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August 12, 2016

Vision 2025: An economic long march


August 12, 2016

Pakistan aims to become one of the top 25 economies by 2025 and one of the top 10 economies by 2047;govt has allocated more resources for education and health

Minister of Planning, Development & Reform

The month of August brings out colourful expressions of patriotism among people of Pakistan. This year the joy is twofold because it marks our sixty ninth Independence Day and second anniversary of Pakistan Vision 2025. In addition to celebrations, August is a month of self-introspection for our nation. We must ask ourselves have we realised our true potential as a nation.

If we set aside our emotions for a moment and try to address this question objectively. The answer would be in negative. As a country we have wasted plenty of time. We can’t afford to repeat our mistakes of the past. Countries which were lagging behind us sixty odd years ago have surpassed us a long time ago. We need to draw inspiration and lessons from these countries viz., South Korea, China, Singapore, Malaysia and Turkey.

These countries devised a framework of national vision and with consistent implementation turned themselves into miracle stories. For a nation to progress, it must have a well-defined and clear vision of its long-term aspirations. Without this clarity a nation would be unable to prepare a coherent roadmap for action. In 2013, there was no such roadmap in place. At Ministry of Planning, Development & Reform (MoPDR), I took up the task of formulating a national vision. A vision that would clearly delineate our collective ambitions and offers guidance to materialise our true potential. Today we have such a document: Pakistan Vision 2025.

Vision 2025 was devised in August 2014 with the consensus of all major stakeholders of the country. It provides us a blueprint to put Pakistan on a fast track of development. The ultimate goal is to become one of the top ten economies in the world by 2047 on our first centenary as an independent nation. Moreover, by 2025, it envisages Pakistan among top twenty five economies of the world and an upper middle income country.

As a developing country, we have two economic tasks in hand. On one hand, we need to increase the size of the economy and on the other hand, we need to ensure egalitarian distribution of wealth. In the post-World War-II era, the conventional wisdom was to do this in stages. That is, first prioritise high growth and once total income increases substantially only then focus on distributional aspect of income. Historically, policy makers in Pakistan had opted for this strategy and the results are in front of us. In Vision 2025, we opted for a new approach of inclusive growth strategy.

If I have to elucidate the crux of Vision 2025 in a word that would be ‘inclusive growth’. Inclusive growth means incorporating all segments of society in the processes of economic development. Historically processes of development have created ‘winners’ and ‘losers’ in Pakistan. Consequently, socio-economic, regional and gender disparities have increased multi-fold in last sixty nine years in Pakistan. We want to reverse these disparities while continue to grow as an economy. This is the real challenge we face today.

In this article, I will present concrete evidence to people of Pakistan to evaluate the progress our government has made in terms of implementation of Vision 2025.

The major driver of economic growth in contemporary epoch is knowledge. It is knowledge that breeds innovation and entrepreneurship in today’s world. Therefore, science and technology are the cornerstone of development and prosperity. From the same token, we can extrapolate that knowledge is also a driver of inequality. Skill-based technical change has shaken the world economy. That is, a shift in the production technologies that favour skilled over unskilled labour by increasing its relative productivity and, therefore, its relative demand.

We cannot be competitive in global economy by restricting ourselves to primordial methods of production. We need to modernise every sector of economy and that is only possible if we are at the cutting edge of science and technology.

It is in this backdrop we have increased allocation of funds to higher education by more than double in last three years. From 2013 to present, two hundred and fifteen billion rupees are allocated to Higher Education Commission (HEC). Compared this with 2010 to 2013 in which hundred billion rupees were allocated to HEC.

We have also initiated US-Pakistan knowledge corridor. This would allow ten thousand Pakistani students to get their PhDs from top universities of the US in next ten years. Our government prioritises transfer of scientific knowledge from the US rather than aid or military gadgets.

Moreover, we have taken an initiative to build a university campus in every district of Pakistan. All students from low income background and especially girls would benefit most from this project. Because usually they are the ones who are unable to pursue higher education if they have to move to another district to attend university. National Endowment Scholarships for Talent (NEST) programme is introduced by MoPDR to provide scholarships and interest free loans to students from low and middle income households to pursue higher studies in top universities of the world.

Our government believes that every child of Pakistan has a right to quality education irrespective of their family’s income, ethnicity and faith. Therefore, under prime minister’s education reform programme three billion rupees are allocated for upgradation of schools infrastructure and laboratories for science and technology. And for the first time in history of Pakistan, Montessori classes are introduced in public schools. As an affirmative action policy, our government has launched Science Talent Farming Scheme that would provide scholarships to 300 school students every year to pursue higher studies up to PhD in science. This scheme targets students from historically disadvantaged segments of our society.

