Economic and Human Capital Development in Pakistan 1999-2007

Pakistan experienced rapid economic and human capital growth in years 2000 to 2008 on President Pervez Musharraf's watch. Savings, investments and exports hit new records and the rate of increase in human development reached new highs not seen before or since this period.

Savings and Investments:

Domestic savings rate reached 18% of the GDP and foreign direct investment (FDI) hit a record level of $5.4 billion in 2007-8. This combination of domestic and foreign investments nearly tripled the size of the economy from $60 billion in 1999 to $170 billion in 2007, according to IMF. Exports nearly tripled from about $7 billion in 1999-2000 to $22 billion in 2007-2008, adding millions of more jobs. Pakistan was lifted from a poor, low-income country with per capita income of just $500 in 1999 to a middle-income country with per capita income exceeding $1000 in 2007.

Pakistan Per Capita Income 1960-2012. Source: World Bank 


The PPP government summed up General Musharraf's accomplishments well when it signed a 2008 Memorandum of Understanding with the International Monetary Fund which said:

"Pakistan's economy witnessed a major economic transformation in the last decade. The country's real GDP increased from $60 billion to $170 billion, with per capita income rising from under $500 to over $1000 during 2000-07". It further acknowledged that "the volume of international trade increased from $20 billion to nearly $60 billion. The improved macroeconomic performance enabled Pakistan to re-enter the international capital markets in the mid-2000s. Large capital inflows financed the current account deficit and contributed to an increase in gross official reserves to $14.3 billion at end-June 2007. Buoyant output growth, low inflation, and the government's social policies contributed to a reduction in poverty and improvement in many social indicators". (see MEFP, November 20, 2008, Para 1)

Human Capital Development: 

In addition to the economic revival, Musharraf focused on social sector as well. Pakistan's HDI grew an average rate of 2.7% per year under President Musharraf from 2000 to 2007, and then its pace slowed to 0.7% per year in 2008 to 2012 under elected politicians, according to the 2013 Human Development Report titled “The Rise of the South: Human Progress in a Diverse World”.



Primary Enrollment Source: Economic Survey of Pakistan

Youth Literacy Rate Source: Economic Survey of Pakistan

Overall, Pakistan's human development score rose by 18.9% during Musharraf years and increased just 3.4% under elected leadership since 2008. The news on the human development front got even worse in the last three years, with HDI growth slowing down as low as 0.59% — a paltry average annual increase of under 0.20 per cent. Going further back to the  decade of 1990s when the civilian leadership of the country alternated between PML (N) and PPP,  the increase in Pakistan's HDI was 9.3% from 1990 to 2000, less than half of the HDI gain of 18.9% on Musharraf's watch from 2000 to 2007.

R&D Spending Jumped 7-fold as % of GDP 1999-2007 Source: World Bank

Acceleration of HDI growth during Musharraf years was not an accident.  Not only did Musharraf's policies accelerate economic growth, helped create 13 million new jobs, cut poverty in half and halved the country's total debt burden in the period from 2000 to 2007, his government also ensured significant investment and focus on education and health care. The annual budget for higher education increased from only Rs 500 million in 2000 to Rs 28 billion in 2008, to lay the foundations of the development of a strong knowledge economy, according to former education minister Dr. Ata ur Rehman. Student enrollment in universities increased from 270,000 to 900,000 and the number of universities and degree awarding institutions increased from 57 in 2000 to 137 by 2008. Government R&D spending jumped from 0.1% of GDP in 1999 to 0.7% of GDP in 2007. In 2011, a Pakistani government commission on education found that public funding for education has been cut from 2.5% of GDP in 2007 to just 1.5% - less than the annual subsidy given to the various PSUs including Pakistan Steel and PIA, both of which  continue to sustain huge losses due to patronage-based hiring.

Pakistan's High-Tech Exports Tripled as % of Manufactured Exports. Source: World Bank


To see a discussion of the above subject and the current situation, please watch the following video:

http://vimeo.com/84504051



Civil-military Stand-Off on Musharraf Trial; Musharraf Govt's Performance Record from WBT TV on Vimeo.

