Pakistan's Financial and Human Capital Development 1999-2007

[Riaz Haq]

Pakistan experienced rapid economic and human capital growth in years 2000 to 2008 on President Pervez Musharraf's watch. Savings, investments and exports hit new records and the rate of increase in human development reached new highs not seen before or since this period.

Savings and Investments:

Domestic savings rate reached 18% of the GDP and foreign direct investment (FDI) hit a record level of $5.4 billion in 2007-8. This combination of domestic and foreign investments nearly tripled the size of the economy from $60 billion in 1999 to $170 billion in 2007, according to IMF. Exports nearly tripled from about $7 billion in 1999-2000 to $22 billion in 2007-2008, adding millions of more jobs. Pakistan was lifted from a poor, low-income country with per capita income of just $500 in 1999 to a middle-income country with per capita income exceeding $1000 in 2007.

Pakistan Per Capita Income 1960-2012. Source: World Bank

The PPP government summed up General Musharraf's accomplishments well when it signed a 2008 Memorandum of Understanding with the International Monetary Fund which said:

"Pakistan's economy witnessed a major economic transformation in the last decade. The country's real GDP increased from $60 billion to $170 billion, with per capita income rising from under $500 to over $1000 during 2000-07". It further acknowledged that "the volume of international trade increased from $20 billion to nearly $60 billion. The improved macroeconomic performance enabled Pakistan to re-enter the international capital markets in the mid-2000s. Large capital inflows financed the current account deficit and contributed to an increase in gross official reserves to $14.3 billion at end-June 2007. Buoyant output growth, low inflation, and the government's social policies contributed to a reduction in poverty and improvement in many social indicators". (see MEFP, November 20, 2008, Para 1)

Human Capital Development: 

In addition to the economic revival, Musharraf focused on social sector as well. Pakistan's HDI grew an average rate of 2.7% per year under President Musharraf from 2000 to 2007, and then its pace slowed to 0.7% per year in 2008 to 2012 under elected politicians, according to the 2013 Human Development Report titled “The Rise of the South: Human Progress in a Diverse World”.

Overall, Pakistan's human development score rose by 18.9% during Musharraf years and increased just 3.4% under elected leadership since 2008. The news on the human development front got even worse in the last three years, with HDI growth slowing down as low as 0.59% — a paltry average annual increase of under 0.20 per cent. Going further back to the  decade of 1990s when the civilian leadership of the country alternated between PML (N) and PPP,  the increase in Pakistan's HDI was 9.3% from 1990 to 2000, less than half of the HDI gain of 18.9% on Musharraf's watch from 2000 to 2007.

R&D Spending Jumped 7-fold as % of GDP 1999-2007 Source: World ...

Acceleration of HDI growth during Musharraf years was not an accident.  Not only did Musharraf's policies accelerate economic growth, helped create 13 million new jobs, cut poverty in half and halved the country's total debt burden in the period from 2000 to 2007, his government also ensured significant investment and focus on education and health care. The annual budget for higher education increased from only Rs 500 million in 2000 to Rs 28 billion in 2008, to lay the foundations of the development of a strong knowledge economy, according to former education minister Dr. Ata ur Rehman. Student enrollment in universities increased from 270,000 to 900,000 and the number of universities and degree awarding institutions increased from 57 in 2000 to 137 by 2008. Government R&D spending jumped from 0.1% of GDP in 1999 to 0.7% of GDP in 2007. In 2011, a Pakistani government commission on education found that public funding for education has been cut from 2.5% of GDP in 2007 to just 1.5% - less than the annual subsidy given to the various PSUs including Pakistan Steel and PIA, both of which  continue to sustain huge losses due to patronage-based hiring.

To see a discussion of the above subject and the current situation, please watch the following video:

http://vimeo.com/84504051



Civil-military Stand-Off on Musharraf Trial; Musharraf Govt's Perfo... from WBT TV on Vimeo.

Related Links:

Haq's Musings

Musharraf Earned Legitimacy By Good Governance

Musharraf Wants to Face Trial; Military Opposed to it

Saving Pakistan's Education

Political Patronage Trumps Public Policy in Pakistan

Dr. Ata-ur-Rehman Defends Pakistan's Higher Education Reforms

Twelve Years Since Musharraf's Coup

Musharraf's Legacy

Pakistan's Economic Performance 2008-2010

Role of Politics in Pakistan Economy

India and Pakistan Compared in 2011

Musharraf's Coup Revived Pakistan's Economy

What If Musharraf Had Said No?

