Investment In Education Will Take Asia Forward
Investment in knowledge, of which education plays a pivotal role, will take Asia forward, a Pakistani business administrator turned politico told a forum in Colombo last Monday.
Asad Umar, Senior Vice President, Pakistan Iehreek-e-Insaf political party- led by former cricketer Imran Khan, speaking at CIMA’s Business Leaders’ Summit took India’s ICT revolution as an example.
He said that 25 years ago India was virtually unknown in the world’s ICT landscape. But it has since grown to become a US$ ($) 88 billion business of which $ 59 billion (equivalent to the size of Sri Lanka’s GDP ) is provided from exports, whilst contributing to 7.5% of India’s GDP and giving direct and indirect employment to 10 million people.
And this sector is still growing, he said.
Uma said that the genesis of India’s ICT sector was begun in the 1960s with the Indian government investing in the setting-up of Indian institutes of technology (IITs) countrywide. “I don’t think India spent a fraction of the amount in setting-up IITs compared to their nuclear and military spends,” said Uma.
He further said that economist Paul Krugman had recently said that the USA needs to invest in education if it’s to go forward. “If the USA with a $ 45,000 per capita GDP needs to invest more on education, how much more South Asia which has a per capita GDP of a mere $ 1,000?” Uma asked.
He also said that ICT in India spawned Wipro, Infosys and gave a spurt to the Tata Group, which have revenues of $ 7.30 billion, $ 6.99 billion and $ 83.3 billion respectively. Uma also said that industries need leaders and in this connection cited Infosys’ founder Narayana Murthy as an example.
Infrastructure, skills and knowledge and people is the way forward.
And the engine of growth is the private sector with the state having to play only a facilitatory role. He said that when Pakistan got its independence in 1947 it was among the world’s 10th most poorest of nations with a literacy rate of under 2%.
But the private sector took it forward and in the 1960s institutions such as the World Bank hailed Pakistan as a role model. However progress was “killed” due to a spurt of nationalization in the 1970s. He said that CIMA’s Regional Director South Asia, Middle East and North Africa Bradley Emerson had told him that Sri Lanka too had had experienced a similar type of a situation before.
Uma further said that the 21st century was a century of open trade. No country operating in silos and in the protectionist mode could expect to progress, he said.
Uma added that with the failure of the Doha round of trade talks, regional integration was the way forward. But South Asia was the world’s laggard in this connection, with intra-regional trade in this bloc amounting to only 1% of its total trade, the lowest among the world’s regions, while East Asia had one of the highest figures, at 27% and Europe (16%).
What South Asia should understand is that what they have in common far outweigh their differences, he said. Europe understood this after World War 2, with France and Germany driving towards unification, though currently, from an economic perspective they are having problems, he said.
Uma further said that 400 years ago the difference in per capita GDP among the world’s richest and poorest was 3:1. But what made the West to surge forward was industrialization and colonization.
However after the colonies got their independence in the middle of the 20th century things began to change. Uma was of the opinion that the crises facing Ireland, Spain, Portugal and Greece currently, have come about due to the emergence of Asia which can produce similar type of goods and services, but at a fraction of the cost.
But at the top end, the West/USA still leads, he said. Middle class America has not got richer in the past two decades because of emerging Asia, said Uma. Previously, Asia achieved fame for its rich history, but now things are changing, he said.
However, politically and economically, Asia is yet to get its fair share in multilateral institutions such as the UN, the World Bank and the IMF which are still dominated by the West. This is because of disunity among Asian, he said, citing South Asia as an example.
Central Bank of Sri Lanka Governor Ajith Nivard Cabraal in his speech said that the ability to change and adapt to fast evolving circumstances was the secret of success in the modern world. He said that the oil shock, the financial shock and the banking shock which rapidly came one after the other was a phenomenon that the world has had never experienced before, making it all the more important to adapt to rapidly changing circumstances.
Whilst the world’s GDP is $ 63 trillion; that of Asia’s is $ 18 trillion. Asia also has 33% of the global trade. However hundreds of millions of Asians are still in poverty, he said.