Pakistan's Performance on Global Competitiveness Index 2015-2016 of World Economic Forum

Assessing National Competitiveness The Global Competitiveness Report 2015-2016 Amir Jahangir Chief Executive Officer Mishal Pakistan A Country Partner Institute of the Global Competitiveness and Benchmarking Network, World Economic Forum

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The Global Competitiveness Index (GCI)

“

”

The set of institutions, policies, and factors that determine the level of productivity of a country. The level of productivity, in turn, sets the level of prosperity that can be earned by an economy.

Basic requirements

1.Institutions

2.Infrastructure

3.Macroeconomic environment

4.Health and primary education

Efficiency enhancers

5.Higher education and training

6. Goods market efficiency

7. Labor market efficiency

8. Financial market development

9. Technological readiness

10. Market size

Innovation and sophistication factors

11. Business sophistication

12. Innovation

The Global Competitiveness Index (GCI)

The Global Competitiveness Index

Qualitative data sourced from the annual Executive Opinion Survey carried out by the network of the World Economic Forum’s Partner Institutes.

Quantitative data sourced from international organizations.

The Global Competitiveness Report 2015-2016 Data

The Global Competitiveness Report 2015-2016 Country Coverage

The Global Competitiveness Index Ranking 2015-2016

3/25/16

Top20 Bo[om20

8

Globaliza(onisarealitythatcountriescannolongerescapeCompe((venessistheonlywaytobenefitfromglobaliza(onandnotbecomeavic(m

ImprovingPakistan’sCompe77veness

Sustained Economic

Growth

Poverty Reduction

Improved Competitiveness

World Economic Forum – Global Competitiveness Report (GCR) 2015-16

9

The World Economic Forum’s Global Competitiveness Report is the Most Influential Ranking of a Country’s Competitiveness and it Effects Pakistan's Image in the World Among Business, Government and Financial Leaders Understanding and Monitoring the Rankings is Important Improved Competitiveness Leads to Sustained Economic Growth Which Has Proven to Be Effective in Poverty Reduction and Employment Generation

Sustained Economic

Growth

Poverty Reduction

Improved Competitiveness



Global Competitiveness Index (GCI) 126 68 55 107

Basic Requirements (60%) 1. Institutions 119 59 60 132 2. Infrastructure 117 64 81 123 3. Macroeconomic Stability 128 115 91 49 4.  Health and Primary Education 127 43 84 101

Efficiency Enhancers (35%) 5. Higher Education and Training 124 66 90 122 6. Goods Market Efficiency 116 51 91 101 7. Labor Market Efficiency 132 130 103 121 8. Financial Market Sophistication 99 51 53 90 9. Technological Readiness 113 93 120 127 10. Market Size 28 61 3 40

Innovation and Sophistication (5%) 11. Business Sophistication 86 44 52 117 12. Innovation 89 43 42 127

PakistanSriLankaIndiaBangladesh

12


2014/15 2015/16 Change

Basic Requirements (60%) 1. Institutions 123 119 +4 2.  Infrastructure 119 117 +2 3.  Macroeconomic Stability 137 128 +9 4.  Health and Primary Education 129 127 +2 Efficiency Enhancers (35%) 5. Higher Education and Training 127 124 +3 6. Goods Market Efficiency 100 116 -16 7. Labor Market Efficiency 132 132 - - 8. Financial Market Sophistication 72 99 -27 9. Technological Readiness 114 113 +1 10. Market Size 30 28 +2 Innovation and Sophistication (5%) 11. Business Sophistication 81 86 -5 12. Innovation 88 89 -1

