the region within the neighboring countries and there is no reason to be petrified and scared of Indian business groups at all.

Question: Initially you talked about entrepreneurship and developing entrepreneurship skills. But an environment where people like Malik Riaz are very successful by just being in real estate why would someone go and setup a business while it is more profitable to invest in property. Answer: We have been a trading nation primarily. We have promoted financial capital as I said earlier. So many people with brilliant ideas are there but they are not able to raise the national capital. For example to open a small restaurant would require fifty thousand dollars. Where from the person would get that money? So we are not providing the infrastructure or the environment where businesses are promoted. The purpose of capital market is to channelize savings of common man and we have failed in doing that. Capitalization is discouraged in this country because if you

are a capital entity a regulator is watching you and regulating you. If you are not a capital entity your tax rate is low and there is no regulation. We need to create an environment where competition and businesses are promoted and we as a nation need to work very hard. Number of investors in the market is low. Over the last few years SECP has taken few steps to encourage investors promote capital market. We have taken the responsibility to educate the investors. We have separate teams for that in SECP and trying to regulate the stock market.

Q: have you been able to implement the capital gain tax? Answer: Capital gain tax was imposed last year. It is the first year that they are

submitting returns. It falls within the domain of FBR and is implemented.

Interview

We need to encourage the businesses and entrepreneurship in this country for that we need vibrant financial markets which can provide

financial capital to the people who have talented ideas.


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Maqsood Ahmad Basra Chief Executive, Atlas Power Limited

Question: Please give your initial comments on NGS. What do you think that is it a new strategy or an old growth plan you have seen? Answer: Whatever we have gone through since this morning is definitely a better latest concept. We have seen many plans in the past and all ended due to implementation

and governance problems. Communication and understanding of this growth strategy is very important.

Question: Do you think that private sector is with us on NGS? Please comment on trade with India. Are you in favor of trade with India? Answer: If the role of the government is limited to provide facilities, infrastructure and give competition and openness then businesses will grow rapidly. When you talk about trade you have to look at the equation on both sides of the borders. We are facing shortage of electricity, we have bomb blasts, severe law and order and security problems, no foreign investment;

while on the other side there is a totally favored market from the world. So we can’t say that we can compete with an economy which has all the support available from the world whereas in our country we don’t have money to invest or even don’t have electricity. Most of our resources are being used in meeting the expenses of the government. We don’t have proper facilities like public transport, proper railway etc.

***

Interview

Iqbal Anwar Kidwai General Manager SMEDA

Question: What is your general opinion about economic growth? Answer: We are getting very fresh ideas by attending this conference. We have also given our comments on this document and

we own it. The dynamics of this growth like governance, openness of markets, cities and youth need to be integrated. Action plans


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should be defined that which sector would play a role to lead this strategy. If we leave it open ended the targets would not be

achieved unless all the sectors in public and private will not work together.

Question: Please give some initial comments regarding the FEG. Do you think that it is a new strategy with the fresh ideas or it is re-hatched? Answer: The FEG is neither a strategy nor a framework. It is a set of new questions and these are drawn from the new economic literature emerged in last three decades. In other words it is a set of rules on the basis of which the economic growth and

performance can be shaped and influenced. The questions which are posed are quite new which would open up a new terrain of policy analysis and actions as a result.

Question: Do you agree with the sequencing of the priority areas proposed in the FEG? Answer: The priorities that have been proposed in NGS are very important. But that doesn’t constitute either a framework or a strategy because a strategy requires two kinds of serious efforts viz. to give greater and concrete approach to improve the quality of life, productivity and liberalize markets etc.; and secondly the implementation mechanism. The intellectual challenge in devising a NGS is that we have to identify the new kind of institutional reforms which require a lot of new research, a look at the history of Pakistan, systems of governance, and its institutions. Whether the markets work efficiently or inefficiently depend upon the institutional framework within which these markets operate. Simply deregulating the markets is not a good idea.

World economic crises happened as the markets were not self regulating. So we need a regulating mechanism and institutional framework for markets. The kind of power structure we have in Pakistan is that we have a coalition of elites which has the power and strong stake in maintaining the status quo. Such coalitions have created institutional structures which exclude common people from economic growth, and restrict open and fair competition in the country. Opening up the markets requires engaging power structures and regulating open and fair competition in the markets. Fruits of the growth should reach not only to the rich but also to people in middle and poor class.

