How To Make Pakistan A Rich Country

HOW TO MAKE

A RICH COUNTRY

How to Make Pakistan A Rich Country

CONTENTS

• We Need Three Hundred Universities in Pakistan
• Pension for All Old Citizens of Pakistan
• We Need Large Gold Reserves : To Make Rupee A Strong Currency
• We Need Thirteen Stock Exchange Companies
• Development Expenditure : A Failed Concept; A Death Trap
• Defects in the Educational System

2


CHAPTER 1

WE NEED
THREE HUNDRED (300)
UNIVERSITIES
IN PAKISTAN

3

WE NEED THREE HUNDRED (300) UNIVERSITIES IN PAKISTAN

In Pakistan higher education is viewed as a benediction which should be only to chosen few
members of society. It is the narrow approach which is perhaps the major obstacle in creation of
universities for the masses in Pakistan. In an ideal society, higher education should be accessible
to all those who want to improve their lot. For example, a third division master’s degree holder
is far more knowledgeable and a useful person to himself and society than a person who has less
education, say a first division matriculate. An educated person, by virtue of his knowledge, is
able to exploit all available resources such as:

• Employment opportunities
• Health facilities
• Baking facilities
• Dealing with government agencies
• Personal resources
• Natural Resources

In our present society, every endeavor requires filing of forms, reading and writing skills, simple
mathematical calculations and judgments based on knowledge. Comparatively, an under
educated person is helpless in coping with demands of life as he lacks the necessary reading,
writing and mathematical skills. For example, an educated farmer can extract more output from
a farm by applying progressive techniques where as an under educated farmer most likely, will
not be able to extract as much output.

INSTITUTION OF UNIVERSITIES A SERVICE INDUSTRY

Role of other institutions of higher learning such as 2‐year, 4‐year colleges, technical college and
professional colleges is obviously very important. These institutions of higher learning are an
integral part of overall educational system and they are indispensable. However, this Chapter is
primarily concerned with Impact of Universities on the Economy. Therefore, presentation in
this Chapter is confined to economic impact of universities only.

A University must be viewed as a large industrial unit because it has all of the characteristics of
an industrial unit. A University qualifies as a large industrial unit because of the following
economic characteristics:

1. Product: A service product in the form of educational degree is created having indirect
economic value.
2. Gross Domestic Product: A very large value of gross Domestic Product is created. The
sum of expenditure incurred of service product (educational degree) is in fact an
economically useful GDP.
3. Employment: Universities create employment opportunities for a large number of
persons.

In addition a University creates an extra benefit. Universities also Absorb A Very Large Number
Of Unemployed Adult Population As Students, Which Diverts Potential Job Seekers Away
From the Employment Market Thereby Creating Better Employment prospects For the
Remaining Unemployed population. This aspect of institutions of universities is extraordinary
and no other industry can match this advantage.
4

ECONOMIC IMPACT IF THREE HUNDRED (300) UNIVERSITIES ARE

CREATED IN PAKISTAN

Existence of highly educated Generate annual and
population will ensure quick
recurring GDP of
economic development Rupees 75‐Billion Per

Provide opportunities
for higher education to
3,000,000 persons

Enable emergence Generate direct
of paper printing employment for
CREATION OF 300,000
and publishing
300
UNIVERSITIES
WILL

Enable Absorption of 3,000,000 Enable Diversion of
potential employment seekers as potential employment
students, this will create better job seekers away from the
job market
prospects for the general

5


COMPARISM BETWEEN STATUS OF UNVERSITY EDUCATION OF UNITED
STATES OF AMERICA AND PAKISTAN
Particulars United States of America Pakistan____

Population 265,284,000 135,280,000
Total No. of Universities 606 33
Average Population Served 437,762 3,661,516

by Universities
Total No. Students in All 6, 827, 28 71,819

Universities
Average No. Students per 11,266 2,176

University
Adult Population 192,507,000 72,515,000
%age of Adult Population 3.546 % 0.00099 %

Enrolled in Universities
Total No. Persons Employed 886,156 33,000

In Universities
Source of Data: Statistical abstract of USA, college hand book 1997. Economic survey, Govt. of PAK
Not only a large segment of population of Pakistan is deprived of access to university
education, but also a large segment of population is deprived of employment opportunities
due to absence of universities.

