Miracle mirage

LAHORE: Pakistanis are hoping against hope that some miracle would rescue them. A miracle that would resolve Pakistan’s all problems overnight, turning it into an economic powerhouse of the region. Fantasies are free.

Our rulers sleep with the hope that one day they will wake up to find Pakistan has turned into the world’s best tourist attraction, or the top IT exporter, struck hydrocarbon reserves bigger than Middle East or Saudi Arabia, undergone a game-changing agricultural revolution, so on and so forth. The list of pipedreams is endless.

If we talk about the potential of the economy then there is no limit. These potentials cannot be achieved through pep talk; they require action from the state. We lack resources to exploit each potential.

Take for instance tourism. There is no doubt Pakistan has got numerous attractive tourist spots. Our problem is that we lack a vibrant quality hospitality workforce and infrastructure. Reaching those spots is more like a wild adventure, which is sometimes risky as well. In recent years the number of foreign mountain explorers has reduced drastically after the terrorist attack on one expedition at K-2.

Our road network even in the big cities is patchy, being excellent in some localities and in shambles in others. Rural Pakistan, where the tourist attractions are located, lack proper roads. It would require a fortune to build the required infrastructure to exploit the full potential of our tourism. We cannot dream of building even a modest one when we are borrowing heavily for our recurring expenses.

The IT exports are on the move without any government support. The greatest hurdles in this sector are unreliability and slow speed of internet services. Then there is a shortage of human resources in this sector. The software companies are building their capacities more through in-house training as quality software institutes are few. The brain drain of software engineers is another problem. India achieved its first $1 billion software exports a decade after first exports were made. Pakistan achieved the same after more than 15 years. India multiplied its IT exports every year for the next 10 years. We doubled from $1 billion to $2 billion in the next five years.

The main reason for this was that the Indian planners had established enough quality software training institutions to meet the growing demand of their exporting industry, while we produced much less software graduates than needed. Like the Indians, our best software graduates also sought a better future in developed economies. It did not create much shortage in India but our software human resource was further diluted. Some of the Indian software institutes are now considered at par with the world’s best and their software exports are 5-6 times our total exports. They have reversed brain drain as software experts that migrated to the West at the start of this century are returning back home to establish their own shops.

Still, software offers us the best chance to wipe out the trade deficit and boost our foreign exchange reserves. Of late, we have seen a surge in foreign funding for our startups. The funding of almost $150 million this fiscal year is music to our ears but it pales when we see foreign venture capital worth over $16 billion entering India every year and it is no big news for them. The IT exports from Pakistan would increase at a steady pace and are likely to overtake textiles within a decade.

Oil discovery is a fluke that may happen anytime or may not materialise at all. Each major agriculture crop like wheat, paddy, and cotton has the potential to take the economy to the next step but that is not possible given the situation on ground. The absence of certified high-quality seeds, research and development and uncertainty of water supply coupled with wastage of water and inability to mechanise agriculture are the hurdles that would require decades to overcome at the current pace of and the importance attached to this sector.

It is unfortunate that remittances sent by the expat Pakistanis are our major source of foreign exchange earnings. The remittances in fact are higher than our total annual exports. This money comes from the most productive workforce of the country that has opted to try its luck in the foreign countries (only the most productive workers are accommodated by foreign employers). Few of the best medical experts, software engineers, workers and educated white collar experts are serving in foreign lands. They hardly send 10 percent of what they earn to Pakistan for their dear ones. That is enough for their comfortable living.

The rest they save outside. These workers through their expertise and high productivity save at least ten times more for the countries they work in. Pakistan definitely loses potential exports of at least $100 billion as these expats are not needed in the country. We should plan efficient state of art industries in Pakistan to lure this talent into the country at lucrative remunerations.