The Seventh Wave - Pakistan’s Chance to Achieve Escape Velocity

behram writes <<< Ignoring some of the rubbishes around here, we can definitely continue in evaluating what Pakistan can do to enhance its drive for modernization and ``taraqui.``

I recently read that US spends about 0.5% of its GDP on R&D. I have no idea, what percentage of GDP does Pakistan spend on it`s R&D >>>

The only ``rubbishes`` around here to quote his word, is his post. The country has vast numbers of the population living below the poverty level, the illiteracy rate is sky high and he is talking about R&D. That is what these people want, they want our economies to be geared to serving the West as coolies and peons, talking about R&D and other nonsense when the foundation itself is dying. When someone talks about strengthening that foundation, removing yourself from the muck the developed world has enslaved you in, they talk about how best to secure the crumb the master throws from his table and carve out a niche among the other slaves that are eyeing that same crumb. Go ahead erase this post as well

Ok, let me rephrase my post # 45 since the word ``mirasi`` is too much for the chowk editors to handle and so they erase my post. Tahmed had labelled me a ``Stalinist`` for seeking protectionism for infant industries in the developing world. So using his logic I had said:

As if Oxfam is a Stalinist organization and the US and the Europeans were ``Stalanists`` when they used maximum protection to protect their industry and as if they are being Stalanist today when they use all their clout to maintain their monopoly industrial standing to the exclusion of the rest of the world. So if the West is Stalanist by your definition, as we have logically deduced then you as its poster child are the biggest Stalinist among the Pakistani crowd here. Now can I rest my case or do you want to call in the (M word censored, refer to line 1) to reply to this?

Now what was so abusive in this that the whole post had to be deleted? Chowk editors, I know you dont like my pov, you block my articles etc, just let me know that you don`t want me posting here and I can find better things to do with my time.

coming back to the article, why can qualified pakistani engineers not work in neighbouring India.They can both contribute and benefit. To imagine that a duplicate fab city can be created in Pakistan is stretching things...

And for the non believers, Ahmad Salman Alvi of Karachi graduated from IIT Delhi in 1983 aftger completing a five year course in engineering. He was a popular student. So many other Pakistani students & others find India a comfortable place to study, work & live..

Let not the chest thumpers daunt you...

#38 urstruly:

If the experience of nationalization has failed (which is still debatable) then it does not mean that we should abolish a government`s policy making role as well.

I agree. And what I wrote did not refer to government policy making. In fact, the government`s regulatory role in Pakistan is weak and needs to be strengthened. You cannot build an extension to a house in the US without getting two or three visits by a government inspector. You cannot operate a restaurant without regular inspections and loss of license if even they see a cockroach in the kitchen. You can complain to the local government if you have been gypped by a merchant and have them intervene on your behalf. In Pakistan, you can build a 15 storey building without proper inspection (as obviously happened to the building in murree that collapsed a couple of days back). And the concept of government intervention to help an average customer out is unheard of.

AND in fact nationalization weakens the goverments policy, and does not strengthen it. this is because of the checks and balances inherent in separation of government from economic activity are lost.


You write I am suggesting that for the country of the size of Pakistan local market forces must dictate the kind of industry that need to be established.

I would agree with you if you took the ``Local`` out and said ``market forces``. By keeping out foriegn investors (as you suggest), the government is interfering in market. And thus setting the stage for all the ills that go with it. Foreign investors should be welcomed and not feared. Reason:

1. Local entrepreneurs have an edge in any case with respect to the local market. Thus, foreign investors generally seek out local partners to work with either through franchises (like in fast foods) or some other forms. You dont need a joint secretary to issue a license for this purpose (with all the ills that go with public officials having control over economic activitiy by exerting his nuisance value).

2. Local entrepreneurs cannot take local customers for granted. They are forced to become more efficient.

In the US, individual states compete with one another to attract foreign investors. Recently, Toyota became the second largest auto seller in the US, pushing Ford to number three and forcing the latter to shut down some facilities. No one in the US batted an eyelid. And what is true for the US in fact applies even more to Pakistan.

I have to go now, and may not have done justice to your post. So I may come back with additional comments on the rest of what you wrote later.

Re: # 43 by Charlie on September 5, 2006 1:29pm PT

Dear Charlie:

Ignoring some of the rubbishes around here, we can definitely continue in evaluating what Pakistan can do to enhance its drive for modernization and ``taraqui.``

I recently read that US spends about 0.5% of its GDP on R&D. I have no idea, what percentage of GDP does Pakistan spend on it`s R&D. Do you? Could Pakistan, as a society afford spending 0.5% of its GDP (around $100B) on R&D? I doubt that paindoos in Islamabad would want to do such a thing.

