Move away from agriculture, Chinese economist advises

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Move away from agriculture, Chinese economist advises
ISLAMABAD:

Pakistan can double its annual economic growth rate to 10% by moving away from being an agriculture-based economy, and dying Chinese industries can become an instrument to achieve this objective, professor Justin Yifu Lin, a Counselor at the influential State Council of China, said on Tuesday.


Sectors where China is losing its competitive advantage can become Pakistan’s latent advantage, said the professor, also a former vice-president of the World Bank and author of 24 books. He said that light manufacturing industries that have been declared “sunset industries” in China can be relocated to Pakistan.

Boosting agriculture: Experts call for collaborative efforts

Pakistan has maintained a decent economic growth rate but it is still relatively poor, said professor Lin, while highlighting flaws of Pakistan’s economic structure and the way forward for the economy of 200 million people.

His economic development theory gives a centre stage to the government as a facilitator aimed at overcoming externality and coordination challenges during the transformation phase.

China will move from labour-intensive to capital-intensive industry and this will free 85 million jobs that will relocate to other countries, said the professor. “China’s upgrading to higher industries will leave a huge space for Pakistan to enter a labour-intensive industrialisation development phase”, he added.

“Poverty is not the destiny of Pakistan,” said Professor Lin while delivering a lecture on how to achieve dynamic growth at the Planning Commission.

“If Pakistan can capture this opportunity, it will be able to grow at 10% annually for 30 or more years and become a high middle income or even high income country,” said Professor Lin, one of China’s foremost economists.

Pakistan’s advantage

According to Pakistani thinkers, the country’s current economic structure is highly flawed, as more than half of the total national output is coming from the services sector that is not labour intensive.

Pakistan grew at 4.7% in the last fiscal year, which was not sufficient to create enough jobs to absorb the youth bulge. Its growth is job exclusive and has widened the gap between the rich and poor, according to independent economists.

The Chinese professor said that the two types of Chinese investments could come to Pakistan -infrastructure and export-oriented sectors. He said that Pakistan’s businesspersons could enter into joint ventures with Chinese partners.

The private sector of Pakistan has to change its mindset as days of protectionism are over, said Ahsan Iqbal, Federal Minister for Planning, Development and Reform. Iqbal said that if Pakistan remains unable to take advantage from 85 million dying jobs in China, these jobs would shift to other countries like Vietnam and Bangladesh.

Pakistan’s journey to success

Professor Lin suggested six steps for Pakistan to indentify sectors of latent competitive advantage. The first step is to find fast growing countries with up to 200% higher per capita income or about 30 years ago had similar per capita income. He said in 1979 China’s per capita income was 30% less than that of Pakistan but today Beijing’s per capita income was 550% more than of Pakistan.

He said that in the next step, the government should see if some private sector firms are already in these industries and should then facilitate them by removing constraints. In step three, the government should invite foreign firms to invest in sectors where the local firms are not working.

Problems riddle agriculture sector, say experts

In step four, the government should also pay attention to spontaneous self-discovery by private enterprises and give support to scale up successful private innovations in new industries.

In the second last step, Pakistan with poor infrastructure and bad business environment should set up special economic zones or industrial parks to overcome barriers to firm entry, attract foreign direct investment and encourage industrial clusters.

In the last step, the government may compensate pioneer firms identified above with tax incentive for a limited period, direct credits for investments and give access to foreign exchange.

The long-term development of China-Pakistan Economic Corridor also revolves around development of special economic zones.

Chinese industries willing to relocate to Pakistan provide excellent opportunity for Pakistan to grow at a faster pace, said Dr Ashfaque Hasan Khan, one of the leading economists of the country.

Use of new technologies to help reduce agri cost

Professor Lin said that for reducing transaction cost in the infrastructure sector Pakistan needs to improve customs, roads and rail networks. He also advised that the federal and provincial authorities should listen to the foreign investors in order to address their concerns.

Published in The Express Tribune, April 5th, 2017.

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source: https://tribune.com.pk/story/1374408/move-away-agriculture-chinese-economist-advises/

 

[Thorough Pro]

The most important and very first aspect of self reliance is self reliance in food. We must be able to produce enough food to feed our nation and then some, this is not an option, but a MUST.

 

[Mumm-Ra]

i think we should not move away from agriculture but enhance our present agri setup to include modern machinery and techniques to produce much more food while using less manpower. The freed resources can be utilized in the light manufacturing industry as mentioned in the article above.

 

[AZADPAKISTAN2009]

Agriculture is Pakistan's Identity it is in our blood.

1- I would like to see More Modenization come to Pakistan in Farming and preservation of food.
2- We have ample "Land" and resources , industrial areas , Human Resources to explore alternative markets

If we stopped producing food , there would be a food crisis in Middle East due to shortages of Food, not to mention we also need to feed 180 Million local population. Plus production of food helps everyone as we do export it to friendly nations

Our future is going to be

• Agricultural Society
• Industrial / Modern Engineering based Society
• Trade Zone

All can coexist , we have ample land , and people to make it happen successfully.
I am sure using Chinese knowledge in Farming / usage of heavy macinery we can make processes more efficient

• Baluchistan is only 3% Utilizaed based on actual sq footage we have
• Sindh is only utilized 10-15%
  
• KPK we already refer it as the unspoiled natural area again very under used
• Punjab while very rich in Agriculture still has ample land for Industries and projects

Note:
MODERNIZATION IN FARMING does not necessarily mean I agree with Genetically modified seeds or products , but I am interested in irrigation and processing.

