Infrastructure development as social justice
Planning minister reveals reason behind PML (N)’s infrastructure development policy
PHOTO: AFP
Some vested interests are trying hard to manufacture a narrative against the PML-N government’s progress on the China-Pakistan Economic Corridor (CPEC). But this narrative is not going to stick because infrastructure development is one of the fortes of the PML-N government. Even the worst of our political opponents acknowledge this fact in their honest moments. Our political opponents are cognisant of the fact that they can’t compete with us in the realm of infrastructure development. Therefore, they seem to have opted to undermine successes of our infrastructural projects and purport that ‘infrastructure development’ plays no significant role in the socioeconomic wellbeing of the poor people of Pakistan.
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It is imperative for us to elucidate the importance of infrastructural development in the idiosyncratic context of Pakistan. Our government conceptualises infrastructure development as an integral component of our ‘inclusive growth’ strategy. Therefore, we are pursuing infrastructure development all across the country because it does not only spur economic growth, it also promotes social justice. In Vision 2025, we have stipulated social justice as one of our immediate priorities. The positive correlation between infrastructure investments and economic growth is a well-known economic fact. Construction of road networks on the western route of the CPEC has already started to positively impact the socioeconomic landscape in Balochistan. Areas which were considered inhabitable only few years ago are now showing strong signs of socioeconomic activity. Similarly, theoretical and empirical evidence suggests that infrastructural development enhances social justice. This provides us with the ideological foundation to pursue infrastructural projects. Predicated on our cynics’ criticism of the projects we are pursuing, we can extrapolate that either they are unaware of these two economic channels or they are consciously denying them because it undermines their politics. In any case, I would briefly delineate the linkage between infrastructure development and social justice.
The majority of the rural-poor households in Pakistan sell their labour power to sustain themselves. Their livelihoods depend on the agrarian economy. One of the biggest challenges faced by poor households in agrarian economies is ‘interlinked factor markets’. That is, when an individual faces the same supplier in more than one market. In the case of agrarian markets in Pakistan, labour, land and credit are the main interlinked markets. Interlinked markets create conditions similar to monopsony and oligopoly and as a result the bargaining power of workers decreases. Thus resource-poor individuals end up locking themselves in highly exploitative socioeconomic relationships. This also reduces the overall productivity in agriculture and leads to an increase in poverty in rural areas.
Redistributive land reforms can potentially end some of these exploitative socioeconomic relationships. But past experiences of land reforms in Pakistan show that elite capture is a likely outcome of these. Moreover, in the absence of well-functioning credit and land markets in rural areas, the positive outcome of land reforms would be minimal if any. Based on this calculus, the cost of land reforms would outweigh its benefit. Thus our government came to the conclusion that to end these exploitative socioeconomic relationships in rural markets, we need to come up with an alternative and effective strategy. Empirical evidence suggests that factor market interlinkages are more prevalent in isolated villages vis-a-vis connected villages. Therefore, we opted a strategy to end this isolation by connecting villages with towns and cities via extended networks of roads in rural areas. This is the most optimal way to end exploitative socioeconomic relationships in these areas given the constraints we face today.
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Motorway and highway projects must be conceptualised in this context to fully grasp their socioeconomic potentialities. Once a motorway or a highway passes through a village, it induces the growth of link roads around that area. This brings more economic activity, information and employment opportunities to erstwhile isolated villages. In other words, networks of roads provide an ‘exit option’ to resource-poor households from exploitative interlinkages. That is, they can find an alternative employment in rural areas or they can move to other towns or cities. Thus exit options increase bargaining power of rural labourers. Consequently, this reduces both the magnitude and intensity of the exploitative interlinkages of labour, land and credit in rural markets, helping working families in the agrarian economy to improve their lives. Similarly, the PML-N government has prioritised working on energy infrastructure because power shortages adversely impact the lives of poor households. Unlike the affluent segments of our society, poor households cannot afford to privately provision their energy needs via uninterruptible power supply or standby generators. Moreover, working-class families are hit worst by power shortages in the industrial sector because demand for labour decreases when factories sit idle. Being cognisant of this, our government has pursued a policy of zero load-shedding for the industrial sector. Furthermore, our government has prioritised the upgradation of energy infrastructure. Today on average, power outages have significantly reduced for residential households as compared to 2013.