ONE UNIVERSITY FOR WOMEN IN EACH DIVISION

There are 24 administrative divisions in whole Pakistan. Each division has average population of
5.6 Million persons. Establishment of one university in each division will effectively provide
opportunities for higher education for a large segment of veil observing women population. In
addition employment opportunities for 24,000 women will be generated. All of these economical
benefits can be achieve at a petty cost of Rs. 100 Million Per Annum per University, Instead of
blasting away 100 Billion Per Annum on wasteful development schemes. This measure will
instantly improve economic and social conditions of women of this country.

6


SUMMARY OF ECONMIC IMPACT IF 300 UNIVERSITIES
ARE CREATED

A. GROSS DOMESTIC PRODUCT
Recurring (Direct) Gross Rs. 75,000 Millions
Domestic Product Per Annum

Recurring Gross Domestic Due to Rs. 15,000 Millions
Additional Demand for Paper, Printing
And Publishing Industries

Additional (Indirect) Recurring Rs. 150,000 Millions
Gross Domestic Product Due to
Multiplier affect

Total Recurring Annual GDP Rs. 240,000 Millions

B. EMPLOYMENT

Direct Employment Opportunities 300,000

Additional Indirect Employment 41,660
Opportunities Due to Demand for
Paper, Printing and Publishing

Additional Employment due to 416,666
Multiplier Affect

Additional Indirect Employment 3,000,000
Opportunities Due to Absorption of
Adult Population as Students

Total Employment opportunities 3,758,326

BIBLIOGRAPHY

1. Statistical Abstract of USA, 1993, U.S. Bureau of Census, 113th Edition.

2. Economic Survey, 199697, Government of Pakistan, Finance Division, Economic
Adviser’s Wing, Islamabad.

3. Economics by William P. Albrecht Jr., Published by Prentice Hall, Englewood Cliff Hew
Jersey, USA 1974.

4. Statistics on Higher Education, University Grant Commission H‐9 Islamabad, Pakistan.
7


CHAPTER 2

PENSION
FOR ALL
OLD CITIZENS OF
PAKISTAN

8

PENSION FOR ALL OLD CITIZENS OF PAKISTAN

At the present there is no pension scheme for old citizens of Pakistan. The citizens who reach old
age have no guaranteed source of income. These old citizens suffer immensely. They loose self
respect and become entirely dependent on their close relatives for financial support. This
creates financial strain on poor families who can ill afford to sustain their own existence.

The suffering is unnecessary and it needs to be alleviated immediately. It can alleviate
immediately irrespective of whether a country is poor or wealthy. All that is required is a System
for Accumulation of Funds and Disbursement of a Minimum Amount to old citizens. The
system must be simple, easy to implement and it should provide a bare minimum level of income
to all citizens including housewives.

In U.K. it is entitled, Social Insurance and in U.S.A. it is entitled, Social Security Act. We need not
experiment afresh and waste valuable time, plenty of models are available. All we need to do is
to Copy A Successful Pension System of a successful nation.

COMPULSORY PENSION SYSTEMS FOR OLD CITIZENS OF SELECTED

COUNTRY AND THE YEAR OF ENACTMENTS

Name of Country Title of Pension or Insurance Program Year of Enactment
Germany Sickness Insurance Law 1883

National Workman’s Compensation Act 1889
Britain Workman’s Compensation 1897
Compulsory Health Insurance 1911
Compulsory Old Age & Survivor’s 1925
Insurance
Russia Sickness Insurance Law 1911
Uruguay Old Age Disability & Survivor’s Insurance 1919
Japan Sickness Insurance Law 1922
Chile Sickness, Disability & Survivor’s Insurance 1924
New Zealand Sickness, Maternity, Disability, Accident 1938
Old Age Survivor’s & Unemployment Act
United States of America Social security Act. 1935
Source: Encyclopedia Americana, International Edition by Grolier Incorporated, U.S.A.

