Framework For Economic Growth Pakistan FEG-Final-Report - 2-1-2012 PDF

International Conference on Framework for Economic Growth, Pakistan
FRAMEWORK FOR ECONOMIC

GROWTH PAKISTAN
International conference on Framework for Economic

Growth, Pakistan Hosted by Planning Commission,
Government of Pakistan
in collaboration with UNDP
13-14 July, 2011
Islamabad
www.planningcommission.gov.pk
InternationalconferenceonFrameworkforEconomicGrowth,Pakistan
Copyright 2011 International conference on Framework for Economic Growth, Pakistan
Planning Commission
Material in this publication may be freely quoted or reprinted,

but acknowledgement is requested, together with a copy of the publication
containing the quotation or reprint.
This publication is available from:

Planning Commission
Pak Secretariat, Block P
Islamabad, Pakistan
Tel: + 92 51 921 4464

memst@mopd.gov.pk
www.planningcommission.gov.pk
_____________________________________________________________________________
Conference Moderators:
Ayaz Amir
Mohammed Mallick
Moeed Pirzada
Syed Talat Hussain
Farrukh Khan Pitafi
Coordinator/ Advisor editing - Framework for Economic Growth, Pakistan:
Imran Ghaznavi (Advisor)
Dr. Haroon Sarwar (Assistant Chief)
Dr. M. Sabir Afridi (Assistant Chief)
Amna Khalid (National Institutional Officer)
Editor Framework for Economic Growth, Pakistan:
Zahid Ali (Consultant-UNDP)
Planning Commission
is pleased to present
The Framework for Economic Growth
Approved by the National Economic Council

in its meeting held on 28th May, 2011
under the Chairmanship of
the Prime Minister of Pakistan
Foreword
rational, efficient, and equitable rules and

procedures for the management of economic
assets and activities.
I have the honor and the privilege to present

the Framework for Economic Growth (FEG)
- a strategy that seeks accelerated and
sustained growth and development based on
economic reform and an emphasis on
productivity. The FEG is based on
widespread
local
and
international
consultation developing strong local
ownership for a quality development
strategy that is informed by the best
knowledge and analysis available.
Accelerating the economic growth rate and

sustaining it at a high level must therefore be
treated as a national priority. The old
paradigm of project and government led
growth has to change. This reasoning has led
the
Planning
Commission
towards
rethinking the traditional growth narrative in
Pakistan. Today international indicators
suggest that Pakistan has more of a
software (management and productivity)
problem than a shortage of hardware
(physical infrastructure). The strategy
emphasizes the need to reduce economic
distortions, improve functioning of domestic
markets, create space in cities through
proper zoning, energizing youth, engaging
communities, inducing investment in human
and social capital; and enhancing
connectivity and interactivity. Vibrant cities
in an enabling environment will be the
hotspot for entrepreneurship and innovation,
assuring better returns through improved
productivity on investments for all investors.
Pakistani cities presently are configured as
suburban clusters instead of creative cities
which are locomotives of growth. The new
cities of Pakistan occupy a large part of the
landscape. In this context it must be
understood that the urban-rural divide and
the classification of cities has undergone a
paradigm shift through demographic
changes.
An unintended consequence of our policies

has been the stifling of internal markets,
cities and communities, which play a critical
role in fostering productivity, innovation and
entrepreneurship and ultimately promote
growth, prosperity and development. In the
new development framework, private sector
should be the growth-driver in open market
environment that rewards efficiency,
innovation and entrepreneurship, while the
government is facilitator that protects public
interests and rights, provides public goods,
enforces laws, punishes exploitative
practices, and operates with transparency
and accountability.
The new growth strategy places emphasis on
what might be called the "software" of
development incentives viz. institutions,
markets, communities, and governance; and
then on the "hardware" viz. physical
investment in buildings, equipment, roads
etc. NGS is an approach needed to release
the dynamism of individuals and enterprises
and seeks to do this through measures for
improving the investment climate, reduce
the cost of doing business and to dissolve
the impediments to entrepreneurship along
with increasing the productivity of
investment. It places much emphasis on
matters of economic governance, that is, to
the formulation and implementation of
Our development projects for building

required human and physical infrastructure
have not been able to impact growth and
private investment because of continued cuts
and inappropriate project selection. While
the projects do generate employment and
economic activity in the first instance, they
4
lack strategic direction and coherence that is

required for sustained high growth and the
delivery of sustainable development
benefits. We have a young and growing
population. Our calculations also suggest
that if we do not accelerate growth to over 7
per cent per annum on a sustained basis, the
coming increases in labour force cannot be
absorbed. Past data suggests that our long
run growth on average is close to 5 per cent
per annum. At this rate of growth, a very
large percentage of the youth bulge will not
find employment. The New Development
Approach should now be based on
endogenous growth, where the quantity of
investment should be complemented by
efforts to improve the quality of investments
i.e. their productivity and efficiency. The
private sector must drive economic growth
with timely implementation of market

reforms
which
should
promote
competitiveness.
I would like to acknowledge and appreciate
the hard work of the growth team and staff
of the Planning Commission and UNDP
which was put in towards the preparation of
this national document. I extend the sincere
gratitude of the Planning Commission to our
partners (donors, civil society organizations,
and academia etc.) who have been a source
of guidance through out this process.
Implementing the growth strategy will
require serious, sustained and disciplined
efforts. A process of reforms beginning with
the Planning Commission has been outlined.
Reform is a continuing process and it needs
to be institutionalized.
Dr. Nadeem Ul Haque
Deputy Chairman
Planning Commission
Abbreviations
ADB
ADP
AIDS
ATM
BMZ
BPR
BRAC
CBR
CDA
CDIA
CEO
CFPR-TUP
AERC
ETP
FATA
FDI
FTA
GCI
GDP
GHG
GIZ
GLC
GPA
GTP
HEC
HIV
HR
HRM
ICT
IT
KPK
LUMS
MDG
MNA
MoU
MPA
NADRA
NCGR
NEC
NES
FEG
Asian Development Bank

Adolescent Development Program
Acquired Immune Deficiency Syndrome
Automated Teller Machine
Bundesministerium Fr Wirtschaftliche Zusammenarbeit
(German Federal Ministry for Economic Development Cooperation
Business Process Re-engineering
Bangladesh Rural Advancement Committee
Central Board of Revenue
Capital Development Authority
Cities Development Initiative for Asia
Chief Executive Officer
Challenging the Frontiers of Poverty Reduction and Targeting the Ultra Poor
Applied Economic Research Council
Economic Transformation Programme
Federally Administered Tribal Areas
Foreign Direct Investment
Free Trade Agreement
Global Competitiveness Index
Gross Domestic Product
Greenhouse Gas
Gesellschaft fr Internationale Zusammenarbeit
Government Linked Companies
Grade Point Average
Government Transformation Plan
Higher Education Commission
Human Immunodeficiency Virus
Human Resource
Human Resource Management
Information & Communication Technology
Information Technology
Khyber Pakhtoon Khawa
Lahore University of Management Sciences
Medium Term Development Goals
Member of National Assembly
Memorandum of Understanding
Member of Provincial Assembly
National Database and Registration Authority
National Commission for Government Reform
National Economic Council
National Executive Service
Framework for Economic Growth
NGO
NGS
NIT
NLC
NUST
ORIC
PASDEC
PhD
PIA
PPP
PPRA
PRA
PSDP
SAARC
SBP
SCEP
SME
SMS
SoFEA
UET
UK
UN
UNDP
UNESCO
USA
USAID
Non-Government Organization
New Growth Strategy
National Investment Trust
National Logistic Cell
National University of Science and Technology
Organization for Research, Innovation and Commercialization
Pakistan Stone Development Company
Doctor of Philosophy
Pakistan International Airlines
Public Private Partnership
Public Procurement Regulatory Authority
Participatory Rural Appraisal
Public Sector Development Programme
South Asian Association for Regional Cooperation
State Bank of Pakistan
Securities and Exchange Commission of Pakistan
Small and Medium Enterprises
Short Message Service
Social and Financial Empowerment of Adolescents and Youth
University of Engineering & Technology
United Kingdom
United Nations
United Nations Development Programme
United Nations Educational, Scientific and Cultural Organization
United States of America
United States Agency for International Development
Contents
Page No.
Introduction
11
Welcome remarks by Dr. Nadeem Ul Haque, Deputy Chairman, Planning Commission
13
Introductory remarks by Ajay Chhibber, Assistant Secretary General, UN and Assistant

Administrator and Regional Director for the Asia and the Pacific, UNDP
16
Session 1: Implementing Governance Reforms
21
Speaker: Sulaiman B. Mahbob, Chairman, Malaysian Industrial Development Authority
21
Civil Service Reforms:
22
Speaker 1: Norma Binti Mansor, Secretary General, National Economic Advisory

Council, Malaysia
Speaker 2: Dr. Ishrat Hussain, Director, Institute of Business Administration, Karachi
22
Question and Answers
27
Session 2: Openness and Competitive Markets
29
Speaker 1: Muhammed Ali, Chairman, Securities & Exchange Commission of Pakistan

Speaker 2: Philip Auerswald, Professor, George Mason University
29
24
31
Discussion by discussants:
i) Rahat Kaunain, Chairperson, Competition Commission of Pakistan
ii) Farhan Bokhari, Pakistan Correspondent & Country Manager, Financial Times UK
33
33

Session 3: Results based Management in Public Sector
Speakers 1: Heru Prasetyo, Deputy Chairman of the Presidents Delivery Unit for
Development Monitoring and Oversight Indonesia
Speakers 2: Nohman Ishtiaq, Advisor, Finance Division, Pakistan
34
36
36
38
i) Dr. Akmal Hussain, Professor, Beaconhouse National University
ii) Dr. Andrew, Rathmell, Coffey International Development
iii) Vinaya Swaroop, Sector Manager of Economic Policy in South Asia, World Bank
iv) Raza Rumi, Public Policy Advisor/Editor
40
40
41
42
44
Session 4: Creative Cities and Urban Development
46
Speaker 1: Emiel A. Wegelin, GIZ Program Coordinator, Cities Development Initiative

for Asia, Philippines
Speaker 2: Belinda Yuen, Urban Development Unit, World Bank
46
48
i) Tahir Shamshad, Member Planning, CDA, Islamabad
ii) Parvez Qureshi, Urban Planner and Architect, Lahore
iii) Philip Auerswald, Professor, George Mason University
iv) Dr. Nuzhat Ahmad, Director AERC
v) Special comments by Rafeh Alam (from Lahore)
51
51
52
53
53
55
Session 5: Human Capital, Productivity and Innovation
58
Introductory remarks by Javed Laghari, Chairman HEC
58
Speaker: John Speakman, Private Sector Specialist, World Bank

Speaker: Shaukat Hameed Khan, Former Member Planning Commission
59
61
i) Ali Arshad Hakeem, Chairman NADRA
ii) Dr. Sohail Naqvi, Executive Director, HEC
iii) Philip Auerswald, Professor, George Mason University
63
63
64
65
Session 6: Connecting to Compete
68
Speaker: Amer Z. Durrani, Sector Coordinator for Trade Logistics, Transport and
Customs, World Bank
68
i) Arshad Zuberi, Chief Executive, Business Recorder
ii) Shaukat Hameed Khan, Former Member Planning Commission
iii) Muhammad Saleem, Director General, Pakistan Telecommunication Authority
iv) Fatma Gul Senior Economist, UNDP
70
70
71
71
73
Session 7: Youth and Community Engagement
75
Speaker: Mahbub Hossain, Executive Director, Bangladesh Rural Advancement

Committee (BRAC)
75
i) Ali Asghar Khan, Head of Omar Asghar Khan Development Foundation
ii) David Martin, Country Director, British Council, Pakistan
iii) Faisal Mushtaq, Chief Executive, Roots School System, Pakistan
iv) Shireen Naqvi, CEO, School of Leadership
78
78
79
80
81
Interviews
84
Special lecture over video conference by Professor Richard Florida
115
Welcome remarks by Nadeem Ul Haque, Deputy Chairman, Planning Commission
115
Lecture by Professor Richard Florida
115
119
Closing Ceremony / Remarks by Parliamentarians
124
Remarks by Nadeem Ul Haque, Deputy Chairman, Planning Commission
124
Remarks / Answers to questions by Parliamentarians:

Palwasha Khan (MNA)
Fauzia Wahab (MNA)
125
125
Closing remarks by Ajay Chhibber Assistant Secretary General, UN and Assistant

Administrator and Regional Director for the Asia and the Pacific, UNDP
126
Closing Remarks and Vote of Thanks By Nadeem Ul Haque, Deputy Chairman,

Planning Commission
127
Conclusion and recommendations
128
10
Introduction
Planning Commission was charged with

developing growth strategy and managing
the Public Sector Development Program.
The National Economic Council (NEC)
headed by the Prime Minister has approved
the Framework for Economic Growth (FEG)
- a strategy that seeks accelerated and
sustained growth and development based on
economic reforms and an emphasis on
productivity.
The conference was inaugurated by Dr.

Nadeem Ul Haque, Deputy Chairman
Planning Commission and Assistant
Secretary General of the UN, Ajay
Chhibber. The FEG formulated at Planning
Commission through widespread local and
international consultation focuses on
building strong local ownership for a quality
development strategy that is informed by the
best knowledge and analysis available.
Following the NEC approval of the NGS,

the Planning Commission, in collaboration
with UNDP hosted an international
conference on Framework for Economic
Growth, Pakistan on 13-14 July, 2011 in
Islamabad. The Conference brought together
around
500
delegates
including
parliamentarians, international and national
experts, federal and provincial policy
makers, economists, development sector
leaders, academia, business community and
officials from UN agencies from across
Pakistan. Framework for Economic
Growth, Pakistan is a new approach to
accelerating
economic
growth
and
sustaining it. It has been developed with
world renowned experts and all the
stakeholders following extensive research
and consultation.
The consultations clearly identified the need

to develop a coherent approach to growth
that goes well beyond projects and targets in
public service delivery, productivity,
competitive markets, innovation and
entrepreneurship. The strategy is based on
sustained reforms that build efficient and
knowledgeable governance structures; and
markets in desirable, attractive and well
connected locations. It recognizes the severe
resource constraint that the country faces
and therefore focuses on productivity improving the efficiency with which assets
are used. Global indicators such as
competitiveness and cost of doing
business also highlight factors such as
management, innovation, quality of
regulation and governance and research
and development as the more immediate
11
knowledge economy. Around 68% of

Pakistans population is regarded as youth
(under 30 years). Many of them are now
coming into the labor force, increasing the
size of the workforce by over 3 per cent
annually. Human resource development is
taken as one of the major objectives of the
new approach. The strategy urged for the
development of financial markets and
institutions, effective governance and
management
through
strengthening
institutions.
constraints to growth. The thrust of this

strategy, therefore, is to focus on the
software of economic growth (issues of
economic
governance,
strengthening
institutions, incentives, human resources,
etc.) so as to provide an environment in
which the hardware of growth (physical
infrastructure) could be expanded and made
more productive at every level.
The Deputy Chairman acknowledged the
problems being faced by the country and
presented a new and fresh approach for
the economic growth to follow and improve
"Quality of Life" based on the four pillars of
the FEG viz. quality governance, vibrant
markets, energetic youth and community
and creative cities. The new approach places
the growth and jobs at top of the agenda.
The speakers presented their ideas papers on

various themes which were discussed by the
selected discussants. Open discussion was
followed by the question & answer session
which served as a good source of knowledge
sharing and to take views from all the
participants. An important feature of the
conference was interviews of the
parliamentarians, national and international
experts who shared their views and gave
well thought recommendations on the
subject.
The key areas of the new growth strategy

includes enhancing the role of the private
sector, entrepreneurship and innovation as
major drivers of growth, enhancing
productivity, improving the quality of
governance through Civil Service reforms,
making cities hubs of economic activities by
relaxing zoning and building regulations,
minimizing the role of the government in the
economy and restricting it to improving
regulation and policy environment. The new
approach takes cities as engines of growth in
the country. Strategy also focuses on
inclusiveness for the development of rural
infrastructure and markets for growth and
poverty
reduction,
enhancing
competitiveness and productivity by
investing in tertiary education, vocational
and technical training and development of a
At the conclusion of the conference, the

Planning
Commission
and
UNDP
exchanged a letter of intent for the
establishment of the proposed Centre for
inclusive Growth and Development. The
revamped centre will contribute towards
building institutional capacity to support the
implementation of the Framework for
Economic Growth. It will conduct research,
advocacy and policy advice, promote
learning and exchange of solutions.
***
12
Welcome Remarks By
Dr. Nadeem Ul Haque

Deputy Chairman, Planning Commission
It surprises me that we had many

conferences here in Planning Commission
but we discussed very little on the topic of
growth and jobs. We have a huge
population and a large number of youth in
our country. We have a low growth rate in
the country. There is a large number of
population and especially the youth who are
looking for the jobs. Let us put growth and
jobs to be at top of the agenda of this
conference.
before you a new Framework for Economic

Growth. It has taken more than a year in
Planning Commission to develop new
framework for which we have talked to the
academia, chambers of commerce and
industry across country and people in all the
provinces. We have here with us in the
conference UNDP, World Bank, ADB,
USAID and many international donors with
whom we had been engaged in discussion
and they have made valuable contribution in
the development of this fresh approach on
the agenda of growth and jobs in Pakistan.
We want to place before you this fresh
approach and ask you to contribute in it. We
got the Framework for Economic Growth
approved by the National Economic
Council, Cabinet and from Parliament and
we promised them to give implementation
plan in next four to six months.
We have also taken a very new approach to

the subject which is the participation of a
large number of people and well known
speakers in the conference. It is not the
agenda of a person but rather a national
agenda we are working on. The key
objective of this conference is to challenge
ourselves to a fresh approach and place
We want to discuss everything here like

reconstruction of the economy, poverty
reduction etc. The first question I want to
put before you is that why there is so little
discussion on the growth in this country? If
growth doesnt take place at 7-8% in next
few years there would be millions of people
who will not have jobs in the country. Let us
Ladies and gentlemen I welcome you to the

conference on the Framework for Economic
Growth. Let me announce here that Honble
Finance Minister couldnt attend the
conference as he had to go to Baluchistan to
attend a meeting there. But InshaAllah he
will be here with us in the closing meeting
tomorrow.
13
opportunities and engaging population in

economic growth activities.
also remember it that we have failed to

provide adequate education in the past. With
this uneducated and unskilled population our
future doesnt look to be good and
promising. I am also surprised that when I
look at newspapers face book, twitter etc. I
find very little material and discussions on
growth and jobs there. Media is also not
discussing this important subject. We find
media and experts discussing issues like
Tax-to-GDP ratio and sovereign economy
whereas there are many other important
issues to discuss like growth and creating
opportunities for the youth in the country.
Another important aspect of Framework for

Economic Growth is to reduce the role of
government. Right now government is a
major stakeholder in many areas like
transport (PIA and Railway), energy,
infrastructure, land, purchase of agriculture
commodities (like grains) etc. In cities there
is huge regulatory burden that government
carries and this role is to be reduced under
new strategy being presented here.
Let us try something new and work on fresh
approaches. Solutions which have failed to
work in the past need to be refreshed and we
need to adopt correct approaches. To my
mind this conference is about changing
narratives of growth, policies and whole
paradigm to place economic reforms upfront
on the agenda. All the new literature in the
world suggests doing something new and
developing software of growth. We need to
develop good institutions for economic
reforms. Growth is not a hardware which we
can buy from the market. We need to
develop it.
Ladies and gentlemen I invite you to

examine this new fresh growth approach and
reform agenda and give your valued input.
Without emphasizing an economic reform,
productivity, using our resources and
ensuring that wastages are eliminated we
can't achieve higher economic growth.
Government can't provide everything and
engineer society. Government can only
make policies and regulate. For education
quality we need to think that whether
resources being provided by the government
are being properly utilized or not? Education
quality is not a funding issue but purely a
governance issue. Government can't pump
in money where there is a lot of wastage and
inefficiency.
Pakistan is a country of more than 170

million people. Growth is a very complex
subject which is more difficult than the
rocket science. We need to work out the
solutions which require hard work and
implementation. All we need to do is
implementing the strategies. For growth we
need solutions which need to be worked out.
It is the most complex subject one can
imagine. It is not like an artwork.
Implementation is the most important
challenge in the new growth strategy which
we have to develop and act upon.
Corruption is another issue which needs

reforms and good public administration.
Along with hard infrastructure we need to
build soft infrastructure. It is soft
infrastructure which would help in
managing hard infrastructure, plan resources
and help in increasing efficiency and
productivity. Poverty reduction is another
important area which needs a strategy to
make it an opportunity for growth. We have
missed out our opportunity as we have
missed growth. Security is another important
challenge for us and we can manage it by
taking certain measures like creating job
Lets also think about constraints to the

investment and growth. Investment rate has
fallen from 17% to 13% in Pakistan. India
has an investment of 30% whereas it is
around 40% in China. Pakistanis are making
14
mobility, connectivity etc. Cities are places

where commerce takes place and industries
are developed. Cities must be commerce and
industry friendly. Economies can't grow
without the growth of the cities. Cities
provide infrastructure and environment to
the youth for development. We have large
number of youth in our country that needs to
be involved in growth. How do we provide
them
infrastructure,
facilities
and
opportunities is an important question.
investments out of the country. Savings are

at very low level in the country. People are
putting their money overseas in real estate.
We need to think about regulatory structure
for investment which is a binding constraint
for investment by the governments.
Whatever we are saying here in the
conference is not the old debate of
government vs. markets but to work together
for socio-economic growth. We need to talk
about a professional, productive, efficient
and quality government. Government used
to attract talent which is not being seen any
more. We need to think about Civil Services
Reforms in this country to face the
challenges of 21st century. Civil Services
system is a system which is not using
technology, good practices and professional
approaches in our country and we need to
talk about this subject in the new approach.
From education to energy, and legal system
to law & order we need to think about
reforms. Civil Servants control everything
and there is centralization of power in this
system for which we have to think in the
new framework. Role of the government is
at the center of the economy. Government is
important as it regulates and controls
everything. The first role of the government
is to guarantee life and liberty. The pursuit
of happiness is one of the things which
government has to do and provide. We need
a kind of regulations which is professional,
not outdated and well informed.
Everyone is going for innovation,

productivity
and
developing
entrepreneurship where as we are still
looking for protecting certain sectors of the
economy. Why construction activities not
growing and leading in our country?
Building codes, zoning laws, regulations in
the real-estate sector are at heart of the
problem due to which construction activities
not taking place. Construction is youth
friendly as it provides opportunities to
youth, develop skills and helps youth to
participate in creativity and help in
developing social capital. Social capital is
very important for growth and we need to
think of youth while making growth
strategies. We need to adopt an inclusive
growth agenda which speaks about all the
segments of the society.
Growth strategy doesnt require money but a
clear headed reform agenda. It requires
building institutions to meet requirements of
the 21st century and thinking solutions to
complexities. Growth strategy is not
something simple but more complex than
rocket science. We need to understand this
reality that things are changing now. We in
Pakistan can't stay with status quo and need
to accept change, and the Framework for
Economic Growth is all about a new change.
Growth will not happen in a vacuum.

Growth happens in cities like history tells us
that it took place in cities like Baghdad,
New York, London etc. Estimates tell us
that about 75% of the world output takes
place in 40 cities. Our cities are centers for
growth and we have to think about it. A city
is a bunch of humans which has density,
creativity, culture, high rising buildings,
***
15
Introductory Remarks By
Mr. Ajay Chhibber

Assistant Secretary General, UN
and Assistant Administrator and Regional Director for the Asia and the Pacific, UNDP
discussions which we think will affect

Pakistans future profoundly and positively.
Your
Excellency Dr. Nadeem Ul Haque,

Deputy Chairman, Planning Commission of
Pakistan, distinguished representatives of
civil society, academia and media,
Development partners and UN colleagues.
Pakistan sits in a region which has seen very

rapid growth over the past two decades with
average growth in Asia at around 7.8% from
1990-2010. Parts of Asia were hit hard by
the Asian financial crisis in 1997-98, but
rebounded quickly. More recently, the Asia
Pacific region has been least affected by the
Global Financial Crisis of 2008, partly
because many countries had become more
resilient after the Asian Financial Crisis and
partly because of effective stimulus
packages, high levels of competitiveness,
flexible labor markets and less exposed
financial systems . Rising food and fuel
prices have increased vulnerability among
the poor and now high inflation - not
deflation - is a major worry in many Asian
countries. But as Asia contends with these
problems there is growing recognition that
the global economic crisis has accelerated
the balance of economic power towards
Asia.
Ladies and gentlemen!

It is an honor to be able to address you all
today on such an important issue. I would
like to thank Dr. Nadeem Ul Haque, Deputy
Chairman of the Planning Commission and
Timo Pakkala, the UN Resident Coordinator
and Resident Representative of UNDP and
their team and all our esteemed partners for
their tireless efforts in organizing this
conference.
This International conference on the New
Growth Strategy organized as a high level
policy dialogue among the policy makers,
international
experts,
development
community, business and civil society
comes at a very critical time in Pakistan. It is
the last link in the chain that has formed the
participatory and transparent advisory
process through which the Framework for
Economic Growth has been formulated. It is
a great privilege to be part of such
Both East Asia and South Asia have

witnessed a considerable acceleration of
16
time which is needed in order to lift large

sections of the population out of poverty.
We hope that the new growth strategy will
help Pakistan reverse this trend and your
deliberations over the next two days will
address the issue of how best to ensure
sustained growth in the future in Pakistan.
growth, more than any other region in the

world. In terms of per capita GDP growth,
the acceleration has been from 5 percent in
the 1970s to 8 percent in the 2000s in East
Asia, and from 0.6 percent in the 1970s to 5
percent in the 2000s in South Asia. This
growth acceleration has happened as a
consequence of a series of economic
reforms- which led to a stronger states, more
vibrant markets, and better human capital.
Until recently the economic literature

provided little guidance on the 'recipe' for
strong economic growth. One interesting
exercise is the work of the 'Growth
Commission. The commission closely
examined 13 cases of sustained high growth
- those economies that had achieved seven
per cent or more for 25 years or more and
found that there is no 'magic bullet' to
achieving growth - 'orthodoxies only apply
so far'. There were, however, five common
elements to those economies that did
achieve sustained high growth: 1) they fully
exploited the world economy; 2) they
maintained macroeconomic stability; 3) they
mustered high rates of saving and
investment; 4) they let markets allocate
resources; and 5) they had committed,
credible, and capable governments.
With rising prosperity poverty has declined.

