Guest blog written by Beenish Amjad
I was afraid that the onslaught of the pandemic would have devastating impact on a developing country like Pakistan which has a strong history of sluggish economic growth and long-standing need-base relationship with the IMF. The economy in 2019 was weakening and poverty (headcount poverty ratio 24.3) and inequality (Gini coefficient of 33.5) was rising. COVID-19 has not only pushed more people to the below-poverty line but also strained the Federal budget due to the substantial allocation to the Conditional Cash Transfer Program (Benazir Income Support Program now Ehsaas).
In the midst of the all this, I decided to take the Program of Leading Economic Growth, with Professor Ricardo Haussmann and Matt Andrews, to evaluate the barriers to the economic growth of Pakistan and learn about the strategies of overcoming them. In my opinion and as Professor Matt said, “we should focus on growth as means and not end”. The past 10 weeks journey, though strenuous, provided the learning experience of years. Throughout the program, wide and diverse range of topics were covered without compromising on the depths of the contents. These topics helped a great deal to understand those issues which have become the binding constraints to the economic growth. Several tools were taught to synthesize and breakdown these binding constraints to reach at the key issue hindering the growth. Some of the most useful tools included economic complexity index, fishbone diagram, PDIA and diagnostic tree. One tool which influenced me a great deal is “the Atlas of Economic Complexity”. Despite my previous education in Economics, I didn’t come across any tool which as user-friendly and so enormously comprehensive. It enabled me to witness the trajectory of the developments in the Exports and Imports of Pakistan and also to compare it with other countries. The snapshots of the export’s basket import basket and economic complexity ranking (along with the rational as explained by Professor Haussmann) was a thorough learning experience for me.
Obviously, it is very difficult to highlight one issue which we consider as binding constraints to the growth. With the help of above tools, principles of binding constraint and case studies, I identified sluggish economic growth due to persistent current account deficit as economic challenge of Pakistan. With the help of further techniques, the problem was narrowed down to sluggish or no growth in exports.
In the fishbone diagram I was able to explain all the possible constraints to the growth contributing to the slow growth in exports.
Another key learning, through the case studies, was about the role played by the private sectors, academia and think tanks in identifying, resolving and overcoming the growth challenge. I agree with Professor Matt, “Government can play key role but not the “only” part”. Throughout the course, we remained focused on the end result of resolving the growth problem, removing the binding constraint and enhancing the economic growth, factoring in the significance of “inclusivity”. One of the key lessons is that inclusivity is all the more important for the less privileged strata of population and we have to make every effort to connect them with the growth process.
I have to admit that while enrolling for the course I was skeptical about the success of this online method of teaching but with the help of great team the entire program was a great success. The concept of breakout rooms provided virtual networking opportunity with the course mates and helped us understand about the other countries as well.
This is a blog series written by the alumni of the Leading Economic Growth Executive Education Program at the Harvard Kennedy School. Participants successfully completed this 10-week online course in July 2020. These are their learning journey stories.
To learn more about Leading Economic Growth (LEG) watch the faculty video, and visit the course website.