‘Water storage holds potential to fetch $1bln from agriculture sector’

ISLAMABAD: Investment in water storage and course maintenance is estimated to generate one billion dollars from a million acre-feet of agriculture land in Pakistan, renowned economists and analysts said at a forum, stressing the need for securing supply under the Indus Water Treaty and from the Kabul River.

Pakistan Business Council (PBC) hosted the fourth Pakistan Economic Forum in January to present building blocks for the next administration-to-be following the end of the current government’s tenure on May 31. Ehsan Malik, chief executive officer of PBC, Ishrat Husain, ex-governor State Bank of Pakistan, Shabbar Zaidi, senior partner at AF Ferguson and others participated in the discussion.

According to the forum’s findings, reservoirs can currently store only 10 percent of inflows as compared to global average of 40 percent with the country’s storage capacity standing at 30 days versus 120 days that are minimally required. The country’s canal efficiency is just 33 percent versus global average of 90 percent.

Improved water storage could boost agriculture and preserve the increasingly scarce resource, while 22 million more acres could be irrigated in southern Punjab, Sindh, southern Khyber Pakhtunkhwa and eastern Balochistan.

The speakers emphasised shift in focus and incentives from surplus wheat and sugar to cotton, fruits and vegetables, and oil-seed cultivation.

Malik said the opportunities in Pakistan far outweigh the challenges. “There are many models of success that go unnoticed.”

He said the country needs to generate three million every year to avert “social discord”. “Pakistan over the years has become over-reliant on the imports and has started deindustrialisation prematurely,” he added. “Is it surprising that Pakistan had to go to IMF (International Monetary Fund) on 12 occasions in the last 30 years? It is an average of once in every two and a half years.”

Husain said energy and roads are prerequisites for employment generation, development in low-income areas and industrial growth.

“The challenge today for the policymakers is that how can we keep up the momentum of investments, which is being shown in the form of higher rates of imports of machinery, equipment, and raw materials,” he said. Current account deficit should be kept in such a manner “that it doesn’t lead to the erosion of our foreign exchange reserves, for example, speculation on or PKR to USD exchange rates and increase in debts,” he added.

Husain said the country is having higher investments and it means these investments are turning into higher growth rate. “Higher growth rate transforms into job opportunities, better living standards and poverty reduction for the country. GDP growth is a powerful mechanism which has proved to achieve national goals worldwide since decades.”

Zaidi attributed collection of taxes not based on incomes to deindustrialisation. “Out of the total tax collection, 74 percent of taxes are not based on net income-basis. Therefore, they are effectively indirect taxes,” he said. “Out of these 74 percent indirect taxes, fixed/presumptive taxes have reached to 23 percent.”