Sustaining high growth

WITH the economy estimated to grow at 8.3 per cent this fiscal year, Pakistan will be joining the ranks of the fast growing nations in the region, including India and China which are expected to lead Asia’s economic resurgence. Helped by the dynamism of the private sector and a favorable weather, the country’s economy has demonstrated great resilience. The growth rate has exceeded the original budget target of 6.6 per cent and the recent revised estimate of seven per cent. As pointed out by Prime Minister Shaukat Aziz, this splendid performance is a rare feat. He says that it is the fifth time in the country’s history that growth rate has exceeded eight per cent. While this development can be a source of great satisfaction for the policy-makers, the prime minister’s remarks bring into sharp focus the question of sustainability of a high growth rate in the long-term.

Positive factors like renewed business confidence and donors’ growing support are no doubt favourable for a sustained economic growth. Yet there are strong constraints to be tackled. Not minimizing the role of rapid credit expansion, an estimated 7.5 per cent growth rate has much to do with rains that have yielded bumper cotton and wheat crops. Agriculture, which is the backbone of the national economy, suffers from low yields and traditional farming practices. Though Pakistan possesses the best irrigation system in the world, it uses it inefficiently. What is urgently called for is to raise yield per acre rather than focusing on increasing acreage under cultivation. Farmers work with outdated technologies, whether it is sowing and following a particular cropping pattern or fighting pests or using the fertilizer. The agricultural extension services have to be strengthened and made more effective. Farming must be modernized on an urgent basis.

A robust growth of 15.4 per cent in manufacturing can be attributed to improved capacity utilization and higher domestic investment. Attracted by privatization of state enterprises and seizing opportunities in telecommunication, financial services and oil and gas sector, inflow of foreign investment is expected to be sustained at around one billion dollars for the second year. Having strengthened their existing business, it is expected that both domestic and foreign investors would venture into new areas of investment. A high economic growth may tempt foreign investment to do more of capital spending. But investment can be encouraged only by improving the dilapidated social and physical facilities at a more rapid pace. For this the primary responsibility rests with the government as the public-private sector partnership in this sector has still to take off. The programme for skill development is still in its initial stages. What is more puzzling is that in first three quarters of this year 30 per cent of the PSDP allocation for the social sector have been utilized against 49 per cent for the overall development spending. A major portion of the PSDP allocation for development is for physical infrastructure.

Risks to high economic growth also emerge from a low rate of national savings. A high savings rate is imperative for investment to be raised to an appropriate level to manage economic expansion at current level. A high inflation rate, now at 11 per cent, is eroding savings and can retard growth. A high growth rate with low inflation is a challenging job that the State Bank and the government have jointly to ensure to keep the economy on the growth trajectory.

And now Taj Mahal?

AS if the Babri mosque affair was not enough, we now have a full-fledged row growing over the Taj Mahal. Both the Sunni Waqf Board and the Vishwa Hindu Parishad, a right-wing Hindu organization, have laid claim to it. The latter claims that the Mughal masterpiece was built on a land where there was once a temple of the Hindu god Shiva. There are fears that the VHP may encourage its followers to start praying at the Taj. If this happens, we could expect a repeat of the 1992 Babri mosque scenario. Managed by the Mughal rulers and later by the British and Indian governments, the Taj has been a monument to love. Now, some 58 years after independence and more than 350 years after its construction by Muslim architects on the orders of Emperor Shah Jahan, the mausoleum is in danger of falling victim to religious bigotry and extremism.

Built in marble, the magnificent monument — which Stanley Lane-Poole called “the spirit of Iran re-incarnated in India” — has been one of India’s greatest tourist attractions. It has inspired generations of artists to produce literary masterpieces, poems and love songs, including Sahir Ludhianvi’s satire: Ek Shahinshah ney daulat ka sahara laikar. Now the VHP would like to dig into its basement to prove that it once was a Hindu temple. In that process, the VHP may not prove anything, but it could do serious damage to the structure and incalculable harm to India’s communal relations. The demolition of the Babri mosque in 1992 led to widespread riots in India and caused thousands of deaths. The Taj Mahal is not a mosque, but the white- domed mausoleum with Quranic verses engraved on its walls and on the graves of Shah Jahan and his beloved wife, Mumtaz Mahal, is of enormous sentimental value to the Muslims of South Asia. No one, of course, would allow the VHP to repeat its Babri mosque vandalism at the Taj, but even a thoroughly fictitious dispute about its location will serve to vitiate the atmosphere of goodwill and harmony that prevails in South Asia at the moment.

Attack on schools

THE bombing of two girls’ schools in the Bajaur Agency on Monday night followed by the ransacking of another two schools on Wednesday, on the suspicion that they were being run by NGOs, were most unfortunate incidents. Mercifully no one was injured in either incident but this does not lessen the damage caused. These schools were established by the Fata directorate of education in collaboration with the Pakistan Education Foundation. These institutions are now being targeted by elements opposed to the provision of education in the area. Earlier, a community school had been bombed and security forces apprehended 14 suspected militants, including foreigners, in connection with the crime. So it is safe to assume that these attacks too were committed by hardliners. Owners of community schools have complained that they received threats to shut down the schools by elements who believe that NGOs are financing these institutions to promote western values and culture. That such groups are opposed to education or even the presence of NGOs is not new, but the lengths to which they will go to prevent the setting up of schools is alarming.

One hopes that the government is not deterred by these incidents and remains committed in its plan to provide education to all. Its immediate task should be to investigate the incidents, arrest the culprits and bring them to justice. That done, it must rebuild the damaged schools and ensure their safety. The Fata political administration plans to convene a jirga to seek the help of tribal elders in tackling the situation, a move which can succeed only if the community is convinced of the importance of education for its children. In this underdeveloped area, steeped as it is in poverty and backwardness, to progress both boys and girls must go to schools.