‘Long-, medium-term projects key to sustainable growth’

LAHORE: The government will have to focus on long- and medium-term projects that not only appease the immediate beneficiaries, but also bring prosperity to the country, experts said on Wednesday.
They pointed out that jobs cannot be created without basic infrastructure that includes electricity and healthcare. “Sustainable growth will remain elusive if people die young and are not in good health,” they said, adding that human capital development would follow if basic building blocks of a society are in place.
“In Pakistan, the focus of the governments is on short term projects that could be completed before next elections,” said financial analyst Mubashar Bashir. Even during the last two dictatorships, the focus was on short term projects to keep the population happy.
He said when there are budgetary constraints that are a routine in Pakistan the governments do away with long term planning. However, building a sustainable infrastructure is a long term job.
The analyst further said broader challenges cannot be addressed through fast track projects, when governments want investments to start showing results during their tenure. “Temporary power or unplanned but quick investment in basic healthcare units does appease the immediate beneficiaries but their long term problems remain unresolved,” he added.
Bashir said the governments remain under pressure due to tweets on social media and fast transfer of information in which they highlight their plight. Ironically, the people may not have enough to eat but even the poorest are now connected, who highlight their problems through social media, expecting that their issues would be resolved soon.
He said the government feels this pressure and responds with quick but short term solutions, adding that there is anxiety among planners that people would not remain patient forever if their small problems are not quickly addressed.
Another financial analyst Amina Usman said the middle class is vocal and easily offended by traffic jams and inability to get a seat in a plane on a short notice.
But, the government has other worries as well that include providing electricity to a large chunk of rural population and ensuring better sanitation facilities in slums.
The graduation from poverty to middle class is not possible if majority is deprived of these basic necessities.
Similarly, the headache that the private sector faces is the unavailability of people with right skill set.
“When they come up with sophisticated manufacturing value creation projects, they have to advise the supplier of the technology to train the workforce to operate the technology,” the analyst said, adding that this is a costly affair and could only be resolved if the government comes out of its short term mode to a medium and long term strategy on enhancing human capital.
The bureaucratic red tape is another hurdle in getting a fairly sustainable medium term project that could be completed during the tenure of a serving government.
Usman said bureaucrats are averse to taking risks, fearing defamation through media and particularly social media.
Despite acute power shortages the private sector is vary of the difficult political environment in Pakistan.
Furthermore, when investors need sovereign guarantees on their investment with agencies like World Bank guaranteeing it, the investment would always be costly.
Market analyst Dr Shahid Zia said government planning is also influenced by public opinion. In the power sector, the public desires low cost power. However, low cost power would come from hydro-electricity projects that are completed in 7-8 years.
“The short term solution is rather expensive.”
Moreover, to appease the public, the government opts for short term projects and subsidizes electricity, which it is unable to pay to even the private power producers for the electricity supplied due to resource constraints.
Still, the government wants to privatize more distribution companies without resolving subsidy issue.
The market analyst said more expensive power being added through short term projects would ensure that, “instead of sustainable growth, a sustainable burden is placed on the national exchequer.”