Human Development in Musharraf Years

[Riaz Haq]

Human Capital and Economic Growth: Time Series Evidence from Pakistan

Faisal Sultan Qadri, Faisal and Dr. Abdul Waheed, Waheed (2011): Human Capital and Economic Growth: Time Series Evidence from Pakistan. Published in: Pakistan Business Review , Vol. 1, No. Jan 2011 (2011): pp. 815-833.

Human capital is generally considered as a positive contributor in the economic growth. In this study, we estimate this relationship using time series data of Pakistan for the period 1978 to 2007. A health adjusted education indicator for human capital is used in the standard Cobb-Douglas production function confirms the long run positive relationship between human capital and the economic growth in Pakistan. A sensitivity analysis was also performed in order to check the robustness of the initial findings. The estimation results supported the findings of the previous studies that human capital is positively related to growth and also that the results are robust. The health adjusted education indicator was found to be a highly significant determinant of economic growth, which indicates that both the health and education sectors should be given special attention in order to ensure long run economic growth.

http://mpra.ub.uni-muenchen.de/30654/

[Riaz Haq]

From The News on Global Talent Index:

Pakistan was ranked 54 out of 60 economies in the Global Talent Index (GTI) prepared by Economist Intelligence Unit for 2015 with India occupying the 35th spot - 19 places above Pakistan. Experts cite country’s poor compulsory and university education for the dismal score.

The ranking is based on a score of 1-100 in which demographics have 11.1 percent weight compulsory education 30.8, and university education 22.2 percent, quality of the labor force 22.2 percent, talent environment 11.1 percent, openness 11.1 percent and proclivity to attracting talent 11.1 percent.

United States with a score of 74.5 percent ranks number one Global Talent Index (GTI) – a position it has been enjoying since 2007 and 2011.

Pakistan’s score in GTI 2015 was 30.8 which improvement 3.8 points over its score in GTI 2011. This increase in score has helped Pakistan climb up two positions from 54 to 56.

The GTI 2015 report says that talent remains an important component of countries’ and businesses’ long-term competitiveness. How they develop, attract and retain talent should therefore remain high on the agenda of policymakers and business leaders for the foreseeable future.

The Global Talent Index Report: The Outlook to 2015 seeks to inform their thinking by assessing talent trends around the world on two dimensions: at the international level through a benchmarking index of talent environments in 60 countries

It further pointed out that the US lead is almost one full point (on a 1-10 scale) in 2011 and 2015 over the next best performers. The country’s foremost strengths are the excellence of its universities, the high overall quality of its existing workforce and a meritocratic environment that is relatively unencumbered by restrictive labor regulation.

China rises to 31st place in the GTI in 2015 from 33rd in 2011, but more notable is the five-point improvement in its score – the largest increase in 2015 of any country in the index.

Unsure of the local availability of skilled staff, companies in Asia often recruit individuals with potentials and try to hone their skills. Creativity in overcoming challenges is the most serious shortcoming identified by executives in new and potential hires – most keenly felt in Asia

In demographics, Pakistan’s score was 56 percent, which was lower than 75.8 percent score of India and 72.8 percent of China but higher than 39.6 percent that of United States. In compulsory education, Pakistan obtained a paltry 5.9 percent compared with 81.3 percent by the US, 66.9 percent by China and 30.5 percent by India. Similarly in University education Pakistan’s score was low at 6.7 percent while it’s was 82 percent in US, 32.1 percent in China and 15.7 percent in India.

In quality of labor force Pakistan scored 34.4 percent, India 64.2 percent, China 41.2 percent and the United States 89.6 percent. In ‘talent environment,’ Pakistan’s score was 45.8 percent, India 50.4 percent, China 59.7 percent and the US100 percent. In ‘openness,’ Pakistan’s score of 51.1 percent was much better than US score of 34.1 percent and India’s score of 34.7 percent.

China’s score of 51.5 percent was slightly better than Pakistan under the head of openness. In proclivity to attracting talent Pakistan’s score was 35.8 percent which was higher than 20 percent in China and 29.9 percent in China but it was almost half of the US score of 79.1 percent.

http://www.thenews.com.pk/Todays-News-3-280240-Pakistan-ranks-54th-...

http://www.economistinsights.com/sites/default/files/downloads/GTI%...

[Riaz Haq]

Pakistan-born Imran Aftab was traveling in 2004 when an AOL Time Warner colleague posed a rude question.

“Imran, you’re from Pakistan, yet you seem normal,” Aftab recalled. “What is the problem with the rest?”

Aftab, then director of global outsourcing at AOL, spent half an hour explaining that there was more to the millions of Pakistanis than the public perception after the Sept. 11, 2001, tragedy.

