News: Weaknesses don’t allow the economy to perform well
Name of NewsPaper: Daily Times
Date of Publication: Thursday, 13 September, 2007
URL: http://www.dailytimes.com.pk/default.asp?page=2007\09\13\story_13-9-
2007_pg5_12

By Ijaz Kakakhel

ISLAMABAD: The USAID-funded Competitive Support Fund (CSF) has identified several gaps including lack of innovative approaches, lack of linkages between the academic community and industry, poor dialogue on policy and reform issues, slow commercialisation of innovation and weaknesses in the legal framework for a viable economic environment.

These gaps hamper the performance of the economy to achieve its potential. The CSF has proposed a series of interventions to accelerate the adoption of practical competitiveness-building initiatives in Pakistan. The CSF was designed to address these gaps.

The government, private sector, academia and media are working together to enhance competitiveness of the country that would lead to promote economic development.

The CSF is a joint initiative of the United States Agency for International Development (USAID) and the Ministry of Finance. The government of Pakistan was able to create a relevant platform by using one of the best practices in emerging market economies to create a dialogue between government, private sector, academia and by making media part of the triple helix to promote competitiveness for sustained economic growth in Pakistan.

Pakistan has been identified as one of the top 10 countries in business dynamism and market flexibility, says CSF.

“Pakistan has shown serious efforts in improving its competitiveness ranking which the WEF measures annually”, said Prof. Klaus Schwab of the World Economic Forum (WEF), who is also recognised as the father of competitiveness at the Harvard Business School. “The seriousness and efforts put in the last one year by the government of Pakistan is commendable,” added Dr Schwab.

The CSF has three operational windows namely: technical assistance, matching grant and business incubators. Through the impact of CSF’s activities on supporting economic development, the government has included for the first time ever competitiveness into the Poverty Reduction Strategy for the next 5 years which includes: private sector, development; intensifying deregulation, privatisation and liberalisation; enhancing competitiveness and productivity; special economic zones, value-addition in agriculture and riding the globalisation wave in the export markets.

The CSF showed the best practice on competitiveness for a sustained economic growth, by identifying for the first time ever the economic sectors that have competitive advantage and potential to grow. In this regard, the policy analysis on the motorcycle industry has identified various opportunities given via CSF recommendations, which includes: commercial banks have been encouraged to increase consumer lending for motorcycles; the custom duty on Complete Built-up Units (CBU) has been reduced from 90 to 80 percent and the custom duty on Completely Knocked Down (CKD) Kits has been decreased from 30 percent to 20 percent.

The result of these activities will be an increase in the capacity of the motorcycle market from existing 750,000 units per annum to 1.7 million units per annum by 2010-11 and 100,000 units to be exported annually.

The CSF has undertaken a study regarding fish quality and value adding at Karachi Fisheries Harbour (KFH). The study identified major competitive issues affecting the fishery were failure to enforce existing regulations, poor infrastructure (especially related to fish marketing in Karachi).

Recognizing the potential of gender’s contribution in economic development, the CSF carried out a study focusing on the competitive pre-conditions for the greater economic empowerment of women in Pakistan.

The fund has been successful in partnering with some of the most important institutions to enhance competitiveness in Pakistan. These include the World Economic Forum (WEF) and various competitiveness agencies in developed economies. In Pakistan, the joint efforts include Higher Education Commission (HEC), Pakistan Agricultural Research Council (PARC), Government of Sindh (GoS), Board of Investment and Pakistan Business Council.