The Ace of Base : Infrastructure in Pakistan

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infrastructureWhat Pakistan’s wobbly current infrastructure needs to stand tall

A NETWORK of sound infrastructure is the backbone of any country striving for economic progress.

Pakistan ranks 67 in the basic infrastructure category among 125 countries, according to World Economic Forum Survey of 2006-2007. This is an alarming figure because without adequate infrastructure facilities, the very sustainability of Pakistan as an independent nation may be at risk.

The lack of irrigation facilities, power and transportation infrastructure, could lead to increased social dissatisfaction and disharmony amongst the federation and the provinces.

There exists an enormous imbalance between the demand and supply of infrastructure facilities in Pakistan. A World Bank report entitled Pakistan Infrastructure Implementation Capacity published recently illustrates the gravity of the situation.

This study states that Pakistan is on the list of the most water-stressed countries in the world and it could face severe water shortage in the next two decades unless strong measures are undertaken.

The country needs to invest almost Rs 60 billion per year in new large dams for the next five years. In the energy sector, Pakistan is predicted to face severe power shortages of approximately, 6,000 megawatts by the year 2010 which is equivalent to about three Tarbela dams!

The World Bank study also reported that the recent power shortages are a classic example of this rapidly growing economy’s ageing power infrastructure.

Power vacuum

The inability to meet the growing demand of energy has led to a power crisis for the country. The contributing factors include weak governance, inept financial management, political interference and ignorance of long-term prudent business practices.

The study also established that the per capita energy consumption in Pakistan is amongst the lowest in the world, with insufficient energy resources limiting industrial development and affecting all sectors of the economy.

Likewise, the inefficiencies in the transport sector are costing the economy about 5 percent of GDP annually, demonstrating the need for considerable investment in roads, rail, airports and seaports.

Various government programmes have attempted to improve transportation through highway construction and automobile imports, but these attempts have been costly, and highway capacity is substantially underutilized.

Furthermore, Pakistan has been ranked 84th among 118 countries in the Global Enabling Trade Report 2008. The index, featured in the report, measures the factors, policies and services facilitating free flow of goods over borders and to other destinations. It divides the enablers into four areas: market access, border administration, transport and communications infrastructure, and business environment.

Arthur Bayhan, CEO of the Competitiveness Support Fund, has stressed the need for Pakistan to facilitate an environment conducive to trade and investment, including a transparent and efficient border administration, well-developed transport infrastructure and highly efficient services.

According to S. A. Zaidi in Issues in Pakistan’s Economy, the country’s municipal infrastructure is also in an appalling state. Chronic under-funding of municipal governments over the years has weakened the municipal governments.

Feeling the pulse

In the absence of capital grants, new infrastructure needed to cope with the requirements of a growing population has not been constructed.

Moreover, the state of existing infrastructure has deteriorated due to the lack of maintenance and repairs. The financial and institutional shortcomings of local governments have caused a reduction in coverage and quality of municipal infrastructure in Pakistan.

Having reviewed the present state of the infrastructure situation in Pakistan, it is important to analyze the nature of the problems plaguing the nation due to poor infrastructure facilities such as shortages of water, irrigation and transport networks.

On the whole, without sufficient infrastructure facilities, Pakistan has been unable to achieve persistent growth and competitiveness in both the local and international arena.

Lack of well-developed water and sanitation facilities at the municipal level have resulted in the population facing risk of various diseases, particularly water-borne illnesses such as cholera.

An inadequate network of roads, especially in the rural areas makes transportation of crops to markets very difficult, causing delays and deteriorating the quality of edibles such as vegetables and thus decreasing their prices in the market.

In addition, insufficient irrigation facilities lead to greater poverty as has been confirmed by a study on Pakistan by the International Water Management Institute of Sri Lanka, which illustrates that rice and wheat productivity is higher in properly irrigated areas as compared to rain-fed areas.

The road less traveled

Inadequate transport networks, such as roads, bridges and railways in urban areas lead to congestion and traffic problems and increase the risk of accidents.

According to World Development Indicators (2002), about 41 fatalities occur in road accidents per 10,000 motor vehicles annually in Pakistan.

Pakistan requires significant investment in physical infrastructure in order to improve delivery of social services and to enhance its local and global competitiveness.

Yusupha Crookes, the World Bank’s Country Director for Pakistan, recently stated: “It is critical to address the core challenges — scarcity of skilled workers and inefficient business processes — to enable the government’s very ambitious infrastructure plan to move forward.”

The recommendations to improve the infrastructure of Pakistan, as stated by the World Bank report include institutional reforms, legal and regulatory reforms, financial reforms and enhancement of the country’s human resources.

There is a need to strengthen the existing institutions in the public and private sector. Currently, there is no institution in Pakistan dedicated to the development of construction and consulting firms.

Trade associations need to be strengthened and provided with representation in chambers of commerce and institutional counterparts in the government.

Needed: Transparency

In case of legal and regulatory reforms, transparent tenets should be laid out that apply uniformly to all projects and stakeholders. Rent-seeking occurs when the government is the regulator, operator, owner and also the financier of infrastructure projects.

Therefore to decrease corruption, the designing, bidding, execution and operation of projects should be carried out in a clear and transparent way.

In terms of financial reform, there is a requirement to develop and provide financing support which meets the specific needs of the construction industry, such as through international loans.

Lack of access to financial resources is a major impediment faced by the industry and also acts as a barrier to the entry of many potential new participants. Therefore, addressing this issue would cause a major turnaround for Pakistan’s infrastructure development.

Long-term commitment from the government, with a well-focused strategy and a broad vision, is required for sustainable development of good quality infrastructure that will allow Pakistan to achieve socio-economic prosperity.

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