9


ECONOMIC AND SOCIAL BENEFITS OF COMPULSORY PENSION SYSTEM
FOR ALL OLD CITIZENS

Enable old citizens to
sustain a minimum Eliminate the extreme level

standard of living of poverty which are
prevailing all over Pakistan

Increase standard of living Support part of
and will decrease the gap COMPULSORY old citizen’s daily
between the rich and poor PENSION expenditure

SYSTEM WILL

Increase spending power of
Instill a sense of pride,
dignity and self‐respect to most house‐holds thereby
old citizens promoting economic stability

Industrial development alone can’t eliminate poverty. Therefore enactment of compulsory
pension scheme for all old citizens is a pre‐condition for elimination of poverty in Pakistan. It
should also be borne in mind that elimination of extreme levels of poverty became possible in
western countries only after enactment of compulsory pension schemes in those countries.

10


CALCULATION OF EXPENDITURE ON OLD AGE PENSION SCHEME

According to 1981 population census, 8.95% of general population is in the age group of 55 and
over. The population of Pakistan in the year 1996‐97 is 135 million persons. Thus, total number
of old citizens who will be eligible for pension scheme will be as under:
Total number of old citizens = General population
Eligible for pension: in 1996‐97 x 8.95%
= 135 million x 8.95%
= 12.082 million persons

And,
Total expenditure on pension = 12 M Old x Rs. 200/‐
pension
Scheme per month citizens per month
= Rs. 2,400 million

Total expenditure on pension = Rs. 2,400 million x 12 months
Scheme per year = Rs. 28,800 million per annum

Estimated Recovery on Amount of Compulsory Deduction of Pension at 1% of Salary

Total work force 38.180 million
Per Capita income Rs. 4,347.00

Pension Recovery = Average Salary x rate of x work
Per worker pension force
= Rs. 4347 x 1% x 38.18 M
= Rs. 1.659 billion

Per Annum = Rs. 1.659 x 12
= Rs. 19.920 billion

Short fall of Rs. 8.880 billion per annum, can be met from 1% pension tax on monthly telephone bills
Source: Economic Survey, 1997‐98, Govt. of Pakistan

BIBLIOGRAPHY


Jersey, USA 1974.

11


CHAPTER 3

WE NEED
LARGE GOLD RESERVES
TO MAKE BRUPEE
A STRONG CURRENCY

12


WE NEED LARGE GOLD RESERVES TO MAKE RUPEE A STRONG CURRENCY

Prior to 1971, the Gold Revenue Exchange Standard System was in operation. Under this system
each nation defined its currency in terms of specific value of gold. In addition each nation agreed
to convert its paper currency into gold on demand. Under this system, large reserves of gold
were maintained by central banks to support value of their respective currencies and to meet
international obligations arising due to trade deficit. The Gold Exchange Standard System had
some inherent flaws due to scarcity of gold which prohibited expansion of money supply. And as
such money supply could not expand in proportion to requirement of trade. It was felt that Gold
Exchange Standard System was no longer adequate to meet the demands for expansion of trade
and demand for expansion of money supply. On August 15, 1971, United States of America
announced that it would no longer redeem paper dollars for gold. Other nations also followed
and dispensed with Gold Exchange Standard System. Currencies were left free to be traded in the
open market to find their own price level.

VALUE OF GOLD
Gold has been universally accepted and valuable community since time immortal. It continues to
be a valuable commodity today. It has a predictable and universally accepted value and it can be
converted into any currency because it is acceptable and valuable to all peoples of world. Value
of gold increased with the passage of time. Its value has a tone of stability because of scarcity of
supply. Because of its universally accepted value, scarcity of supply, stability in its value, gradual
and predictable increase in its value with the passage of time, the gold continue to be significant
component of Reserve Assets of developed nations. Gold imparts a predictable value to the
currency it backs. In simpler terms large gold reserve increase the value of currency in domestic
and international markets. Compared to even the most sought‐after countries, the US dollar, the
Gold is universally more acceptable, stable in value, with constant rise in its price. Therefore
Gold must be recognized as the most important of Reserve Assets.

