Big ideas, bold moves

Published January 1, 2021
The writer is a former member of the prime minister’s economic advisory council, and heads a macroeconomic consultancy based in Islamabad.
The writer is a former member of the prime minister’s economic advisory council, and heads a macroeconomic consultancy based in Islamabad.

PAKISTAN has been beset with severe challenges on a wide number of fronts for the past several decades, ranging inter alia from poverty to pollution, climate change and water stress. These near-existential challenges require ‘big’ responses — in scale as well as scope. To be successful, the responses need to be underpinned by resources and the means to deliver. These include both fiscal resources as well as a minimum threshold level of state capacity. They also need to be sustained over a protracted period of time.

In the main, these challenges have festered and remained either unaddressed by successive governments, or addressed haltingly via badly conceived half measures. In some cases, the good work begun by one government was dropped by the successor government (the Karachi package or the establishment of engineering universities with foreign collaboration conceived during president Musharraf’s tenure being two notable cases in point). As a result, the country has suffered as a whole.

Fortunately, this government has either resurrected some of the much-needed but stalled initiatives from the past, or rolled out some new ‘big ideas’ of its own. A brief look at some of these follows.

Combating climate change: Pakistan is deemed to be the fifth most affected country in the world between 1998 and 2017 to the effects of climate change, according to the NGO Germanwatch. At the same time, Pakistan has one of the lowest levels of forest cover in the region — and amongst the fastest levels of deforestation.

One of the measures to offset global warming, among an array of policy responses, is to launch carbon sequestration initiatives. The KP government launched a massive afforestation-cum-reforestation programme in 2015 (The Billion Tree Tsunami Afforestation Project) that has sought to restore 350,000 hectares (865,000 acres) of forests across the province. The PTI government formed at the centre in 2018 has since upgraded that ambition to launch a national ‘Ten Billion Tree Tsunami’ programme.

In addition, it plans to embark on an urban afforestation initiative in Lahore as part of the Ravi Riverfront project. The afforestation-cum-reforestation drive, in conjunction with the restoration of national parks, is meant not only to create ‘carbon sinks’ to slow or reverse the effects of global warming, but also to provide livelihood opportunities for local communities via tourism and income-generation ventures.

In response to severe challenges, some big ideas are in play.

Poverty alleviation and social safety net: Another mega initiative of the government is the Ehsaas programme, which is a multi-sectoral poverty alleviation and social safety net programme loosely modelled on China’s New Century Rural Poverty Alleviation Plan for the period 2001-2010 (the successor programme to its initial ‘8-7’ national plan for poverty reduction).

While the PPP government should be credited, despite its leakages and massive targeting issues, with launching Pakistan’s largest cash transfer programme in 2010 (the Benazir Income Support Programme), it remained largely uni-dimensional with its focus on unconditional transfers.

The Ehsaas programme seeks to build a comprehensive, multi-sectoral platform for poverty alleviation that includes unconditional cash transfers, education stipends, distribution of ration to households, a health and nutrition conditional cash transfer programme, asset provision for starting micro-enterprises, and special programmes aimed at orphans and widows.

The Ehsaas platform was used for distribution of emergency relief during the past year to vulnerable households affected by the Covid-19 pandemic. According to data from the Poverty Alleviation and Social Safety Division, cash disbursements under the Ehsaas emergency relief programme have totalled Rs179 billion, with an estimated 14.8 million beneficiaries.

In addition to Ehsaas, the government has launched shelters for the homeless and food langars. More meaningfully, a micro health insurance programme (Sehat Sahulat) has been launched in which nearly 7.2m families have been registered. Health issues are a leading cause for vulnerable families to fall into poverty.

The aforementioned programmes provide an important platform to reduce poverty and income vulnerability in the country, but may not be enough on their own. China’s experience, while unique and non-replicable in many respects, does offer some important lessons. Sustained economic growth that is inclusive is an important prerequisite, along with improvements in agricultural productivity. Along with a multi-sectoral approach, structural as well as institutional reforms are required to sharply reduce poverty levels in a sustained manner.

Urban renewal: Pakistan has two of the largest mega cities in South Asia — Karachi and Lahore. With rapid and unplanned growth, these cities are facing issues ranging from bulk water supply to solid waste management and a broken-down urban transportation system. To address the declining liveability and economic vigour of the cities, the government has announced two mega projects, namely the Karachi Transformation package and the Ravi Riverfront Urban Development Project.

The Karachi Transformation Package is a portfolio of infrastructure projects for the city that has been on the table since the Musharraf years, if not earlier in the case of some interventions. However, the drive and level of seriousness in pursuing the same from the top leadership has been missing in the past. While both mega projects offer immense hope for the two cities, given their scale it is imperative to avoid ‘policy capture’ by developers, and ensure transparent and effective implementation through open bidding and involvement of reputed international firms. Implementation remains a perennial challenge.

Some of the other big moves by the government include the reopening of the contracts with the IPPs in the power sector, the construction incentives package to kick-start the economy, its low-cost housing initiative and the inauguration of the first of the foreign-affiliated engineering universities.

Sadly some perennial challenges remain unaddressed, such as FBR reform, and improvement in the governance of state-owned enterprises, especially in the power sector. Regional development plans for Balochistan, south Punjab, rural Sindh, Gilgit-Baltistan and AJK have not been formulated, while the 10-year development plan prepared for ex-Fata under the aegis of UNDP remains largely unimplemented. While a lot of effort has gone into civil service reform, its potency and success remain unclear at this stage.

In summary, the government has launched important initiatives in key areas, while it is lagging in some others.

The writer is a former member of the prime minister’s economic advisory council, and heads a macroeconomic consultancy based in Islamabad.

Published in Dawn, January 1st, 2021

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