Respectfully submitted,

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Just as a sidenote to the use of word ``seth`` in this article.Not everyone is a Paan chewing Gujrati or Marwadi ``kem chho`` bhaaya.Some of the ``seths`` i`ve seen working are extremely crafty, patient and professional dudes.But then the variety among humans is as much varied and you cannot form opinions on one or two bad examples.

Re: # 40

May be, I was not that much clear in explaining relationship between industry and academia... (My example was very rough.)

Being more precise, university and industry should go side by side. If Industry is complaining about universities not doing enough, it is infact pointing to its own weakness.

Industry should have good terms with universities and guide them to generate professionals according to their needs. Smart software houses often have good contacts with faculty members and pick up good graduates as soon as they come out of university or even start their final year projects.
On the other hand, Fan makers in Gujranwala are always complaining that they have unresolved issues or they are not having any change in their state since last 30 years. Reason is simple... If you are smart industrialists, you keep your influence in the university and provide constant feedback to the academia guys. If you are not, then you complain...

The attitude of landlords in multan, as mentioned by tahmed, is attitude of so many people among us. This attitude is reinforced, when we don`t see so many positive examples around us... Some exceptional people set examples, rest of them follow them and then it becomes a culture...

Behram

I wouldn`t have written any of my posts had they not been relative to this article and on going discussion. Please do disgaree all you want or ignore (even better) but do not portray something that is not.

#39 by Urstruly on September 5, 2006 11:32am PT

Dear Urstruly:

Please allow me to respond to your posts #38 and #39.

For the most part both of these posts are somewhat valid. However, as we say in our engineering consulting business, some aspects of your thoughts are beyond the scope of this discussion. And I will try to elucidate you on this.

Most of my posts are almost inline with your thoughts:

{Now please tell me why would local indigenous government invest in a particular field of higher education e.g. Electronics when they cannot even predict where this filed would be in the next five years. }

Agreed, and educating the local engineering community is not part of this discussion, although Charlie (ref. post #40) has answered this particular question quite eloquently.

{The …..Because of the lack of any labor laws and regulating authorities every member of male workforce want to immigrate to Canada.} Valid point and agreed for the most part, however, engineers migration to other countries is beyond the scope of this discussion.

Unless we can propose a new agreement to those who get government financing, such as that they may not leave the country until they repay the cost of government financed education, etc.. Again, all of this discussion is not what this article is all about.

{….this vicious circle starts because local governments do not take interest in the development of human capital and the reason they do not do that is because they can`t predict…}

Agreed. Why in the world should the engineering community be held responsible for what these politicians do?

In your response to tahmed32, post # 35: you noted

{I am suggesting that for the country of the size of Pakistan local market forces must dictate the kind of industry that need to be established.}

Agreed, and all my posts on this site is about this thought. Pakistan is not ready for a semiconductor FAB, but can definitely venture out in the design houses, as the article suggests.

{For example, Pakistan is a hot and humid country, and it always has been, but an indegenous airconditioner industry did not evolve until very late in `80s. Was Pakistan not hot before `80s or were there not many a/cs being sold?}

Agreed, that Pakistan should develop an a/c manufacturing industry. All it needs some sheet metal and a bunch of fans. You have stated what I have always wanted. As you must be knowing, India has started exporting heavy machinery to the US and is competing with Caterpillar. Why can Pakistan not do the same?

{Therefore, I am for a very aggressive government role in policy making in conjunction with local Chambers of Commerce and Manufacturer Associations.}

And that is why in one of my earlier posts, I am all for public/private partnership. But, I would be very skeptical to invite those who are not without rational minds to be involved in an engineering society. Wouldn’t you agree?

{See, the problem in West is different from us….ess. If the recent wave of global terrorism, and emergence of leftist governments in various parts of the world is not the signs of global sedition against this atrocity then what is?}

This fight that you are referring to is about natural resources such as oil, and minerals, etc. and not about human knowledge. And that is the distinction, at least, I have been trying to make.

Respectfully submitted,

I personally liked the posts of Behram, tahmed and aslam... Quite a positive approach...

Re: # 29

Dear Behram,



Here are again some comments about your post.

>> do agree with only the design house concept, but for that to materialize we need extensive educated workers in the electrical engineering profession.


Right... I agree... But I don`t think that it is very difficult to do... For fresh engineers to work in design houses, they need to know a little basics of digital design, hardware architecture, modeling in hardware, coding in C/Assembly etc.. Which they already do at universities in Pakistan.
For a little better start, they need to know embedded operating systems, ASIC/FPGA designs, System level design and understanding the design flow... It can be covered in a couple of new courses. So, I don`t think that at courses level, we might have some probelm generating good people. (Because of my background in Academia, I have a lot of friends currently teaching /planning to teach in Pakistani universities. And If I suppose that if I wanted to start a design house, it will be the least important thing for me to worry about the courses as I could easily ask them to teach whatever I needed. Or I can even deliver lectures once a week in my university to attract the most talented engineers to work in my design house.)

