What Will it Take to Realize Pakistan’s Potential?
“Pakistan can do much better, and should do much better.” That was the central message delivered by Sri Mulyani Indrawati, managing director of the World Bank Group and former finance minister of Indonesia in a recent address to the Higher Education Commission in Islamabad, Pakistan.
“For the past two decades, Pakistan’s growth rate has been only half that of India and China,” Indrawati noted. “If current trends continue, by 2050, India’s economy will be 40 times larger than Pakistan’s, and China’s economy 100 times.”
Pakistan has many assets which can help it get on the right track, Indrawati said, including its coastlines, cities, and mining potential. “Pakistan’s growing middle class, an estimated 40 million people, represents a powerful engine for change, demanding both improved services and access to opportunities,” she said. “They are also key to driving growth and creating jobs.”
The areas Pakistan needs to work on, according to Indrawati, include improving education, empowering women and girls, and instituting better governance practices. On the last point, Indrawai congratulated Pakistan on its first peaceful transfer of power between two civilian governments. She termed that development “a truly encouraging sign of the country’s strengthening democracy.”
On the economic front, “Pakistan has the good fortune to be positioned between two of the largest and fastest growing countries in the world, China and India,” Indrawa noted. “Yet its trade with them is negligible,” she added. “And Pakistan is losing ground. While its world market share has declined over the past 20 years, those of Malaysia, Mexico and Thailand have doubled, and China’s has tripled.”
There have been discussion on developing the China-Pakistan economic corridor and these “now must be implemented,” said Indrawai. “And a parallel priority should be to normalize trade relations with India.”
Pakistan is also well situated between Europe, the Middle East, Central Asia, East Asia and South Asia. “Improving logistics, transport and customs,” said Indrawati, “can position Pakistan to play a major role in both national trade and transit trade.”
One lesson of East Asia’s growing prosperity, according to Indrawati, is that there can be strong benefits of increasing trade and investment links. “But,” she added, “these gains can be uneven without a parallel internal effort to strengthen competitiveness. This is an urgent agenda for Pakistan.”
Pakistan, in 128th place, currently ranks low on the World Bank’s 2015 Doing Business report. “A better business environment, skills training, use of innovation, and cutting edge technology,” said Indrawati, “will be essential if Pakistan is to compete.”
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