In Asia, the absolute number of poor people
living on less than $1.25 a day has declined
significantly from 1.7 billion in 1981 to 933
million in 2005. Despite rising population,
Asia lifted about 712 million people out of
poverty in that 25 years period. But despite
significant progress on poverty reduction,
Asia still hosts about two-thirds of the
global poor.
Pakistan has not so far fully shared the
successful Asian growth story and I believe
the Framework for Economic Growth for
Pakistan comes at a very important time and
our conference today gives us an
opportunity to better understand what is
happening in the region and in the world and
to see how best Pakistan can join the rest of
Asia in achieving high, sustainable and
inclusive growth.
The Commission noted a big role for

infrastructure in high growth economies.
These economies had investment rates of at
least 25 percent of GDP. The Commission
observed that high growth economies put
substantial public investment at least 7-8 per
cent of GDP into their people. The
Commission found infrastructure spending
in low-growth countries, on the other hand,
to be badly neglected. The Commission
highlighted the importance of governance in
a fast growing economy. To promote
growth, governments should facilitate the
entry and exit of firms and labor mobility.
Governments should protect people, not job
positions through social safety nets to
cushion the 'blows of the market'.
I am by no means an expert on Pakistan as

many of you gathered here are, but a very
quick overview of Pakistans economic
history tells us that there have been periods
when Pakistan achieved very high rates of
economic growth. Pakistan achieved
impressive rates of economic growth in the
1960s and 1980s, but growth fell in the
1970s and 1990s. Over a 40 year period the
trend growth rate in Pakistan is declining,
whereas in most other countries in South
Asia it has been rising. What has marked
Pakistan out from others in Asia is that
Pakistans growth spurts have not been
sustained over a sufficiently long period of
While growth is necessary for poverty

reduction it is not sufficient. Asias rise has
17
impressive record on poverty reduction has

inequality problems. There are also
compelling reasons why high levels of
inequality could dampen growth prospects.
High inequality could lead to adverse
consequences for social cohesion and the
quality of institutions and policies, which, in
turn, slow growth. The Growth Commission
also strongly argued that growth strategies
cannot succeed without a commitment to
equality of opportunity, giving everyone a
fair chance to enjoy the fruits of growth.
helped reduce global inequality but at the

same time we have seen rising in-country
inequalities across most of Asia. The recent
Asian growth has not been sufficiently
inclusive. One important indication of
inadequate inclusive growth in Asia is that
inequality among rural-urban population and
between regions is still not only high, but
also increased over the period. During the
last two decades, out of 14 Asian countries
for which sufficient data are available,
inequality measured by the Gini coefficient
is found to have increased in 11 countries.
Inequality increased by 6 to 9 Gini points in
Sri Lanka, China, and Cambodia and by
about 4 to5 Gini points in India, Indonesia
and Nepal. Rural-urban inequality is often a
large component of overall inequality,
contributing about half of the overall
inequality in country like China. The ratio of
urban to rural per capita income has
increased from 2.2 in 1990 to 3.3 in 2007 in
China, and from 2.4 in 1971 to 2.8 in 2005
in India.
Healthy and well educated populations are

essential not only for the sake of productive
labor force for economic growth but to
achieve a healthy and well educated society
is a goal in itself. As the great Pakistani
economist Mahbub Al Haque observed that
the real wealth of the region are its people. If
sufficient investment is made in these people
they can radically change the prospects of
the region in the 21st century. Instead South
Asia in particular has been falling behind the
rest of the world in terms of its health and
education spending but leads the world in
military spending as a share of GDP.
Pakistan is no exception. Maternal mortality
rate is still very high in Pakistan with 276
women die during birth out of every 100,000
live births. Only 22 percent of Pakistani
women participate to the labor force, one of
the lowest in the world. 45 percent of the
population in Pakistan is still illiterate and a
disproportionate share of these is women
and girls. Providing high quality education
to young people is important for Pakistan
which is one of the most valuable resources.
Girls and children living in rural areas must
have equal access to high quality education
same as their urban and male counterparts
have, and their human potential needs to be
realized.
Growth in Asia has been less-inclusive

because (i) growth has been uneven across
sectors and locations, (2) demand for skilled
and unskilled labor also uneven resulting
huge wage premium for skilled labor, (3)
growth has been driven by capital-intensive
sectors and (4) high disparities in assets and
access to infrastructure impede the poor
from fully participating in the growth
process. Government policies in terms of
public spending on social sectors, social
protection and agriculture, and financial
inclusion, among others, have also not been
sufficiently inclusive in Asia. Since the poor
lack both human and financial capital,
public policies that help poor to build their
human capital, better manage their risks, and
improve the access to credit are key for
making growth more inclusive.
One marked feature of Asias rise has been

its heavy focus on trade as an engine of
growth. Intra-Asian trade has also risen very
markedly. For South-East Asia, for example,
Lack of inclusive growth could undermine

pace of poverty reduction and achievement
of the MDGs. Even in China which has an
18
Access to finance will play a key role in this

effort, as well as reducing the time
it takes for business startups through
removal of red-tape and artificial
restrictions. Pakistans 18th amendment
brings the state closer to the people but it
now requires building sufficient capacity at
the local level to carry out the newly
expanded responsibilities and adequate
coordination between various levels of
government.
intra-regional trade has been rising rapidly

and now accounts for more than half of trade
in manufactured goods up from 40 per
cent in 1994- 95 (ADB, 2009). In other subregions, such as South Asia and Central
Asia, the level of intra-regional trade is low.
These are impressive potential gains waiting
to be tapped. The recent experiences of
India-Sri Lanka FTA are striking since they
highlight the potential of bilateral trade to
strengthen supply capabilities leading to
correction of trade imbalances. Since the
operationalization of the FTA, Sri Lankas
exports to India have grown by 132 per cent.
Pakistans Framework for Economic Growth

correctly highlights the role of vibrant cities.
Well functioning cities are the engine of
dynamic innovation and efficient modern
life. They are the springboards for new ideas
and a better life for Pakistans rapidly
growing population. At the same time with
such a large population still dependent on
agriculture and living in rural areas it is
important that the rural-urban divide does
not become too large. Even by 2035 almost
half of Pakistans population will still be
living in rural areas and must feel included
in its growth processes. If the goal of high
sustainable and robust growth is to be
realized, there is urgent need for policies
that not only would address how to increase
economic efficiency but also the different
concerns of the rural poor and the urban
poor. Failure to do so would make cities
uninhabitable, with pressures on water,
transportation, fuel and power, and countries
susceptible to conflict, and growth
meaningless for a large majority of people.
After the global crisis Asian countries have

tried to re-balance their economic
orientation towards more reliance on
domestic demand. This is a necessary
rebalancing for the larger Asian economies.
But for the smaller and medium sized Asian
countries trade with developed countries and
intra-regional trade still remains a very
important engine for growth. Pakistan, in my
view, has huge unexploited potential for
more trade both globally and regionally; and
as outlined in the New Growth Strategy
Pakistan will need to become more open and
build up its competitiveness to achieve that
potential. The new growth strategy rightly
points out that its not an issue of
government vs. markets but instead
government and markets working together.
The Asian state-led development success
has occurred because of a strong and smart
state not a large one. It has come because of
a partnership between state and market to
build
competitiveness
and
improve
productivity. It has not come by dismantling
the state but by changing its role from direct
producer to regulator and guide as an
enabler. We need an active, smart, effective
state for efficient and vibrant markets.
Pakistans New Growth Strategy points out
in the right direction, highlighting the need
for public sector reform and the importance
of reducing the costs of doing business, in
order to develop more vibrant markets.
Like many other Asian countries Pakistan is

vulnerable to natural disasters and conflict.
In the last six years we have seen two huge
disasters; the 2005 Kashmir earthquake and
massive floods in 2010, which affected the
entire country. In the last decade, Asia
accounted for about three fourths of global
casualties from natural disasters. These
factors reinforce the need to proactively
consider building resilience in countries like
Pakistan as a part of the sustainable
19
demographic dividend if the kind of vision

laid out in the New Growth Strategy of
engagement, empowerment and job creation
is realized.
development agenda. Building resilience

will help households, societies, and
countries to withstand not only short-term
economic and environmental shocks, but
also longer-term climate change threats.
Therefore, spending on social protection and
helping build resilience from disasters is not
a cost; it is an investment for nations. Asia
has done a lot to protect its people from such
vulnerabilities, but there is still a lot to be
done.
The international community must stand by

and support Pakistan in this formidable task.
It is nevertheless vital that the Framework
for Economic Growth is fully owned and
implemented by Pakistans own institutions.
External support is vital but it must be
embedded in Pakistans own structures and
systems. We believe the new Growth Center
in the Planning Commission can be a very
useful and valuable base for planning the
implementation.
The New Growth Strategy proposes to put

the dynamic sectors and the resources of
Pakistan in front of the steering wheel. It is a
forward looking strategy that will mobilize
resources from areas that have been
untapped until now; from cities, young
brains, and from communities. The Arab
spring shows us that jobless growth,
especially if it neglects the youth and creates
a sense of despair, can easily lead to social
unrest. Pakistan can reap a huge
I wish you all great success in your

discussions and deliberations as you help
Pakistans leaders prepare a new framework
for re-imagining Pakistan. Thank you.
***
20
Session 1: Implementing Governance Reforms
Speaker: Sulaiman B. Mahbob

Chairman, Malaysian Industrial Development Authority
can work effectively like maintenance and
management of public goods and services
etc.
I thank Dr. Nadeem Ul Haque, Deputy

Chairman Planning Commission for
organizing such a good conference and
inviting me here to speak. There are two key
players to economic growth viz. the
government and the other is private sector.
Both of these sectors cant be separated as
they both complement each other for
economic growth in the country.
Governance should be focused to manage

the private sector, ensure healthy
competition and to help build new markets
in the country. Provision of utilities is the
governments responsibility. We need to
build capacity of the public services to get
desired results. There is need to bring
transparency and accountability in the
governance and all aspects of the economic
activities. There is need to build institutions
and strengthen institutions like anticorruption department etc. to eradicate
corruption, special commissions for looking
after regulations, competition etc.
Rural development is one of the important

areas which need to be focused for the
economic growth. Other important area is
private investment in the country which will
create opportunities for employment and
help in reducing poverty. Investment in
private sector helps in improving
productivity and creating niche markets.
Privatization is also important to bring
efficiencies in the sector. Trade and
investment are also important for private
sector growth in the country. List of public
goods and services need to be developed so
that we can plan what we can do now and
what can be done in the future.
The key to success lies in privatization and

deregulation. Implementing governance
reforms require strong political support, as
otherwise things would fail to work. In our
country it was Mahathir Mohammad who
provided us political support from the top
for brining reforms in the country. In
Malaysia Chief Secretary is also there to
oversee all the areas and monitor progress.
The most important thing is that we focus on
implementing our policies and work on
Result Based Management for outcomes.
Deregulation is another important factor to

be reviewed. There are many bureaucratic
procedures and unnecessary requirements
which need to be simplified or abolished.
Public Private Partnership (PPP) is one of
the important areas which can help in risk
sharing and filling the resource gap in the
country. There are many areas where PPP
***
21
Civil Service Reforms

Speaker: Norma Binti Mansor
Secretary General, National Economic Advisory Council, Malaysia
The documents presented by us have so
many similarities with Pakistans FEG and I
think that we are moving in the same
direction. For medium to long term period
growth (next 10 years period) we are
moving towards making Malaysia a high
income advance nation in the world. After
two years of establishment, the Performance
Management and Delivery Unit presented
eight strategic reform initiatives and 51
policy measures to the government. Six key
priorities were the main theme on which we
have been working in Malaysia to improve
quality of life.
First of all I thank Dr. Nadeem Ul Haque for

giving opportunity to share what we are
doing for moving Malaysia towards a high
income advance nation. A new reform
vehicle i.e. Performance Management and
Delivery Unit was established under Prime
Ministers office to work on the agenda of
transformation in Malaysia. Unit was
established by the government as a
corporation, headed by a CEO from private
sector, to support the government and
provide a vehicle for transformation. The
idea of vision 2020 was given by Mahathir
Mohammad which was continued by
Abdullah Badawi and President Najib
Razak. Vision 2020 was to support united
Malaysian nation with a focus on National
Transformation Programme. Two Pillars of
the National Transformation Programme
are:
For the new economic model we went to the

public for their input. We went to the
politicians, opposition parties, private sector,
NGOs and academia to ask what you want
Malaysia to be by the end 2020? Three
objectives of the new economic model were
identified which are as follows:
i) Economic Transformation Programme

(ETP): New economic model for a high
income, inclusive and sustainable nation,
1. High income: growth + wealth creation,

2. Inclusiveness: narrowing disparity,
3. Sustainability: fixing the foundational
issues.
ii) Government Transformation Plan (GTP):

Effective delivery of government services.
We defined specific quantifiable measures

for all above three objectives. High income
was defined to be an income level within the
range of US $15,000 - 20,000 per capita by
the year 2020. Inclusiveness being the
second important objective would enable all
communities to fully benefit from the wealth
of the country. Sustainability was the third
objective which meets present needs without
compromising future generations. We have
targeted a growth rate of 5-6 % in the region
for sustainable development.
Malaysian government is embarking on both

National Transformation Programme pillars
at the moment. There are 6 key areas which
will be focused in the transformation process
which are:
1. Reducing crime,
2. Fighting corruption,
3. Improving student outcomes,
4. Improving living standards of low income
households,
5. Improving rural basic infrastructure, and
6. Improving urban public transport.
Two documents were presented to the
government for the reforms in the country.
Public investment has to be supported by

private investment. We need effective and
22
dynamic capital markets in the country.

Inclusiveness also means sustainability, and
responsiveness to the environmental issues
such as sensitivity to climate change. We
need to manage our renewable and nonrenewable resources. We cant use oil
resources to finance management of the
country. Economic transformation program
needs to be focused. One of the important
programmes is focusing all the sectors
where we have strength. Second important
programme is the cross cutting foundation of
issues which were divided into following
categories:
Labor safety net,

Womens Talent,
Strengthen HR Management,
Labor market analysis, and
Up skilling & re-skilling
4. Governments role in business:
Reduce crowding out private

sector
- Divestment of Government
Linked Companies (GLCs)
Increase liquidity in capital markets
Pare-down
&
listing
of
governments stake in companies
Improve governance for state-owned
companies
- Anchored on performance.
- Replicate the success of
Khazanahs Putrajaya Committee on
GLC high performance.
1. Creating a competitive investment

environment:
International
standards
&
liberalization,
Governments role in business, and
Enhancing the sources of growth.
5. International standards & liberalization:
Competition law - encourage

competitiveness.
- Implement Competition law by
2012.
Liberalization: Healthcare, education
and business services.
Standards:
Adopt
international
standards,
develop
Malaysian
standards and raise Malaysian
standards as the benchmark.
2. Developing quality workforce:

Human capital development.
3. Transforming government:
Public service delivery, and
Public finance reform.
4. Narrowing disparities:
Regional, ethnic and income levels.
Some of the key policy measures are further
explained below:
2. Public service delivery.
6. Narrowing disparities:
Improve
social
services
and
infrastructure to all regions,
Improving capacity of the bottom
40% of households,
Improving capacity of SMEs:
- Entry point with 1,100 companies.
- High Performance Bumiputra
Scheme.
- Performance based with clear entry
and exit criteria.
3. Human Capital Development:
Modernize labor laws,
Until we work with all the sectors and

propose to the government that we work on
1. Public Finance:
Improve tax administration,
Rationalize corporate tax incentives,
Transparent procurement,
Control Expenditure,
Broad based Tax, and
Accrual accounting.
23
above key areas for the transformation

Programme we cant get out of the middle
income trap.
Speaker: Dr. Ishrat Hussain

Director, Institute of Business Administration, Karachi
South Asia presents a fascinating
combination of many contradictions. It has
governments that are high in governing and
low in serving; it has parliaments that are
elected by the poor but aid the rich; and
society that asserts the rights of some but
perpetuates exclusion for others. Despite a
marked improvement in the lives of few,
there are many in South Asia who have been
forgotten by formal institutions of
governance.
These are the poor, the
downtrodden and the most vulnerable of the
society, suffering from acute deprivation on
account of their income, caste, creed, gender
or religion. Their fortunes have not moved
with those of the privileged few and this in
itself is a deprivation of a depressing
nature. (Human Development South Asia
Report, 1999)
First of all let me thank Dr. Nadeem Ul

Haque for inviting here and to share my
thoughts on this important subject. The
Framework for Economic Growth has taken
into consideration a very important element
of the governance structure. The overall
governance structure is important because it
is through this structure that economic
policies are intermediated and translated into
economic and social benefits for the vast
majority of the population.
I would like to focus on the governance
structure which consists of the executive,
judiciary and legislature. The highest impact
on day to day life is created by the executive
branch of the state. The present discussion
will, therefore, focus firstly on the executive
branch whose main pillar is the Civil
Service. The second important question I am
going to ask is that if there is a need for
change then what different and new we
should do and present a package which will
make a difference to the lives of the
common citizens of the Pakistan? The third
important point is that if there is a consensus
on the package then we should see that how
it can be implemented.
Governance constitutes for ordinary

people, a daily struggle for survival and
dignity. Ordinary people are too often
humiliated at the hands of public
institutions. For them, lack of good
governance
means
police
brutality,
corruption in accessing basic public
services, ghost schools, teacher absenteeism,
missing medicines, high cost and low access
to justice, criminalization of politics and
lack of social justice. These are just few
manifestations of the crisis of governance.
(Human Development South Asia Report,
2005)
The present system of Civil Services has

become dysfunctional and is not doing the
job. The following extracts from the Human
Development Reports on South Asia of 1999
and 2005 depict a vivid picture of the
governance in South Asia and which is even
more applicable in case of Pakistan? Human
Development South Asia Report 1999 and
2005 presents the picture in following
words:
A question that is often raised in Pakistan is

that why has India retained the same Civil
Service Structure as they had inherited from
the British? Why is Pakistan moving to
24
Civil Servants Capacity, Competency and

Courage have to be revived in them
through these reforms while the compassion
has to be imbibed through greater exposure,
awareness and incentives. The end result of
the reform should therefore be a majority, if
not all, Civil Servants displaying and
practicing these attributes. There is need to
restore 3Cs in Civil Servants of the future.
change the legacy, texture, and complexion

of the Civil Service?
I dont think that after these very cogent
reasons about the crisis of governance
anybody in this room would disagree with
my hypothesis that economic growth can't
take place unless these policies are
translated into the benefit of the longer
majority of the population and is free of
corrosion and fully functional. This can be
compared to a water system whereby water
is gushing out of the tap but if the pipe
through which water is conveyed is
corroded, leaking or clogged then those
expecting water at the other end of the pipe
would either only get a trickle or water of
unhygienic quality that is not usable for
drinking, cooking, bathing and other uses of
human consumption. This pipe is the
institutions of governance which needs to be
fixed. Economic growth can't yield results
unless it is backed by good governance. In
my point of view main pillar of the good
governance is Civil Servants. Empirical
evidence across countries has now
confirmed that economic performance not
only in terms of aggregate growth but also
the distribution of income is determined by
the quality of institutions. These institutions,
in turn, are manned by the Civil Servants.
We have a history that clearly tells us that
for the first two and half decades the country
had Civil Servants who had the capacity and
competency to take decisions in the larger
public interest. They also enjoyed courage
of conviction whereby they resisted
extraneous pressures and influences which
could disable them from taking the right
decisions. Being wedded to the Colonial
Civil Service their mindset and attitude
betrayed the tendency of guardianship and
paternalism. They were not responsive to the
needs of the population and lacked the
compassion to come to rescue the poor,
marginalized and less well-to-do segments
of the society. What is being proposed here
is that the first three attributes (3 Cs) of
I was heading National Commission for

Government Reform (NCGR) consisting of
both senior serving Public Servants and
individuals from the private sector who have
excelled in their professions. We spent two
years and submitted a comprehensive report
to the Government of Pakistan in May, 2008
with
very
detailed
and
specific
recommendations for the Civil Services
Reforms. The gist of these recommendations
is given below:
1) Open,
transparent
merit-based
recruitment to all levels and grades
of public services while protecting
regional representation as laid down
in the constitution.
2) Performance evaluation to be based
on measurable objectives, and
assessment of key performance
indicators.
3) Promotions and career progression to
be based upon a combination of past
performance and assessment of
potential with mandatory training at
post-induction, mid-career and senior
management levels.
4) Equality of opportunity for career
advancement to all employees
without preferences or reservations
for any particular class. A shift
should take place in the mind set
from Entitlement to Eligibility.
5) Replacement of the concept of
Superior Services by equality among
all cadres and non-cadres of public
servants, federal and provincial Civil
Services,
professionals
and
generalists. Suitability for the job
25
population. They are not updated and have

therefore become a major source of
harassment and extortion. There are
conflicting rules on the same subject coexisting in the rule book or manual because
the old ones and those superseded have not
been weeded out. Some of the rules are so
outdated that they have become a nuisance.
If all the government rules, regulations,
instructions, circulars are continuously
updated and only the most current versions
are posted on the website of each ministry a
lot of good will be done to make the lives of
common citizen easy. The transparency
achieved through automation will minimize
the discretionary powers of the government
functionaries and provide convenience to the
citizens who are actually the voters in
ultimate analysis. The posting of updated
Foreign Exchange Manual on the website of
the State Bank of Pakistan (SBP) which
could be accessed by anyone from his home
or office created a lot of trust in the
organization. Computerized land records
will substantially bring down the volume of
litigation that is clogging our courts and
provide a lot of relief to those engaged in
protracted and expensive court cases.
should be the governing principle

rather than the origination of the
appointment.
6) Grant of a living wage and
compensation package including
decent retirement benefits to all Civil
Servants.
7) Strict observance of security of
tenure of office for a specified period
of time.
8) Separate cadre of regular Civil
Services at the federal, provincial
and district levels co-existing with
contractual appointments and lateral
movement.
9) Creation of a National Executive
Service
(NES)
for
senior
management positions open to all
federal, provincial and district Civil
Servants through a competitive
process.
10) Induction of three specialized cadres
under the NES for Economic
Management,
Social
Sector
Management, and General cadre.
11) Citizens Survey and Score Cards to
judge the responsiveness.
To implement above recommendations we
need to focus on some key reforms and
institutions first. We need to adopt a
selective approach to go ahead. It has
therefore to be phased over a period of 5-10
years with adjustments and fine tuning to
meet the exigencies of circumstances.
Good governance reforms are necessary for

improving economic performance and
reducing income inequalities and regional
disparities in Pakistan. The thrust of these
reforms lies in a dynamic and vibrant Civil
Service.
Government rules, regulations and manuals

are not widely available to the affected
***
26
Questions and Answers

QUESTIONS:
Question: I would like to share my observation that best decision to empower local communities
is by shifting power to the local governments. We talked about District Civil Service idea. Is
there any example of successful District Civil Servants in the world?
Question: It is told here that we have 56% literacy rate in Pakistan. My question is that whether
this figure is correct or not and what is the quantum of literacy in Pakistan, Malaysia and
Bangladesh? We have 70% population living in rural areas of Pakistan. I cant understand that
how this literacy rate is established. Please comment.
Question: We have a wonderful growth strategy but we see things going in different directions.
We reviving 1861 Police Act again and my question is that what is happening in the country?
Question: We had been using 5 Years Plans in the past in Pakistan and other countries
following our model have progressed very well. Why we have failed to evolve 5 Years Plans
and why Planning Commission is not considering it for the growth in Pakistan?
Question: Why a democratic government is hostile to local government structure whereas
military government implemented it?
Question: New Framework for Economic Growth is presented by the Planning Commission.
How would this new framework work with energy crises in the country? And why issue of Thar
Coal project is not being addressed by Planning Commission whereas there is so much delay in
this project?
ANSWERS:
Answer by Dr. Ishrat Hussian (Director, Institute of Business Administration, Karachi):
I think there is a lot of misinformation about the devolution of the local governments.
Amendments which were made after 2002 in the Local Government Ordinance have deprived
the local governments of the real power. It is the small plant which needs watering and
nourishing over time. We have four experiments of local government. What we need is a very
strong local government institution in this country. So we cant just uproot the plant and replace
it by a tree over time. I would submit that the empowerment of local communities leads to
outcome. I personally believe in empowering local communities to take decisions. For the
district Civil Service I would say that two third of the provincial government servants operate at
the district levels. To provide the real power we propose a district service. All the teachers,
health workers etc. would be in district government and there would be no clash between district,
and federal government.
About literacy rate the definition is not invented by Pakistan. There is a definition for literacy by
UNESCO which is followed by all the countries. Bangladesh has much more literacy rate than
Pakistan. Malaysias literacy rate is also very high. Bangladeshs female literacy rate is also
higher than Pakistan. Even India has 63% literacy rate with the definition being the same.
27
I cant comment about reviving Police Reform 1861 as that decision was taken by particular
government and they must know what they are doing. Police Act of 2002 which was relatively
good act has been changed. I think there is always competition for political space. The MNAs
and MPAs feel that Nazims had taken over all the powers and that is why there is power tussle in
political governments. The military is one man rule and they want to have the legitimacy and
they think that the local government can provide them the broad band democratic space.
Answer by Norma Binti Mansor (Secretary General, National Economic Advisory Council,
Malaysia):
For improving quality of education in rural and urban population, one of our 6 key priority areas
is education. In Malaysia women are much more educated as Malaysia has a small population
and we have to use all available citizen resources in the country. The Women enrolment in the
universities is also very high and we have policy that higher level posts should also be occupied
by the women.
We have a federal system with 30 states and we want the local governments to come there in the
federal system. We talk to the opposition parties, NGOs etc. about the framework that what is to
be done in the government. We start dialogues and take suggestions from the stakeholders. Using
e-government tools we also get suggestions from people and have made it interactive.
Answer by Sulaiman B. Mahbob (Chairman, Malaysian Industrial Development
Authority):
We involve the private sector in dialogues for policy making and take suggestions from them.
Preparedness to change is the approach we follow in our country for which we always look for
participation of the stakeholders and take their input for better implementation.
Answer by Ayaz Amir (Columnist/ Journalist):
Some of the best public relation experts in this country are confused with the fact that we are
again going to run our police force using 18th century old Police Act. 1861 Police Act is a very
short act of at the most two pages which is just an enabling umbrella sort piece of legislation just
saying that a police force would be setup. It doesnt speak about a good police force. Even Police
Order 2002 didnt lessen incidences of police brutality or corruption. Most important thing in
Police Act is that how we implement the things. There is no shortage of good intentions in this
country and a paper of few pages would not make our police force a good force. Good intentions
and implementation is required for a good police force to work.
***
28
Session 2: Openness and Competitive Markets
Speaker: Muhammad Ali

Chairman, Securities & Exchange Commission of Pakistan
imposed on Pakistan there was only one
year in which we saw real economic growth.
In 2001, after the incident of 9/11, we
started receiving financial assistance and we
were able to achieve economic growth.
Governments reliance on borrowings and
foreign resources has undermined the
economic growth in the country.
I would like to start my presentation by

sharing a story with you first. Mid last year I
went to the office and found that one of my
good staff persons has resigned. My office
staff told that the person resigned because he
wants to start his own business and he is
interested to meet me. The gentleman came
to me and I asked him that how could I help
him? He requested me for a loan of hundred
thousand rupees for two years period to start
a grocery business. After listening to his
logic I provided him the required money.
Today that gentleman is running his own
shop successfully, employing two people
and paying back the loan every month.
Twelve hundred dollars were needed by that
gentleman and he was not able to get that
money and start his own business in this
country.
We have not been able to develop a

competitive environment in this country
whereby businesses and manufacturing
sector can lead us to growth. Foreign
assistance has played a major role in our
growth and that cant go on in future. We
have under developed markets. We have
financial markets in our country. We cant
be
competitive
without
creating
entrepreneurship in our country. We cant
create entrepreneurship without financial
capital. We have developed only equity
market in the country which is less than 25%
of our GDP. Debt market is non- existent in
our country. Commodity markets are also in
infancy stages yet and we need to promote
it.
Entrepreneurship and human capital is the

basis we need for competition in our
country. In my presentation I would like to
focus on two important areas viz. openness
and competition. The theme is that we as a
nation for the last so many years have only
rewarded the financial capital in Pakistan.
Because of short sightedness we valued
financial capital and failed to value human
capital and talent. We have not been able to
develop a competitive environment in our
country.
We are a banking centric nation. Without

being financially strong we cant have
financial capital. If someone needs financial
capital it is almost difficult to get it unless
he is already financially strong. Our savings
are lying in the banks and the banks have
been lending only to the government or
large size corporate sector. We have not
been able to develop an effective SME
sector. For the last 20 years I keep hearing
two words debt market and SME sector. I
have not seen any of these two developed in
our country. Unless we create a competitive
debt market where people can borrow from
Pakistans economic growth since 1972

shows a volatile growth with boom and bust.
I would like you to note that Pakistan have
had high economic growth rate only in times
when there was financial assistance from the
outside world. In 1979, after the Afghan
war, we saw an economic boom in the
country. After 1990 when sanctions were
29
debt markets, from mid-size financial

institutions which are not banks rather nonbanking financial sector, merchant banks or
investment banks we would not be able to
develop entrepreneurship in the country. No
nation in the history of mankind has grown
by keeping their money in banks. Today we
have an environment where without any
effort we can earn 10-14% interest rate on
our savings and the economic growth rate is
3 to 4 %. There is no incentive to take the
risk to go into business. Unless interest rate
comes down and we have high growth rate
we will not be able to create a competitive

environment.
Ease of access to credit is very important.
Financial market sophistication and ease to
access to credit is very poor in Pakistan.
Lack of governance and transparency is also
very important. Without transparency and
proper government structure we would not
be able to create a competitive market. PIA,
insurance sector, NIT, mutual funds etc. are
still controlled by the government. We need
to privatize these sectors sooner or later.
Countries
Intensity of Local
Competition
Table -1
Prevalence of
Trade Barriers
Global Competitiveness
(rank/125)
Pakistan
Indonesia
India
China
Malaysia
87
54
30
19
38
106
58
96
69
88
101
54
49
29
24
Source: Global Competitiveness Report 2009-2010
As per Global Competitiveness Report

2010-2011 Pakistans rank is 101 in the
world. In GCI rank (Table -1) Indonesia is at
54, Indias rank is 49 whereas rank of China
is 29, and Malaysias rank is 24. Pakistan is
very low in Comparative Competitiveness
Position in the region. In Intensity of Local
Competition Pakistans position is 87th
which is lowest in the region. For
Prevalence of Trade Barriers Pakistans
position is 106th which is again lowest
amongst countries compared.
lack of consistency of policies people are

not investing in the country. We as a nation
are losing our competitive position.
Competition will increase efficiency,
increase choices, lower the prices and
increase innovation.
Achieving higher growth was not easy task
in the past. Today people sitting in China are
serving people in Japan. People sitting in
Bangalore are serving companies in Europe
and USA. We have failed to capitalize the
opportunity. Today the world is much
smaller. Internet, e-commerce, technological
advancements are tools giving us
opportunity to create competition and to
achieve higher growth rate. Regional trade,
macro economic and political stability,
consistency in policies and sound legal and
institutional infrastructure can leverage
competitive advantage.
Openness will lead to competitive markets

and economic growth. We need to think
about trade in the region especially in the
SAARC countries. Regional trade will lead
to higher competition and growth and
competition will help bringing efficiency in
the sectors. Consistency of policies is also
important for sustainable growth. Due to
30
Speaker: Philip Auserwald

Professor, George Mason University
but are growing and are not visible from the
top. There is the middle range which is
deficient in many countries and not meeting
the economic potential.
I appreciate the process led by the Planning

Commission. I am honored to be the part of
this event.
One of the things working in Pakistan today
is mobile firms. In telecom sector there are 5
major providers in Pakistan with 100 million
subscribers and lowest SMS and call rates in
the world. It is a very highly competitive
industry which is providing the needed
service in the country and we can celebrate
that. We discussed about the banking
industry where service area is seriously
deficient. Currently banks serve only 15 per
cent of Pakistan's population. Credit
availability to SME is inadequate. Only 7
per cent of bank lending is to the rural
population. House financing facilities are
not available through the banking service in
Pakistan. An almost identical case pertains
to housing finance, in particular the total
denial of funding for low cost housing
(construction, purchase or renovation). In
each of the three product markets agricultural credit, SME financing and
housing finance - there is neglect in the
policies. I want to point out the dots between
entrepreneurship, competition and growth.
Given the number of banks in the country,
banking should be the most competitive
sector in the economy.
Immortality is an ugly thing from a social

point of view as there is no place for new to
develop. But this is not the case with regard
to the countries which have not achieved
maturity through competition. These are the
immature competitive economies. So I
would focus on new and growing enterprises
which is the SME sector or the Missing
Middle of the economy. The new and
growing firms may have a small share of the
GDP but both in poor and high income
economies they have a substantial share both
in terms of GDP and employment. Exit of
the firms create opportunities in the
economy. In a forest some old trees die and
give place to some new tress to take place.
Firms failure is an opportunity to
reconfigure economy. Exit of the firms that
fail to utilize the resources of the firm is
important for a new entry. So an enabling
competition enables both exit and entry of
the firms. The growth of economies is the
growth of firms1. One of the important
factors in the growth of the economy is the
Missing Middle. For doing business the
exit and entry of firms both are important for
the economy. We need private sector to be
engaged and provide them a favorable
business climate.
I want you to think about the economy as

one sector. The sector I am interested to
discuss an example is the forest sector.
Forest sector has a number of large trees
which form the canopy and all we see from
the outside is just the large trees or the
canopy. In the forest there is also large
number of underbrush we cant see from the
top. In between the trees there is the growth
sector. The growth sector of the forest is the
same as of the growth sector of the
economy. It is those trees which are small
Dr. Nadeem Ul Haque said in his speech

that growth is a very complex subject which
is more difficult than the rocket science. I
agree with his statement. We need private
1 Schumpeter,1911; Shell ,1962, 1966; Lucas ,1978;

