Ayesha Mudassar

Pakistan can achieve sustainable development through effective implementation of productivity enhancement reforms, according to a World Bank's report. According to the report titled “From Swimming in Sand to High and Sustainable Growth,” the country's inability to allocate all its talent and resources to the most productive uses has stunted the economic growth. Other impediments to productivity growth include regulatory complexities, lack of technological adaptations, and anti-export bias of trade policies.

National Productivity Organisation (NPO) Chief Executive Officer (CEO) Muhammad Alamgir Chaudry told WealthPK that productivity is one of the main indicators of a country's development, as it has a direct impact on economic growth and social welfare. However, he said, Pakistan has a long history of low productivity. According to Asian Productivity Organisation (APO) Databook-2022, Pakistan’s productivity is lower than its regional competitors. Over the period 2015-2020, it grew at an annual rate of 1.6% in Pakistan, compared to 2.6% in India, 4.6% in China, 4.9% in Bangladesh, and 5.2% in Vietnam.

The negative trend of productivity is affecting all sectors of the economy including agriculture, manufacturing, and services. “Low productivity results in an increase in production costs, which leads to price escalation and a loss of competitiveness at the international level,” the NPO CEO said. Listing the needed reforms, Alamgir said that productivity growth can be attained through investing in human capital, encouraging technological adaptations, reducing deterrents to trade openness, and bolstering competition-based markets. “Reforming institutions and improving environmental conditions are also ways to expand ideas and enhance creativity,” he added. Low productivity is a major challenge for a developing economy. Hence, better strategies are needed to boost productivity and to achieve development.

Credit: Independent News Pakistan-WealthPk