By: Sourajit Aiyer
An advance in annual gross domestic product of around 3% in recent years does not reflect the true potential of Pakistan, a country of 180 million. While recent positives highlighted in the second review of the IMF during its assistance programme for the country suggest the economy is taking constructive shape, a lot is still needed to sustain and enhance that momentum.
The number of graduates and professionals is increasing each year. If job creation fails to keep pace with talent supply, then the youth’s restlessness and frustrations with the establishment will only increase. Once an organised job market brings in more people within its fold and income sustains a northward trend, the community’s purchasing power rises and creates more demand.
Apart from jobs, recent newsflow suggests key challenges facing the economy are: boosting exports, increasing foreign direct investment (FDI), reducing dependence on foreign assistance through fiscal self-sufficiency, and converting into a more producer-oriented nation.
These challenges are already known to everyone. Potential solutions are also known. But how can the economy utilize this improving climate to hasten the economic advance? At such stages, it is imperative to identify and build upon areas of ‘competitive advantages’.
These are areas where a country already has some inherent resources, which act as a foundation. Thereafter, once it invests to further develop the talent, processes and competencies of these sectors, they have the potential to grow much faster than other sectors.
This helps it to become a producer-nation of choice in the global arena in those areas. The aim is to become specialists in areas of competitive advantages so that it becomes a country of ‘first-recall’, or at least ‘initial-recall’, when foreign partners are looking to source or invest.
Most importantly, these build brand for the country, and if one looks at the global context, it is critical to create branding in today’s competitive age. Branding creates relevance and recall.
Experience of emerging markets shows India did it in the IT/software sector, Taiwan in chips/semiconductors, China in hardware manufacturing, etc. This enhances opportunities for sustained economic growth, investing into mass job creation, and meeting the changing aspirations of its people.
Pakistan already has competencies in textiles, home furnishings, primary products etc. But it needs more to achieve the economic magnitude required for a country its size. In the next pages are six areas where I think the country can convincingly build competitive advantage.