Baumol, Litan, Schramm, 2007.
31
The circumstances which made South Korea

to develop and move forward from
devastation is very important. We also need
to look at the development in China,
Rwanda, Sri Lanka, and Israel etc. An
important challenge of the growth strategy is
the sense of determination to change and
transform the economy without going to the
conditions of devastation. People will come
in Pakistan and invest when we will have
good governance. This country in my view
has globally the number one business
opportunity in the world because it is the
country which is still far from its potential.
sector to be engaged. A good example of the

development made in a country is Korea.
What do we learn from the Korean model is
explained by one of my colleague at
Kennedy School. He has worked in Korea
and in his paper, presented in 1995, he
explained it in following words:
What was required was a
competent, honest and efficient
bureaucracy to administer the
interventions, and a clear-sighted
political leadership that consistently
placed high priority on economic
performance [along with] an
exceptionally high degree of equality
in income and wealth. Wealth
distribution played an important role
in shaping the political landscape in
both countries. This is probably the
single most important reason why
extensive government intervention
could be carried out effectively,
without giving rise to rampant rent
seeking.
For an entrepreneur there are three choices

viz. to immigrate, compete or rent seek.
Society needs to create opportunities for its
most talented people to compete and create,
and not to leave. To foster entrepreneurship
there is need to make trust affordable.
Pakistan needs to join rest of the Asia on the
turn pike of growth.
***
32
Discussion
Discussant: Rahat Kunain
Chairperson, Competition Commission of Pakistan
issue. Penalties of 7.3 billion rupees were
made by Competition Commission on
various firms and sectors but the cases are
pending in the courts. There are 140 cases in
the courts with decisions pending. People
are making profits in our country due to
unhealthy business competition practices.
What these regulatory bodies doing if
decisions are not being taken there?
First of all I would like to thank Planning

Commission to give me an opportunity to be
here. We are the Competition Commission
agency to ensure a competitive and healthy
environment for doing business. In telecom
sector we went for an inquiry for
cartelization. What happens here is that a
person goes to court and takes a stay. Same
is with edible oils and many other sectors. A
report made by Competition Commission
tells that in banking sector 95% of the profit
made was concentrated in just top five banks
whereas there are 51 banks operating in the
country. The banking sector needs to be
closely monitored and regulated to improve
efficiency and increase healthy competition.
To have an impact on the economy we are

focusing now on two areas in Competition
Commission. One is public procurements
and the other is concessions being given.
PPRA rules are not being followed in public
procurements. Companies are making
profits and still taking concessions. So there
are many areas which we need to look at to
create a healthy competition in the country.
Another important issue to be addressed in

our society is cartelization. Cartelization is
taken as something normal in our society
and we need determination to address this
***
Discussant: Farhan Bokhari

Pakistan Correspondent & Country Manager,
Financial Times UK
It is not much difficult to come up with a
success story as in many years Pakistan has
gone forward. It is very important to discuss
about the issue of institutions and
governance in Pakistan. The role of the
institutions is very central to the economic
development of the country. It is the time to
come up and take Pakistan towards
economic growth. It was 2008 when
Pakistan celebrated one of the largest

inflows of US $ 8.4 billion, including FDI
etc. We need to focus on many aspects to
move forward. Collapse of the democracy
may result in collapse of the economy. If we
want to be a democracy, democratic
aspiration should not collapse. Regional
trade is also one of the important factors we
need to look at.
33

QUESTIONS:
Question: The gap between the actual and potential productivity in our country can be seen as a
great opportunity. Power structure in this country is restricting competition as a small coalition
of elites can generate risk. With this power structure the development of a new institutional
framework is very problematic. What is the nature of power structure that has prevented
fundamental institutional changes which was required for sustainable economic growth and
efficient markets to operate? What specific strategy you suggest to address this issue?
Question: SECP is one of the important organizations in Pakistan to regulate the markets. What
challenges SCEP see in the implementation of the Framework for Economic Growth and
regulating the markets?
Question: Laws governing economic sector are ambiguous. There are many agriculture related
disputes unsettled for the last many years. Resources are not being utilized due to poor laws
governing various sectors of the economy. Please comment on above referred issues.
Question: We can see cities burning in Pakistan and shipments stuck in cities and at ports. There
is severe shortage of electricity, gas, furnace oil etc. Offices and factories are being forced to
shut down in cities due to strikes. How can we compete with other countries globally with cost of
doing business going high and investment not coming in Pakistan?
Question: As we heard the panelists that there is a gap between the potential productivity and
actual productivity in Pakistan, how FEG can help in filling this gap and avail this opportunity?
ANSWERS:
Answer by Dr. Nadeem Ul Haque, Deputy Chairman Planning Commission:
There are many issues to answer like why
stock markets not working properly? Why
stock
markets
not
encouraging
entrepreneurship in the country? Why
competition not unleashing the competition?
We need regional trade to promote. Our
industrial competition practices need to be

looked at. We are offering answers to all the
issues through our new growth strategy for
the markets to be competitive and
productivity to increase to create
opportunities.
Answer by Professor Philip Auerswald, George Mason University:

There should be a coalition of industrial
giants who can come forward and work for
Pakistan. They need to work with Planning
Commission, SECP, and Competition
Commission etc. and take Pakistan where it
should be. It is their country and country of
their children. Now is the time to make a
coalition and come forward to develop

Pakistan.
Government needs to give a competitive
environment to create a space for the future.
There is need to promote entrepreneurship.
Investors are even working in countries like
34
Afghanistan. The local entrepreneurs

understand the local markets better then
foreign investors and they need to come
ahead. There is need to develop a healthy

environment for the business.
Answer by Rahat Kunain, Chairperson Competition Commission of Pakistan:

Mandi system should also be taken into
account to make the markets competitive.
Informal sector should also be developed
and regulated. It requires a lot of research
and documentation for these markets to
bring in formal network and regulate them.
There is a need to meet compliance to
minimum
standards
for
increasing
competitiveness. We also need to be very
clear about openness, free trade and
liberalization policies. There is need for our
domestic markets to be competitive,
compete globally, and protection of the
domestic markets should not be the policy.
Answer by Muhammad Ali, Chairman SECP:

Companies go to stock markets to raise
capital. The moment a company starts
business as a private or public limited
company the regulation starts. Along with
promoting equity market SECP is also
working for the development of debt and
commodity markets in the country. We are

an agriculture based economy and we need
to develop mandi system in this country. We
need pricing of the agricultural markets
which mandis can develop.
***
35
Session 3: Result Based Management in Public Sector
Speaker: Heru Prasetyo

Deputy Chairman of the Presidents Delivery Unit for Development Monitoring and
Oversight, Indonesia
condition was very disheartening. That was
the time when president Soeharto stepped
down and handed over the government to
President Dr. B.J. Habibie and reforms era
started. Before 1998 we had only two
presidents, but in the last twelve years we
have seen four presidents. We reformed the
government from provincial level to the
district level. We activated a system to take
presidential and parliament campaigns
promises as key performance indicators of
the government. We started monitoring
presidential campaign. I am of the opinion
that Framework for Economic Growth for
Pakistan should also be implemented and
monitored in the same manner.
While coming to this room in the morning

the first emotion I have is that I feel amazed.
There are forty universities connected in this
conference which is something really good.
While listening to the discussion I feel more
humble as all this intellectual work is also
being done in my country as well, but not
with so many universities connected through
the internet. I find similarities in the
approaches. I would not try to be more
intellectual here but just to present what my
President asked me to be.
We need to make a strategy with a bias for
the implementation as otherwise it is not
workable. Let me start with some
background of Indonesia. Indonesia has 1.9
million /km2 land with 6 million /km2 at the
water. We have population of 235 million
people. Pakistan is going to face the same
challenges in 2020 which we are facing
now. We have 33 provinces, 400 districts
and 43000 villages. We have blessing of
many natural resources such as coal, oil and
wood. We were formerly a Dutch colony
and we fought our independence in 1945.We
have experienced three governance stages in
our country which is as follows:
In year 2020 the per capita income in

Indonesia would be approximately US $
4800. With new reforms poverty is going
down, unemployment reducing and growth
of investment also looking good. Jakarta
Globe2 writes about the ambitions of the
government in following words:
There is no denying that the country is
on the right path. But speed is of the
essence so that 2011 will be an even
better year than 2010.
1. 1945 1966 (The Soekarno Era

Nation Building),
2. 1966 1998 (The Soeharto Era
Economic Growth), and
3. 1999 Now (The Reform Era
Democratic Balance).
Our economy is growing fast and issue with

us is that how can we grow faster in future?
We are looking for money from publicprivate partnership. For the growth in the
country it is estimated that 80% of the funds
must come from private sector. Indonesian
governments current budget is about US$
Now we are working in reform era. We need

to remember one thing that solution to a
problem has the potential to be a new
problem. In 1998 we faced economic crises
and riots etc. in the country and the
36
Jakarta Globe, 31 December, 2010
If one ministry was not coordinating with

the other ministry it was being reported in
cabinet meetings. We have set up targets on
every 3 months basis. Presidential Delivery
Unit started reporting actual performance on
an eight column (standard) form. We
monitor them, check on ground physical
achievement, score them and report to the
cabinet. Whatever target achievement is
reported by the ministries we send a team on
to physically verify that. We are also
focusing on debottlenecking problem areas.
Based on the feedback from the field we
remove bottlenecks. For infrastructure
development the land is not available for
which we find solutions through publicprivate partnership (PPP). In PPP we are
facing many problems. We are trying to find
that who is responsible for the failures in
PPP and why it is not working?
Coordination between Ministry and local
government is another problem.
130 billion. To achieve the growth targets

we need three times the current budget. We
are looking for money from public-private
partnership. US$ 150 billion are planned for
infrastructure and US$ 50 billion are
planned for community development. After
decentralization under new reforms we are
facing new problems as districts are now
more in control than the centre and
provinces. Bureaucracy is still bad and
decision making is poor.
Indonesian government has set up 11
national priority areas for reforms, which
are:
1. Bureaucratic
Reform
and
Governance,
2. Education,
3. Health,
4. Poverty Reduction,
5. Food Security,
6. Infrastructure,
7. Investment and Business Climate,
8. Energy,
9. Environmental and Post Disaster
Management,
10. Disadvantaged, Isolated, and PostConflict Area, and
11. Culture,
Creativity
and
Technological Innovation.
We place everything in front of the

President in his Situation Room. President
himself monitors progress of all the
development and priority areas of the whole
country. We also have web-based online
reporting system and anybody can report
progress of a program to the Presidents
Delivery Unit.
Problem of our government is lack of

consistency,
synchronization
within
ministries, and poor coordination at
community as well as village level. There is
lack of inter-ministerial coordination. We
planned a methodology and a 5 year
program in the government. We planned
about 369 action plans from 11 priority area
for which challenge foreseen was
monitoring i.e. how to and what areas to
monitor. These 369 action plans of strategic
importance were identified out of 6000
action plans which were identified by our
Planning Department. We have placed all
these action plans in our monitoring system.
Moving forward the lessons and challenges

are as follows:
1. Managing bureaucracy, without a
bureaucratic mindset,
2. Coordination is a challenge: Not
only central-local, but also among
central government agencies,
3. Non-partisan working unit: In the
midst of a noisy democracy, and
4. Courage for breakthroughs: fail in
trying is better than failing to try
In my point of view proof of a strategy to
be successful is its implementation
***
37
Speaker: Nohman Ishtiaq

Advisor, Finance Division, Pakistan
An ordinary strategy well executed is better
than a brilliant strategy that for one or the
other reason is never implemented.
Importance of the implementation of the
strategy has already been highlighted by the
speakers and my presentation is also about
implementing the Framework for Economic
Growth.
1. Government should steer rather than

row (provide a framework for nongovernment action rather than
operate institutions),
2. Government should focus on
outcomes (desired results) and needs
of customers (service recipients),
rather than inputs (rupees and jobs)
and needs of bureaucracies (rules),
3. Government should decentralize and
address problems from the lowest
level of government possible
(subsidiary),
4. Public agencies should compete with
private agencies, and should adopt a
market orientation, and
5. Government which works better also
costs less.
The FEG speaks about two important

constraints to the economic growth in
Pakistan which are given as follows:
1) Inadequate market development: It
includes following important factors to
be considered:
-
Lack of competition,
Tax, tariff and policy distortions,
Poor regulation,
Entry barriers, and
Government involvement.
The core of whole Public Sector

Management is the Result Based
Management (RBM) which focuses mainly
on the customer or people. The inputs are
human, financial and material resources
which give output in form of service
delivery. In Pakistan public sector currently
looks at only inputs i.e. economy factors.
We in Pakistan dont have system whereby
we can measure efficiency by looking at
service delivery performance in public
sector. As effectiveness of the public sector
is also not being properly looked in Pakistan
we dont have a comprehensive mechanism
where we can monitor, budget and plan
outcomes.
2) Lack of efficient public sector

management: It includes the following
areas to be focused:
-
To provide core governance

goods,
To facilitate markets and
investment, and
To promote deepening of
physical, human and social
infrastructure.
Growth strategy basically needs an

implementation
strategy.
Government
should provide a framework for nongovernment action rather than operate
institutions. Reforming Public Sector in
Pakistan requires New Public Sector
Management which include following areas
to be considered:
Results Based Management system focuses

on service delivery and this should have an
orientation at planning, budgeting and
monitoring stages. Monitoring results should
back the planning process in the form of
feedback. The overall working should be
aligned with the individual performance
assessment mechanism of the Civil Service
38
government is made based on inputs and

outputs along with performance indicators
given for each of the ministry. The system is
there but there is need to look at this overall
holistic picture whereby plans, budgets and
monitoring and evaluation is focused for
results.
and reward and penalty should be attached

with the achievement of the results.
My first recommendation for the whole
system would be to put at one side different
government actors and political setup. On
the other side there would be planning and
budgeting, whereas monitoring would be at
the top. It would all be about a fiscal
framework approved by the cabinet with
expenditure limits for each of the ministry to
form basis for ministerial planning.
Ministerial planning should also be based on
the results with an over sighting body from
Planning Commission and Finance Ministry
together to look at the performance. This
fiscal framework should at the end be
approved by the parliament and a cabinet
sub-committee for monitoring government
performance, same as Presidents Delivery
Unit doing in Indonesia or like Prime
Ministers Delivery Unit in UK.
Important question here is to overlook the

performance. In case of Indonesia it is the
Presidents Delivery Unit which monitors
the implementation process. In UK the
Prime Ministers Delivery Unit performs
this job. In case of Pakistan Prime Ministers
Office or cabinet can answer, but these
questions require further deliberations.
Linkages between federal and provincial
government are also important for the whole
system to effectively work. One last
important thing I want to say before closing
remarks is that our constitution allows
government to approve and spend
supplementary budgets along with reappropriations without prior approval by the
legislator. This article within the constitution
undermines our planning, budgeting and
monitoring. It requires considerable thinking
so that ex- ante approval by the legislator is
made mandatory before spending any
amount.
With regards to this medium term fiscal

framework government already has a
process whereby a macro economic situation
is analyzed, revenue and fiscal policies are
debated, and results and expenditure ceilings
are given to all ministries, which is also
endorsed by the cabinet. We also have a
process whereby the budget in the federal
***
39
Discussion
Discussant: Dr. Akmal Hussain
Professor, Beaconhouse National University
number of people are involved in the growth
process where there is competition,
efficiency, innovation etc. it can be
sustainable.
Let me start this with a note of appreciation.

Link between public sector management and
economic growth is very important. Let me
start with the question that what is the link
between Result Based Management in
public sector and the macro economics? I
think the link precisely is the institutional
framework.
Institutional
framework,
whether for a public sector organization or
economy as a whole, consist of a set of rules
and norms and incentive structure embodied
within it to shape different kind of behavior
by the economic actors.
If we look at micro level public sector

management system we can have a system
which build new rules and performance
evaluation system to enable them to do their
jobs. Government should focus on providing
a minimum set of key services such as
quality education, quality health, sanitation
etc. which are to be delivered by the public
sector. Internal performance and evaluation
mechanism can also bring results. RBM is
an important element. It should be customer
at the other end to monitor the results and
performance. In Pakistan we need to enable
organizations of the poor to be
institutionally linked with every part of the
government at provincial level, district and
village level. We need to enable local
government with institutional network to
bring results. Poor should be systematically
involved in the process of performance
evaluation and results.
The growth framework should unleash the

productivity, quality of life and growth
potential of various actors. At the same at
micro economic level it should be
considered that what kind of institutional
framework we need to build so that they can
set incentive structure, rules and norms that
can be built in public sector organizations.
An important challenge in front of us is to
generate a growth which is sustainable and
equitable. It should be inclusive to involve
large number of people both in middle class
and the poor in the process of investment
and high wage employment. When a large
***
Discussant: Dr. Andrew Rathmell

Coffey International Development
Thank you very much for inviting me here. I
will talk about four observations based on
UK experience and other in a number of
different environments around the world. In
UK they are using target selection
approaches using flexible management
framework for helping public sector

organization and civil society in getting
outcomes. Pakistan has a complex political
and economic environment with whole
range of issues. How can we improve
organizations in Pakistan to RBM
40
delivery monitoring and evaluation

mechanism may be developed in Prime
Ministers Office, involving focus
groups to take feedback, it can help in
improving public responsiveness. So
flexible management framework along
with public participation would be
important in improving public sector
responsiveness and results.
programs? There are following three ways to

make public sector more effective and
responsive to the service delivery:
1) Process of agreeing and setting
outcomes across federal and provincial
bureaucracy i.e. forcing decision makers
and stakeholders to really think that how
their interventions may lead to give
outcomes. Using outcome and results in
setting process forces decision makers to
look at actual outcomes rather than just
looking at inputs.
3) Improving planning including even

medium term budget planning for the
development programs in public sector.
We need a very flexible and responsive
management framework to get desired
results in the public sector. For Pakistan we
need to also include stakeholders and to take
public opinion for getting better results,
improving overall planning process, public
service
delivery
capability
and
responsiveness and making budget planning
more adaptive.
2) How to use monitoring and

evaluation once budgets and programs
have been set to build capability for
responsiveness. In Pakistan direct
feedback mechanism dont exist for
many areas of service delivery,
especially for the citizens at federal,
provincial and district levels. If a
combination of product and service
***
Discussant: Vinaya Swaroop

Sector Manager of Economic Policy in South Asia, World Bank
started laughing and said that you want my
performance to be judged based on inflation
in my country? You must be kidding as I am
a Civil Servant. It was 1995 and we knew
that this thing couldnt go forward.
I need the attention of Deputy Chairman

Planning Commission and would like to talk
about the things which should not be done.
Back in 1990s I first time heard about
Result Based Management System (RBM),
also known as Performance Based
Management. We must collect information
on performance indicators for improving
performance in public sector. We heard
about the experience of New Zealand and
Australia where it turned on the economies.
In New Zealand performance and pay of the
head of a financial institution working under
a contractual agreement was linked to
inflation. The head was asked to manage and
bring down the inflation and his
performance was linked to controlling
inflation. When I told this example to one of
my counterparts in the country he just
Pakistan needs to collect information to

develop performance indicators. We have
worked on medium term expenditure
framework in over hundred countries and we
must admit that this was not a successful
experience as we have found that
infrastructure spending in developing
countries is not associated with higher
economic growth. We have worked on
explaining this fact and also developed
working papers on the issue. To explain
here, I share Ugandas experience where
their bank started Public Expenditure
41
One such example is of South Asian

countries where they used one such indicator
for improving performance of doctors in
public sector. They developed an indicator
in which doctors performance was linked
with the condition that how many patients a
doctor saw in a day. But this experience to
bring efficiency in checking maximum
number of patients became a nightmare.
Same is the problem with setting too many
targets and collection of information which
is inversely related to the effectiveness of an
RBM
system.
Simply
collecting
performance information also does not
necessarily lead to service delivery
improvement. The key to success is what to
do with that information and how to use it
effectively to change behavior and
outcomes.
Tracking Surveys (PETS). PETS started

looking at the amount of resources budgeted
in ministry of finance and the actual money
which reached the school. It was found that
in terms of actual expenditure only 30 %
amount was actually spent on the sector and
the rest leaked out.
If we talk about the productivity of public
expenditure and just look at infrastructure
spending we are not going to get the right
answers. We did a working paper for
looking at the impact of public sector
spending on education outcomes and health
outcomes and we also looked at governance
matters. We found that the public
expenditure is closely associated with the
education sector outcomes and health sector
outcomes when we controlled governance.
In other words the countries where
governance is good the outcome was also
found to be good.
We in World Bank have come a long way.

While lending we have disbursed money on
the basis of expenditures. But we have just
coined a new instrument which is called
P4R i.e. Program for Results in which we
disburse money based on actual results
achieved and outcomes. Concept is not easy
as we cant look at the end result. But we are
in the process of putting things together to
develop a mechanism.
We have a growth strategy here and looking

at the implementation plan. Suppose we take
one indicator of Tax-to-GDP. This indicator
is easy to monitor. But what happened in
many countries is that they over achieved
the targets by specifying lower targets and
using unlawful measures. We should be very
conscious while using incentive framework.
***
Discussant: Raza Rumi

Public Policy Advisor/Editor
First of all I would thank Dr. Nadeem Ul
Haque for having me here in this conference
on Framework for Economic Growth.
Planning Commission is holding a good
conference for the change and let us hope
that this momentum is carried through and
sustain to help the government in developing
and
implementing
programmes
and
strategies.
Pakistans governance has been an issue as

our inability to focus on results has resulted
into decline in social indicators. Nothing
better illustrates this that what happened
with the Social Action Programme which
was started in 1990s. A large amount was
given to the program from various donors
and international organizations and at the
end of 1990s our social services were
worsened. Whether it was child or mother
mortality all indicators had gone down. It
42
was institutional failure that we never

focused on the results from the federal to the
local levels. In Pakistan institutions are
unfortunately not delivering results which
have led to successive erosion of public trust
and legitimacy in the state. Due to
institutional failure we also find many
stateless regions in the country like in
Baluchistan, FATA, even Karachi and South
Punjab where land mafia, terrorist and nonstate actors are operating. One of the
missing part of the growth strategy is that
how do we tackle informal sectors and black
economy, mafias and many other issues
being faced in this country?
I would sum up with few key points that the

FEG has talked about very useful steps for
the Civil Service reforms. It talked about
monetization of perks and to have right
people at the right jobs. We are getting
funds from World Bank etc. for the training
of Civil Servants but when they come back
they are not being placed in the ministries
where they ought to be. A person trained
with investment of sixty thousand ponds in
London Business School comes back and
work in Ministry of Minorities. Important
point here is that nobody in Pakistan is held
accountable. Accountability is all imaginary
and just on papers. Moreover, without
having local governance system in place we
cant have feedback mechanism, state
engagement and results in a heavily
populated country like Pakistan. Use of
benchmarking techniques, report card tools,
introduction of e-government etc. can be the
way forward for a Result Based
Management system.
Unfortunately in Pakistan we take one step

forward and ten steps back. Current
government has moved to a better structure
for defining powers of the Centre and the
provinces. But at the same time in Sindh
1861 Police Order has been restored. So it
is almost a joke that in the year 2011 we
want 1861s police model to work again.
***
43

QUESTION:
Question: We discussed about RBM and public-private partnership. Why is this not working in
Pakistan?
Question: We have Prime Ministers Inspection Commission in Pakistan. Why that commission
is not doing the job to effectively monitor and evaluate the results in the country?
Question: We are talking about growth in the country. In a country where we have load shedding
how can we go for the growth?
Question: Economic growth comes with the introduction of new products and processes in the
economy. My question is that how government is monitoring actions in term of innovation in
products and processes, innovation in society and institutions etc?
Question: In RBM we heard about disbursement of budgets against outcomes. I was just
wondering that it takes long time to know about the results then how this tool would work in the
real world?
Question: What is our strategy to make public and private sector accountable? And how people
are going to be the part of this strategy in context of role of local government?
ANSWERS:
Answer by Dr. Akmal Hussain, Professor, Beaconhouse National University:
up with the local government delivery
system.
In Pakistan decision are being made at topdown basis in. The Prime Minister or the
Chief Ministers forget taking feedback from
the inspection team or the feedback is vague
and doesnt work as it should. We talked
about two kinds of institutional mechanisms
for ensuring that public sector service
delivery becomes questionable. One
important thing is to identify clearly timebound objectives. Second important thing is
the evaluation of performance in
measureable terms. My point is that instead
of internal performance based efficiency and
controls we also need to have a system of
external evaluation where we can link
service delivery with community based
organizations. There are many community
based organizations working at district,
tehsil and village level which can be linked
I would also like to say that new products

and processes are essential for sustained
economic growth of the country. It is the
duty of the government to provide a setup to
have such impacts for the development of
new products and processes. But the
problem is that how we measure that
impact? I think that Dr. Nadeem and his
team has tried to bring together what all new
literature in the last three decades on
economics suggest. It tells that new products
and processes and innovation occur as a
result of opening up of the economy for
private sector competition where a large
number of economic actors outside
government compete and their survival
44
depends on increasing efficiencies and

innovation and merit based selection.
Inefficient firms in the process die and there
is fresh entry of the efficient firms who

compete to survive.
Answer from Heru Prasetyo, Deputy Chairman of the Presidents Delivery Unit for
Development Monitoring and Oversight, Indonesia:
Let me share with you Indonesias
experience that we have very large tropical
forest in our country. Different ministries
give licenses for cutting forests, mining etc.
There are 20,000 villages in these forests.
To protect marginalized people living in
forests we try to decide boundary lines of
the forests and involve local community
living in these forests in the process of

planning and monitoring and to decide the
use of that land. We dont just follow topdown approach in monitoring but it goes
both ways. So involving local community at
the stages of planning, implementing and
monitoring has been very useful.
Answer by Dr. Andrew Rathmell, Coffey International Development:

Based on lessons in UK for target
monitoring mechanism I am of the view that
there should be some formal mechanism to

make the reports public.
***
45
Session 4: Creative Cities and the Urban Development
Speaker: Emiel A. Wegelin

GIZ Program Coordinator, Cities Development Initiative for Asia, Philippines
Before I start my presentation let me express
my gratitude to the Planning Commission to
open up discussion on such an interesting
and important planning document with cities
being at the heart of the agenda. Let me also
thank Planning Commission and UNDP for
inviting me here. In the course of the
presentation I would discuss that why it is a
good idea to focus cities for economic
growth of the country.
regions serve as magnets for people,

enterprise and culture, but with urbanization,
poverty also urbanizes. The Asia-Pacific
region remains host to about 60% of the
worlds slum population which in 2010
amounted to an estimated 505.5 million
people. The world slum population in 2010
is 828 million people. It is estimated that
urban
environmental
infrastructure
investment requirement in Asia Pacific
region is about $100 billion/year. Urban
environmental infrastructure investment
means development of various facilities
such as water and sanitation, drainage,
transport, flood protection etc. Cities often
have macro development strategies and
spatial plans, but city infrastructure projects
to implement are often not adequately
defined and prepared for financing.
Particularly there is issue for the 1,400+
medium sized cities in Asias developing
countries with populations of 250,000 to
5,000,000.
I first visited Pakistan in 1977 when I started

my work with Karachi Metropolitan
Corporation as a member of team of Dutch
experts to help the city in implementing a
program of regularization of katchi abadis
which was at that time a policy decision of
the city government. Let me explain you
briefly a series of running commentary,
documents and regional statistics. The
worlds urban population in 2009 was
estimated at 3.4 billion. Asias urban
population in 2009 was estimated at 1.72
billion and between 2010 and 2020 there
would be 411 million people added to Asian
cities. 60% of the growth in the world takes
place in the urban areas. By 2020 urban
population of the world will increase to 4.2
billion out of which approximately 2.2
billion people will be in Asia. Cities provide
80% of the economic base, but generate
significant
environmental
footprints,
including contamination of air and water, as
well as 75% of the GHG emissions.
Developing Asias projected global share of
CO2 emissions for energy consumption will
increase from 30% in 2006 to 43% by 2030.
The economic potential of the cities is clear
but we need to be careful about handling of
the environmental issues as well. City
The CDIA is assisting medium sized Asian

cities to bridge the gap between their
development plans and financing of their
infrastructure investments, with emphasis
on:
- Urban environmental improvement,
- Urban poverty reduction,
- Climate change mitigation or
adaptation, and
- Improved governance.
The CDIA partnership was established in
2007 jointly managed by ADB and GIZ and
financially supported by ADB, BMZ,
government of Austria and the Shanghai
Municipal Government etc. CDIA has a core
46
use zoning) and housing (low income

housing space standards; incentives for
private sector rental housing) directions are
by and large supported.
budget of $ 35.3 million (2007-2012) and

non-core resources of $ 19.3 million. CDIA
assists cities to implement their development
strategies through the following measures
for demand-driven support approach to
provide:
-
Let us also recognize the diversity of urban

places. Islamabad is a totally different place
and not a typical of Pakistans cities such as
Hyderabad, Karachi etc. The main problems
have been plan implementation and
enforcement, rather than planning itself. In
Islamabad regulations are more dominant
then other cities. Katchi abadis are the
dynamic growth areas of the cities, which
are affordable to the poor, as they are the
world over. Small scale entrepreneurs and
small home/cottage industries flourish in
such areas, unless they are repressed by the
wrong government actions. Creativity takes
place in such areas and should be supported
by the government. The policy towards
katchi abadis should be supportive and
should be supported to make them
participate in the development of the overall
city.
Advisory support to infrastructure

investment
programming
&
prioritization,
Consultancy support to prepare prefeasibility studies for high priority
projects,
Local
institutional
capacity
strengthening
in
infrastructure
investment planning,
Identification of potential private
sector involvement, and
Linking cities and their infrastructure
investment proposals to investment
financiers (local/international).
CDIA in Pakistan is working on city

interventions in Faisalabad and Chiniot. The
focus areas include water supply, drainage
and waste management and improving urban
transport & industrial waste management. A
MoU
with
Infrastructure
Project
Development Facility, Ministry of Finance
was also signed in 2011 for development
and transfer of knowledge and to provide
expertise in the field of municipal
infrastructure financing and PPPs through
exchange programs, seminars, conferences
and material dissemination in Pakistan and
the region.
Public transport is the most serious

bottleneck within the cities, particularly
impinging on the poors ability to connect to
work which must be addressed as a core
priority area for action. Public housing is
not a doable option at scale in Pakistan,
given the public sector capacity constraints.
There is need for public-private partnership
which requires strong government support
and reliable government partner to work
along with a clear regulatory framework.
Urbanization is essentially a local
government activity and should be
supported. Government support must
primarily be through provision of local
infrastructure and services (roads, public
transport, electricity, water and sanitation),
and ensuring security of land tenure. Local
government must come into its own as the
driver of urban management a third tier of
government with legally/constitutionally
defined functions and resources. Cluster city
Urbanization is the spatial translation of

economic growth and restructuring. The
framework recognizes urban development as
a driver of economic growth. Overall
direction of deregulation and retreating
government is required. Let government and
the private sector do what they are best
placed to do, but do not throw out essential
provision of public services with the
privatization. The Planning (compact
development, more attention to mixed land
47
development also needs to be supported, but

the institutional ramifications must be
carefully considered. There is need to look
at
organizational
programmes
and
implementation and it should be seen as
investment. Deputy Chairman Planning
Commission has also said earlier that
institutional reforms and capacity building
are essential for local governments. Capacity
doesnt mean to just provide training or send
people abroad. Government authorities, such

as development authorities should be
integrated into the local government system
for better functioning.
At the end I would like to wish best of luck
to Planning Commission and Dr. Nadeem Ul
Haque for this ambitious plan.
***
Speaker: Belinda Yuen

