A country like any brand needs to present a unique identity to the world at large just like the business of a successful business is to create and sustain a brand or brands of its products or services. While there a successful economy is comprised of businesses that are producing goods that have consumers across nations, it is the country where those customers reside that determines the availability of those of goods to their citizens and to a large extent the demand side of it.
Foreign Trade is crucial to economic growth and prosperity of a country while resource generation capacity of a Government can translate into spending directed at achieving growth. Massive government spending in China was able to deliver double digit growth rates till 2013; reducing poverty to less than 3.3 percent of the population.
Prioritized investments, inward transfer of technology, trained workforce and lower cost of production enabled the Chinese to become competitive sellers in the international market; the Global Competitiveness Index 2017-2018 ranks China 27th in the world. That says something about that country’s brand image. A country’s image can enhance a its international trade performance and diplomatic positioning.
We do have a few firsts in the world, we make the most soccer balls in the world, 50 percent of the world output, we have the world’s largest deep-water sea port, the Karakoram Highway, connecting China and Pakistan, is the highest paved international road in the world and the youngest Nobel prize winner is from Pakistan, to name a few. Do we have unique selling proposition as a country? Can we bring an advantage to the market?
The numbers in our economy do not reflect the true potential of Pakistan. Our major exports are unable to finance even few of our major import costs which are said to be only 46 percent of the total imports. China has a total debt-to-GDP ratio of 260 percent, but their trade surplus amounted to 421.44 billion U.S. dollars in 2017 while the fiscal deficit was about 2 percent. What if we are able to even out the twin deficits (generally referred to as balances as they are in positive for some countries)? we will still need to be able to produce goods and services, on a sustainable basis, that people in other countries are willing to pay for. Balancing of books and achieving discipline is a great idea and one that is much needed, but it is not a big idea.
The focus needs to go to building capacity of generating export earnings through targeted investments (FDI and local both) in textiles value added goods, packaged &processed food, business process outsourcing and most importantly technology-based industries, smart phones& electronics, for example, that can produce high value products. With local demand going up, the cost of production in China will go up and industry will move towards innovation, a relocation of industries will start taking place, which is an opportunity for us to diversify our export base.
Information communication technology (ICT) is another sector that can bring competitive advantage to our economy. It brings in revenues in the vicinity of a billion USD and Pakistan ranks among the top 4 free lancing countries. Note that this is without support of the banking industry and the absence of venture capital funds. It is being said that within a decade, China will overtake the United States as global leader in artificial intelligence. Shenzhen and Beijing have become important centers of innovation and start up activity. We have the seventh-largest pool of scientists and engineers and the fourth largest broadband internet system in the world is in Pakistan. We can learn in the areas of regulation, venture financing, commercialization and scaling up and bring life to the ecosystem that can produce entrepreneurs and exports.
Building a good country brand and strong reputation for Pakistan will be the key in developing a positive country of origin effect global consumers in the competitive world we live in. Exports carry the public image of products and services.
Pakistan needs a transformative “new deal” with an engaging definition of what the point of arrival will look like for the new Pakistan. Big Ideas need policy making to go beyond optimal policy prescriptions, finding targeted interventions, unlocking constraints to set in motion a long-term cycle of virtuous growth driven by trade. The list of to do things tends to be long, while the success lists are short, says Gerry Keller. The ever-looming question “to be or not to be” for us; now needs to evolve into “being and becoming”.
Published in Daily Times, October 1st 2018.