Improving our quality of life
Status quo is not an option and priorities need to be re-ordered if country is to reverse the infrastructural decline.
The WB report states that the government needs to invest Rs2.5 trillion a year to close the infrastructure gaps, which would require a paradigm shift of macroeconomic thinking that is extremely unlikely. CREATIVE COMMONS
A visit from the fortune teller can bring good news or bad and the fortune teller in the form of the World Bank (WB) has just delivered a taste of a bleak future. A new WB report, Reducing Poverty by Closing South Asia’s Infrastructure Gap, lays out in considerable detail the scale of the mountain Pakistan has to climb if it is not to be forever spiralling slowly downwards in terms of overall development — and of never being able to meet development goals.
In many ways, what the WB report says is not “new news” but it aggregates the bad news in such a way as to present a very bleak prospect developmentally.
The facts are stark. Less than half of the population has access to adequate sanitation and only two-thirds to electricity — and that is to electricity infrastructure, not to the actual power that should come down the wires and is absent for many for much of the time. There are six socio-economic areas that need financing and taken together they require financing that is greater than our current tax revenues.
The WB report states that the government needs to invest Rs2.5 trillion a year to close the infrastructure gaps, which would require a paradigm shift of macroeconomic thinking that is extremely unlikely. The consequence of failing to invest on such a large scale in transport, electricity, sanitation and water supplies, irrigation, solid waste management and telecoms will result in a slowdown in economic growth — analysts have already noted a downturn in growth — poverty will increase as will food insecurity and the development goals that are already in most cases far from our grasp will never be achieved. There is a slowing of urbanisation that is linked to people having low purchasing power alongside the infrastructure gaps that are vital to a developed urban environment.
One has only to observe the lateral sprawl that is un-serviced in most of our major cities to realise that we are creating a vast set of slums, themselves fertile ground for everything from crime to rampant disease to say nothing of a population explosion that is bordering on the disastrous.
For this or any future government to address the problems in terms of percentages, they will need to invest between 6.6 and 9.6 per cent of GDP. With the value of the economy approximately Rs26 trillion, the Rs2.5 trillion that the fortune teller says we need to spend is close to 10 per cent of our total income. Currently the federal Public Sector Development Programme is Rs420 billion, which is 1.6 per cent of GDP and clearly short of the figure the WB has in mind. Tax collection, always a weak spot in successive governments, is targeted at Rs2.475 trillion for this year, with expected receipts likely to fall short of that.
There is a national basket of deficits — health and education top the list — but the failure by successive governments to invest in the root and branch of infrastructure in every sector has enfeebled Pakistan in socio-economic terms.
There is no quick fix, and building a motorway here and there or setting up a metro bus system is palliative rather than restorative. Yet on the plus side, the prime minister has said that the energy crisis will be resolved “in a few years” and there are some significant power-generation developments coming on stream.
Mass-transit systems really do create jobs and wealth — but not immediately — and the pressure for structural reform in respect of taxation may finally produce results — and hence a happier exchequer. The status quo is not an option and priorities need to be re-ordered if the country is to reverse the infrastructural decline. The clock is ticking.
Published in The Express Tribune, April 5th, 2014.
In many ways, what the WB report says is not “new news” but it aggregates the bad news in such a way as to present a very bleak prospect developmentally.
The facts are stark. Less than half of the population has access to adequate sanitation and only two-thirds to electricity — and that is to electricity infrastructure, not to the actual power that should come down the wires and is absent for many for much of the time. There are six socio-economic areas that need financing and taken together they require financing that is greater than our current tax revenues.
The WB report states that the government needs to invest Rs2.5 trillion a year to close the infrastructure gaps, which would require a paradigm shift of macroeconomic thinking that is extremely unlikely. The consequence of failing to invest on such a large scale in transport, electricity, sanitation and water supplies, irrigation, solid waste management and telecoms will result in a slowdown in economic growth — analysts have already noted a downturn in growth — poverty will increase as will food insecurity and the development goals that are already in most cases far from our grasp will never be achieved. There is a slowing of urbanisation that is linked to people having low purchasing power alongside the infrastructure gaps that are vital to a developed urban environment.
One has only to observe the lateral sprawl that is un-serviced in most of our major cities to realise that we are creating a vast set of slums, themselves fertile ground for everything from crime to rampant disease to say nothing of a population explosion that is bordering on the disastrous.
For this or any future government to address the problems in terms of percentages, they will need to invest between 6.6 and 9.6 per cent of GDP. With the value of the economy approximately Rs26 trillion, the Rs2.5 trillion that the fortune teller says we need to spend is close to 10 per cent of our total income. Currently the federal Public Sector Development Programme is Rs420 billion, which is 1.6 per cent of GDP and clearly short of the figure the WB has in mind. Tax collection, always a weak spot in successive governments, is targeted at Rs2.475 trillion for this year, with expected receipts likely to fall short of that.
There is a national basket of deficits — health and education top the list — but the failure by successive governments to invest in the root and branch of infrastructure in every sector has enfeebled Pakistan in socio-economic terms.
There is no quick fix, and building a motorway here and there or setting up a metro bus system is palliative rather than restorative. Yet on the plus side, the prime minister has said that the energy crisis will be resolved “in a few years” and there are some significant power-generation developments coming on stream.
Mass-transit systems really do create jobs and wealth — but not immediately — and the pressure for structural reform in respect of taxation may finally produce results — and hence a happier exchequer. The status quo is not an option and priorities need to be re-ordered if the country is to reverse the infrastructural decline. The clock is ticking.
Published in The Express Tribune, April 5th, 2014.