Urban Development & Local Government Unit, World Bank
Over the next fifteen minutes or so I would
talk about three topics which are cities,
urban markets and growth. Cities are the
centers of economic progress. By the year
2050 it is estimated that 75% of the total
population is expected to live in cities with
total world population to be 9 billion. No
country has achieved advance levels of
development without urbanization3 and the
same trend is observed in last many years in
Pakistan. In year 1900 there were only 16
cities in the world with population over one
million. In year 2007 cities with population
over one million have increased to 450 and
would increase to 600 cities by the year
2050. Same trend of population growth is
taking place in Pakistan. By year 2030 about
50% of the Pakistanis would be living in
urban areas with more than 17 cities living
with a population of more than one million.
As urbanization is expanding the cities are
becoming
incubators
of
innovation,
technology, and creativity. Cities are
generating more than 80% of the global
GDP. In Pakistan this figure is
approximately 78% of the countrys national
wealth. Firms seek to locate at places where
they have access to markets, good

infrastructure and connectivity. Besides,
cities are also important places for human
health and wellbeing where they grow up,
grow old and spend much of the leisure
time. 75% of the GHG emissions are
generated by cities. We need to balance
economic
growth
and
ecological
sustainability.
What makes the cities successful the
experience may vary from city to city. But
in successful cities we find three common
factors (3 Is) working for development
which are:
1. Institutions: Promote institutions that
enhance functioning of land markets
and provide basic services,
2. Infrastructure: Strategically place
infrastructure to connect the city
with external markets and ensure
local mobility, and
3. Investment: Invest into local
economy to create jobs and improve
living conditions for the public.
If we look at successful cities in Asia like
Seoul it has focused on strong institutions,
connective infrastructure and targeted
interventions to enable transformation of
World Development Report, 2009
48
security, waste management and necessary

interventions which are important to
improve urban growth and investment.
slums to improve their environment and

make part of a bigger economic growth
agenda. Change in Seouls planning
concepts involved a change from growthoriented model (quantitative growth) to
growth-management model (quality of life)
having a focus on following factors:
Preparing to a livable and prosperous city is

very important. There is a need to make the
cities livable and prosperous places by
setting higher benchmarks. World Bank
urban strategy has a focus on the following
important areas to make the cities livable
and prosperous:
Growth-oriented model:
-
Expansion of urban space,

Model based on car transport,
Large-scale investment,
Model based on facilities
development,
Strategic point development.
Growth-management model:
-
Balanced development,
Model based on public transport,
Improvement of life quality,
Model Based on
benefit/management,
Based on network system.
A system of cities driving growth,

reducing poverty,
Focusing on the core elements of the
city system,
Making pro-poor policies a city
priority,
Supporting city economies,
Encouraging progressive urban land
and housing markets, and
Promoting a safe and sustainable urban
environment.
One of the tools developed under urban

strategy by World Bank is Eco2City
approach.
The
Eco2City
program
comprises methodologies, studies, best
practices, as well as multiple financial
systems. Managing urban development is
important for city development, job creation
and asset utilization. The stock of land and
property is often an overloaded resource in
most of the cities. Non utilized and
underutilized land and property assets can
provide major opportunities for development
and re-development. Raising capital to
finance urban infrastructure is a big
challenge. One solution is to use land based
financing to unlock urban land value. A
good example of raising money from
unutilized resources is of Cairo where more
than 3 billion US dollars were raised from
the auction of desert land. Levy on land is
another tool to collect funds. All such
activities require a clear regulatory
framework. Land use regulations are
significant in determining the pattern of
Cities in China managed to develop special

economic zones. Shenzhen is also one of the
successful model cities in China. Shenzhen
served as a pilot project for implementing
policies, bring change, and it is working on a
carbon free environment. Development
gives these zones special economic policies
and flexible measures. The institutions of
reform and special policies allowed to use
more
market
oriented
economic
management system which is especially
conducive for doing business.
Good connectivity improves productivity.
Mobility and public transport system such as
tube station improved passenger comfort,
boarding time and accessibility in successful
cities. There are many cities in the world
which are not working on the agenda of
carbon-free green cities. Successful cities
need to work for equally providing the
basics of urban development and ensuring
basic services such as water, electricity,
49
population and urban development. There is

also need for long term planning to make
livable cities. When city improves it attracts
business and skilled workers. But it also
requires protecting natural environment.
Efficient cities have service and land
policies to support urbanization and
connectivity for markets. Livability attracts
people from various areas to migrate
towards cities. Integrated land use and
transport planning improve the options for
efficient communities to grow.
infrastructure. Much has changed over now

in Singapores urban land structure with
careful planning. Singapore has become a
viable and livable green city. Successful
cities demonstrate a viability of social,
economic and environmental systems.
Livable and prosperous cities are not a
dream but a reality to happen. However they
need good local government, and to ensure
that visioning, planning and actions take
place in the cities.
Here World Bank would like to join our
colleagues at UN to help Pakistan in
progressing and implementing the New
Growth Strategy because I think you
(Pakistan) are at a very exciting threshold of
development time.
Singapore in 1960s faced acute urban

problems. Its city centres were overcrowded
and there was shortage of proper housing
facilities. More than half of the population
was living in slums. There was also very
high unemployment and lack of urban
***
50
Discussion
Discussant: Tahir Shamshad
Member Planning, Capital Development Authority, Islamabad
having provisions for basic facilities. Very
recently we have once again studied the
issue of slum and informal development in
the city. In Zone No. 4 we have opened
75,000 acres of land for public to come up,
invest and make all kind of recreational
facilities in that area.
Islamabad is considered to be one of the best

developed cities in Pakistan but, because of
slums coming up and informal development
taken place around in recent past; it is not
that Islamabad which was dreamed at the
time of planning. Instead of going into the
theories about cities I would like to go
straight to what we have planned for
improving Islamabad in future.
I told earlier that public participation had not

been there as part of policy in the city
development we are inviting architects,
planners along with public to participate in
the city development. Islamabad has
diversified cultural assets. People from
various countries and various places of
Pakistan come and live here. Cultural
planning is one of the important challenges
for us to plan and we are taking care of these
diversified resources while planning. Very
recently we have seen opening of Pak-China
friendship centre in Islamabad. Art & craft
village has also been added to the city. Very
soon a cultural complex is being developed
in Shakkarparian. A proper thought out
cultural planning is being made to ensure
that diversified cultural asset is taken care
while planning the city.
Islamabad was planned in 1960 and at that

time there was very little concept of public
participation particularly in the decision
making and infrastructure development.
CDA Ordinance 1960 didnt include
sufficient provisions for public participation
and investment in infrastructure. We have
identified basic requirements now that what
we need in todays scenario to ensure that
the city is at par with other imaginative and
creative cities. Recently we have prepared
an amendment of the ordinance to bring the
city at fast track again.
In master plan of the Islamabad there were
many green and distinct areas planned for
the city to cater for the food needs and other
basic requirements of the city. With shortage
of space and rapid growth in population we
have come up with a new plan for
Islamabad. In new plan Islamabad has been
divided into five zones, with each zone
I would take benefit of this audience and

request this august forum to give some
suggestions.
***
Discussant: Parvez Qureshi

Urban Planner and Architect, Lahore
I am thankful to Deputy Chairman Planning
Commission for inviting me in the
conference. It is heartening to hear Mr.
Tahir Shamshad (Member Planning, CDA,
Islamabad) speaking about urban issues.

People have been talking about issues
pertaining to development, expansion; issues
related to traffic, pollution, environment,
51
framework and urban management. These

two important areas need to be addressed to
effectively respond to urban planning issues.
We need to clearly define that who are our
urban development managers? One of the
potential solutions is that along with Civil
Service we need to have another specialized
cadre of experts, i.e. urban managers. These
people would serve as urban managers with
continuity to better understand the problems
of the city.
housing, katchi abadis etc. All these issues

have been recurring over a long period of
time in Pakistan. But I would like to focus
here on an important area which is
institutional framework under which all
above referred areas have been working.
Institutional development framework issues
are very old. Director Generals of the
development authorities are the persons who
have no understanding of the urban
problems. They come from federal and
provincial Civil Services and they dont
have understanding of the problems related
to city development like road, traffic,
pedestrian traffic, pollution, bicycle lanes
etc. In Lahore about 10 to 15 % of the
population is utilizing 85% of the city
resources such as roads, electricity, land
space etc. Majority of the population dont
have adequate resources available with
them. In terms of space utilization there is a
major disparity.
We need to bring reforms in institutional
Key solution to urban development is the

institutional reforms. People from Civil
Services come for 10 to 18 months and then
go to some other place. Our friend Mr. Tahir
Shamshad has seen two to three bosses in
last two to three years. We need to recognize
that our institutions need strengthening. We
need people who have understanding of the
problems and are trained in the areas of city
development.
***
Discussant: Philip Auerswald,

I share Richard Floridas sense who
discussed about Pakistani cities like Karachi
and Lahore and other cities in Asia as
Shanghai, Singapore. I take city planning
like holding a party for 18 million people
that would last for four years. Holding a
party for 200 people that would last three
days requires a lot of work to do that where
they would stay, what would they eat etc.?
To arrange a party for 18 million people for
next thirty years need a lot of work to do. To
have good time both party organizers and
participants need to have a sense of
participation. Party planning involves topics
like engineering, planning details and
thinking in advance. It is not possible to
have a successful party without having a
party planning. City planning, transport,

governance etc. all are boring topics which
need a lot of work and general public dont
have interest and inspiration in such work.
When we talk about the violence in cities we
talk about security issues related to the
cities. Washington D.C. is the capital of the
United States and a prosperous city. If we
look at violence in Washington D.C. we find
that in 1991 there were 482 murders which
come to 68 murders per hundred thousand.
In 1996 in Karachi there were 1782 murder
cases which come to 17 murders per
hundred thousand which means that
Washington D.C. is four times more violent
place in terms of murders than Karachi
52
which is a reality. But in fact the case is not

the same as it look like.
areas. Connection of prosperity between

cities and rural areas is very simple. A prorural policy is required for a growing
country like Pakistan to bring prosperity.
Prosperous markets create prosperous firms.

We dont develop prosperity in the rural
***
Discussant: Dr. Nuzhat Ahmad

Director, AERC
studied while making city planning. In a
latest research project we are studying
comparative advantages of various cities,
their
competitiveness,
supporting
infrastructure, overall environment, skills in
surroundings etc. Important question to be
asked is that why cities are different from
each other. Why Sialkot, Karachi and
Islamabad are different. We have started
consultation with industry focus groups,
business leaders etc. to know about specific
clusters there, their competitive advantages
and make development plans for specific
city clusters.
I want to discuss about public housing in

which the role of the government can be to
subsidize development in the housing sector.
In terms of financial decentralization
changes are made in the 18th Amendment.
Capacity development in city management
is another important area to focus.
For cities like Lahore and Islamabad we
have the data available but the data is not
available about most of the cities, especially
small and medium sized cities. While
making the growth strategy the federal
government need to consult the cities that
what priorities they have in their mind for
their city. Major stakeholders should be
consulted for the feedback for the urban
development strategies. For countries like
Pakistan an important question comes to
mind is that what we are going to do for the
rural areas in strategy development? Cities
should be taken as clusters with surrounding
areas included into it. Clusters need to be
ADB has conducted studies in Delhi, Dhaka

and Colombo to identify special industrial
clusters. They found what is lacking in
specific clusters in various cities. We are
studying the important areas identified in
ADBs study and trying to apply that
knowledge in some of the selected cities in
Pakistan.
***
Special Comments From

Rafeh Alam (from Lahore)
First of all I want to congratulate Deputy
Chairman Planning Commission for
arranging such a successful conference. I
want to read out five short points which I
have prepared about our cities.
I would like to react first to the comment

made about Islamabad that indeed it is not
the best city in Pakistan. It has slums around
because of the failure in urban planning,
misallocation of resources and misalignment
of priorities. Islamabad has no water (like in
53
G-10 sector) and high crime rate (like sector

G-13). There is no public transport in
Islamabad for general public. It is difficult to
move unless you have a car. It is an antipoor city with a segregated society.
entire world since World War II. Where is

that Pakistani culture in Islamabad? This
city has not produced writers, intellectuals
and
artists.
This
city
kills
the
entrepreneurship spirit and creativity.
Islamabad is running out of resources. We
need to realign our priorities.
City economics stimulate people by

encouraging entrepreneurship, using capital
in cities and providing opportunities. Cities
dont socially segregate people. If we look at
cities like London and New York we find
few city blocks which gave culture to the
I thank you and congratulate the Deputy

Chairman for organizing such a successful
conference.
***
54

QUESTION:
Question: Most of the donors in Pakistan dont have community development as one of their
priority areas. How Planning Commission going to find resource gap and address this issues?
Question: With respect to devolution there are many other challenges to be addressed like
encroachments, city mafias, capacity crises, urban migration, security threats etc. There is also
over deterioration in public infrastructure. I think we need to undo some wrong things in our way
forward. Please comment.
Question: How Planning Commission would implement strategies announced in FEG?
Question: There is no local government in Pakistan. What you think is the goal of the
development strategy in this regard?
ANSWERS:
We have a resource gap in our country.
Resource gaps are there everywhere around
the world. It is not question of resources but
to reorganize ourselves and think differently.
For example we have China Centre, Jinnah
Centre etc. in Islamabad.
differently for better utilization of our

resources. Our cities have tremendous
potential, but the real challenge is to change
the way we think. Implementation cant take
place in a room. It takes time and a lot of
work to do. People, Civil Servants,
universities, private sector etc. need to take
responsibilities to address these issues, bring
change and play a proactive role.
The main idea of this conference is also to

adopt a fresh approach and rethink
Answer by Parvez Qureshi, Urban Planner and Architect, Lahore:

Whole focus in last forty to fifty years in our
policy development was like poor dont
exist in this country. In Lahore there are no
pedestrian lanes for more than 7 million
people. Vehicles have roads but over 2.5
million people dont have bicycle lanes. We
are widening roads but not thinking about
urban poor. Same is the issue with
Islamabad and nine cities I have worked in.
In housing there has been no plan for urban
poor except some small projects. In last
fifteen years there has not been a single
urban focused project for the poor and as a
result poor go to marginalized lands. While

we talk about encroachments where we
expect the poor person to go? Where poor
people will go to exist? There has been an
absolute failure of understanding of urban
poor. In terms of urban development it is a
total failure. Same is with Islamabad,
Lahore, Faisalabad, Multan and other cities.
All these are administratively failed cities.
We have cities run by incompetent people
having power. Strategy needs to focus on
these issues.
55
Answer by Emiel A. Wegelin, GIZ Program Coordinator, and Cities Development

Initiative for Asia, Philippines:
Before I answer the questions we need to be
very clear about the concept of
decentralization. Good public service is the
right of both rich and poor alike. It is
important for us to ensure that poor people
can transform environment, reduce cost and
corruption to a small fraction through high
quality technical support and innovation. It
also shows the importance of high quality
technical support capacity. There must be a
partnership between the informal sector and

the
local
government.
Innovative
partnerships between the government and
agents involved can address the problem of
the poor with participation. Shifting urban
policy from pure providers to sharing
responsibilities and mobilizing local
resources
for
co-implementation
is
important.
Answer by Belinda Yuen, Urban Development and Local Government Unit, World Bank:
Yesterday Dr. Nadeem mentioned about the
issue of change. Change is necessary indeed.
At the same time we underscored a point
that it is a complex issue and we need to
plan it comprehensively. For example to
understand the issue of law and order we
need to understand the factors and drivers of
the issues. We need to identify factors

before going for solutions. All this requires
leadership, commitment and champions to
plan urban development very differently.
We need to plan differently to integrate the
urban planning and agencies involved. We
need to build livable and viable cities.
Answer by Philip Auerswald, Professor, George Mason University:

We talked about problems of housing
markets and housing finance. Generally
speaking whether it is issue of physical
spaces or marker spaces there needs to be
physical space in a city for investment to
happen. It is important to create mechanisms
to promote and encourage the type of
development which will be beneficial to the
country, and thats the planning we should
think about. Violence and crimes are also

important problems in cities. To deal with
the crimes we need to develop opportunities
so that people participate in communities.
Traffic accidents are another source of
violence we need to look at.
Answer by Dr. Nuzhat Ahmad, Director AERC:

We need to create more job opportunities so
that people get diverted from violence. Role
of the state needs to be improved. Another
important thing to look at is family ties. We
have conducted a research on violence and

family ties. I think family ties are breaking.
Basics of family values are important and
we need to look at that.
Answer by Tahir Shamshad, Member Planning, CDA, Islamabad:

We have a big gap in social and cultural
planning of the city. Social and cultural
planning is being focused by CDA in future
plans. Physical planning actually caused
social segregation. We have adopted a
business management system and a system

to deal with paper-less public management
system. Now we coming up with a phasewise mass transit system and purchasing
new busses for Islamabad. Within next six
56
months buses will be on the road. We have

also planned tourism system to take tourists
in surrounding areas such as Rawat and
Taxila. We are making pedestrian zones in
various areas. We have planned a project for
water supply. Physical and social planning

shall go side by side. We are also making a
bylaw to collect rain water in houses to
overcome water shortage problem in the
city.
Comments by Vice Chancellor, UET Peshawar:

With the help of Planning Commission and
HEC we have developed first national
institute of urban infrastructure in our
university. I agree with the things discussed
here in this conference. We need to design
cities by focusing on roads, transport, slums

etc. There is need to put creativity into
design, as Deputy Chairman Planning
Commission has also emphasized upon.
Comments by Tallat Hussain, media person:

We are grateful to all of you for giving
remarkable remarks. I would just comment
that Cities are what our politics is. States
and cities rise and fall together. We have
not been able to plan our cities as politics is
involved in cities. Cities are designed by the

rich and for the rich. When we talk about
Karachi we need to talk about land mafia
and city politics as well.
***
57
Session 5: Human Capital, Productivity and Innovation
INTRODUCTORY REMARKS BY
Dr. Javed Laghari

Chairman Higher Education Commission, Pakistan
Investment in academic
yields significant returns
economy and the society.
If we look at the report on Framework for

Economic Growth it states that:
Countries that have attained sustained
economic growth show that they have
invested in their people.
One of the entrepreneurs put it very

correctly about the secret of silicon valleys
success by saying that:
One cant have developed countries

with under developed people.
Take one research university and

venture
capitalism
and
shake
vigorously, that is the recipe.
Report further says that Pakistan is one of

the twelve countries where public spending
on education is less than 2% of the GDP
and actual numbers are even less than 1.3%
of GDP.
World Bank talks about three pillars of

knowledge economy which are:
i)
Education and skilled force,
ii) Infrastructure and communication
technology, and
iii)
Innovation.
Last night we also had an opportunity to

listen to Richard Florida in video lecture
and he also talked about 4 Ts i.e. Talent,
Tolerance, Technology, and Territorial
Assets. He discussed about importance of
universities for a creative economy in
following words:
If we look at World Economic Forums

Global Competitiveness Report 2011 it
talks about some of the important pillars of
global competitiveness, among which some
important are higher education and
training, technological readiness, and
innovation.
Universities serve as an innovative

engine of economic development.
Table - 2: The Global Competitiveness Index 2010-2011 rankings

GCI 2010
GCI 2009
Rank
123
51
44
27
Score
3.48
4.33
4.43
4.84
Rank
101
49
54
29
Change 2009-2010
Pakistan
India
Indonesia
China
Malaysia
26
4.88
24
-2
Country/Economy
research
to the
World Economic Forum, 2010
58
-22
-2
10
2
As per GCI Report 2010-11 Pakistans

overall competitiveness rank is 123 in the
world. In 2009 Pakistans GCI rank was 101
which have further deteriorated in 2010-11.
Indias ranking in GCI is 51, Indonesia at
44, China at 26 whereas Malaysias rank is
26. In Information and Technology our
rank is 109, in Education and Training we
are at 123, in Technology Readiness we
are at 109, and in University-Industry
Linkage we are at 92. These are some of
the aspects we need to focus on to increase
our competitiveness.
investment in road and building with the

same amount created only 5 jobs. This is an
important thing for our planners to think
about as we are spending large amounts on
building roads and underpasses etc. and less
on incubation, innovation and capacity
building. Some facts about incubators are
that there are 1100 incubators in USA, 500
in China, 270 in South Korea, 50 in India
and only 2 in Pakistan which are still at
infancy stage.
We in HEC since the last year are
encouraging innovation and creative
research and trying to convert it into
tangible output i.e. commercialization of
research. We are also pursuing initiatives
like Competitive Support Program to
establish incubators at our universities.
There is another fact that comes out of U.S.

Department of Commerces Economic
Development Administration Report (2009)
which says that 10,000 dollars investment in
incubators created 45 jobs whereas
***
Speaker: John Speakman

Private Sector Specialist, World Bank
Thank you very much Mr. Chairman and it

is good to speak here about innovation. If
we look at the ideas of creative cities and
quality of governance innovation is required
in all these areas. My talk today is about
innovation policy. We dont have an
innovation policy here in Pakistan, but we
need that. It needs to cover innovation,
commercialization, research and competition
that drive innovation, vibrant markets, and
incubators for innovation.
real new innovation. Adoptation of existing

technologies is another important thing we
need to look at. Upgraded technological
capabilities in a firm lead to productivity
improvements. These innovations can be:
-
New to the firm,

New to the market, or
New to the world.
The channels by which this up-gradation

occurs can be in following forms:
In Pakistan we see firms which are globally

competitive. But at the same time we also
have firms here which seem to be working
in stone ages and are even they are not
mechanized.
Adoption
of
existing
technologies may also include using
accounting systems. There are many
countries who have achieved higher
technological levels. A new drug developed
by a pharmaceutical industry is a kind of
Original research and development,

The adoption of existing technologies
that have not yet been applied in a firm,
and
Through inputs that embody the
innovation.
The Pakistan Innovation Ecosystem consists

of the following factors and institutions:
59
Knowledge providers:
-
We need to encourage openness. How many

textile companies in Pakistan have foreign
know-how and capital coming in the
country? Countries like Bangladesh, Sri
Lanka and Ukraine etc. have more openness
in their country which makes others to help
and make things better. Foreign investors
bring technology to the country. Level of
development of a country also matters.
Country should be very careful about R&D
for the development. Pakistan needs to focus
on middle income people.
Government Research
Institutions/Academia (e.g. LUMS),
Associations and Cooperatives (e.g.
PASDEC),
Private Sector Suppliers (e.g. Business
Development Services Business Edge),
International Technology Transferors
(e.g. Foreign Investors).
Government:
-
Policy Makers (e.g. Planning

Commission),
Resource Providers financial and
human (e.g. foundations, donors,
associations, government),
Coordinators (e.g. NUST),
Regulators (e.g. Ministry of Commerce).
The institutional capacity is also important

for innovation. Subsidies are very common
in Pakistan and the experience has been very
mixed. There are some very clear dos and
donts in this area. Countries cant pour
resources from the government. Countries
embrace technologies and they work very
actively.
Koreans
experience
of
development in 1960s and 70s was very
successful. They focused on technology.
Pakistan needs an innovation policy. Deputy
Chairman talked about many such areas
which need to be focused and can work as
accelerating indicators for economic growth.
If we look at the growth strategy I would

like to talk about the competition.
Competition is the key driver for innovation.
Moreover innovation doesnt live in a
vacuum but it is dependent on many
important factors e.g. the level of human
development, the strength of the regulatory
environment and levels of infrastructure
particularly the great innovation enabler viz.
ICT.
Culture for innovation is very
important that how we develop more
competition to go for more innovation.
Countries level of development is very
important. The distance a firm is from the
frontier of what is technologically possible
is a strong determinant of the effectiveness
of research and development expenditures.
Institutional capacity (monitoring and
evaluation,
coordination,
policy
development and financing) is needed to
drive innovation development.
Pakistan has a very huge domestic market

which they need to focus. Pakistan needs to
follow what Koreans did for their economy.
Commercialization of research is also very
important. Firms need to think about new
ideas, the capital from where resources can
come in. Competition policies, capacity
building,
encouraging
knowledge,
innovation financing and venture capital are
also important to encourage innovation.
***
60
Speaker: Shaukat Hameed Khan

Former Member Planning Commission
diversification of our exports is also low as

I am grateful to Dr. Nadeem Ul Haque for
per world market demand. Still major share
giving this opportunity. I would like to
of our exports is based on cotton based
congratulate Dr. Nadeem and his team for
products. There is a great demand for
opening up a bit of new pandora box in this
pharmaceutical and mechanical products etc.
conference on important factors. A lot of
and we need to go for diversification.
things have to be done and implementation
framework is still to be identified. I am glad
In vocational and technical education
that this new Framework for Economic
performance of Pakistan is poor. 70% of the
Growth is a natural extension and follow up
technical institutions in Pakistan are run by
of vision 2010.
the private sector. 60% of the enrollment is
in the private sector. When we talk of the
I would like to talk briefly about constraints
knowledge economy, knowledge workers
to Pakistans economy. I would like to
dont have to be necessarily Ph.D. or master
particularly highlight a particular aspect of
degree holder. Persons working in a house
our labor force for our economy. I would
as electrician, a telephone operator, people
like to say something about global
working in offices etc. are all knowledge
environment, the competitive environment
workforce. There are a large number of drop
in which we have to operate. Issues of
outs in educational institutions. International
entering into 21st century are changed and
data shows that nations with a large
Pakistan has to accept difficulties of this
proportion of student enrolling in upper
new world. The dispersion of information
secondary vocational programs have
and technology are the key profiles of new
significantly higher rate of school
industrial economy. Shifting of industries to
attendance, participation and completion and
Asia, South America etc. from developed
there is very little drop out there. In USA
countries need to be taken into account. We
90%
of
the
students
attending
need different and high skills. There is
comprehensive school take at least one
dispersion of skills, work and talent across
occupation specific course. In UK there are
national boundaries which we need to
about 45 to 50% of students who go for O
understand in new paradigm for growth.
level. Keeping this in mind we must reform
secondary education to improve low
Because of the change in information and
productivity, low skills, invoke secondary
communication technologies there are also
schools into comprehensive schools of a
organizational and technological changes
specific labor market for at least one
taking place. Induction of unskilled
program. It will also help in reducing drop
workforce is also seen in developing
outs in non-metropolitan areas. Developing
countries in the era of globalization and this
soft skills will have a major impact on
trend is being seen there since 1970s.
SMEs.
National Science Foundation report of 2010
found that China (9 Asian countries) has
At higher education level we need to bring
overtaken Japan in components of
higher qualified people from abroad.
technology and manufacturing. Changing
Generally we are against importing talent.
profile of the workforce and skills in last 20
But we need to fill this gap from abroad. We
years require attention. China and India are
need to focus on school teachers as well. If
at top in Asia and they have increased their
there is shortage of teachers we need to
share of skilled labor. In Pakistan
61
bring good teachers from outside.

International benchmarking is also important
for every sector. Strategic alliances are
required to match skills with what is
required by the partners in other countries.