***

We The intellectual challenge in devising a NGS is that we have to identify the new kind of institutional reforms which require a lot of

new research, a look at the history of Pakistan, systems of governance, and its institutions


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BY PROFESSOR RICHARD FLORIDA

WELCOME REMARKS BY


Mr. Richard Florida is a well known name around the world. There are too many facts to read out about him. But let me tell you something about his books “The Rise of the Creative Class”, “Who is Your City” and the latest one “The Great Reset” which are very interesting and look at the global crises and their ramifications as well. Richard Florida is a well known academic and a popular writer. He is writing for The Atlantic, New York Times, Wall Street Journal, The Economist and Harvard Business Review. He has also been featured on every major news channel. He has also been appointed to the business Innovation Factories’ Advisory Research Council and also recently named European Ambassador for Creativity and Innovation. I hope that he will give us a good lesson on cities and creativity. He has some very innovative ideas. The thing which attracts me is the fact that he is talking about creativity.

We have put forward a NGS and urban development is at the heart of it. I would say that the ideas from your work would help us to harness energy of our cities and really reconfigure them. Our cities are exactly the opposite of what Richard told us. Our cities are sub-urban sprawls with no city centres, no culture and no creativity. This is what I want you to talk about and challenge us to rethink on notions of urban growth. Currently we have 90 million kids under the age of twenty and many of them are uneducated and probably not going to get the jobs. Our growth rate is 2%, almost same as our population growth which means that our per capita income would remain the same. So I want you to educate us that where we are going to find the jobs for our kids? And if we don’t find that then who is safe in this world? Thank you very much Richard and we look forward to hear from you.

***

LECTURE BY Professor Richard Florida

Thank you for that kind introduction. I wish we can be with you personally for this wonderful programme and magnificent dinner for both celebrating your incredible accomplishments on the NGS and helping you chart a course for the future of Pakistan.

I applause what you do Nadeem and your entire team, the conference attendees and the participants. I know what you doing is very important for Pakistan’s cities in emerging and developing world. More generally my hope is that you can chart path that others

Special Lecture over Video Conference


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can begin to emulate. First of all I would discuss my ideas on creativity, the creative class, cities at urban areas and anything more applicable to the context of Pakistan and the emerging economies. Main motivation behind all my work is that people talk about trade in growth strategy, exporting as a growth strategy, attracting investments, innovation and technology as a growth strategy; but I want to focus my attention on the most fundamental quality which is shared by all human beings. A nice intellectual lead I made in my research is that it is not simply technology, or trade, or FDI, or even innovation that drives economic growth but the basic human quality of creativity which is there in all six billion people around the world. I think we had forgotten that. If you ask me what lies behind the economic and financial crises is the fact that it began in United States and spread across the world. We tried to build an economy on trading, financial instruments, banking and on speculations and tried to make wealth for making money in an easy way instead of building real economy based on human talent, creativity and human capability. That is why I called my book not the greatest crises, or the great crash, or the great depression but called it “A Great Reset”. What I was able to find by looking back at the periods of contemporary history is that it took twenty to thirty years to resolve the issues of the economic crises and depression of 1930s and 1870s. But in new economies and new economic systems it is raised based on knowledge and creativity. So challenge today before us in Pakistan and across the world is to build new and endeavoring structures, new institutions and models, polices and frameworks which are geared to harness the most fundamental and most essential key economic measure we have which is creativity of our people. We are living in this world of the greatest

economic revolution of human history. This is greater than the shift from agriculture society to an industrial society. Agriculture society was quite disruptive because of two massive worldwide depressions and World Wars and it took about 100 years to build a public policy regime called the new deal. The shift we are going today is deeper and more elemental because for the first time in human history the nature that how wealth is created has changed. In the past we could create wealth from a combination of physical resources i.e. raw materials, massive factories in urban industrial areas combined with labor, capital, and land to produce things and increase our standard of living. But that is no longer a recipe for creating wealth now. So the key to create wealth and improve living standards lies in harnessing intellectual labor and knowledge based production and more importantly human creativity. Now this creative resource has become the main thrust of economic growth. When some people hear about my notion of creative economy and a creative class they believe that it is a latest notion. Only the advanced cities like Silicon Valley in California or the great cities of the West, like emerging cities in China, have that capability. But this is a misreading. In fact in my book I pointed out that the key economic success lies not in 20% or 30% of us who have the great fortune to be members of creative class working in science, technology, innovation, business, arts, culture or the entertainment but the key success in 21st century lies in harnessing capability and creativity of everyone. I learnt this as a young boy by going with my father to the factory where he used to work. My dad had education only up to grade seven. He dropped out from school during period of great depression to help and support his family. He worked in a factory in industrial sector of North New Jersey.


