CHINA PAKISTAN ECONOMIC CORRIDOR (CPEC)

CHINA PAKISTAN ECONOMIC CORRIDOR (CPEC)

Mr. Kashif Mateen Ansari,

CEO Sachal Energy

At the moment CPEC is one of the most significant topics under discussion. It ranges from the drawing rooms to the floors of the National and the Provincial assemblies. Though the CPEC is rightly a game changer in the region and especially, for Pakistan but it has also evoked a lot of positivity mixed with anxiety, unfounded fears, and some rightly-placed apprehensions. As soon as CPEC was announced, there was a visible lobby which lost no opportunity to finding fault with the CPEC, the way it is planned or in the manner it is executed as well as how it moves forward. While we will try to discuss some reservations about CPEC, we will also try to steer our discussion in areas, which are often not yet touched upon in the popular discourse. CPEC has been maligned on various bases ranging from Punjab being the favored beneficiary, to the fears of the Baloch losing their own homeland and becoming a minority. However, if you look at Chinese history for the last thousands of years, China has never engaged with occupational wars, it does not bear any favoritism towards taking over and subjugating other people. The way CPEC Is planned, it is a large infrastructural project having no parallel in the history of Pakistan. It is planned as a network of roads and rail bridges and tunnels and then adding together industrial zones and power generation being the most dominant element of the grand project. Now in the area of power generation we all know that in the early harvest projects, we are looking at almost 10,000 MW of energy ultimately getting to our grids. Already work on grid projects is underway that means the bottleneck created by our old and poorly maintained grid would be solved. New grid lines are being planned and at least a few of the major ones have started coming on ground. Another fear is that the cheap Chinese goods are going to elbow out the Pakistani products. I think this is an unfounded fear because what we are seeing in the core projects of CPEC, they do not relate to any cheap product. First of all we are looking at the power plants. The Pakistani manufacturers and the Pakistani industrial sector have nothing to offer in competition where we can produce the power machinery the turbine generators or the power plants. While we are looking at the roads and the railways most of the raw material in the form of cement and steel will come from the local area economy and once it comes to the construction of these mega projects I believe there is still a division over the underlying sub-contracting between the Chinese and the Pakistani businessmen. However, what we must look at is that, at the moment at many levels Pakistani businesses do not possess the adequate experience and knowledge in high- level engineering and technology. They will be best served by their interaction with the ongoing and the future projects and working in those areas where they have a competitive advantage and yet being exposed to those areas which are traditionally new to us and thus creating new expertise and understanding. The real trade between China and Pakistan will start and as the numbers go we are looking at hundreds of thousands of containers moving over these arteries. Obviously this will give rise to enormous economic activity ranging from the logistics businesses to the services and supplies enroot for the trade convoys going down to Gwadar and I believe that the people living in the far flung areas of the Baluchistan, KP and GB will see unprecedented economic growth which they have never seen before. With the better network of railways and roads they will be connected to the outside world, information knowledge and money will flow-in, opportunities will grow so shall the economy. With the availability of power and increase in the power generation we are sure that the economic activity will grow. There will be remarkable increase in the GDP and the peripheral economic activity will also be stimulated by the availability of the power. There will be a certain cost to it. First of all you must allay the fears about the CPEC being loaded on the weak economic backbone of Pakistan in the form of the costly debt. First of all not all the part of the CPEC is debt, and second, if there is a debt associated with the project that can produce returns in excess of the interest burden of the debt then such a debt can only enhance the economic activity and will not harm the economy in general. Although it is very easy to criticize the CPEC and the Chinese investment marking it as purely debt but if you look back a few years even from my own experience of developing a Wind Power Project, Pakistani projects were struggling to find any financing in the international market. Hence, even the availability of the foreign debt by virtue of CPEC is a positive thing for our economy. However, generally the kind of fear that Mr. Kashif Mateen Ansari CEO Sachal Energy 14 February 2017 is evoked by the perception of the foreign debt actually relates to the debt which is not used for any productive set-up of projects or economically viable project. If a foreign debt is used only to pay off for the largesse or the corruption of the ruling elite then obviously that debt is a trap that would lead any economy to ruin. But in case of CPEC projects, the investments which are coming in the form of debt, will ultimately result in the construction of power plants or the erection of the major grid lines or the network of motorways, rails and roads along with the industrial estates, allied industries and the dry ports, which will have a positive impact on our economy. What we have yet failed to understand is that CPEC requires something more, not only that this is an economic activity creating enormous economic opportunities for the people but also there will be an avenue of the cultural exchange and enhance friendly ties, with not only China but with all the regional players in Central Asia and South Asia. I believe the real long term effect of the CPEC would be the integration of this region in a friendlier economic zone lowering of the restrictions on the movement of trade, goods, and people. It is likely to enhance the cultural exchanges between us, the Central Asian states, China and rest of the South Asia. What we need to look forward to is how we can enhance the technical knowledge and the productivity of our people, how to get ready for the incoming competitions, how to benefit from the enormous opportunities that are going to open in front of us, how not to get carried away by our fears rather to look towards our future with hope and promise. We must also start thinking on the lines that we have to put down the gauntlet and reduce the negativity towards the regional players, though this has to be reciprocated from all sides but nonetheless we have to change the narrative on our side also. We have to bring forth a narrative of peace, a narrative of mutual co-existence and respect for all the players in the region. We have to cultivate and encourage any opportunity to improve ties with India and we must look towards China to help us in settling our dispute over Kashmir and water. We must look towards Afghanistan to help Afghanistan gain stability which in turn would stabilize our tribal areas and foremost we have to equip our young generation with the modern knowledge and tools to be able to take part in economic activity that is now being unleashed from the heights of Himalayas down to the shores of Gwadar.