Innovation is also important to develop
collective competence.
***
62
Discussion
Discussant: Ali Arshad Hakeem

Chairman NADRA
I am thankful to the Deputy Chairman
Planning Commission for inviting me here.
Core job of NADRA is to register National
Identity Cards. Our banking sector is now
connected through ATM cards and online
transaction has become possible due to
technology. We were also able to use our
database to make arrangements to make
payments to 1.7 million flood affected
people through cards. To make payments to
such a large number was not possible
without having databases and technology.
What we learnt from different programs is
that we can innovate to provide specific
services to people. We also have a challenge
in taxation. We are working with CBR and

trying to look at the patterns that how our
databases can be used to identify people
paying more taxes or the people who are not
there in the system.
Pakistan is a large country with a big
internal economy. We need to be more
creative while looking at this economy.
Percentage of educated persons is less but
the number is huge. We have good telecom
connectivity, a high growing banking sector
and a larger market size. What we need is to
be creative, see at positive side and
innovating new products.
***
Discussant: Dr. Sohail Naqvi

Executive Director, Higher Education Commission of Pakistan
domain where academia-private partnership
can be focused. Ownership is very important
in all above domains. Community and
industry needs also need to be looked at
while developing curriculum. Innovation
and research based education is one the part
to be looked at. We need to introduce
application oriented programs based on
specific needs. For example subjects like
Mathematics, Statistics, Economics or
Botany are excellent to teach. But to
introduce such courses in an area like
Chaman (in Baluchistan) may not be much
useful based on geographical and industry
requirements. We need to look that what
kind of programs to be introduced based on
specific
requirement
for
each
of
geographical area and institutions.
I would like to focus on three things i.e.

institutions, implementation and application
of idea. Universities are there to serve as
engines of growth for the socio-economic
development of Pakistan. Universities are to
be considered as one of the owners of this
idea of human capital development,
innovation, and productivity. Universities
need to build economy, leadership and
entrepreneurship across Pakistan.
Curriculum reform is also important for
education. It is important to know that how
we teach and what is the creative spirit of
individual to do that. Third step is
application of the ideas like building a new
aircraft, a wind mill etc. Next step is to
move from technological domain to business
63
Discussant: Philip Auerswald,

When I came here last October I had an
opportunity to travel around in Karachi,
Lahore and Islamabad and met some
Pakistani entrepreneurs. I met with Monis
Raheem, who is an engineer. He worked
successfully in his profession. He decided to
come back to Pakistan and started a
company. He is the CEO of Rozee.pk
which is a good example of entrepreneurship
development. He is one of the many young
people in Pakistan who started business and
there would be many other examples of
entrepreneurship development. I also had a
chance to meet Seema Aziz of Care
Foundation who has educated about
1,50,000 students in Pakistan. Another

example of successful woman entrepreneurs
is Nasreen Kasori of Beacon House School
System. She in their schools has educated
about 600,000 children which are about 2%
of all the children being educated in
Pakistan today. If two women like Seema
Aziz and Nasreen Kasori can educate more
than 0.7 million children then I am sure that
about 50 women entrepreneurs can educate
more than 10 million people in this country
in next few years. This kind of
entrepreneurship experience is required in
Pakistan.
***
64

QUESTION:
Question: I am Chairman of IT department of University of Sargodha. My question is that while
talking about creative ideas we see that government has invested billions of rupees in public
school buildings. Some other countries like India are using their buildings in evening. Buildings
can be used for software houses and call centres in the evening. Is that idea applicable or not to
use these buildings twenty four hours for classes in evening in Pakistan?
Question: I am Professor of Political Science Department in Karachi University. I would like to
refer to the issues like we facing here in Karachi. If we talk about USA, Canada and Japan we
find that their political environment is absolutely perfect. We have both domestic and foreign
studies on political economy of Pakistan. My question is that how can we make concrete and
practical recommendations for the political stability of Pakistan?
Question: If in our education system universities are designing courses in relevance to the
different area requirements then when this system is going to be implemented?
Question: I am from Lasbela University and I teach entrepreneurship subject. We talked about
business plans and developing linkages with the industry for their development. Researchers
need research facilities for their work. We have a very limited job market and we need to
motivate our graduates to develop their own businesses. My question is that how researchers can
have facilities to apply entrepreneurship skills in the industry?
Question: In the presentation the speakers discussed about universities as centres for knowledge
creation. Industry-academia linkage was highlighted for innovation. Is the role of the universities
confined to knowledge creation or to develop industry-academia linkages?
Question: I am from University of Sargodha. My question is that how can we develop human
capital for productivity and development. There are political problems in universities with fight
for titles, devolution, and lack of academic leadership etc. There is absence of senior faculty
members.. How can we develop human capital for being competitive and to meet globalization
challenges?
Question: Based on my experience of serving in universities I feel that universities should be
academically, administratively and financially autonomous. Boards in universities should have
the powers to take decisions. I invite the comments of the speakers and discussants.
Question: I am Akbar Khawaja, former Senator and World Bank official. I would like to
appreciate Dr. Nadeem Ul Haque, Dr. Leghari and the sponsors here for having such a large
audience in this conference. In my opinion determination and implementation are very important
to make things possible. FEG is an excellent framework and I have gone through the document. I
would like to ask one line message to integrate all the things discussed here.
Question: We have discussed about human capital development. There are so many ghost
schools in rural areas in Pakistan. Schools are there in papers but dont physically exist. My point
is that we have universities, HEC etc. but dont have focus on school education. Please comment.
65
Question: We have many traditional skills already available there in the country. India and other
countries have also worked on this important area and these traditional skills can easily be
marketed all over the world. My point is that we need to harness this potential and universities
need to do research on it. Please comment.
ANSWERS:
It is innovation and competing in

global economy on global standards.
economy we are not doing well. Money is a

major problem but main issue is how
efficiently and effectively we use our
resources.
We need to accept global standards whole

heartedly. Innovation is to get a new idea in
business. For human capital development
government needs to do it, but not directly.
For higher education PSDP funding is
already there. It would be HECs choice that
whether they need more buildings or more
professors. There are international standards
available. Education is the only way forward
and change will take time. In global
Innovation is something which depends

purely on education. Uneducated people can
also be innovative. Universities should be
most innovative and creative part in the
world and should be taken as part of the
community. Universities should be places
for youngsters to take risks and take
initiatives. It is a global market place for
talent. We need to understand talent which is
already there with us.
My one liner message is that:
Answer by Shaukat Hameed Khan, Former Member, Planning Commission:

If we talk about innovation in businesses it
is all about management, financing,
strategies.
But
innovation
is
like
development of Chinese bureaucracy system
which was a great innovative idea at that
time. Chinese did it thousands of years ago.
Google was a different and innovative idea.
Along with innovation harnessing the
innovation is also important. I see many
challenges in Pakistan. Whenever there are
challenges, we find there innovation taking

place. I dont see problems in innovation.
Harnessing innovation in a structured
manner to make it productive is important. I
would say that in running business we need
to build collective competence in a
structured manner. It is important to
understand that this is our world and we
need to change it for us.
Answer by Sohail Naqvi, Executive Director, Higher Education Commission:

Innovation and entrepreneurship is also to
understand that when we will wake up next
day we will still have load shedding;
political problems etc. and we have to deal
with this reality. This is our country and
entrepreneurship needs to accept these
challenges to turn these into opportunities.
To talk about shortage of professors it is

important to note that we cant create
professors as it takes thirty years in their
development. We can import them to fill the
gap. So our emphasis is on the faculty
development. For allowing universities to
66
take decision at local level it can be done by

remaining within the legal framework. As
far as standards are concerned international
standards are already available and we have
to meet those standards. About question of
Karachi and political role I would say that it
is the political sanity and the strategy to
decide that whether universities develop
leadership or play a leadership role. There is
a leadership vacuum. Let the intellectuals
get together and present a solution.
For industry-academia linkages we need to

do that immediately. We need to
immediately
start
work
on
the
implementation of the strategy. For the
comment about the teaching standards we
certainly need working at higher standards
and we need to work on that. Education is
the only way forward to keep going.
Answer by John Speakman, Private Sector Specialist, World Bank:

We need linkages between universities and
private sector for innovation. We need to
build incubators in universities and provide
venture capitals
development.
for
entrepreneurship
Answer by Philip Auerswald, Professor, George Mason University:

First of all I agree with the point that
innovation is mostly not all about
universities. The whole functions of the
universities are changing globally like we
also have virtual universities there in the
world and also in Pakistan. Universities

should be places where young people go and
make experiments, take risks and come out
to apply knowledge.
***
67
Session 6: Connecting to Compete
Speaker: Amer Z. Durrani

Sector Coordinator for Trade Logistics, Transport, and Customs, World Bank
Internet contributes about 4% to GDP.
Connecting people and goods behind the
borders (internal) is also very important. 70
million tonnes of goods move across our
borders every year out of which 98% moves
through two ports in Karachi. In terms of
cargo the given volumes move five times
inside Pakistan.
Before I start on the topic of connectivity to

compete I was thinking that what was the
thing in this conference which impressed
me? What would be my answer if someone
asks me that how was the conference?
Before I answer these questions allow me to
give you a Romanian quote that In todays
free market nothing seems visible until it is
scandalous, and nothing is scandalous
enough to be memorable. So I hope that it
will be a very scandalous growth workshop
and would remain in our national and
collective memories.
Impediments to connectivity include

technology and we have not been able to use
it properly. Affordability is also important like use of taxi is expensive. External
connectivity is something that not only
contributes to trade but also to regional
stability. We are working basically in
traditional textile goods and with the
markets which are far way. It takes 27 days
longer to take citrus to Spain from the point
of production to the point of use. We need to
explore new markets which have value both
in terms of distance and value for us.
Transport and logistics system is performing
poorly and costing economy 3% of GDP
annually which is about 480 550 billion
rupees a year, and cause direct and indirect
losses to occur in the following ways:
Before I start I would like to explain that

what actually connectivity means in the way
the growth strategy presents it. We talked
about connectivity in term of transport. We
also talked about connectivity in physical
terms i.e. to take people and goods from one
place to another. Transport actually provides
connectivity as a utility of place. In real
terms connectivity can be physical or
virtual. In case of connectivity it is
important that whether it is virtual or
physical connectivity it should have access
and mobility.
Connectivity is linked with utilization and

provision of services. Like road is there but
we are not using that. In urban and cross
border terms connectivity is also important.
It is also important in cross border and
international border context. Just ten to
fifteen years ago it required to physically go
to banks to deposit utility bills which now
require less than thirty seconds doing the
same job. To think of virtual connectivity is
fast replacing the need to physically move.
While talking of connectivity we also talk
about internet and mobile revolution.
Highways, trucking and railways sector

contribute a loss of Rs. 254-323
billion/year,
The ports and shipping sector contribute
losses of Rs. 60 billion/year, and
Poor trade facilitation and logistics costs
Rs. 167 billion/year.
There is 30% loss of the farm produce to

take to another area. Container dwell times
at Pakistani ports are back to 9-11 days
which is 4 times that of developed countries
and 3 times that of East Asia. Customs
68
clearance alone takes 4-5 days which is 1.25

hours in Singapore. In trucking sector rates
for high value commodity traders are higher
than India and Brazil. Rail carries less than 5
% of freight in Pakistan and again taking
1428 days to deliver up country (1800 km)
which is 4 to 7 times slower than in China
and United States. There was a study
conducted in 2006 by a Swedish firm on
logistic sector efficiency. The study
benchmarked Pakistan against Korea and
Malaysia and compared public logistic
sector efficiency with private sector. The
study pointed out that by bringing efficiency
in public sector logistic we can bring about
14 rupees of efficiency.
Major internal
Pakistan are:
-
logistics
challenges
Looking at cities we find that 21 million

pedestrian trips are generated in Lahore and
yet we have not heard that government is
making anything special for them. Coverage
of broadband is a good story in Pakistan, but
it is not being delivered to the wider public.
Key to competitiveness is not easy. As
Deputy Chairman said earlier that everyone
says that solutions are out there and it is not
rocket science. I challenge that it is far more
difficult than the rocket science and also
difficult than what nuclear scientists doing
in Pakistan. With cost of fossil fuel going
high internal connectivity is getting difficult.
in
Domestic Transport,
IT Development, and
Contemporary in-house logistics.
Pakistani firms are very inefficient in many

areas and still go to the government for
subsidies. While talking about internal
connectivity we find that half of the rural
Pakistan is not mobile. Women carry the
transport burden. Following is the position
of access and mobility in the country:
-
48% communities served by regular

public transport services,
45% of communities with basic access
still lack regular public transport,
Un-served village communities have to
travel 4 km (30 minutes) on an average
to reach public transport.
We need to talk about key institutions.

Increasing
effectiveness
and
fixing
inefficiencies means handling multiple
stakeholders and processes. We should
allow other people to run Railways and give
autonomy to provinces. Connectivity with
Gawadar needs to be developed. Why cant
we do an experiment like metro cab?
Internet connectivity is another challenge
and government needs to start serving using
internet.
15% communities still lack basic

motorable access,
53% communities have paved access,
***
69
Discussion
Discussant: Arshad Zuberi
Chief Executive, Business Recorder
many states of the British India. In Pakistan
we have NLC which has containerized cargo
services whereas train cargo share has
decreased to less than 5% in Pakistan.
Pakistan Railways last year carried the same
number of passengers and less freight which
it did in 1955; while Pakistans population
has increased seven folds. In public sector
organization we would find many other
examples of inefficiency due to which
connectivity has suffered.
The topic is connecting to compete and I

would like to start by telling you that there
used to be tea houses and restaurants near
the ministerial and Civil Servant enclave in
Karachi and Lahore where poets, writers,
journalists and government functionaries
used to sit and share ideas on a variety of
national issues. Communication of concepts
and ideas can be regarded as diffusion
similarly as particles of perfume are spread
in a room. Pakistan needs an incremental
intellectual growth. Social connectivity
between the middle class and the decision
makers has suffered in Pakistan in the past.
Civil Servants, khaki and white collars that
used to come from middle class are now part
of the upper elite. With this change the
government funds are shifted from social
sector to the defense and infrastructure as
desired by the elite. The British were very
proud of their services as they introduced
postal services, railways and connected
There is need to develop national trade

corridor to connect people and goods for
servicing business efficiency. We also need
to ease the visa processes with our neighbors
and other countries for easy movement.
There is need to improve rail and road
connectivity along with connectivity from
farm to market. We also need to improve
inter and intra-city connectivity. We also
need to connect both physically and socially.
***
Discussant: Shaukat Hameed Khan

Former Member Planning Commission
Mr. Amer Durrani (Sector coordinator for
Trade Logistics, Transport, and Customs;
World Bank) did an excellent job and
covered a wide spectrum of things and we
needed some more time from him to expand
some other themes. I would like to tell that
mangoes are being exported in large number
these days and have become expensive.
Such a large number of exports are because
of another reason which is internal
technology transfer and another type of
connectivity to link with exports. With
Horticulture Development Board and
Pakistan Atomic Energy Commission

Authority working together the shelve life of
mangoes has been increased to 80 days.
We have example of USA before us. They
worked
on
productivity,
physical
connectivity, and social connectivity. In
1905, USA had only 3000 vehicles and 100
kilometers paved roads. It took hundred
years to become an industrial giant. It is
important that physical environment must
conform to the needs of the time. When we
talk about information technology we find
70
that data storage capacity is a very important

factor in that. Let me quote Bill Gates here.
He said in 1981 that to have a personal
computer 640 K data storage capacity
should be enough for anyone. He was happy
to quote it at that time.
have a social responsibility of conserving

our local languages. Linguistic heritage is
not being taken care in IT. Universities etc.
should come ahead to promote local
languages. Industry-academia connectivity
should also be encouraged. Connectivity
within university environment is also
important. We also need to connect with
various mother institutions. There should be
cross discipline accessibility and access to
workshops etc.
In IT sector, Pakistan has a major constraint

of electronic security. Infrastructure for
electronic data security is not in place. We
also dont have electronic commerce
developed as it should have been. We also
***
Discussant: Muhammad Saleem

Director General Pakistan Telecommunication Authority
look at government collection we find that
tax collection in this sector was Rs. 30
billion in 2003 and now government is
collecting more than Rs 100 billion a year.
Looking at foreign direct investment it was
US $ 6.4 billion between 2006 and 2010
which had opened up about one million jobs
in the country. There are still many issues
about connectivity but I want to bring to
your notice that at present about every tehsil
headquarter in each province is connected
through fiber optic. We are looking forward
for 3G technological revolution now. With
the introduction of 3G the scenario will be
totally changed as we would be having
another telecommunication revolution in
Pakistan.
I appreciate Mr. Amer Z. Durrani as he has

given very informative and analytical paper
on connectivity. He has also discussed about
the access and disparity between rural and
urban areas. He has also highlighted
impediments in the connectivity and issues
related to broadband connectivity.
When we talk about connectivity, things
cant be completed unless we discuss some
revolutionary changes which have taken
place in ICT sector. If we compare ICT
sector of 2003 with today, when
deregulation process was started, we find
that how much revolution has taken place. If
we look at number of telecom subscribers
there were only 0.2 million mobile
subscribers in 2003 and we crossed figure of
1.7 million subscribers. Similarly when we
***
Discussant: Fatma Gul

Senior Economist, UNDP
First of all I am thankful to the government
of Pakistan and UNDP, Pakistan office for
organizing such a profound conference. Last
two days of conference have exceeded my
expectations and I was surprised by

participation, the criticism made and
information of the people of this country.
71
technology to integrate the rural market

which will help in growth. Pakistan has very
good internet connectivity. Last night I also
heard Richard Florida saying that it is not
just trading any more to make growth in a
country but there are other important factors
to it like technology and innovation, new
products and processes etc. Logistics is also
very important for connectivity which helps
in connectivity and increasing efficiency.
Logistics is also important as part of supply
chain. I would say here that Pakistani
universities should motivate their students to
conduct research on the supply chain and
give recommendation to the industry in this
regard.
We have been listening to the ideas like this

is the time of knowledge society. In different
periods of time we had different modes of
production. This is the knowledge era, and
an era of Information technology and
internet. As an economist we try to justify
use and importance of such technologies for
efficiency purposes and resource allocation.
Internet access is also important to provide.
As per UN document, access to information
and internet is human right. The
connectivity through telecom technology
and internet is important thing for
knowledge society. Information technology
is very important for connectivity these
days. Internet access is important as a source
of information. In Asia, internet users are
approximately 44 % of the population.
There are approximately 5 billion people
waiting to join internet. IT is one of the
major engines of growth in economic
development. Pakistani universities also
have internet connectivity. Asia has 22%
internet users and with many populous
countries there are tremendous opportunities
to grow this sector and to use this
Connectivity is very important for growth

strategy. We also need to connect society
and youth when we talk about the
connectivity in FEG. Uses of internet,
telecom, logistics etc. are all important.
Pakistani culture, legacy and market
environment are also important and we need
to talk about it FEG.
***
72

QUESTION:
Question: We talked about connectivity here. But we didnt talk about connectivity of ministries
which is missing in our country. Connectivity within academia is also important. Please
comment.
Question: What percentage of growth we trying to achieve after this conference?
Question: One of the panelists mentioned here that UN has recognized right to internet as a basic
human right. Based on that statement what level of connectivity service and public information
should be available to public from government about various departments under this framework?
Question: What steps would be taken to follow up the points learnt from this conference and how
participants would come to know that points discussed here would be translated into workable
plans?
Answer:
We have given recipe and way how to cook.
Please dont expect from us to be chefs. Go
and try to understand this strategy.
Universities need to debate on it and come

up with ideas to make implementation
happen.
Answer by Muhammad Saleem, DG, PTA:

After independence we have not added even
a single rail track for connectivity. We
inherited railways from British. We built
motorway. But nobody talks about mass
transit in Karachi. We need to develop

connectivity in all the areas discussed for
growth.
Answer by Amer Z. Durrani, World Bank:

We need to develop and promote both hard
and soft infrastructures for connectivity.
What Dr. Nadeem Ul Haque said is that we

need to build architects in this country.
Answer by Shaukat Hameed Khan, former member Planning Commission:

When we talk about privatizing Railways we
need to be very careful. We need to learn
from examples what a country should not
do. Privatization of water services, national
health services etc. were disasters. We dont

have electricity and we need to work on
electricity connectivity.
Answer by Fatma Gul, Senior Economist, UNDP:

Pakistan has good technology base
especially in terms of internet access. I think
for access to information and internet
government should play its role as it is also
there in UN declaration to give access to

everyone being a fundamental right. Idea
like making a web page and advertise in one
dollar to one million companies can be an
73
innovative
idea
and
can
help
entrepreneurship. People using internet
technology and using ideas are becoming

entrepreneurs as well.
***
74
Session 7: Youth and Community Engagement

Speaker: Mahbub Hossain
Executive Director, Bangladesh Rural Advancement Committee (BRAC)
First of all I would like to thank Planning

Commission and UNDP for giving me
opportunity to participate in this conference
and to share our experience about civil
society engagement, youth and community
engagement.
budget of US $ 495 million in Bangladesh

and US $130 million in BRAC International.
BRAC employs 54,000 core staff, 45,000
teachers and health workers, and 89,000
community health volunteers.
Youth development is an important subject

for socio-economic growth of any country.
At 1.4 billion population in world (0.5
billion in South Asia) youth in developing
countries constitute almost a quarter of the
population and growing at 1.8% per year.
Investing in youth can accelerate the fight
against poverty, socio-economic disparity
and gender discrimination. Opportunities
like
access
to
education,
gainful
employment, or financial services remains
limited in many countries in the region.
Youth must be equipped with appropriate
skills, capacities and knowledge to
effectively deal with the present day
development challenges urbanization,
migration, ethnic conflicts, HIV and AIDS,
etc. Marginalized youth are at risk of being
engaged in crime, armed conflict and
terrorism. Increased youth unemployment
threatens civil unrest, safety and security of
people.
I started my career in Karachi as staff

economist of the Pakistan Institute of
Development Economics. As an NGO we
are working in Bangladesh. We have also
started
work
in
Pakistan.
Since
independence in 1971 we reduced
population growth from 3.0% in 1970s to
1.3% in 2010. We have achieved selfsufficiency in rice production from large
import dependence. Under five years age
mortality has reduced from 148 in 1990 to
52 in 2009. Our net primary school
enrolment has reached to 94 percent and we
have achieved gender parity in secondary
school participation. Poverty rate has been
reduced from 76% in 1973 to 31% in 2010.
A driver behind the progress is the
government giving space to civil society
organizations as partners of development,
particularly
for
inclusive
growth.
Bangladesh is a country of large NGOs such
as Grameen Bank and BRAC etc. NGOs
have
been
working
for
reaching
microfinance, education, health, hygiene,
nutrition and community empowerment
services to marginalized people, especially
women.
In Bangladesh, civil society organizations

join hands with the Government for social
and economic empowerment of the youth.
BRAC reaches over 1 million adolescents
and youth in Bangladesh to empower them
through multiple interventions. BRAC is
training 260,000 adolescent girls on
livelihood skills and opens space for social
engagement with peers through Adolescent
Development Program. We are helping
generate employment and livelihood for
240,000 adolescent girls and young women
BRAC was established in 1972 as a relief

organization to resettle refugees returning
from India. Later it turned into a not for
profit development organization which
operates in 9 countries outside Bangladesh
to share knowledge and experience with a
75
with financial education, training and microcredit. We also supporting multipurpose

community library for continuing education
of 250,000 out of school youth.
Adolescent Development Program (ADP) is

one of the important programs in
Bangladesh focusing to improve the quality
of life of vulnerable adolescents and youth
(14 to 21 years), especially girls with
coverage of 260,000 girls in 8,660 clubs
organized. We are providing life-skills based
education
and
livelihood
training,
community participation through forums,
rallies, adolescent fairs, organize cultural
competition, cricket tournament, safeswimming initiative etc. to identify and
groom talent. Another program being run by
BRAC
is
Social
and
Financial
Empowerment of Adolescents and Youth
(SoFEA) to empower adolescents and youth
(15-24 year) socially and economically so
that they can lead their lives with confidence
and dignity. Programme includes building
capacity through life-skills based education,
livelihood training, financial education,
microfinance, and community participation
for long-term sustainability of the clubs.
Another important program is Community
Empowerment Program which forms social
capital of marginalized people and assists in
strengthening local governance through
capacity enhancement of women union
council members and builds up mechanism
for transparency and accountability at grass
root level. BRAC supports a network of
12,000 people with 750,000 memberships
all over Bangladesh.
We are engaging communities to redress

insecurity and violence to ensure
participation of all level of people in the
community (men, women, youth, adolescent
boys and girls, local elites, local
government, police) activities. We have
given consideration to ensure womens and
adolescent girls participation in planning,
implementation and monitoring of projects.
The community safety and security concerns
are identified and prioritized for actions by
the community themselves by following
participatory approaches. The community
themselves develop action plans to address
the concerning issues identified. Community
mobilization for effective utilization of
sanitary latrines involves formal and
informal community and religious leaders,
seeks
participation
of
educational
institutions and engages media and other
local civil society groups.
BRAC is also working for the extreme poor

under the program entitled Challenging the
Frontiers of Poverty Reduction and
Targeting the Ultra Poor (CFPR-TUP). It
is a unique case of community participation
and contribution in combating extreme
poverty in rural Bangladesh which has
especially targeted ultra poor households
who are provided:
Making the local government more

responsive to the needs of the
marginalized people,
Developing direct linkages between the
people and different tiers of local govt.
a) Grants of small assets,

b) Intensive training on management of
assets, and
c) Free medical care, for a period of two
years to graduate them out of extreme
poverty.
Approach of the Community Empowerment

Programme is as follows:
- Making the marginalized people aware
of their rights,
- Empowering them to claim their
entitlements, and resist exploitation by
facilitating functioning of community
based organizations,
It costs US $ 320 per households to provide

this facility. A total of 400,000 households
already graduated through the programme.
76
The Program ensures intensive community

involvement in two major program
activities:
i)
ii)
Lessons learnt from above programmes

include the following:
Targeting program participants,

Mobilizing community support
through formation of Village
Poverty Reduction Committees.
The program participants are selected

through Participatory Rural Appraisal (PRA)
method. The two major steps in PRA are:
i)
ii)
Social Mapping,
Wealth Ranking.
Villagers draw the map of their village and

follow a wealth ranking exercise to identify
households as non-poor, poor, very poor and
ultra poor. Through various activities,
BRAC encourages the village elites to work
for the development of their own village.
***
77
For inclusive growth community

engagement is essential.
Community
proactively
identifies
problems, suggests solutions and
participates in implementation.
Multi-stakeholder participation (people,
local government officials, religious
leaders) ensures greater ownership and
accountability.
Youth and adolescents can be invaluable
assets to improve community safety, and
for voluntary social work, if guided
properly.
Equal participation of women and men is
necessary to ensure positive outcome
and sustainability.
Discussion
Discussant: Dr. Ali Asghar Khan

Head of Omar Asghar Khan Development Foundation
collectively work for them. Access to
information is also important. Students are
being used as instruments by many to hold
their rallies in the streets. But unfortunately
in decision making process the youth are
seldom seen.
We are here to talk about youth and

community engagement. As Dr. Nadeem
said that FEG is a recipe, I agree with his
point that we need to add spices in it for
implementation. Connecting people is very
important because we as a nation need to
connect with others in this region. If we talk
about people in Baluchistan or KPK we
know that what is happening over there.
Connectivity of people in these areas should
be prime objective of the government to lead
them to improving things. Youth in our
society feels that their voices are not being
heard and they are looking for space for
them. Organizing citizens and particularly
the youth in society is the way forward and
the government needs to play its role for
their development and engagement in socioeconomic development.
Access to information has also become very

difficult in the country and even budgetary
information is not correctly available. If we
look at KPK budget we find that out of 85
billion rupees about 56 billion were not
allocated. So if we cant ascertain that where
money is to be used how can we hold
institutions accountable? Without holding
institutions accountable no change will
come and that requires political will. Last
year KPK government allocated 4.5 million
rupees for educational budget for Mardan
city. But at the end of the year in the revised
budget 576 million rupees were spent.
Unless, we as a nation, including state dont
raise the questions we would not be able to
solve the problems. We need to give youth
chance to be heard and strategies need to
give importance to youth to empower them.
If we look at the institutions we find that all

our institutions have suffered due to military
rules in the past. Trade unions, labor unions
and student unions are not active as they
were also affected in these regimes. We
need to give youth space to organize
themselves, and provide them opportunity to
***
Discussant: David Martin

Country Director, British Council, Pakistan
Thank you very much for inviting me here.

It was fascinating for me to hear about
NGOs working in Bangladesh. In Pakistan
many NGOs are doing fascinating job. Last
night I was talking to a number of
representatives of organizations that how
they can achieve networks and work
together to avoid stepping over each others

toes and being rivals, but instead becoming
trade partners and allies in work activities.
British Council is running a programme for
active citizens for youth engagement and
empowerment in community. We had setup
a program in 2009 to train young people to
78
enable them to engage in social action

programmes in communities. We have
trained facilitators all over the country. We
are working on training more facilitators of
some new partner organizations. We have
done a lot of work across Pakistan under

active citizenship programme. We plan to
expand that network to mobilize youth to
work for society.
***
Discussant: Faisal Mushtaq

Executive Director, Roots School System, Pakistan
Engagement means connectivity to help

First of all I would like to thank Dr. Nadeem
engage the youth in value added activities so
Ul Haque and congratulate and compliment
that they can create and help sponsoring the
him for sponsoring the change that we
change in their provinces, districts, tehsils
wanted to see serve. Inviting young people
etc. Without a viable and progressive
at this forum discussing and debating the
national public education system it would be
growth strategy is by itself a testament to the
very difficult to create social and
commitment of the Planning Commission.
entrepreneurship values to help masses,
provide them skills, and understand their
To me the single problem to help and sustain
potential. If we want to have citizens in
the youth and community engagement is
action then the debate is that how state is
through education. Without a viable,
going to provide them opportunities to serve
relevant and public education system we
the state, especially the youth? It can work
cant implicate the values of the community
both ways. It is duty of the state to engage
education, civic education and citizenship
youth and communities in their personal
education. Without sponsoring community,
development and create opportunities for
civic and citizenship values we cant create
them. Thus education, employment,
a viable society which has both the desire
engagement,
empowerment
and
and determination for sustainable social
entrepreneurship will create a viable and
impact. Process of education starts from the
scalable socio-economic impact. We need to
curriculum. The gap between public and
develop a new education system to meet
private education system also needs to be
challenges of 21st century and promote the
looked after. To create opportunities we
value of community education. 68.8% of the
need citizen based programmes- like British
Pakistans population is under the age of 30,
Council and Ibrar Ul Haques foundation is
63.3% is under the age of 25 and 28% are in
doing in Pakistan. Such forums create an
age group of 15 to 25. 50% of the economy
inert-generation
engagement,
civic
is service economy and 8.3% is the level of
engagement; and democratic and social
entrepreneurship outside agriculture sector.
development planning. Through education
We need workable and sustainable solutions
we can create employment for the
for youth connectivity and engagement.
engagement of youth.
***
79
Discussant: Shireen Naqvi

CEO, School of leadership
change our mind set from blaming the
government, America and others and instead
take the charge of the things. We have come
together with one mandate which is youth.
We need to be creative to find solutions to
the problems.
Thank you for inviting me in the conference.