• CPEC does aims to increase the % ratio of Industrial Acreage used in Pakistan and bring existing zones to upto speed, which would be a great mile stone in itself

 

[Arsalan]

We have enough sq. miles of barren land and enough jobless people to take care of both. While modern agriculture techniques need to be applied across the spectrum, to all crops, in order to meet our domestic needs we can cater any of the Chinese industry that they want to relocate to Pakistan, in fact we should and do welcome that. No need to neglect agriculture as a vast majority of our people are employed in that business and also because with a population of around 200 million we have lot of domestic requirement to address.

 

[Finer]

Agriculture is the whole game. I am afraid they might be trying to monopolize the game of agriculture. Agriculture is not just main strength of Pakistan but also necessity for survival. Local people should not be dependable on other nations for foods especially when their nation has strong fertile lands to promote agriculture sectors. India has made the same mistakes which is something Pakistan should avoid to learn the lesson from India's mistake.

 

[Mangus Ortus Novem]

Why would China be investing in power generations if Chinese did not have a follow up plan?

Just to help Pak?

If we take into account the informal economy of Pak then the GDP is far bigger than accounted at present. Just look around and see how many smart phones are there in whose hands..

Pak at the stage does not have a coherent economic plan. If it is the case then someone else has to design one for Pak. It looks like China has a celar cut plan.

However, from Pak Civlisation perspective Agri sector is ciritical as well. Only trouble in the present structure is industrialisation of Agri sector. Per hectare yield is too low to make a difference and then there is issue of quality as well.

Besides, if Pak is to become bread basket of Africa or Asia then some capital injection is absolutely required. Just don't go GMO route.. the global demand for organic food is growing faster than ever. Through CPEC your produce can be in China, Japan, Russia and Europe in days. Think about it.

Regarding, moving industries from China to friendly states...it is truly a historic opportunity for Pak to grap with both hands. Or do you wish BD to boast and malign you further?

All of Chinese proudcts that go to Africa, South America and Europe in labour intensive industries can be made in Pak. With 10% growth for even two decades Pak GDP will cross 3 Trillion mark. This has to be the strategic priority above all else.

With proper population management (read: stablising popluation growth to about 250mln) Pak can become an economic, political and military powerhouse.

I would say follow a two pronged strategy:

1) Modernise / industrialise Agri sector with focus on quality and organic produce and maximise value added products. Mango's and rice won't just cut any mustard. Never forget for a moment that you have a vast export market i.e. ME, Africa, Europe, Russia, China and NE Asia. This market runs in multi-billions and will last as long as humans exist.

2) Capture with both hands Chinese investment and industrial re-loaction. However, make sure that you have a long term industrialisation plan. From automotives, ship building to aerospace all the way to consumer electronics. Full spectrum industrialisation that is.

You can be both be industrial and agricultural one.

Really a chane of historic proportions!

 

[kasper95]

India has made the same mistakes which is something Pakistan should avoid to learn the lesson from India's mistake.

What mistake did India do ? India is a food surplus country ,we dont have shortage of food but the problem is distribution,each year millions of tons of food rots in but some people go hungry because of the food not reaching them.

 

[ziaulislam]

The most important and very first aspect of self reliance is self reliance in food. We must be able to produce enough food to feed our nation and then some, this is not an option, but a MUST.

food is also getting cheaper, coz its economy of scale, in Pakistan the reason why we see food shortage is that we cannot compete with imports

countries like USA can produce enough food to feed all the world, Punjab can produce enough food to feed Pakistan 3 times over, but is it economical or not is the reason why production fluctuates

being labour intensive setup vs mechanized agriculture our food is expensive and noncompetitive in Pakistan
another example USA produces almost all of its wheat but imports alot of vegetables and fruits..why? labour

 

[313ghazi]

It would be most upmost idiocy to move away from agriculture.

First and foremost anyone who can grow their own food has the basic requirements for survival.
Secondly the world population is becoming larger and more urbanised, the demand for food exports will increase.

We need to industrialise our agricultural sector, focus on using less water, less chemicals, higher yields, produce the food to FSA standards in EU and US, increase regulation to meet demands of western markets, make it easier to export, issue export lisences to farmers and small scale operators.

I also think for domestic demand we should have state funded farms, farms on state owned land, run by salaried staff which grow the essential foods we need in the country, without exporting them. This way we can control those hording food for higher prices or to export it illegally. If domestic demand is 50% met by state owned farms, then the influence of these mafias decreases massively. It also puts a lot of poor people into work.

