Pakistan slips on the Global Competitiveness Ranking to 133 in 2013-14

Pakistan fails to address its security challenges and business risks - slipping competitiveness ranking to 133.

Institutions and innovation increasingly important for competitiveness

Excellent innovation and strong institutional environments are increasingly influencing economies’ competitiveness, according to The Global Competitiveness Report 2013-2014.

“Innovation becomes even more critical in terms of an economy’s ability to foster future prosperity,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum. “I predict that the traditional distinction between countries being ‘developed’ or ‘less developed’ will gradually disappear and we will instead refer to them much more in terms of being ‘innovation rich’ vs. ‘innovation poor’ countries. It is therefore vital that leaders from business, government and civil society work collaboratively to create education systems and enable environments which foster innovation.”

Amir Jahangir, Chief Executive Officer of Mishal Pakistan, a partner institute of the WEF, in his findings said that “Pakistan needs to focus on competitiveness or the economy can slide into a dangerous downward spiral. The road to economic recovery will be difficult if Pakistan fails to address its security challenges and business risks.”

Pakistan has slipped down to 133 rank among 148 countries on the Global Competitiveness Index of the World Economic Forum, announced in the Global Competitiveness Report 2013-14. Pakistan was ranked at 124 in 2012-13 and 118 in 2011-12.

The gradual slipping of Pakistan’s rank shows weakening of its institutions and capacity of the economy to create space for innovation. The areas of public and private partnerships for cooperation for improving competitiveness are also diminishing as well. This indicates increasing mistrust between the public and the private sector due to increase corruption and policy instability issues.

The report has included the views of more than 14000 business leaders globally to measure the competitiveness of 148 countries. More than 200 business leaders in Pakistan, identified corruption as the most problematic factor for doing business, followed by policy instability, access to financing, inadequate supply of infrastructure, inefficient government bureaucracy and high inflation as some of the areas identified in the GCR.

Pakistan has lost on almost all indicators of the Global Competitiveness Index (GCI); an in-depth analysis on each pillar has been discussed below:

1^st Pillar: Institutions

The Global Competitiveness Report 2013-14 shows that, Pakistan has shown poor performance on governments’ use of diversion of public funds from 76 in 2012 to 103 in 2013. It further states that the wastefulness in government spending has also increased and the rankings have dropped from 96 last year’s to 116 this year. Similarly the burden of government regulation has also deteriorated from 62 to 82 in 2012 and 2013 respectively. The efficiency of legal framework in challenging regulations, which means, how easy is it for private businesses to challenge government actions and/or regulations through the legal system has fallen 11 points since last year and ranks at 108 this year. This depicts a SRO culture has been prevalent in the country for economic decision making instead of legislations through legal frameworks.

The businesses in Pakistan has also shown reluctance in improving the efficacy of corporate boards by fallen to 123 in 2013 from 111 in 2012. However the regulator on the securities market has shown improvements in terms of and protection of minority shareholders’ interest from 83 in 2012 to 73 this year. Pakistan has maintained its competitiveness advantage in the region by securing the rank at 31 this year.

The biggest impact on the pillar of institutions has been due to law and order and Pakistan’s fight in the war on terror, where Pakistan ranks among the least 10 in the world; business cost of terrorism 144, business cost of crime and violence 138 and organized crime 141 among 148 countries globally. Pakistan has shown improvements on judicial independence, improving from 57 to 55.

2^nd Pillar: Infrastructure

The overall infrastructure in the country has deteriorated from last year, where Pakistan stands at 119 as compared to 105 last year among 148 countries. Quality of air transport (88) lost 10 points this year, however the scheduled available airline seat kilometers per week originating in country is where Pakistan has a competitiveness advantage securing 46 out of 148 countries, this depicts the governments policy to open airspace to airlines however poor performance at the part of the Civil Aviation Authority in Pakistan.

3^rd Pillar: Macroeconomic Environment

Government’s budget balance % of GDP has fallen to an alarming 138 place as compared to 125 last year; similarly the gross national savings has also dropped to 125 from 107 in 2013 and 2012 respectively.