School of leadership has been working for
the last ten years in country. Sadly
community service is a subject which is not
being taught at all. The first university for
any child in the world is the mothers lap.
For the growth of children we need to build
community spirit. Community development
is a mindset. My organization is working to
change that mindset towards community
service. Youth come with a very low selfesteem from their homes and that cant be
easily changed. To change low self-esteem
from I Cant to I can and I will we
have worked hard in our organization and
trained more than twenty thousand people.
Pakistan is a land of opportunities. Every

human being is born with a potential and
main thing is the realization of that potential.
Fortunately we have here with us public and
private sectors, social and education sectors
along with media to support us in this
endeavor to work together for youth. We can
impact 7.2 million in one year and
investment can be paid back in seven years.
With public and private sectors coming
ahead together we can change Pakistan in
next four to five years. Let us join hand to
bring this revolution.
When we started school of leadership we

had a vision that we will change Pakistan.
We believe that every human being has
some potential and the important thing is the
realization of that potential. We also need to
***
80
QUESTION:
Question: To convert youth in productive assets education is the key. We have three systems of
education in Pakistan viz. public schools, English medium schools and madrisas. Until and
unless we reform our education system how can we address inequality issues in education system
in Pakistan under education reforms?
Question: Under 18th amendment provincial ministries have a very important role to play. How
Planning Commission is planning to involve Youth Ministry in the implementation of the
strategy? It took twenty years for government to come up with a national youth policy. What
mechanism Planning Commission has to implement this new strategy?
Question: In this youth conference we didnt heard about the role our religions has set for our
society. Moreover, no one in this gathering talked about tolerance space. When we talk about
connectivity it is basically connecting different tolerance spaces. Panel is requested to please
comment as it is an important issue for educational institutions as well.
Question: There is a divide between English and Urdu medium school systems and job market
has a bias towards English medium schools which is a double standard. Is this system not a
constraint for the youth of Pakistan?
Question: Universities and colleges are producing the knowledge but attitude is not being
developed in educational institutions. Child is told from the start that after getting seventeen
years of education he will get a 17 grade job or a maximum salary. But we dont develop
attitudes in them. Please comment.
Question: For the last 64 years we are confused about our education system in Pakistan. We must
learn from India as they have one system for their country. Can we do that in Pakistan?
Question: Role of music, theatre and their revival should also be recognized. Where youth will
go, the youth is taking a leadership role in reviving music, including Sufi music etc. Please
comment.
ANSWERS:
Answer by Shireen Naqvi, CEO, School of leadership:
If I ask you to make list of role models
which you have in your mind, or a person
who have made a great difference in the
history to whom you would like to admire?
Just think that what made them to do all
those fantastic things? I promise you that
none of the lists would have a degree,
school, university or GPA mentioned on that
list. You would find name of Mr. Abdul
Sattar Edhi in Guinness Book Record and he

is just class eight pass. I work for rural
communities and public schools. Please
dont say that they are giving bad education
as there are many fantastic teachers and
students there in public schools in rural
areas. The thing lacking is the proper
training of the youth.
81
Answer by Ali Asghar, Head of Omar Asghar Khan Development Foundation:

I think religious extremism comes when
there is anger and frustration. So it is
important to organize youth and look at their
positive energies. Young people need to be
encouraged as they have been ignored on
different occasions. Youth has made great

sacrifices at many occasions for the country
like floods and earthquake etc. So energy is
there in our youth but we are wasting that by
not providing them opportunities.
Answer by Mahbub Hossain, Executive Director BRAC, Bangladesh:

The discussion we are having is on
education and opportunities available. Youth
is going to schools and there are a large
number of drop outs. We need to do
something for that also. We need to put
some skills in them to place them into

formal industrial sector and develop
entrepreneurship etc. to enable them to
develop their own businesses. We need to
give them opportunity as well.
Answer by David Martin, Country director, British Council, Pakistan

We need education reforms to move towards
the right direction. There is a large
population which is to be taken on board.
We need to do something good as other
countries have done it and they have moved
to near a perfect education system. Look at
Brazil and China that what they have
achieved in last few years. Second important
thing to focus is attitude and behavior of the
young people. I agree with the panelists here
that we need to focus on the training of the
youth.
education systems around the world moving

towards English medium for their education
system and a decline is seen there in quality
of education. Education system in mother
tongue in early age allows children o learn
in a language which they speak at home.
They can afterwards move to another
language which can be Urdu or English.
There are many countries in Europe where
people speak good quality English such as
Netherlands. People in country like
Switzerland managed to learn English,
French, German and Italian. Problem here in
Pakistan is that English is taught here in
schools as a subject. Better way to learn
English is by communicating with students
while teaching.
At the end I would like to comment that we

need to take English language as a medium
of education. Being an educationist I would
like to say that the solution is not there in
English medium education. I have seen
Answer by Faisal Mushtaq, Chief Executive, Roots School system:

We talked about uniformity and equality
within education system. Private education
in Pakistan is no more an urban elite
phenomena. There is a recent study by
Harvard Business School that education in
Pakistan is now a rural-urban phenomenon.
There are private schools which start with a
fee of 50 rupees a month and go up to 15000
rupees a month. Its a matter of choice.
It is the responsibility of the state to promote
quality, relevant, accessible and one
education system. Since denationalization of

education in 1979 there has been a
successive vacuum which is filled by the
private sector. Our national education is
world class and nothing is wrong with the
education system. But the problem is with
the implementation. Now under 18th
amendment education is a provincial
subject. Even in Germany and India
education is a state subject. So while going
82
into 21st century we cant limit the choices
for quality education.
***
83
Interviews
REMARKES BY
Dr. Nadeem Ul Haque

Deputy Chairman Planning Commission
Basically we are here to discuss the growth
strategy. The growth strategy has been
approved by the National Economic Council
and the Parliament. The growth strategy is
about increasing the productivity in the
government, reforming the government in
main stream, reforming the markets and
above all reforming the cities to make them
the beacon of investment and unleash their

potential for growth. Finally growth strategy
is about including the youth as they
comprise the largest segment of the
population. Unless youth start looking after
themselves there is no security for the rest of
us.
REMARKES BY
Ajay Chhibber
Assistant Secretary General, UN and Assistant Administrator and Regional Director for
the Asia and the Pacific, UNDP
It is an honor to be here. It is a great
discussion today on the Framework for
Economic Growth. I think FEG really
highlights key forces that must be unleashed
.
for Pakistan to get on a turn pike of growth

like the rest of Asia. I think this is a very
positive development and we are so happy
to be a small part of it.
***
84
Interview
Fatma Gul
Senior Economist, UNDP
Question: First of all I request you to give some initial comments on FEG please.
the Pakistan and creative cities and markets
as engines of growth. It is looking promising
and dynamic, but at the same time also
challenging while looking at the existing
institutions and the structure.
Answer: The Framework for Economic

Growth which we also discussed in UNDP
is a brand new framework which is utilizing
different and dynamic parts of the society
looking forward into 21st century. It is quite
new to look at youth as a major resource for
it is brand new framework which is utilizing different and dynamic

parts of the society looking forward into 21st century.
Question: Do you agree with the priorities laid down in the FEG like emphasis on cities, Civil
Services reforms, youth etc.?
working together rather we talk about
government vs. markets. I think that if it was
my strategy I would promote a more
efficient government because now in this
world, especially with large size countries
like Pakistan, there would be no other
agency which can reach such a large area in
terms of the provision of the services and
bringing economic growth.
Answer: I do agree with the priorities, but

with some reservations. There is significant
population of Pakistan living in rural areas
on which the Planning Commissions
strategy don't emphasize. It also doesnt
elaborate the rural dynamism and role of the
rural young people into the economy to
integrate. Being an Economist I believe that
government and markets cant be discussed
separated. I see government and markets
Question: In terms of way forward, what do you see in the FEG?

Answer: Probably one of the biggest
challenges in rural areas is land zoning and
inequality problem. The production structure
in such areas would be a major challenge
which government has to face. It would be
very difficult to change the status quo. One
promising thing about Pakistan is the

openness of the Planning Commission and
of the government of Pakistan to be critic
about themselves. Another important and
promising thing about Pakistan is dynamism
from the youth and the media. In terms of
85
opportunities to move forward we can see

that China is moving on higher wage scale
which can be taken as an opportunity for
Pakistan as it has cheap labor and a large
population. So Pakistan, Bangladesh and
Indonesia can take the empty space made by
China. But another challenge comes to mind
for Pakistan is quality of education. Once

educated and armed with the skills it will
also become a major opportunity for
Pakistan. There are so many people hungry
for the opportunities and interested in
making things happen.
***
Interview
Suleiman B. Mahbob
Chairman, Malaysian Industrial Development Authority
Question: I would invite some initial comments from you on FEG. How would you compare
Pakistans experience with the Malaysian experience and compare our growth experience? What
you think that where we have gone wrong?
liberalize its investment climate. Pakistan
also needs to analyze its administrative
procedures and bottlenecks and should
deregulate some of the areas which may be
obstruction to the commercial development
of the country. Some of the regulations were
needed in the past but those are not required
now as competitiveness of the country has
come down. There are many administrative
hurdles which need to be reduced to make
Pakistan more attractive for private
investment.
Answer: I have gone through the report on

the FEG in Pakistan prepared by the
Planning Commission. I must congratulate
that it is a very good long term path towards
the economic growth of Pakistan.
Comparing Pakistan and Malaysia, Malaysia
has achieved a very high economic growth
through liberalization and deregulation,
particularly in terms of promoting industrial
development and private investments.
Pakistan needs to put measures and policies
to enhance private investment including
foreign investment. Pakistan needs to
There are many administrative hurdles which need to be reduced to

make Pakistan more attractive for private investment.
Question: In context of law and order situation and administrative control how would you make
a sharp comparison between Malaysia and Pakistan?
Answer: Pakistan needs to improve law and
order situation, especially of the foreign
86
workers for investments. Law and order

problems need to be reduced at earliest for
private investors. Support from political
leadership is very important in this regard.
In our country President Mahathir
Mohammad was very supportive of
economic growth and private sector

development. I appreciate that top leadership
in Pakistan is addressing the same thing
which is important ultimately for economic
growth as well as job creation.
Question: Going forward what challenges you see for Pakistan?

most importantly by the top leadership in the
country. There should be a synergy of
support from various sections of the
community like businessmen, political
leadership, administrators and general public
to make a very attractive business
environment in the country.
Answer: The real challenge is the

implementation of the reform measures
which have been identified in FEG. It is
very good report which is even very relevant
to the Malaysia as well. We need to put a
mechanism for implementation and buy
support from the society, Civil Servants, and
***
Interview
Emiel A. Wegelin
GIZ Program Coordinator, Cities Development Initiative for Asia, Philippines
Question: I would like to invite some initial comments on FEG. In your opinion what would be
the challenges to this new approach?
Answer: FEG is good attempt and breaks
new grounds. It is innovative, daring, but
requires a lot of work to be done. The main
challenge is to think out of the box and bring
all the constituents on board which is not an
easy task as people are used to doing the
things they have always done in the past.
The Framework for Economic Growth
suggests to try to move on and not to be

hampered. New ways should be found to
better harness the resources that exist in the
country, especially human resources. At the
end of the day nothing will work unless
human resources are devoted to what we
want to achieve.
At end of the day nothing will work unless human resources are
devoted to what we want to achieve.
Question: Do you agree with the four priority areas and pillars identified in the FEG?
87
Answer: Four priority areas are not only

excellent but also inevitable. Urban
development is an essential ingredient for
economic growth. One of the reports by
McKenzie Global Institute says that as
India's urban infrastructure is in a poor state

it misses about 20% of its annual growth
rate. So we can say that some of the
important economic growth challenges are
in the middle of the urban areas.
Question: With respect to Pakistan do you have some suggestions for going forward?
overall growth framework and make poor
people participate in overall growth effort.
Second important thing is the need for
institutions particularly at local level to
make this happen which requires more
capacity at level of local bodies and sub
local levels and a capacity to recognize them
as a legal part of the society, deal with the
communities and engage them in positive
activities.
Answer: In Pakistan I see two particular

challenges which must be addressed. One is
the recognition that these are the cities
where all economic activities need to be
reinforced. A city consists of two parts
which is formal city and informal city. The
informal city needs to be recognized as what
it is, not encroachment, but as a part of the
city where people live, work, and create
something. The challenge ahead is that how
to bring informal part of the city into the
The informal city needs to be recognized as what it is, not

encroachment, but as a part of the city where people live, work, and
create something.
***
Interview
Dr. Norma Binti Mansor

Secretary General, National Economic Advisory Council, Malaysia
Question: I would like some initial comments on the Framework for Economic Growth? Do you
find it new, ambitious and challenging?
Answer: I was struck by how similar is
Pakistans Growth Framework with
Malaysias new economic model. In
Malaysia we analyzed the issues and
challenges being faced by the country.

Before Pakistan moves forward you need to
identify the challenges and issues being
faced. Pakistan in FEG document has
88
identified all the issues and hindrances.

Main issues are covered comprehensively
and honestly in the document but the real

challenge is the implementation.
Question: Do you agree with the four priority areas highlighted in the framework?
Answer: The four main areas identified in
FEG are important. The issues Pakistan is
facing are identified in four priority areas.
To go on high growth trajectory would be
the way forward the economy should be
focusing on. The intelligent way of going

forward is to focus on some of the important
areas instead of looking at all the things
altogether.
Question: In similarities with Malaysia what would you suggest for implementation? And have
you chalked out Civil Service Reforms for your Civil Servants?
Management Office and the Chief Secretary
(number one Civil Servant position in
Malaysia) were part of the team.
Engagement of all the stakeholders from all
the government agencies and stakeholders
from private sector was important for
implementation and ownership. To address
the whole Civil Service Reform was too big
to address for us. We worked on Civil
Service Reforms with an approach to
facilitate economic plans and transformation
of the country.
Answer: In Malaysia the implementation

framework was slightly different as we
working closely with the Prime Minister and
we brief him about our analysis and findings
which he understands. We don't have hunger
in our country and unemployment is very
low. We established a Program Management
Office as a corporation being run by an
independent council comprising of ten
persons who are economists, socialists,
bankers etc. The close relationship between
the Prime Minister, the Council, Program
Question: Do you have incentive structure in monetary terms? Was there a challenge to monetize
the perks in Malaysia?
To monetize, in my point of view, was not a
question of choice as there were not enough
housing facilities, cars etc. for the Civil
Servants in our country.
Answer: We proposed incentive structure

based on performance. All of the perks in
Malaysia are monetized. Everything is
quantified in incentives which are in practice
for more than ten years.
The Political will is the main challenge that how government accepts
and willing to support reform initiatives. In case of Malaysia the
whole Cabinet and Prime Minister was with us.
Question: Going forward how do you view the challenges for Pakistani growth?
Minister was with us. It requires selling the
ideas
and
consultations
for
the
implementation.
Crisis
gives
both
opportunity and challenges. In case of
Answer: The political will is the main

challenge that how government accepts and
willing to support reform initiatives. In case
of Malaysia the whole Cabinet and Prime
89
Malaysia we engaged the Chief Secretary,

Chief Justice and judiciary to support the
economic transformation reforms.
***
Interview
Dr. Parvez Tahir

Ex. Chief Economist, Planning Commission of Pakistan
Question: I invite some initial comments on the Framework for Economic Growth.
amendment has devolved many powers and
resources to the provinces. The wish of the
provinces is to have autonomy which has
been fulfilled to a great extent, but provinces
are refusing to devolve powers to the local
governments. Local government systems are
important everywhere. A centralized Civil
Service system is going along with local
system reforms in Pakistan. There are same
people managing central, provincial and also
the local governments. Commissionary
system and 18th century old Police Act 1861
are back and we are talking about the
reforms.
Answer: Framework for Economic Growth

of the Planning Commission is very good
initiative as people have started thinking,
which is an important thing before any
change to take place. Areas identified are
not new as economists have already
discussed these areas in the past. But the
question is why didnt it happen? Civil
Service Reform is an important area to talk
about in FEG. Civil Servants are of the view
that they can do anything which is not a
good idea as nobody can do everything in
this world.
This
country
is
devolving
as
18th
Things dont happen as political constituency for reforms is weak in

our country
view that unless we have good elementary
education system we would not be able to
move ahead. There should be quality
universities for higher education and poor
should be given scholarships. Public money
should be used for elementary education
Things do not happen here as political

constituency for reforms is weak in our
country. We heard about Malaysia that
Prime Minister himself was involved in the
reform process, but it is not the case with
Pakistan. For education I am of the firm
90
with a skill bias to make people ready for

innovation and do something good for the
country. We need to convince political
persons and political parties to ask their
economic committees to debate important
issues and tell everyone about this important

thing for the country. Political will and
building the economic capacity of the
political parties is very important for
countrys growth.
***
Interview
Dr. Mahbub Hossain

Executive Director, Bangladesh Rural Advancement Committee (BRAC)
Question: I invite your initial comments on the Framework for Economic Growth.
Answer: Framework is good analytical work
with innovative ideas for moving forward.
But real issue is of implementation. We have
seen many plans in the past but most of the

plans remained in shelves because of the
issues in implementation.
The conference is very innovative to share the experience of other

countries. Pakistan can take benefit from the experience of other
countries to move forward
take benefit from the experience of other
countries to move forward. But the real test
would be the real outcome and how the plan
is implemented.
I think Planning Commission has done a

tedious and excellent work with new ideas
and way forward for the growth. The
conference is very innovative to share the
experience of other countries. Pakistan can
Question: According to you the main challenge is the implementation. Would you please specify
some more about implementation?
Answer: In Pakistan the Civil Service is one
of the important actors in implementation.
There are also many other actors in private
sector to be taken on board. How we
mobilize society and involve marginalized
people at grass root level is the main
challenge. Community mobilization and
good governance at local level is very

important for inclusive growth.
Government needs to give space to other
actors of the society in the economy for
inclusive growth. In Pakistan government is
controlling infrastructure,
information,
91
planning and regulations. Involving the civil

society as partner of the development
process is very important. In Bangladesh
civil society has worked with the

government in the development of
education, health etc.
***
Interview
Heru Prasetyo
Deputy Chairman of the Presidents Delivery Unit for Development Monitoring and
Oversight Indonesia
Question: Please give some initial comments on the Framework for Economic Growth.
Answer: The growth strategy presented in
this conference is very comprehensive
which talks about the youth, cities, markets
as well as governance. In developing
countries this is something which needs to
be done with a multi-stakeholder approach.
The approach adopted in the conference to
connect more than twenty universities is
excellent. But the key work to be done is the
implementation. Having a very good

strategy requires at very next level the
review of the existing regulations and the
changes required. It is important to consider
the inputs of everyone in the strategy
development
process
and
their
implementation which is a big challenge.
But I believe that government of Pakistan
would be able to meet this challenge.
The Growth strategy presented in this conference is very

comprehensive which talks about the youth, cities, markets as well as
governance
Question: How do you compare Indonesias reform strategy with Pakistan?
Answer: In terms of approach and process
there is similarity between both the countries
as in this conference you are getting input
from academia, NGOs and community at
large. Development stages in both the

countries are different but I believe that you
have the same vision which you really want
to achieve for the people.
92
Interview
Parvez Qureshi
Urban Planner and Architect, Lahore
Question: What are your initial comments on the Framework for Economic Growth?
Answer: It is an extraordinary conference
taking place here. A lot of credit goes to the
Planning Commission to put all the things
together. Thrust of the framework related to
cities, urbanization, matters pertaining to the

urbanization, and having cities as engines of
growth for the economy in the agenda topics
is very useful.
Question: With respect to creative cities what major challenges you see for Pakistani cities to
face?
million. There would be about 17 cities in
the next 5 to 10 years in Pakistan with
population more than one million. Nobody
talks about the secondary cities growing
with population of over half a million. In
next 5 to 10 years there would be about 35
to 40 cities in Pakistan with population over
half million. All these cities need planning,
urban management and institutional
framework to manage and rum them.
Unfortunately we have lost our ability to
work out an appropriate mechanism to run
our cities. We need to look into our past and
revise our policies.
Answer: If we look 40 to 50 years back

Pakistan was one of the few countries which
had extraordinary experience in building
new things and innovations in urban
development. We developed a new city
Islamabad; developed projects in Karachi,
Kotlakhpat project in Lahore, public housing
schemes and katchi abadis etc. People came
from other parts of the world came to us and
learnt from our experience.
For the last few years we have lost track of
our institutional history and we are making
same sort of mistakes now. This morning we
discussed about a number of cities in
Pakistan having population of more than one
There would be about 17 cities in next 5 to 10 years with population

more than one million. Nobody talks about the secondary cities
growing with population of over half a million
We also need to focus on divide of the poor
and rich in the country. With respect to
urban housing very little work has been
done in Pakistan for the urban poor. For

transportation of urban poor very little work
is done yet. For example millions of people
93
ride bicycles for which we dont have plan

for routes and lanes. There are no concept
and plans for pedestrians. Other major issues
include pollution, water supply systems and
sewerage networks, land use planning,
municipal services, land banking and
environment etc. Unfortunately our urban
institutions are not structures even to talk
about these important issues. Institutions
that run the cities are very weak and the top
management keeps on changing. Top
management lacks background of urban

planning and issues related to urbanization.
The bosses of the development authorities
serve in a city for very short time, learn the
subject at the cost of the tax payers and
move to some other place. There is a need to
make a dramatic change in the system to
guarantee appointment of the people with
proper background and with some continuity
to manage the cities.
With respect to urban housing very little work has been done in
Pakistan for urban poor
***
Interview
Sohail Naqvi
Executive Director, HEC
Question: I would like to invite your initial comments on the Framework for Economic Growth.
Do you think that its a new strategy or a re-hatched strategy, and what challenges you see in it?
Answer: The growth strategy builds upon
previous thinking, previous initiatives and
work done in the past in Pakistan, as it
should be. It also brings in new ideas and
highlights the critical and important items
that are necessary for the economic growth
of this country. In Pakistan it is focusing on

connectivity,
youth,
entrepreneurship,
human capital, and cities which are all very
core items on which we have to pay great
attention if we want this country to grow.
Question: When we talk about ideas, the youth and harnessing our young population universities
play an important role. What do you foresee that in what direction our universities are going?
Answer: It is indeed heartening to see this
growth strategy which comes after the
second phase of HECs medium term

development framework. HEC mission was
94
defined to facilitate universities to serve as

engines of growth for socio-economic
development of Pakistan. So there is a clear
link between the development of universities
and the economic growth. Secondly we are
focusing on three strategies which are that
universities are playing role in building
economies, communities and the leadership.
All our focus is that universities work as
autonomous entities to look at where they

are located, look at their surroundings, assets
they have and the industry around to play a
positive and leadership role in taking the
opportunities that are there and making the
best out of them for the socio-economic
development of the country. For growth
strategy of any country to work the
universities have to play an important role.
Today we have, for the first time, five universities ranked among the
top 500 in the world; and our universities ranked amongst top 100
universities in Asia.
Question: What role HEC is playing in reforming universities?
network of the universities. We are building
physical infrastructure and expanding the
universities. We also focusing on the quality
standards and building the capacity of the
universities to implement these standards.
All above acts together have served to
reform the higher education sector in
Pakistan. Today we have, for the first time,
five universities ranked among the top 500
in the world; and our universities ranked
amongst top 100 universities in Asia which
is a very positive development in the higher
education sector.
Answer: We looking at the entire

environment as an ecosystem of higher
education which includes students, faculties,
curriculum, facilities, interconnectivity,
trainings, research and their application,
innovation, entrepreneurship etc. We started
programmes for improving universities with
entirely focusing on faculty development.
We started working on infrastructure and
focused first on improving digital
infrastructure of the universities. We can see
this conference being televised widely
across Pakistan through Pakistan educational
Question: Last night we heard Dr. Richard Florida and he talked about 4 Ts viz. Technology,
Talent, Tolerance and Territorial Assets. We find many youngsters going abroad to find an
environment which they think is better and stimulating to harness mental powers. In such a
situation how can we harness Pakistani talent?
very lowest level of education building up to
the higher education. We are focusing on the
higher education as an output which is
directly going into the economy and making
a direct impact.
Answer: We recognize a phenomenally

talented young population of Pakistan to be
a great resource. We talked about the
demographic dividend that is to come from
Pakistan. We have a lot of young bright
people here. Unless we provide them
opportunities to recognize and harness their
talent we would not be able to convert this
resource into capital. Here the role of
education system is crucial - staring from
We have to handle both the issues of social

and technical nature for better understanding
and solutions. We are focusing on our
universities to build on a capacity to look
95
around them and have an impact on the local

community, the local environment and the
economy.
Question: As a Pakistani citizen what would be your comment about our primary education.
Madrisa education, O level, A level etc.
There is no problem with high school
(matriculation) or intermediate (FA/F.Sc.)
system but the problem is that how we teach
them. In primary education we need to
focus on the fundamental problems that how
innovatively we are teaching, a focus on the
teacher, and provision of training to the
teachers. We have an idea in Pakistan that
lower is the education level, lower the
qualification required. In my point of view
we should use Ph.D. psychologists for preschooling for their early age education and
growth. We should reward the teachers both
financially as well in status as teacher is the
most important element in this new
development paradigm.
Answer: We have a real problem with our

primary education system. One of the
fundamental
issues
universally
acknowledged is that a child learns early in
the mother tongue. We are binding our
people and putting chains around their necks
to learn in a language which is not their
mother tongue. English is a very important
language, but can be learnt only as a
language. English doesn't have to be a
medium of instruction and education. Use of
English as a medium of education cant be
conducive to the development of this
country. Second important issue is that if we
are one country we should have one
education system everywhere. In Pakistan
we have English medium, Urdu medium,
One of the fundamental issues universally acknowledged is that a

child learns early in the mother tongue. We are binding our people
and putting chains around their necks to learn in a language which is
not their mother tongue.
Question: Moving forward what do you see a major challenge for economic growth?
you have heard the debate on the creative
cities the fundamental part was that if there
is no local government there is no creative
city. Ownership of institutional framework
for implementation would be a real
challenge for the government and the role of
the leadership is important in this regard.
Answers: The major challenge is the

implementation of FEG. We have crises of
governance in Pakistan. At the political and
institutional levels nothing can be
implemented until there is some institutional
ownership and agreement at the highest
level. Just few days back we changed the
local government system in a province. If
***
96
Interview
John Speakman
Private Sector Specialist, World Bank
Question: Please give your initial comments on FEG.
Answers: Growth happens in firms located
in cities. Particularly in South Asia we see
very little emphasis on these three points.
First point is that very little emphasis is
given on the importance of the cities and
that the cities being the drivers and places
where growth will happen. My point is that
the growth takes place in the firms, not in
the government. Second big driver of the

growth strategy is the need to get the
government out and to do the right job.
Thirdly firms need the space to breathe and
grow on their own. They need supportive
regulations, not the regulations that are
going to destroy that and refrain from
competing.
growth takes place in the firms, not in the government.

