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International Finance Corporation (IFC), the private lending arm of the World
Bank, conducted a study involving more than 300 software and hardware
companies in India and China. The study discusses strategies behind the
success of the Software Industry of India and Manufacturing Industry of China.
According to its findings, India’s policies for the software sector and China’s
promotion of Special Economic Zones (SEZs) for the manufacturing sector
suggest that well-designed and sector-specific government policies can
overcome weaknesses in investment climate and allow developing countries to
compete globally in new fields.
The emergence of China as a formidable economic player on global front is a
mix of strong national objectives, well thought out & consistent policies, followed
by sincere implementation. One is inclined not to attach a greater role to the
political system of China in this respect because the immediate neighbor India,
with a totally different set of political tools, is not far behind China. In fact India
excels China in some areas by quite a margin. Vision, political will and
adherence to stated objectives rather than political ideology, have played the
decisive role in placing China and India where they stand today.
The IFC study praises the prudence of software sector policies of India and
promotion of SEZs in China for the manufacturing sector. China started with
facilitating access to cheap energy for manufacturing and India facilitated
broadband access for software companies and both achieved phenomenal
success. The respective governments, instead of directly subsidizing
companies or protecting them against imports, offered tax concessions which
lowered costs and reduced government interference in their business.
Resultantly, China’s hi-tech manufacturing competes at global level, as do India’
s software and biotech industries. Fueled by handsome returns, the Research
& Development spending remained above 7 percent in both the countries in
2008 compared with 4 percent in the US, 2 percent in Japan and surprisingly,
one percent decline in EU. This speaks volumes of the investment friendly state
policies. As against this, our monetary & fiscal policies are driven by political
exigencies, often by panic and are replete with massive disregard to long term
impact. The power and gas tariffs are classic examples. Generating revenues
for the immediate needs is more important even if the overall returns diminish
due to the closure of industrial units.
While advancing in their respective areas of strength, India & China both took
note of the strengths of the other country to reduce deficiencies back home.
India started putting more emphasis on the development of SEZ to strengthen
its manufacturing sector. And China facilitated the growth of Software Industry
by creating domestic demand for software through automating state processes.
Something we so badly need and our policy makers so blatantly ignore. While
the automation of public sector generated huge demand for software and
software enabled services in India, the E-government initiative of Pakistan is a
non starter. The E-government Directorate (EGD) is supposed to be the hub of
e-government initiative. If one visits the website of EGD, the first news is about
the Federal Minister IT&T, Awais Ahmad Laghari launching God knows what.
The News & Press Release section of EGD has “Currently no news available on
EGD” as the solitary, permanent item on the hugely blank page that symbolizes
the desertification of mind, thought & vision. How significant is the Ministry of
IT&T for the government is evident from the fact that the Ministry has no
Minister for the last more than a year. So much for survival in this knowledge-
driven world.
Malaysia is an inspiring example what the vision of the leadership and strong
national objectives can do to a nation. The Multimedia Super Corridor (MSC) of
Malaysia is yet another SEZ success story. Malaysia enjoys third place after
India and China in outsourcing ICT activities. The outsourcing industry alone is
the biggest contributor to MSC, accounting for RM5.3 billion (3.53 RM=1US$).
The SEZ initiatives have paid dividends in the area of Biotechnology as well.
The former Prime Minister Dr Mahathir Mohamad inaugurated the BioValley in
2003. Today the Biotech Industry of Malaysia is a resounding success.
According to the global research house Frost & Sullivan, the Malaysian
Biotechnology Industry is expected to generate RM45 billion in revenue by
2013.
The Global Biotech market is evaluated a $917 billion sector. For the last 15
years, India has been aggressively advancing in this area. Down from year-on-
year growth of 34 percent due to global economic crisis, the growth of Indian
Biotech Industry was 18% in 2007-08. In absolute terms, industry grew to Rs.
12,137 crore from Rs.10,274 crore, the previous fiscal. Banglore, the IT hub, is
now poised to be the center of excellence in Biotechnology as well. Small
miracle India is aiming to be the world leader in Biotechnology. It would be
nothing short of a small wonder if our top political leadership ever used the term
‘Biotechnology’ in their conversations.
The SEZs of India have attracted investments of over Rs1,08,903 crore besides
providing direct employment to about 3,87,439 persons. Such is the potential of
SEZs that despite global recession, their export of Rs.99,689 crore during the
fiscal 2008-09, are about 50 percent more than the exports made by SEZs
during the year 2007-08. Recently, the Turkish government came under fire for
exporting only $400 million worth of Biotech products while tiny Ireland is
earning billions of dollars annually through the export of such products and
equipment. Do we hear anyone mention Biotechnology or SEZs in Pakistan?
Nobody even notices the slowly degenerating Commission on Biotechnology. If
the Commission is only clinically alive, it is only because the funds meant for the
promotion of Biotechnology are being used for paying staff salaries. Since its
inception, the Commission has done little more than merely existing.
This scribe studiously avoided mentioning the pathetic support of the
government to outfits like Hattar Industrial Estate which are a far cry from SEZs.
But if our attitude to SEZs and Biotechnology remains unchanged, we would
soon see India vanishing beyond the Biotech horizon, as it did in the case of
ICT, leaving us huffing, puffing and coughing in the wake of swirling dust.
