pakistan’s performance on the global competitiveness index 2015-2016 of the world economic forum

Assessing National CompetitivenessThe Global Competitiveness Report 2015-2016

Amir JahangirChief Executive OfficerMishal PakistanA Country Partner Institute of the Global Competitiveness and Benchmarking Network, World Economic Forum

[email protected]

Credibility Lab @ Mishal: Mishal Pakistan through its Credibility Lab’s initiative is working with policy makers,

researchers, academia and industry professionals on creating new industry benchmarks.

The Credibility Lab undertakes the following initiatives in Pakistan: As a Country Partner Institute of the World Economic Forum, works on the

following: The Global Competitiveness Report The Travel and Tourism Competitiveness Report The Global Enabling Trade Report The Global Gender Gap Report The Human Capital Report The Financial Development Index Report The Global Information Technology Report The Global Risks Reports EOS serves as the basis for Corruption Perception Index by TI AGAHI Journalism Awards – First Journalism Awards in Pakistan

– Framework for Ethical Journalism Media Development Trust Trust Gold Medal Recognition for Public Interest Communication Ethical Audit of News Media (Framework) Media Credibility Index

The Global Competitiveness Index (GCI)

“

”

The set of institutions, policies, and factors that determine the level of productivity of a country.

The level of productivity, in turn, sets the level of prosperity that can be earned by an economy.

Basic requirements

1.Institutions

2.Infrastructure

3.Macroeconomic

environment4.Health and

primary education

Efficiency enhancers

5.Higher education and training

6. Goods market efficiency

7. Labor market efficiency

8. Financial market

development9. Technological

readiness

10. Market size

Innovation and sophistication

factors

11. Business sophistication

12. Innovation

The Global Competitiveness Index (GCI)

The Global Competitiveness Index

Qualitative data sourced from the annual Executive Opinion Survey carried out by the network of the World Economic Forum’s Partner Institutes.

Quantitative data sourced from international organizations.

The Global Competitiveness Report 2015-2016 Data

The Global Competitiveness Report 2015-2016 Country Coverage

The Global Competitiveness Index Ranking 2015-2016

02/05/2023

Top 20 Bottom 20

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Globalization is a reality that countries can no longer escape

Competitiveness is the only way to benefit from globalization and not become a victim

Improving Pakistan’s Competitiveness

Sustained Economic

Growth

Poverty Reduction

Improved Competitiveness

World Economic Forum – Global Competitiveness Report (GCR) 2015-16

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The World Economic Forum’s Global Competitiveness Report is the Most Influential Ranking of a Country’s Competitiveness and it Effects Pakistan's Image in the World Among Business, Government and Financial Leaders

Understanding and Monitoring the Rankings is Important

Improved Competitiveness Leads to Sustained Economic Growth Which Has Proven to Be Effective in Poverty Reduction and Employment Generation