Question: In terms of the emphasis on the cities in Pakistan what do you see as the major
challenge? Why have not our cities been able to evolve?
Answer: Cities dont have the money. I
previously visited Middle East and seen very
successful cities there. The reason for these
cities to be successful was their earning
sources, revenue generation and tax
collection. But here the cities, generally and

specifically in Pakistan, have cash
constraints. What I feel that once the cities
have proper resources then they would be
able to see the things happening.
Question: Would you recommend revisiting the devolution plan and perhaps the decentralization
as well?
own revenues. To raise the revenues and
engage proper partnership some of the cities
in Middle East make the money by engaging
in commercial real estate, using the space
and involving in corporate businesses etc.
Once city governments have resources
available they should be accountable to the
people. If city governments fail to perform,
Answer: I dont know much about that in

Pakistan but I understand devolution has
started here. Some of the speakers today had
a very strong suggestion that to be an
authority of the government, as it is there in
case of India also, it must be very much
supportive of encouraging not only fiscal
devolution but allowing cities to raise their
97
people can throw them out. The institutions

in cities are naturally going to be held
accountable to provide services to the
people, as otherwise people will not stay

around.
Question: What main challenge you see for the growth strategy?
Answer: Major challenge for the growth
strategy is to recognize that Pakistan needs
to improve the governance. I think it is
incredible that the Deputy Chairman has put
on the table a very brave and courageous
thing to do. It is a big challenge going
forward that how to get the government
behave in a way which would enable the

kind of ideas which are happening here. The
government has a strong vested interest to
keep status quo. To change that status quo
this conference would mobilize public
opinion and allow them to exchange their
ideas.
***
Interview
Philip Auerswald
Question: Please give your initial comments on FEG.
Answer: It is a very exciting initiative and I
have followed it from inception. I was
involved in drafting one of the numerous
papers that served an imprint into this
growth strategy. So I have seen it
developing since then. I can say, from an
outsider perspective, that this is a quite
unique initiative. I am not aware of any

initiative that has taken specific ideas which
are embedded in the growth strategy. I think
FEG is a leading initiative that a country
would be looking towards in terms of
economic growth in 21st century.
I think FEG is a leading initiative that a country would be looking

towards in terms of economic growth in 21st century.
Question: Please describe a little about your background paper for the growth strategy.
Answer: My paper is about the
entrepreneurship in the markets. The title of
this paper is Creating a Place for the

Future. I think it is one way of thinking
98
about what the growth strategy is trying to

do. In any environment in combined
activities the exciting successful businesses
are a little bit like a canopy in a rain forest.
This is what an outsider from a distance
would see it in totality of an economy. But
underneath the canopy of the rain forest
there is all the life of the forest including the
underbrush etc. And importantly those
rapidly growing new trees in terms of
metaphor are the firms and businesses in an

economy. It is a process by which large
entities succeed and prosper, but eventually
they leave and make room for the new
businesses
which
create
economic
dynamism and ultimately long term growth
and economic success. That was the nature
of our paper that how firstly we can create
markets for Pakistan and government to
provide level playing field.
.. underneath the canopy of the rain forest there is all the life of the
forest including the underbrush.
Question: With respect to growth framework do you agree with the four priorities identified?
Answer: I absolutely agree with the four
priorities. People can find different
approaches to articulate that what is
fundamentally same idea and connection. In
terms of markets, competition, and
entrepreneurship what I just described was
the dimension that I also emphasized in my
work. Certainly the dimension of
governance is important in which people in
public service need to be effective public
servants to contribute to national well-being.
Another important dimension is of cities. In
context
of
urbanization
I
think
understanding the role of cities is very
important in 21st century. The growth
strategy is inventing the concept relating to
large scale urbanization. What I think
Planning Commission is articulating by
emphasizing cities in growth strategy is that
this process is happening now and it should
be focused towards the objective of
advancing Pakistans economy and helping
to realize its potential for 21st century.
Question: Do you think that given the current power structure we would be able to think about
this reform?
Answer: All I know is that every country has
its own politics. Every country has its way
of organizing existing interests. Whether it
is USA or Pakistan, or any other part of the
world political parties tend to reflect existing
economic power. So in that sense the change
will be required in Pakistan, and similarly
change also happening in USA. I look at the
difficulties that are faced politically here in
terms of liberating markets, encouraging
entrepreneurship, creating future markets,

opportunity for youth and these are similarly
important elsewhere in the world. I believe
that people in Pakistan are very much patriot
and they love their country. That sense of
national pride will lead them to make the
choices which will really help this country
reach its potential not only in 21st century
but also in the future.
***
99
Interview
Fauzia Wahab
Member National Assembly
Question: Please give your initial comments about the FEG.
Answer: FEG is a very valuable document
for the country. If somebody really goes
through this document he will find answers
of many questions. This new framework is
giving certain new directions to follow.
There are solutions to many problems in this
document which we had been looking for
the last many years. This document should
not be confined to the Planning Commission
but to be distributed at all levels like

universities and government offices etc. Dr.
Nadeem Ul Haque along with his team
should go and have interactive sessions in
the universities. Boys and girls in the age of
14 to 20 should also be involved in the
discussions on this framework.
There are solutions to many problems in this document which we had

been looking for the last many years.
Question: Do you think that this New Growth Strategy needs to be discussed in the National
Assembly as well?
Answer: Yes it should also be discussed in
National Assembly. It can be discussed in
Question & Answer session and in Standing
Committee. We can pass a resolution as
well. Deputy Chairman and his team should
encourage members of the National
Assembly to talk about this growth strategy.
I agree with the reforms which this
document is proposing.
community as well as youth. Why USA is

growing very fast is because of the
innovation and creativity which has made
them a leading nation in the world. In
Pakistan when Khadi started first time I
thought that it would not work. But now it
has become a well known brand name in
Pakistan. Same is with the Bareeze which
is mainly due to creativity and their business
is growing rapidly both locally and abroad.
So our focus should be on creativity and
encouraging new ideas. I agree with all the
four points which can bring change in our
life style.
I agree with various suggestions and reforms

regarding creating a vibrant market. I agree
with the concept of creation and creativity.
We
need
to
encourage
more
entrepreneurship among our people, trading
Question: In governance issues we talked about Civil Services Reforms. Do you agree with the
100
idea of such reforms? And there has been a lot of discussion about local body structure in this
conference. FEG gives very much importance to it as well. Please give your comments on the
local body structure.
Answer: Civil Services need to be reformed
and restructured. Bureaucratic structure in
Pakistan is very stale and outdated and it
needs to be reformed. I have always heard
that local body structure is an instrument in
delivering services. Actually in Pakistan
local body structure has been high jacked by
the non-democratic forces. The democratic
forces have not been able to adopt this tool
of governance. We find the gap because

whenever a military adventurer takes over
the country he compensates the wrongs and
give the people a new voice in shape of local
government. So we have seen the growth of
local government during the military
government regime. If you want local
government to be adopted in genuine way it
has to come through the parliament.
Question: During the time of elected governments we have seen the Commissionary system
which has come back right now. Do you think that it is a good setup?
seen many changes. This system has been
able to sustain all the pressures and
remained intact.
Answer: Commissionary system is the time

tested system. It has been with us for the last
more than 125 years. It was introduced in
1882 and since then the subcontinent has
Other important challenge would be that this document sustains any

kind of regime change. It needs to be discussed and made more
public.
Question: What major challenges you see for this New Growth Strategy?
Answer: The challenge is that everyone
should read this document and it should
become a focus of our people. Other
important challenge would be that this
document sustains any kind of regime
change. It needs to be discussed and made
more public. Mr. Ajay Chhibber has very
rightly pointed out that there has to be a
consensus on this document. Something
which is created by the bureaucracy mostly

remains confined to them. But if it is
discussed at the parliament level it will also
be discussed in electronic and print media.
Once discussed at media and at the level of
politician people will own it. So this growth
strategy should be discussed at the floor of
the assembly.
***
101
Interview
Dr. Aliya Khan

Department of Economics, QAU
Question: In your opinion what are the key pillars of this growth strategy?
Answer: The key pillars which I understand
is that we need to have a more efficient
government and efficient markets. The cities
need to be made dynamic to provide
opportunities and spaces for businesses and
commerce. As university teachers have due
emphasis on the youth it is important to

answer that how we prepare the youth and
harness their potential to make them partner
in the process of growth and development of
Pakistan.
Q: Do you think that our system is efficient enough to deliver when we look at the strategy?
the process of reforming themselves because
they have to fight hard in this global
economic environment with the kind of
decades old structures. Pakistani society is
awakening and it is going through a kind of
transition and change.
Answer: I think that it is going to be the

biggest challenge in terms of implementing
NGS. I think we should at least open debate
on it. Everything would not be possible in
the short term but if we have
implementation
plans
we
can
go
accordingly. I think many institutions are in
Dr. Nadeem very well said that this is a fresh approach and fresh
approaches are always difficult to start, propagate and to take
forward
Q: How do you see the entire concept of the growth strategy in the current environment?
they might get views they had not thought
about. There is wisdom outside in civil
society organizations as they are working in
fields and they are well aware of the grass
root level issues. So let us hear them and let
us see what opinion they have about the
implementation challenges and about the
ideological components of this strategy.
Answer: I think the New Growth Strategy

needs to be widely debated and consulted.
As far as the whole concept is concerned Dr.
Nadeem very well said that this is a fresh
approach and fresh approaches are always
difficult to start, propagate and to take
forward. So it is important that the Planning
Commission and its partners try to make
consensus around different issues and I think
Q: Do you think that there is a need for selling plan for this growth strategy? And do you think
102
that other key stakeholders would be engaged in the process?

Answer: I think that this NGS is more a sort
of communication strategy. Now this is the
framework for the whole Pakistan so it
needs very effective communication
strategy. You have to make everyone aware
of the role of provincial governments also
which are now more empowered and they
have to decide that how they want to
implement this growth framework. Most of
the implementation of this strategy will be at
the provincial level. There is private sector,

academia, civil society and workers etc. to
be engaged in the process. How does factory
workers, vendors etc. connect with this
growth strategy is an important question.
What does a working woman of Pakistan
think about this growth strategy is also
important. So you have to connect with
different segments.
***
Interview
Dr. Akmal Hussain

Professor, Department of Economics
BNU, Lahore
Question: Please give your initial comments on FEG. Do you think that it is a new approach and
not re-hatched approach of old ideas?
Answer: The new economics has emerged in
the last three decades and hopefully what
this conference is trying to do is to bring the
new economic literature broadly under the
roof of institutional economics to develop a
fresh perspective and fresh growth strategy
for economic growth of Pakistan. Basically
what this literature is telling is that the
central challenge for the policy making is
not just resource allocation but to setup an
institutional framework, set of rules,
incentives and disincentives which can
shape the behavior of individuals and the
organizations. Objective is that the
individual actors and organizations become
more efficient, productive and leaders for
the process of economic growth.
With reference to the shift of a paradigm and

perspective we can say that the conference
has redefined it and provided a broader, but
abstract, outline of new thinking. There is
still long way to put nuts and bolts together.
I believe that the future of Pakistan and the
process of growth lie in the inclusiveness
where a large number of people including
poor and middle class get economic
citizenship in terms of processes, savings,
productivity and investments. Weakness of
this conference is that it is not taking
account of the central challenge that we
dont just want high growth but an inclusive
growth in which poor and deprived people
can become subject of this new growth
103
process. That requires much work to be
done.
The new economics has emerged in the last three decades and
hopefully what this conference is trying to do is to bring the new
economic literature broadly under the roof of institutional economics
to develop a fresh perspective and fresh growth strategy.
Question: Do you think that the potential of large number of young people has been included and
addressed in the strategy?
recognizes the demographic structure i.e.
young people. Any strategy being given
must give direction to the youth as well as
opportunities and to undertake them in the
process having high wage employment,
productivity etc. Youth must be given a
leadership role in the strategy presented.
Answer: I dont call it a new strategy. But

one of the new points of this conference is
participation of youth and focus on them.
The strategy is more a set of questions
which have been raised. It is an abstract
outline and a fresh terrain of thinking of new
economies. Thus the conference also
***
Interview
Participant
Q: Would you say that it is a new strategy or a revised growth strategy?
Answer: I would say that the part of this
strategy is revised and rest is a very new
strategy presented, especially the part of the
document referred about youth and
employment. We need to visualize economy
in such a way that the youth are made

participative in whole economic activity.
That is the new thing or I would say a new
paradigm in FEG.
Q: Are you looking at the strong potential of the youth, and you think that they have been
involved in conceiving such strategy and being involved in the thinking process?
Answer: Honestly speaking if the new ideas
about youth are implemented we can bring
something good for them, apart from giving
good education. I think that the youth have
tremendous potential, much more than us. If
youth are given the due importance which is

the requirement of the 21st century then I am
sure whole economy, system and
governance would be changed. Our youth
should be given a chance to outwardly think
104
and they should not be restricted to primitive

ideas. Their focus and vision is much
broader. Youth has streams of continuous
information available to them which was not

available to us.
Question: Do you think that the strategy needs a good selling plan to sell it to key stakeholders?
Answer: Yes it requires very concentrative
effort, not a halfhearted. It requires
involvement of all the stakeholders. It is not
a strategy to be ignored if we want to shine
in this particular region. We must
concentrate on the strategy inclusive of
youth. It would automatically involve
stakeholders because they know it is good
for the future of their children. Now it is the

time to change our choices. The change in
our choices would come when there will be
change in the mind set and the mindset
change come only when we come up with
new ideas and fresh blood.
The change in our choices would come when there will be change in
the mind set, and the mindset change comes only when we come up
with new ideas and fresh blood.
Question: How do you look at the implementation process especially after the 18th amendment in
which provinces are more empowered to cater to the needs of the population? Will those
stakeholders being involved to implement such strategies?
Answer: I am from Ministry of Defense.
Even the Ministry of Defense is contributing
in economic growth in many ways. We run
the cantonments, give civic facilities through
cantonment boards and those cantonments
are better living places as they have better
planning and implementation. Their
implementation is monitored all the time.

There are checks and balances in the system.
Such check and balances are unfortunately
not available in the civil sector. You bring
hundred devolution, they will not bring
those affects until you put some personal
effort in that.
***
Interview
105
Dr. Samar Mubarakmand

Member Science and Technology, Planning Commission
Q: The people who have knowledge are powerless and those who have power dont have much
knowledge. What strategy you devise to turn Pakistan into a knowledge base society?
advancement of this nation. This nation has
to be modernized and has to advance its
industrial growth to achieve GDP growth
beyond 3%. The products we produce
should be exportable and of good quality
which requires engineers and scientists.
Answer: I dont say that the people who

have power dont have knowledge. Some of
the people have the power and have
knowledge too. Devising growth strategy in
the Planning Commission was a very hectic
process. We did emphasize in the strategy
that we have to make sure that the
technology and education play a very
leading role in the development and growth
of the economy.
Deputy Chairman said very well that rocket

science is easier and this job is more
difficult. I am a person of science and in my
opinion optimization theory needs to be
adopted to prioritize things within economy,
as told also by the Deputy Chairman. 95%
of our wealth lies in our mineral resources.
Pakistan has third largest coal deposits in the
world which in terms of energy is bigger
than the oil reserves of Middle East, Saudi
Arabia and Iraq combined. Pakistan has
third largest deposit of gold and silver in the
world in Baluchistan and FATA. We can
produce cheap energy using our coal
resources and I propose Planning
Commission to work on two large projects
on priority viz. coal gasification project in
Thar (Sindh), and copper and gold project in
Riko dek. Both projects will give
employment opportunities and will help in
boosting economic growth.
What we have done in this regard is that the

universities which cater the education and
research have been guided to conduct
research in the areas which are relevant to
the growth of the economy. We are funding
universities to a larger extent in research
programmes. We have leveraged those ideas
which have to be done on priority for the
growth of our energy sector, industrial
sector, development of new materials,
technologies, software, automation etc.
Industries are really looking hard to work on
the relevance of it.
Planning Commission is serious about the
technical people, the technologists, scientists
and engineers as they would lead the
***
Interview
106
Dr. Masoom Yasinzai

Vice Chancellor, QAU, Islamabad
Question: While conceiving the new growth strategy was you looking at strategy for a
knowledge driven economy?
Answer: I believe that we have a role to play
in higher education institutions. Pakistan
needs to move from resource based
economy to the knowledge based economy
and we, being a university, have started
playing our role. First thing we started in
QAU is that we are giving access to the
students on merit from all over the country.
We have strategically planned things even at
departmental level to make it more
internationalized and we are moving to
introduce
internationally
compatible
programmes. We are targeting markets for
our graduates across the border. As part of
the agenda we have changed our old
departments structure to the school
structures. Recently we have introduced
School of Economics and introduced four
years programme and Ph.D. programme. I

have also injected fresh blood in form of
Ph.D. from North America. We have also
started School of Politics and Intentional
Relations. Another important thing is that
whatever we do in university it should be
relevant to the country needs. We have also
introduced Office of the Research,
Innovation and Commercialization (ORIC).
We believe that whatever we produce it
should be of quality and national agenda.
We
have
established
a
Quality
Enhancement Cell in the campus to ensure
the quality of intake of students, teachers;
quality of teaching and research etc. So we
are in line with the national strategy which is
being devised for building Pakistan for 21st
century.
Q: Pakistani society is passing through an awakening phase. Do you see any role of
academicians, intellectuals and scientists as leaders of this country in future agenda?
Answer: We heard here that Malaysian
government has developed a strategy in
which General Secretary of a national forum
is a professor of a university. Unfortunately
in our country everybody believes that we
are purely bookish as we are not as useful as
we should be. We need to involve ourselves

in all kinds of national affairs. Everywhere
in the world academicians are consulted for
developing
strategies.
In
Pakistan
unfortunately this role is missing. To make a
difference we need to involve academia.
***
Interview
107
Saqib Mohiuddin
Business Support Fund
Question: What role of SMEs you see in FEG for the development of Pakistan?
Answer: We all understand that SMEs play
an important role in the economic
development of the country. In Pakistan we
have 96% of SMEs being the business
entities which are serving as engine of
growth for the country. We need to develop
entrepreneurship, innovation and growth
strategies in SME sector. An important fact
about our SMEs is that 25% of our SMEs go
beyond 15 years of survival. Reason is that

they are not able to face global competition.
Entrepreneurship skills are lacking and they
have failed to bring innovation strategies.
Good governance is also lacking.
I think that this conference will go a long
way in introducing new models in SME
sector development and sustainability.
***
Interview
Ayaz Amir
Columnist/ Journalist
Q: Please give some initial comments on FEG. Do you agree with the growth strategy and will it
work?
Answer: Good ideas are presented in the
conference. Whatever the growth strategy is,
it will not work unless we have political
consensus and support behind which should
cut across all the political lines. It is

important that this strategy should become a
part of all government policies and thinking
to make it work.
Whatever the growth strategy is, it will not work unless we have
political consensus and support behind which should cut across all
the political lines.
Q: What is the most binding constraint you see in this growth strategy?
108
Answer: The situation through which the

country is passing the government is caught
up in short-termism which is not conducive
for long term thinking and cant serve
Pakistan over a period of next twenty to
thirty years. We should concentrate and
emphasize mainly on key factors and key
sectors. It is due to our short-term planning
approaches that we are facing crises after
crises. We need to rise above everyday
problems and to think of larger and long
term things. So our task is to sell this idea
not just to the people but also to the

government. Planning Commission should
be a part of decision making team with
powers. The ideas generated by the Planning
Commission should be sold to the
parliament so that representatives of the
people get educated. There should be
general economic discussions in the arena of
all political parties, party leadership and in
the parliament.
Interview
Dr. Ishrat Hussain

Director, IBA Karachi
Question: To begin with please give some initial comments on new growth framework.
Answer: I think that it is a very good
beginning to start thinking about challenges
we would be facing in 21st century such as
globalization,
information
explosion,
urbanization, demographic transition etc.
which are realities of today. At least we
have started thinking of implications of
these global trends. Particularly our youth
population is important. 50% of our youth
population is going to be in job market and
looking for opportunities. If we fail to create
opportunities there can be a risk of social
explosion. This is the reason we need at
least 7% to 8% growth rate in Pakistan.
Implementation is very important which
requires will of the successive governments.
Desirability of reforms and implementation
is a real challenge ahead.
About Civil Services Reform I would like to

say that the capacity to translate this vision
and policies resides in the capacity of
institutions which further depends on
capacity of the Civil Servants. If we dont
have high caliber Civil Servants who are
responsible to the needs of the poor
segments of the population then whatever
good policies we may have will not get
translated into real benefits. About revival of
Commissionary system we think that we
have to make a distinction between different
jobs such as law and order, revenue and
disaster management etc. which my
commission has also recommended in Civil
Services Reform document. There should be
neutral administrators in districts. Sanitation,
109
education,
health
etc.
should
be
administered by the local governments. I
have also written a chapter on devolution
plan for monetization and presented a
complete Performance Management System
based on integrated value chain system
including recruitment, training, performance

management,
career
progression,
compensation and retirement. If we dont
pay well nobody will come to Civil
Services. So there is a need for an integrated
system.
50% of our youth population is going to be in job market and looking

for opportunities. If we fail to create opportunities there can be a risk
of social explosion.
Q: Do you think that it is a new growth strategy or re-hatched from the old one?
Answer: It is a new growth strategy in the
sense that it gives a thinking to address the
problems of 21st century. We need to think
that where the world is going to be and
where we have to position ourselves. To
position ourselves we need to think that how

we have to reform our institutions, policies
etc. so that living standards are improved
and poverty is reduced in the country.
***
Interview
Participant
Question: To begin with please give some initial comments on Framework for Economic
Growth.
Answer: Thank you for having me here at
Planning Commission and I am pleased to
see all the efforts. We were also involved in
giving inputs on the FEG to Planning
Commission together with our partner
Economic Freedom Network Pakistan. I
am pleased to see efforts going to large
public, students, and universities and to
different parts of the Pakistan. FEG is really
a big step forward. The contents and ideas
expressed here are phenomenal. Pakistan has
such a good youth, dynamic knowledge
assembled here which all we guarantee a
positive development. Pakistan falls behind

just for not reforming things. Population
growth will eat up all the efforts. How
successful are policies we can see at India
which is transforming from socialist ideas to
a free market economy. Free market
economies will improve quality of life.
Ideas of giving subsidies harm economy and
benefit few people. Pakistan needs to take
into account knowledge which is already
here and implemented. I agree with the
sequencing of four pillars of FEG. It has
structures and patterns from all over the
110
falling back in Economic Freedom Index by

not doing things and delaying reforms. The
process of FEG needs to be continued.
world which are also experienced by

Malaysia, Indonesia and other neighboring
countries.
Implementation is the real challenge for
NGS. Implementation must go on and it
should be a constant reform. Pakistan is
Pakistan has such a good youth, dynamic knowledge assembled here

which all we guarantee a positive development. Pakistan falls behind
just for not reforming things
Question: Is aid good for Pakistan or it is crippling our economy?
Answer: Even Western countries have made
mistakes in the way of giving aid. The main
case study was conducted in Africa, but the
principles remain the same. Now we are
shifting towards a free market economy. In
traditional aid system countries remain

beggars. In new strategy the focus is on
creating structures to enable people to earn
their own living with dignity which is a
much better approach to provide aid.
***
Interview
Muhammad Ali
Chairman, SECP
Question: How do you find this conference on Framework for Economic Growth? Please also
comment that how can we develop entrepreneurship in our country?
Answer: I fully agree with the timing and
the approach of this conference and we need
a new growth strategy in the country. It is
easier said than done. In my session I
pointed out that we have seen the period of
high growth when we were receiving foreign
assistance. We have to look at the internal
flaws and need to identify the weaknesses of
the system.
One thing which is identified by everyone is

entrepreneurship. We need to encourage the
businesses and entrepreneurship in this
country for that we need vibrant financial
markets which can provide financial capital
to the people who have talented ideas. With
financial gap it is not possible to bring
entrepreneurship. Secondly we need to
111
reduce the interest rate in this country. We

have very high interest rate regime because
of which there is no motivation to take the
extra risk in the investment in businesses.
Legal infrastructure also needs to be
improved and policies have to be consistent
across the board. We need to come up with
the ways by which trade can be promoted

with the neighboring countries and to take
benefit of the competitive advantage. We
need to improve the education level of this
country. All these factors need to work
together to achieve high growth rate.
We need to encourage the businesses and entrepreneurship in this

country for that we need vibrant financial markets which can provide
financial capital to the people who have talented ideas.
Question: Talking about competitive advantage and trade with India our industrialists seem to be
petrified from Indians. Please give your comments.
Answer: In terms of talent our businessmen
are not less than Indian businessmen. What
we are getting is a market of billion people
and what India is getting it is a market of
170 million people. So we have a lot of
benefit to get and we have to encourage
people for competition. Being petrified and
scared of the competition we would not be

able to become efficient and effective in
longer term. Pakistan has a lot to benefit
from the region within the neighboring
countries and there is no reason to be
petrified and scared of Indian business
groups at all.
Question: Initially you talked about entrepreneurship and developing entrepreneurship skills. But
an environment where people like Malik Riaz are very successful by just being in real estate why
would someone go and setup a business while it is more profitable to invest in property.
Answer: We have been a trading nation
primarily. We have promoted financial
capital as I said earlier. So many people with
brilliant ideas are there but they are not able
to raise the national capital. For example to
open a small restaurant would require fifty
thousand dollars. Where from the person
would get that money? So we are not
providing the infrastructure or the
environment
where
businesses
are
promoted. The purpose of capital market is
to channelize savings of common man and
we have failed in doing that. Capitalization
is discouraged in this country because if you
are a capital entity a regulator is watching

you and regulating you. If you are not a
capital entity your tax rate is low and there
is no regulation. We need to create an
environment where competition and
businesses are promoted and we as a nation
need to work very hard. Number of investors
in the market is low. Over the last few years
SECP has taken few steps to encourage
investors promote capital market. We have
taken the responsibility to educate the
investors. We have separate teams for that in
SECP and trying to regulate the stock
market.
Q: have you been able to implement the capital gain tax?

Answer: Capital gain tax was imposed last
year. It is the first year that they are
submitting returns. It falls within the domain

of FBR and is implemented.
Interview
112
Maqsood Ahmad Basra

Chief Executive, Atlas Power Limited
Question: Please give your initial comments on NGS. What do you think that is it a new strategy
or an old growth plan you have seen?
Answer: Whatever we have gone through
since this morning is definitely a better latest
concept. We have seen many plans in the
past and all ended due to implementation
and governance problems. Communication

and understanding of this growth strategy is
very important.
Question: Do you think that private sector is with us on NGS? Please comment on trade with
India. Are you in favor of trade with India?
Answer: If the role of the government is
limited to provide facilities, infrastructure
and give competition and openness then
businesses will grow rapidly.
while on the other side there is a totally

favored market from the world. So we cant
say that we can compete with an economy
which has all the support available from the
world whereas in our country we dont have
money to invest or even dont have
electricity. Most of our resources are being
used in meeting the expenses of the
government. We dont have proper facilities
like public transport, proper railway etc.
When you talk about trade you have to look

at the equation on both sides of the borders.
We are facing shortage of electricity, we
have bomb blasts, severe law and order and
security problems, no foreign investment;
***
Interview
Iqbal Anwar Kidwai

General Manager SMEDA
Question: What is your general opinion about economic growth?
Answer: We are getting very fresh ideas by
attending this conference. We have also
given our comments on this document and
we own it. The dynamics of this growth like

governance, openness of markets, cities and
youth need to be integrated. Action plans
113
should be defined that which sector would

play a role to lead this strategy. If we leave
it open ended the targets would not be
achieved unless all the sectors in public and

private will not work together.
Question: Please give some initial comments regarding the FEG. Do you think that it is a new
strategy with the fresh ideas or it is re-hatched?
Answer: The FEG is neither a strategy nor a
framework. It is a set of new questions and
these are drawn from the new economic
literature emerged in last three decades. In
other words it is a set of rules on the basis of
which
the
economic
growth
and
performance can be shaped and influenced.

The questions which are posed are quite new
which would open up a new terrain of policy
analysis and actions as a result.
We The intellectual challenge in devising a NGS is that we have to

identify the new kind of institutional reforms which require a lot of
new research, a look at the history of Pakistan, systems of
governance, and its institutions
Question: Do you agree with the sequencing of the priority areas proposed in the FEG?
World economic crises happened as the
markets were not self regulating. So we need
a regulating mechanism and institutional
framework for markets.
Answer: The priorities that have been

proposed in NGS are very important. But
that doesnt constitute either a framework or
a strategy because a strategy requires two
kinds of serious efforts viz. to give greater
and concrete approach to improve the
quality of life, productivity and liberalize
markets
etc.;
and
secondly
the
implementation mechanism. The intellectual
challenge in devising a NGS is that we have
to identify the new kind of institutional
reforms which require a lot of new research,
a look at the history of Pakistan, systems of
governance, and its institutions. Whether the
markets work efficiently or inefficiently
depend upon the institutional framework
within which these markets operate. Simply
deregulating the markets is not a good idea.
The kind of power structure we have in

Pakistan is that we have a coalition of elites
which has the power and strong stake in
maintaining the status quo. Such coalitions
have created institutional structures which
exclude common people from economic
growth, and restrict open and fair
competition in the country. Opening up the
markets requires engaging power structures
and regulating open and fair competition in
the markets. Fruits of the growth should
reach not only to the rich but also to people
in middle and poor class.
***
114
Special Lecture over Video Conference

BY PROFESSOR RICHARD FLORIDA
WELCOME REMARKS BY
Dr. Nadeem Ul Haque

We have put forward a NGS and urban
development is at the heart of it. I would say
that the ideas from your work would help us
to harness energy of our cities and really
reconfigure them. Our cities are exactly the
opposite of what Richard told us. Our cities
are sub-urban sprawls with no city centres,
no culture and no creativity. This is what I
want you to talk about and challenge us to
rethink on notions of urban growth.
Currently we have 90 million kids under the
age of twenty and many of them are
uneducated and probably not going to get
the jobs. Our growth rate is 2%, almost same
as our population growth which means that
our per capita income would remain the
same. So I want you to educate us that
where we are going to find the jobs for our
kids? And if we dont find that then who is
safe in this world?
Mr. Richard Florida is a well known name

around the world. There are too many facts
to read out about him. But let me tell you
something about his books The Rise of the
Creative Class, Who is Your City and the
latest one The Great Reset which are very
interesting and look at the global crises and
their ramifications as well. Richard Florida
is a well known academic and a popular
writer. He is writing for The Atlantic, New
York Times, Wall Street Journal, The
Economist and Harvard Business Review.
He has also been featured on every major
news channel. He has also been appointed
to the business Innovation Factories
Advisory Research Council and also
recently named European Ambassador for
Creativity and Innovation. I hope that he
will give us a good lesson on cities and
creativity. He has some very innovative
ideas. The thing which attracts me is the fact
that he is talking about creativity.
Thank you very much Richard and we look

forward to hear from you.
***
LECTURE BY
Professor Richard Florida

Thank you for that kind introduction. I wish
we can be with you personally for this
wonderful programme and magnificent
dinner for both celebrating your incredible
accomplishments on the NGS and helping
you chart a course for the future of Pakistan.
I applause what you do Nadeem and your

entire team, the conference attendees and the
participants. I know what you doing is very
important for Pakistans cities in emerging
and developing world. More generally my
hope is that you can chart path that others
115
economic revolution of human history. This

is greater than the shift from agriculture
society to an industrial society. Agriculture
society was quite disruptive because of two
massive worldwide depressions and World
Wars and it took about 100 years to build a
public policy regime called the new deal.
can begin to emulate.

