Pakistan lags behind in ‘global infrastructure ranking’
LAHORE – Pakistan is among lowest ranked countries in ‘global infrastructure ranking’ though the country has invested heavily in public infrastructure development.
These views were expressed by the speakers at a symposium on the subject of ‘Impact of Infrastructure development on Pakistan Economic Growth’.
The Symposium was organized by the Pakistan Engineering Congress here on Friday. PEC president Engineer Ghulam Hussain also addressed on the occasion.
The key speakers included Dr. Izhar ul Haq, Suleman Najib Khan, Iftikhar Ul Haq, Engr Riaz Rashid, Engr Khurram Amin, Muhammad Ali and Waheed Anjum.
The speakers recommended the government to take aggressive steps to improve quality of infrastructure to fulfill the requirement of economic growth at high rate. Moreover, effective planning to ensure usefulness and fully utilization of infrastructure is essential to optimize the benefits in terms of GDP growth, they added.
The speakers said that Pakistan has highest rate of urbanization in South Asia which has put more pressure on already stressed infrastructure. The speakers quoted the World Bank as reporting that Pakistan’s key infrastructure shortages lie in the water, irrigation, power and transport sectors. The country is amongst the most water-stressed in the world and rehabilitating current wear and tear in the water sector will require more than $7 billion in maintenance over the next 5 years. Pakistan had been facing severe power shortages, with per capita energy consumption among the lowest in the world, slowing industrial growth. The inefficiencies of the rail, road, port and aviation sectors are now costing the economy over 4 % of GDP. The productivity of agriculture sector is declining due to poor condition of irrigation infrastructure. The access to irrigation infrastructure helps to keep the incidence of chronic poverty at lower levels.
The speakers said that improved infrastructure provide safety against natural disasters such as earthquakes, drought and floods which could result in negative economic impact on the country.
“Economic loss to Pakistan due to 2010 flood is estimated to be around Rs. 855 billion. Efficient infrastructure in transport, electricity and communication creates enabling environment for private sector to play their role for economic growth.” The speakers said that infrastructure development is vital for economic growth of developing countries.
“The economic growth of Japan and Korea in 60s and 70s indicates vital role of infrastructure development and public investment in transport, communication and energy sector for economic growth of the country.”
They said that lack of infrastructure in Pakistan in transport, energy and water sector proved to be major hindrance towards economic growth of the country. Lack of investment in water sector reduced country’s agricultural output, increased unemployment in rural areas, decreased per capita income of more than 50% of population associated with agriculture, which in return put pressure on urban centers due to migration from rural areas, they added. High population growth of the country demand huge investment in water infrastructure to improve economic growth of country and rural population and to absorb massive rural population in agricultural sector. Indirect benefits must be accounted for while planning and deciding infrastructure development in the water sector. Comprehensive development framework which includes all major sectors is necessary and development should be coordinated in such a way that growth of one sector complement the growth of other sector. They said that sequencing and prioritizing of infrastructure is important keeping in view existing and future demand, employment and socio-economic condition of the people and long term and short-term impact of development. Infrastructure development is the only way for Pakistan to achieve its Millennium Development Goals (MDGs).
Governance and political stability are variables of political economy are significant elements that can affect the economic growth related with infrastructure development. Efficiency, accountability and reforms in public sectors are considered as vital element for effective monitoring and evaluation of projects funded by government.
Different type of infrastructure has different impact on GDP growth depending upon the situation of the country.
Energy sector has direct benefit in GDP development as it relates to development of many other sectors. Telecommunication has best documented impact on GDP growth and has highest and most impressive payoffs than any other sector. Impact of transportation infrastructure is consistently correlated with economic growth, with rate of return as high as 63%. China spends 1% of its Gross National Product (GNP) on transport infrastructure and its GDP growth is constantly in the range of 9%. Impact of transportation infrastructure is low in case of developed countries but for developing countries scenario is totally opposite and improvement of transport infrastructure hold positive impact on GDP growth. Water and sanitation have no direct connection with GDP growth but it has indirect connection with other sub sectors.