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Can Pakistan Become a Market of Tomorrow?

Amir Jahangir discusses how Pakistan can transform its inherently rich potential into meaningful economic growth.
Published 21 Aug, 2023 11:46am

Pakistan’s journey to becoming a ‘Market of Tomorrow’ has been hindered by various challenges in creating a cohesive economic narrative. Fragmented vision and political instability have led to inconsistent policies that have left investors uncertain about the country’s economic prospects. Furthermore, negative perceptions, ineffective communication and recently, a significant emphasis on security concerns have overshadowed Pakistan’s potential. To overcome these hurdles, a proactive and strategic approach is essential. Pakistan must develop a coherent economic strategy with long-term goals, continuity and stability.

The concept of competitiveness has evolved and is no longer defined merely by GDP figures. Instead, the emphasis is on delivering ‘beyond-GDP goals’. Pakistan holds several competitive advantages, including a young, tech-savvy population and emerging sectors, such as the ‘Orange Economy,’ centred on knowledge and information generation.

Pakistan holds the potential to become the trade and transit hub, positioning itself as a strategic pivot for global commerce. By leveraging its geographical location and enhancing trade, Pakistan can foster regional connectivity and facilitate the seamless movement of goods and services. Special Economic Zones (SEZs) and export-oriented industries will further boost its trade capabilities, while digital infrastructure and a skilled workforce will drive innovation and efficiency in trade practices.

Pakistan has recently unveiled the ‘Economic Revival Plan’, a strategic blueprint that aims to harness the country’s potential and elevate its global competitiveness. At the core of this ambitious endeavour lies a strategic focus on key sectors that can attract investments and drive growth. One such pillar is agriculture technologies (agri-tech), which holds the potential to revolutionise the agrarian landscape through modernisation and innovation. By adopting precision agriculture and sustainable practices, Pakistan can ensure food security, boost exports and enhance agricultural productivity.

However, challenges persist in the agricultural sector, with notable gaps between Pakistan’s crop yields and international standards for major crops like wheat, rice, sugarcane, maize, gram and cotton. Inefficient irrigation practices, limited use of agri-tech tools, such as fertilisers, pesticides, and advanced seeds, reliance on outdated crop varieties and limited access to credit are some of the factors hindering productivity. The ‘Green Pakistan Initiative’ aims to transform barren land into fertile ground, fostering increased productivity and revenues. Encouragingly, many Gulf countries have expressed interest in investing, leading the country to aspire for a transformative $30-50 billion investment boost in the agriculture sector.

Pakistan also holds a unique geo-economic advantage, being in proximity to the world’s two most populous countries, China and India. This favourable position opens up opportunities for Pakistan to become the breadbasket of the region. Southern Asia and China combined are home to over 3.5 billion people, constituting nearly 43% of the world’s population. The vast potential market size presents a compelling incentive for Pakistan to harness its agricultural capabilities and cater to the growing food demand.

Pakistan embraces the concept of large-scale corporate farming, which offers the prospect of enhanced efficiencies and cost reductions in the long run; there is also growing emphasis on expanding cultivation to address food security challenges. The approach extends beyond simply improving yield benchmarks per hectare and aims to ensure a sustainable supply of food to meet the needs of the population.

On the energy front, Pakistan can take centre stage by harnessing its abundant natural resources. Embracing renewable energy sources like solar, wind and hydroelectric power not only guarantees energy security but also positions the country as a vanguard of sustainable development. Moreover, Pakistan’s strategic positioning in the regional energy corridors, with gas and oil supplies from Kazakhstan, Iran, Russia and other Central Asian countries, bolsters its potential to emerge as a net energy exporter to Europe, China and Africa.

Venturing into the digital realm, Pakistan’s vibrant tech-savvy population can fuel the rise of digital trade and e-commerce. With a large market eager to embrace digital solutions, the potential for growth in e-commerce platforms and digital trade is immense. By capitalising on this, Pakistan can tap into both domestic and international markets. Young Pakistanis are already making attractive incomes through opportunities on Amazon, Alibaba, Fiver, Upwork and other digital platforms.

Pakistan’s youthful population requires accessible and quality education. EdTech initiatives have the potential to democratise education, offering e-learning platforms and skill development programmes. The shift from long-duration degree-based education is transitioning into a more skilled-centric ecosystem. Transformative and generative AI is creating opportunities for people to learn irrespective of the lines of divisions between literacy and illiteracy, language barriers and digital divides. With a population of 240 million plus, it has the potential to create a life-smart, jugar-centric (innovation-based) and solution-oriented population.

Pakistan’s freelancing market has experienced remarkable growth, with an impressive 78% annual growth rate, making it the fourth fastest-growing country in the world. The Ministry of IT and Telecom has reported that the freelancing market has generated over $500 million in the last year alone. The country currently boasts an estimated three million freelancers, with graphic designing and web development emerging as the most sought-after skills. Pakistani freelancers are also making their mark in the international arena, earning an average hourly rate of $20. The majority of these freelancers are under the age of 30, showcasing the potential of Pakistan’s youth in driving growth in this sector. The country is also number one on multiple freelancing platforms, such as Upwork, Freelancer, Fiverr – a further testament to how the young generation can be part of the global value and supply chain of technology and of creative responsibilities. This potential is something that governments and the private sector should explore in the Orange Economy.

In fact, Pakistan holds immense potential for the Orange Economy, also known as the ‘Creative Economy’. This sector encompasses creative industries, such as arts, culture, media, architecture, design, technology and video games. As creators, Pakistan’s talented young can play a pivotal role in driving the growth and innovation of this sector on the global stage. In fact, the Orange Economy’s role in income generation and job creation can contribute about 30 million jobs globally.

In Pakistan, nearly one-third of creative occupations are filled by people under 24, showcasing their significant participation in this sector. With a more strategic focus on local creativity and skills, the creative industries can contribute substantially to GDP and foster sustainable economic growth. However, to unlock this potential, it is essential to expand access to affordable and high-speed internet services, while the local creative industries must focus on producing culturally relevant and diverse content that resonates with the Pakistani audience, while also creating native platforms and indigenous products to benefit local creators. Leveraging digital platforms and social media will empower creators to reach millions of users and foster engaged communities around their content.

Nurturing a supportive ecosystem for start-ups and creative entrepreneurs is equally critical. Initiatives like incubators, accelerators, and co-working spaces will cultivate creativity and innovation, offering access to funding, mentorship and networking opportunities that encourage individuals to turn their creative ideas into sustainable businesses.

To achieve excellence, Pakistan must undertake certain fundamental steps. Firstly, by enhancing accountability to ensure transparency in financial and performance aspects as well as by promoting transparency through open government mechanisms and data-driven policies. Embracing data for policy designs and implementations is crucial. Secondly, by establishing a “Prosperity Council” (promoting reforms and optimising strategic plans for economic resurgence and inclusive growth) with a team of apolitical experts focused on implementing reforms based on professional expertise and knowledge. This approach will foster transparency, efficiency and effectiveness in addressing critical issues.

With innovative thinking and a commitment to growth, Pakistan can become a beacon of opportunity, attracting investments and shaping a vibrant and diverse economy on the global stage.

Amir Jahangir is a global competitiveness, risk and development expert. He leads Mishal Pakistan, the country partner institute of the Centre for the New Economy and Society Platform at the World Economic Forum.