Democracy implies a right to mobility, both in the socioeconomic and spatial context, for every citizen. Given the colonial legacy of our country, social hierarchies are still prevalent in our society. These social hierarchies are most pronounced in social environments which are isolated. By providing networks of roads and communication to faraway places, we are trying to end their isolation by integrating them into the broader society and economy. The PML-N government has also pioneered the concept of the Bus Rapid Transit (BRT or metro) system for the cities of Pakistan. Academic studies by the London-based independent research institution, International Growth Center, show that the size of the labour market has increased by 33 per cent due to the introduction of the BRT in Lahore. This implies more economic activity and employment opportunities for low and middle income households. Therefore, in the context of Pakistan, infrastructural development is not merely an advancement of the physical landscape. It also improves the lives of low and middle income households. Unlike some of our political opponents, the PML-N government does not conceptualise the delivery of social justice via mudslinging at the opposition. Our government recognises that the task in hand is of a complex nature. We want to promote economic growth concurrently with social justice. Infrastructural projects initiated and completed by our government in the last three years reflect our commitment to inclusive growth in Pakistan.
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Our political opponents disregard all these socioeconomic benefits attached with infrastructure development for their petty, short-run political gains. This reveals two very significant aspects about the politics of our opponents. First, it reflects their negative approach, that is, unconditional criticism and opposition of whatever socioeconomic initiative our government initiates just for the sake of criticism. Second, it shows that if our political opponents have to make a choice between the ‘welfare of the people’ or ‘criticising our government’, they would sacrifice the former for the latter without hesitation. The development of roads, bridges, public transport systems and energy infrastructure are public goods and irrespective of who commands political power, the people of Pakistan as a collective body are the real owners and beneficiaries of these projects. Contrary to acknowledging this, our critics frame infrastructure development as a ‘waste’. This is tantamount to not only spreading misinformation but also doing a big disservice to the people of this country.
Published in The Express Tribune, August 7th, 2016.
Govt clears Lahore-Sialkot motorway link worth Rs52.7b
It is imperative for us to elucidate the importance of infrastructural development in the idiosyncratic context of Pakistan. Our government conceptualises infrastructure development as an integral component of our ‘inclusive growth’ strategy. Therefore, we are pursuing infrastructure development all across the country because it does not only spur economic growth, it also promotes social justice. In Vision 2025, we have stipulated social justice as one of our immediate priorities. The positive correlation between infrastructure investments and economic growth is a well-known economic fact. Construction of road networks on the western route of the CPEC has already started to positively impact the socioeconomic landscape in Balochistan. Areas which were considered inhabitable only few years ago are now showing strong signs of socioeconomic activity. Similarly, theoretical and empirical evidence suggests that infrastructural development enhances social justice. This provides us with the ideological foundation to pursue infrastructural projects. Predicated on our cynics’ criticism of the projects we are pursuing, we can extrapolate that either they are unaware of these two economic channels or they are consciously denying them because it undermines their politics. In any case, I would briefly delineate the linkage between infrastructure development and social justice.
The majority of the rural-poor households in Pakistan sell their labour power to sustain themselves. Their livelihoods depend on the agrarian economy. One of the biggest challenges faced by poor households in agrarian economies is ‘interlinked factor markets’. That is, when an individual faces the same supplier in more than one market. In the case of agrarian markets in Pakistan, labour, land and credit are the main interlinked markets. Interlinked markets create conditions similar to monopsony and oligopoly and as a result the bargaining power of workers decreases. Thus resource-poor individuals end up locking themselves in highly exploitative socioeconomic relationships. This also reduces the overall productivity in agriculture and leads to an increase in poverty in rural areas.
