ADB identifies 15 sectors for rapid economic growth

[Naveed Yaseen]

By Ijaz Kakakhel
ISLAMABAD: The Asian Development Bank has formulated a business strategy for the 15 sectors of the economy and has claimed that if followed the contribution to these sectors in GDP could increase from $16 to $26 billion and in exports it can increase from $22 to $28 billion over the next 5 years.

The detailed fact-based assessment of ADB identified latent potential across 15 sectors, which was composed in three types of sectors. This value splits across the different sectors as follows. Anchor sectors contribute up to $17.3 billion. Nascent sectors contribute up to $4.7 billion and Black swan sectors contribute up to $3.8 billion.

The ADB suggested that the Government of Pakistan has to create a business climate in the long-term that allows private investors to invest in the most promising opportunities. The ADB, in its document available with Daily Times, revealed that the government could influence and accelerate the pace of private investment by making choices on where it would prioritise infrastructure spending, make land available and which regulatory changes to pursue first.

In order to facilitate the decision process, the document revealed that the ADB examined 41 economic sectors within Pakistan’s economy. Based on number of factors-some Pakistan-specific, such as sector size, competitiveness, export value and growth, employment and investment—plus global factors—such as overall export growth, investment patterns and sector grown—the ADB identified a number of potential priority sectors for Pakistan. The ADB later on identified 15 key sectors in more detail, covering 50 percent of Pakistan economy, 65 percent of its exports and 67 percent of its employment base. The ADB then developed for each of these 15 sectors a “deep-dive” analysis to assess potential growth opportunities. It included sector level global trends, Pakistan’s likely competitiveness, sector-level performance and momentum, and growth feasibility.

According to ADB the 15 sectors can be grouped in 3 groups as follows:

Anchor Sectors: According to the ADB report, these sectors were the ones which were well-entrenched in and constitute a large portion of the nation’s economy such as major crops, minor crops, livestock, textiles, garments and leather, construction, retail and wholesale trade.

Nascent Sectors: The report showed that these sectors were relatively small but with high growth potential (1 to 5 percent of GDP, 5 percent of exports in a fast growing global export market or in a hotspot for investors: It includes chemicals, food products and beverages, machinery, mining and quarrying and sporting and other goods.

Black swans: These are emerging sectors where Pakistan could have a global competitive advantage (sectors where Pakistan might have a competitive advantage, were in global hotspot, or meet other strategic criteria). These include alternative fuels, medical, precision and optical equipment, off shoring and outsourcing and transportation equipment, Pakistan’s likely competitiveness, sector-level performance and momentum, and growth feasibility.

http://www.dailytimes.com.pk/default.asp...2009_pg5_7