Entrepreneurship and the role of Higher Education Institutions

By

Kashif Mateen Ansari

Entrepreneurship education has attained a new importance in the 21st century on account of various factors. The youth of this modern information age wants to think outside the box and to identify and pursue opportunities in totally new and innovative ways. The founder of Grameen Bank of Bangladesh and Nobel laureate Muhammad Yonis said, “My greatest challenge has been to change the mindset of people. We see things the way our mindset instructed our eyes to see.”

In today’s world, social change can be brought about by the entrepreneurship. The great management guru Peter Drucker said, “What we need is an entrepreneurial society in which innovation and entrepreneurship are normal, steady and continual.”  A lot of studies have been conducted in the last few decades which clearly underline the need for the modern education’s requirement to develop entrepreneurship and entrepreneurial mindset in the youth so that they can act as a catalyst of change in the social and the economic sector.

What is entrepreneurship? Entrepreneurship can be defined in a number of ways. A crisp one that I found reads as “the pursuit of opportunity beyond the resources you currently control.” This definition is attributed to Stevenson and Jarillo. Another definition that I came across:  “Entrepreneurship refers to an individual’s ability to turn ideas into action. It includes creativity, innovation and taking calculated risk, as well as the ability to plan and manage projects in order to achieve objectives. This supports everyone in day-to-day life at home and in society; makes employees more aware of the context of their work and better able to seize opportunities, and provides a foundation for entrepreneurs establishing a social or commercial activity.” (European Commission, 2008) In simple words entrepreneurship is a process that results in creativity, growth and innovation. Entrepreneurship takes various forms and its benefits are not limited to starting up of new businesses or creating new jobs but it leads to overall development in the fields of science, art and culture.