QUANTITIES OF GOLD HELD AS RESERVE ASSET BY DEVELOPED NATIONS
OF WORLD

Quantity of Gold Value of Gold
Name of Country (in millions of troy ounces) (in billions of dollars)

United States of America 264.320 92.512
Germany 95.180 33.313
Switzerland 83.280 29.148
France 81.850 28.647
Italy 66.670 23.335
Netherlands 43.940 15.379
Venezuela 11.460 4.011
Pakistan 2.265 0.793
Source of Data: Encyclopedia of Banking and Finance, by Glenn G. Nunn, F.L. Garcia, Charles J. Woelfel,
Published by Banker’s Publishing Co., Rolling Meadows. Illinois, USA and Economic Survey
1995‐96, Govt. of Pakistan.
13


The table reveals direct relationship between strong currency and large quantities of gold held
as Reserves. All of above countries have strong currencies having high trading value in the
international markets except Venezuela and Pakistan. High value of currencies of above
countries is well known and the prices are published daily in newspapers. The important point
to note is that all of the developed countries are maintaining very large quantities of gold as
reserves, which has imparted very strong value to their currencies in the international
markets. And strong currencies have advantage over weak currencies in international trade
because less domestic currency is required for imports from other nations.

TOTAL QUANTITY OF GOLD HELD AS RESERVE ASSET BY DEVELOPED AND
UNDERDEVELOPED COUNTRIES

Quantity of Gold Percentage of
In millions of Total World
Ounce Reserve Held

Total Gold Reserves of
All Countries of World 946.200 100.00%

Developed Countries 783.600 82.82%

Underdeveloped Countries 162.600 17.18%
Source: Encyclopedia of Banking and Finance by Glenn G. Munn, F.L. Garcia, Charles J. Woelfel published by
Banker’s Publishing Co. Rolling Meadow, Illinois U.S.A.
The Exhibit reveals that total Developed Countries have very strong currencies. Thus it can be
concluded without any reservation that holding of large quantities of Gold Reserves is a
major factor which significantly contributes to high value of currencies of developed
countries in the international trading market.

CALCULATION OF REQUIRED QUANTITY OF GOLD RESERVES FOR

PAKISTAN

Geographical size of Land Area of 803,943 Sq. km
Pakistan in percentage of Pakistan = = 8.78%
of size of U.S.A. Land area of 9,169,454 Sq. km
U.S.A.

Population of Pakistan Population of Pak. 135 million
in percentage of = = 50.94%
population of U.S.A. Population of U.S.A. 265 million

Mean of both percentage (8.78% + 50.94%)/2 = 29.85%

14

Calculation of required Gold Reserve of x Mean of both percentage

U.S.A.

Gold Reserves of Pakistan 264.320 million x 29.85% = 78.925 million
Ounce troy ounce

Value of Required Gold At price of 350.00 x 78.925 M = 27.624 B
Reserves in U.S. dollars dollars per ounce ounce dollars

BIBLIOGRAPHY


Jersey, USA 1974.

3. Encyclopedia of Banking and Finance by Glenn G. Munn, F.L. Garcia, Charles J. Woelfel
published by Banker’s publishing Co. Rolling Meadow, Illinois U.S.A.

4. Statistical Bulletin, State Bank of Pakistan, June 1995.

15


CHAPTER 4

WE NEED
THIRTEEN
STOCK EXCHANGE
COMPANIES

16

ADDITIONAL STOCK EXCHANGES REQUIRED

Creation of additional Stock Exchanges in major population centers of Pakistan will provide
opportunity for residents of these areas to invest their idle savings in the shares of companies. A
vast amount of Investment Capital will be available for investment in the industry. It can safely
be estimated with reasonable accuracy that an additional Investment Capital amounting to Rs.
1460.064 billion will be available.

That country has potential for Public Limited Companies in the range of 5000 to 7000
companies. It is beyond the managerial capacity of existing Stock Exchanges to accommodate
such a large number of companies. This is evident from the fact that small investor has been
banned from buying and selling of shares through stock exchanges of Pakistan. Obviously
the Stock Exchanges of Pakistan are not in need of additional business of buying and selling of
shares. They are already making too much money! Therefore, if the country is to become an
industrialized nation, then at least ten (10) additional stock exchanges will be required.