Related Links:

Haq's Musings

Musharraf Earned Legitimacy By Good Governance

Musharraf Wants to Face Trial; Military Opposed to it

Saving Pakistan's Education

Political Patronage Trumps Public Policy in Pakistan

Dr. Ata-ur-Rehman Defends Pakistan's Higher Education Reforms

Twelve Years Since Musharraf's Coup

Musharraf's Legacy

Pakistan's Economic Performance 2008-2010

Role of Politics in Pakistan Economy

India and Pakistan Compared in 2011

Musharraf's Coup Revived Pakistan's Economy

What If Musharraf Had Said No?

Human Development in Musharraf Years

Comments

Anonymous said…
Human Capital and Economic Growth: Time Series Evidence from Pakistan

Faisal Sultan Qadri, Faisal and Dr. Abdul Waheed, Waheed (2011): Human Capital and Economic Growth: Time Series Evidence from Pakistan. Published in: Pakistan Business Review , Vol. 1, No. Jan 2011 (2011): pp. 815-833.

Human capital is generally considered as a positive contributor in the economic growth. In this study, we estimate this relationship using time series data of Pakistan for the period 1978 to 2007. A health adjusted education indicator for human capital is used in the standard Cobb-Douglas production function confirms the long run positive relationship between human capital and the economic growth in Pakistan. A sensitivity analysis was also performed in order to check the robustness of the initial findings. The estimation results supported the findings of the previous studies that human capital is positively related to growth and also that the results are robust. The health adjusted education indicator was found to be a highly significant determinant of economic growth, which indicates that both the health and education sectors should be given special attention in order to ensure long run economic growth.

http://mpra.ub.uni-muenchen.de/30654/
Riaz Haq said…
International conference on emerging technologies: Chairman HEC for translating opportunities into reality

https://www.pakistantoday.com.pk/2017/12/28/international-conference-on-emerging-technologies-chairman-hec-for-translating-opportunities-into-reality/

Higher Education Commission (HEC) Chairman Dr Mukhtar Ahmed has stressed on the need for translating the opportunities created by new technologies into reality while ensuring a positive use of advanced gadgets.

He said that the HEC is committed to facilitating universities and encouraging research activities. “We need to conduct researches that cast positive impacts on society and mitigates the miseries of humanity,” he underlined.

He expressed these views while speaking as a chief guest at the two-day 13th International Conference on Emerging Technologies (ICET) jointly organized by the Capital University of Science and Technology (CUST), in collaboration with the HEC and Institute of Electrical and Electronics Engineers (IEEE) Islamabad.

CUST Vice-Chancellor Dr Mansoor Ahmed, Professor Aamer Iqbal Bhatti, ICET General Chair and a large number of faculty members and students were also present on the occasion.

The HEC Chairman pointed out that water and food security will become vital issues in the near future. He emphasised that the solution to all social ills including terrorism, poverty and unemployment lies in the promotion of education.

“It is the era of a knowledge economy and no nation can make progress without promoting education,” he stated. He said that the universities are responsible for imparting education, creating knowledge and integrating it into society. He urged the faculty to pay special attention to the training of students, as training is imperative for a peaceful society.

Shedding light on the achievements of the HEC during the last 15 years, the chairman said that HEC set off on its journey when Pakistan had only 59 universities, adding that the number of universities in the country has now reached 188. He maintained that the HEC has been putting strenuous efforts to promote ICT in the country.

“Pakistan has one of the best ICT setups of South Asia”, he informed.

He also announced that the HEC plans to establish centres of excellence in data and artificial intelligence.

Sharing the background of the conference, Professor Aamer Iqbal Bhatti said that the first international conference on emerging technologies was held in 2005. He said CUST lays great emphasis on applied research and the 13th ICET is a testimony to that fact. He appreciated the role of the HEC and IEEE Islamabad in collaborating to organise the conference.

