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‘flawed development made - Newspaper - DAWN.COM
A flawed development model
FAISAL BARI — PUBLISHED ABOUTs0 HOURS AGO
EACH time we have had a growth spurt
in Pakistan, it has been based on
investments in physical infrastructure or
investments in physical capital.
oe The writer is a senior
Expansion in the 1960s was based on research fellow at the
gains in industrial and agricultural Institute of Development
production. There were gains from and Economic
: . oe Alternatives and an
increased agricultural productivity but associate professor of
these were based on research that had economics at Lums,
Lahore.
2
mostly been done elsewhere.
The expansion in the 1980s was again a similar combination.
We did get some benefits from opening up the economy in the
early 2000s but most of the gains even then were
consumption-led. Now we are again hoping investments in the
energy sector, roads and other infrastructure projects, through
the China-Pakistan Economic Corridor (CPEC) or otherwise,
will get us the economic growth we need.
In all previous instances, reasonable or high growth rates
vanished fairly quickly. The last years of reasonable growth
were almost a decade ago. Recently, we have even been
struggling to reach growth rates of five to six per cent. Low
growth rates of the economy limit our ability both to tackle
poverty and offer good employment opportunities to the
millions who join the working-age population every year.
There might be a number of hypotheses that could, quite
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reasonably, be created to explain why we have not been able to
sustain high or reasonable growth rates. Corruption,
overregulation, weak institutions, poor infrastructure, state
incompetence and institutional inefficiencies could all provide
alternative explanations. But I want to focus on another
candidate: the poor state of our human capital. I feel this, more
than anything else, explains where we stand today.
If people are educated and healthy, why should it
matter if growth rates do not match those of East
Asia?
Many experts have commented on the human development
gap in Pakistan over the last two to three decades. They have
pointed out that for our growth rates and level of income
Pakistan’s achievements in the area of human development
has been much lower when we compare them to other
countries in similar situations. We could and should have been
doing much better in terms of education, health and other
human development indicators.
Going further, my contention is that the reason we have not
been able to sustain high growth rates, even when various
events have afforded us a few years of higher growth is that we
just do not have the human capital: we do not have enough
creative, educated, trained and healthy people who can sustain
growth.
Historically, we have never invested very much in our people.
And you can see the difference in countries that have. When
East Asian states started to invest in their people they were not
very different from where we were at that time. Today, the
comparison appears unwarranted and decades of investments
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‘flawed development made - Newspaper - DAWN.COM
have created the difference. But the conditions back in the
1950s were not terribly different.
We have good examples closer to home too. Sri Lanka is an
excellent example of a country that invested heavily in its
people and that is now reaping the benefits. Despite decades of
civil strife, Sri Lanka’s life expectancy today is 77.9 years, its
infant mortality rate is 8.5 per 1,000 births and maternal
mortality 0.39 per 1,000 births. Its overall literacy rate is
92.5pc, while the youth literacy rate is 98pc. In addition, 87.3pc
of the population has access to safe drinking water. All of the
above statistics are comparable to developed countries and are
several orders of magnitude better than where we stand today.
The numbers mentioned here are indubitable. But some
experts have been arguing that Sri Lanka’s higher
achievements in the area of human development in that
country have been achieved at the cost of GDP growth: by
diverting resources to health, education and other human
development sectors, Sri Lanka has had to live with lower
growth rates of GDP.
There are two responses to this. One, this story might have
been a good reading of Sri Lanka until a decade or so ago, but it
is no longer the case. Sri Lanka has doubled its per capita
income since 2005. Poverty levels stand at 7.6pc only and the
current unemployment rate is 4.9pc.
But secondly, and far more importantly, so what? If growth has
been a little slower, so what? Is the quality of life of the people
there not the metric by which to judge the success or failure of
the policies of a country? If the people are educated and
healthy, and have a reasonable standard of living, why should
it matter if growth rates do not match those of China or East
Asia?
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