4^th Pillar: Health and Primary Education  

Although Pakistan has lost five points on the Health and Primary Education pillar from 117 in 2012 to 128 in 2013, the country has been successful in improving its ranking on business impact of tuberculosis 120 to 114, business impact of HIV/AIDS 106 to 97 and HIV prevalence as percentage of population 12 to 11 in 2012 to 2013 respectively.

5^th Pillar Higher Education and Training

Pakistan showed improvements on the tertiary education enrolment indicator, where it moved to 121 this year from 125 in the last year. While the quality of Math and Science education dropped to an alarming 104 in 2013 from 88 in 2012, the extent of staff training has gone from bad to worst this year by securing the rank of 128.

6^th Pillar: Good Market Efficiency

On goods market efficiency pillar, the extent of market dominance has lost 12 points from 65 to 77, the effectiveness of the anti-monopoly policy has decreased from 75 to 85 and the effect of taxation on incentives to investment from 72 to 82 in this year.

The buyer sophistication has also declined from 78 to 88 in 2013, indicating a more price conscious business environment instead of quality, thus creating more space for imports from other countries for large consumptions.

The intensity of local competition has improved ranking from 85 to 79 this year, in addition to improving prevalence of trade barriers from 114 from 92 this year. However the country was successful to improve the extent of rules and regulations to encourage or discourage foreign direct investments, thus improving the business impact of rules on FDI and securing the 75 rank this year as compared to 96 last year.

7^th Pillar: Labor Market Efficiency

Labor Market Efficiency pillar has shown insights into the human resource face of the economy, the cooperation in labor-employer relations have worsened in the last one year from 90 to 105, similarly, the hiring and firing practices have slipped down from 21 to 35 this year, although keeping a competitiveness advantage in the region. The pay and productivity indicator has also fallen from 73 in 2012 to 86 in 2013.  Pakistan is also among the worst countries to include women in its workforce, ranked at 144 among the 148 countries.

8^th Pillar: Financial Market Development

Both the financial market regulators have shown great improvements, while the incumbent regulator of the securities market, the Securities and Exchange Commission of Pakistan has shown significant improvements this year, improving seven points and securing the rank of 48 on the regulations of securities exchanges from 55 last year; the State Bank of Pakistan has also shown solid improvements in the soundness of the banking sector in the country. Improving to 71 this year to 85 in the last year. However this gain has not able to improve the constantly declining the state of venture capital in Pakistan, slipping down to 77.

9^th Pillar: Technological Readiness  

Pakistan has shown significance gains on the technical readiness pillar, with the availability of latest technologies (79), firm-level technology absorption (81). Improvements in the international Internet bandwidth has been a catalyst for businesses to move towards a more knowledge-based economy, with ranks gaining from 108 last year to 101 this year. While the mobile broadband subscriptions per 100 population has fallen from 121 to 126.

10^th Pillar: Market Size

Pakistan is maintaining its regional competitiveness advantage on the domestic market size index at 27

11^th Pillar: Business Sophistication

The businesses have shown restrain on delegation of authority, shown corporate insecurity from large investors to professional managements, especially in the family owned businesses, the rank fell from 94 in 2012 to 122 in 2013.

12^th Pillar: Innovation

Pakistan has shown improvements on capacity for innovation by improving 11 points and securing regional competitiveness advantage at 49. While the quality of scientific research institutions 75 and company spending on research and development 75 have been on the loss. The university-industry collaboration for research and development has been declined from 81 to 98, making industry depend on replicating instead of creating new products and services. 

The report’s Global Competitiveness Index (GCI) places Switzerland at the top of the ranking for the fifth year running. Singapore and Finland remain in second and third positions respectively. Germany moves up two places (4th) and the United States reverses a four-year downward trend, climbing two places to fifth. Hong Kong SAR (7th) and Japan (9th) also close the gap on the most competitive economies, while Sweden (6th), the Netherlands (8th) and the United Kingdom (10th) fall. 

The United States continues to be a world leader in bringing innovative products and services to market. Its rise in the ranking is down to a perceived improvement in the country’s financial market as well as greater confidence in its public institutions. However, serious concerns persist over its macroeconomic stability, which ranks 117 out of 148 economies.

