New technology to foster economic growth
A high economic growth of 7 to 8 per cent is required to fight the country’s rising poverty, create effective demand and generate more revenues so that its mounting debt burden is reduced. Pakistan should create more exportable surplus to reduce its rising trade gap by vigorously promoting major productive sectors like industry, agriculture, infrastructure, and SMEs

By M. Oman Ghani

Technology constraint is one of the main problems that hinder socio economic development in Pakistan. Pakistan has not yet been able to make requisite advancement in modern technology in some major socio-economic sectors. In 2006, Pakistan’s position in the global ranking was 86th in technology index, 75th in macro economic development index, 91st in global competitiveness index and 134th in human development index. This is why we have poor national health, low education level and fluctuating economic growth. If Pakistan wants to enter into the club of middle income group of countries it must assign priority to latest technologies, along with developing a few of its major sectors. After recording a high GDP growth during 2003-07 (average 7.3 per cent), it came down to 4.1 per cent in 2007-08 and further down to 2 per cent in 2008-09.  For the current fiscal year (2009-10), a target of GDP growth has been projected at 3.0 per cent.  A growth figure of the economy below 5 per cent is not encouraging for a country like Pakistan, in view of its rising population, increasing unemployment, more than proportionate rise in the number of younger population and their demands for appropriate jobs.  A high economic growth of 7 - 8 per cent is required to fight the country’s rising poverty, create effective demand, generate more revenues so that its mounting debt burden is reduced, create more exportable surplus to reduce its rising  trade gap by vigorously promoting major productive sectors like industry, agriculture, infrastructure, and SMEs.  There is no second opinion that to create a favourable environment for high economic growth, priorities need to be set up and execution of the policies need to be expedited.  The priorities should also include the solution of hurdles and impediments in the way of rapid economic growth. The main impediments currently facing the nation in general and commodity producing sectors in particular are not beyond the reach of the government, and the private sector, which may be dealt with the help of latest knowledge and technology.  Pakistan’s economic growth can be accelerated by ensuring effective utilization of available resources. 

Despite the fact that several incentive packages were introduced to give a new life to rapid industrial and agricultural development by various governments, it is not showing an encouraging result.  This is because Pakistan’s deep rooted and creeping problems in the way of rapid growth of major sectors are not being resolved properly and effectively. There are several sectors which demand due attention like energy, infrastructure, industry and agriculture etc which cannot be modernised unless adequate resources are created with the help of latest scientific knowledge and technology.

Energy crisis is a huge issue and no quick fixes are possible in the short run. But in the long run the energy shortages could be met with the help of latest technology and investment.  Low agricultural productivity, narrow tax and export bases, trade policy distortions, and huge non-development expenditure by the government are among the major reasons why the government has not been able to generate adequate public savings for a number of years.  The government needs to pay immediate attention to food crop production to feed a large and growing population. The international price of rice and wheat has doubled in the past few years while, freight costs have also increased sharply on the back of rising fuel prices.  It is a common misconception that the improvement in agriculture alone holds the key to lift rural population out of poverty.  Rural population accounts for about 70 per cent of the total but 80 per cent of Pakistan’s poor live in the rural areas. Agriculture accounts for only about 40 per cent of rural household incomes and the poorest 40 per cent of rural households derive only about 30 per cent of their total income from agriculture.  Fiscal incentives and lower energy costs would give a shot in the arm to the industry to increase exports, boost food production and would help lower overall inflation through more supplies and lower costs.  Cutting the overall deficit through new or higher taxes would also lower government borrowings and dependence on external sources.

Our agricultural sector is facing many problems and some of the major problems are the conversion of arable land into non-agricultural uses.  Water logging and salinity and land erosion scenarios are the most disastrous of the present day crisis.  It has been estimated that throughout the country, everyday approximately 500 acres of farmland is taken out of agriculture by the expansion of settlements, roads, factories and many other non-agricultural activities.  It is predicted that if this trend continues then after every decade approximately a million acre or more of crop land would be taken out of agriculture in Pakistan. Pakistan is a rich country in the world with regard to its well-knit irrigation system. Over the years, about 40 per cent of the irrigated cropping land in Pakistan, which produces around 90 per cent of the total agricultural output of the country, has come under water logging.  This makes the land non-cultivable and poses a serious threat to the agriculture sector and to the country, as agriculture is the bloodline of Pakistan’s economy. Salinity and water logging are adversely affecting agriculture at an alarming rate in Pakistan.  It is not that the problem has been left unattended.  Numerous efforts have been made in the past 40 years to counter water logging to salinity and retrieving lost or damaged land. All campaigns in this direction, however, suffered from two shortcomings.  One, while some affected lands were restored for cultivation, the malaise continued engulfing other areas.  Here also latest technology needs to be introduced to reclaim lost land.

The menace of water logging and salinity is very grave in Sindh and many parts of Punjab. For example, the menace is rapidly spreading in the Nawabshah district and other parts of Sindh despite various measures, taken by the government for its control.  The water logging is not only destroying agricultural lands in rural areas, but also posing serious threats to the properties in urban areas.  According to experts, the ground water level has come up to very close to surface particularly in Nawabshah town.  Salinity and water logging is destroying trees, parks and gardens of the towns as well.

Technological development is more essential for prosperity, security, health, environment, and quality of life.  Capacity of any economic or business sector to meet consumer demands heavily depends on the availability and adoption of new technology.  In a developing country like Pakistan, industrial R&D becomes more significant particularly at a time when the level of competition, production processes and methods are rapidly changing and advancing on the globe.  It is also inevitable to cope with ever-increasing challenges to the economy posed by the free markets around the world.  National economy has been passing through critical times for many years.  Today the country is in fact facing a negative growth rate when inflation and other factors are taken into account. It is the extensive use of technology, R&D and resultant high value addition through innovation in products and services that has made the developed nations as high income economies and financially strong.  Our economic woes can be substantially solved only through their route.  Unfortunately, in Pakistan comprehensive institutional mechanism has been absent towards these objectives, although the nation is gifted with tremendous talent, knowledge and resources.  Effective interaction between the industries, R&D institutions, academia can bring good results in a short time.

Technological advancements are the only solution to the economic challenges being faced by the country and both the public and private sector would have to pool their efforts to achieve the goal of progress and prosperity.  There is a coordinated policy to enhance productivity growth and to exploit natural resources of the country.  Better application of technologies of broad national interest can improve many aspects of social and economic development from pest-resistant crops to less wasteful food processing; from reduction of environmental contaminants to purification of water; and from more reliable electricity to more efficient and affordable communication and transportation systems.  Almost every area of business and economy, including agriculture, food storage and export promotion is intertwined with the technological capabilities of the country.  The bureaucratic hurdles and obstacles at the working level faced by the investors and common citizens in their day to day operations are still considerable. 

There has been a decline in the unit value of Pakistani exports.  While favourable domestic policies and aggressive entrepreneurs can bring about an increase in the quantity and quality of exportable goods,  our commitment and dedication to turn things around for the betterment of the country should be as strong and fierce as anyone else’s. And our appetite for adopting new technology to increase productivity and modernization should be second to none.