“People see all bad news. I thought, ‘How can I change things even at a small scale through business?’ ”

After that trip, the chemistry major decided to use his knowledge of outsourcing at AOL to start his own business that could make money while also helping his fellow citizens in Pakistan.

The business he created is called 10Pearls, a profitable custom software company based in Herndon, Va., and Pakistan. The company has more than 150 software experts supervised by Aftab’s brother in a 33,000-square-foot office in Karachi. Only about 15 employees work in Herndon.

Aftab creates customized software for all kinds of interfaces, including mobile platforms, kiosks and Web sites. Clients include NVR, Time Warner Cable, Discovery Education, National Geographic and Zubie, a spinoff of Best Buy.

For Zubie, 10Pearls helped develop an Android and Apple application that allows people to see where their cars are located, diagnose auto repair issues and track historical routes.

Although 10Pearls is relatively small, with revenues of less than $10 million, Aftab said it has been profitable since it began 11 years ago making Web pages for handyman businesses.

The company, which Aftab calls a social experiment, reminds me of the “double bottom line” businesses that Washington sports mogul Ted Leonsis espouses. That refers to business that earns profits while accomplishing some social good.

“I see that business causes positive impact,” said Aftab, who makes three visits a year to his native country. “It can change things even at a small scale. Business is a good way for people to learn about each other.”
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“I see that business causes positive impact,” said Aftab, who makes three visits a year to his native country. “It can change things even at a small scale. Business is a good way for people to learn about each other.”

The enterprise isn’t all about altruism.

Pakistan is a good candidate for outsourcing because of its large English-speaking population — 180 million or so — that is tech-savvy, has mathematical skills and whose labor costs are far below that of the United States and other developed countries.

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He knew the bigger money was in developing software applications, but he had to build experience first. He quit AOL Time Warner in 2005 and worked as a consultant while he grew 10Pearls.

Bigger contracts started coming in, including one from a big telecommunications firm that needed help. During the Great Recession that started in 2008, business stagnated and 10Pearls pivoted to mobile applications.

“I could see that mobile was going to grow explosively,” he said.

The company’s big break arrived in 2011, when it won a highly competitive contract to build a mobile application for Social Radar, a Washington company started by Blackboard co-founder Michael Chasen. A key part of Social Radar’s business is that the app allows users to interact with people in the immediate vicinity.

The deal with Chasen helped establish 10Pearls’ credibility. That led to more and larger mobile app contracts....


http://www.washingtonpost.com/business/economy/pakistan-native-trie... 

[Riaz Haq]

Services Trade Development Council (STDC) during its maiden meeting noted that Pakistan is the fourth largest IT service provider to the overseas clients ranked only behind US, India and Philippines with over 200,000 Pakistani professionals working in this field.
First meeting of the Services Trade Development Council took place in the Ministry of Commerce, which was chaired by the Engr. Khurram Dastgir Khan, Minister for Commerce. The Minister said that Ministry of Commerce would put in place the regulatory framework necessary for enhancing the exports of services from Pakistan. The Council will consult the State Bank of Pakistan to devise a suitable mechanism to facilitate these IT professionals to bring the wages of their work to Pakistan directly. 
In order to effectively market the Pakistani Technology industry, the Ministry of Commerce will enhance the participation of Pakistani IT companies in the international trade fares and exhibitions. The Government will also take measures to enhance the capacity of the free lancers working from their homes and small offices providing IT services to foreign clients. The Minister said that the Ministry will train its trade officers abroad to effectively market the Pakistani Technology industry.
The meeting also agreed to take necessary steps to enhance tourism especially religious tourism in the country as Pakistan hosts remains of various ancient civilisations and religions for example Indus Valley Civilisation, Gandhara, pertaining to Hindus, Sikhs, Buddhists and other religions. The Council suggested taking measures to enhance intra-SAARC trade of services which is currently very low.
Meeting was also attended by the representative of Ministry of Information Technology and Telecom, Secretary Trade Development Authority of Pakistan, representatives of Pakistan Software Houses Association for Information Technology, Pakistan International Freight Forwarders Association, Travel Agents Association of Pakistan, Insurance Association of Pakistan and Constructors Association of Pakistan.

http://nation.com.pk/business/21-Jan-2015/pakistan-ranks-fourth-in-...

[Riaz Haq]

Four Pakistani and three United States universities will undertake collaborative research under the project of `Centres for Advanced Studies’ (CAS) to harness applied research to find innovative solutions in water, agriculture and energy challenges for Pakistan.

