Post-Covid national reconstruction

Wednesday / Jun 17 2020

Newspaper : The News

As we look ahead to a world with many devastated industries and tottering economies, following the Covid-19 pandemic, we need to formulate a strategy, to recover not only from the disaster that has struck us but to develop a roadmap far beyond building a strong knowledge economy.

For this to happen, our leaders need to be guided not just by economists who are experts in juggling figures, but visionary scientists and engineers who truly understand the path that we need to adopt to develop a strong knowledge economy. In a nutshell, this path must be focused on the manufacture and export of high technology goods, and our institutions must be aligned to this vision and mission.

CPEC can be a game-changer, provided our prime minister can persuade Chinese President Xi Jinping to shift some of their major industries involving automobiles, electronics, pharmaceuticals, aircraft manufacture, information technologies and others to Pakistan as joint ventures with Pakistani industries. In my recent meeting with Chinese Minister of Science and Technology Wang Zhigang, it was agreed that a joint China-Pakistan Committee should be set up for manufacture and export of high technology products involving Chinese and Pakistani industries. This needs to be taken as a strategic move and not just a commercial undertaking, as the next few decades are particularly challenging since certain foreign powers are working to destabilize our country.

There are many things that we can learn from China. The dramatic growth of China in the last three decades has been triggered by a leadership that has focused single-mindedly on strengthening education, science, technology and innovation. In a recent report, published in the world’s leading science journal Nature, it was highlighted that “From 2000 to 2017, R&D spending in the United States grew at an average of 4.3 percent per year...But spending in China grew by more than 17 percent per year during the same period… the United States accounted for 25 percent of the $2.2 trillion spent on R&D worldwide in 2017, and China made up 23 percent. Preliminary data from 2019 suggest that China has already surpassed the United States in R&D spending”.

In fact, since the cost of living is much lower in China as compared to the US, in real terms, China is already spending at least twice as much as the US in Research and Development. No wonder American leaders are so jittery about China’s spectacular progress. I had the pleasure of meeting President Xi Jinping earlier this year when he conferred the highest scientific award of China, the International Science and Technology Cooperation Award, in recognition of my contributions to develop strong scientific collaborations between the two countries. In a moving hour long speech delivered before an audience of several thousand leading dignitaries in the Great Peoples Hall in Beijing, the Chinese President emphasized that those nations that failed to understand the new world challenges posed by the 4th industrial revolution, and failed to invest in education, science and technology will be washed away by the tide of history.

China has focused for the last 30 years on Foreign Direct Investment for the joint production and export of high technology products. The Torch Program started by China in 1988 provided massive funds to high-technology goods manufacturing companies and encouraged scientists working in government institutes to start businesses with government funding. In Pakistan, our narrow-minded leaders have done the opposite – they have prohibited scientists and engineers working in government universities or research institutes to start their own businesses. This policy must change.

A historic decision taken by the State Council of China in 1999 was to take a number of measures to boost industrial manufacture in high-technology sectors. These incentives included: (a) tax breaks to private companies investing in Research & Development; (b) tax exemption for all income derived from the transfer or development of new technologies; (c) reduced value-added tax rate for software products developed and produced in China; (d) VAT exemption and subsidized credit for high-tech exports; and (e) the listing of new high-technology companies on the Shanghai and Shenzhen stock exchanges. Pakistan must follow the same path but it can only do so if there is proper understanding within our leaders regarding the decisions that need to be taken to establish a strong knowledge economy.

The stunning average GDP growth rate of 8-11 percent achieved in China during the last 30 years became possible through acquiring advanced technologies and training manpower in top foreign universities. China started sending its brightest students abroad for PhD level and postdoctoral training in 1978 and the number has now grown to about 600,0000 annually. I started a similar programme during 2003-2008 when I was chairman of the HEC and some 11,000 students were sent abroad by the HEC for PhD and postdoctoral training. Unfortunately, the programme was not sustained. However, the students sent abroad for foreign training by Pakistan have already had a major impact on research output from Pakistani research institutions. In 2002, Pakistan had only 44 research publications per 10 million persons as compared to 172 by India in the year 2000. In 2018, Pakistan had 916 research publications per ten million populations as compared to 708 publications from India, a truly remarkable and unprecedented achievement.

Another major area of focus in China is the promotion of innovation. The Innovation Funds and Science and Technology Promotion Funds in China were set up for the promotion of R&D activities. Starting from 6.3 billion yuan in 1978, the allocation was systematically increased to 124.4 billion yuan in 2004 and to over 200 billion Yuan in 2018. Through such interventions, the Chinese government’s R&D policy has supported indigenous innovation capability. This has led to the development of an enterprise-centred technology innovation system and resulted in the development of high technology-intensive industries in China, and increased exports of high-tech products.

Similarly the Korean government’s policies played a key role in the development of telecom companies such as Samsung. These include the early development of mobile technologies (between the 1980s and 1996), the development of CDMA (Code Division Multiple Access) (between 1996 and the early 2000s), the development of Internet Platform for Interoperability (WIPI) (2001–2007), and the development of the iPhone (between 2007 and 2009) followed by the introduction of locally made smartphones. This provides a lesson for Pakistan where government support to private companies to grow and evolve is considered as corruption. This must change.

The top priority for this country must be education, science, technology and innovation leading to the manufacture and export of high-technology goods. Therein lies our future.