Amendments in the role of Pakistan ministries: a viable soultion

Dr. Hassnain Javed

January 04, 2019

 

 

 

Pakistan is an economy which needs to experiment with new themes and policies in the existing ministerial structure and departments to face both the domestic and international competition. The main mandate – indeed cure – to major economic ills of the economy is to focus on export, export and only export based policies and reforms. For that it is suggested to have industrialization and structural transformation with the main policy goals of creating markets and access to trade with product diversification. This policy should primarily focus on import substitution, infant domestic industry protection and the sector development especially the promotion of small scale and cottage industry which will gradually lead to selective opening of competitive environment. But, for the implication of the stated policy it is required to have high political legitimacy to form national development strategies.

Once, the above policy is achieved then Pakistan industrial sector could move towards stabilization, liberalization and laissez faire features. This will lead to the main policy agenda of market led modernization and limit the government involvement. It will actually lead to implementation of more horizontal policies with the Foreign Direct Investment (FDI) opening and forming the base of having exposure to competition. Under this scenario favorable policy environment would be to have low political legitimacy and limitations to policy space through international commitments.

After achieving the first two goals Pakistani Industries can further move towards modern industrial policies by having the knowledge economy and Global Value Chains (GVCs) with key policy agendas of specialization and increased productivity. Additionally, there would be a need of sustainable development that will capture the policy goal of modern industrial ecosystem development. It will translate into technical capabilities developments, innovation in production, learning economy, sustainable goal development sector; public-private knowledge-tech-development institutions, acquisitions of foreign technology and most importantly will provide a platform for entrepreneurship development. This stated policy will require having more policy space in new fields with more emphasis on inclusiveness.

The major amendments are proposed keeping in view the emerging and developed economies like China (Merger of Ministry of Industries and Production with Ministry of Science and Technology);Malaysia (a separate branch for International Trade), Europe; and Japan (A strong liaison between Ministry of Economy, Trade and Industry).

In China, the industrial catalogue is the policy transmission method being utilised by the government to be fully integrated by 2025, in the lower level of the institution as well.

Moreover, the new ministry can serve as a guide for the construction of information system to capitalize on the capacity cooperation policy to develop Pakistan’s global reach; and Internet of Things (IOT) and cyber security upgrades.

In Malaysia, the Ministry of International Trade and Industry is responsible for the international trade development, investment and productivity in the industry, as well as, the management of small and medium enterprise, development finance institution, halal industry, automotive, steel, strategic trade. The vision of the ministry is to “make Malaysia the preferred investment destination and among the most globally competitive trading nations by 2020”. (Portal for the Ministry of International Trade and Industry) Governments all over the world, are employing market intelligent Business Process Softwares, as a part of their Strategic Plan to enable the industry best practices in their manufacturing units and expedite the much-anticipated Fourth Industrial Revolution.(Portal for the Ministry of International Trade and Industry).

Similarly, many countries in the European Union generate and implement, macroeconomic policies for the growth of its overall economy. Europe has created a strong liaison between its Ministry of Economy, Trade, Industry and Business Environment, thereby employing the use of market economy principles and supporting economic agents’ initiatives, to manage the mineral resources, energy, trade, small medium enterprises, cooperatives and the business sector.

During 2001, the Japanese Central Government Reform Ministry of International Trade and Industry has also merged with agencies from other ministries related to economic activities, such as the Economic Planning Agency. The move has proved to be quite beneficial as the ministry has since been transformed into a “human resource agency” as per the leaders of politics, business and academia. The Ministry of Economy, Trade and Industry mission is to “develop Japan’s economy and industry by focusing on promoting economic vitality in private companies and smoothly advancing external economic relationships, and to secure stable and efficient supply of energy and mineral resource.”

Following the model used in Europe and Japan, adopting a similar policy in Pakistan, will lead to effective strategic policy making, regulation and implementation of internal market development. Therefore, it will help enable the internalization of economic growth by defining the National Strategy for Competitiveness, National Export Strategy and development of support scheme for the increasing competitiveness of industrial products.