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When I was a young boy I asked my father to take me to the factory. When I entered the factory it was an old industrial building making eye glasses and I was fascinated by the machines and technology. My dad corrected me that Richard it is not the machines that make this factory great but it is knowledge, intelligence and creativity of people who work here. Whether it is a transformation of inputs to products, or to service sector, it is not simply quality of production or reducing cost, but it is addition of creativity in design. It is human knowledge and capability that creates value. Rise of creative economies in context of old institutions is very powerful which is organized around massive production, big companies, sub-urban sprawl and that is where adjustment comes in. Cities that can realign and reset themselves can build new institutions, new public policy regimes, structure and urban norms that enable them to adjust capturing this creativity which will give enormous boost. These great adjustment periods and resets are openings for upwards and conversely downwards movement. The great economist Mancun Oslon and his great book “The Rise and Decline of Nations” argued that these resetting periods often shift geographic locus of economic power, economic development and technological innovation in growth. The reason he argued is because incumbent countries and leader countries/ regions get trapped by the older institutions, frameworks and models that spur their success which he called it trapped by scleroses of arteries - an institutional and organizational scleroses trapped by the old order which doesn’t allow a country or region to go into new order. By adopting a new growth strategy and focusing on harnessing creativity Pakistan has enormous potential and opportunities to insert themselves in global economy in a more powerful and productive way.

Dr. Nadeem mentioned in his opening remarks about focus on cities and creativity. If 21st century is the century of creativity then the rise of cities and creativity are economic forces and main driver for harnessing human potential as wealth generator across science, technology, manufacturing, service and agriculture across the board. The rise of the moderns corporations and industrial firms has become the mechanism for exploiting natural resources combing with capital, labor and building wealth. The agricultural economy in the past was organized around farms and small trading centres. Human productive power, new material and soil was transformed to wealth in and around an organizing system of farms. But in the industrial era the modern industrial firms became mechanism of exploiting resources. The system of mass industrialism and corporations had a geographical analogue – suburban sprawl when companies could break production and in fact move production in different parts of their home country and then all over the globe. They could create industrial parks, areas and large horizontal factories that required roads, production and consumptions, energy etc. The rise of creative and knowledge driven economy has brought us to a new social and organizing unit. Whether you look at the innovative sectors of Silicon Valley which are creating new companies or you look at the clusters in Europe and throughout the world, as Professor Michael Porter also identifies as driving growth and specialization, what you find is that the city or community itself has become a social and economic organizing unit of our time. City is the place where innovation occurs and human beings can combine their talents. Robert Locus at university of Chicago, who after winning his Noble Prize in economics, pointed out to Jane Jacobs that I believe that Jane Jacobs has discovered the very mechanism of economic development which occurs not by building giant firms, ports,


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firms, roads or not through trade but by mobilizing people in cities where we combine them to harness their creative energy that is the spur to the birth of great creative destruction and innovation that drive growth. In my work I am coming to the conclusion that the world is not just flat but the knowledge drives economies which are very spiky. In our research we were able to identify mega regions of the world like Boston, New York, London, Shanghai and many others; and forty largest of which produce more than two third of our economic output and nine in ten of our innovations. In fact the 21st century is the century of creativity and great cities which will harness human capability. I have developed four ‘Ts’ of economic development. First ‘T’ is “Technology”. For growth a country or a city needs to invest in technology and harness it. It needs to create technology in homes, firms, in businesses, colleges and universities. Second ‘T’ is “Talent” which requires investing in talent and attracting talent. Talent doesn’t mean to have a degree. It can come from any corner of the society. A city needs to be vibrant to attract talent and technology. There is a

global competition for talent. A city needs to be “Tolerant” which is the third ‘T’. Many people say that we want to go to Washington D.C. as it has openness and tolerance. A person’s choice for openness and tolerance is a motivator and a pre-condition to attract talent in a city. Inclusiveness is very important and everyone should have an opportunity to live a life with excitement. Finally the fourth ‘T’ is “Territorial Assets”. In a world where every city looks like the same and has become generic; people are looking for something unique about a place which is a community’s territorial asset. One important thing in this regard is the city’s own unique history, culture, artistic history, street food, street music and culture. The fusion of the new and the unique can be a driving force for a city. I am a professor and can speak for ever. But I stop here. I congratulate you and looking forward for questions to answer. I hope that in some small way my remarks help you on this incredible path to a New Growth Strategy based on harnessing human assets and building great cities in Pakistan. Thank you for the opportunity to be with you.