Riaz Haq said…
Pakistan needs a balanced mix of quality skilled workers, technicians, technologists, engineers, researchers and development scientists to promote the country's industrialization. National University of Technology is Pakistan government's answer to fulfill this need.

https://youtu.be/ZDQ2dy3cBSY

The problem with Pakistan’s technological education hitherto has been a surfeit of theory adept engineers, who lack practical skills upon graduation and are therefore of limited use for industry that demands hands on technologists, who could run industrial processes with the desired degree of competence. NUTECH seeks to fill that void through degree programs that will give both respectability and international recognition to the technologists who would undergo four year degree programs in different disciplines of engineering technology. These engineering technology graduates would be exposed to a curriculum geared towards practical aspects of technology that come in handy for an industrial employer. While the engineering degree holders would concentrate on designing and policy aspects the graduates of NUTECH would be focused on actual execution of technological tasks on shop floor. With a practical orientation these engineering technology graduates would already be adept in engineering practices on graduation unlike a normal engineering graduate whose learning starts upon graduation.

The production of top quality engineering technologists accredited to top class international technology regimes like the ‘Dublin, Sydney, and Bologna Accords’ would be a big shot in the arm for our human resource starved industrial sector. As a pioneer technology university under the Ministry of Education and affiliated with the Higher Education Commission, the University is charged with forging a direct linkage with the industry. While NUTECH would be mainly conducting Degree Programs, it is capable of reaching out to less developed areas through its widespread network of technical and vocational training institutes, producing skilled workers for the industry. With more focus on hands on practical training and inclusion of the industrial sector as a stakeholder in designing of curricula, it would synergise the academic output for the benefit of industry.

Pakistan that has suffered because it has completely bypassed industrial development by taking a shortcut to the services sector. Without industrial sinews, no country in the contemporary world can enjoy sustainable economic development. The time has come to correct that egregious flaw in our national development planning through sustainable initiatives. NUTECH is one such initiative, which was long overdue.

https://dailytimes.com.pk/246297/technical-education-industrial-development-and-pakistan/
Riaz Haq said…
Look at the #economic growth trend in #SouthAsia! #Pakistan #economy grew rapidly in 2000-2008 during #Musharraf years!! And then the bottom fell out!!! Bitter fruit of kleptocracy disguised as "democracy"??? #PPP #PMLN #PTI #PandoraPapers https://www.economist.com/asia/2021/10/05/pakistan-got-its-way-in-afghanistan-now-what

https://twitter.com/haqsmusings/status/1445398625698336770?s=20

Mr Khan’s current diplomatic offensive comes in the context of the dwindling options bequeathed by his country’s feeble economy, hypocrisy over Xinjiang and long history of double-dealing. “Pakistan is trying to use Afghanistan to rehabilitate itself,” says Michael Kugelman of the Wilson Center, an American think-tank. “Its message is that we were right all along, there never was a military solution, so it is wrong to blame us.” What Pakistan now wants is for other countries to lend a hand, and help shore up the Taliban government as the only way of sustaining regional stability. The trouble is that just as Pakistan’s leaders imagine the country’s strategic significance to have grown because it holds unique influence over the Taliban, the West’s withdrawal has entailed a steep decline in its interest in the region.

Mr Khan may well be right that the best hope for preventing a humanitarian disaster in Afghanistan now, and for keeping a grip on jihadist groups that linger on its blood-soaked soil, is to help the Taliban keep a lid on things. “If Afghanistan destabilises, the spillover effect comes to Pakistan,” says Moeed Yusuf, Mr Khan’s national security adviser. “After Afghanistan we are the biggest victim of the past four decades and we are not interested in going there again.” But coming from a country that has for so long run with the foxes while hunting with the hounds, as Pakistan has, such words carry limited credibility. ■
Riaz Haq said…
HUMAN DEVELOPMENT
REPORT 2021/2022

https://hdr.undp.org/system/files/documents/global-report-document/hdr2021-22pdf_1.pdf

World set back by 5 years on development indices
India falls from 131 to 132 mainly on back of 2.5 years reduction in life expectancy
BD forges ahead from 140 to 129
Pakistan falls from 154 to 161- in low HDI category now
Riaz Haq said…
Bilal I Gilani
@bilalgilani
Close to 350k engineers in Pakistan ( registered with engineering council)

Largest number is electrical , followed by civil engineers

https://twitter.com/bilalgilani/status/1577366163700465664?s=20&t=WBzayqQ-JdSiEUMBO2EdXA
Riaz Haq said…
Ahmed Jamal Pirzada
@ajpirzada
Doesn't look good for Pak: the human capital index has stayed flat since 2005. While "avg years of schooling" has increased from 4 years in 2000 to 6 years in 2015 (Barro-Lee dataset), the quality has not improved. Worse, the gap with regional countries has increased since 80s.