13

Indices 2014/15 2015/16

Property Rights 121 118 +2

Intellectual Property Protection 117 112 +5

Diversion of Public Funds 94 85 +9

Public trust in Politicians 108 99 +9

Irregular Payment and Bribes 123 116 +7

Life Expectancy Years 109 106 +3

Favoritism in decision of Government Officials 101 75 +26

Wastefulness of Government Spending 103 102 +1

Burden of Government regulation 103 86 +17

AreaswherePakistanhasshownimprovements

World Economic Forum – Global Competitiveness Report (GCR) 2014/15-16

14

AreaswherePakistanhasshownimprovementsIndices 2014/15 2015/16

Business cost of crime and violence 132 130 +2

Organized Crime 137 132 +5

Reliability of Police Service 127 126 +1

Ethical behavior of Firms 111 98 +13

Strength of Investor Protection 34 21 +13

Quality of overall Infrastructure 113 98 +15

Quality of Railroad Infrastructure 72 60 +12

Quality of Air Transport Infrastructure 92 79 +13

Quality of Electricity Supply 133 129 +4


15


Government budget balance, % GDP 134 106 +28

Gross National Savings, % GDP 120 115 +5

General Government Debt, % GDP 106 101 +5

Country Credit Rating 121 115 +6

Malaria Cases 47 46 +1

Business Impact of Malaria 50 49 +1

Business Impact of Tuberculosis 108 104 +4

Business Impact of HIV/AIDS 97 94 +3

Infant Mortality, deaths/1000 live births 137 134 +3


16

AreaswherePakistanhasshownImprovementsIndices 2014/15 2015/16

Quality of Primary Education 119 112 +7

Secondary Education Enrollment 131 129 +2

Quality of Education System 92 75 +17

Quality of math and science education 104 89 +15

Availability of specialized training services 101 94 +7

Total Tax Rate, % Profits 56 50 +6

No. of Procedures to Start a Business 118 116 +2

No. of Days to start a Business 96 94 +2

Agricultural Policy Costs 109 103 +6


17


Trade Tariffs, % Duty 140 137 +3

Imports as a Percentage of GDP 134 132 +2

Buyer Sophistication 80 78 +2

Hiring and Firing Practices 49 48 +1

Redundancy Costs, weeks of Salary 118 115 +3

Country capacity to retain talent 87 70 +17

Country capacity to attract talent 110 96 +14

Women in labor force, ratio to men 140 136 +4

Availability of Financial Services 82 80 +2


18


Affordability of Financial Services 84 83 +1

Venture Capital Availability 92 78 +14

Availability of Latest Technologies 85 79 +6

Firm Level Technology Absorption 83 82 +1

FDI and Technology Transfer 90 77 +13

Individuals using Internet, % 122 119 +3

Fixed Broadband Subscription 113 107 +6

Mobile Broadband Subscription 127 125 +2

Domestic Market Size Index 25 23 +2


19


Foreign Market Size Index 63 55 +8

Exports as a % of GDP 141 137 +4

Local Supplier Quantity 66 53 +13

Control of International distribution 88 62 +26

Production Process Sophistication 87 86 +1

Company Spending on R&D 93 88 +5

Government Procurement of Advanced tech products

98 52 +46

Availability of Scientists & Engineers 49 44 +5

PCT Patents, applications/millions 114 109 +5


20

Indices 2014/15 2015/16

Judicial Independence 67 82 -5

Efficiency of legal framework in settling disputes

101 108 -7

Efficacy of legal framework in challenging regulations

89 101 -12

Transparency of Government Policymaking 118 125 -7

Strength Of Auditing and Reporting Standards 90 117 -27

Efficacy of corporate boards 119 121 -3

Protection of Minority shareholders Interests 79 112 -33

Quality of Roads 75 77 -2

Quality of Port Infrastructure 59 66 -7

AreaswherePakistanhasshowndeteriora7on


21

Indices 2014/15 2015/16

Inflation, annual % Change 120 127 -7

Tuberculosis cases/100,000 pop 123 125 -2

Primary education enrollment, net % 132 134 -2

Quality of Management Schools 67 70 -3

Internet Access in Schools 89 103 -14

Intensity of Local Competition 84 98 -14

Extent of Market Dominance 71 110 -39

Effectiveness of Anti-monopoly Policy 85 106 -21

Effect of Taxation on incentives to Invest 64 66 -2



22

Indices 2014/15 2015/16

Prevalence of Trade Barriers 94 114 -20

Fixed Telephone Lines/100 pop 111 112 -1

Business Impact of rules on FDI 75 111 -36

Burden of customs procedures 87 111 -24

Degree of customer orientation 98 106 -8

Cooperation in Labor employment relations 107 131 -24

Flexibility of Wage Determination 103 114 -11

Effect of Taxation on Incentive to Work 82 84 -2

Pay & Productivity 86 95 -9



23

Indices 2014/15 2015/16

Prevalence of Foreign Ownership 114 116 -2

Reliance on Professional Management 87 122 -35

Financing through local Equity Market 61 69 -8

Soundness of Banks 71 99 -14

Regulation of Securities Exchanges 51 93 -42 Legal Rights Index (0-10) best 63 93 -30

