KARACHI: Globalisation has reshaped the world today, making it more interconnected and interdependent. Unfortunately, its benefits have not been equally distributed across countries. Business is surrounded by issues of disparity and equity, both at national and international levels. Politically, there are resurgent signs of social fragmentation, populism and nationalism. The rise of a new world order is imminent and economics is changing.
The lack of sound local and global governance poses a larger risk than we may anticipate today. Country risk at the individual level varies due to conflict of interests, differing norms and values, scarcity of resources and war. World bodies like the UN and G20 have yet to endorse a decision to combat global risk effectively. We are surrounded by demographic challenges, and there is huge fiscal pressure on advanced economies, leading to a higher risk of social stability within emerging economies. There is a prevalent risk of war and the possibility of renewed nuclear proliferation between states.
Food production requires water and energy, the extraction of water requires energy, and energy production requires water. Food prices are highly sensitive to energy costs – which indirectly affect the GDP of a country as high costs of processing, irrigation, fertiliser and transportation affect production and lead to lower exports.
This nexus poses a challenge to governments and population. The lack of energy security, lower agriculture yields and higher cost of relief goods is leading us towards unrest and uncertainty. This threatens our masses, our government and our business as 70 % of our country’s production is dependent on our agricultural sector.
Hunger and poverty are on the rise while we remain clueless about the future. Our reservoirs need to be secure and more dams need to be constructed faster, as draught and famine are fast turning into a possibility.
Agriculture, in Pakistan or elsewhere, consumes more than 70% of global water demand. For example, countries that produce meat require up to 20,000 litres of water for every kilogramme of meat produced, compared to at least 1,200 litres to produce a kilogram of grain. We do not realise the need for secure water resources due to illiteracy and lack of community awareness.
Climate change, in the shape of torrential rains, has also affected our country; we are one of the few countries facing a chronic food emergency today.
Economists forecast that global demand for energy will increase by 40% by 2030, and that this energy will draw heavily on freshwater resources. Over 75% of global demand for energy from 2012-2030, will be dependant on fossil fuels – predominantly coal. The Thar coal reserves need to be developed rapidly, as this is the only way to ensure job security, resource mobilisation, income and prosperity for the population. It makes good business sense for leaders to work on this. Furthermore, we have to ensure fast-tracked building of dams between now and 2015, a failure to do so may lead us to bankruptcy, as people will lose faith in the nation’s ability to sustain itself and business will suffer colossal damages.
We need good business and we need to understand the difference between dependency on others and self reliance. Bad governance is a major issue in Pakistan, eating up business and politics and leading us to ruins. Pakistan faces risks ahead as its next big war will not be over power or money – it will be over food, water or energy. All are vital as we struggle to survive. For Pakistan, failure is not an option.
The writer works in the media and writes on international relations.
Published in The Express Tribune, March 19th, 2012.