A $127 million US investment is being executed by the United Stated Agency for International Development (USAID) and the Higher Education Commission (HEC) for the US-Pakistan Centres for Advanced Studies to support Pakistan’s economic development by strengthening universities.

This was revealed by officials of US Embassy and USAID during a roundtable discussion with media held here on Monday.

Participating universities in this programme include University of Agriculture, Faisalabad and University of California, Davis in agriculture sector and National University of Science and Technology (NUST), University of Engineering and Technology, Peshawar and Arizona State University in energy sector.

While Mehran University of Engineering and Technology, Jamshoro and University of Utah will collaborate in water sector.

The participants were informed that the project was structured as three partnerships in the fields of energy, water and agriculture between three US and four Pakistani universities.

Each CAS would form public-private partnerships and interest specific networks by bringing together leaders in academia, government and the business community to identify the applied research solutions in the agriculture, energy and water sectors.

The project would prepare around 1000 graduates for employment in the private and public sectors and provide them opportunities of limited resources or from disadvantaged groups to pursue higher education.

The CAS project would support self-sustaining applied research through an enhanced working relationship between universities and industry-producing graduates and research conducive to Pakistan’s economic growth and raise the quality of faculty.

The project would assist in several areas including providing curricula, financial management, governance, teaching and other reforms to make university education and research more relevant to the needs of industry and government.

The project would help develop scholarship programmes, leading networking activities, developing strong links with private sector and facilitating relevant policy dialogues and reforms.

The meeting was also informed that a high level US delegation and Pakistani government officials would hold inaugural session of the newly established US-Pakistan Education, Science and Technology Working Group on June 3 (Wednesday).

This session would underscore the ongoing long-term cooperation between the United States and Pakistan in the fields of higher education, science and technology.

The officials who spoke during the roundtable included Assistance Coordinator, US Embassy, Brian Aggeler, Counsellor for Economic Affairs, US Embassy, Daniela Ballard, Cultural Affairs Officer, US Embassy, Judith Ravin, Director, USAID Education Officer, Tom LeBlanc and Deputy Director, USAID Education Office, Garth Willis. 

http://www.dailytimes.com.pk/national/02-Jun-2015/us-pakistani-univ...

[Riaz Haq]

#Pakistan ranks among top 10 for #science contribution in #Asia for 1996-2014 

http://www.scimagojr.com/countryrank.php?area=0&category=0&... … 

pic.twitter.com/L2FYioicdD 

[Riaz Haq]

#US #Pakistan #Knowledge Corridor to send 10,000 scholars to US, the Higher Education Vision 2025 http://bit.ly/2eqvzS8 via @techjuicepk

Reaffirming its commitment towards a developing Pakistan, the Government of Pakistan has announced that an agenda on set of goals to be achieved in the education sector, the Higher Education Vision 2025 will soon be announced and shared with general public.

While addressing an interactive discussion session on the Higher Education Vision 2025, the Federal Minister for Planning, Development and Reforms, Ahsan Iqbal announced that the the draft on the Higher Education Vision 2025 is in its final phases and will be shared soon, reported Dawn. Chairman HEC Dr. Mukhtar Ahmed were also among the other notable guests who graced the gathering.

Ahsan Iqbal shared the to-be incorporated points with the gathering stating that the emphasis is being pivoted from the STEM (science, technology, engineering, and mathematics) fields to the STEAM (science, technology, engineering, arts and mathematics) fields. Stressing over the importance of Arts education, Ahsan Iqbal said that Government will be establishing an academy to promote the study on social sciences across the country.

Mukhtar Ahmed agreed and pointed that HEC already had redesigned its goals in the light of national goals as prescribed in the Vision. Ahsan Iqbal also mentioned that, as part of the US-Pakistan Knowledge Corridor, 10,000 Pakistani scholars will be sent to the United States for higher study in the next 10 years.

The Higher Education Vision 2025 consists of a set of goals which the state will aspire to achieve in coming years through to 2025. The document will give a direction to the government’s efforts in the education sector and will help it remain focused towards the set targets. The reaffirmation of this resolute is necessary as it also helps state in keeping up with the ongoing developments and improvements in the education sector from around the globe.