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QUESTION & ANSWER SESSOION

Opening Remarks and Question from the Deputy Chairman, Planning Commission Richard thank you very much. It was really an interesting talk and I have enjoyed it enormously. Even though I have read all your books still I learnt something new. Let me also tell you about Richard that he is also a very good professor and encouraging. He has also encouraged my son, Umair Haque, to write a book and Richard has also written a blurb for that. Richard has told us a number of things and you would be pleased to know that we have included a number of good ideas including 4 Ts in FEG. Before I open floor for discussion and questions I would like to ask you first that how do you think that being a thousand dollar per capita developing country we need to follow the stages of growth, create industry first, things which are way beyond us or jump and start it? Answer by Dr. Richard Florida: This is a very fundamental question. My hunch is that if you look at the traditional ladder model and tried it, it has not let you go to great success. It seems to me that the success of a country with great resources, like Pakistan, lies in its large population, rich history of creativity, and entrepreneurship. We need to enable entrepreneurship in Pakistan. But entrepreneurs you have sent to America and other parts of the world. Every single day they come to America from Pakistan building great technology companies, service companies and call centres etc. I think the talent base is there and we need to focus much on entrepreneurship spirit. Once you enable entrepreneurs and motivate them

they may come back, share their experience here and start businesses. Secondly you have a great number of cultural entrepreneurs in your artistic world in music, food, art & craft etc. and they are ignored by the strategies made by the government because you focus mainly on building large scale industries. I think you need to make a new bargain with your people and tell them that we are going to invest in your talent, creativity, education etc. to harness talent. Bargain on the citizens should be that they use their talent and use capabilities in most productive way to not only try to get a better job for themselves but also create job opportunities for others.

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Questions to Professor Richard Florida from audience

Question: I have a question which looks at the link between agriculture and city’s development. In a country like Pakistan we see disparities between agriculture and urban sector. In this text when we talk about city to be inclusive of agriculture sector it becomes difficult to convince people. How do we do that? Please comment. Answer: I think it is a false distinction. I want to try to clear that this issue is also there in United States and Canada. People

ask there as well that if we go to cities do we leave rural areas behind. Jane Jacobs said that our model typically means that


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agriculture gives us cities. Rise of trade in agriculture has given us cities. But what she has said is that it happened other way around. The development of cities i.e. aggregation of human beings and division of labor happened before the development of modern agriculture as it could only happen when urban population and dwellers were there to demand those products. The upgrading of agriculture and the rise of the more creative entrepreneurs transforming

the farming for sustainable and local ingredients, or transforming simple products into value added businesses. Returns on businesses are much higher in urban areas due to large population or so called spiky world. So our growth strategy should not only bridge the gap between agriculture and urban areas but also to develop a system in which agriculture and urbanization can fit together in a more creative wealth generating pattern.

Question: Cities are new and these are developed in thousands of years. But in context of developing economies, may be about ten years ago, cities were slums. In your analysis have there been contents of creativity in these towns? Answer: A recent book by Professor Edward Glazer at Harvard speaks about it that generally the income level, wages and living standards across the globe are much higher in urban areas and surroundings than rural

areas. Improving city life and making it livable, as you doing in FEG, requires dealing with many problems in cities which is a key path on the road to real economic growth.

Question (by Emiel A. Wegelin, GIZ Program Coordinator): There is a recent book by a Canadian Journalist Duck Sandres titled “A Rival City”. It testifies vibrancy of informal areas in a city. It also told that settlements and informal sector over last forty years had been the dominant mode of generating wealth in our cities and we should not forget that. I would like Richard to respond to that. Answer: Thank you for your recommendations. Duck Sandres is my colleague and a good writer, reporter and I strongly recommend that book. I think there are two things we can do. One is that there are a lot of public policies that impede the process of migration and resource mobilization from rural to urban areas. Secondly we can engage public policies for this and put in place incentives and initiatives to enable the kind of resource mobilization. Jane Jacobs already pointed

out that what makes cities great is when you take some person with some attitude and ability; may be not a lot of formal education, but a lot of ambition and energy; and take them from an isolated community and put them in an affordable city around other ambitious and enterprising people who can work with them and provide them a market. The key strategy for resource mobilization is to attract talent in cities and develop entrepreneurship there.

Question: You talked about the role of innovation, science and technology for particularly developing less developed countries. My understanding is that if you look at the development experience of the industrial nations like Japan, South Korea, even United States of 18th century; they have been using the financial sector to socialize the risk involved in creativity and innovations. How Pakistan’s growth strategy can really build innovation without having financial resources to socialize rest in the order? Answer: First of all it is a very good question and very well phrased. Let me


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answer by way of an example. I am going to say something, perhaps controversial, that in an old economy model if you want to build a textile industry, car or steel industry where massive amount of new capital are required, that might have worked in past. But I don’t think that it can work anymore. The situation I am going to give you from the context of United States is the birth of new economy in the Silicon Valley where no state provisions of financial capital, no heavy arm of government was involved in the venture capital. What happened was that entrepreneurs built success for businesses and mobilized capital themselves.