Int’l internet bandwidth, Kb/s per user 110 115 -5

Local Supplier Quality 94 98 -4

State of Cluster Development 58 68 -10



24

Indices 2014/15 2015/16

Nature of Competitive Advantage 93 99 -6

Extent of Marketing 74 100 -26

Capacity for Innovation 51 95 -44

Quality of Scientific Research Institutions 94 104 -10



25

Indices 2014/15 2015/16

Business costs of terrorism 139 139 -

Available airline seat km/week 48 48 -

Mobile Telephone Subscriptions/100 pop. 124 124 -

HIV prevalence % adult pop. 1 1 -

Tertiary education enrollment, gross % 115 115 -

Extent of staff training 122 122 -

Ease of access to loan 90 90 -

GDP (PPP$ billions) 26 26 -

Value chain breadth 64 64 -

Willingness to delegate authority 115 115 -

University-industry collaboration in R&D 98 98 -

AreaswherePakistanhasmaintaineditsposi7on


26

GlobalRankingsofVariousIns(tu(ons

Institutions 2012-13 2014-15 2015-16

Intellectual Property Organization 106 117 112

Judicial Independence 57 67 82

Police Services 127 127 128

AGPR 86 90 117

NHA 73 75 77

Railways 66 72 60

CAA 78 92 79

NEPRA 126 133 129

HEC 125 115 115

NAVTEC 102 101 94

CCP 71 85 106

Customs 93 87 111

SBP 85 71 99

SECP 55 51 93

TDAP X 141 137

NAB 139 126 117

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GoalshouldbetoInvolvePublic

PrivatePartnershipsandActasacatalystto:

Public-PrivatePartnershipistheonlywaytoimprovePakistan’sCompe77veness

Improve Competitiveness

Increase Productivity

Enhance prosperity


The Way Forward – Steps to be Taken to Improve Competitiveness

•  Na(onalCompe((venessCouncil

•  TheAnnualStateofCompe77venessReport•  Ins7tu7onalEfforttoUpdatetheData

•  RegionalCompe((venessCouncils•  ProvincialCompe77venessReports

•  IndustryAcademiaLinkages

•  GetOutof“TheNarra(veTrap”•  Narra7veBuildingStrategy

•  InwardLooking•  OutwardLooking

The Narrative Trap

•  PakistanMadeImprovementsonnumberofindices63

•  PakistanDeterioratedonnumberofindices 40

•  PakistanRetaineditsPosi7on 11

TOTAL 114

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Backup Slides

31

Improvements 2014-15 è 2015-16 •  Property Rights 121è118 •  Intellectual Property Protection 117è112 •  Diversion of Public Funds 94 è 85 •  Public Trust in Politicians 108è 99 •  Irregular payment and Bribes 123è 116 •  Favouritism in decisions of Government Officials 101è 75 •  Wastefulness of Government Spending 103è 102 •  Burden of Government Regulation 103è 86 •  Business Costs of Crime and Violence 132è 130 •  Organized Crime 137è 132 •  Reliability of Police Services 127è 126 •  Ethical Behaviour of Firms 111è 98 •  Strength of Investor Protection 34è 21 •  Business Costs of Terrorism 139è139

Weakening •  Judicial Independence 67 è 82 •  Efficiency of Legal Framework in settling disputes 101 è 108 •  Efficiency of Legal Framework in Challenging regs 89 è 101 •  Transparency of Government Policy Making 118 è 125 •  Strength of Auditing and Reporting Standards 90 è 117 •  Efficacy of Corporate Brands 119 è 121 •  Protection of Minority Shareholders Interests 79 è 112

