Human capital

LAHORE: We have more cattle but the United States produces more milk from 1/3 stock. Our local chicken breed produces equivalent meat after six months that a western breed produces in six weeks. Our human resources are less productive than workers in China.

Productivity is a major cause of our economic worries. It is the quality and efficiency that matters and not the number of people performing a task.

Our productivity in agriculture and livestock is lower than China and India, we are nowhere near efficient in the service sector and we operate mostly obsolete technologies that impede our industrial production.

Singapore has a population of 5.92 million but its exports are over $730 billion.

We boast a population of 240 million and our exports average $30 billion. Pakistan has one of the largest young populations in the world. Young people are

said to be energetic and more productive. But the ground reality is that we have low overall productivity.

Why is it so? It is the quality of human resources that matter. Singapore or Korea have about a 100 percent literacy rate and the quality of education is high.

Our official literacy rate is around 6o percent and even the quality of education imparted is low. Our life expectancy, infant mortality rate is lower than East Asian economies.

We have the highest percentage of stunted children, anemic women and what not. All these factors impede productivity. Economists point out that Pakistan’s demographic divide is both a threat and an opportunity as much would depend on how our planners nurture its 63 percent human resource that is less than 25 years old.

Maintaining the status quo on human capital in Pakistan would lead to anarchy because enriching human capital is vital for economic growth. We could either arm them with knowledge to improve national productivity or throw them to wolves who may use them as fodder in criminal activities.

Expenditure on education, training, medical care etc are investments in human capital. Schooling, computer training courses, medical care facilities, lectures on the virtues of punctuality and honesty are essential parts of human resource enrichment.

All these virtues raise earnings, improve health, and add to a person’s good habits over much of his lifetime.

Our administrative costs are very high, which leaves a paltry amount that could be spent on research and development.

The United States greatly raises a person’s income, even after netting out direct and indirect costs of schooling, and even after adjusting for the fact that people with more education tend to have higher IQs and better-educated, richer parents. Similar evidence covering many years is now available from more than a hundred countries with different cultures and economic systems.

The earnings of more-educated people are almost always well above average, but the gains are generally larger in less-developed countries.

Enormous increase in the labor participation of married women is the most important labor force change during the past fifty years. As a result, the value to women of market skills has increased enormously, and they are bypassing traditional “women’s” fields to enter accounting, law, medicine, engineering, and other subjects that pay well, he revealed.

This transition has not happened in Pakistan where women are still discriminated against. Even in garmenting where all leading Asian textile economies have 70 percent garment workers from fair gender, the ratio in Pakistan is less than 20 percent.