Redistributive land reforms can potentially end some of these exploitative socioeconomic relationships. But past experiences of land reforms in Pakistan show that elite capture is a likely outcome of these. Moreover, in the absence of well-functioning credit and land markets in rural areas, the positive outcome of land reforms would be minimal if any. Based on this calculus, the cost of land reforms would outweigh its benefit. Thus our government came to the conclusion that to end these exploitative socioeconomic relationships in rural markets, we need to come up with an alternative and effective strategy. Empirical evidence suggests that factor market interlinkages are more prevalent in isolated villages vis-a-vis connected villages. Therefore, we opted a strategy to end this isolation by connecting villages with towns and cities via extended networks of roads in rural areas. This is the most optimal way to end exploitative socioeconomic relationships in these areas given the constraints we face today.
CASA-1,000 project: Central, South Asia to finalise contract for converter stations
Motorway and highway projects must be conceptualised in this context to fully grasp their socioeconomic potentialities. Once a motorway or a highway passes through a village, it induces the growth of link roads around that area. This brings more economic activity, information and employment opportunities to erstwhile isolated villages. In other words, networks of roads provide an ‘exit option’ to resource-poor households from exploitative interlinkages. That is, they can find an alternative employment in rural areas or they can move to other towns or cities. Thus exit options increase bargaining power of rural labourers. Consequently, this reduces both the magnitude and intensity of the exploitative interlinkages of labour, land and credit in rural markets, helping working families in the agrarian economy to improve their lives. Similarly, the PML-N government has prioritised working on energy infrastructure because power shortages adversely impact the lives of poor households. Unlike the affluent segments of our society, poor households cannot afford to privately provision their energy needs via uninterruptible power supply or standby generators. Moreover, working-class families are hit worst by power shortages in the industrial sector because demand for labour decreases when factories sit idle. Being cognisant of this, our government has pursued a policy of zero load-shedding for the industrial sector. Furthermore, our government has prioritised the upgradation of energy infrastructure. Today on average, power outages have significantly reduced for residential households as compared to 2013.
Democracy implies a right to mobility, both in the socioeconomic and spatial context, for every citizen. Given the colonial legacy of our country, social hierarchies are still prevalent in our society. These social hierarchies are most pronounced in social environments which are isolated. By providing networks of roads and communication to faraway places, we are trying to end their isolation by integrating them into the broader society and economy. The PML-N government has also pioneered the concept of the Bus Rapid Transit (BRT or metro) system for the cities of Pakistan. Academic studies by the London-based independent research institution, International Growth Center, show that the size of the labour market has increased by 33 per cent due to the introduction of the BRT in Lahore. This implies more economic activity and employment opportunities for low and middle income households. Therefore, in the context of Pakistan, infrastructural development is not merely an advancement of the physical landscape. It also improves the lives of low and middle income households. Unlike some of our political opponents, the PML-N government does not conceptualise the delivery of social justice via mudslinging at the opposition. Our government recognises that the task in hand is of a complex nature. We want to promote economic growth concurrently with social justice. Infrastructural projects initiated and completed by our government in the last three years reflect our commitment to inclusive growth in Pakistan.
PM says personally overseeing CPEC projects
Our political opponents disregard all these socioeconomic benefits attached with infrastructure development for their petty, short-run political gains. This reveals two very significant aspects about the politics of our opponents. First, it reflects their negative approach, that is, unconditional criticism and opposition of whatever socioeconomic initiative our government initiates just for the sake of criticism. Second, it shows that if our political opponents have to make a choice between the ‘welfare of the people’ or ‘criticising our government’, they would sacrifice the former for the latter without hesitation. The development of roads, bridges, public transport systems and energy infrastructure are public goods and irrespective of who commands political power, the people of Pakistan as a collective body are the real owners and beneficiaries of these projects. Contrary to acknowledging this, our critics frame infrastructure development as a ‘waste’. This is tantamount to not only spreading misinformation but also doing a big disservice to the people of this country.
Published in The Express Tribune, August 7th, 2016.