POPULATION AREAS WHERE ADDITIONAL STOCK EXCHANGES ARE
REQUIRED

Additional Stock Exchanges are immediately needed in the following major cities of Pakistan:

• Gujranwala
• Faisalabad
• Sargodha
• Multan
• Sukkar
• Hyderabad
• Quetta
• Peshawar
• Azad Kashmir
• Federal Administrated Tribal Areas

Creation of Additional Stock Exchanges will enable additional one hundred (100) million citizens
of Pakistan to invest their idle savings in shares of companies. At the present citizens living in
the above population centers are completely cut‐off from the activity of buying and selling
shares of companies. There is no justification why only one, two or three Stock Exchanges should
be operating? No expenditure of Government is involved and there is no divine law which
prohibits more Stock Exchanges. Therefore there exists no justification for not having additional
Stock Exchanges in the above cities of Pakistan. It is important to borne in mind that cost of
establishment of additional Stock Exchanges will be incurred by the private sector.

17


POPULATION OF CITIES HAVING STOCK EXCHANGES

Name of City Population in Million

Karachi 7.503

Lahore 4.890

Islamabad 0.470

Total 12.863 9.525% of total
Population of Pakistan
Total population of Pakistan 135.000

Resident of other cities of Pakistan also invest in shares of companies to a smaller extend but
their participation is limited only to investment in initial floatation of shares. In order to test the
hypothesis that only ten percent (10%) of potential source of Investment Capital is being tapped,
a random sample of 166 certificates of 10023 shares of 37 companies was examined. The
certificates were selected on the basis of availability on hand on a certain date which was in
personal custody. Data on geographical location of original allot tees of share certificates was
collected. The results of sample survey are summarized below:

A SURVEY FOR DETERMINATION OF RESIDENCE OF SHARE HOLDERS

Geographical Number of Shares Percentage of
Location of Allotted to Shares Held by
Investor Original Investor Investors

Karachi 5267 52%
Lahore 1989 20%
Islamabad 1016 10%
Total 8272 82%
Rest of Pakistan 1715 18%
Grand Total 10023 100%
The survey reveals that:

1. Source of Investment Capital of Listed Companies is restricted primarily to residents of
three cities i.e. Karachi, Lahore and Islamabad.
2. Only 12% of Potential source of Investment Capital is being tapped.
3. Major Segment of population of country does not have access to shares investment
market (Stock Market).
4. Approx. 88% of total potential source of Investment Capital remains un‐utilized.
18


Additional 5929 listed
Additional Capital will enable Companies will generate gross
formation of additional 5929 domestic product of Rs. 3,593
listed Companies billion per annum

ESTABLISHMENT
OF ADDITIONAL
TEN STOCK
EACHANGES

Will create

Employment for
2,979,500
Will enable harvesting of This will complete the process
additional investment capital of of Industrial & Economic
Rs. 1,460 billion development of country

BIBLIOGRAPHY


Jersey, USA 1974.

3. The Listing Regulations of Karachi Stock Exchange (Guarantee) Limited.

19


CHAPTER 5

DEVELOPMENT
EXPENDITURE:
A FAILED CONCEPT;
A DEATH TRAP!

20

DEVELOPMENT EXPENDITURE: A FAILED CONCEPT; A DEATH TRAP!

Federal Government of Pakistan does not provide any service or benefits to citizens of Pakistan.
National Defense is perhaps the one and the only beneficial and useful service provided by the
Federal Government. What benefits do people of: Charsada or Bukkar receive from Federal
Government? This is a very deep and penetrating question. Unfortunately the answer is none.
Against total expenditure of Rs. 170.131 billion in 1997‐98, a sum of Rs. 90.106 billion was
blasted away in the name of Development. The question which arises is that since Federal
Government does not provide any services or benefits to citizens of Pakistan, then why does the
Government such a huge amount of money year after year in the name of Development remedies
and how to contain this monster within limits. It is important to know that approximately 50%
of civilian none‐ Development expenditure is also wasted which also needs to be curtailed.