Among the Asian economies, Indonesia jumps to 38th, making it the most improved of the G20 economies since 2006, while Korea (25th) falls by six places.  Behind Singapore, Hong Kong SAR, Japan and Taiwan (China) (12th) all remain in the top 20. Developing Asian nations display very mixed performances and trends: Malaysia places 24th while countries such as Nepal (117th), Pakistan (133rd) and Timor-Leste (138th) are near the bottom of the ranking. Bhutan (109th), Lao PDR (81st) and Myanmar (139th) join the index for the first time. 

Xavier Sala-i-Martin, Professor of Economics, Columbia University, USA, said: “The report highlights a shift in the narrative of the global economy from one year ago, when fire-fighting still characterized much of global and regional economic policy. This has now given way to an increasing urgency for leaders to make wide-ranging structural reforms to their economies.

Mapping Digital Media: Pakistan

The first ever report on Mapping Digital Media on Pakistan was launched today here in Islamabad. Huma Yusuf, a senior journalist and lead author of the report, presented her findings. The event was attended by leading journalists, media practitioners and representatives from the regulatory bodies, civil society and researchers from academia.

The report describes Pakistan’s evolving media landscape, with focus on key areas, including changes in media consumption patterns; the role of public service media; growing internet access and online engagement; the impact of new media technologies on journalism practices; spectrum utilisation and media licensing; the media industry’s financial model; and existing media policies and regulations.

Huma Yusuf, international media researcher and author of the report, shared her views on the report and said; “There has been a proliferation in broadcast media outlets since deregulation in 2002 and a phenomenal expansion of Pakistan’s telecommunications and information communication technology sphere. The country has great potential for media to grow, inform and play an important democratising role in the age of digital convergence. However, the media’s potential could be undermined by the industry’s infrastructure, regulatory weaknesses, and an overall lack of awareness of the media’s role in a democratic set-up”. “We are sure that the stakeholders in Pakistan will greatly benefit from this extensive research”, she added.

The launch of the report on Pakistan is part of the global Mapping Digital Media project, which examines the changes in-depth, aims to build bridges between researchers and policymakers, activists, academics and standard-setters across the world. It also builds policy capacity in countries where this is less developed, encouraging stakeholders to participate in and influence change. At the same time, this research creates a knowledge base, laying foundations for advocacy work, building capacity and enhancing debate.

On the occasion, Marius Dragomir, senior manager and global publications editor for the media program at the Open Society Foundations, said, “the Pakistan Report completes the 44th segment in the global mapping digital media project. As such it offers a unique opportunity for comparative research that puts Pakistan’s media evolution in an international context.”. He further said, the Media Program of the Open Society Foundations has seen how changes and continuity affect the media in different places, redefining the way they can operate sustainably while staying true to values of pluralism and diversity, transparency and accountability, editorial independence, freedom of expression and information, public service, and high professional standards.

The Mapping Digital Media project assesses, in the light of local values, the global opportunities and risks that are created for media by aspects impacting media developments such as, the switch-over from analog broadcasting to digital broadcasting; growth of new media platforms as sources of news; convergence of traditional broadcasting with telecommunications.

Covering 60 countries, the project examines how these changes affect the core democratic service that any media system should provide—news about political, economic and social affairs.

Local researchers and partner organizations in each country produce the Mapping Digital Media reports. Cumulatively, these reports will provide a much-needed resource on the democratic role of digital media.

In addition to the country reports, the Open Society Media Program has commissioned research papers on a range of topics related to digital media. These papers are published as the MDM Reference Series.

The complete Mapping Digital Media: Pakistan report can be downloaded from the Open Society Institute’s website: http://www.opensocietyfoundations.org/reports/mapping-digital-media-pakistan

Credibility Lab Launched in Pakistan for Research on Media and Competitiveness

Mishal Pakistan Launches “Credibility Lab” for Research on Media and Competitiveness

Credibility Lab to adopt the Triple Helix model to develop and launch the Media Credibility Index for Ethical Journalism in Pakistan

Mishal Pakistan launches the Credibility Lab, an initiative to create new frameworks and methodologies to measure current trends and indices on Media Ethics, Journalism Standards, Media Credibility and Rankings to be measured on international benchmarks.