Bank, conducted a study involving more than 300 software and hardware
companies in India and China. The study discusses strategies behind the
success of the Software Industry of India and Manufacturing Industry of China.
According to its findings, India’s policies for the software sector and China’s
promotion of Special Economic Zones (SEZs) for the manufacturing sector
suggest that well-designed and sector-specific government policies can
overcome weaknesses in investment climate and allow developing countries to
compete globally in new fields.
The emergence of China as a formidable economic player on global front is a
mix of strong national objectives, well thought out & consistent policies, followed
by sincere implementation. One is inclined not to attach a greater role to the
political system of China in this respect because the immediate neighbor India,
with a totally different set of political tools, is not far behind China. In fact India
excels China in some areas by quite a margin. Vision, political will and
adherence to stated objectives rather than political ideology, have played the
decisive role in placing China and India where they stand today.
The IFC study praises the prudence of software sector policies of India and
promotion of SEZs in China for the manufacturing sector. China started with
facilitating access to cheap energy for manufacturing and India facilitated
broadband access for software companies and both achieved phenomenal
success. The respective governments, instead of directly subsidizing
companies or protecting them against imports, offered tax concessions which
lowered costs and reduced government interference in their business.
Resultantly, China’s hi-tech manufacturing competes at global level, as do India’
s software and biotech industries. Fueled by handsome returns, the Research
& Development spending remained above 7 percent in both the countries in
2008 compared with 4 percent in the US, 2 percent in Japan and surprisingly,
one percent decline in EU. This speaks volumes of the investment friendly state
policies. As against this, our monetary & fiscal policies are driven by political
exigencies, often by panic and are replete with massive disregard to long term
impact. The power and gas tariffs are classic examples. Generating revenues
for the immediate needs is more important even if the overall returns diminish
due to the closure of industrial units.
While advancing in their respective areas of strength, India & China both took
note of the strengths of the other country to reduce deficiencies back home.
India started putting more emphasis on the development of SEZ to strengthen
its manufacturing sector. And China facilitated the growth of Software Industry
by creating domestic demand for software through automating state processes.
Something we so badly need and our policy makers so blatantly ignore. While
the automation of public sector generated huge demand for software and
software enabled services in India, the E-government initiative of Pakistan is a
non starter. The E-government Directorate (EGD) is supposed to be the hub of
e-government initiative. If one visits the website of EGD, the first news is about
the Federal Minister IT&T, Awais Ahmad Laghari launching God knows what.
The News & Press Release section of EGD has “Currently no news available on
EGD” as the solitary, permanent item on the hugely blank page that symbolizes
the desertification of mind, thought & vision. How significant is the Ministry of
IT&T for the government is evident from the fact that the Ministry has no
Minister for the last more than a year. So much for survival in this knowledge-
driven world.
Malaysia is an inspiring example what the vision of the leadership and strong
national objectives can do to a nation. The Multimedia Super Corridor (MSC) of
Malaysia is yet another SEZ success story. Malaysia enjoys third place after
India and China in outsourcing ICT activities. The outsourcing industry alone is
the biggest contributor to MSC, accounting for RM5.3 billion (3.53 RM=1US$).
The SEZ initiatives have paid dividends in the area of Biotechnology as well.
The former Prime Minister Dr Mahathir Mohamad inaugurated the BioValley in
2003. Today the Biotech Industry of Malaysia is a resounding success.
According to the global research house Frost & Sullivan, the Malaysian
Biotechnology Industry is expected to generate RM45 billion in revenue by
2013.
The Global Biotech market is evaluated a $917 billion sector. For the last 15
years, India has been aggressively advancing in this area. Down from year-on-
year growth of 34 percent due to global economic crisis, the growth of Indian
Biotech Industry was 18% in 2007-08. In absolute terms, industry grew to Rs.
12,137 crore from Rs.10,274 crore, the previous fiscal. Banglore, the IT hub, is
now poised to be the center of excellence in Biotechnology as well. Small
miracle India is aiming to be the world leader in Biotechnology. It would be
nothing short of a small wonder if our top political leadership ever used the term
‘Biotechnology’ in their conversations.
The SEZs of India have attracted investments of over Rs1,08,903 crore besides
providing direct employment to about 3,87,439 persons. Such is the potential of
SEZs that despite global recession, their export of Rs.99,689 crore during the
fiscal 2008-09, are about 50 percent more than the exports made by SEZs
during the year 2007-08. Recently, the Turkish government came under fire for
exporting only $400 million worth of Biotech products while tiny Ireland is
earning billions of dollars annually through the export of such products and
equipment. Do we hear anyone mention Biotechnology or SEZs in Pakistan?
Nobody even notices the slowly degenerating Commission on Biotechnology. If
the Commission is only clinically alive, it is only because the funds meant for the
promotion of Biotechnology are being used for paying staff salaries. Since its
inception, the Commission has done little more than merely existing.
This scribe studiously avoided mentioning the pathetic support of the
government to outfits like Hattar Industrial Estate which are a far cry from SEZs.
But if our attitude to SEZs and Biotechnology remains unchanged, we would
soon see India vanishing beyond the Biotech horizon, as it did in the case of
ICT, leaving us huffing, puffing and coughing in the wake of swirling dust.
| Article (Nov 2008) |
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