MEDIUM TERM DEVELOPMENT FRAMEWORK

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Medium Term Development Framework 2005-10
Technology Driven Development An Overview
Presentation to the President
By Deputy ChairmanPlanning Commission 23rd
August, 2005
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MTDF 2005-10 is to Eventually Realize the Long
Term Vision 2030

• Developed, industrialized, just and prosperous
  Pakistan through rapid and sustainable
  development in a resource constrained economy by
  deploying knowledge inputs.

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MTDF 2005-10 Objectives

• Building a strong and prosperous Pakistan having
  a fully integrated economy with a sense of common
  and shared destiny
• Protecting the rights of every citizen
  particularly those of children, youth, women and
  minorities
• Ensuring equitable development of regions
• Minimizing wastages in the economy

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MTDF 2005-10 Objectives

• Establishing a just and sustainable economic
  system for reducing poverty and achieving
  Millennium Development Goals
• Organised and disciplined movement towards an
  efficient, balanced, internationally competitive,
  environment friendly, and technologically driven
  knowledge economy for rapid and sustainable
  growth to become an industrialized nation in 25
  years
• Evolving a mature, tolerant, democratic society
  which is developed economically, culturally,
  ethically and imbibed with Islamic values of
  moderation and enlightenment, and at peace with
  itself and with the rest of the world

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Structure of Manufactured Exports
WORLD
PAKISTAN
RB 18.5
HT 28
LT 87
LT 17.4
MT 36.1
MT 9
HT 0.65
RB 3
Exports enhance growth and employment and reduce
poverty
Source Industrial Development Report, 2004
(UNIDO)
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Trade Comparison
PAKISTAN
WORLD
1990 3,337 billion US
1990 6.9 billion US
2001 5,984 billion US
2001 9.3 billion US
2003 7,503 billion US
2003 11.9 billion US
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2.96
21.99
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1.78
TEXTILES
ENGG. GOODS
63
63
9
10.33
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Agri Products
Textile Clothing
Chemicals
Others
Engg. Goods
Source WTO Database
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Knowledge as a Factor of Growth (Example from US
Economy)

• 7/8th of the growth in US economy (1900-1950)
  accounted for by technical progress, while 1/8th
  was driven by capital (Abramovitz)
• 94 growth of US economy (1939-82 ) is caused by
  the factors relating to knowledge generation and
  dissemination (Kendrick)
• 64 is linked to advances in knowledge generation
  (i.e. RD)
• 30 is linked to advances in education and
  resource management

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Conclusions drawn by World Community

• Need of a sound, aggressive, long-term and
  flexible national policy for Science and
  Engineering (SE)
• Degree of success is directly proportional to
  strategic investments in science, engineering
  technology and information systems
• Need of Centres of Excellence for ST to enhance
  capabilities of industry, government and
  educational institutions
• International cooperation and integration

IBERO American Science Technology Consortium,
2002
Countries that do not adapt to technological
explosion will not be able to compete and
survive as sovereign states
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Global Scenario

• All developed and newly developed countries have
  invested heavily in science, engineering,
  technology and human resources along with massive
  industrialization as main tools for their
  development

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Paradigm Shift - Integrated Approach

• Simple categorization like, Import
  Substitution, Export Led Growth are misleading
  depictions of strategies that are far more
  complex and require an integrated approach for
  developing national technological capabilities to
  achieve rapid and sustainable economic
  development.
• During last six years the integrated approach
  even though limited has produced very good
  results but much more needs to be done to achieve
  the desired goals.

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The Way Forward Required Paradigm Shift

• Economic development is not necessarily at the
  mercy of natural resources or cheap labour but
  depends on
• Intellectual Capital Science, engineering and
  technology have always been the main driving
  forces of the world economies and hence the basis
  of sustainable socio economic development
• Industrialisation and Development of Human
  Capital The key to high GDP growth
• Value Added Produce Maximise value added exports
  in agriculture and industry
• Quality Total quality management for
  optimisation of productivity

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Pakistans Exports by Technology Categories (US
million)
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Comparative Export Sophistication Levels in 1990
and 2000
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Ranking in Terms of Key Factors Affecting Growth
Source Global Competitive Index, World
Economic Forum, 2005.
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Build up of National Technology Capability in
Asian Countries
Federal and Provincial
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Competitive Industrial Performance (CIP) Index
(Year 2000)
UNIDO Industrial Development Report 2004
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TVE as of total enrolment 11 - 17 Age Group
Ref EFA Global Monitoring Report, 2003-04,
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Ranking in Quality of Education and of RD
Institutions
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Source Global Competitiveness Report (2004-05)
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Elements of An Integrated and Innovative Approach
Development in terms of science, technology and
industry
Products and Services
Market
Market
Improve productivity
Create knowledge base Improve education level
Innovation Demand
Universities
Ind./prod. sectors
Productive Sectors
Produce Knowledge Human resources Development and
supply
Collaboration
Utilize Knowledge
Knowledge base
Knowledge Base
Tax and Financial Policy
Develop Social Infrastructure
Economic Policy
Science and Technology Policy
Policy
Education Policy
Labour Policy
Government
Society
Politics and economy
Environment, culture, tradition, national
character
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An Integrated Plan Pakistan
Incorporated

Value Added
Agriculture
Agro Processing
Manufacturing

Crops
Incentivize Develop Local Strengths Cluster
Culture for Maximum Competitive Advantage
Livestock


Forestry

Fisheries
Services including
IT Telecom

• Mining/ Minerals

• Oil Gas

• Construction

• Engineering

Services
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The MTDF Size
Rs Billion
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Overall PSDP by Objectives
Rs Billion
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PSDP Allocation for the Knowledge Economy (Rs
billion)
Private Sector contribution is expected to be
an additional Rs 40.00 billions in this
sectorFederal and Provincial Govts Current
expenditure during 2005-10 about Rs. 1300
billion
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Productivity Gaps in Agriculture
Science
Science Gap
T3
World
World Gap 55-83
Research in Pakistan
Output
T2
Research Gap 25-57
T1
Best Practice
Extension Services Gap 31- 75
T0
Pakistani Average
X
Inputs
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Manufacturing

• Creation of industrial estates in every province
  with the necessary infrastructure, self-contained
  utilities and ancillary facilities, including
  common technology support centres
• Industrial corridors and specialized industrial
  estates to be set up by Provincial Governments
  along the motorways, expressways and railways,
  with full support of Federal Government
• Infant and pioneering industries to be protected
  for a limited period
• Encouraging inflow of foreign investment for
  accelerated industrialization
• National Plan of Action for Industrial Technology
  Development
• Diversification of industries besides textiles
  and leather in which the country has comparative
  advantage into
• Food processing
• Chemicals, Pharmaceuticals, and Non-metallic
  mineral products
• Engineering, industries
• Automobiles, Electronics and Automobiles

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Manufacturing Sector
Additional employment 1.03 million
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Strategic Thrust
The same principle of greater value addition
applies to other sectors of the economy
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Royalties Technical Fee Payments (US million)
Source World Development Report 2000-01
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Employment Generation (2005-10)
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Value Addition Current Status and Future Agenda

• Current Status During last six years major steps
  have been taken towards greater value addition.
  For example
• Tariff rationalization (Manufacturing share in
  GDP up from 14.7 to 18.3)
• Greater emphasis on higher education and ST
• Focus on IT and telecommunication
• Future agenda New technologies need to be
  identified and investments made to establish
  institutes, laboratories and development of human
  capital

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THANK YOU