Sustained Economic

Growth

Poverty Reduction

Improved Competitiveness



Global Competitiveness Index (GCI) 123 6855 107

Basic Requirements (60%)1. Institutions 119

59 60 1322. Infrastructure 117 64

81 1233. Macroeconomic Stability 128 115

91 494. Health and Primary Education 127 43

84 101Efficiency Enhancers (35%)5. Higher Education and Training 124 66

90 1226. Goods Market Efficiency 116 51

91 1017. Labor Market Efficiency 132 130

103 1218. Financial Market Sophistication 99 51

53 909. Technological Readiness 113 93

120 12710. Market Size 28

61 3 40Innovation and Sophistication (5%)11. Business Sophistication 86 44

52 11712. Innovation 89

43 42 127

Pakistan Sri Lanka India Bangladesh

12


2014/15 2015/16 ChangeBasic Requirements (60%)1. Institutions 123

119 +4 2. Infrastructure 119

117 +23. Macroeconomic Stability 137 128

+94. Health and Primary Education 129 127 +2

Efficiency Enhancers (35%)5. Higher Education and Training 127 124

+36. Goods Market Efficiency 100

116 -167. Labor Market Efficiency 132

132 - -8. Financial Market Sophistication 72 99 -

27 9. Technological Readiness 114

113 +1 10. Market Size 30

28 +2

Innovation and Sophistication (5%)11. Business Sophistication 81 86

-512. Innovation 88

89 -1

13

Indices 2014/15

2015/16

Property Rights 121 118 +2Intellectual Property Protection 117 112 +5Diversion of Public Funds 94 85 +9Public trust in Politicians 108 99 +9Irregular Payment and Bribes 123 116 +7Life Expectancy Years 109 106 +3Favoritism in decision of Government Officials

101 75 +26Wastefulness of Government Spending 103 102 +1Burden of Government regulation 103 86 +17

Areas where Pakistan has shown improvements

World Economic Forum – Global Competitiveness Report (GCR) 2014/15-16

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Areas where Pakistan has shown improvementsIndices 2014/1

52015/16

Business cost of crime and violence 132 130 +2Organized Crime 137 132 +5Reliability of Police Service 127 126 +1Ethical behavior of Firms 111 98 +13Strength of Investor Protection 34 21 +13Quality of overall Infrastructure 113 98 +15Quality of Railroad Infrastructure 72 60 +12Quality of Air Transport Infrastructure 92 79 +13Quality of Electricity Supply 133 129 +4


15


52015/16

Government budget balance, % GDP 134 106 +28Gross National Savings, % GDP 120 115 +5General Government Debt, % GDP 106 101 +5Country Credit Rating 121 115 +6Malaria Cases 47 46 +1Business Impact of Malaria 50 49 +1Business Impact of Tuberculosis 108 104 +4Business Impact of HIV/AIDS 97 94 +3Infant Mortality, deaths/1000 live births 137 134 +3


16

Areas where Pakistan has shown Improvements Indices 2014/1

52015/16

Quality of Primary Education 119 112 +7Secondary Education Enrollment 131 129 +2Quality of Education System 92 75 +17Quality of math and science education 104 89 +15Availability of specialized training services 101 94 +7Total Tax Rate, % Profits 56 50 +6No. of Procedures to Start a Business 118 116 +2No. of Days to start a Business 96 94 +2Agricultural Policy Costs 109 103 +6


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52015/16

Trade Tariffs, % Duty 140 137 +3Imports as a Percentage of GDP 134 132 +2Buyer Sophistication 80 78 +2Hiring and Firing Practices 49 48 +1Redundancy Costs, weeks of Salary 118 115 +3Country capacity to retain talent 87 70 +17Country capacity to attract talent 110 96 +14Women in labor force, ratio to men 140 136 +4Availability of Financial Services 82 80 +2


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52015/16

Affordability of Financial Services 84 83 +1Venture Capital Availability 92 78 +14Availability of Latest Technologies 85 79 +6Firm Level Technology Absorption 83 82 +1FDI and Technology Transfer 90 77 +13Individuals using Internet, % 122 119 +3Fixed Broadband Subscription 113 107 +6Mobile Broadband Subscription 127 125 +2Domestic Market Size Index 25 23 +2


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Areas where Pakistan has shown improvements Indices 2014/1

52015/16

Foreign Market Size Index 63 55 +8Exports as a % of GDP 141 137 +4Local Supplier Quantity 66 53 +13Control of International distribution 88 62 +26Production Process Sophistication 87 86 +1Company Spending on R&D 93 88 +5Government Procurement of Advanced tech products

98 52 +46Availability of Scientists & Engineers 49 44 +5PCT Patents, applications/millions 114 109 +5


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Indices 2014/15

2015/16

Judicial Independence 67 82 -5Efficiency of legal framework in settling disputes

101 108 -7Efficacy of legal framework in challenging regulations

89 101 -12Transparency of Government Policymaking 118 125 -7Strength Of Auditing and Reporting Standards 90 117 -27Efficacy of corporate boards 119 121 -3Protection of Minority shareholders Interests 79 112 -33Quality of Roads 75 77 -2Quality of Port Infrastructure 59 66 -7