AN ANALYSIS OF SERVICES AND BENEFITS PROVIDED BY THE FEDERAL

GOVERNMENT

Basic services such as law and order, education, construction and maintenance of roads,
sanitation, water supply and health are provided by the provincial and local governments. Other
services such as electricity, gas, radio and television broadcasting, railway, shipping, telephone,
telegraph, ordinance factories, air lines and ownership of industrial and commercial
undertakings are in fact purely private sector functions, which are unnecessarily being provided
by the Federal Government. These services are paid‐for from charges at a very high cost to
consumer (public). The private sector can provide all of these services at one half the cost
charged b) the Government enterprises. So the services provided by the Federal Government
should in fact he provided by the private sector. And there exists no justification whatsoever for
indulging in these activities by the Federal Government. Thus in fact Federal Government
provides no cervices or benefits to citizens of Pakistan from tax revenue.

A FAILED CONCEPT

The concept of Development was envisioned by the communist revolutionaries who believed
that industrial and economic development could be achieved by centralized planned economy
approach. This concept has not been successful. The planned economies of Easter Europe and
communist countries have failed to keep pace with Free Economies of Western Europe. The
Socialist arid Communist countries have moved on to the concept of Free Economy approach.
Unfortunately, the concept of planned economy or development approach is lingering on in
this country. Practical experience of past seventeen years shows that nothing visible and
tangible has been achieved from Development Expenditure. This concept must now be
abandoned, it is a failed concept. The item of expenditure entitled, Development must be
deleted from the annual budget of the country. It must be recognized that industrial and
economic growth can only be achieved by undertakings by the private sector. Instead of
Blasting Away 100‐billion per annum year after year, the emphasis should be on creation of
5.959 listed Companies in the private sector.
21


A DEATH TRAP

There is direct relationship between Development Expenditure, burden of repayment of loans
and more borrowing (deficit financing). Firstly, 90% of Development Expenditure is wasted. No
tangible and visible achievements are on record. And secondly, the money borrowed for
development has to be repaid with interest. The item Debt Servicing is in fact accumulation of
many years of wasteful Development Expenditure in the shape of debts which are now being
repaid.

TABLE SHOWING PERCENTAGE OF TAX REVENUE UTILIZED FOR
REPAYMENT OF LOANS
(Rupees in Billion)
Repayment of Loans Percentage of Tax
Of Loans Domestic Total Tax revenue extended
Year Foreign & Interest Revenue on Repayment of loans

1993‐94 128.848 162.922 79%
1994‐95 133.067 180.160 74%
1995‐96 165.917 202.872 82%
1996‐97 198.523 221.581 90%
1997‐98 247.861 276.843 90%
Source: Economic Survey, 1997‐98, Govt. of Pakistan

Country has fallen into a Death Trap, where in, entire tax revenue has to be diverted towards
repayment of previous loans which were wasted in the name of development in the first
place. And more money is being borrowed to finance more wasteful Development Expenditure
and more wasteful Non‐Development Expenditure. The act of borrowing money for wasteful
Development Expenditure creates shortage of Investment Capital resulting in halt to industrial
growth, devaluation of currency, rise in prices, and rise in interest rates, lower Gross Domestic
Product, un‐employment and ultimately leading to Economic Death! On September 1998 the
Government of Pakistan was insolvent: it did not have funds to repay loans and it did not have
funds to finance normal operational expenditure.
EXPENDITURE ON DEFENSE

The general public of Pakistan has been wrongfully led into believing that Defense Expenditure
is a burden on the economy. Every now and then policy makers shift economic failures on the
Defense Expenditure. Statements and presumptions without reference to facts are harmful to
national defense. The crux of the matter is that Defense Expenditure is the only expenditure
which is beneficial with real benefits. Following benefits are provided by the Defense
Expenditure:
22

1. Protection of borders from hostile neighbors.

2. Development of highly qualified, (academically and technically) manpower. Defense
personnel are more qualified than their civilian counterparts by virtue of constant
training of Defense personnel.

3. Maintenance of cantonment areas of country. Cantonment areas are better maintained
than other parts of city due to discipline and systematic‐approach of defense personnel.

4. Financing and administration of a large number of educational and technical
institutions which are beneficial not only for defense but are useful for the entire
country.

5. Establishment and maintenance of Ordinance Factories which provide employment
create GDP, save foreign exchange and through which technical know‐how has been
transferred into this country.