Somewhere they touched a New York financier, not a big investment bank, for a little flow of money. But the venture capital industry; the one that built inventive companies like Intel, Apple, Google they grew indigenously. Going back to the previous question what I encourage you is that enabling the process of migration and local resource mobilization to occur can grow those entrepreneurs into something like venture financiers. I want you to look at the model of growth oriented and innovative industries which might be a better model for growth than the previous model.

Question (Fatma Gul, Senior Economist, UNDP): Cities are definitely platforms to energize creativity. Do you have some suggestions that while such transitions from rural society to urban society take place, where cities are center of growth and dynamism with human beings having knowledge; we don’t need to go through the same old painful experiences again? We saw painful experiences of transition in early industrial eras in our cities (like we saw in UK) in the past. I would be grateful if you share some best practices with us. Answer: I think your question is very apt. I think that any place anywhere in this world has not done this very well. Even the Canada which has done the best job to go up with social inclusion, diversity, and encouraging migrants even with the best programmes also has rising inequality and political polarization problems. It seems to me that the only way around is to engage every person in creativity to the fullest extent. But these problems of marginalization, exclusion, rising property value in cities are very real and will take a lot of hard work. One important thing is that the people are going to acknowledge the power of cities which is coincidental with the rising of inequality. If we can increase the power of cities and their capacity in wealth generation we can also begin to engage people’s creativity and start

addressing issues. But it requires very hard work to do. Bottom line is that social contracts of industrial age like welfare support, government support in housing etc. are now gone. We need a new social contract which engages people and enables them to be productive. We need to engage communities to use own resources. What I would love to see you is to engage those best practices in Pakistan. You developed FEG which recognizes the need for creative cities and its communities, neighborhood and informal gatherings where people live as a driving force of the economy. We also need enabling the places where we live to become stronger and vibrant and deal with the problems of marginalization and inequalities.

Question (Moeed Pirzada, Journalist): I am a Journalist and my question is very Pakistan specific. You clearly favor a dense urban atmosphere for creativity. You also talked about tolerance, youth and talent. Karachi is one of our major cities which have become very intolerant. It has problems like mafias, land grabbing, law and order etc. Would you comment on


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the issue of a city like Karachi which has communities with ethnic conflicts which has made it virtually impossible for people to develop it? It is a city even where Pakistan’s economy is also stuck. What would be your prescription for an urban city like Karachi? Answer: I am an Italian American. My people were from Southern Italy. When my people moved to the United States they did the same sort of things and went for ethnic clashes with Jews, Irish and other people typically over gaining power in informal city sectors and organized crime and mafias. This practice is very common and recurring in our cities. Only solution is to go for creativity and engaging people. People I grew up with as kid mostly turned into criminals, thieves and were involved in drug dealing. As a kid, like me, they were also very creative but fell outside the channel as they had no other way. Creating

mechanisms to mobilize energies is crucial. We need to channelize people and make them more productive. One of the remarkable things happened in USA is that we saw our cities becoming remarkably safer. We have immigrants from all the over the world. But important thing is the way this diversity is managed to handle issues. To give people hope and channelize their energies in more productive way is the real solution which is good for them as well as for the national growth. Periods of transformation take time to have a drastic shift.

Question (Dr. Nadeem Ul Haque): In this new strategy, or urban strategy, there are two to three charges on us which I want you to tackle. People label this charge at us that this strategy is not poor friendly as we have a focus on urban areas. Second charge is that we are ignoring rural areas. We saw earthquake in 2005 and floods last year. There is an underline narrative that let us build these villages first. My question is that should we encourage mobility into the cities? Or is urban dimension way forward for poverty eradication? Answer: It is a mistake to say that something is urban focused and not rural friendly. I give you an example. Many years ago I was a part of a group between USA and Korea. There was a big debate in Seoul that it has grown too big and consuming all the resources. How do we reallocate and redistribute the resources in rest of Korea? I just said something very simple to them that look at Shanghai, Singapore, Hong Kong and all the cities around you. If you are weak at Seoul you are gone. It doesn’t matter what you try to do to the little cities if you are weak in your big cities. If you are weak in big cities and you don’t have strong city in this spiky world your cities are unable to compete. I ask to my students that should we make

human migration to urban areas a human right. Should the ability to migrate and improve yourself and your family be a human right? I asked them to leave their homes and go to some village in Africa or in developing countries and read their experiences when they come back. Everybody when came back to me after looking at the conditions of these villages said that ‘Richard you are right’. People must have the right to migrate to urban areas. Urbanization creates the pockets where people come and do more, become more productive and innovative. Anywhere if you make these adjustments simpler and fluid it is going to improve the conditions of their lives, community’s life and of the country.