Pillar 1 Institutions

32

Improvements 2014/15 è 2015/16 •  Quality of overall infrastructure 113 è 98 •  Quality of railroad Infrastructure 72 è 60 •  Quality of Air transport Structure 92 è 79 •  Quality of Electricity Supply 133 è 129 •  Available Airline Seat Km/week, million 48 è 48 •  Mobile Telephone Subscriptions/100 pop 124 è 124 Weakening •  Quality of roads 75 è 77 •  Quality of port infrastructure 59 è 66 •  Fixed Telephone lines/100 pop* 111è112

Pillar 2 Infrastructure

33

Improvements 2012 è 2013 •  Government budget balance, % GDP 134 è 106 •  Gross National Savings, % GDP 120 è 115 •  General Government Debt, % GDP 106 è 101 •  Country Credit Rating 0-100 pop* 121 è 115

Weakening •  Inflation, annual % change 120 è 127

Pillar 3 Macroeconomic environment

34

Improvements 2014/15 è 2015/16 •  Malaria Cases 47 è 46 •  Business Impact of Malaria 50 è 49 •  Business Impact of Tuberculosis 108 è 104 •  Business Impact of HIV/AIDS 97 è 94 •  Infant mortality, deaths/1,000 live births 137 è 134 •  Live Expectancy Years 109 è 106 •  Quality of primary education 119 è 112 •  HIV Prevalence, % adult pop 1 è 1

Weakening •  Tuberculosis Cases/100,000 pop* 123 è 125 •  Primary Education enrollment, net % 132 è 134

Pillar 4 Health and Primary Education

35

Improvements 2014/15 è 2015/16 •  Secondary education enrollment 131 è 129 •  Quality of educational system 92 è 75 •  Quality of math and science education 104 è 89 •  Availability of research & Training Services 101 è 94 •  Tertiary Education Enrollment 115 è 115 •  Extent of Staff Training 122 è122 Weakening •  Internet Access in Schools 89 è 103 •  Quality of management schools 67 è 70

Pillar 5 Higher Education and Training

36

Improvements 2014/15 è 2015/16

•  No. of procedures required to start a business 118 è 116 •  No. of days to start a business 96 è 94 •  Agricultural policy costs 109 è 103 •  Trade tariff, % duty 140 è 137 •  Imports as a percentage of GDP 134 è 132 •  Buyer sophistication 80 è 78 •  Total Tax Rate, % Profits 58 è 50

Weakening

•  Prevalence of Trade Barriers 65 è 106 •  Prevalence of Foreign Ownership 114è 116 •  Business Impact of Rules on FDI 75 è 111 •  Burden of Customs Procedures 87 è 111 •  Degree of Customer Orientation 98 è 106 •  Intensity of Local Competition 84 è 98 •  Extent of Market Dominance 71 è 110 •  Effectiveness of Anti Monopoly Policy 85 è 106 •  Effect of Taxation on Incentive to Invest 64 è 66

Pillar 6 Goods Market Efficiency

37


•  Redundancy costs, weeks of salary 118 è 115 •  Hiring and firing practices 49 è 48 •  Country capacity to retain Talent 87 è 70 •  Country capacity to attract Talent 110 è 96 •  Women in labor force, ratio to men* 140 è 136

Weakening

•  Cooperation in labor employment relations 107 è 131 •  Flexibility of Wage Determination 103 è 114 •  Effect of Taxation on Incentives to Work 82 è 84 •  Pay and productivity 86 è 95 •  Reliance on Professional Management 87 è 122

Pillar 7 Labor Market Efficiency

38


•  Availability of financial services 82 è 80 •  Affordability of financial services 84 è 83 •  Venture Capital Availability 92 è 78 •  Ease of access to Loans 90 è 90

Weakening •  Financing through local Equity Market 61 è 69 •  Soundness of Banks 71 è 99 •  Regulation of securities exchanges 51 è 93 •  Legal rights index 63 è 93

