WB asks Pakistan to increase investment on health, education

ISLAMABAD: The World Bank’s Country Director in Pakistan Patchamuthu Illangovan said on Monday that Pakistan would have to double its investment to GDP ratio and triple its investment on health and education in order to achieve higher growth trajectory on sustained basis.

The investment to GDP ratio, he said, would have to be doubled increasing from 15 to 30 percent while spending on health and education which stands at 3 percent of GDP, would have to jack up to 8 to 9 percent of GDP on annual basis.

“I am optimistic about growth projection of 9 percent for Pakistan but over next 30 years by 2047 when the country will be celebrating its century of independence will have to slow down its population growth rate from 2.3 percent and achieving GDP growth of 8 percent for prospering lives of people,” the WB’s Country Director Illango said while addressing investment conference titled “9% GDP Next Level And Beyond” organised jointly by Board of Investment and Geo Network here on Monday.

The WB’s Country Director said that Pakistan would have to increase its investment to GDP ratio from 15 percent to 25-30 percent and removing bottlenecks of infrastructure for achieving growth rate of 8 percent on annual basis. The population growth, he said, stands at 2.3 percent so the country will have to slow down pace of population growth and will have to achieve GDP growth of 8 percent for making difference in lives of people of Pakistan. He said the total factor productivity should be enhanced to achieve real growth potential of the country.

He said that Pakistan’s 50 percent population was consists of younger people so the country would have to spend resources on human capital by investing more on health and education. Pakistan is spending 3 percent of GDP on health and education against the commitment of 7 percent but it should be increased to 8 to 9 percent of GDP.

Chairman National Highway Authority (NHA) Jawad Rafique Malik said on the occasion that the eastern and western route under China Pakistan Economic Corridor (CPEC) would be completed by next fiscal year 2018-19. He said that Lahore-Multan-Sukkhar Motorway would be completed next year. He also said that Havalian-Thakot was also under construction and would be operational next year.

The western route, he said, was also under construction and its portion from Islamabad to Dera Ismail Khan would be completed next fiscal year. In the next phase, from Quetta to Zohb, China agreed to finance under CPEC, he added.

He said the government utilised $13.6 billion for construction of motorways and highways including road infrastructure under CPEC during last four and half year’s period in order to ensure connectivity between North-South network and east to west corridor.

The government, he said, undertook initiative of $3.4 billion for construction of highways and motorways under the concept of public private partnership for which one window system was placed where the private sector did not have responsibility for procuring lands.

Dwelling upon successful projects executed through PPP, he said the modernisation of Islamabad to Lahore Motorway was done with $420 million, Karachi to Hyderabad with 6 lanes with cost of $400 million and with rate of return at 17.82 percent, Lahore to Sialkot motorway at the cost of $400 million. For Sukkhar to Hyderabad M-6 Motorway the bidding was done and LOI was issued to one party with cost of $2.16 billion but another party went into redressal of grievance mechanism and fate of this project would be finalised soon.

He said that six projects were in the pipeline on PPP mode with estimated cost of $1830 million including Sialkot to Kharian motorway at $365 million, Kharian to Rawalpindi at $512 million, Pindi Bhatian to Multan having 6 lanes with cost of $727 million, Nowshera to Peshawar expressway $100 million, Karachi Northern Bypass $120 million and sixth operating concession agreements for M2 from Islamabad to Lahore.

Shahzad Dada CEO Standard Chartered Bank said that Pakistan will have to focus on three Cs including consistency in policies, capacity building and consensus for achieving higher growth trajectory. It requires three things to do including boosting exports, improving service sector and jacking up investment and savings in terms of GDP.

Richard Morin MD Pakistan Stock Exchange said that Pakistan would have to lure retail sector involvement for development of capital markets. Abbass Akberali Chairman Amreli Steels said that Pakistan needed radical and surgical reforms and first and foremost requirement was overhauling Estacode to overhaul bureaucracy in order to bring meritocracy.

Kimihide Ando, CEO Mitsubishi said that Pakistan Standards and Quality Control Authority (PSQCA) was working under Ministry of Science and Technology as they were doing cut and paste without developing quality standards and suggested that Ministry of Industries and Commerce should be merged into single ministry.

Ahmed Quli Khan Khattak from Ghandhra Nissan Ltd said the corruption was eating away this country so it should be overcome to exploit real potential of the country. Many other speakers also spoke on the occasion.