Learning lessons from Chinese development experiences

Mature nations always look for a package of learning rather than the economic package containing dollars

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By Dr Abdul Saboor

History proves that a progressive nation always leaves some rational package of lessons for the nations left behind in the race of economic development.

This is how many developing countries learnt lessons from the success stories of developed nations in almost all realms of life and in every affair of running the state machinery. When Muslims were leading in political and economic fronts in Baghdad, the rest of the world was taking notes of all new things from them. Similarly, when Muslims were ruling in Europe, the highest seat of learning was Cordova of Spain. A number of states including England used to get new ideas from the cultural, economic, educational and political systems of Spain by visiting Cordova. In the same fashion, Umer Laws are still in promulgation in most of the European countries. In the present era, Australia and the US learnt remarkable lessons from Great Britain.

Japan made a great progress with the aid of a similar learning process from the development experiences of the UK and the US. In the same learning track, China started emerging as fastly growing economy of the world. It followed the narrative that one thousand miles journey starts from the first step. It learnt a lot from past experiences by strengthening the spirit of nationalism. Chinese accepted the pace of capitalism and liberalism in their own terms and conditions in which they filtered out the oddities of such isms and launched true elements. Now, as the world’s second best country in terms of GDP earnings, it has enough success stories that can be replicated in a country like Pakistan where the typical Asian culture and the traditional socio-economic system is prevailing.

A strong political system of China backed by a single party developed an excellent state machinery, which never hesitated to crush anti-state elements. Tiananmen Square is the classical example when the writ of the state was established forever.

This brief retrospect convinces us about the fact that mature nations always look for the package of learning rather than the economic package containing dollars, for which heavy cost is to be paid by the coming generations in the shape of interest rates. The success story once created by any country becomes a global property as any other country can replicate it for gaining social, economic and political benefits. No one can stop any nation to follow the Confucius value system being followed in the whole economic and political systems of China. Moreover, there is not much cost of learning success stories and development experiences though there might be a heavy cost of ignoring any successful idea and doing experiments uselessly. There is a price tag attached to Economic Package while there is value tag associated to Learning Package. The latter has always been a sustainable option for nations. So, tested ideas should always be welcome for these are easy to operate keeping the indigenous environments in view. No need to reinvent the wheel when someone else has already invented and that too by importing ideas from your own heritage and values. So, the whole wisdom lies in learning from others’ experiences.

In this context, an Economic Package of 2-3 billion dollars cannot be as good a news for the public as having some brilliant package of learning from the development experiences of China. There is a great deal of scholarship to be gained from the public and private sectors of Chinese business, commerce and trade models. The e-commerce model of Ali Baba is the classical success story being replicated in many parts of the world with little modifications. The way the Chinese achieved a comparative and competitive advantage in the world of trade for the production of goods and services, is fairly a remarkable story for others to imitate in a rational way. They have developed a good governance system through excellent institutional development in which there is zero tolerance against corruption and white collar crimes. A very well verse accountability system and “Check & Balance” structure have led the whole economic and political affairs in a smooth and progressive way. Standard Rules of Business and regulatory arrangements have been made for all the affairs, authorities and bodies associated with trade, commerce and other state organs.

 We must learn that China is enjoying world leadership in the breaking the vicious circle of extreme poverty of around 700 million poor (76 per cent of the world) who are now taking off their micro-economy and living a reasonable life. There has been substantial emphasis on agricultural and economic development via placing innovation at the centre of public policy. For this purpose, there has been much focus on Research and Development (R&D) – 15 per cent of World’s total – to play an important role in helping China to transform into a service-based economy. Similarly, the Chinese exploited “Diaspora Capital” and world-class knowledge for making an investment in health and education. Rural reforms have been exemplary in which some restructuring of property rights and a big push to both savings rates and output were made. Competitive exchange rate invited the attention of investors both at domestic and foreign levels. All out efforts were made to revive the trust of trade community on government through business-friendly regulatory initiatives and holistic incentive mechanisms. A decentralized kind of governance system with free and fair accountability norms transmitted excellent justice system at grass root level.

China’s strategic depth in public policy making may offer some nice food for thought. It offers a basis for open consensus and active participation across members of society. We need to understand how entrepreneurial forces were unleashed in China through incentive mechanism and by tendering them to pursue those economic activities which were not only personally rewarding but net beneficent for the society as well. China has exercised discipline on the efficiency and effectiveness of both government and private enterprises. It introduced a high priority on policymaking capacity and investment in research and extension competencies in universities. These are linked to various ministries for important decision making and implementation processes of public policies. Under the Belt and Road Initiative Beijing, Tianjin, Shanghai, Guangzhou, Chongqing and Chengdu have been declared as “central mega-cities”. These act as China’s major economic poles and thereby cause trade liberalization with marvellous terms of trade in its favour. How one can make a replica of all such policy initiatives in Pakistan?

History is providing us with a chance to capitalize and mobilize lifelong friendship with China and thus take benefit out of it. We will have to learn how to learn from their development experiences. A great deal of commitment and selfless spirit is required for taking the start of one thousand miles journey. We know that being a rational entrepreneur at a public and private level, Chinese will be less interested in providing money but they would be happy to see their traditional business, commerce, and development ideas popular all over the world. For that matter, they would be interested in providing scientific and technical support in all affairs of life. This natural character of China may be activated in the real benefit of Pakistan. In this regard, we need to establish at least 5 specific Task Forces which could learn the mechanism of success stories in five different areas of the economy.

The First Task Force (TF1) would identify the ways and means through which macroeconomic management has been pursued in China under various crisis situations. How we can handle dual deficit (fiscal and trade) of the economy by formulating short term and long term policies in line with China? Second Task Force (TF2) would dig out the step-by-step method of coming out of a vicious circle of corruption and poverty through a strong political will. The proposed TF2 needs to see how all kinds of corruption were eradicated at grass root level and a mindset of good integrity and honesty was established. It would also be important for this TF2 to trace the whole procedure how huge chunk of the population was managed by creating employment and business opportunities. Third Task Force (TF3) may see the trade affairs very deeply. The fundamental goal of this TF3 should be to make a balance in ‘terms of trade’ by capturing at least some share of Chinese trade economy. Fourth Task Force (TF4) would understand the whole system of higher education where the flow of funds for R&D are continuously increasing and a knowledge-based economy is being created through mobilizing “Diaspora Capital”. The fifth Task Force (TF5) would focus on agriculture and rural development in China to pick some workable policy message for launching modernization in agriculture, Family Corporate Farming and well-coordinated supply chain network. 

These TFs would serve the purpose of learning groups which might include a good mix of experts from academia, bureaucracy, businesses, visionary politicians, and policy experts in these TFs. Besides visiting China and taking lessons from observing the things at grass root level, it would be more important to invite key business concerns, experts, intellectual leaders and policy makers in Pakistan and prepare a crash programme in these proposed areas. We should not celebrate that a “Basket of Dollars” is flowing in the economy but we must realize the fact that “Basket of Best Practices” is far better in correcting the ills of political economy of Pakistan. The learning process should not be stopped even if all dollars are stopped flowing in. This is the best tip for the Prime Minister to materialize his dream of diverting Pakistan from debt taker to debt giver.

 Divine values and the entire nation-state system pillared on those values is not the monopoly of a single country. Universal truth ruling anywhere in the world is a global property. Let us take our share.

 

Dr Abdul Saboor is Professor of Economics and is Dean (Faculty) of Social Sciences at PMAS Arid Agriculture University, Rawalpindi

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