Reclaiming the Roar

The success of both Japan’s and Korea’s development models hinged on building strong and robust institutions for long-term growth.

Pakistan’s economic trajectory presents both challenges and opportunities. By drawing on the experiences of Japan and Korea, the nation can craft a multi-pronged strategy for sustainable economic growth that addresses past shortcomings.

“Public-private partnerships, targeted incentives and tax breaks, entry of new corporate players in strategic sectors, ensuring transparency, a strong and independent judiciary, robust regulatory bodies, facilitation of knowledge economy, infrastructure development and empowerment of rural communities can help achieve the Asian tiger status for Pakistan.”

Similar to both Japan and Korea, Pakistan can leverage the strengths of both the public and private sectors. However, to avoid pitfalls, a nuanced approach is necessary. Instead of blanket subsidies, Pakistan can identify a limited number of high-growth sectors with strategic importance. These could be industries where Pakistan has a comparative advantage (textiles) or sectors with high future potential (renewable energy). Targeted incentives like tax breaks, subsidized loans, and streamlined regulations can be offered to attract private investment in these areas. Unlike Korea’s early model, which sometimes rewarded chaebols regardless of performance, Pakistan’s incentive structure should be linked to achieving specific goals. This could involve targets for export growth, job creation, or technological innovation within the chosen sectors. Lessons from Japan’s zaibatsu dominance highlight the importance of fostering a competitive environment. Pakistan can achieve this by encouraging the entry of new players, both domestic and foreign, into strategic sectors. Additionally, strengthening regulatory bodies can ensure fair competition and prevent anti-competitive practices.

The success of both Japan’s and Korea’s development models hinged on building strong and robust institutions for long-term growth. Concerns about a lack of transparency plagued both Korea’s chaebols and Japan’s zaibatsu. Pakistan must prioritize transparency in public-private partnerships. This includes clear guidelines for awarding incentives, open bidding processes, and robust anti-corruption measures. Independent auditing of public-private projects can further ensure accountability. A strong and independent judiciary is crucial for enforcing contracts, resolving disputes fairly, and protecting property rights. Similarly, establishing robust regulatory bodies with the autonomy to set and enforce standards in areas like environmental protection, consumer safety, and financial regulations is essential for fostering a healthy business environment.

The knowledge economy demands a skilled and adaptable workforce. Pakistan can invest in its enormous human capital for the knowledge economy to address its challenges. Move beyond rote learning and emphasize critical thinking, problem-solving skills, and digital literacy in the education curriculum. This requires increased public funding for education to ensure affordability and accessibility for all. Public-private partnerships can also be explored to develop specialized training programs aligned with industry needs. Prioritize Science, Technology, Engineering, and Mathematics (STEM) education to create a talent pool equipped for the demands of a technology-driven world. This can involve introducing specialized STEM programs at the secondary school level, fostering collaboration with universities and research institutions, and encouraging public-private partnerships to equip schools with modern technology and resources. The pace of technological change necessitates a focus on lifelong learning. Pakistan can create a system that encourages continuous skills development through vocational training programs, online learning platforms, and industry-specific certifications.

Both Japan and Korea recognized the importance of infrastructure for economic development. Pakistan can replicate this strategy while addressing regional disparities with infrastructure development and rural upliftment. Invest in transportation infrastructure like roads, railways, and ports to improve connectivity between urban centers and rural areas. This will facilitate the movement of goods and people, fostering trade and economic integration. Upgrade energy infrastructure to ensure a reliable and affordable power supply, crucial for attracting investment and powering industrial growth. Empower rural communities through programs that go beyond just infrastructure development. Consider initiatives similar to Korea’s Saemaul Undong, which fostered self-reliance and community ownership. This could involve providing resources and support for local communities to improve housing, healthcare facilities, and agricultural practices. Additionally, investing in modernizing agricultural techniques and promoting agribusiness can boost rural livelihoods and increase agricultural exports.

Finally, Pakistan’s vulnerability to external economic shocks necessitates a more prudent approach to managing external dependence and building resilience. Reduce dependence on a few major trading partners by expanding trade with new markets. This will mitigate risks associated with global economic fluctuations and provide greater stability. Accumulate foreign exchange reserves to act as a buffer during external financial crises. Attract foreign direct investment (FDI) by creating a business-friendly environment. This reduces reliance on the IMF and provides greater negotiating power in the event of an economic downturn for Pakistan.

Mus’haf Khan
The writer is a Fintech-DFS advocate, Policy Enabler & former Advisor of the Government of Punjab.

Mus’haf Khan
The writer is a Fintech-DFS advocate, Policy Enabler & former Advisor of the Government of Punjab.

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