Government has set up National Curriculum Council (NCC) to work with all relevant stakeholders to modernise the curriculum in public schools. The idea is to transform learning experience from rote learning to innovative, critical and out of box thinking. We have emphasised to NCC that new curriculum should encourage and incentivise students to think out of box and develop innovative and critical thinking skills. Moreover, teachers’ training is an essential component of our education reform programme. For that purpose, a teacher training programme has been initiated to equip teachers with innovative, interactive and new scientific teaching methods.

Our government has taken major initiatives in health care. Prime Minister’s National Health Insurance Programme is the first large scale health insurance programme in Pakistan. The objective is to achieve universal health coverage. As the programme will roll out, millions of low income households will be able to access quality health care services.

Moreover, national and provincial strategic plans for tuberculosis control have been developed. Free of cost diagnosis and treatment through a BSL3 lab network at 1,257 tuberculosis care facilities are up and running.

First time in the history of Pakistan, field epidemiology and disease surveillance division is established by our government in 2014. It will take a lead in disease surveillance and provide technical support to provinces. Furthermore, under New Blood Policy initiative sixty blood banks across the country are upgraded. Moreover, construction of ten new regional blood centres is already underway.

In order to address injustices and socio-economic inequities, we must first have concrete data on it. Such data is very scarce in Pakistan.

Therefore, government took an initiative on this by sanctioning Multidimensional Poverty Index (MPI) which is produced by UNDP. It reveals that income disparity is only one aspect of inequities in Pakistan. Disparities in terms of gender and region are strikingly high. The publication of MPI was a small but a necessary step. Now government is in the process of designing and implementing pertinent socio-economic policies to address social, gender and regional inequities.

Being cognizant of these challenges, our government has internalised Sustainable Development Goals (SDGs) as our national goals and this is a major policy shift. Because previous governments did not own Millennium Development Goals (MDGs) and consequently, we could not meet those goals.

If we look at the aggregate statistics, our government has increased the allocation of funds to Public Sector Development Programme (PSDP) to 2,467 billion rupees since 2013. This is an increase of 76 percent as compared to 2009-2012. Moreover, allocation for infrastructure projects increased from 744 billion rupees to 1,517 billion rupees. This is an increase of 103 percent.

Infrastructure and energy projects worth of $46 billion are already underway under China-Pakistan Economic Corridor (CPEC). This is going to positively transform socio-economic landscape of the country in an unprecedented way.

Similarly, in energy sector investment has increased to 1,237 billion rupees since we took over government, i.e. an increase of 95 percent as compared to last three years of PPP government. Allocation of funds for transportation and communication has increased to 731 billion rupees, i.e. an increase of 141 percent as compared to 2009-12 period.

Government is paying special attention to enhance competitiveness of our economy through productivity, quality and innovation (PQI) in agriculture, mining and manufacturing. Moreover, large scale clusters of different industries will be promoted in order to develop efficient backward and forward linkages between different sectors.

The dividends of most of these projects would fully mature in future but we are already experiencing a major economic recovery. The average GDP growth rate in last three years is 4.3 percent. Whereas, from 2010-2013, the average GDP growth rate was 3.7 percent. Inflation rate in Pakistan is at its historic low. The average inflation rate for last three years is 5.3 percent. Whereas, from 2010-2013, it was 10.7 percent. Unemployment rate was 6.24 percent in 2013; today it is 5.94 percent.

Moreover, Pakistan’s macroeconomic stability has allowed government to discontinue borrowing from International Monetary Fund (IMF) via Extended Fund Facility (EFF). This is a remarkable story of a country that was declared on the brink of a default by major international publications only 3 years ago.

The average revenue collection by FBR has increased from 1,795 billion rupees to 2,651 billion rupees today. From 2010 to 2013, on average, remittances were $12,770 million. Whereas in last three years, they have been $18,158 million.

Foreign exchange reserves are at historic high of $23,085. Compare this with 2013 when they were $11,020 million. Similarly, stock exchange has seen its historic high of 37,783 points in 2015-16. In 2013, it was hovering around 21,006 points.

This is just a beginning. But every journey starts from a small step in a right direction. I have illustrated with the concrete evidence that we are making a lot of ground on the implementation side of Vision 2025. After three years of dedicated work we are finally on a path towards economic stability and prosperity. But this is just a beginning and in order to build on this we must ensure consistency and that is predicated on the political stability of the country.

We don’t expect our cynics in media and in politics to acknowledge any of our achievements. In last three years, they have demonstrated time and time again that they are only interested in furthering their narrow vested interests. And if that requires halting Pakistan’s economy and creating a chaos, they would still do it.

Today the people of Pakistan face two distinct and very clear choices. On one hand, there are some vested interests who are preparing for a ‘chaotic long march’ so that they can halt Pakistan’s economy and fuel political instability. On the other hand, our government is committed to put Pakistan among top twenty five economies of the world by 2025. In order to materialise this we have prepared a ground for ‘economic long march’ so that prosperity can be spread across all segments of our society.

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