Imperatives for development

Nearly half a century ago, most of the current high income Asian Tiger countries were on an almost equal footing with Pakistan having weak economies comparable to sub-Saharan Africa. It was only in the last 30 years that the Asian Tigers picked up pace to join the ranks of the upper- and upper-middle-income countries of the world.

The common elements in the making of the Asian Tigers include an unwavering focus on export-oriented industrialisation; technological progress continually enhanced by innovations and creativity; stable governments; good governance; low corruption and strong implementation of rules and regulations, and the effective utilisation of favourable age structures of their young populations to spearhead their respective economic agendas facilitated by sustained decline in the population size. The countries invested heavily in human capital and enhanced the economic value of their citizens.

The demographic contribution to accelerating economic growth is known as the demographic dividend. It is the window of opportunity that arises when the ratio of the under-15 population is less than 30% of the total population and the ratio of the elderly population (65+ years) is below 15%, leading to lower dependency. The Asian Tigers were able to take advantage of the demographic dividend by making significant and continued investments in three areas, namely, (1) education; (2) healthcare, including family planning; and (3) integration of women in the labour market. All three areas have a direct and interlinked bearing upon economic growth.

Comparing the development trajectories of four high-income Southeast Asian countries, ie, South Korea, Singapore, Thailand, Singapore and Malaysia, since 1960, with that of Pakistan, we find important lessons to be learnt. In 1960, all five countries had a total fertility rate (ie, the average number of children a woman has in her reproductive life) of about six. The two original Asian Tigers Singapore and South Korea managed to halve their fertility in 10 and 16 years, respectively. The more recently developed ‘Tiger cub’ economies of Thailand and Malaysia achieved this milestone in 20 and nearly 30 years, respectively. On the other hand, it has taken Pakistan almost 50 years to reduce its total fertility rate from 6.6 in 1960 to the current level of 3.6. Fertility reduction helped economic growth in three ways. First, it reduced the size of the economically less productive dependent population of young persons below 15 years of age, freeing up government resources that would have been required to meet continually expanding educational and health infrastructure needs. Second, smaller families had greater opportunities to save more, contributing to national savings. And third, smaller families allowed women to enter the workforce earlier and to stay longer.

Investment in healthcare is linked to economic productivity as it contributes to a healthy workforce and lowers fertility. In 1960, life expectancy at birth was 66 years in Singapore, and less than 60 years in Malaysia, Thailand, South Korea and Pakistan. Currently, life expectancy in the four Asian Tigers is over 75 years while in Pakistan it is around 66 years. A strong indicator of healthcare is the Infant Mortality Rate (IMR) ie the number of infant deaths per 1,000 births. In 1960 Thailand had an IMR of 101, South Korea 79 and Pakistan 190. Korea and Thailand were able to reduce this to half in the next 18 and 13 years, respectively, while it took Pakistan 27 years to achieve the same. Currently both countries have an IMR of less than 10 while in Pakistan it is around 62 per 1,000.

One area where the Tiger countries had an advantage was having moderately high literacy levels to start with. In 1960, the literacy rate was 60% in Singapore, 70% in South Korea, 68% in Thailand, 22% in Malaysia, and 16% in Pakistan. By 1980, Singapore’s literacy rate had crossed 90%, and by the turn of the century, all four Asian Tigers had attained nearly 95% literacy. Meanwhile, in Pakistan, a third of the population aged 15 years and above remains illiterate. Public education was a key government priority in all four Tiger countries based on the early recognition that investment in human capital would be key to economic success in a competitive world.

Another area that has spurred economic growth is female labour force participation. This is currently above 50% in all four Asian Tiger countries while in Pakistan it remains around 25%. At the macroeconomic level, the benefits of female labour force participation include expansion of the labour market and productivity while at the micro level they manifest as increased savings and purchasing power of families. Women’s participation in the workforce also improves their decision-making power in household matters, including family size, and reduces gender disparities in education and healthcare.

While Pakistan has lagged behind in all development indices, the major lesson that can be learnt from the Asian Tigers is that a turnaround is possible in a short span of time. The crucial take-home message for planners and policymakers in Pakistan is that our development prospects will remain elusive till such time as we focus simultaneously on the three imperatives of education; healthcare, including family planning; and female work force participation. Presently, 56% of Pakistan’s population is in the productive age group of 15-64 years. To harness the potential of this young population the government needs to invest in the above three areas while at the same time focus on improving governance, accountability and justice, and ensure an efficient bureaucracy.

Pakistan has an advantage today that was unavailable to other countries in the past: vast technological advancements in communication technology — especially software-based learning applications, mobile health through electronic devices and electronic commerce — that have revolutionised the education, healthcare and business sectors. By tapping effectively into this technology, we can make up for lost time.

Published in The Express Tribune, November 21^st, 2018.

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