AS many as 94 per cent of the 60 American multinationals have a negative image of Sindh government, according to a recent annual survey.
Sharing this perception, chief executives of a few British and German multinationals described “bad governance’’ the single most critical challenge to the development of the province.
The World Bank too, carried out a survey of primary stakeholders in December 2004 to discover that “an overwhelming majority of them consider bad governance as the biggest challenge to the Sindh’s development’’.
“Corruption and law and order, which are derivatives of weak governance system, emerge as the second and third most critical challenges’’. It is this candid observation of the World Bank report that has caused discomfort to the political leadership as well as the bureaucrats in Karachi.
A recent report of Transparency International put Punjab government ahead of Sindh on corruption index has brought some consolation to the provincial administration. But the World Bank report, “Pakistan: Securing Sindh’s Future: The Prospects and Challenges Ahead’’ awaits official comments from the provincial authorities even after submission and presentation about nine months ago.
According to World Bank sources in Islamabad, the bank gives the draft report to the government after carrying out surveys and holding sessions with stakeholders. A presentation is made and then the relevant authorities are expected to offer comments. The bank’s board then reviews the draft report in the light of comments of the government and gives it a final shape that accommodates all views and comments.
Spread over 100 pages, the World Bank report is divided into seven chapters. The bank study has detected an all round deterioration. Thee province is falling behind in almost all sectors be it economy, manufacturing, agriculture, services education, gender equality and social sectors.
What is startling is the fact of highest incidence of absolute landlessness, highest share of tenancy and the lowest share of land ownership in Sindh. The wealthy landlords with holdings in excess of 100 acres, who account for less than one per cent of all farmers in the province, own 150 per cent more land than the combined holdings of 62 per cent of small farmers in the province with land holdings of less than five acres.
Crops and livestock have been devastated by the four years drought exposing more than 50 per cent of its rural population to extreme poverty. Being on the lower riparian, water supply remains less than what is needed and hence all the problems.
The World Bank found Sindh to be endowed with many characteristics of a high growth region. At one time it was the most industrialized province accounting for 40 per cent of the country’s manufacturing output in the country.
Rich in mineral resources, the province possesses one-third of total deposits of the country. At one time it was the most efficient producer of agricultural goods. The per capita income in Karachi was 55 per cent higher than the national average at the time of independence. Karachi was the first city in Asia to have a full fledged airport and its sea port was the main supplier of cotton and grains to Europe in 19th and 20th century.
The city’s seaport is well connected by extensive road and rail network with all parts of the country and is well extended to India in East and up to Central Asia in North. The province has highest literate population, a strong entrepreneurial class, a large pool of educated labour with relatively low wages and home to many institutions of higher learning,
According to the World Bank report “Sindh should be on a fast growth track and Karachi should have been a flourishing metropolis’’.
Instead of building on the initial advantages to become country’s growth engine, the province, “has been gradually losing position of pre-eminence’’ the report notes and goes on to illustrate its observations with facts that show the rise in unemployment in the province.
The report warns of deterioration in unemployment situation as it counts 610,000 unemployed in the year 2003-04 and nearly half a million persons are likely to be get added each year for next ten years.
“Without a sustained growth rate of around 7-8 per cent per year, the number of unemployed in Sindh could go as high as 1.6 million by 2013-14’’ warns the report.
The province’s share in the national gross domestic production (GDP) is found to have fallen in almost all sectors with the largest declines recorded in large scale manufacturing, finance and insurance, transport and communication sectors.
Another significant observation of the World Bank is that the Sindh’s development indicators are not only low in absolute term, but are growing less rapidly relative to rest of the country. For example, its literacy increased by five percentage points from 51 to 56 between 1998-99 and 2004-05, while corresponding increase in the country was eight per cent, from 45 to 53 per cent. With a 41 per cent net primary enrolment rate, it was one percentage behind the national average.
This gap widened to four percentage points by 2004-05. In 1998-99, the percentage of household with access to roads exceeded the national average by two percentage points but it fell by seven percentage points in 2004-05.
Poverty headcount ratio increased from 23.4 to 40.4 per cent between 1995-96 to 01-02 when corresponding national poverty was 30.1 per cent in 95-96 and 36.4 per cent in 01-02.
The report has raised issues as to why Sindh has grown below its potential and is lagging behind the other provinces in growth, poverty reduction and social indicators.
The report addresses the growing inequality and disparity within the province across various dimensions. How can these barriers be removed, enabling the province to accelerate its economic growth, improve distribution and reduce poverty? This is one question that the World Bank tries to answer in the context of sound economic policies of the federal government.
But in this utter dismal socioeconomic scenario, the World Bank report finds light at the end of tunnel. “Fortunately, the favourable conditions at the global and national levels and the province’s own existing and potential strengths provide an opportunistic setting for the government to embark on a broad and ambitious reform programme’’ the report suggests.
The report notes polarisation in Sindh political environment, where political parties are formed on ethnic lines and it pleads for building a consensus in favour of reform among the existing political parties. According to the WB report, it is the only province where politicians are mobilised on ethnic lines with conflicting interests.
As a part of its study, the World Bank in its earlier report given in May last year found that nature of coalition government seems to have been burdened by political stalemates that is holding the provincial government to focus on developing the “type of strategic vision, action programme and implementation drive that made the province a leader in implementing reforms in earlier years.
Moreover, a lack of attention to business related issues and sustained bureaucratic inaction has created a perception of severe policy uncertainty and has heightened the level of mistrust between the business community and the public sector institutions’’ the report pointed out while drawing attention towards economic stagnation and increase in the number of people being pushed down the poverty line.
“It seems that the progressive policymakers, the resilient business community and the activist civil societies have given up any hope of creating a more prosperous Sindh’’, the report said.
Top executives of about half a dozen multinationals and business leaders endorse most of the observation of World Bank. “ The government does not have any vision for future economic development’’ remarked a chief executive of a giant multinational. Except for Governor of province, the business leaders and executives of big corporations find difficulties in communication with the ministers and the bureaucrats.
‘Is there really any Investment Cell in the Chief Minister House?’’ asks an executive of a corporation who said he never knew if there was any cell working in the province. But his questions as to when the cell was notified, what are its terms of reference, who are its members and how many times it has met and whether it has given any approvals to projects and finally does it interact with local and foreign businessmen remain unanswered. So long as Kamal Mustafa was the provincial minister for IT there was some communication between the government and foreign investors.
The Karachi Chamber of Commerce and Industry leadership including President Majyd Aziz have high hopes from the political leadership of the provincial government. “From the Governor to the Chief Minister, all area easily accessible’’ Majyd Aziz said.
But he admits that the government does not have any vision for industrialisation and agricultural growth. He concedes that lawlessness is growing out of proportion that now threatens the normal day-to-day economic activity. “But four times reshuffling in the cabinet portfolios is no issue for us’’ Majyd Aziz said and hopes for best in the coming days.
AS many as 94 per cent of the 60 American multinationals have a negative image of Sindh government, according to a recent annual survey.