6. Defense Expenditure provides employment for a very large segment of population
(defense personnel) who provide useful services. This greatly provides relief to
population which would otherwise be unemployed. An ultimate goal of all governments
of countries of world is to provide employment for its citizens.

7. Because of better academic and technical qualification and training in discipline, the
retired defense personnel continue to be useful citizens even after retirement.

WHAT SHOULD BE DEVELOPED
The most important, useful and most beneficial service which the Federal Government can
provide to citizens of Pakistan is, to stop wasting money, eliminate development expenditure,
reduce nondevelopment expenditure by 50% and to stop borrowing from domestic and
foreign sources. The most important task at hand at this hour for the parliament of
Pakistan is to find ways and means to reduce wasteful federal expenditure. There is literally
nothing which requires to be developed by Federal Government. Let us follow the example of the
great nation of United States of America and leave the task of economic and industrial
development to the private sector.

Mega Projects Only
There are very few mega projects which required the help of Federal Government and they are:
1. Construction of double tract railway line for main tract and subsidiary tract.
2. Large Dams
3. Sea ports and air ports.
4. Super high ways.
23

Steps for Quick Economic and Industrial Growth
For a quick economic and industrial growth, the following steps are required to be completed:
1. The function of education for class 1 to 10 should be entrusted to local government as
in USA.
2. One hundred and fifteen universities should be created. One university in each district
for general public and one university in each division for women.
3. Ten stock exchanges may be created in major cities by the private sector.
4. Pension scheme for all old citizens of Pakistan may be commenced immediately.
5. Gold reserves must be increased gradually to reach required level of 28 billion dollar.
6. There must be complete halt to government borrowing from foreign loan agencies.
Above measure if implemented wholeheartedly will quickly transform this poverty stricken
country into a rich nation.

BIBLIOGRAPHY



Jersey, USA 1974.

3. An interview with Mr. Muhammad Aslam Siddiqi, Manager National Bank of Pakistan,
who provided information on the prevailing system of foreign exchange controls of State
Bank of Pakistan.

24


CHAPTER 6

DEFECTS IN THE
EDUCATIONAL
SYSTEM

25


EDUCATION: A SERVICE INDUSTRY

The educational activity must be recognized as a service industry. This activity fulfills the criteria
for qualification as a service industry. The educational activity has the following basic
characteristics which qualify it as a service industry.

Product:

A service product in the form of education and Knowledge is created. And to the consumer
(student) this product is delivered in the shape of certificates, diplomas and degrees. The final
shape of product has greater economic value than raw factors of production.

Factors of Production:

Basic factors of production namely, land; capital labor and entrepreneurship are converted into
educational service or knowledge.

Economic Benefit:

The service product created has far greater economic value to the individual and society as a
whole than the factors of production.
For example, cost of a MBA degree is approximately Rs. 34,000 for two years of study at the rate
of Rs. 1,000 per month in fees and Rs. 5,000 per annum for books and material for study. An
MBA degree holder is likely to be employed at a starting of Rs. 5,000 per month. Thus, cost of
degree (product) will be recouped in just seven months. And for the remainder of employment
service, the degree holder will earn salary (economic gain) having much greater value than cost
of degree. Similar economic benefits will accrue to all holders of other types of educational
qualifications. The point being made here is that educational institutions are in fact a service
industry. These institutions produce a very valuable product entitled, education. And the
cumulative value (cost) of this product is in fact, Gross Domestic Product.

ECONOMIC BENEFITS OF EDUCATIONAL DEVELOPMENT
There are many benefits of economic developments, Exhibit ‐1, 2, 3, 5 may be seen for detail.
Some of the important benefits are listed below:
1. Establishment of required number of educational institutions will create employment
opportunities for 1.455 million persons.

2. Gross Domestic Product having value of Rs. 84.516 billion will be generated per annum.

3. Approximately 20.809 million persons will be absorbed in institutions of learning.
Absorption of child laborers as students will in fact create better employment
opportunities for the remaining population.

26

4. A large educated population will be able to utilize available financial, natural and
personal resources more efficiently to the benefits of individual and the society as a
whole.

