LAHORE: The present regime has succeeded in covering the foreign exchange needs for this fiscal but it may not be able to mobilise recurring needs next year; however, it could still be able to lightening its future burden by plugging public-owned resources and improving agricultural efficiencies.
After Saudi Arabia the United Arab Emirates has also confirmed depositing $3 billion in State Bank’s account to shore up foreign exchange reserves. This would reduce pressure on our reserves. The Chinese assistance would be a bonus. But we must understand we are borrowing money to pay back our past loans.
The loans are not being used for development purposes and are a burden on the exchequer. The rulers plan to generate foreign exchange through increased exports may partially succeed but a wide gap in current account is unlikely to be plugged.
Pakistan is compounding its troubles through inefficient use of its available resources. We waste around Rs800 billion in power theft due to mismanagement. The gas theft is risen to the tune of Rs52 billion, but that looks a small loss if we compare the one we incur through inefficient use of gas appliances like faulty burners, kitchen appliances, heaters and highly inefficient captive power gas generators.
Apart from exploiting the actual potential of agriculture we are wasting a huge quantity of our most scarce resource, the water. The post harvest losses in agriculture deprive farmers and traders of huge quantities of produce i.e., grains, fruits, vegetables, and milk. This also increases the rates of commodities for consumers.
Pakistan could improve its growth rate without any foreign assistance if the above losses are brought down to reasonable levels. Improvements in many of these cases would not require cash but only prudent, effective, and transparent regulators. And in case of investment, the amount would be many times lower than adding further capacities.
There is an acute shortage of natural gas in Pakistan particularly during winter when the domestic consumption almost doubles.
The experts have pointed out and the gas distributors and regulators are fully aware our domestic gas appliances have only 30 percent efficiency that means 70 percent of the gas used is wasted.
If the domestic home appliances particularly gas-fired room heaters and geysers are standardised by the regulators, there would be no need for gas load shedding during winter.
The industrial production would not suffer, while exports would increase and it would not require any government funds.
The water conservation techniques would not require even 1/10th of the amount needed to build a mega dam. That does not mean that new dams are not needed. We can plan new dams to stop wastage of average 32 million acre feet (MAF) water we throw in the sea and start these projects when resources are available.
However the water availability would increase by at least 30 percent if all the irrigation canals are lined. There would be 30 percent less use of water in the farms if the fields are leveled with laser levelers for which few billions would be needed. This could help the country increase its cultivation area by 20-30 percent that would eventually boost agricultural productivity.
The distribution and transmission losses in electricity amount to over 25 percent in Pakistan Electric Power Company (PEPCO) and 40 in K-Electric (KE). The PEPCO produces around 12,000 to 16,000 megawatt (MW) electricity for its distribution systems.
If the system losses are brought down to internationally accepted 8 percent, then the system would have an additional 17 percent or 1870 MW to 2040 MW electricity in the system. Even if half of the wastage is due to theft we can add 935 MW to 1020 MW in the grid by upgrading transmission lines that would require a small amount.
Post harvest losses in Pakistan account for 30 percent of wastage in vegetable and fruits and 7-8 percent in food grains like rice and wheat. Most of the post harvest losses are due to faulty storage and packaging. The farmers lose billions in post harvest losses and the nation risks its food security because of these losses that could be controlled through prudent regulations.
For instance agricultural experts have recommended that instead of stuffing 100-125 kg potatoes and onions in jute bags, regulations should be enacted to pack them in 50kg plastic net bags to reduce losses. This practice is in vogue at some major markets and stores in big cities.
Similarly farmers should be provided with small tin silos of 1500-2000 kg to store grains. Most of the losses could be eliminated through better administration and would reduce the need for foreign assistance besides improving the growth rate of the country.