Yes, if we are talking in terms of numbers of engineers because of the opinion that the number of good engineers is the bottleneck for the number of design houses in the country, then we probably need to open a few more universities related to engineering which they are already opening... (Quality of engineers will have to be compromised in that scenario however.)



>>Days of just being cheaper are over. Dell is bringing its call centers back to the US, because there is a huge cultural disparity. Pakistan has to contend with political image crisis that can only be removed if they hire political lobbyist in the US, in Capitols of every major US States. Commerce is a state issue, where multinationals usually resides. It seems that paindoos in Islamabad have yet to realize that.

Perfectly agree...


>>On your point #3, I disagree to the extent that lying and deceiving should not run a society. This is of course more of the government policy issue, which could hurt the already tarnished Pakistani image.

Right... I agree..
We will discussPakistan`s image someother day whch I think is not a big reason for lack of investment...

>>On your point #4, you are banking too much on those who have money and who are unscrupulous. I would never allow those who have money to run the show, when it comes to high level knowledge based industry, like design houses. Yes, they can be investors, just like any venture capitalists are. Personally, I believe that those in Pakistan who have money are not much better than the government.


Yes, I was talking in terms of Seths taking the roles of investors and venture capitalists... It is the duty of educated Pakistanis to educates seths and show them that more profitable ways of earning exist in the world.

Even if Seths don`t understand, Venture Capital companies are already opening up in Pakistan and venture capital companies from west can prove to be even more helpful.

We really don`t needs Seths to make things working if they find our proposals bad.


It is always interesting to discuss the things with someone who understands what you are talking about. It rarely happens on chowk and never happens on other sites... :)

Now I can see some people trying to play the roles which are ``bigger than themselves``. Only way for them to become developed is to bulldoze capitalism and make a new ``ism`` to be successful... Isn`t it a difficult way to reach to a relatively easier target?

Behram

Please read this paragraph from the article:`` Instead of rushing in we first need to comprehend the complete cycle of this industry and then try to see and analyze the areas that can be easily accommodated into our current Industrial stream and business psyche.. ....``

In this paragraph writer says that `` Design houses don’t require too much of an investment in terms of capital expenditure but does require a lot of rich human expertise and Intellectual capital and since both these quantities are in extremely short supply, the chances of a large scale proliferation of Semiconductor design houses or Fabless companies as they are more commonly known is unlikely, since top level knowledge and human capital is not our forte, nonetheless there are a few top notch design houses functioning in the ever green and serene environs of Islamabad, mostly operated by a handful bunch of sincere US based Pakistanis for whom giving something back in return means more than just handing out charity.``

Now please explain to me where and how would we produce ``rich human expertise and Intellectual capital`` unless someone invests in the education system of the country. The multinational corporations will not invest in education is theird world countries for two reasons:

1. They want to keep the knowledgebase to themselves (I have no problem with that).

2. They plan on moving to next cheapest country of production (production is a comprehensive term) just as the opportunity strikes, so why invest in local population. ( I have problem with that).

Now please tell me why would local indegenous government invest in a particular field of higher education e.g Electronics when they cannot even pridct where this filed would be in the next five years.

The horrible effects of this trend is showing in the Pakistani education sector, where now 75% of the post graduate students are females. Out of these 75% hardly 5% join the workforce, rest get busy in increasing the population. The half of 25% male students graduate from universities like Jamshoro and NED and they cannot even compose a letter in English. Because of the lack of any labor laws and regulating authrities every memeber of male workforce want to immigrate to Canada.

So the lesson is that had we strengthened our indigenous industries, improved labor laws, and standardized manufacturing this talent would have not gone to waste. And this takes us back to square one i.e. this vicious circle starts because local governments do not take interest in the development of human capital and the reason they do not do that is because they can`t predict.

Re: # 35

There is a difference between nationalization and policy making role of the governments. If the experience of nationalization has failed (which is still debatable) then it does not mean that we should abolish a government`s policy making role as well. These are two different animals.

If you read my post again I am suggesting that for the country of the size of Pakistan local market forces must dictate the kind of industry that need to be established. For example, Pakistan is a hot and humid country, and it always has been, but an indegenous airconditioner industry did not evolve until very late in `80s. Was Pakistan not hot before `80s or were there not many a/cs being sold? No, in fact, the demand was already there but anti-Pakistan government policies were not conducive to establish a local industry. Similarly, Pakistan produces best and world class textile products along with textile products that were affordable by the lowest echelon of the society. The local market forces were dictating the price, henece, making it affordable. The competiont was cut throat and there was no question of monopoly. Hundereds of thousands of families were connected to textile business at all level. It was a self sustaining economic engine untill government policies allowed inferior textile products, especially from India, to be dumped in local market. The people were told that they will get even cheaper product but opposite has happened. Even with this mindless dumping people cannot buy clothing anymore because they (more and more textile related workers) are out of work and hence lost buying power.