https://twitter.com/ajpirzada/status/1583239244168200193?s=20&t=vJZdCxMsdx3c4vDdPyGlHw
Riaz Haq said…
HOW ROADS CHANGED THARPARKAR


by Arif Hasan

https://www.dawn.com/news/1714144

The main recommendation of the 1987 report on drought and famine conditions in Thar, prepared by the author, was that the changes taking place in Thar could only be consolidated through increased mobility and linkages of Thar with the rest of Pakistan in general and Karachi and Hyderabad in particular.

It was felt that, if a road-building programme did not take place, the inequities in Thari society would increase, since those who could hire or possess four-wheel drives would be the main beneficiaries of Thar’s huge mineral and livestock potential.

For mobility and linkages to happen, a road-building programme had been recommended, which envisaged linking the four Thar taluka headquarters with one another and with the national road network. However, it was not till the Musharraf era (2000-08) that a road-building programme commenced.

The roads have made transportation cheaper and easier. The old six-wheeler kekra [World War II era American truck], which was slow and consumed enormous amounts of energy plying on the desert tracks, has been replaced by normal Bedford trucks, which are cheaper to run and can carry 250 maunds as opposed to 150 maunds carried by the kekras.

It is claimed by the transporters that, earlier, it used to take three hours from Mithi to Naukot, but now this has been reduced to one hour. They also claim that the cost of petrol/diesel and maintenance of vehicles have been reduced by 20 per cent.

With the building of the road network, trade and commerce has increased substantially. Thar’s agricultural produce now goes to distant markets — six to seven lorries per day carry onions from Nagarparkar to Lahore, and vegetables and fruit from other areas of Sindh and Punjab are now easily available in Thar.

Unlike the situation that prevailed 15 years ago, there are cattle markets in the taluka headquarters, so the Tharis do not have to make the long trek on foot to Juddo to sell their animals. Shops carrying industrially produced household food have multiplied and sell items such as baby diapers, something quite unimaginable before. Every hour an air-conditioned bus, complete with TV and Wi-Fi (owned mainly by Pakhtuns and people of Mianwali based in Karachi) leaves for or arrives in Mithi.

The number of taxis operating in Thar has increased from 150 to over 400, while the qingqis in Mithi have increased from over 150 to over 300 since 2013. These taxis carry passengers not only within Thar but to distant locations all over Pakistan, while the qingqis have almost completely replaced transport animals such as camels and bullocks.

Bank loans for the purchase of taxis are available, but to buy the qingqis and trucks, one can only borrow from the informal market. Interest rates against loans are high and vary depending on how much advance payment can be made by the borrower, or if property or land can be mortgaged against the loan. Spare parts and mechanics for the maintenance of the taxis and qingqis are locally available, which was not so in 2000 and, very often, the vehicles had to be taken to Umerkot for maintenance purposes.

Almost all these different types of vehicles have no insurance, since the owners find insurance rates far too expensive and prefer to put their trust in God. The qingqi and taxi owners have no association but are of the opinion that they desperately need one to negotiate with government agencies and fight against the bhatta [protection money] that the police extorts from them.

An association is also necessary to resist pressure from national transporters’ associations, who coerce the Thari transporters to call a strike on their advice. This was not an issue in the past, because the kekras, which the new vehicles replaced, were collectively owned by seths in Umerkot and Naukot. One truck driver pointed out that there was a desperate need for a driving school in Mithi, because people who were learning to drive were dangerous and caused a large number of animal deaths.
Riaz Haq said…
Ex spy chief Amarjit Singh Dulat tells DH why he thinks both India and Pakistan have their best chance at peace now

https://www.deccanherald.com/opinion/panorama/it-could-be-a-question-of-modi-bailing-out-pakistan-and-he-could-do-it-1192023.html

S. Raghotham of Deccan Herald: What is the legacy that Gen Pervez Musharraf, who passed away recently, has left on the Kashmir issue?