First of all I would discuss my ideas on
creativity, the creative class, cities at urban
areas and anything more applicable to the
context of Pakistan and the emerging
economies. Main motivation behind all my
work is that people talk about trade in
growth strategy, exporting as a growth
strategy, attracting investments, innovation
and technology as a growth strategy; but I
want to focus my attention on the most
fundamental quality which is shared by all
human beings. A nice intellectual lead I
made in my research is that it is not simply
technology, or trade, or FDI, or even
innovation that drives economic growth but
the basic human quality of creativity which
is there in all six billion people around the
world. I think we had forgotten that. If you
ask me what lies behind the economic and
financial crises is the fact that it began in
United States and spread across the world.
We tried to build an economy on trading,
financial instruments, banking and on
speculations and tried to make wealth for
making money in an easy way instead of
building real economy based on human
talent, creativity and human capability. That
is why I called my book not the greatest
crises, or the great crash, or the great
depression but called it A Great Reset.
What I was able to find by looking back at
the periods of contemporary history is that it
took twenty to thirty years to resolve the
issues of the economic crises and depression
of 1930s and 1870s. But in new economies
and new economic systems it is raised based
on knowledge and creativity.
The shift we are going today is deeper and

more elemental because for the first time in
human history the nature that how wealth is
created has changed. In the past we could
create wealth from a combination of
physical resources i.e. raw materials,
massive factories in urban industrial areas
combined with labor, capital, and land to
produce things and increase our standard of
living. But that is no longer a recipe for
creating wealth now. So the key to create
wealth and improve living standards lies in
harnessing intellectual labor and knowledge
based production and more importantly
human creativity. Now this creative resource
has become the main thrust of economic
growth.
When some people hear about my notion of
creative economy and a creative class they
believe that it is a latest notion. Only the
advanced cities like Silicon Valley in
California or the great cities of the West,
like emerging cities in China, have that
capability. But this is a misreading. In fact in
my book I pointed out that the key economic
success lies not in 20% or 30% of us who
have the great fortune to be members of
creative class working in science,
technology, innovation, business, arts,
culture or the entertainment but the key
success in 21st century lies in harnessing
capability and creativity of everyone. I
learnt this as a young boy by going with my
father to the factory where he used to work.
My dad had education only up to grade
seven. He dropped out from school during
period of great depression to help and
support his family. He worked in a factory
in industrial sector of North New Jersey.
So challenge today before us in Pakistan and

across the world is to build new and
endeavoring structures, new institutions and
models, polices and frameworks which are
geared to harness the most fundamental and
most essential key economic measure we
have which is creativity of our people. We
are living in this world of the greatest
116
Dr. Nadeem mentioned in his opening

remarks about focus on cities and creativity.
If 21st century is the century of creativity
then the rise of cities and creativity are
economic forces and main driver for
harnessing human potential as wealth
generator across science, technology,
manufacturing, service and agriculture
across the board. The rise of the moderns
corporations and industrial firms has
become the mechanism for exploiting
natural resources combing with capital,
labor and building wealth. The agricultural
economy in the past was organized around
farms and small trading centres. Human
productive power, new material and soil was
transformed to wealth in and around an
organizing system of farms. But in the
industrial era the modern industrial firms
became mechanism of exploiting resources.
The system of mass industrialism and
corporations had a geographical analogue
suburban sprawl when companies could
break production and in fact move
production in different parts of their home
country and then all over the globe. They
could create industrial parks, areas and large
horizontal factories that required roads,
production and consumptions, energy etc.
The rise of creative and knowledge driven
economy has brought us to a new social and
organizing unit. Whether you look at the
innovative sectors of Silicon Valley which
are creating new companies or you look at
the clusters in Europe and throughout the
world, as Professor Michael Porter also
identifies
as
driving
growth
and
specialization, what you find is that the city
or community itself has become a social and
economic organizing unit of our time. City
is the place where innovation occurs and
human beings can combine their talents.
Robert Locus at university of Chicago, who
after winning his Noble Prize in economics,
pointed out to Jane Jacobs that I believe that
Jane Jacobs has discovered the very
mechanism of economic development which
occurs not by building giant firms, ports,
When I was a young boy I asked my father

to take me to the factory. When I entered the
factory it was an old industrial building
making eye glasses and I was fascinated by
the machines and technology. My dad
corrected me that Richard it is not the
machines that make this factory great but it
is knowledge, intelligence and creativity of
people who work here. Whether it is a
transformation of inputs to products, or to
service sector, it is not simply quality of
production or reducing cost, but it is
addition of creativity in design. It is human
knowledge and capability that creates value.
Rise of creative economies in context of old
institutions is very powerful which is
organized around massive production, big
companies, sub-urban sprawl and that is
where adjustment comes in.
Cities that can realign and reset themselves
can build new institutions, new public policy
regimes, structure and urban norms that
enable them to adjust capturing this
creativity which will give enormous boost.
These great adjustment periods and resets
are openings for upwards and conversely
downwards movement. The great economist
Mancun Oslon and his great book The Rise
and Decline of Nations argued that these
resetting periods often shift geographic
locus of economic power, economic
development and technological innovation
in growth. The reason he argued is because
incumbent countries and leader countries/
regions get trapped by the older institutions,
frameworks and models that spur their
success which he called it trapped by
scleroses of arteries - an institutional and
organizational scleroses trapped by the old
order which doesnt allow a country or
region to go into new order. By adopting a
new growth strategy and focusing on
harnessing creativity Pakistan has enormous
potential and opportunities to insert
themselves in global economy in a more
powerful and productive way.
117
global competition for talent. A city needs to

be Tolerant which is the third T. Many
people say that we want to go to Washington
D.C. as it has openness and tolerance. A
persons choice for openness and tolerance
is a motivator and a pre-condition to attract
talent in a city. Inclusiveness is very
important and everyone should have an
opportunity to live a life with excitement.
Finally the fourth T is Territorial Assets.
In a world where every city looks like the
same and has become generic; people are
looking for something unique about a place
which is a communitys territorial asset. One
important thing in this regard is the citys
own unique history, culture, artistic history,
street food, street music and culture.
firms, roads or not through trade but by

mobilizing people in cities where we
combine them to harness their creative
energy that is the spur to the birth of great
creative destruction and innovation that
drive growth.
In my work I am coming to the conclusion
that the world is not just flat but the
knowledge drives economies which are very
spiky. In our research we were able to
identify mega regions of the world like
Boston, New York, London, Shanghai and
many others; and forty largest of which
produce more than two third of our
economic output and nine in ten of our
innovations. In fact the 21st century is the
century of creativity and great cities which
will harness human capability.
The fusion of the new and the unique can be

a driving force for a city. I am a professor
and can speak for ever. But I stop here. I
congratulate you and looking forward for
questions to answer. I hope that in some
small way my remarks help you on this
incredible path to a New Growth Strategy
based on harnessing human assets and
building great cities in Pakistan.
I have developed four Ts of economic

development. First T is Technology. For
growth a country or a city needs to invest in
technology and harness it. It needs to create
technology in homes, firms, in businesses,
colleges and universities. Second T is
Talent which requires investing in talent
and attracting talent. Talent doesnt mean to
have a degree. It can come from any corner
of the society. A city needs to be vibrant to
attract talent and technology. There is a
Thank you for the opportunity to be with

you.
***
118
QUESTION & ANSWER SESSOION

Opening Remarks and Question from the Deputy Chairman, Planning Commission
Richard thank you very much. It was really an interesting talk and I have enjoyed it enormously.
Even though I have read all your books still I learnt something new. Let me also tell you about
Richard that he is also a very good professor and encouraging. He has also encouraged my son,
Umair Haque, to write a book and Richard has also written a blurb for that.
Richard has told us a number of things and you would be pleased to know that we have included
a number of good ideas including 4 Ts in FEG. Before I open floor for discussion and questions I
would like to ask you first that how do you think that being a thousand dollar per capita
developing country we need to follow the stages of growth, create industry first, things which are
way beyond us or jump and start it?
Answer by Dr. Richard Florida:
they may come back, share their experience
here and start businesses. Secondly you have
a great number of cultural entrepreneurs in
your artistic world in music, food, art &
craft etc. and they are ignored by the
strategies made by the government because
you focus mainly on building large scale
industries. I think you need to make a new
bargain with your people and tell them that
we are going to invest in your talent,
creativity, education etc. to harness talent.
Bargain on the citizens should be that they
use their talent and use capabilities in most
productive way to not only try to get a better
job for themselves but also create job
opportunities for others.
This is a very fundamental question. My

hunch is that if you look at the traditional
ladder model and tried it, it has not let you
go to great success. It seems to me that the
success of a country with great resources,
like Pakistan, lies in its large population,
rich
history
of
creativity,
and
entrepreneurship. We need to enable
entrepreneurship
in
Pakistan.
But
entrepreneurs you have sent to America and
other parts of the world. Every single day
they come to America from Pakistan
building great technology companies,
service companies and call centres etc. I
think the talent base is there and we need to
focus much on entrepreneurship spirit. Once
you enable entrepreneurs and motivate them
***
Questions to Professor Richard Florida from audience

Question: I have a question which looks at the link between agriculture and citys development.
In a country like Pakistan we see disparities between agriculture and urban sector. In this text
when we talk about city to be inclusive of agriculture sector it becomes difficult to convince
people. How do we do that? Please comment.
Answer: I think it is a false distinction. I
want to try to clear that this issue is also
there in United States and Canada. People
ask there as well that if we go to cities do we

leave rural areas behind. Jane Jacobs said
that our model typically means that
119
agriculture gives us cities. Rise of trade in

agriculture has given us cities. But what she
has said is that it happened other way
around. The development of cities i.e.
aggregation of human beings and division of
labor happened before the development of
modern agriculture as it could only happen
when urban population and dwellers were
there to demand those products. The
upgrading of agriculture and the rise of the
more creative entrepreneurs transforming
the farming for sustainable and local

ingredients, or transforming simple products
into value added businesses. Returns on
businesses are much higher in urban areas
due to large population or so called spiky
world. So our growth strategy should not
only bridge the gap between agriculture and
urban areas but also to develop a system in
which agriculture and urbanization can fit
together in a more creative wealth
generating pattern.
Question: Cities are new and these are developed in thousands of years. But in context of
developing economies, may be about ten years ago, cities were slums. In your analysis have
there been contents of creativity in these towns?
areas. Improving city life and making it
livable, as you doing in FEG, requires
dealing with many problems in cities which
is a key path on the road to real economic
growth.
Answer: A recent book by Professor Edward

Glazer at Harvard speaks about it that
generally the income level, wages and living
standards across the globe are much higher
in urban areas and surroundings than rural
Question (by Emiel A. Wegelin, GIZ Program Coordinator): There is a recent book by a
Canadian Journalist Duck Sandres titled A Rival City. It testifies vibrancy of informal areas in
a city. It also told that settlements and informal sector over last forty years had been the
dominant mode of generating wealth in our cities and we should not forget that. I would like
Richard to respond to that.
out that what makes cities great is when you
take some person with some attitude and
ability; may be not a lot of formal education,
but a lot of ambition and energy; and take
them from an isolated community and put
them in an affordable city around other
ambitious and enterprising people who can
work with them and provide them a market.
The key strategy for resource mobilization is
to attract talent in cities and develop
entrepreneurship there.
Answer:
Thank
you
for
your
recommendations. Duck Sandres is my
colleague and a good writer, reporter and I
strongly recommend that book. I think there
are two things we can do. One is that there
are a lot of public policies that impede the
process of migration and resource
mobilization from rural to urban areas.
Secondly we can engage public policies for
this and put in place incentives and
initiatives to enable the kind of resource
mobilization. Jane Jacobs already pointed
Question: You talked about the role of innovation, science and technology for particularly
developing less developed countries. My understanding is that if you look at the development
experience of the industrial nations like Japan, South Korea, even United States of 18th century;
they have been using the financial sector to socialize the risk involved in creativity and
innovations. How Pakistans growth strategy can really build innovation without having financial
resources to socialize rest in the order?
Answer: First of all it is a very good
question and very well phrased. Let me
120
answer by way of an example. I am going to

say something, perhaps controversial, that in
an old economy model if you want to build a
textile industry, car or steel industry where
massive amount of new capital are required,
that might have worked in past. But I dont
think that it can work anymore. The
situation I am going to give you from the
context of United States is the birth of new
economy in the Silicon Valley where no
state provisions of financial capital, no
heavy arm of government was involved in
the venture capital. What happened was that
entrepreneurs built success for businesses
and
mobilized
capital
themselves.
Somewhere they touched a New York

financier, not a big investment bank, for a
little flow of money. But the venture capital
industry; the one that built inventive
companies like Intel, Apple, Google they
grew indigenously. Going back to the
previous question what I encourage you is
that enabling the process of migration and
local resource mobilization to occur can
grow those entrepreneurs into something
like venture financiers. I want you to look at
the model of growth oriented and innovative
industries which might be a better model for
growth than the previous model.
Question (Fatma Gul, Senior Economist, UNDP): Cities are definitely platforms to energize
creativity. Do you have some suggestions that while such transitions from rural society to urban
society take place, where cities are center of growth and dynamism with human beings having
knowledge; we dont need to go through the same old painful experiences again? We saw painful
experiences of transition in early industrial eras in our cities (like we saw in UK) in the past. I
would be grateful if you share some best practices with us.
addressing issues. But it requires very hard
work to do.
Answer: I think your question is very apt. I

think that any place anywhere in this world
has not done this very well. Even the
Canada which has done the best job to go up
with social inclusion, diversity, and
encouraging migrants even with the best
programmes also has rising inequality and
political polarization problems. It seems to
me that the only way around is to engage
every person in creativity to the fullest
extent.
But
these
problems
of
marginalization, exclusion, rising property
value in cities are very real and will take a
lot of hard work. One important thing is that
the people are going to acknowledge the
power of cities which is coincidental with
the rising of inequality. If we can increase
the power of cities and their capacity in
wealth generation we can also begin to
engage peoples creativity and start
Bottom line is that social contracts of

industrial age like welfare support,
government support in housing etc. are now
gone. We need a new social contract which
engages people and enables them to be
productive. We need to engage communities
to use own resources. What I would love to
see you is to engage those best practices in
Pakistan. You developed FEG which
recognizes the need for creative cities and its
communities, neighborhood and informal
gatherings where people live as a driving
force of the economy. We also need
enabling the places where we live to become
stronger and vibrant and deal with the
problems
of
marginalization
and
inequalities.
Question (Moeed Pirzada, Journalist): I am a Journalist and my question is very Pakistan

specific. You clearly favor a dense urban atmosphere for creativity. You also talked about
tolerance, youth and talent. Karachi is one of our major cities which have become very
intolerant. It has problems like mafias, land grabbing, law and order etc. Would you comment on
121
the issue of a city like Karachi which has communities with ethnic conflicts which has made it
virtually impossible for people to develop it? It is a city even where Pakistans economy is also
stuck. What would be your prescription for an urban city like Karachi?
mechanisms to mobilize energies is crucial.
We need to channelize people and make
them more productive. One of the
remarkable things happened in USA is that
we saw our cities becoming remarkably
safer. We have immigrants from all the over
the world. But important thing is the way
this diversity is managed to handle issues.
To give people hope and channelize their
energies in more productive way is the real
solution which is good for them as well as
for the national growth. Periods of
transformation take time to have a drastic
shift.
Answer: I am an Italian American. My

people were from Southern Italy. When my
people moved to the United States they did
the same sort of things and went for ethnic
clashes with Jews, Irish and other people
typically over gaining power in informal city
sectors and organized crime and mafias.
This practice is very common and recurring
in our cities. Only solution is to go for
creativity and engaging people. People I
grew up with as kid mostly turned into
criminals, thieves and were involved in drug
dealing. As a kid, like me, they were also
very creative but fell outside the channel as
they had no other way. Creating
Question (Dr. Nadeem Ul Haque): In this new strategy, or urban strategy, there are two to three
charges on us which I want you to tackle. People label this charge at us that this strategy is not
poor friendly as we have a focus on urban areas. Second charge is that we are ignoring rural
areas. We saw earthquake in 2005 and floods last year. There is an underline narrative that let us
build these villages first. My question is that should we encourage mobility into the cities? Or is
urban dimension way forward for poverty eradication?
human migration to urban areas a human
right. Should the ability to migrate and
improve yourself and your family be a
human right? I asked them to leave their
homes and go to some village in Africa or in
developing countries and read their
experiences when they come back.
Everybody when came back to me after
looking at the conditions of these villages
said that Richard you are right. People
must have the right to migrate to urban
areas. Urbanization creates the pockets
where people come and do more, become
more productive and innovative. Anywhere
if you make these adjustments simpler and
fluid it is going to improve the conditions of
their lives, communitys life and of the
country.
Answer: It is a mistake to say that something

is urban focused and not rural friendly. I
give you an example. Many years ago I was
a part of a group between USA and Korea.
There was a big debate in Seoul that it has
grown too big and consuming all the
resources. How do we reallocate and
redistribute the resources in rest of Korea? I
just said something very simple to them that
look at Shanghai, Singapore, Hong Kong
and all the cities around you. If you are
weak at Seoul you are gone. It doesnt
matter what you try to do to the little cities if
you are weak in your big cities. If you are
weak in big cities and you dont have strong
city in this spiky world your cities are
unable to compete.
I ask to my students that should we make
Question (Dr. Nadeem Ul Haque): People also level a charge at us that we have forgotten export-
122
led growth. I would like you to comment.

Answer: Has export-led growth worked?
Have there any shining examples of exportled growth? Is export-led growth
sustainable? Is it a way to develop a
country? I must say that it was a time bound
strategy. In order to develop a country it
must develop its own resources, partly God
given, partly natural, and the most important
resource a country has is its people. Human
resources and creativity leave the farm (rural
area) and Pakistan and go to London, New
York, Washington D.C., Silicon Valley and
Toronto. Make sure that people dont jump

to other countries but jump to cities within
Pakistan. For example in Taiwan innovators
first moved to Silicon Valley but then they
came back and started enterprises at their
home. So we need to build such cities in
Pakistan where we can mobilize resources
and develop businesses. That strategy of
human capital development and human
creativity is more appropriate and
sustainable.
Question: Richard please give us some insight of your book The Great Reset and tell us about
the issue of Institutional Scleroses because we seem to have institutional problems here too. In
your opinion how reset is going to happen here?
Young people are coming looking at world
in a new way and they are connected to the
world. My hunch is that by harnessing
useful energy and giving people ability to
live their dreams, mobilize resources and
make adjustments in institutions you have
great chances to lead them to growth. It is
great that you are leading this effort that this
discussion started and I encourage you to
move as quickly as possible in the frontier of
this new urban growth strategy.
Answer: In every crisis what happens is that

most countries are trapped by institutional
scleroses. Institutions when become so
failed, bank corrupted, have corruption, and
so ineffective then finally someone wakes
up and says that there is another way to do it
better. I think this is what propelled USA
over past resets. Idea is that there are so
many pockets of the world that have
resources to build capability and can harness
human capability. Advantage to Pakistan is
that it has large number of young people.
***
123
Closing Ceremony / Remarks by Parliamentarians
Remarks By
Dr. Nadeem Ul Haque

We have here in the panel Mr. Ajay

Chhibber (Assistant Secretary General, UN
and Assistant Administrator and Regional
Director for the Asia and the Pacific,
UNDP), Mr. Timo Pakkala (UN Pakistan
Resident
Coordinator/UNDP
Resident
Representative);
and
two
important
members of the Parliament Dr. Fauzia
Wahab (MNA) and Palwasha Khan (MNA).
We are here with the panel to discuss the
subject of growth and to respond to your
questions.
Questions and answers by Parliamentarians

And their special remarks
Questions from the audience:
Question: I must congratulate Deputy Chairman particularly and Planning Commission generally
for organizing an outstanding event and such a large gathering in this room. Particularly after
18th Amendment when Planning Commission needs to convert sub-national governments I dont
know why the provinces are absent in this conference on FEG. They should be here and part of
this conference as they are the main players in implementation.
Question: Political will and commitment is fundamental to reforms, and particularly the reforms
we have been talking for the last two days. Under the devolution powers and resources would be
transferred from the federal government to the provinces. Do you think that the political will
work to make the things happen?
Question: We talked about urban development earlier. Do we have necessary resources available,
like energy etc., to have that perceived level of urbanization in Pakistan? Should we go for urban
development while knowing that the coefficient of correlation between poverty alleviation and
agricultural development is very high especially in sub-continent, as opposed to urban sector?
Question: We can see a lot of brain drain in Pakistan especially in educated people. Do we have
any plan to create opportunities for the people of Pakistan?
Question: We heard about what Indonesia and Malaysia is doing for the growth of the country.
One thing common in success of both the countries was high political will. Are Parliamentarians
serious to bring change? And second question is that if the government changes, will this
strategy document sustain?
Question (Amer Durrani, World Bank): I have one question to ask from the parliamentarians that
when the parliament is going to think about the Pakistan?
124
Question: I was persuaded last night by Richard Floridas lecture. Framework for Economic
Growth focuses primarily on urban development. I would say that if we take example of
California in USA they first developed their agriculture sector, created surpluses from agriculture
sector, invested in required infrastructure and at the end they have the Silicon Valley. Is there
any short cut without going through that route to the growth? I would like your comment on the
FEG.
Question: We are making policies for the poor people here but all the people sitting in this room
are from elite class. Is there any plan to bring poor people here and listen to them?
Question: After this conference we would make certain decisions and points to follow on. My
question is that would we be able to say No or Yes at our own to certain projects and points
and would not be compelled to do that in Planning Commission?
***
Special remarks and answers to questions

By Palwasha Khan
MNA
Let me thank Planning Commission and
you for producing this document. About
political will, which has repeatedly been
mentioned here, my view is that political
will eventually come from the people of
Pakistan. If you felling we are not doing
the right things then change us. What we can
guarantee is political will for the rest of the
tenure for which we have been elected.
Political will is not something which I think
guarantee sitting here. I can guarantee you
political will for the next tenure as I dont
know what happens in the next poll. So it is
up to you people and youth which have
power of the ballot. I would say that the
energetic youth and community who have

been mentioned here also are more
important.
We have a tradition of scrapping of what has
previously been done and to start something
new. So by the time project a start delivering
there comes a change in government. Do we
have magnanimity to own something which
is started by someone else? No. Let us be
honest to the people and do what they ask
from us. We cant ignore them. so political
will is a two way thing and directly
connected to the people.
Special remarks and answers to questions

By Fauzia Wahab
MNA
I would like to say that FEG is a valuable
document. If anybody goes through this
document I am sure that he will find that it is

not something political and has nothing to
125
do with the political manifesto. Some facts

that this document is addressing are the key
issues we are facing today in Pakistan. For
instance chapter on vibrant markets gives us
certain points which are new and we are
going to implement it in next two years. I
think that no government will disown it. For
instance this document talks about Transfer
of Property Act 1882. Who is going to deny
that it needs to be addressed and changed?
This
document
also
talks
about
computerization of land records which
nobody is going to deny. This document
says to unify NTN and GST registration to
one tax registration number and nobody
would disagree with it. This document is
asking for the repeal of Agriculture
Produce Market Act, 1939 which is again
something important and whoever is there in

power should look at it. So there are so
many important areas identified in this
document which we cant ignore.
About ownership of this document I would
say that the biggest problem this book has
highlighted is lack of continuity. If there is
continuity and political stability we hope
that the system we have evolved would not
be disrupted. If political system has
continuity the system here will also move.
You have given the example of Indonesia
and Malaysia. I think from mid-seventies
onwards there has been a continuity and
stability in their political system. Every
government has owned what the parliament
and collective wisdom have decided there.
***
Closing Remarks By
Ajay Chhibber
Assistant Secretary General, UN and Assistant Administrator and
Regional Director for the Asia and the Pacific, UNDP
you have already done in past. I think that
all those countries in Asia which are
growing so fast developed a consensus on
such issues over a period of time and then
whichever person comes in the power
followed that direction more or less. That
sort of consensus should also happen in
Pakistan and it should not be question of one
election or the other.
Thank you very much Dr. Nadeem and I

really add my concurrence to what the two
esteemed members of parliament have just
said. What has to happen is the consensus
around the direction of change which is
needed here. The real question here is that
whatever government comes, as you rightly
said, that must own it. There is a need to
carry on this document and I think it is very
important. I think there is a consensus
among your thoughtful people - like the
people we have here in this room. Of course
you must keep widening the circle. I can tell
you that I have never attended anything like
this in any other country. I must congratulate
Dr. Nadeem Ul Haque and the Planning
Commission the way this opening has come
together and the way the energy of youth
have been involved into this discussion. I
know this is coming after many events that
We would really support Pakistan in

implementation of FEG for which our
Growth Centre would be a kind of place
which will generate such kind of good ideas
and discussions. It is a large agenda and
definitely some sequencing would be
needed. Some low hanging fruits would be
needed to get started quickly. To start with
the work like Civil Services Reforms and
deregulation are harder to start with. We
126
need to start with some quicker things to

keep up the momentum.
been made in last two days was such a rich

discussion and I feel that if you get the
consensus going on the political will has to
be there. If direction is there you can tackle
the issues.
Youth and community need to be the center

of the strategy right from the beginning. I
would say that the Growth Centre idea is a
very good idea. The progress which has
Thank you very much.

***
Closing Remarks and Vote of Thanks by

Dr. Nadeem Ul Haque
tank type thing to the Planning Commission
which is our new Growth Centre. We are
setting up it in Planning Commission. So I
invite Ajay Chhibber to sign MoU of new
Growth Centre. It will be an inclusive
growth centre for all kinds of research etc.
and I also invite universities to participate in
it. If we have enough research and thinking
the politicians will learn too and we will
change.
I think that the issue of political will is in

every bodys head. But to remind you that
this country has not invested in reform and
change. Universities and researchers are
there. Show me how many research you
have done on this subject? Show me that
how much media discussed the reform
issue? How many of you have forced
parliamentarians to do this reform. Go to
them and ask for change. That is how you
are going to get political will. Problem with
us is that we need readymade cooked food.
You take pain and get it. Youth must write
papers every day on public service delivery.
Come up with research papers every day and
prepare your own city plans and growth
strategy etc. When you go back to
universities discuss our plans and strategies
and force us to think differently.
I thank all the donors like ADB, DIFID,

USAID, and World Bank for being good
partners. I also appreciate and thank Wajid
Rana, Asif Bajwa (Secretary Statistics
Division),
Vice-Chancellors
of
the
universities, HEC, professors, media and
friendly youth of Pakistan. I also applause
Planning Commissions team, Members,
Chiefs and technical team here for their hard
and outstanding work. Finally thank you
Ajay and international participants.
About risk management I would say that we

already had too much risk management. We
want stability in our growth and need to get
out of it. We all have to change and come
out of yesterdays questions. Todays
question is that how we are going to educate
people and get political will? What we are
going to do here is to ask youth and
universities and communities etc. that are
you ready to change?
UNDP has been very kind to offer a think
127
CONCLUSION AND RECOMMENDATIONS

CONCLUSION
The Framework for Economic Growth (FEG) was based on widespread local and
international consultations for developing strong local ownership for the strategy. The
FEG is well informed by the best knowledge and analysis available locally and
internationally. International conference on FEG for Pakistan has served as one of the
effective tools for the Planning Commission to share national and international collective
wisdom for devising an implementation plan for the future.
The Conference brought together around 500 delegates including parliamentarians,
international experts, federal and provincial policy makers, economists, development
sector leaders, academia, business community and officials from UN agencies from
across Pakistan who shared their ideas and helped Planning Commission to fine tune the
strategy. The conference was a remarkable experience where national and international
experts critically analyzed the document and endorsed the ideas. The conference also
helped Planning Commission to prioritize most critical areas for the future growth and
develop key performance indicators (KPIs) to monitor implementation process.
Experience shared by the representatives of other countries has also helped the Planning
Commission to develop future roadmap and devise a mechanism to make the consultative
process continuing and inclusive.
The strategy emphasized the need to improve, inter alia, the following:
-
Public service delivery based on sustained institutional reforms that build efficient
and knowledgeable governance structures,
Improving the quality of governance through Civil Services Reforms,
Minimizing the role of the government in the economy and restricting it to improving
regulation and policy environment,
The need to reduce economic distortions,
Human resource development as one of the major objectives of the new approach,
Investing in youth and harnessing their potential,
Energizing youth; engaging communities and inducing investment in human and
social capital,
Investing in tertiary education, vocational and technical training and development of a
knowledge economy,
Investing in promoting entrepreneurship,
Enhancing physical and human connectivity,
Improving the investment climate and reducing cost of doing business,
Functioning of domestic markets; create space for the private sector;
Making cities hubs of economic activities by relaxing zoning and building
regulations,
128
Developing vibrant cities by developing an enabling environment which will be the

hotspot for promoting entrepreneurship and innovation, assuring better returns
through improved productivity on investments for all investors,
Inclusiveness of rural infrastructure and markets for growth and poverty reduction,
Recognition of informal sector,
Development of financial markets and institutions and mandi system,
RECOMMENDATIOSNS:
Following are some of the recommendations to effectively implement FEG:
-
Unless we have political consensus and support behind which should cut across all
the political lines, we cant deliver the result,
To make this strategy become a part of all government policies and thinking to make
it work,
One of the important challenges for the FEG is to sell the idea to all the stakeholders
in public and private sector. We need to put a mechanism for implementation and buy
support from the society, Civil Servants, and most importantly from the top
leadership in the country,
To equip youth with appropriate skills, capacities and knowledge to effectively deal
with the present day development challenges. Investing in youth which can accelerate
the fight against poverty, socio-economic disparity and gender discrimination,
There should be a synergy of support from various sections of the community like
businessmen, political leadership, administrators and general public to make a very
attractive business environment in the country,
Sequencing of the do-ables would be needed. Some low hanging fruits would be
needed to get started quickly.
Recognition by federal, provincial and local governments to put the cities at the
center of growth initiatives.
New Growth Centre should take benefit of the global knowledge and identify clusters
across the country.
To bring informal part of the city into the overall growth framework and make poor
people participate in overall growth effort,
Greater accountability and better fiscal management are needed to achieve more
inclusive growth in developing,
Results Based Management system focusing on public service delivery should be
introduced at planning, budgeting and monitoring stages.
Development of KPIs for each of the policy initiative for federal, provincial and local
governments, and approval from the cabinet to make it a part of monitoring and
evaluation mechanism.
Development of a Performance Delivery Unit (same like as Presidents Delivery Unit
for Development Monitoring and Oversight Indonesia)
***
129

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International Conference on Framework for Economic Growth, Pakistan

FRAMEWORK FOR ECONOMIC

International conference on Framework for Economic

Copyright 2011 International conference on Framework for Economic Growth, Pakistan

Material in this publication may be freely quoted or reprinted,

This publication is available from:

Tel: + 92 51 921 4464

Approved by the National Economic Council

under the Chairmanship of

the Prime Minister of Pakistan

rational, efficient, and equitable rules and

I have the honor and the privilege to present

Accelerating the economic growth rate and

An unintended consequence of our policies

Our development projects for building

lack strategic direction and coherence that is

with timely implementation of market

Asian Development Bank

Framework for Economic Growth

Welcome remarks by Dr. Nadeem Ul Haque, Deputy Chairman, Planning Commission

Introductory remarks by Ajay Chhibber, Assistant Secretary General, UN and Assistant

Session 1: Implementing Governance Reforms

Speaker: Sulaiman B. Mahbob, Chairman, Malaysian Industrial Development Authority

Civil Service Reforms:

Speaker 1: Norma Binti Mansor, Secretary General, National Economic Advisory

Question and Answers

Session 2: Openness and Competitive Markets

Speaker 1: Muhammed Ali, Chairman, Securities & Exchange Commission of Pakistan

Question and Answers

Question and Answers

Session 4: Creative Cities and Urban Development

Speaker 1: Emiel A. Wegelin, GIZ Program Coordinator, Cities Development Initiative

Question and Answers

Session 5: Human Capital, Productivity and Innovation

Introductory remarks by Javed Laghari, Chairman HEC

Speaker: John Speakman, Private Sector Specialist, World Bank

Question and Answers

Session 6: Connecting to Compete

Question and Answers

Session 7: Youth and Community Engagement

Speaker: Mahbub Hossain, Executive Director, Bangladesh Rural Advancement

Question and Answers

Special lecture over video conference by Professor Richard Florida

Lecture by Professor Richard Florida

Question and Answers

Closing Ceremony / Remarks by Parliamentarians

Remarks by Nadeem Ul Haque, Deputy Chairman, Planning Commission

Remarks / Answers to questions by Parliamentarians:

Closing remarks by Ajay Chhibber Assistant Secretary General, UN and Assistant

Closing Remarks and Vote of Thanks By Nadeem Ul Haque, Deputy Chairman,

Conclusion and recommendations

Planning Commission was charged with

The conference was inaugurated by Dr.

Following the NEC approval of the NGS,

The consultations clearly identified the need

knowledge economy. Around 68% of

constraints to growth. The thrust of this

The speakers presented their ideas papers on

The key areas of the new growth strategy

At the conclusion of the conference, the

Dr. Nadeem Ul Haque

It surprises me that we had many