5. Education will enable young citizens to acquire technical training and advanced
knowledge for gainful occupations.

6. Secondary and dependent industries, paper, printing and publishing will become fully
developed due to greater demand for paper and books.

7. Educated population will provide impetus for development of all other industries
because as a whole require educated personnel having technical skills.

A very important aspect of educational institutions is creation of employment opportunities
for a very segment of population. In addition to imparting of knowledge to
population, these institutions add GDP to national economy. An exceedingly important
benefit of educational activity is that institutions of learning absorb a very segment of
young citizens as students, who otherwise would end up as child labourers. The child
labourers not only create bleak future for young citizens but this activity also takes away
employment opportunities from adult population.
A COMPARISON OF EDUCATIONAL SYSTEMS OF UNITED STATES OF

AMERICA AND PAKISTAN

The present overall administrative system of Pakistan for management of educational function
has failed to meet the needs of population. In spite of best efforts of provincial governments,
desirable results are not forthcoming. Therefore, in order to determine where we stand in
relation to other advanced countries and to detect obstacles in the system, it is exceedingly
important to compare the administrative systems of education of Pakistan with administrative
system of education of the most advanced nation of the world, United States of America.

27

ENROLMENT OF STUDENTS IN INSTITUTIONS OF LEARNING IN UNITED
STATES OF AMERICA(POPULATION,265,284,000 IN 1996)

Type of Number of Total

Institution Institution Enrolment

Elementary 64,091 35,700,000
Middle (Class7,8,9) 14,475 (Elementary and Middle)
Secondary (Class10,11,12) 27,197 15,000,000
Higher Learning 3,706 14,398,000
Total 109,469 65,098,000
Total Enrolment in percentage of total population 24.54%
NUMBER AND TYPE OF INSTITUTIONS OF LEARNING REQUIRED FOR

VARIOUS SEGMENTS OF POPULATION
Number and type of Institutions required Segment of Population

One primary school for every, 2,356 persons

One middle school for every, 3,810 persons

One high school for every, 7,957 persons

One intermediate college for every, 13,262 persons

One Institution of higher learning for every, 90,186 persons

One university for every, 450,900 persons

28

How To Make Pakistan A Rich Country

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ECONOMIC IMPACT IF THREE HUNDRED (300) UNIVERSITIES ARE

Particulars United States of America Pakistan____

Total No. of Universities 606 33

Average Population Served 437,762 3,661,516

Total No. Students in All 6, 827, 28 71,819

Average No. Students per 11,266 2,176

Adult Population 192,507,000 72,515,000

%age of Adult Population 3.546 % 0.00099 %

Total No. Persons Employed 886,156 33,000

Name of Country Title of Pension or Insurance Program Year of Enactment

Germany Sickness Insurance Law 1883

Calculation of required Gold Reserve of x Mean of both percentage

1. Economic Survey, 199697, Government of Pakistan, Finance Division, Economic

A COMPARISON OF EDUCATIONAL SYSTEMS OF UNITED STATES OF

Type of Number of Total

NUMBER AND TYPE OF INSTITUTIONS OF LEARNING REQUIRED FOR

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How To Make Pakistan A Rich Country

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ECONOMIC IMPACT IF THREE HUNDRED (300) UNIVERSITIES ARE

Particulars United States of America Pakistan____

Total No. of Universities 606 33

Average Population Served 437,762 3,661,516

Total No. Students in All 6, 827, 28 71,819

Average No. Students per 11,266 2,176

Adult Population 192,507,000 72,515,000

%age of Adult Population 3.546 % 0.00099 %

Total No. Persons Employed 886,156 33,000

Name of Country Title of Pension or Insurance Program Year of Enactment

Germany Sickness Insurance Law 1883

Calculation of required Gold Reserve of x Mean of both percentage

1. Economic Survey, 1996­97, Government of Pakistan, Finance Division, Economic

A COMPARISON OF EDUCATIONAL SYSTEMS OF UNITED STATES OF

Type of Number of Total

NUMBER AND TYPE OF INSTITUTIONS OF LEARNING REQUIRED FOR

Anda mungkin juga menyukai

1. Economic Survey, 199697, Government of Pakistan, Finance Division, Economic