22 economies of the world have been individually selected by global institutions and have been earmarked to lead global economic growth into the 21st century. These countries currently account for 75% of global GDP and 70% of its population. It is pertinent to note that these 22 nations account for a mere 10% of the countries in the World Bank’s global database.
The most encouraging aspect is that Pakistan is among these 22 select nations. In 2005 when all our economic indicators were positive and showing an upward trend, Pakistan was added to the list called NEXT-11, a group of 11 countries – Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea, and Vietnam – that global financial institutions and researchers felt would lead the future global economic growth, behind the G-7 countries – Canada, France, Germany, Italy, Japan, UK, and USA – and BRIC countries (abbreviation for Brazil, Russia, India, and China). It was a great honour and a testimony that we are among the largest contributors of the world.
As a background perspective, G-7 was created in 1986 and since then they have significant influence on regional as well as global policies regarding healthcare, education, carbon emission, and other sustainability initiatives. BRIC was coined in 2001 and reflected a shift in global economic power away from the developed G-7 economies and towards the developing world. These four countries, combined, account for more than a quarter of the world’s land mass and more than 40% of its population and it is estimated that BRIC economies will overtake G-7 economies, in size, by the year 2027. Next-11 economies have the potential of becoming the world’s largest economies within this century right behind G-7 and BRIC countries. The selection of Next-11 was based on macroeconomic stability, investment policies, size of economy, and future growth potential.
Do we still deserve to be part of this list?
Last few years have been very rough on Pakistan. With our lacklustre macroeconomic performance and deteriorating infrastructure, there is a high probability that international experts may decide to drop us from the NEXT-11 list unless we fix our structural issues and rebound back and show strong economic progress that we had displayed in early 2000. Reviewing Pakistan’s past performance trends, we see that in 2001 we had the lowest economic growth among all the 15 countries (Next-11 + BRIC), by 2004 our economic growth had risen to the top 30% percentile and we remained in the top 50% percentile in 2005 and 2006. After that it has continued to drop steadily and in 2011 we again hit rock bottom to 15 in the list.
Despite our lacklustre economic performance over the last few years, we have the potential, resources and competency to deliver significantly higher growth rates. However, to do so we require strong commitment from our government, bureaucracy and political leadership. We must first fix the security situation, followed by investing heavily in infrastructure especially energy reliability.
We also must focus on improving overall governance, intellectual property rights, and strengthening our investment opportunities to attract local and international investors. To make this growth sustainable we must invest significant resources in upgrading our education infrastructure as well as research and innovation standing.
I have no doubt that with the immense natural resources, 7th largest population coupled with the 10th largest workforce with three million workers entering workforce every year together with intelligent policies, we can get back our past glory. We just need a sincere qualified economic team and support from government institutions.
The writer works in the corporate sector and is active on various business forums and trade bodies.
Published in The Express Tribune, August 6th, 2012.