[Riaz Haq]

A little “#MIT for #Pakistan” #Technology

http://tribune.com.pk/story/1266461/little-mit-pakistan/


by Umar Saif

This little “MIT for Pakistan” is driven by a culture of research and entrepreneurship. Its main purpose is to advance innovation and research in the areas of science, technology and engineering. We are highly selective in admitting faculty, research staff and students. This year, our student admission rate was only 2.28 per cent. The scholarship programs, both merit and need based, ensure that applicants are admitted solely on the basis of merit, irrespective of their ability to pay university fees. ITU’s main strength is the quality of its tenure-track faculty. Our tenure-track faculty hiring process is driving entirely by the candidate’s potential to conduct world-class research. Faculty members must have a PhD from a top-tier university and proven research credentials.

In the short duration of 3 years, our faculty members have won over Rs700 Million in competitive research grants, published scores of papers in top journals and conferences and made technology that solves local problems in Pakistan. For instance, Dr Mujeebur Rehman has invented a low-cost ventilator to replace the hand-pumped ventilators in hospitals, which could save thousands of lives every year; Dr Tauseef Tauqir has developed a new fan motor that would drastically reduce the energy consumption for fan manufacturers in Gujranwala; Dr Ali Agha has made a speech-based system that enables illiterate people to access Internet services and Dr. Yaqoob Banghash is digitising the historical archives of Punjab. Collaboration between PITB and ITU researchers has helped the Punjab Government in designing an early epidemic warning system for Dengue, reducing the dropout rates in child vaccination programmes in Punjab, Baluchistan and K-P, and devising a data collection platform that underpins mobile applications used by the government of Punjab.

Cambridge results: Record setting year for Pakistanis

With a specific focus on entrepreneurship; we have established a startup incubator, called Plan9 which is jointly run with the PITB. It has graduated over 130 startups and helped bootstrap a culture of tech startups in Pakistan. Plan9 now supports over 17 startup incubators throughout the country. Each faculty members gets one day off every week from university services to work towards the commercialisation of their research projects. In order to establish a credible scientific publication in Pakistan, ITU has licensed MIT’s Technology Review magazine, one of the most credible scientific publications in the world. MIT Technology Review Pakistan is printed every two months and covers technology research, startups and products in Pakistan.

We have just work on a purpose-built campus spread over 183 acres on Barki Road in Lahore. At the same time, we are entering into a partnership with EdX (MIT and Harvard University online course platform) to introduce online learning in our classrooms. I hope our little “MIT for Pakistan” will become a platform to advance scientific research, innovative and entrepreneurship in Pakistan.

[Riaz Haq]

#Pakistan doctoral grads produced in 2014: 1351 #PhD #education http://www.hec.gov.pk/english/universities/Pages/PhD-Produced-by-Pa... …

https://twitter.com/haqsmusings/status/945411423760347136

[Riaz Haq]

International conference on emerging technologies: Chairman HEC for translating opportunities into reality

https://www.pakistantoday.com.pk/2017/12/28/international-conferenc...

Higher Education Commission (HEC) Chairman Dr Mukhtar Ahmed has stressed on the need for translating the opportunities created by new technologies into reality while ensuring a positive use of advanced gadgets.

He said that the HEC is committed to facilitating universities and encouraging research activities. “We need to conduct researches that cast positive impacts on society and mitigates the miseries of humanity,” he underlined.

He expressed these views while speaking as a chief guest at the two-day 13th International Conference on Emerging Technologies (ICET) jointly organized by the Capital University of Science and Technology (CUST), in collaboration with the HEC and Institute of Electrical and Electronics Engineers (IEEE) Islamabad. 

CUST Vice-Chancellor Dr Mansoor Ahmed, Professor Aamer Iqbal Bhatti, ICET General Chair and a large number of faculty members and students were also present on the occasion.

The HEC Chairman pointed out that water and food security will become vital issues in the near future. He emphasised that the solution to all social ills including terrorism, poverty and unemployment lies in the promotion of education. 

“It is the era of a knowledge economy and no nation can make progress without promoting education,” he stated. He said that the universities are responsible for imparting education, creating knowledge and integrating it into society. He urged the faculty to pay special attention to the training of students, as training is imperative for a peaceful society.

Shedding light on the achievements of the HEC during the last 15 years, the chairman said that HEC set off on its journey when Pakistan had only 59 universities, adding that the number of universities in the country has now reached 188. He maintained that the HEC has been putting strenuous efforts to promote ICT in the country.

“Pakistan has one of the best ICT setups of South Asia”, he informed.

He also announced that the HEC plans to establish centres of excellence in data and artificial intelligence. 

Sharing the background of the conference, Professor Aamer Iqbal Bhatti said that the first international conference on emerging technologies was held in 2005. He said CUST lays great emphasis on applied research and the 13th ICET is a testimony to that fact. He appreciated the role of the HEC and IEEE Islamabad in collaborating to organise the conference.