NATIONAL Economic Council (NEC) has revealed that in the nine months of FY 05-06, of the Rs204 billion earmarked for the July-March period under PSDP, only Rs103 billion were utilized.

A more startling observation by the Annual Plan Coordination Committee (APCC) is that, on the average, mega projects utilised just 18 per cent of the allocation in the first year of their construction phase.

The Planning Commission, however, is of the view that FY 05-06 development outlay may actually exceed the figure of Rs103 billion because expenses are booked in public accounts (and contractors paid) with a lag of two to three months. In this backdrop, the allocation of Rs350 billion for FY 06-07 PSDP, although very welcome, doesn’t build much hope about higher utilisation and economic yield from this allocation.

Under-utilisation of development funds shows yet again the laidback style in which government and its agencies manage development. The fact that year after year, a large part of PSDP funds remain unutilised while we ceremonially keep pointing to deficiencies in the infrastructure manifests a dangerous tendency – accepting as an irreversible reality the government’s recurrent under-performance in this area.

In 2005, it was claimed that the concept of ‘management by objectives’ had firmly been embedded into the administrative philosophy and the practice of quarterly performance review of all federal ministries and agencies had been institutionalised. But ground realities manifested by lacklustre development effort don’t confirm this claim. Explaining poor performance in the context of bureaucracy’s incapacity is a weak defence.

Bureaucrats have the capacity to deliver but only if those who carry that responsibility, are held accountable and their incompetence, and all else that stopped them from delivering. Retaining under-performing bureaucrats in positions of power and forcing the nation to suffer because of their incompetence would be wholly unforgivable. In an election year, a widely held perception such as this could have serious implications for the party in power.

What need to be investigated at the highest level are the factors that prevent fuller utilisation of development funds, which in any case, are never enough to plug the gaps in the infrastructure. Given the galloping rate of growth in population (one of our many claims to fame) these gaps are rapidly expanding. If we continue to overlook failures in managing development, these gaps could reach catastrophic proportions in not too distant future.

Two critical managerial deficiencies need addressing: the way we identify the development priorities (and re-prioritise them in the light of fast-changing realities) and standby strategies to face up to scenarios that develop if projects freeze in their tracks (like the big dam proposals now), or take longer than their estimated completion time? These aspects should be inquired into because some crippling infrastructure gaps that we confront now, should have been addressed long ago.

Take, for instance, our failure to discover enough indigenous reserves of fossil fuel and building the network for their transport to consumption centres to cut our dependence on imports. This oversight is unforgivable in view of the fact that, for nearly a decade-and-a-half, everyone was aware of the inadequacy of power generation and its steadily rising demand.

News is that the controversial big dams may yet be constructed but it will take another three years to complete the crucial pre-construction investigative work that make any dam a lasting success. Thereafter, will commence construction, and there is no way of knowing how many disruptions therein will extend the projected timeframe of construction.

With experience of Tarbela Dam still fresh in our memories, the prospects don’t seem promising and the question about, “what do we do in this uncertain interim period” remains unanswered.

Escalation in the price of oil was inevitable even before US invasion of Iraq (and disruption of supply of nearly two million barrels a day) because impact of rising consumption in China and India became visible since the early 1990s.

The scenario worsened after US invasion of Iraq, and would become unmanageable if the US invades Iran. Given the continued failure of the EU to find a seemingly credible route that satisfies the elongated egos of both Iran and America (and of course, Israel) disruption of supplies from Iran appears a possibility.

Should that happen, how shall we manage the supply gap at its then price, given the already high deficit in the balance of payments? Can such an arrangement sustain the competitiveness of Pakistan’s exports even at their current level? These are relevant questions but it is unlikely that the strategy the government has in mind will be clever enough to face this scenario without destabilizing the economy and the country’s fragile social order.

The recent decisions of the government to permit installation of wind energy and drip irrigation system make sense but the decision has come too late. The reason is not the late discovery of the alternative; it was on the table for years but the busy policymakers couldn’t assess it quickly enough. This approach to managing critical development priorities must be checked to stamp out a laidback attitude to examining alternatives.

Whether it has to do with a traditional mindset that under-rates adoption of new technology, sheer lethargy, or a belief that adopting an idea is a favour to the initiator of the idea (and therefore deserves a favour in exchange), must be investigated. This attitude (which, it seems, was ever-present) slowed development work in critical areas at a tremendous cost to the country in social and economic terms including its break-up in 1971.

Not surprisingly therefore, Pakistan has remained a developing country for decades while countries like China, Taiwan and South Korea that lived through conditions worse than those inherited by Pakistan in 1947, have become economic powers. In fact, South Korea is a country whose pioneering industrial workforce was trained in Pakistan way back in the 1970s, at the Pakistan Machine Tool Factory in Landhi.

What Pakistan faces now is one of the toughest period of its existence. In the past five years, through our oft-repeated gleeful references to ‘high growth’ (without caring to plan for sustaining it under the changing global political and economic scenario) we have built up a mountain of expectations.

Policymakers need to speed up the process of examining and implementing projects for storage of water and generating energy from technology that is based on cost-free or indigenous inputs.

Adequacy of water supply and power generation must be our top priority. If we can ensure uninterrupted supply of these vital inputs, we will sustain self-sufficiency in food and keep the wheels of the industry rolling to save time and resources for attending to the crying needs of the social sector. If, however, this does not happen, we will face a multiplicity of problems that we may find impossible to handle.

Economic planners must realise that their failures have a cost not just in economic terms but far more important social terms that can destabilise societies to a point where all political alternatives put together may not work. We have suffered immensely precisely because of bad, worse still skewed development priorities should know this fact more than anyone else.