Question (Dr. Nadeem Ul Haque): People also level a charge at us that we have forgotten export-


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led growth. I would like you to comment. Answer: Has export-led growth worked? Have there any shining examples of export-led growth? Is export-led growth sustainable? Is it a way to develop a country? I must say that it was a time bound strategy. In order to develop a country it must develop its own resources, partly God given, partly natural, and the most important resource a country has is its people. Human resources and creativity leave the farm (rural area) and Pakistan and go to London, New York, Washington D.C., Silicon Valley and

Toronto. Make sure that people don’t jump to other countries but jump to cities within Pakistan. For example in Taiwan innovators first moved to Silicon Valley but then they came back and started enterprises at their home. So we need to build such cities in Pakistan where we can mobilize resources and develop businesses. That strategy of human capital development and human creativity is more appropriate and sustainable.

Question: Richard please give us some insight of your book “The Great Reset” and tell us about the issue of “Institutional Scleroses” because we seem to have institutional problems here too. In your opinion how reset is going to happen here? Answer: In every crisis what happens is that most countries are trapped by institutional scleroses. Institutions when become so failed, bank corrupted, have corruption, and so ineffective then finally someone wakes up and says that there is another way to do it better. I think this is what propelled USA over past resets. Idea is that there are so many pockets of the world that have resources to build capability and can harness human capability. Advantage to Pakistan is that it has large number of young people.

Young people are coming looking at world in a new way and they are connected to the world. My hunch is that by harnessing useful energy and giving people ability to live their dreams, mobilize resources and make adjustments in institutions you have great chances to lead them to growth. It is great that you are leading this effort that this discussion started and I encourage you to move as quickly as possible in the frontier of this new urban growth strategy.

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Remarks By


We have here in the panel Mr. Ajay Chhibber (Assistant Secretary General, UN and Assistant Administrator and Regional Director for the Asia and the Pacific, UNDP), Mr. Timo Pakkala (UN Pakistan Resident Coordinator/UNDP Resident

Representative); and two important members of the Parliament Dr. Fauzia Wahab (MNA) and Palwasha Khan (MNA). We are here with the panel to discuss the subject of growth and to respond to your questions.

Questions and answers by Parliamentarians And their special remarks

Questions from the audience:

Question: I must congratulate Deputy Chairman particularly and Planning Commission generally for organizing an outstanding event and such a large gathering in this room. Particularly after 18th Amendment when Planning Commission needs to convert sub-national governments I don’t know why the provinces are absent in this conference on FEG. They should be here and part of this conference as they are the main players in implementation. Question: Political will and commitment is fundamental to reforms, and particularly the reforms we have been talking for the last two days. Under the devolution powers and resources would be transferred from the federal government to the provinces. Do you think that the political will work to make the things happen? Question: We talked about urban development earlier. Do we have necessary resources available, like energy etc., to have that perceived level of urbanization in Pakistan? Should we go for urban development while knowing that the coefficient of correlation between poverty alleviation and agricultural development is very high especially in sub-continent, as opposed to urban sector? Question: We can see a lot of brain drain in Pakistan especially in educated people. Do we have any plan to create opportunities for the people of Pakistan? Question: We heard about what Indonesia and Malaysia is doing for the growth of the country. One thing common in success of both the countries was high political will. Are Parliamentarians serious to bring change? And second question is that if the government changes, will this strategy document sustain? Question (Amer Durrani, World Bank): I have one question to ask from the parliamentarians that when the parliament is going to think about the Pakistan?

Closing Ceremony / Remarks by Parliamentarians


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Question: I was persuaded last night by Richard Florida’s lecture. Framework for Economic Growth focuses primarily on urban development. I would say that if we take example of California in USA they first developed their agriculture sector, created surpluses from agriculture sector, invested in required infrastructure and at the end they have the Silicon Valley. Is there any short cut without going through that route to the growth? I would like your comment on the FEG. Question: We are making policies for the poor people here but all the people sitting in this room are from elite class. Is there any plan to bring poor people here and listen to them? Question: After this conference we would make certain decisions and points to follow on. My question is that would we be able to say “No” or “Yes” at our own to certain projects and points and would not be compelled to do that in Planning Commission?

