Wednesday May 29, 2024

Boosting productivity

By Dr Murtaza Khuhro
October 28, 2023
Representational image. AFP File
Representational image. AFP File

Productivity, embodied by the contributions of entrepreneurs, managers, and workers, is a fundamental indicator of an economy's health. The United Nations' Sustainable Development Goal 8 promotes enduring, inclusive, and eco-friendly economic growth, coupled with full, productive employment and dignified work for everyone. Bolstering productivity is a conduit to widespread advancement and affluence.

Various methodologies exist for calculating productivity indices. The chosen method often depends on the specific context. Common indices include labour productivity, capital productivity, and total factor productivity. Labour productivity measures output per worker or hour worked. In contrast, capital productivity gauges output relative to capital investment. Total factor productivity takes into account diverse inputs, such as labour, capital, and technology, to assess overall production efficiency.

The United Nations Conference on Trade and Development (UNCTAD) has identified several criteria to evaluate productivity across countries, including human capital, natural resources, energy, transport, information technology, institutional infrastructure, private sector progression, and structural change. UNCTAD has highlighted the correlation between a country's productivity, GDP growth, GDP per capita, and merchandise exports.

Economics strives to efficiently manage resources to fulfill human necessities and enhance life quality, satisfaction, and well-being. By prioritizing productivity and prudent resource distribution, economies can aspire to realize these goals.

Numerous developing nations face hurdles like limited capital access, inadequate infrastructure in areas like transport and communications, deficient education and skills, a vast informal economy, weak governance, rampant corruption, transparency deficits, and an underdeveloped legal system. Furthermore, technological and innovation shortages, restrictive trade barriers, political unrest, societal disruptions, and militaristic disputes are common issues.

Pakistan, since its birth, has grappled with these challenges and its unique set of problems. The All-India Muslim League, which garnered significant traction between 1940 and 1946 and secured victories in the December 1945 and January 1946 elections through a separate electorate, faced challenges in fostering a sturdy leadership hierarchy. Their triumph was rooted in the belief they instilled in Muslims across the subcontinent: that they formed a distinct nation, disparate from the Hindu majority. This sentiment led the Muslim populace to vote overwhelmingly in favor of the All-India Muslim League.

Yet, despite its success in unifying a significant portion of the Subcontinent's Muslims, the League's internal organization was fragmented. This became glaringly apparent post-Partition, exposing the League's governance shortcomings and fractionalization of the party as early as in 1948.

In contrast, the Indian National Congress boasted a rich history in political and economic stewardship. When Hindu leaders in the 19th century championed education, scientific methodologies, and early Industrial Revolution opportunities, some Muslim leaders discouraged their followers, hinting that modern education and science clashed with their religious convictions.

Hindu entrepreneurs flourished, sometimes even rivaling English enterprises in the early 19th century. Meanwhile, the Muslim economic fabric was predominantly influenced by feudal lords and religious leaders who dissuaded their followers from modern educational pursuits. British colonial rulers strengthened their hold through a land grant system, engendering allegiance among local elites, who then assisted in governance. This limited the emergence of dynamic leaders like Mohammed Ali Jinnah, whose leadership was only later acknowledged.

In contrast, Hindus progressively adopted modern scientific techniques and ventured into industrial pursuits. Therefore, it's unsurprising that progressive leaders from the Congress ensured India received an advanced constitution by 1950, merely three years post-independence.

Contrasting starkly with its peers, Pakistan was governed by three British-established institutions: the civil bureaucracy, the judiciary, and the army. From 1947 to 1951, the civil bureaucracy held the reins of governance. However, following his appointment, Ayub Khan, the first indigenous commander-in-chief of the Pakistani Army, swiftly rose as a pivotal authority. Ascending to power, he augmented his influence over the state machinery and cemented his position as a central figure in Pakistan's political landscape.

Ayub Khan and his civil bureaucratic team, rather than pursuing an independent or non-aligned foreign policy, positioned Pakistan as an active partner in military alliances that primarily served American interests, both within and outside the region.

The Constituent Assembly of Pakistan struggled to draft a constitution, leading to its unconstitutional dissolution by the bureaucratic administration. Pakistan continued as a British dominion until 1956 when, at last, the bureaucracy endowed the nation with its constitution. This document, however, dissolved the provinces in the country's western region and introduced a parity principle. The very provinces that had endorsed Pakistan's creation via the June 3 plan in 1947 were amalgamated. Following two years of nominal civilian rule, martial law was declared, a decision that was upheld by the Supreme Court of Pakistan, drawing on Hans Kelsen's legal theory.

Pakistan's present political and economic strife echoes a series of crises that have persisted since its inception, with martial laws intensifying these troubles. The nation's citizens have endured the repercussions, both constitutionally and economically. Productivity in sectors like agriculture, manufacturing, services, and education has declined due to these challenges. Despite being one of the more organized sectors, services also operate inefficiently.

So, what's the remedy? Restructuring power dynamics, particularly through the establishment of constitutional rule and electoral reforms, is of paramount importance. However, two key steps can swiftly address our inefficiencies and in-competencies.

First, it is crucial to digitize and digitalize government operations and economic ventures. Many countries have successfully pioneered in this realm, providing a roadmap for Pakistan to follow. The necessary technology and expertise are attainable. Digitization will naturally enhance transparency, accountability and efficiency, thereby reducing corruption.

Second, complementing this effort with proactive, evidence-based government disclosures and widespread information dissemination, as mandated by the right to information acts already in place at the federal and provincial levels, will further strengthen these initiatives. This will promote transparency and efficiency in governance.

Implementing both quick-fix solutions will not only invigorate education and healthcare for all, facilitate access to affordable electricity, and improve the transportation system, but also enhance law and order. Moreover, it will boost productivity across all economic sectors and sub-sectors, ultimately leading to diversification and an increase in exports.

The combined efforts of digitization, digitalization, and proactive disclosures will significantly reduce corruption and greatly enhance efficiency. This will effectively tackle challenges such as deficient education and skills, a large informal economy, weak governance, widespread corruption, transparency deficits, and an underdeveloped legal system.

The writer is an advocate of the high court and a former civil servant.