Areas where Pakistan has shown deterioration


21

Indices 2014/15

2015/16

Inflation, annual % Change 120 127 -7Tuberculosis cases/100,000 pop 123 125 -2Primary education enrollment, net % 132 134 -2Quality of Management Schools 67 70 -3Internet Access in Schools 89 103 -14Intensity of Local Competition 84 98 -14Extent of Market Dominance 71 110 -39Effectiveness of Anti-monopoly Policy 85 106 -21Effect of Taxation on incentives to Invest 64 66 -2



22

Indices 2014/15

2015/16

Prevalence of Trade Barriers 94 114 -20Fixed Telephone Lines/100 pop 111 112 -1Business Impact of rules on FDI 75 111 -36Burden of customs procedures 87 111 -24Degree of customer orientation 98 106 -8Cooperation in Labor employment relations 107 131 -24Flexibility of Wage Determination 103 114 -11Effect of Taxation on Incentive to Work 82 84 -2Pay & Productivity 86 95 -9



23

Indices 2014/15

2015/16

Prevalence of Foreign Ownership 114 116 -2Reliance on Professional Management 87 122 -35Financing through local Equity Market 61 69 -8Soundness of Banks 71 99 -14Regulation of Securities Exchanges 51 93 -42Legal Rights Index (0-10) best 63 93 -30Int’l internet bandwidth, Kb/s per user 110 115 -5Local Supplier Quality 94 98 -4State of Cluster Development 58 68 -10



24

Indices 2014/15

2015/16

Nature of Competitive Advantage 93 99 -6Extent of Marketing 74 100 -26Capacity for Innovation 51 95 -44Quality of Scientific Research Institutions 94 104 -10



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Indices 2014/15

2015/16

Business costs of terrorism 139 139 -Available airline seat km/week 48 48 -Mobile Telephone Subscriptions/100 pop. 124 124 -HIV prevalence % adult pop. 1 1 -Tertiary education enrollment, gross % 115 115 -Extent of staff training 122 122 -Ease of access to loan 90 90 -GDP (PPP$ billions) 26 26 -Value chain breadth 64 64 -Willingness to delegate authority 115 115 -University-industry collaboration in R&D 98 98 -

Areas where Pakistan has maintained its position


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Global Rankings of Various Institutions

Institutions 2012-13 2014-15 2015-16Intellectual Property Organization 106 117 112Judicial Independence 57 67 82Police Services 127 127 128AGPR 86 90 117NHA 73 75 77Railways 66 72 60CAA 78 92 79NEPRA 126 133 129HEC 125 115 115NAVTEC 102 101 94CCP 71 85 106Customs 93 87 111SBP 85 71 99SECP 55 51 93TDAP X 141 137NAB 139 126 117

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Goal should be to Involve Public Private Partnerships and Act as a catalyst to:

Public-Private Partnership is the only way to improve Pakistan’s Competitiveness

Improve Competitiveness

Increase Productivity

Enhance prosperity


The Way Forward – Steps to be Taken to Improve Competitiveness

• National Competitiveness Council• The Annual State of Competitiveness Report• Institutional Effort to Update the Data

• Regional Competitiveness Councils• Provincial Competitiveness Reports

• Industry Academia Linkages• Get Out of “The Narrative Trap”

• Narrative Building Strategy • Inward Looking• Outward Looking

The Narrative Trap

• Pakistan Made Improvements on number of indices 63

• Pakistan Deteriorated on number of indices

40

• Pakistan Retained its Position

11

TOTAL

114

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Backup Slides

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Improvements 2014-15 2015-16• Property Rights 121118 • Intellectual Property Protection 117112 • Diversion of Public Funds 94 85