Ex RAW Chief AS Dulat: I was a great admirer of Musharraf. In fact, it was one of my unfulfilled desires that I wanted to meet him, but I never could. Having watched Kashmir for more than 35 years, I feel that there has been no Pakistani leader who has been more reasonable on Kashmir than Musharraf. From our point of view, the most positive thing was that he repeatedly said that whatever is acceptable to Kashmir and Kashmiris would be acceptable to Pakistan. There’s not been anybody else in Pakistan who has said that. Of course, Musharraf got into trouble when 9/11 happened, and he had to willy-nilly join George Bush’s War on Terror. And 9/11 definitely helped us, because it put pressure on Musharraf. And as part of that pressure, he was also told that he had to behave with India. In the years following 9/11, militancy went down. The other positive thing for us (post-9/11) was that the average Kashmiri....

-------

Manmohan Singh is on record that they (he and Musharraf, after Vajpayee and Musharraf in Agra in 2001) were very close to signing an agreement.


Q: What happened that we didn’t?

A: I think we dragged our foot, we took too long…Musharraf kept waiting for Manmohan Singh’s visit to Pakistan. The visit never happened.

Q: So, the recent revelations by Gen Qamar Bajwa, that PM Modi was to go to Pakistan, stay in a temple there for nine days, and then come out with a peace accord that would freeze the Kashmir issue for 20 years. Is that all true? Is it still possible? ...

A: I wouldn’t know. But coming from the (recently retired) Pakistan army chief Gen. Bajwa, there has to be some truth in it. I mean…there may be some exaggeration in it. I think this year -- this is my hunch, my gut feeling -- that something should happen because the Pakistanis are very keen. And they are in a big mess. So, it could be a question of Modi actually bailing out Pakistan. And he could do it…I feel Modi is the right man, he is under no pressure to move forward, but he can move forward.
Riaz Haq said…
Athar Osama PIF Facebook post

Today we embark upon a 6-month long learning journey with 60 Pakistani Teachers and 6 Indonesian Teacher Trainers on Holistic Science Teaching.

This is an innovative approach to Teaching Science in a manner that is connected with other branches of knowledge such as History, Philosophy, Ethics, Religion and the Liberal Arts being piloted, to our knowledge, for the first time in the Muslim World.

Over 3 years, we will 6 workshops in Pakistan, Indonesia, and the Arab World - very different cultures, education systems, languages but the same objective: Train Teachers to create Curious Classrooms!

6-8 Grade Science Teachers may register to attend a future workshop at
http://pif.org.pk/scienceteaching/


World Science Collaborative Ltd, in collaboration with, Lahore University of Management Sciences (LUMS), The Aga Khan University – Institute of Education Development (AKU-IED), South East Asian Ministerial Organisation (SEAMEO), Indonesia, and Qatar University, Qatar, as well as partners Khawarzimi Science Society (KSS), Lahore; Pakistan Innovation Foundation, Pakistan, and STEMx – STEM School for the World, Islamabad presents a unique workshop to enable teachers to explore and learn how to teach science holistically.

In our society, teaching of science is often extremely siloed and compartmentalised whereby the science teacher delivers the content in the classroom but does not relate what is being taught to the real world nor brings forth (or draws upon) the diverse body of knowledge available in disciplines such as history, philosophy, religion and ethics. In doing so, he/she runs the risk, at the very least, of leaving the scientific learning unconnected, or much worse, leaving the students more confused than informed.

It is absolutely critical, therefore, to teach science holistically i.e. connect the learning in the classroom with the real world, for example, by:

* Bringing together knowledge from diverse sources and disciplines such as science, history, philosophy, religion, and ethics?

* Using hands-on experiments and play to bring inspiration and insight in the science classroom?

* Planning lessons that adequately address the curious minds of students and encourage critical inquiry?

* Addressing Big Philosophical Questions that stem from scientific discoveries such as Big Bang, Multiverses, Genetics, Evolution, Artificial Intelligence, etc.

The Holistic Teaching of Science Workshop is OPEN to ALL Teachers of Science in Middle School (Grades 6-8) at any public, private, or religious (madrassa) school who struggles with teaching modern science in the classroom and wants to do better.

The Holistic Science Teaching Online (Hybrid) Workshop is 1 of 6 Workshops that will be carried out in Pakistan, Indonesia, and Qatar between Dec 2022 and July 2025.

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