News: CSF sets goal to achieve 60th rank in GCI
Name of the Newspaper: Business Recorder
Date of publication: Tuesday, March 13 , 2007
Website: http://www.businessrecorder.com.pk

ISLAMABAD (March 13 2007): Pakistan's global competitive index (GCI) can improve from the present 91 to 60 by 2010 provided the government takes several steps to improve its competitiveness. These steps include, among other things, active efforts by the government and private sector.

But a large number of the suggestions are not more than generalities so often agitated the multilateral agencies, the government itself and a plenty of development economists. The Competitive Support Fund (CSF), a joint initiative of the Ministry of Finance and the USAID aimed to shape a more competitive economy, on Monday released its 86page report on the State of Pakistan's Competitiveness 2007, amidst considerable fanfare.

The Competitiveness Support Fund has set the goal of moving Pakistan from its rank of 91 to a rank between 60 and 65 by 2010 by improving its competitiveness.

On behalf of the government, the Fund has suggested that it should implement reforms in the macro and micro economic business environment, and the private sector should improve its business strategies and operations, compliance with global standards and that business leaders should reposition their industries and companies in world markets. It is also necessary to prepare a new generation of business managers and entrepreneurs.

It states that by improving its competitiveness, higher growth and higher level of employment would be ensured. As regards improving the Macroeconomic Environment it suggests the Ministry of Finance, must maintain and improve the sound macroeconomic policies. To achieve higher rates of growth, inflation must be kept within single digit; the budget deficit must now be reduced; fiscal and monetary policy should help in increasing federal savings and investment as a percentage of GDP. Increased foreign remittances and increased foreign investment will ensure growth in foreign currency reserves and improve balance of payment position.

It adds, through tax modernisation, the government will be seeking increased revenues while lowering the rates and expanding the base and simplifying compliance. This will set the macroeconomic environment for growth.

With a good macro economic environment, it is also essential to have an excellent microeconomic environment. This can be achieved by reducing the obstacles to the formation of new business and the growth of small and medium enterprises. Smeda is playing a very useful role in fostering development of competitive industry clusters and growth of small businesses.

The government will need to focus on continued progress in judicial reforms and the effective application of the rule of law to commerce, including the enforcement of contracts and the fair resolution of disputes.

The country must improve enrolment rates at all levels of education while improving the relevance of this education. Schools should focus on equipping students with marketable skills, as it is important to equip young people with the aptitudes as well as the attitudes needed to secure employment. Education leaders have a vital role to work more together to define skill gaps, skill standards, current deficiencies and new training programmes.

It further suggests that technological readiness and innovation can be fostered by improved linkages, among research institutes and their respective industries. Policies need to be in placed that lead to rapid expansion of digital technologies. The government should follow the Chinese example of one child one computer.

In the words of the report, the private sector has critical role to play. Productivity can only be delivered by real individuals that improve their productivity and real companies that improve their strategies and operations. Therefore, private firms must play a leadership role in boosting Pakistan's competitiveness. Corporate governance and accountability must improve among Pakistan's private companies.

The Government can reform its tax policy, lower rates and reduce the cost of compliance, but the private sector must respond to this with a culture of voluntary compliance. Private companies need to modernise their use of human resources, use incentives and invest in training.

Pakistani firms must lead the way as export champions and position themselves as compliant with global labour, consumer and environmental standards. It warns that failure to adopt world class labour standards will risk erosion of confidence from international investors, and buyers. Since these are being demanded by the foreign investors and buyers, Pakistan can position itself in the world economy as a country in full compliance with such standards.