According to a report on entrepreneurship by Kaufman Foundation it was found in a number of studies that 25% of kindergarten level children manifest the characteristics of initiators (we will describe initiators later) But the study found out that for the same kindergarten level children who showed this trait, regrettably when they graduated from high school the percentage had dropped to 3% of the students. “Initiator “is the basic form of an entrepreneur, who has the ability to identify good market opportunities and possesses the required skills and the passion to lead the effort to follow those opportunities and take risk. In other words initiators are the kind of person who is ready to take risks and go into action. The study mentioned above puts forward the great dilemma of today’s education system that instead of creating the spirit of taking action and creating new things, the education systems, even in the developed countries, are stifling the creativity of the young mind.

The modern emphasis on Entrepreneurial education has many proponents but the seminal work of Schumacher “Small Is Beautiful” has made a lot of impact. Schumacher was mentored by John Maynard Keynes. Schumacher recognized that unemployment and poverty had scourged the world and raised his voice against the focus on large-scale projects and organizations.  According to him, individuals mattered. He propounded that with proper training, education and support, individuals can become self-employment and active members of the economy.

Further support to this phenomenon was provided by the British Prime Minister Margaret Thatcher who favored private enterprise and preferred individual responsibility. This was further supported by Ronald Reagan in the US with his focus on privatization and entrepreneurial frame work of private enterprise. Demise of larger enterprise due to oil prices and economic crises also helped the situation.

The emphasis on entrepreneurial education led to a lot of work on what constitutes the main frame for this activity. So there came out a list of fundamentals required to be understood by the potential entrepreneurs. Important amongst these included;

·         Understanding the pleasure of business,

·         A desire to serve others, of wealth creation and ownership.

·         Market opportunity recognition and research,

·         Empathy ,  

·         Comparative advantage.

·         Laws of supply and demand.

·         Marginal utility (“economics of one unit”).

·         Return on investment and break-even calculation.

·         Compound interest

If we get back to the Guru, Peter Drucker, he said: “Entrepreneurship is not magic, it’s not mysterious and it has nothing to do with the genes. It’s a discipline and like a discipline, it can be learnt”. If we cross this major hurdle of mindset and move forward, that entrepreneurship can be taught then the universities themselves can become entrepreneurial centers.

Entrepreneurship cannot be exercised in vacuum. Our higher educational institutions have to understand that the young people have a desire to do something and do something new. They have a desire to create something good and they have an innate longing to give back to the society. So the higher education institutions have to encourage and foster such attributes which can help the young people do the same. Entrepreneurship can be supported and helped in the most effective way by the education system at the higher level.

We have to create an Eco- system whereby various education institutions and the government have to come together to help support the entrepreneurs. Obviously that Eco- system will be incomplete till the time the businesses don’t partner with the higher education institutions and the government. The higher education institutions have to come up with new and innovative ways of imparting education which is conducive for generating an entrepreneurial mindset.  It has been found that just by adding courses on entrepreneurship alone does not help the young minds to transform into entrepreneurs. Globally this has been found out that where the curriculums are broad base or students are allowed to come together into teams drawn from various disciplines of knowledge; like business, marketing, engineering, technology and social sciences, the cross learning which occurs across all these various disciplines help the students become entrepreneurs.

Our universities have to look more into creating multi-disciplinary approach towards entrepreneurship which can be best achieved by creating centers of entrepreneurship having no particular course or curriculum of their own rather having a collection of multi-disciplinary courses and multi-disciplinary education which can be brought together in the form of various teams working on various technical, social or business projects. Then the universities have to be supported by the government in the form of small seed capital which can be assigned to such teams. The businesses must join hands in helping the young entrepreneurs to put their ideas to practice in the real business world. The ideas selected should be the ones that have been tested in the incubatory environments of the universities’ entrepreneur centres. This will be a win-win situation whereby businesses will get a new injection of ideas and fresh blood, and the young entrepreneurs will find a ready market for their newly developed ideas.

The universities can play an important role by overcoming the myth that new business formation or entrepreneurship is only the domain of a select few who either come from rich backgrounds or from families that are already well-known for establishing new businesses. There is no such evidence which links entrepreneurship with the genes. However, there can be a lot which can be found in the research studies linking entrepreneurship and education.

