Prime Minister Shaukat Aziz has said result-oriented reforms and continuation of policies have played a key role in putting the economy on the right track. However, the country still faces challenges of high inflation and increasing current account deficit.
He was addressing the 21st annual meeting and conference of Pakistan Institute of Development Economics (PIDE) here on Monday. The Prime Minister said that Pakistan had made tremendous achievements in all sectors of economy, "and today it stands tall" among the world community with better GDP growth.
He recalled that six years back Pakistan was really on the verge of default and at that time the government decided to go for bold steps to correct the wrongdoings of the past and set the economy in the right direction. This strategy, he added, worked to the expectations of the government, "and today Pakistan is doing extremely well".
The Prime Minister said that the policy makers were making all-out efforts to bring inflation within reasonable limits and reduce its negative impact on the people.
He stressed the need for big water reservoirs and said that the government was going to take bold steps to construct big dams to meet the future water needs.
He vowed to impart technical training at mass level in order to move Pakistan towards knowledge-based economy.
He said: "Productivity growth requires focus at the whole economic paradigm and not just one or few elements, if we have to remain competitive and a fast growing economy."
Before taking up the theme of the PIDE Conference 'Skill Development, Productivity, and Growth', the Prime Minister elaborated his government's approach saying. "We believe that integration into the global economy represents both a competitive challenge and a tremendous opportunity," he said.
Shaukat said that corporate profits were all-time high in Pakistan now as profits were essential for creation of new investments. He added that technological advances had allowed markets to expand as never before.
He said that capital was flowing across geographical boundaries and continents to places where it finds better margins.
The PM said: "Rapid improvements in the production technologies have changed the complexion of the labour market not just in Pakistan but all over the world." Last year, he admitted; " we had some overheating of the economy as we violated the range of sustaining growth rate between six and eight percent by going beyond eight percent, but we did manage it. Nevertheless, this put inflationary pressures on the economy in the wake of prices already being under pressure of the international oil prices hike." He said "This year, we would be achieving the adequate target." The Prime Minister said that earthquake had struck Pakistan on October 8 leaving behind widespread devastation and enormous loss of life and property. "But we are determined to provide relief for the destroyed infrastructure and the lost livelihood in the shortest possible time, without affecting our economic growth."
Highlighting the theme of the Conference, he said that the above three elements were inter-related. He said: "We recognise that an efficient and innovative economy is critical if we are to achieve sustainable growth and prosperity for Pakistan. The real key to sustain higher growth is higher productivity but several factors impact productivity growth, which include education and skill technology and operational physical infrastructure".
He added: "We must realise that innovation and know-how of a highly skilled workforce are the economic edge of the 21st century. Consequently, when we talk of strengthening the education and skills of our people, we mean to strengthen our economic advantage. We have huge human capital, with ingenuity and innovativeness."
The Prime Minister said that the government was focusing on establishing national technical and vocational training 'Authority', bringing all institutions under one umbrella, sustained increases in investment, promoting information technology, upgrading industry and building the national trade corridor by investing in human capital and promoting the social sectors.
He noted that an effective strategy was in place now for a relationship between government, business, training providers and all partners. He said: "Our mission is to convert our progress into meaningful gain for all segments of our society."
Earlier, Dr Atta-ur-Rahman, Advisor to Prime Minister on Science and Technology and Chairman Higher Education Commission (HEC), delivering keynote address, said: "In this rapidly changing world, science and technology has become great divider as the rich are becoming richer and the poor poorer. However, there is a hope as education and skill-development can help improve the situation rapidly."
He said that now socio-economic development was no longer dependent on natural resources. Therefore, the vision for the future was knowledge-driven. In this scenario the key challenge for Pakistan was to become a significant competitor in the 'global knowledge economy.' To this end, he said, "there is a need for research to meet our needs".
Atta said that Pakistan should learn from the experiences of countries like China, Korea, and Japan; especially from China which is the fastest growing economy in the world. The basic pillar of China's strategy is massive human resource development.
Dr Rahman said that to achieve the objectives of industrialisation and socio-economic development a number of steps had been taken, "but still there is a lot more to be done".
He stressed that children "are our real wealth" and Pakistan is blessed with a huge pool of creativity as Pakistan has 100 million of population below the age of 25. However, the challenge is to empower them with quality education and skills and provide them opportunities to contribute to the process of socio-economic development.
PIDE President in his presidential address, entitled 'Skill Development in Pakistan', said that there had been significant improvement in the human resource development indicators of Pakistan in the past few years, "but still we are way behind". Similarly, in the last few years, Pakistan had improved in the field of technology, as indicated by the World Economic Forum Report, "but still our economy is lagging in this respect as well".
He said that Pakistan lies in the low level of skill development and it must move out of that.
Dr Kemal said that in terms of skill development there are 3 types of skills: creative and cognitive skills, personal and social skills and most importantly vocational skills. However, Pakistan does not possess these skills in the required quantity. At the same time, quality is also not up to the required standards.
He said that skill development, human resource development, and technological progress "are very important if Pakistan is to make steady progress in terms of sustained economic growth".
In the morning session, Professor M Ali Khan delivered the Iqbal Memorial lecture.
Professor E Evenson, of the Department of Economics, the Johns Hopkins University, Baltimore, USA, chaired the session.
Professor Khan in his lecture said that a resolute working between the boundaries of economics and sociology without privileging the material or the symbolic need should be of studying the transformations between them. These notions did not spring from pure theoretical work, but from a need to identify the principle of social effects. These can be seen clearly at the level of individual agents - where statistical inquiry inevitably operates - but cannot be reduced to the set of properties individually possessed by an agent.
He said that different individuals obtain very unequal profits from virtually equivalent (economic or cultural) capital, depending on the extent to which they can mobilise by proxy the capital of a group.
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