The Credibility Lab among other areas will be working on models to improve more creative interactions between the Triple Helix players.

The Credibility Lab will also be working to explore the potential for innovation and economic development in a Knowledge-based Society, which lies in a more prominent role for the university and the hybridisation of elements from University, industry and Government to generate new institutional and social formats for the production, transfer and application of knowledge.

The Six Pillars of Media Credibility Index

Mishal Pakistan’s Credibility Lab will work as a knowledge sharing for the experts from the industry, academia and policy makers. The Credibility lab will be working with more than 10 research-academic institutions, specializing in journalism studies and media sciences across Pakistan, a similar number of international universities and media development institutions will be partnering with Mishal Pakistan on this initiative.

The Credibility Lab at Mishal will be undertaking new initiatives in this year i.e. the Media Credibility Index (MCI), an initiative started in January 2013 in collaboration with leading research institutions across Pakistan and international journalism and media academics and practitioners. The Media Credibility Index focuses on the relative credibility and believability of various media channels through which content is created.

First time in Pakistan a media credibility index will be developed after an extensive examination of media laws, ethics, rules and regulations drafted by different media groups, regulatory bodies and journalistic organizations both at national as well as international arena. The MCI will explore the state of media in Pakistan against six media credibility indicators and 20 sub-indices.

Mishal has incorporated more than thirty code of conducts, ethical code and journalism principles, which include currently prevalent seven national code of conducts and twenty four international code of ethics from international regulatory bodies, country code of conducts and agreed journalistic codes of ethics across the globe.

Codes of Ethics framed by Pakistani media groups have also being included such as Jang group’s Geo Asool, Dunya’s code of ethics, Express group’s journalism code of conduct and Dawn Group’s principles and code of conduct.

After reviewing the principles of journalism and codes of ethics for journalists; six media credibility indicators with 20 sub-indices have been developed in order to measure the media discourse and credibility of current affair content in Pakistan. This extensive study entails thirty-five current affair programs of the mainstream Pakistani news channels.

The Credibility Lab, through its activities will further strengthen the Triple Helix concept, which relies on three main ideas: (1) a more prominent role for the University in creating new though and research processes, on a par with Industry and Government in the Knowledge Society; (2) a movement toward collaborative relationships among the three major institutional spheres, in which information and knowledge policy is increasingly an outcome of interaction rather than a prescription from Government; (3) in addition to fulfilling their traditional functions, each institutional sphere also “takes the role  of the other” performing new roles as well as their traditional function.

The Credibility Lab will be publishing its research in collaboration with its partners on periodic basis on the state of media and competitiveness in Pakistan.

Mishal Pakistan is the partner institute of the Global Competitiveness and Benchmarking Networks, World Economic Forum. Mishal assists the forum in creating the soft-data on Pakistan, identifying Pakistan’s competitiveness challenges. Mishal has also launched Pakistan’s first journalism awards on the framework designed jointly with the Center for International Media Ethics and UNESCO’s Media Development Indicators.

World Intellectual Property Rights Day 2013 and Pakistan

Pakistan Needs to Improve its framework on Intellectual Property Protection

On the World Intellectual Property Rights Day 2013, MishalPakistan, a country partner institute of the Global Competitiveness andBenchmarking Network of the World Economic Forum shared the State of IPR in Pakistan.

The country is not being able to improve the environment to protect the Intellectual Property Rights (IPR). Pakistan is showing substantial deterioration on the indicators to improve the IPR, Pakistan now stands at 106 among 144 countries on Intellectual Property Protection, as compared to 86 in 2010. The trend shows 20% decline in IP protection in the country, announced Mishal sharing the data on IPR from the Global Competitiveness Report of the World Economic Forum.

On the other hand, an enabling framework required to create intellectual asset in the system continues to perform poor. The capacity of research institutions and private sector spending on scientific research and development has been stagnant for the past three years. This is causing the country to lose its competitiveness by not being able to create implementation mechanism for the citizens to protect their intellectual property.

The University-Industry Collaboration is also a matter of concern in Pakistan as more emphasis is being put on non-research initiatives or research in isolation from the industry. This also indicates that the businesses in Pakistan are not benefiting from the R&D being done in academic and research institutions across the country, resulting in lack of indigenous solutions for the local and international challenges.   

