Daily Times

Pakistan economy has been in a low growth trap for last three decades while its neighboring countries China, India and Bangladesh have sustainable moderate to high economic growth rate during the same period. There can be many reasons for Pakistan low economic growth including its peculiar geographical location and geo-strategic circumstances. But its more than that and one needs to evaluate it. Economic growth mainly depends upon two factors: growth in size of the labour force and increase in productivity, output per hour. Pakistan economic growth may be linked with increase in labour force due to high population growth. However, fruits of this increase in labour force remain limited as 50% of its labour force (Female) is not very actively participating in theeconomy. On productivity frontier, Pakistan has not very encouraging picture mainly because productivity is based on knowledge, learning and advancement in S &T. Pakistan has not only low literacy rate but its performance at secondary and tertiary level is also not matching with those of modern requirements.

PTI was great proponent of investing in education and health when it was in opposition. PM Imran Khan used to say he would declare educational emergency once he had assumed power. Many people borrowed Imran Khan narrative of investing more in education and health than building hard core infrastructure. But in practice it’s not the case as government has allocated Rs. 43 billion in the budget which is almost 40% lower than that of the last year. This budget cut will increase miseries of the poor students who get financial assistance in public sector universities to continue their studies. Universities have to increase their fees. Research in universities will be compromised as public universities had very limited funds available for importing chemicals and research equipment. Pakistan spending on a university student is already lower than most of the countries. Pakistan spends around $1500 per student per year while India spends almost spends $5000 per student per year in institutions like IIT. US spends 40,000 to 80,000 USD per student per year (varies across universities). Though money is not the only factor but it’s a major factor in carrying out research in public sector universities and providing skilled and trained manpower to the society. Productivity, output per person, can only be increased if there is a good quality labor force produced at the universities.

Unfortunately, some naïve analysts start comparing research output and quality of our domestically produced graduates with those of the US or other advanced countries. They forget that Harvard University total endowment is many times higher than that of total export of Pakistan.Moreover, most of the government advisors don’t know the difference between academic, applied and policy research. They find university research has no relevance to the issues of the country. Even if this is partially true it does not mean to reduce funding for local research and development, but effort should be made to make research more focused and demand based.

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One mustrealise that Pakistan low economic growth and stagnant export is mainly due to human capital deficit.Pakistan excessive reliance on having hard-core infrastructure ignoring software development, and assuming that projects like CPEC will make us grow on sustainable basis are misplaced.Increase in export is an indicator of how competitive and innovative an economy is? Whether there is rule of law, culture of tolerance, honor of social and property right, innovation among many others. Pakistan support, surgical, electrical and many industries have failed to have brand names because of lack of managerial and organizational skills required to work on such issues. Pakistan needs software infrastructure which means investment in people. It can’timportsoftware: rule of law, property rights, minority rights, tolerance, talent attraction and trained manpower. It is always a local phenomenon and it also takes time. Universities are the places from where this software development emerges all over the world.

Our policies are mainly formulated either by following best practices suggested by consultants or adopting outdated strategies. These best practices are not applicable as one size does not fit all. Pakistan has already been suffering from lack of research and dialogue locally. There is need for dialogue, conversation and ideas debate locally instead of importing technocrats/consultants.

If Pakistan has to achieve high economic growth, it has to enhance its productivity. As Nobel Laureates Stiglitz writes “Central to rapid growth is an increase in knowledge, and the underlying basic research has to be supported by the government.” If US government has to do, then its obvious that research and quality education in Pakistan can’t be left at the hands of private sector. Private sector sole purpose is to maximize profits without paying attention to social returns.Cut in HEC budget is not an issue of underfunding of the universities but it indicates compromising on productivity which is already stagnant or on decline in many areas. It is universities from which all welfare comes from. Electronic, print and social media is busy being busy and follows noise. HEC budget has hardly received media attention.

Advanced countries who have achieved high economic growth was mainly because they improved their productivity over decades. Their productivity enhancement rests on foundation of knowledge emanating from their universities. Pakistani Public sector universities are serving common masses. If public universities funding is not increased this will lead to further widen inequality. Good quality affordable university education to most of the youngsters is only recipe for prosperous Pakistan. Universities not only focus on scientific research but also provide key role in providing skills to youth matching to the demands of the society.

Investment in research and development must come from the government .Research is core for increase in knowledge and is a public good. Any public good if left to the market forces, it is always undersupplied as per standard economic theory. Private research is almost zero in our country and even if it is there, it is always kept secret all over the world. Therefore, it is essential for large public investment in research especially basic and applied research.

The writer is a freelance contributor