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Name of the Newspaper: Pakistan Observer
Date of publication: Wednesday, March 14, 2007
Website: http://pakobserver.net/200703/14/news/business03.asp

Ijaz Kakakhel

Islamabad––Pakistan ranked 67th on the Business Competitiveness Index (BCI) and 91st on the Global Competitiveness Index (GCI) in the 2006-2007 Global Competitiveness Report.

The wide gap between Pakistan’s performance in these two rankings is partly explained by the country’s low scores in health and education, which are included in the GCI but not the BCI.

Pakistan’s competitiveness rankings and impressive growth reflect increased macroeconomic stability. These data are presented to the Prime Minister Shaukat Aziz on Monday in the “The state of Pakistan’s Competitiveness 2007” report.

Improved macroeconomic management and first-generation economic reforms have delivered increased economic stability and spurred higher rates of economic growth. Increased macroeconomic stability is allowing the economic leadership to turn its attention to second-generation microeconomic reforms despite the economic stresses of oil price increases and unanticipated budget spending associated with relief to earthquake victims.

Improving competitiveness will require microeconomic reforms and continued improvements in access to health and education. Addressing these issues will require active leadership and a coordinated effort by both public and private sector leaders at the federal, provincial and municipal levels.

The Government of Pakistan (GoP) has proposed an ambitious program for addressing microeconomic issues that directly impact competitiveness. The government is focusing on macroeconomic stability, improving the business environment and implementing practical initiatives through the Competitiveness Support Fund (CSF).

However, many of the microeconomic constraints can only be solved at the provincial level. Provincial and local leaders must therefore be part of the competitiveness dialogue. Provincial, district, and municipal governments must play a lead role in improving the business climates within their regions and improving the provision of health and education services. Many competitiveness initiatives are regional in nature. Industries tend to “cluster” around specific areas.

It is the government’s role to help ensure that the business environment is conducive to creating sustainable jobs. In addition, provincial and district governments are primarily responsible for education and health care, which means that regional leadership must be brought into the competitiveness dialogue.

Strengthening inter-regional trade relationships will provide promising prospects for continued growth. There are now unique opportunities for the government to develop prosperous trade relationships with China, South Asia and Central Asia.

Ensuring trade access for local exporters and continued trade facilitation will help Pakistan improve its export performance.

The purpose of this State of Pakistan’s Competitiveness Report is to provide an overall look at the Pakistan economy and prospects for growth using the annual Global Competitiveness Report as the framework for evaluation.

Competitiveness is critical to the Government of Pakistan’s objective of achieving high levels of economic growth and rapid poverty reduction.

The most widely followed indicators for competitiveness are publishing each year by the World Economic Forum (WEF) in the Global Competitiveness Report (GCR).

The State of Pakistan’s Competitiveness Report is important for mobilizing broad popular understanding and support within the country for important second-generation economic reforms. The report is designed to help the government benchmark current performance of the country and measure future progress. The government is committed to the process of dialogue with leaders of the private and social sectors in order to build consensus around initiatives to spur growth and employment. This report establishes a common platform for public-private dialogue and informs and catalyzes clear decision making among economic leadership.