Well taking the earlier numbers I posted w.r.t India.
Reference point objective for Pakistan in 10 years (using the 1/6th of India today):
Market cap: 670 billion USD
Forex: 100 billion USD
Govt revenue: 110 billion USD
Exports: 150 billion USD
Current levels of Pakistan (and growth needed to reach above in 10 years):
Market cap: 40 billion (needs 33% growth each year)
Forex: 13 billion (needs 23% growth each year)
Govt revenue: 40 billion USD (needs 11% growth each year)
Exports 40 billion USD (Needs 14% growth each year)
These growth numbers look achievable to you?
Keep in mind gross fixed capital formation rate has never went above 20% (in the 1990s) of GDP and has averaged around 15% since:
Free and open access to global development data
data.worldbank.org
When all macroeconomic analysis of the world has shown to get 5+% growth rates consistently need GFCF as high as possible (well into the 20s, 30s and even 40s % wise of GDP)....given importance of capital formation (the core investment in the end for any economy).
Then when we come to RnD numbers, we find that Pakistan files about 2 patents to the PCT international patent regime on a good year:
www.wipo.int
If India is commensurately filing ~ 2600 right now in comparison....and we divide that by 6 we get about ~ 430 for Pakistan to have as the "in 10 years time" reference.
From 2 to 430 needs a growth rate of about 70% per year.
Is that likely or are the filings going to be stuck in the single digit range in those 10 years instead? You can see for yourself in the end I suppose.
You see, there is very low level of public trust in the system in Pakistan (clearly explaining the low GFCF to begin with) given the sheer level of acumen that has been thrown away to make way for the power at all costs in the status quo establishment and what this means for anti-intellectualism deep in the core. Both when it comes to direct thinking capacity of this kind of power setup and how it values, judges and promotes those that can think. Given every small % here counts immensely for a developing country given how these need to be networked, organised and comfortable long term (it cannot afford to throw away the little it has in some snapshot so recklessly.....only deep-thinking knows best how to grow more of it, and needs means and resources front and centre as far as possible.....rather than swatting away and squelching because its not on the same exact page about power-dynamic status quo + blowhard vengeance stuff).
IMO, Long form of this conversation is probably best suited to this other thread to analyse (given I already started there a bit earlier), and over time tagging folks like jamD, quwa, oscar, vcheng etc to impart their thoughts, its a thread you started as well:
The underlying issue facing Pakistan, at least the way I see it, is its political system. It has caused instability since direct military dictatorship ended, and if analysts are to be believed, a hybrid system was introduced. In such a system, the struggle for power is almost inevitable, and...
defencepk.com
But we can continue here if you want too and bring it there later maybe.
Its not that difficult. The govt consults subject matter experts in consultancy role for policy.
They have the basic snapshot of the HR and capital situation (in the various tiers) present in A relative to B.
This dictates what is the rough starting incentive amounts needed to re-allocate in some time frame....either for transferring or generation (depends on the capital and HR).
This was done across the board by Deng's teams in the 80s for example for light manufacturing in PRC. Asian Tiger economies before that too. Thailand, Vietnam you name it.
The greater disparity, the more you need to offer. But its tied to raw amounts you have to put up as incentive that you can afford to do so without too much
That is the bind Pakistan finds itself as its much lower-trust society it has formed over time in its system as a bunker state first in its power dynamic. It squandered far more than India and this has void costs now....just like India has with China and others but has certain options to harness increasingly with what it does have as there are competency trusts and institutions of sufficient note, capacity and reliability. Things you can do without having to worry if total unwarranted knock on door arrives later. Its matters in all Tier A endeavours that look to pull up whole society from some morass.
The point is you cannot assume costs will simply decline for the same chunk of relevancy for this.
If cost on something decreases 5 or 10 times like you suggest (1-2 billion 10 years downroad for "same stuff" to "leapfrog").... it means the supply side is that much more assured worldwide and there are new tiers of relevancy that fill in for the "10 billion". You get out what you put in as early as you can and you grow your HR and capital expertise to be in best position long term.
But you cannot shortcut that HR and capital growing (and reputation + reliability + competitiveness) whatever the terms and numbers are around it.
These are all hypotheticals on multiple roulette wheels going right.
Bringing in another like China is always the question "whats in it for them"? w.r.t what they want to hold onto increasingly (if you look at what precipice thats coming into view).
Are they expediently deploying light manufacturing in Pakistan right now where they can? To then finance logistics from that inside out with the forex that brings? Or logistics first with promise of something later (i.e reversing order what Deng et al did inside China)....however that is supposed to fall into place however it does and with the (USD only) bills to pay on the infra+logistics on top.
If not, why not?
Best to focus on own competency and wherewithal....trust, investment, basic forex and fiscal maths....and doing this over and over again for a decade and then another.
Then everyone more genuinely sees reason for win-win w.r.t augmenting and helping as makes sense.
focustaiwan.tw
asia.nikkei.com
borgenproject.org
