Pakistan’s competitive advantages in six key areas

But since the population is earning more, it is able and willing to pay for convenience. Apart from longevity, increasing awareness of hygiene is another factor. Packaged food addresses hygiene better than the raw version.

There might be a rationale to invest into further processing facilities, given this would have a growing domestic market as the economy becomes larger, plus a major export market if costs remain competitive.

Currently, most Asian department stores stock processed/packaged foods from Thailand, Malaysia, China etc. Pakistan already has a ready supply of raw products like meats, grains, fruits, etc, so can compete effectively with the incumbents.

Production processes also evolve, as evidenced by the large-scale cattle farms in Argentina etc dedicated for meat produce. Most importantly, this sector addresses a major social objective. It is a major employer for the female workforce, thus ensuring women contribute to the economic process and increasing household income.

Skills are also easily developed, since the assembling and packaging process is not as complicated as in some other manufacturing sectors.

ANIMATION AND GRAPHICS

This area might sound unconventional, but I firmly believe that most people in the South Asian region have a creative and imaginative streak in them.

Maybe it has come through heredity due to our centuries-old cultures, or maybe it has come as a ‘counter-force’ to take the mind away from the hardships our countries have faced historically. Whatever the reason, there seems to be an abundant supply of creativity and imagination in this part of the world.

Developing the animation and graphics sector might be a way to channel this talent productively. Thanks to increased proliferation of advertising and entertainment content, there is a big demand potential for both graphics and animation worldwide.

Also, as the experience of evolving social structures in most large economies shows, more children end up playing on games or watching TV content for entertainment, rather than playing outdoors. While this might not sound like a healthy proposition, Pakistan might eventually also go the same way.

Japan, Korea and India have developed hubs of production, whose content are viewed globally today. Increasing the manpower supply needs professional institutes dedicated to these disciplines, which churn out skilled professionals in designing, visualization, artwork, character modeling, etc. The inherent imagination and creativity will achieve the rest.

POWER SECTOR

Despite getting close to resolving its electricity “circular debt” conundrum – where big, government consumers cannot pay suppliers, creating financial blockages and leading to shortages – the country still faces energy challenges.

Increase in economic activity will demand even more power. Prices of oil and natural gas imports will not become much cheaper, keeping the cost of producing electricity high.

For a country with a large area and energy shortages, large-scale ‘Solar Farms’ connected to the national/provincial grids might address some of the shortfall. Solar photovoltaic panels are easily set up on tracts where real estate and agriculture development are not occurring.

The main challenge is the panel cost, as it can make the per-unit electricity costly. However, as demand picks up with increasing acceptability of energy alternatives, the cost of panels can be expected to move south.

An example is that of compact fluorescent light bulbs in India, whose price fell drastically in recent years as demand increased. Local factories of panels can also come up with improving visibility of the demand potential, creating further jobs and export opportunities.

Panels are the main cost, as sunlight is free. Some of the cost incurred can be realised by staggered pricing for higher levels of electricity consumption per dwelling, though this is a sensitive issue. Owners of the identified tracts need to be compensated through leases.

Earmarking such land parcels at the initial stage itself would help estimate the quantum of panels to be procured, and thus bargain for better pricing. Output can also be exported out to its neighbouring markets if the rationale and network exists.

TEACHING ENGLISH

Sending out instructors for English-language, primary and secondary education might seem unconventional too, but there is a rationale.

First, many countries have emerged from decades-long civil wars in recent years. Their middle-aged generation spent most of its time in conflict zones and did not pick up education to that extent. Hence, the supply of instructors to teach their young generation is limited.

Second, there are countries which are seeing growth now, but need to increase their qualified workforce to achieve the next level of development. But education enrolments were not high in the past, hence the supply to teach increased number of students is limited.

Third, there are countries where the number of English speakers was limited, but which are focusing on this skill in today’s modern economic age.

Examples of all the three cases abound across continents. In order to meet the supply of instructors, there might be potential to send out qualified teachers to those countries.

The region has excellent educational institutions, which are producing quality manpower in line with the British education system. Hence, supply is assured and of good quality.

Such instructors might emerge as a key source of foreign remittances in coming years. They might be cost effective as compared to instructors from Western countries. For instance, a number of English instructors have moved to China from the West, but I am sure the cost of Asian instructors would be lower comparatively.

The only reason why I am limiting the scope of instructors to schooling is because schooling content is more universal across countries, and this is the foundation which many countries are unable to fill in. Higher education can be the next stage.

It is imperative for Pakistan to utilize its current improving climate by concentrating on areas of competitive advantages. It has to emerge as a country of initial-recall in the global market in those areas ahead of peers.

Its businesses have to increase their visibility on global platforms like road shows, tradeshows and forums. Developing Pakistan’s areas of competitive advantage will help achieve long-term mass employment, sustained economic growth, export earnings and it would build a brand for the country in the global arena.

The author works with a leading capital markets company in India. Views expressed are entirely personal and do not represent those of any entity.

2 thoughts on “Pakistan’s competitive advantages in six key areas

  1. Sourajit Aiyer

    Dear Sir,
    Thank you for your comments. It was encouraging to note that my thought-process on the topic was more or less in the right direction. I had narrowed on these 6 areas based on initial research and reading and thereafter, some drill-down thinking and deliberation with ideas that get formed in the process. Perhaps you might have some advice on how to convey this article and its 6 areas across to Minister Ishaq Dar or Minister Khurram Dastagir. I had written a similar note on Bhutan as well, based on observations made during the personal visit in Jan. The Bhutan piece was also posted by Ms Antonia Oprita on http://www.marketmoving.info. You might find that piece interesting read as well. In fact, I have been researching on some preliminary points on Bangladesh market since early-May. Hopefully might be able to finalize it soon. Thanks again for your comments.
    best regards
    Sourajit Aiyer

  2. Mohsin Khan

    The focus of the Pakistan government has been exclusively on the current problems plaguing the economy–energy, public finances and external imbalances. As such, economic policies have been geared to these immediate problems and only limited attention has been paid to long-run economic development of the country.
    Determining Pakistan’s competitive advantage is exactly the way to design a long-term economic strategy. The areas identified by Sourajit Aiyer are the ones that the Government of Pakistan, and particularly the Planning Commission, should be looking at seriously. I would add in IT where there is a booming cottage industry that needs to move up in scale. Pakistan also has cost advantages in manufacturing because of low wages and a favorable exchange rate. It lacks raw materials and inputs, but hopefully opening up trade with India will result in cheaper inputs.
    I hope that policymakers and businessmen will see the long-run potential of Pakistan and act to realize that potential.

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