Chinese GNP increased 35 times since 1978 through a combination of freed markets and strong central planning. Back in the 1980s, Japan, Inc was a popular moniker for coordinated Government-Business...
Chinese GNP increased 35 times since 1978 through a combination of freed markets and strong central planning. Back in the 1980s, Japan, Inc was a popular moniker for coordinated Government-Business action. Even in USA, where the Department of Defence and NASA funded the birth of Silicon Valley, even today Elon Musk has obtained almost $5 billion in government tax breaks, incentives and funds, says a press release.
What this tells us is that, in high growth economies and even in advanced free market ones, while the private sector drives the economy, it is supported by the government through meaningful, coordinated initiatives that are beyond garden variety ‘enablement.’ While tactical planning, such as for local roads, schools and hospitals, and their budgets and execution should be devolved down to the district level, strategic planning, coordination and monitoring has to be undertaken at the federal level. What is an example of such planning? Take agriculture, for example. A real agriculture strategy would include crop selection, water management, technology transfer, R&D, innovation, canal lining, reservoirs, supply chains, credit and funding, regulation, taxation and incentives, human resource development, institutions, and international linkages and value chains. Success would mean coordination across all these elements and their interdependencies, monitoring of outputs of each link in the value chain, and then learning and fine-tuning. Such a plan would also cut across multiple government departments, other institutions and the private sector.
Skeptics would rightly argue that when even consistency of planning, lets alone its quality, have been issues in the past, however can we hope to achieve such sophistication? In Governing the Ungovernable, Dr Ishrat Hussain reminds us that Pakistani planners and bureaucrats attained great successes in the nineteen sixties, which included a green agri revolution, construction of some of the largest dams in the world, and rapid industrialization. The tonic then, as now: Focus, to minimize political fallout and economic disruption, and smart people with authority.
How can the effectiveness of iconic planning and coordination organisations like Japan’s MITI or South Korea’s EDB or of the Planning Commission circa 1960s be recreated in modern Pakistan? How about riding the winds of change blowing through the country and creating a ‘Tabdeeli Commission.’ Because change is pervasive and much more rapid now and the economy far more complex, ‘Tabdeeli Commission’ would need to be a tech-enabled think tank and implementation monitoring and analysis body. What that means is that it would have experts studying global trends and data from all over Pakistan to come up with plans for agri, energy, textiles, electronics, IT, automotive, engineering, chemicals and other focus sectors, and then monitor and learn from their implementation. In fact Dr. Atta urRehman came up with such a sectoral plan, in conjunction with Pakistan Institute of Development Economics, back in 2007, achieving some quick wins in the short time available to that government.
With the facilitation of federal line ministries and provincial ministries, ‘Tabdeeli Commission’ would engage with the private sector, R&D institutions, training and educational institutions, and other stakeholders to formulate policy. Matrix-managed ‘Tabdeeli Commissioners’ in each ministry and department would help implement. Certain measures will be economy-wide, cutting across agriculture, industry and services. The World Bank’s Ease of Doing Business, for example, lays out regulatory and other measures to boost entrepreneurship and SME. The World Economic Forum’s Global Competitiveness Index rates institutions, human development, infrastructure, macro-economics, innovation, and market sophistication. The key driver of competitiveness is public institution quality, which Dr Ishrat Hussain terms ‘Governance.’ Competitiveness drives long term growth and prosperity, which is important to human development and well being. There are no examples of countries improving the well-being of their citizens without growth.
Says Ehsan Malik, Pakistan Business Council: “Industry needs long term policies to promote transformation rather than short term transactional packages. What is needed is a comprehensive alignment of all the policies that impact industry. These include trade, fiscal, energy, labour, industry and agriculture policies. Often policies of different ministries work in their respective silos, sometimes even at variance from each other, to the confusion, complexity and detriment of industry. Provinces and the federation must come together to facilitate this. There are multiple taxation authorities and more than 50 different types of taxes. Businesses are forced to act as unpaid tax collectors.”
What makes the idea of a Tabdeeli Commission implementable today is technology. Back in 2007, the PM Office used MS Excel to give quarterly red-orange-green evaluations to progress in strategic initiatives associated with each Ministry. Not bad for back then. Today, we can employ much more sophisticated and powerful tools for data driven decision making. For example, Government-owned Ignite, which transformed and rebranded itself a year ago, employs real time data analytics and soon AI to make its nation-wide DigiSkills.pk online training initiative more responsive. The recipe for transformation is the same anywhere: A compelling vision, ownership by the leader, driven by an empowered direct report, initial focus on a beachhead, demonstrating and showcasing success, and then fanning out and openly updating on progress and problems.
The writer is Chief Executive Officer of Ignite.