• Public Trust in Politicians 108 99

• Irregular payment and Bribes 123 116• Favouritism in decisions of Government Officials 101 75• Wastefulness of Government Spending 103 102• Burden of Government Regulation 103 86• Business Costs of Crime and Violence 132 130 • Organized Crime 137 132 • Reliability of Police Services 127 126 • Ethical Behaviour of Firms 111 98• Strength of Investor Protection 34 21 • Business Costs of Terrorism 139139

Weakening• Judicial Independence 67 82 • Efficiency of Legal Framework in settling disputes 101 108 • Efficiency of Legal Framework in Challenging regs 89 101• Transparency of Government Policy Making 118 125 • Strength of Auditing and Reporting Standards 90 117 • Efficacy of Corporate Brands 119 121 • Protection of Minority Shareholders Interests 79 112

Pillar 1 Institutions

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Improvements 2014/15 2015/16

• Quality of overall infrastructure 113 98• Quality of railroad Infrastructure 72 60• Quality of Air transport Structure 92 79• Quality of Electricity Supply 133 129• Available Airline Seat Km/week, million 48 48• Mobile Telephone Subscriptions/100 pop 124 124

Weakening• Quality of roads 75 77 • Quality of port infrastructure 59 66• Fixed Telephone lines/100 pop* 111112

Pillar 2 Infrastructure

33

Improvements 2012 2013

• Government budget balance, % GDP 134 106• Gross National Savings, % GDP 120 115• General Government Debt, % GDP 106 101• Country Credit Rating 0-100 pop* 121 115

Weakening

• Inflation, annual % change 120 127

Pillar 3 Macroeconomic environment

34


• Malaria Cases 47 46• Business Impact of Malaria 50 49• Business Impact of Tuberculosis 108 104• Business Impact of HIV/AIDS 97 94• Infant mortality, deaths/1,000 live births 137 134• Live Expectancy Years 109 106• Quality of primary education 119 112• HIV Prevalence, % adult pop 1 1

Weakening• Tuberculosis Cases/100,000 pop* 123 125• Primary Education enrollment, net % 132 134

Pillar 4 Health and Primary Education

35


• Secondary education enrollment 131 129• Quality of educational system 92 75• Quality of math and science education 104 89• Availability of research & Training Services 101 94• Tertiary Education Enrollment 115 115• Extent of Staff Training 122 122

Weakening

• Internet Access in Schools 89 103• Quality of management schools 67 70

Pillar 5 Higher Education and Training

36


• No. of procedures required to start a business 118 116• No. of days to start a business 96 94• Agricultural policy costs 109 103• Trade tariff, % duty 140 137• Imports as a percentage of GDP 134 132• Buyer sophistication 80 78• Total Tax Rate, % Profits 58 50

Weakening

• Prevalence of Trade Barriers 65 106• Prevalence of Foreign Ownership 114 116• Business Impact of Rules on FDI 75 111• Burden of Customs Procedures 87 111• Degree of Customer Orientation 98 106• Intensity of Local Competition 84 98• Extent of Market Dominance 71 110• Effectiveness of Anti Monopoly Policy 85 106• Effect of Taxation on Incentive to Invest 64 66

Pillar 6 Goods Market Efficiency

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• Redundancy costs, weeks of salary 118 115• Hiring and firing practices 49 48

• Country capacity to retain Talent 87 70• Country capacity to attract Talent 110 96• Women in labor force, ratio to men* 140 136

Weakening

• Cooperation in labor employment relations 107 131• Flexibility of Wage Determination 103 114• Effect of Taxation on Incentives to Work 82 84• Pay and productivity 86 95• Reliance on Professional Management 87 122

Pillar 7 Labor Market Efficiency

38


• Availability of financial services 82 80• Affordability of financial services 84 83• Venture Capital Availability 92 78• Ease of access to Loans 90 90

Weakening

• Financing through local Equity Market 61 69• Soundness of Banks 71 99• Regulation of securities exchanges 51 93• Legal rights index 63 93