Although Pakistan has shown improvements on the number of applications filed under the Patent Cooperation Treaty (PCT) per million populations, where Pakistan stands at 88 among 144 countries globally, a thirty percent improvement as compared to 2010.

The recent developments and initiatives by the Higher Education Commission ofPakistan to encourage academia and research institutions to file for patents has resulted in more applications filed for patents in the country, however the lack of expertise and understanding about new ideas and innovations at the Intellectual Property Organization (IPO) has hampered IPR activities in the country.

Pakistan adopted the Intellectual Property Rights Act in December last year, which protects the Intellectual Property Rights including copyrights, trademarks, patents, designs, lay-out designs of integrated circuits, trade secrets and other intellectual property laws; supported by other laws are powerful tools for economic growth. The protection of these and similar intellectual property rights of the citizens is essential to foster creative thinking, stimulate creativity, provide incentives for technological innovations, and attract investment.

An increase in patent filing and lack of capacity of IPO to decide on patent declarations can create a serious situation for IPR appreciation in the country, said Amir Jahangir, CEO of Mishal Pakistan. Intellectual property protection is important for recognizing and respecting creative and intellectual work in a knowledge-based society.

Mishal Pakistan is the partner institute of the Global Competitiveness and Benchmarking Networks, World Economic Forum. Mishal assists the forum in creating the soft-data on Pakistan, identifying Pakistan’s competitiveness challenges. 

Pakistan Ranks at 105 on World Economic Forum’s Global Information Technology Report 2013

Pakistan Ranks at 105 among 144 countries on World Economic Forum’s Global Information Technology Report 2013

Despite efforts in the past decade to improve information and communications technologies (ICT) infrastructure in developing economies, there remains a new digital divide in how countries harness ICT to deliver competitiveness and well-being, according to the 12th edition of The Global Information Technology Report, released today by the World Economic Forum.

Published under the theme, Growth and Jobs in a Hyperconnected World, the Report suggests that national policies in some developing economies are failing to translate ICT investment into tangible benefits in terms of competitiveness, development and employment. This is in addition to the profound digital divide that already exists between advanced and developing economies in access to digital infrastructure and content.

Pakistan continues to lag behind in the rankings. Unable to achieve a sustained rapid economic growth may put Pakistan’s ICT-competitiveness in jeopardy unless the right investments are made in ICT, skills and innovation.

Amir Jahangir, Chief Executive Officer of Mishal Pakistan, a partner institute of Global Competitiveness & Benchmarking Network of the World Economic Forum said, “As other countries are improving rapidly, Pakistan has shown little change, this is a matter of concern. Pakistan is 37 ranks behind India. The big challenge for the next government in Pakistan would be to put more emphasize on ICT environment and regulatory framework. The role of ICT for sustained economic growth and job creation is crucial to improve Pakistan’s competitiveness". "ICT has revolutionized the way businesses are done and the country has not being able to capitalize on this”, he further added.

Pakistan's Score on the Global Information Technology Report 2013

Some of the areas where Pakistan lost its ICT competitiveness are; govt’s procurement of advance technologies, which ranked 109 this year as compared to 91 in 2012. Although Pakistan has improved the fixed broadband Internet tariff substantially by making Pakistan the 68^th most competitive broadband provider in the world, individuals using Internet, which depicts affordability of Internet for citizens is shrinking. Pakistan lost 22 points in 2013 and ranks at 120 on individuals using Internet. The report highlights that the gains in broadband affordability are being achieved by cannibalizing the individual Internet users.

Pakistan achieved significant gains in the last decades, when it embraced the mobile technologies and led the region by providing human resources capital and technical knowhow to the global pool of mobile communication providers. However this gain has been greatly diminished due to lack of advancements and inconsistency in decision making to adopt new technologies at the right time. The Importance of ICTs to govt’s vision has deteriorated from 92 to 117 in 2012 and 2013 respectively. Making ICT as one of the least priority areas for the govt. in Pakistan. 

