Page 8 - Pakistan Link - October 18, 2019

P8 – PAKISTAN LINK – OCTOBER 18, 2019 OPINION
As Asian Economies Take Center Stage, How Can Pakistan Cash in?

n By Dr Syed Akhter The country will need to redirect its at-
Milwaukee, Wisconsin tention to its neighbors in order to increase
the flow of goods, capital, technology, labor,
he economic map of Asia is changing ideas, and information. However, the main
at a fast pace, shaped by trade disputes stumbling block will be that Pakistan is not
Tbetween the United States (US) and regionally integrated. Its share of Asian ex-
its trading partners, and by commercial de- ports, imports, and FDI remains miniscule.
velopments in Asia, especially in China. The While Asia has become a major source of
Trump administration is using tariffs, and FD I, Pakistan has not been the desti-
the threat of higher tariffs, to leverage its nation for investments. The inflow of manu-
bargaining positions and extract trade con- facturing and service sector FDI into the
cessions through negotiations with China. country, for example, is lackadaisical and not
While policymakers in the US and China are commensurate with its market size and labor
struggling to come up with a joint commu- force. According to the United Nations Con-
nique, business executives are going to the ference on Trade and Development, Pakistan
drawing board to decide what to do next. A witnessed a decline in FDI in 2018, while In-
key decision for these businesses is what to dia, Bangladesh, and Sri Lanka experienced
do with their value chain, the mix of produc- an increase.
tion and distribution activities that add value Investments always flow to countries
to their products and services. where returns can be maximized. Businesses
The widely dispersed value chain ac- require an environment that is stable and pre-
tivities of corporations are the products of dictable, which is why Vietnam is attracting
globalization. Companies have taken their investments because of its stability and disci-
manufacturing and assembling operations plined workforce. Pakistan is slowly moving
to places where they can be most economi- increasing productivity and exports, have but also because it enjoys preferential tariffs towards stability, and its work force is indus-
cally and efficiently performed. Apple, for made the region vibrant and prosperous and on its exports. Other countries in the region trious. Lest we forget, it is the same work force
example, sources components and parts for heightened the prospect of making Asia the such as Thailand and the Philippines are also that helped build the vaunted infrastructure
its iPhone from more than 20 countries, most world’s largest regional economy. benefiting from the changing business cli- in the Middle East, its bridges, roads, hospi-
of them in Asia. These components and parts Asian economies are growing at a rapid mate and increased flow of FDI. tals, skyscrapers, schools, houses, and palaces
are sent to China where they are assembled pace and will continue to grow faster than But the reconfiguration of value chain in the oppressive and scorching heat. This is
into finished products and then shipped to economies in other regions such as Latin activities in Asia is creating both opportuni- the workforce that stands at the front-line,
markets throughout the world. For Apple, America, Europe, and North America. Eco- ties and threats. For Pakistan, these disrup- ready to work for corporations willing to give
Haier, Samsung, and others, the uncertainty nomic changes sweeping across Asia are both tions present opportunities. With over 210 them a chance t to integrate will be sidelined,
of trade wars and the economic ascendancy breathtaking and unprecedented in their million people, it is the fourth largest country watching the wonders of economic growth
of Asia have drawn the reconfiguration of the scope and impact. Regional integration has in Asia and the fifth largest in the world based and development merely as spectators and
value chain activities to the forefront. These increased, and the idea that this is the Asian on population. It is both a large market and wondering where they went wrong.
companies are looking for ways to reduce century has taken root. a valuable source of labor. Businesses need a (The author is Professor Emeritus of
manufacturing and assembly costs to stay Countries in South, Central, South-East, disciplined labor force and Pakistan can and Marketing at Marquette University in Mil-
competitive. They are also looking for mar- West, and East Asia are benefitting from should look to provide this. waukee, Wisconsin, USA, and a Fulbright
kets to sell their products. greater economic integration as well as from No one would argue with the idea that scholar. He has published extensively in busi-
Asia, now center stage, is drawing at- the ongoing trade disputes. Vietnam, for ex- Pakistan should grow economically, increase ness and marketing journals and has taught
tention for its manufacturing prowess and ample, has seen an increase in the inflow of income, reduce inequality, and improve the graduate and undergraduate level courses in
lucrative markets. The high gross domes- foreign direct investments (FDI) not only quality of life of its people. The argument, North America, Europe, South America, and
tic product (GDP) growth rates that many because it is seen as a cost-effective location however, and not unexpectedly, will come Asia. The Express Tribune)
FLYERS-FINAL-06_.ai 1 8/27/2019 11:31:41 PM
Asian countries have achieved, propelled by for manufacturing and assembling activities from how to achieve these goals.

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