Pillar 8 Financial Market Development

39

2014/15 2015/16

Improvements

• Availability of latest technologies 85 79• Firm Level Technology Absorption 83 82• FDI and Technology Transfer 90 77• Individual using Internet 122 119• Broadband Internet subscription/100 pop 113 107• Mobile Broadband subscriptions/100 pop 127 125

Weakening

• International bandwidth, kb/s per user 110 115

Pillar 9 Technological Readiness

40


• Domestic market size index 25 23• Foreign market size index 141 137• GDP ( PPP$ Billions) 26 26

Weakening

• Foreign Market Size 63 55

Pillar 10 Market Size

41


• Local supplier quantity 66 63• Control of international distribution 88 62• Production process sophistication 87 86• State of Cluster Development 68 68• Value Chain Breadth 64 64• Willingness to delegate Authority 115 115

Weakening

• Local supplier quality 94 98• Nature of competitive advantage 93 99• Extent of marketing 74 100

Pillar 11 Business Sophistication

42


• Company Spending on R&D 93 88• Govt. Procurement of Advanced Tech Products 98 62• Availability of Scientists and Engineers 49 44• PCT patents, application/million pop 114 109• University Industry Collaboration in R&D 98 98

Weakening

• Capacity for Innovation 61 95• Quality of Scientific Research Institutions 94 104

Pillar 12 Innovation

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India is better than Pakistan in? Pakistan India

Intellectual Property Organization 118 103Diversion of Public Funds 112 50Public trust in Politicians 99 31Irregular Payment and Bribes 118 63Favoritism in decisions of government officials 75 32Wastefulness of government spending 102 51Burden of government regulation 88 27Transparency of government policymaking 125 58Business costs of terrorism 139 126Business costs of crime and violence 130 98Ethical behavior of firms 98 44Strength of auditing and reporting standard 117 95Efficacy of corporate boards 121 96Protection of minority shareholders’ interests 112 69Strength of investor protection, 0–10 (best)* 6 21

India outperformed Pakistan on GCI

Global Competitiveness Report (GCR) 2014/15-16

44


Gross national savings, % GDP* 115 23Country credit rating, 0–100 (best)* 115 50Malaria cases/100,000 pop.* 48 44Tuberculosis cases/100,000 pop.* 125 113Extent of staff training 122 48 Effectiveness of anti-monopoly policy 106 41Effect of taxation on incentives to invest 66 38Agricultural policy costs. 103 53Prevalence of non-tariff barriers 106 82Business impact of rules on FDI 111 92Burden of customs procedures 111 54Cooperation in labor-employer relations 131 86Reliance on professional management 122 86Ease of access to loans 90 29Venture capital availability 78 12



45


Regulation of securities exchanges 69 93State of Cluster Development 68 29Willingness to delegate authority 115 56Quality of scientific research institutions 104 45University-industry collaboration in R&D 98 50



46

Pakistan is better than India in? Pakistan India

Fixed-telephone lines/100 pop.* 112 116Government budget balance, % GDP* 106 131General government debt, % GDP* 101 103Business impact of malaria 49 60Business impact of tuberculosis 104 132HIV prevalence, % adult pop.* 1 63Business impact of HIV/AIDS 94 130Intensity of local competition 98 101Total tax rate, % profits* 50 123No. procedures to start a business* 116 129No. days to start a business* 94 110Flexibility of wage determination 114 120Availability of financial services 80 81Soundness of banks 99 100

Pakistan outperformed India on GCI


47

Pakistan is better than India in? Pakistan India

Availability of latest technologies 79 108Firm-level technology absorption 82 102FDI and technology transfer 77 95 Int’l Internet bandwidth, kb/s per user* 115 116Local supplier quantity 53 54 Availability of scientists and engineer 44 49


Pakistan outperformed India on GCI

48

Thank you!

pakistan’s performance on the global competitiveness index 2015-2016 of the world economic forum

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