On the economic impact pillar, Pakistan failed to show progress on creating impact of ICTs on new organizational models by losing 10 points (91). Keeping businesses in mostly traditional areas and connecting Pakistan with the global knowledge economies.

Similarly, government’s failure to create social impact through ICT also showcases it’s poor understanding of innovation ecosystem and value creation for the citizens in the digital age. 

The government failed to create value through ICT use and improving efficiency, where Pakistan lost an alarming 16 points (121 among 144 countries). Not being able to improve any regulations on venture capital availability has also created a bottleneck for an innovation economy in the country. This signifies Pakistan’s lack of correlation between innovation and competitiveness with finance, thus further isolating Pakistan from moving towards a knowledge-based economy.

Pakistan also lost 15 points on the E-participation index, where government engages citizens through online services and grievance mechanism, thus resulting in stronger red-tapism slower economic progress.

On the overall political and regulatory environment, the efficiency of legal system in challenging regulations has also deteriorated, where Pakistan is ranked 97 as compared to 79 in 2013 and 2012 respectively. Intellectual property protection has also been neglected and Pakistan lost 13 points by securing 103 on the network readiness index.

Some of the areas where Pakistan has shown improvements are on the business and innovation environment pillar, where the business sector has ensured the availability of latest technologies for ICT competitiveness by improving 10 points and securing 83 rank among 144 countries.

The Report’s Networked Readiness Index (NRI), which measures the capacity of 144 economies to leverage ICT for growth and well-being, finds Finland (1st), Singapore (2nd) and Sweden (3rd) take the top three places. The Netherlands (4th), Norway (5th), Switzerland (6th), the United Kingdom (7th), Denmark (8th), the United States (9th), and Taiwan, China (10th) complete the top 10.

“This analysis shows how matching investments in ICT with investment in skills and innovation can help economies cross a ‘magic threshold’, beyond which return on investment increases significantly,” said Bruno Lanvin, Executive Director of the e-Lab at INSEAD and co-editor of the report. “Individual countries need to identify what separates them from reaching that threshold if they have not reached it yet in order to fulfill long- term growth, competitiveness and innovation targets” he added.

“ICT’s role in supporting economic growth and the creation of high-quality jobs has never come under such scrutiny. Despite initial concerns that ICT would hasten the deployment of resources towards developing countries, the benefits of ICT are now widely recognized as an important way for companies and economies to optimize productivity, free up resources and boost innovation and job creation” said Beñat Bilbao-Osorio, Economist, Global Competitiveness and Benchmarking Network, World Economic Forum, and co-editor of the report.

Against this backdrop, “countries need tools to measure and track progress and the report has become the most comprehensive and respected international assessment, providing policy-makers, business leaders and civil society at large with a useful tool for designing national strategies for increased networked readiness and for benchmarking their country’s performance against other relevant comparators” said Soumitra Dutta, Anne and Elmer Lindseth Dean at the Samuel Curtis Johnson Graduate School of Management at Cornell University and co-editor of the report.

“Digitization created 6 million jobs and added US$ 193 billion to the global economy in 2011. Although in aggregate positive, the impact of digitization is not uniform across sectors and economies – it creates and destroys jobs” said Bahjat El-Darwiche, Partner, Booz & Company and sponsor of the Report. He added that “policymakers wishing to accentuate the positive impact of digitization need to understand these different effects if they wish act as digital market makers in their economies.”

“This report demonstrates that economies that fail to implement comprehensive national broadband strategies risk losing ground in global competitiveness and may fall behind in the delivery of societal benefits from ICTs. Plans that incorporate both supply and demand-side measures offer countries the best opportunity to advance broadband adoption," said Dr. Robert Pepper, Vice President for Global Technology Policy, Cisco and sponsor of the report. "

The Network Readiness Index (NRI) uses a combination of data from publicly available sources and the results of the Executive Opinion Survey, a comprehensive annual survey conducted by the Forum in collaboration with partner institutes. This Survey of more than 15,000 executives provides insight into areas critical for networked readiness.

The World Economic Forum is an independent international organization committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas.

Incorporated as a not-for-profit foundation in 1971 and headquartered in Geneva, Switzerland, the Forum is tied to no political, partisan or national interests.