| January 20, 2003 | Monday | Ziqa'ad 16, 1423 |
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Light rail for Lahore
Housing for the poor
THE Pakistan Economic Update released the other day by the Asian Development Bank presents an optimistic view of the country’s economy. However, it warns against some of the pitfalls that need to be avoided in order to achieve the targets set for the current financial year. The trend in the fiscal deficit improvement appears much more encouraging than what it was in the same period last year. But while the tax collection trends appear to be on target, expenditure seems to be outstripping income, making it that much more difficult to achieve the fiscal deficit target of four per cent for the whole year. Similarly, while exports in the first five months reflected a rising trend, imports too followed a spiralling curve, posing questions about the plausibility of maintaining the trade deficit at the level of a billion dollars fixed for the whole year. On the face of it, these two trends, if they persist, will certainly cause a degree of macroeconomic destabilization.
But then, in an economy which seems to be emerging out of a long period of stagnation, this is only to be expected. Exports are going up, the agriculture sector is showing signs of improvement, private sector credit is picking up, share prices are rising as bank interest rates are being lowered and the sharp improvement in the balance of payments registered in the last three quarters of 2001-02 has continued through the first quarter of 2002-03, with the current account remaining in surplus. Developments thus far indicate that the target of 4.5 per cent growth in GDP in 2002-03 is likely to be attained and possibly even surpassed. With better GDP growth, the targets fixed for both the fiscal deficit and trade deficit are likely to be realized despite the current rising trend in expenditures and imports. So, the focus of the economy should remain continuously on growth and reforms rather than be dislodged by an acceleration in expenditure and imports.
It is only through higher spending and increased imports that a minimum level of growth can be achieved. More expenditure means more economic activity, which in turn generates employment and creates greater demands for goods and services. The spiral inevitably has a multiplier effect on production, exports, revenue earnings and foreign exchange reserves. More imports too means more production. If for fear of causing macroeconomic destabilization, expenditure is cut to fit a higher income target or imports are curtailed to achieve a certain export earning figure, it would only result in further depressing growth which in turn would cause the economy to return to its recessionary state. Stagnating economies do not generate jobs, neither do they help improve the lot of the poor. So, it would be advisable to make the most of the buoyant trends promising a turnaround in the economy and press on with reforms and production activity in order to reach the take-off stage within a reasonable period of time.
HOPES created by the Light Rail Transit project for Lahore have been revived by reports that a consortium of companies which was awarded the contract for the project in August last year has recently conducted a survey of the proposed route. Work on the $400 million scheme is expected to begin in March with the laying of 34 kilometres of the track from Shahdara to the new Lahore airport terminal. The project envisages a 17-foot-high track from the Lahore Bridge on the Ravi near Shahdara to Bhati Chowk and from there to the airport. The travel time is expected to be reduced by half of the present one hour. A key advantage will be a reduction in the chaotic traffic and environmental problems resulting from Lahore’s rapid expansion.
Unfortunately, technical hitches and resource constraints have held up the implementation of the project for long. A Japanese firm, after a study of the LRT in 1997, had agreed to bear 80 per cent of the cost; the remainder was to be contributed by the government in kind. But the sanctions imposed on Pakistan after the May 1998 nuclear tests came as a major delaying factor. Obviously, work can only start when the necessary technical and financial resources have been lined up. The survey now conducted suggests that the prospects for external assistance have improved. The consortium will be responsible for looking after the project and get income from it till 2014. These are encouraging signs indicating that some key tasks and formalities have been wrapped up and implementation may start in the coming few months. Lahorites will hope so.
IN addition to education and health, providing shelter is also among the state’s responsibilities. But according to the All Pakistan Alliance of Kutcha Abadis (APAKA), slum dwellers constitute over 36 million people, who live in an estimated 8,532 kutcha abadis in urban centres all over the country. Based on this estimate, a staggering 25 per cent of the country’s total population of 145 million are living in kutcha abadis. These people, mostly migrants from the rural areas in search of better economic opportunities in the cities, live in dilapidated, poverty-stricken conditions without proper access to basic facilities like clean drinking water, sanitation, electricity or services like health care and education.
On several occasions in the past, governments had announced policies regarding either regularization of the squatter colonies or the resettlement of their residents. However, so far nothing concrete has materialized in terms of provision of alternative low-cost housing for the slum dwellers. What has happened, according to the APAKA, is that some kutcha abadis have been forcefully demolished and their dwellers evicted without being provided compensation or alternative housing.
In Islamabad itself, the process of regularization of certain kutcha abadis and the resettlement or shifting of others to Alipur Farash has been slow and ridden with many problems, chief of which, according to APAKA, is the high cost of the housing units being offered to the slum dwellers. It is obvious that the kutcha abadi problem should be tackled not so much as an issue by itself but within the overall context of the government’s policy of poverty alleviation. This means that the government will need to coordinate its efforts in providing increasing access to housing, employment, health, education, and basic utilities to slum dwellers. Any solution short of this will only be an ad hoc one that will not contribute to the larger effort to reduce or at least contain poverty in the country in the long run.