Therefore, I am for a very aggressive government role in policy making in conjunction with local Chambers of Commerce and Manufacturer Associations. The only way a foreign product could be allowed in the country is when its manufacturer establishes a manufacturing facility in this country and preferably in collaboration with a local manufacturer.

See, the problem in West is different from us. Almost all Western countries have a negetive population growth rate. They do not have enough human resources to make their industrial engine work. It is their compulsion to take the manufacturing elsewhere, but the challenge for them is to always stay on top as well. Therefore, they want weaker labor laws, environmental laws and minimal govermnet interference on part of third world countries. So that they can get their products made cheaper. They sugarcoat this attrocity with words like ``free trade``. This vile plan of theirs, which they enforce through WTO dictats is going to make third world a dump of misery and lawlessness. If the recent wave of global terrorism, and emergence of leftist governments in various parts of the world is not the signs of global sedition against this attrocity then what is?

Re: # 33 by tahmed32 on September 5, 2006 10:00am PT

Dear Tahmed32:

Just a difference of opinion as regards to Pakistani engineers and their design houses. Why in the world should I promote my country`s best engineers at the cheapest price? If Pakistan can produce the best engineers, then their price is irrelevant, is it not?

In this global economy, the efficiency is already being built in, that the technical world needs the best brains, and not the cheapest brains. And that is where Pakistanis are.

Respectfully submitted,

Dear Urstruly:

This article is not about International Trade or mercantile trade. Free trade is a concept for transfer of raw materials and resources. This article is about knowledge and nobody is suggesting the transferring knowledge based inside Pakistan to outside Pakistan. On the contrary, the transfer of knowledge that is talked about in the article is about knowledge transfer from outside Pakistan to inside Pakistan.

{I would agree with Masadis thesis.} I am sorry but Masadi has no thesis, except for using weapons of mass deflection from the subject matter.

{It is common sense that, …Free trade is a death sentence for indigenous industry in the third world. } Agreed, and none of my post on this subject would suggest otherwise.

{I do not want to use heavy jargon of economics and trade, but this common sense observation must be obvious to all.} You must start appreciating the nuances of the modern world of complex trade theories, etc. to become some sort of commentator, don’t you think?

{The West still has the hold on manufacturing and engineering but they need cheap labor along with cheap raw material.}

This is true and so yester year’s thought, and not an issue with this article, to say the least. We are discussing knowledge, which needs to be developed inside Pakistan, and selling of this knowledge to the Pakistani design houses.

{Only a third world country can provide both.} Design houses should not and does not provide the cheapest labor. At the least, I hope not.

{All the manpower associated with production….costs by using crude work ethics and draconian labor laws (or no laws at all) to meet the competition. In that case domestic market forces become even more irrelevant and people are left without any buying power.} Agreed for the most part, but what has this got to do by building a knowledge based society of engineers, eh!

{It is a vicious circle which brings on lawlessness, anarchy, and death; as this circle has started to rotate in Pakistan. } Urstruly, where are you going with your thoughts?

{For the country of the size of Pakistan free trade is a death warrant; it must be avoided like a plague.} Yes, and nobody is suggesting that. Who in their right mind has suggested that?

For several months, you have read my posts on the subject matter, and have you ever found me suggesting the notion that Pakistan should be out in the forefront of free trade? But, free trade is only an issue with mercantilists in mind.

Do you consider that knowledge based transaction can be construed as free trade?

Respectfully submitted,

Urstruly: You get the Second Prize (after Masadi) for being the Last Stalinist on Earth. :-)

You write It is the role of governments and policy makers to protect these industries from external forces.

All the ``intellectuals`` were saying this until about 30 years ago. Now, they have changed their tune - based on experience that ``infant industries`` refuse to grow up; based on the experience with ``naukar shahi``, as was evident when Bhutto killed the nascent Pakistani banking system by nationalizing it - and overnight, bank employees changed their attitude from one of customer service to one of ``naukar shahi`` where they took your bank deposit as a favor to you (after they had their cup of tea, like good public servants). The indian economy was stuck at 4% growth rate as long as they followed your recipe - and took off only when IT came in and public servants didnt know how to get their arms around this type of an industry. The entire Soviet Union collapsed after 70 years of misleading themselves and the entire developing world with talk of the evils of capitalism.