We may quote five core elements identified by Bortum clerk in his book “Creating Entrepreneurial Universities, Organizational pathways of transformation”. The core elements which he indicated were:

1.      A clear vision and mission

2.      Good structures and mechanisms to interact with the outside world

3.      Diversified funding base

4.      Inter and multi-disciplinary activities

5.      An integrated entrepreneurial culture

If we look around in the international arena, many universities will come out as great examples of entrepreneur centers which are furthering entrepreneurship. In the list of such universities, Stanford University ranks really high, which is generating patents for almost 80% of the amount of funding spent on their research. That is a great example of entrepreneurial activity. Across the world governments are helping big universities with their initiatives to stimulate links between businesses and universities. An example rams

There are many approaches which can be taken by our universities to include entrepreneurship as a form of mainstream learning. These approaches can be that:

1.      They can develop leadership skills

2.      They can embed entrepreneurship in general education

3.      As discussed earlier, they can take a cross-disciplinary approach

4.      They can leverage the availability of technology in the form of the technological advances in general and in the information technology in particular.

In Pakistan we can bring about a great change through the universities by creating a high number of entrepreneurs who, instead of becoming job-seekers will become job-makers and the few factors which can help this initiative succeed, would be formation of an entrepreneurial ecosystem as discussed earlier, which would include the Interaction of government with the universities and the interaction of businesses with universities in a well-linked program. Other important success factor would be developing good teachers who can instill the qualities and traits required for entrepreneurship.

Another key area for success would be development of a curriculum which instead of suppressing the creativity of the youth would develop it. We have to adopt a strategy where we have to include all the social classes in this process. Especially we have to hunt and groom talent by outreaching the students of far flung areas.

We have to understand as a society that it will be entrepreneurship that will lead the next wave of our development in Pakistan. Global data is already available linking the US dominance in the world economy to the spirit of Entrepreneurship that is there. With the young population constituting over 25% of our population we are already facing a  population bulge that comes with a lot of threats of chaos and turmoil if not handled properly or can become a time of unprecedented growth if channelized properly.  We would not be able to engage this multitude of youth properly and feed them unless we move quickly on the road to entrepreneurship.of such work includes:

1.      Formation of innovation centers

2.      Entrepreneurial university centres and science parks

3.      Support of collaborative innovation and research

4.      Funds for the development of university projects and making them ready for commercialization

rams

There are many approaches which can be taken by our universities to include entrepreneurship as a form of mainstream learning. These approaches can be that:

1.      They can develop leadership skills

2.      They can embed entrepreneurship in general education

3.      As discussed earlier, they can take a cross-disciplinary approach

4.      They can leverage the availability of technology in the form of the technological advances in general and in the information technology in particular.

In Pakistan we can bring about a great change through the universities by creating a high number of entrepreneurs who, instead of becoming job-seekers will become job-makers and the few factors which can help this initiative succeed, would be formation of an entrepreneurial ecosystem as discussed earlier, which would include the Interaction of government with the universities and the interaction of businesses with universities in a well-linked program. Other important success factor would be developing good teachers who can instill the qualities and traits required for entrepreneurship.

Another key area for success would be development of a curriculum which instead of suppressing the creativity of the youth would develop it. We have to adopt a strategy where we have to include all the social classes in this process. Especially we have to hunt and groom talent by outreaching the students of far flung areas.

We have to understand as a society that it will be entrepreneurship that will lead the next wave of our development in Pakistan. Global data is already available linking the US dominance in the world economy to the spirit of Entrepreneurship that is there. With the young population constituting over 25% of our population we are already facing a  population bulge that comes with a lot of threats of chaos and turmoil if not handled properly or can become a time of unprecedented growth if channelized properly.  We would not be able to engage this multitude of youth properly and feed them unless we move quickly on the road to entrepreneurship.

(The writer can be reached at kashifmateenansari@post.harvard.edu)