Pillar 8 Financial Market Development

39

2014/15 è 2015/16 Improvements •  Availability of latest technologies 85 è 79 •  Firm Level Technology Absorption 83 è 82 •  FDI and Technology Transfer 90 è 77 •  Individual using Internet 122 è 119 •  Broadband Internet subscription/100 pop 113 è 107 •  Mobile Broadband subscriptions/100 pop 127 è 125 Weakening •  International bandwidth, kb/s per user 110 è 115

Pillar 9 Technological Readiness

40


•  Domestic market size index 25 è 23 •  Foreign market size index 141 è 137 •  GDP ( PPP$ Billions) 26 è 26

Weakening •  Foreign Market Size 63 è55

Pillar 10 Market Size

41


•  Local supplier quantity 66 è 63 •  Control of international distribution 88 è 62 •  Production process sophistication 87 è 86 •  State of Cluster Development 68 è 68 •  Value Chain Breadth 64 è 64 •  Willingness to delegate Authority 115 è 115 Weakening •  Local supplier quality 94 è 98 •  Nature of competitive advantage 93 è 99 •  Extent of marketing 74 è 100

Pillar 11 Business Sophistication

42

Improvements 2014/15 è 2015/16 •  Company Spending on R&D 93 è 88 •  Govt. Procurement of Advanced Tech Products 98 è 62 •  Availability of Scientists and Engineers 49 è 44 •  PCT patents, application/million pop 114è 109 •  University Industry Collaboration in R&D 98è 98

Weakening •  Capacity for Innovation 61 è 95 •  Quality of Scientific Research Institutions 94 è104

Pillar 12 Innovation

43

India is better than Pakistan in? Pakistan India

Intellectual Property Organization 118 103 Diversion of Public Funds 112 50 Public trust in Politicians 99 31 Irregular Payment and Bribes 118 63 Favoritism in decisions of government officials 75 32 Wastefulness of government spending 102 51 Burden of government regulation 88 27 Transparency of government policymaking 125 58 Business costs of terrorism 139 126 Business costs of crime and violence 130 98 Ethical behavior of firms 98 44 Strength of auditing and reporting standard 117 95 Efficacy of corporate boards 121 96 Protection of minority shareholders’ interests 112 69 Strength of investor protection, 0–10 (best)* 6 21

India outperformed Pakistan on GCI

Global Competitiveness Report (GCR) 2014/15-16

44


Gross national savings, % GDP* 115 23 Country credit rating, 0–100 (best)* 115 50 Malaria cases/100,000 pop.* 48 44 Tuberculosis cases/100,000 pop.* 125 113 Extent of staff training 122 48 Effectiveness of anti-monopoly policy 106 41 Effect of taxation on incentives to invest 66 38 Agricultural policy costs. 103 53 Prevalence of non-tariff barriers 106 82 Business impact of rules on FDI 111 92 Burden of customs procedures 111 54 Cooperation in labor-employer relations 131 86 Reliance on professional management 122 86 Ease of access to loans 90 29 Venture capital availability 78 12



45


Regulation of securities exchanges 69 93 State of Cluster Development 68 29 Willingness to delegate authority 115 56 Quality of scientific research institutions 104 45 University-industry collaboration in R&D 98 50



46

Pakistan is better than India in? Pakistan India

Fixed-telephone lines/100 pop.* 112 116 Government budget balance, % GDP* 106 131 General government debt, % GDP* 101 103 Business impact of malaria 49 60 Business impact of tuberculosis 104 132 HIV prevalence, % adult pop.* 1 63 Business impact of HIV/AIDS 94 130 Intensity of local competition 98 101 Total tax rate, % profits* 50 123 No. procedures to start a business* 116 129 No. days to start a business* 94 110 Flexibility of wage determination 114 120 Availability of financial services 80 81 Soundness of banks 99 100

Pakistan outperformed India on GCI


47

Pakistan is better than India in? Pakistan India

Availability of latest technologies 79 108 Firm-level technology absorption 82 102 FDI and technology transfer 77 95 Int’l Internet bandwidth, kb/s per user* 115 116 Local supplier quantity 53 54 Availability of scientists and engineer 44 49


Pakistan outperformed India on GCI

48

Thank you!

Documents

Pakistan's Performance on Global Competitiveness Index 2015-2016 of World Economic Forum