Pending projects slowdown economic growth

LAHORE: Pakistan needs a paradigm shift in the growth strategy, keeping in mind that the strategies adopted in the past have failed to put the country on a sustained growth path.

Economic planners in Pakistan emphasised on initiating development projects. Each government that comes to power announces its own development projects without bothering to complete the projects already in the pipeline.

There may be certain projects that might not be beneficial for the economy. In that case those projects should be shelved if not much work has been done on them.

But on projects where a substantial amount has already been invested should be completed on priority. Delaying projects always increases the cost.

New development projects should not be announced unless absolutely necessary . Pending projects should be completed quickly or shelved.

No one ever tried to evaluate as to why we have failed to perform consistently despite adding new infrastructure every year. In our single minded approach to make roads, buildings, and other projects we neglected other factors vital for growth.

There are two types of developments. One is hardware like buildings, bridges, dams and roads. The other and more important is the software part of the development without which hardware would be useless.

For the software side of development we failed to develop our governance, improve our human capital, introduce measures that improve efficiency and strengthen domestic commerce. This has resulted in wavered economic performance of our country.

We grow at a high speed for a few years and then go into recession. Soft and hard development operate like a computer.

You may have the best hardware computer but it would be useless if it is not loaded with proper software as well as a skilled human resource to operate it.

We install telemetry sensors on our canal system, but the absence of proper human resources and patchy governance fails to satisfy the provinces about the fair distribution of water.

The software side of development now needs more attention than its hardware side. The problem however is that innovation, competent human resources and transparent governance that the software of development brings does not suit vested interests in our society. It uproots the well entrenched rent seeking culture.

Our industrial growth strategy was always based on incentives. Five decades down the lane we find that the incentives strategy failed to deliver.

Shortage of energy and power is not a valid excuse for slow industrial growth, as growth was stagnant in most industries when the interest rates were very low and there was surplus electricity and gas.

Neighbouring countries of China and India have the same infrastructure constraints as in Pakistan but they have sustained high economic growth.

The only difference is that we have neglected prudent management, efficiency, innovation and productivity while China and India did not.

In our endeavour to promote industries we loaded ourselves with too many things that we could not manage. We forgot other sectors of the economy that could trigger more growth. We have become mimics as we try to copy what goes on elsewhere in the world.

Pakistani planners never encouraged innovation. T here is a dire need to change the mindset in the planning commission and make them believe that the real sustainable growth could only be achieved by formulating a policy after taking input from all stakeholders, including the consumers, civil society, academia, services sector, industry and trade.

It seems as if the members of the planning commission have never read the growth strategy documents that the Planning Commission prepares from time to time. Most members restrict themselves to the chapter that they wrote. This is the reason that growth strategies lack coherence.

A new growth strategy should be formulated after taking input from all sections of society and the economy.

The growth model should shift from sectoral incentives to thematic approach where all sectors would get similar incentives and facilitation on the basis of the innovative approach they introduced.

Market reforms, innovation and entrepreneurship should be the basis of new economic planning.

The rent seeking mentality would have to be replaced with fair opportunities for everyone. Currently, there is a load of over 3,000 development projects worth worth five complete budgets of the country in which the share of development is hardly 20 percent.