Pakistan needs to connect with the South Asian region to spur its economic growth and a revitalised railway network could be one way to achieve this goal.
This was the crux of a seminar titled “Regional Connectivity and Economic Growth in South Asia” organised by the Sustainable Development Policy Institute (SDPI) on Monday.
“Lack of connectivity is putting Pakistan’s relevance in South Asia in danger,” SDPI Deputy Executive Director Dr Vaqar Ahmed said. “The fact that we have become a (closed) border between Central Asia and the Far East is hurting our economic prospects,” he added.
He said India is investing in Afghanistan and Iran so it could bypass Pakistan eventually and improve trade with the Central Asian states.
A railway network from Wagah to Torkham could be the ultimate trade bridge between countries of the Southeast Asia and Central Asia, Ahmed said.
Muhammad Naveed Iftikhar, governance specialist at the Finance Ministry’s Economic Reforms Unit, cited Pakistan Railways as an example of a public sector enterprise to make the case for privatisation.
He said Pakistan Railways owes Rs40 billion to the State Bank of Pakistan as over draft. It has a labour crisis and does not have enough locomotives. Around 68 per cent of railway infrastructure is in need of maintenance, Ahmed added.
He said if freight trains start operating again, people will opt for them instead of trucking because freight trains are faster and cheaper. A significant portion of the 80,000 railways’ workforce could be utilised if private sector takes over the rail operations, he said.
The government will, however, have to chip in with the infrastructure development initially, he said.
“We just don’t want to adopt the successful models,” Ahmed said. “If the government is not in favour of outright privatisation, it should at least make some efforts to reach out to the private sector.”
He said the government could have a limited regulatory role and give the marketing, finance and service delivery side to the private sector.
Ahmed said he believed the finance ministers in the past have worked toward creating debt instead of honestly resolving the problems of public sector enterprises. He admitted that it was a tall claim but said the debt situation helps private commercial banks who buy the government paper to underwrite the debt. These banks, he said, were backed by influential people with political connections.
Published in The Express Tribune, March 5th, 2013.
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