Tuesday / Jan 17 2017
Newspaper : The News
The China-Pakistan Economic Corridor (CPEC) has enormous potential to launch Pakistan into today’s knowledge-driven world where human resources rather than natural resources are the driving force for socio-economic development.
The CPEC should be construed as far more than a highway that carries goods between China and Pakistan – this should just be a fringe activity. It should be developed with the primary focus on high-tech manufacturing with a number of industrial clusters along its path. Each of these clusters should be powerful knowledge hubs with four key components within each hub.
These components include technical training centres producing highly qualified technicians for the group of industries that it is serving and university research centres carrying out frontier research in areas of benefit for the particular cluster of industries that is collocated with it. They also include tech parks – to support new start-up companies and develop new prototypes of exciting new products and processes – and industries for the production of high-technology (and, hence, high value) products in a specific field.
The fields in which these knowledge hubs should be set up need to be carefully chosen to significantly enhance exports in consultation with the Chinese government so that they can attract Chinese private sector investments of $500 billion over the next 10 years.
One of the knowledge hubs could be set up in the field of biotechnology products, such as enzymes, vaccines, biopharmaceuticals, biopolymers, recombinant proteins etc). Another knowledge hub could be established in the field of electronics – such as radio receivers, television sets, MP3 players, video recorders, DVD players, digital cameras, camcorders, personal computers, video game consoles, telephones and mobile phones, etc. A third knowledge hub could focus on high-value agriculture. These could include high-yielding and disease-resistant varieties of cotton, wheat, rice and other edible crops, selected high-value medicinal plants/extractions of commercially important constituents and the production of hybrid seeds for rice/vegetables, flowers, mushrooms, ornamental trees, etc. Similar hubs could be established to manufacture engineering goods, automobiles and defence goods.
Metallurgy is an area of great importance. Specialised metal alloys with special characteristics are in great demand to manufacture engineering goods, automobile engines and defence equipment. A knowledge hub to manufacture specialised materials – including special metals, composites, polymers and nanomaterials – would, therefore, be important. A related knowledge hub should set up to focus on mineral extraction and processing, including technologies for the production of rare earths needed in the electronics and other industries.
Balochistan is rich in mineral resources. But it is being drained of this national wealth through the export of crude ores. This should be banned and manufacturing industries should be established in collaboration with China, Russia and other countries so that we can produce and export only highly purified minerals. Similarly, we should establish manufacturing hubs in the fields of chemicals, pharmaceuticals, windmills, solar panels and other areas of
national importance.
The role of associated technical training institutes in each hub would be to train highly professional technicians who are required by the industries within that hub. The university research centres in each hub would carry out research in the development of next-generation products in that field. The tech parks within the hubs would be to incubate and assist new start-up companies and help transform studies undertaken in the research centres into commercial products and processes. The companies in the tech parks would be assisted by access to venture capital funds, legal services, financial services and groups of experts who could serve as mentors for new start-up companies.
These four important pillars in each knowledge hub would work together with Chinese partners to enhance Pakistan’s exports to exceed those of Singapore – presently over $518 billion – within 10 years. So each knowledge hub should be set up according to a product-driven approach where the key product demand for exports is first identified and industries are sanctioned for only those products where the business plans justify the investments.
A suitable facilitation mechanism to ensure the success of these knowledge hubs would involve the government offering 15-year tax breaks, such as the one I approved when I was the federal minister of science and technology for the IT industry. This was one key factor that led to the growth of the IT industry in Pakistan from $30 million in 2001 to $2.8 billion by 2015. This was highlighted in an article in The New York Times on August 10, 2015. The article also stated that freelance programmers in Pakistan were ranked third in the world with annual exports of $850 million.
Another facilitation mechanism could be to offer foreign training grants to train personnel working in the industries within each knowledge hub so that they can obtain specialised training at foreign institutions to acquire special skill sets. A third facilitation mechanism could be to facilitate the development of R&D labs within these industries through government grants for equipment and the training of technical manpower so that private sector R&D could be facilitated. A government-sponsored insurance scheme should also be launched so that any losses caused by political unrest, death or injury that occurs in the industries within each knowledge hub should be adequately compensated.
The CPEC alone will not bring about a transformation to a knowledge-driven economy. There are five key factors that need to be addressed. The first involves the quality of school and college education since the mind is shaped in these younger years. Students must develop analytical problem-solving skills. The second factor is the quality of our universities and research centres. We don’t have a single university now which is ranked among the top 700 of the world. The third factor is our expertise in the realm of technology. Our technical training schools are in shambles and the engineering universities are weak in research and development. They need to be substantially strengthened. The fourth factor is the ecosystem for innovation. To promote this, we need to set up tech parks in every university, provide access to venture capital funds, facilitate new start-up companies by offering free legal and financial services and provide funding for international patenting.
The last, and perhaps the most important, factor for a transition to a knowledge economy is the need for a visionary technocrat government that understands and implements a clearly defined roadmap. Each federal and provincial secretary should be a subject expert in the field of his ministry. He or she must be backed by a strong think tank comprising the best experts in the field. It is only under such a government that the CPEC can become a real game-changer for Pakistan.