 

[Flash_Ninja]

Agriculture is the whole game. I am afraid they might be trying to monopolize the game of agriculture. Agriculture is not just main strength of Pakistan but also necessity for survival. Local people should not be dependable on other nations for foods especially when their nation has strong fertile lands to promote agriculture sectors. India has made the same mistakes which is something Pakistan should avoid to learn the lesson from India's mistake.

I disagree, we should modernize farming, and automate the process.

Not only will we get much higher yields, but we will also end up with a lot of labour which can be put into industries.

 

[El Sidd]

Its counter productive. I strongly disagree with this perspective.
The backbone of Pakistan' economy has been and will forever be the agriculture sector. We need to modernize our agriculture sector. I agree if we continue with our age old methods we will not utilize the full potential of our great Indus valley.
with the advent of Smart Farming i think the govt. should focus on training the farmers in best utilization of our resources for e.g. greenhouse farming, the concept of smart city to smart village with renewable energy sources.
Progress is directly proportional to contentment of our farmers. we have sufficient irrigation infrastructure to sustain the growth.
Providing cheap electricity and modern techniques(education) to our farmers should be our first priority.

if we just look at the situation and poverty stricken Chinese farmers we will get a better picture of such claims.

 

[Talwar e Pakistan]

He's right, I can't name one single high-income country that has an agriculture-based economy. That does not simply mean that we let go of it, it means that we put more focus and emphasis on industry and exports.

 

[Azadkashmir]

combination of mechanized farming but keep it natural and organic 100 percent right down to the soil. now add solar/wind/including river powered and pure wind power mill. Then do survey on what to grow that does not take alot of water but gives the most nutrition and is easy to grow. rain collection tanks/ piping system for water/water wells built for rural population/ farm houses built with shop fronts so they can sell from house. biogas stoves/machinery/ even have biodiesel machinery. make your own cow fertilizer.
communication is another factor i say vhf/uhf mobile rig / handheld for farmers to comunicate amongst thier workers on the farm.
provide water filteration system to each house for clean water to drink.

keep livestock that you can get most out of like ostrich/sheep/buffalo = feathers /milk/meat/wool/oil/ etc.

a farmer never goes hungry and eats the best stock.

can introduce farming to cities and use aquaponics/solar powered.
maybe even make group farming and prizes for best produce.

pakistan should never ever move away from this otherwise the consequences will be dire. people in england are fed up with crappy over priced city life they want to move to rural quiet farming society since food is purer cheaper etc.

high income doesnt mean sh it when you have to pay for high price and lower quality for
survival needs and you not in control. for example gas/water/tax/food/etc but farmer he picks up wood and throw in stove and cooks gets food straight from his farm and gets the best. water is from well not those crappy recycled toilet water from pipes and you pay money for it.

money shows the wealth but wealth can be invis ble to the eyes
view like this see it as material asset like water well/farm food/free wood/ cow fertilizer /livestock

in pakistan city people will suffer alot more like karachi - the firms are corrupt so yor food /water is corrupt. the prices will go up and down. you will not have a decent days rest you will alays be worried about next day meal. but a farmer rarely.

plus farmer has nice sleep no noise from cars etc headache from idiot people/ you know what they say health is wealth.

 

[武成王]

I'm not sure whether it's appropriate to put my 2 cents here, but I sincerely wish Pakistan stable and prosperous which is not only interest of Pakistan, but also aligned to China's interest, China need a stable and prosperous Pakistan. The current situation is, India is desperately, eagerly stimulating domestic industry development, if Pakistan can not catch up in some sectors, it will be a big challenge to Pakistan's future. The Kashmir issue is a LONG TERM issue, the winner will be the country which can keep stable, and keep prosperous. Kashmir will finally belong to the winner, or go independent. The title of this article apparently imply the concerns from SOME Pakistan Establishment regarding the agriculture sector which is the foundation of Pakistan economy. I know that land is private property here, landlord can rent their land to poor people,
so it's a very stable cash flow for landlords. Industry development may impact interest of landlords, landlord worry that industry will compete cheap labors with agriculture, or government will requisite land in cheap price. The truth is there're lots of redundant labors in Pakistan, these labors can be utilized to facilitate low end manufacture industry which can create lots of jobs.
Apparently Lin's suggestion is to emphasize on industry development, not emphasize on 'shift from agriculture', the title is misleading. It simply reflect the concerns from SOME people.
China is upgrading its industry sector to high end, robotics based, many cheap labors will be replaced by robotics this is a world wide trend. However, some sectors still rely heavily on cheap labors, if Pakistan can not grasp this opportunity, these factories will be relocated to Africa, or SEA countries. CPEC in my eyes is essentially a stabilizer for Pakistan's society and economy, which could help to build a decent industrial foundation for Pakistan's development,
e.g. electricity power, high way, railway, port, manufacture factories, which is experience when China opened door to the rest of world. It's a tough task for Pakistan to implement the plans, this require government's determination and hard works and people's cooperation. If China intend to earn big money from the $45 billion investment, it's better to pour into other region, e.g. SEA or Africa, not Pakistan, so it's a strategic investment, not profit driven.