Fill in the policy blanks!

LAHORE: Most of developing countries that gradually found a sustainable growth model, did so on their internal strength, consistent policies, research and innovation – all of which are missing in Pakistan’s growth model.

We have seen countries like Malaysia, rising from the ashes like the mythical phoenix, especially after defying the International Monetary Fund (IMF) diktats, and today it is a robust economy.

In 1997 all its foreign exchange reserves had vanished due to manipulations by the likes of George Soros, a Hungarian-American investor and premier currency dealer. Back in the day, Malaysian Prime Minister Mahathir Mohamad had accused Soros of ruining Malaysia's economy with "massive currency speculation". Soros was said to have been a buyer of the ringgit during its fall, having selling it short in 1997.

India has continued growing despite droughts, various global slowdowns, and changes of government. Their growth model basically remained the same no matter which party was in power.

The once penniless Bangladesh is now a global role model in poverty alleviation and its growth strategy remains the same whether it has Khalida Rehman or Hasina Wajid as its Prime Minister. The global recessions we faced in last 30 years were also faced by India and Bangladesh. The droughts that struck Pakistan also hit India equally hard as it is our next door neighbour.

In Pakistan we plan a growth strategy and if it does not work or planners blame the failure on global recession, droughts, or bias of some developed economies. They never accept the failure of their strategy. When experts chalk out a solid strategy for growth they take into account all aspects that might impact the growth. The strategy is based on different scenarios in which steps are suggested to minimise the negative impact of weather, global economy and domestic commerce. They incorporate innovative strategies to keep the growth movement going. All governments in Pakistan over-glorify their achievement and underscore their shortcomings.

Agriculture is considered our strength but we have failed to upgrade our seeds. Basmati introduced in 1985 is still the same, while India that was way behind Pakistan at that time is now way ahead in both yield and quality.

The wheat seed introduced in 1960s is still the same. No new high-yielding varieties have been introduced. The average per acre yield of wheat in India is double than that of Pakistan. India has left us far behind in cotton production. While our per hectare cotton production is stagnant at 1990s-level the Indians have more than doubled their yield and tripled the cotton cultivation area. We have better availability of water than in India. Our soils are also more fertile. But we waste water through our rudimentary irrigation methods and end up providing less water to the soil than India where modern irrigation has been largely introduced.

If we had performed at par with India in agriculture yield most of our problems would have been solved at least in rural areas where majority of our population resides.

We have played havoc with our industry by exposing it to unethical imports. India jealously guards it industrial sector from imports. The protection provided to their industries cannot be bypassed any way. They are very strict on under-invoicing and smuggling. We consider smugglers and under invoicing importers as genuine businessmen.

They steal government revenue. The economic planners have no clue on who is stealing the revenue. Prime Minister’s Advisor on Finance Abdul Hafeez Shaikh is reportedly said to have accused the top industrialists of under-invoicing from China. Reports have quoted Shaikh as saying, that too in the presence of the Chief of Army Staff, that Pakistan’s documented imports from China are $6 billion, while Chinese claim their exports to Pakistan are $12 billion. It must be noted that manufacturers do not under-invoice as most of the under-invoicing is done on finished goods that could be produced in Pakistan. As Chairman Federal Board of Revenue Shabbar Zaidi has rightly pointed out several times that under-invoicing is undermining the viability of our industries.

Our industry today is in shambles. It has not upgraded for a long time. Except for textile exporters that in the past made some good money but did not upgrade; all other industries are not earning much because of dual menace of smuggling and under-invoicing. Our planners in their growth strategies do not take into account the negatives that hurt our growth.

These include bad governance, tax evasion (under-invoicing and under-reporting of production), smuggling, high power and energy cost, and above all the inconsistent policies. No growth strategy would work unless measures are incorporated to eradicate these negatives.