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Special remarks and answers to questions

By Palwasha Khan MNA

Let me thank Planning Commission and you for producing this document. About political will, which has repeatedly been mentioned here, my view is that political will eventually come from the people of Pakistan. If you felling we are not doing the right things then change us. What we can guarantee is political will for the rest of the tenure for which we have been elected. Political will is not something which I think guarantee sitting here. I can guarantee you political will for the next tenure as I don’t know what happens in the next poll. So it is up to you people and youth which have power of the ballot. I would say that the

energetic youth and community who have been mentioned here also are more important. We have a tradition of scrapping of what has previously been done and to start something new. So by the time project a start delivering there comes a change in government. Do we have magnanimity to own something which is started by someone else? No. Let us be honest to the people and do what they ask from us. We can’t ignore them. so political will is a two way thing and directly connected to the people.

Special remarks and answers to questions

By Fauzia Wahab MNA

I would like to say that FEG is a valuable document. If anybody goes through this

document I am sure that he will find that it is not something political and has nothing to


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do with the political manifesto. Some facts that this document is addressing are the key issues we are facing today in Pakistan. For instance chapter on vibrant markets gives us certain points which are new and we are going to implement it in next two years. I think that no government will disown it. For instance this document talks about ‘Transfer of Property Act 1882’. Who is going to deny that it needs to be addressed and changed? This document also talks about computerization of land records which nobody is going to deny. This document says to unify NTN and GST registration to one tax registration number and nobody would disagree with it. This document is asking for the repeal of “Agriculture Produce Market Act, 1939” which is again

something important and whoever is there in power should look at it. So there are so many important areas identified in this document which we can’t ignore. About ownership of this document I would say that the biggest problem this book has highlighted is lack of continuity. If there is continuity and political stability we hope that the system we have evolved would not be disrupted. If political system has continuity the system here will also move. You have given the example of Indonesia and Malaysia. I think from mid-seventies onwards there has been a continuity and stability in their political system. Every government has owned what the parliament and collective wisdom have decided there.

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Closing Remarks By

Ajay Chhibber Assistant Secretary General, UN and Assistant Administrator and

Regional Director for the Asia and the Pacific, UNDP Thank you very much Dr. Nadeem and I really add my concurrence to what the two esteemed members of parliament have just said. What has to happen is the consensus around the direction of change which is needed here. The real question here is that whatever government comes, as you rightly said, that must own it. There is a need to carry on this document and I think it is very important. I think there is a consensus among your thoughtful people - like the people we have here in this room. Of course you must keep widening the circle. I can tell you that I have never attended anything like this in any other country. I must congratulate Dr. Nadeem Ul Haque and the Planning Commission the way this opening has come together and the way the energy of youth have been involved into this discussion. I know this is coming after many events that

you have already done in past. I think that all those countries in Asia which are growing so fast developed a consensus on such issues over a period of time and then whichever person comes in the power followed that direction more or less. That sort of consensus should also happen in Pakistan and it should not be question of one election or the other. We would really support Pakistan in implementation of FEG for which our ‘Growth Centre’ would be a kind of place which will generate such kind of good ideas and discussions. It is a large agenda and definitely some sequencing would be needed. Some low hanging fruits would be needed to get started quickly. To start with the work like Civil Services Reforms and deregulation are harder to start with. We


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need to start with some quicker things to keep up the momentum. Youth and community need to be the center of the strategy right from the beginning. I would say that the ‘Growth Centre’ idea is a very good idea. The progress which has

been made in last two days was such a rich discussion and I feel that if you get the consensus going on the political will has to be there. If direction is there you can tackle the issues. Thank you very much.

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Closing Remarks and Vote of Thanks by


I think that the issue of political will is in every body’s head. But to remind you that this country has not invested in reform and change. Universities and researchers are there. Show me how many research you have done on this subject? Show me that how much media discussed the reform issue? How many of you have forced parliamentarians to do this reform. Go to them and ask for change. That is how you are going to get political will. Problem with us is that we need readymade cooked food. You take pain and get it. Youth must write papers every day on public service delivery. Come up with research papers every day and prepare your own city plans and growth strategy etc. When you go back to universities discuss our plans and strategies and force us to think differently. About risk management I would say that we already had too much risk management. We want stability in our growth and need to get out of it. We all have to change and come out of yesterday’s questions. Today’s question is that how we are going to educate people and get political will? What we are going to do here is to ask youth and universities and communities etc. that are you ready to change? UNDP has been very kind to offer a think

