Pakistan has fared poorly in handling challenges, says IBA dean

Technology and capital proving to be hindrances, says Ishrat Husain

KARACHI:

Pakistan has done a poor job in handling the challenges posed by globalisation, according to Institute of Business Administration (IBA) Dean and Director Dr Ishrat Husain.

Speaking at the launch of his book titled “Globalization, governance and growth” at the Karachi Literature Festival on Saturday, Husain said globalisation is inevitable even though a lot of people in Pakistan want to opt out of it.

“Some people say Pakistan should be inward-looking, insular and completely isolated from the rest of the world, that we should be self-reliant and self-sufficient. But after Myanmar and Cuba decided to integrate themselves as part of the global community, North Korea remains the only country that is still trying to resist the forces of globalisation,” Husain said.



Pakistan must establish whether the path taken by North Korea is the one that it wants to take in the future, Husain added.

In the proverbial global village that the world has become in recent decades, businesses operate across international borders rather freely. For some people, enhanced global trade has lowered the cost of living and improved the overall standard of living. For others, however, globalisation has resulted in fierce competition in a high-pace technological era that threatens the old ways of doing business.

Explaining his viewpoint on globalisation, Husain said it has four ‘pillars’ - trade, technology, capital, and migration and remittances. “At this moment, the only positive of globalisation, which is being internalised (in Pakistan), is migration and workers’ remittances,” he said.

However, a gap existed even there given that most migrants from Pakistan are unskilled, he said. “A majority of our younger population (that) is coming out of universities and colleges is not skilled. They are not employable,” said the IBA dean and director. Saying that the share of vocational and technical training is negligible, Husain stated tertiary education in Pakistan is mostly in subjects that are irrelevant to both Pakistani and global economies.

With regard to international trade, the former central bank governor said Pakistan is the only country in South Asia where the share of exports in the GDP is declining. The situation is not different in technology and capital, he said.



Pakistan may have mobile penetration of 65.3%, Husain said, but this technology is not being used to improve agriculture, education and health services - something that can benefit people in far-off areas in Pakistan. “Technology is getting penetrated through ICT. But outside ICT, we don’t have much of technology advancement in Pakistan,” he said.

Pakistan is doing an unimpressive job in attracting international capital, a term that Husain uses in lieu of foreign direct investment (FDI). “In 2007, we received $5 billion in FDI. Our 30-year bond was oversubscribed in US market,” he said, adding that FDI has decreased notably in recent years. Pakistan received just $709.3 million in FDI in the last fiscal year.

Husain said Pakistan should plug the holes in these four areas to take advantage of globalisation. Highlighting the importance of good governance, Husain said it is the intermediary between globalisation and growth. “If your institutions for governance are strong and sound, then the transmission from globalisation towards high growth takes place much easily,” he added.

The book has 577 pages and is available for Rs1,995.

Published in The Express Tribune, February 7^th, 2016.

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