ISLAMABAD: Pakistan would need to double its share of skilled workers to reach the level of Chile, says the World Bank.

The bank in its latest report, “the World Development Report 2024: The Middle Income Trap”, stated that more than 100 countries — including China, India, Brazil, and South Africa — face serious obstacles that could hinder their efforts to become high-income countries in the next few decades, according to a new World Bank study that provides the first comprehensive roadmap to enable developing countries to escape the “middle-income trap.”

It further stated that in many middle-income countries, power markets are still a monopoly: an SOE operating under a vertically integrated utility remains in charge of generation, transmission, distribution, and the retail supply. This arrangement hinders competition and results in the inefficient use of resources.

In countries that include Pakistan, Poland, South Africa, and Türkiye, SOEs account for 84 percent of total installed capacity. By contrast, the private sector owns about an equal share (80 percent) of the installed capacity of renewable energy.

The share of skilled workers among the workforce is very low in low-income countries, but it increases steadily as countries move from lower-middle-income to upper-middle-income to high-income status.

Pakistan would need to double its share of skilled workers to reach the level of Chile and China would also need to increase its share substantially. In general, as middle-income countries grow—particularly as they approach high-income status and must innovate rather than simply adopt technologies—they require increasingly sophisticated talent. Such transformations in the economy make the development and efficient allocation of talent particularly important for middle-income countries and place social mobility and equitable access to opportunities at the forefront of policies to promote growth and social welfare.

In Pakistan, female physicians are considered “trophy brides” in the marriage market. More than 70 percent of graduates of medical school are women in Pakistan, and yet only 23 percent of them practice their profession after they graduate.

In Pakistan increases in upstream markets’ tariff duties reduced the productivity of firms in the downstream markets. In Peru, firms that were helped to enhance their capabilities in the early 2000s experienced a 17 percent higher export growth rate than firms that did not participate.

Copyright Business Recorder, 2024