tank type thing to the Planning Commission which is our new “Growth Centre”. We are setting up it in Planning Commission. So I invite Ajay Chhibber to sign MoU of new “Growth Centre”. It will be an inclusive growth centre for all kinds of research etc. and I also invite universities to participate in it. If we have enough research and thinking the politicians will learn too and we will change. I thank all the donors like ADB, DIFID, USAID, and World Bank for being good partners. I also appreciate and thank Wajid Rana, Asif Bajwa (Secretary Statistics Division), Vice-Chancellors of the universities, HEC, professors, media and friendly youth of Pakistan. I also applause Planning Commission’s team, Members, Chiefs and technical team here for their hard and outstanding work. Finally thank you Ajay and international participants.


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CONCLUSION AND RECOMMENDATIONS

CONCLUSION

The Framework for Economic Growth (FEG) was based on widespread local and international consultations for developing strong local ownership for the strategy. The FEG is well informed by the best knowledge and analysis available locally and internationally. International conference on FEG for Pakistan has served as one of the effective tools for the Planning Commission to share national and international collective wisdom for devising an implementation plan for the future.

The Conference brought together around 500 delegates including parliamentarians, international experts, federal and provincial policy makers, economists, development sector leaders, academia, business community and officials from UN agencies from across Pakistan who shared their ideas and helped Planning Commission to fine tune the strategy. The conference was a remarkable experience where national and international experts critically analyzed the document and endorsed the ideas. The conference also helped Planning Commission to prioritize most critical areas for the future growth and develop key performance indicators (KPIs) to monitor implementation process. Experience shared by the representatives of other countries has also helped the Planning Commission to develop future roadmap and devise a mechanism to make the consultative process continuing and inclusive.

The strategy emphasized the need to improve, inter alia, the following:

- Public service delivery based on sustained institutional reforms that build efficient and knowledgeable governance structures,

- Improving the quality of governance through Civil Services Reforms, - Minimizing the role of the government in the economy and restricting it to improving

regulation and policy environment, - The need to reduce economic distortions, - Human resource development as one of the major objectives of the new approach, - Investing in youth and harnessing their potential, - Energizing youth; engaging communities and inducing investment in human and

social capital, - Investing in tertiary education, vocational and technical training and development of a

knowledge economy, - Investing in promoting entrepreneurship, - Enhancing physical and human connectivity, - Improving the investment climate and reducing cost of doing business, - Functioning of domestic markets; create space for the private sector; - Making cities hubs of economic activities by relaxing zoning and building

regulations,


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- Developing vibrant cities by developing an enabling environment which will be the hotspot for promoting entrepreneurship and innovation, assuring better returns through improved productivity on investments for all investors,

- Inclusiveness of rural infrastructure and markets for growth and poverty reduction, - Recognition of informal sector, - Development of financial markets and institutions and mandi system,

RECOMMENDATIOSNS:

Following are some of the recommendations to effectively implement FEG: - Unless we have political consensus and support behind which should cut across all

the political lines, we can’t deliver the result, - To make this strategy become a part of all government policies and thinking to make

it work, - One of the important challenges for the FEG is to sell the idea to all the stakeholders

in public and private sector. We need to put a mechanism for implementation and buy support from the society, Civil Servants, and most importantly from the top leadership in the country,

- To equip youth with appropriate skills, capacities and knowledge to effectively deal with the present day development challenges. Investing in youth which can accelerate the fight against poverty, socio-economic disparity and gender discrimination,

- There should be a synergy of support from various sections of the community like businessmen, political leadership, administrators and general public to make a very attractive business environment in the country,

- Sequencing of the do-ables would be needed. Some low hanging fruits would be needed to get started quickly.

- Recognition by federal, provincial and local governments to put the cities at the center of growth initiatives.

- New Growth Centre should take benefit of the global knowledge and identify clusters across the country.

- To bring informal part of the city into the overall growth framework and make poor people participate in overall growth effort,

- Greater accountability and better fiscal management are needed to achieve more inclusive growth in developing,

- Results Based Management system focusing on public service delivery should be introduced at planning, budgeting and monitoring stages.

- Development of KPIs for each of the policy initiative for federal, provincial and local governments, and approval from the cabinet to make it a part of monitoring and evaluation mechanism.

- Development of a Performance Delivery Unit (same like as President’s Delivery Unit for Development Monitoring and Oversight Indonesia)

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framework for economic growth pakistan feg-final-report_2-1-2012.pdf

Documents

economic growth feg

pakistan tel

sustained growth

economic reform

new development framework

national economic council

quality development

international consultation