National economic growth is driven by total factor productivity (TFP), which is a portion of output driven by operational efficiency, managerial skills, innovation, and competitiveness besides conventional factors. Various studies show that Pakistan’s TFP growth has ranged from 0.5% to 1.8% and that its TFP growth is lower than that in its South Asian counterparts, despite having a greater proportion of youth in its demography and economic potential.

Therefore, the situation calls for designing better policy interventions to improve investment, workforce capabilities, and technological and institutional arrangements. This brief article outlines interventions to enhance productivity across the economy which were introduced during my various tenures as Minister for Planning, Development and Reforms.

First, I initiated a countrywide campaign on productivity, quality, and innovation (PQI) to excite both the public and private sectors about inculcating these important concepts into their areas of service or production delivery. Subsequently, a project titled Improving Competitiveness through Sustainable National Productivity (SNP) sponsored by the Ministry of Industries and Production and executed by the National Productivity Organization (NPO) was approved by the Planning Commission. Afterwards, the NPO started work on preparation of the National Productivity Master Plan (NPMP) for Pakistan. The effective intervention and collaboration with the NPO resulted in preparation/final shaping of the NPMP.

The Planning Commission’s 11th and 12th Five-Year Plans were developed to focus on tweaking the institutional and policy frameworks besides drastically increasing the size of the Public Sector Development Program. Emphasis on learning about modern technologies such as cloud computing, nanomaterials and nanotechnology, biotechnology, robotics, and AI were introduced by establishing Centers of Excellence in various higher education institutions; collaborations between the public and private sectors were encouraged. National Skill Development Programs and National Internship Programs were introduced, aligned with industry needs to ensure that the workforce is equipped to meet current and future challenges, fostering more productive industrial and service sectors.

Moreover, efficient logistics and connectivity reduce costs and delays in the supply chains, contributing to overall economic efficiency and productivity. Therefore, under China Pakistan Economic Corridor (CPEC) coordinated by Ministry of Planning, Development and Special Initiatives, the Government took various initiatives for improving the transportation networks, energy supply, and communication infrastructure.

Effective collaboration between the public and private sectors is a key to inculcating productivity. We established the Public Private Partnership Authority (P3A) to cater to the future needs of the economy. P3A is working to remove bottlenecks and improve the efficiency of capital, particularly for highways and other transportation infrastructure.

These comprehensive efforts will help boost productivity, earning potential, and competitiveness besides enhancing national economic growth. By focusing on these strategies and fostering collaboration, Pakistan can significantly enhance productivity across various sectors, driving sustained economic growth and improving the quality of life for its citizens.

From my perspective, improving productivity in Pakistan requires a multifaceted approach, i.e., investing in people and technology, developing infrastructure, and fostering collaboration between the public and private sectors. Productivity is not just about doing more; it’s about doing better. I firmly believe that balancing individual productivity with collective output requires strategies to motivate and support all stakeholders. In developing countries like Pakistan, too many regulatory requirements and supply chain complexities are the major barriers to optimizing productivity. Evidenced-based and data-driven policymaking to overcome these challenges has the potential to raise productivity.

Prof. Ahsan Iqbal, Federal Minister of Planning, Development and Special Initiatives, Government of Pakistan, is the recipient of the 2024 APO Meritorious and Distinguished Award.